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Some “Nuts and Bolts” of Financing for Systems of Care. Technical Assistance Partnership for Child and Family Mental Health August 10, 2011. Welcome to Today’s Webinar. Audio Information: Dial Into: 800-503-2899 Conference ID: 1384349 For Technical Assistance: Dial: 1-866-493-2825
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Some “Nuts and Bolts” of Financing for Systems of Care • Technical Assistance • Partnership for Child and • Family Mental Health August 10, 2011
Welcome to Today’s Webinar Audio Information: Dial Into: 800-503-2899 Conference ID: 1384349 For Technical Assistance: Dial: 1-866-493-2825 To Submit Questions: Use the Q&A button at the top of your screen
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Some “Nuts and Bolts” of Financing for Systems of Care Presenter: Frank Rider- Technical Assistance Coordinator, Technical Assistance Partnership for Child and Family Mental Health
Context/Overview The Economics of Systems of Care: • Macro-Economics • Micro-Economics • The Pursuit of A Unified Theory?
Polling Question #1 At what stage of financial development is your SOC initiative? • Graduated site – federal funding already ended • Graduating in just 50 days/funded October 2005 • In 5th Year of 6/funded October 2006 • In 3rd Year of 6/funded October 2008 • In 2nd Year of 6/funded October 2009 • In 1st Year of 6/funded October 2010 • Forging ahead without any federal grant funding.
Strategic Financing Approach: A Few Key Questions • Clarify “Financing for What?” • Estimate Your Fiscal Needs • Map Current Relevant Funding • Assess Gaps • Identify Financing Strategies and Funding Sources
1. Clarify “Financing for What?” • Scope of Supports and Services • Scale of Supports and Services • Other Relevant Factors and Cost Assumptions
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2. Estimating Fiscal Needs Develop Information to Support: • Program costs • Start-up costs • Operating costs • Infrastructure costs • Ramp-up Strategy/Going to Scale • Assumptions
3. Map Current Spending Know What You Have to Work with Today: • What are your current sources of funding • Cash • In-Kind • Are they restricted? • Over what timeframe are they available? • How stable and reliable is each source?
Kaiser Commission on Medicaid and the Uninsured (April 2011), MENTAL HEALTH FINANCING IN THE UNITED STATES: A PRIMER
Show Me the Money! • Cooperative agreement funds • Other grants • Federal, state and local service programs • Partnering agencies: private providers, community organizations , universities (e.g. in-kind services) • Private insurance claiming • Redeployed funds into lower cost services • And leverage natural and other informal supports!
4. Assessing the Spending Gap What is the gap between our current spending and our projected fiscal needs? • by strategy/activity • by fiscal year
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Micro-Economics of Systems of Care (CMHI Cooperative Agreements) • “Venture Capital” • Annual Budgeting and Accountability: • Required Reports • Continuing Application • Carryforward and No-Cost Extensions • Matching Funds • The Rules
What Are the Rules? Cooperative Agreement Requirements: • Semi-annual progress reports • Annual reapplication (continuing application) • Annual Financial Status Reports (SF-425) • Matching Funds requirements Secure approval by CMHS for: • Change in scope of cooperative agreement • Change in contractor or subcontractors • Major budget modifications • Carryover funds/no-cost extension
Cooperative Agreement Funds: Information References • SAMHSA Request for Applications (RFA) • US DHHS Grants Policy Statement (2007) • CMHS/Bazelon Center (2008): Building Sustainable Systems Change: A Guide to Non-Federal Match Funding
Macro-Economics of Systems of Care Cost of Providing BH Treatment and Support: • MH Service Delivery • Maintaining “Ready” Capacity • Lost Opportunity Costs Cost of Not Providing Effective Treatment and Support : • Costs of Providing Ineffective MH Services • Immediate Related Costs • Long-term/Societal Costs • Intergenerational Costs
Review Strategic Financing Steps • Clarify what you need and when • Review current funding mix • Analyze promising options to pursue as additional funding sources • Determine most appropriate funding sources to support your goals.
Four Potential Financing Strategies • Redeploy Existing Resources • Refinance to Maximizing Public Funds • Raise New Revenues • Create New (Boundary-Crossing) Funding Structures Pires, S.A. (Second edition, 2010), Building Systems of Care: A Primer
1. Redeploy Existing Resources …from service areas that are producing high costs and/or poor outcomes (e.g. out of home placements), to invest in promising new approaches. Example: Maine – July 2011 QI Data Snapshot: “The (Wraparound) results showed a 28% reduction in overall average per child MH expenditures in 12-month period and significant reductions in crisis intervention, residential treatment and in-patient hospital services.”
2. Refinance to Maximize Public Funds (e.g. Medicaid) • Multi-systemic therapy • Wraparound process • Facilitation • Team Member Participation • Intensive in-home services • Family psycho-educational services • Integrated MH-SA treatment • Assertive Community Treatment (ACT) teams • Therapeutic foster care • Respite care • Family Peer Support • Youth Peer Support • Illness/Disability Self- Management • Telemedicine-Delivered BH Services • Traditional Healing Modalities
Polling Question #2 Of the 15 services listed on the previous slide, how many are covered services in your state’s Medicaid program? ___ None ___ Some, but fewer than 5 ___ About half of them/6 to 10 ___ All 15, or nearly all ___ I don’t know enough about the services in my state’s Medicaid program to answer this
3. Raise New Revenues • Fees, third party billing (e.g. ACA affordable benefits exchanges) • Grants • United Way • Sponsorships • Trust funds • Special taxes: • California - Proposition 63 • Missouri, Illinois - County Tax Levies • Fundraising
4. Create New Funding Structures • Blended Funding Pools (e.g. flex funds) • Case Rates (examples: Wraparound Milwaukee, Impact SOC, MI) • Braided Funding (example: Arizona ‘s Therapeutic Foster Care)
Look to the Future Use the opportunity of federal cooperative agreement funding to lay a strong foundation for the future: • Develop, test, demonstrate better approaches • Leverage cross-system investments, and secure commitments now for later years’ funding • Build strategies to modify what permanent funding streams will pay for later. • Provide services now to avoid costly high-end placements, and secure commitments for reinvestment of saved funds to increase capacity for cost-effective supports and services that work!
And Remember… Not ALL Worthwhile Sustainability Depends of Financing!
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Polling Question #3 Financing is a difficult area to master. Which of the following dimensions do you feel the strongest need to learn more about? ___ Medicaid ___ Non-Federal Matching Funds ___ Flexible Funds (“Flex Funds”) ___ Private Health Insurance ___ Primary Funding Streams of Non-Mental Health Child Service Systems (Child Welfare, Education, Juvenile Justice, etc.)
Presenter Contact Information Frank Rider frider@ffcmh.org 919-896-8309