Some “Nuts and Bolts” of Financing for Systems of Care Technical Assistance Partnership for Child and Family Mental Health August 10, 2011

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Presenter: Frank Rider- Technical Assistance Coordinator, Technical Assistance Partnership for Child and Family Mental Health Some “Nuts and Bolts” of Financing for Systems of Care

Do You Have the Tools You Need?

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 5 th Year of 6/funded October 2006 ∆ In 3 rd Year of 6/funded October 2008 ∆ In 2 nd Year of 6/funded October 2009 ∆ In 1 st Year of 6/funded October 2010 ∆ Forging ahead without any federal grant funding.

15 Strategic Financing Approach: A Few Key Questions 1.Clarify “Financing for What?” 2.Estimate Your Fiscal Needs 3.Map Current Relevant Funding 4.Assess Gaps 5.Identify Financing Strategies and Funding Sources

16 1. Clarify “Financing for What?” Scope of Supports and Services Scale of Supports and Services Other Relevant Factors and Cost Assumptions

Strategies and activities that we want to develop and sustain Over what time period will we develop, implement and sustain them? At what scale and pace will we build and sustain them? Year 1Year 2Year 3 Financing for What? Worksheet

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19 2. Estimating Fiscal Needs Develop Information to Support: $ Program costs ¢ Start-up costs ¢ Operating costs $ Infrastructure costs $ Ramp-up Strategy/Going to Scale $ Assumptions

Strategies/Activities Training and Consultation Staff Supplies Travel Subtotal Evaluation/Data Collection Staff Travel Subtotal Management & Administration Staff Total Sample Cost Estimates Worksheet

21 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

Strategies/ Activities Available Resources Source of Funds and In-Kind Contributions AmountRestriction on Uses of Funds, if any Expected Timeframe Funding is Available Training and Consultation Evaluation/Data Collection Management & Administration Resource Mapping Worksheet

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

27 Strategies/ Activities Total Costs Available Resources GapTotal Costs Available Resources GapTotal Costs Available Resources Gap Staff Positions Training and Consultation Evaluation/ Data Collection Management & Administration Funding Gap Analysis Worksheet

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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

Shifting Gears Now…

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 1.Redeploy Existing Resources 2.Refinance to Maximizing Public Funds 3.Raise New Revenues 4.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