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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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
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 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
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
15
1. Clarify “Financing for What?”
 Scope of Supports and Services
 Scale of Supports and Services
 Other Relevant Factors and
Cost Assumptions
16
Financing for What?
Worksheet
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 1
Year 2
Year 3
Questions?
Please press *7 on your phone to
unmute your line.
When you are finished, please
press *6 to remute.
2. Estimating Fiscal Needs
Develop Information to Support:
$ Program costs
¢ Start-up costs
¢ Operating costs
$ Infrastructure costs
$ Ramp-up Strategy/Going to Scale
$ Assumptions
19
Sample Cost Estimates
Worksheet
2010-11
Strategies/Activities
Training and Consultation
Staff
Supplies
Travel
Subtotal
Evaluation/Data Collection
Staff
Travel
Subtotal
Management & Administration
Staff
Total
2011-12
2012-13
2013-14
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?
21
Kaiser Commission on Medicaid and the
Uninsured (April 2011), MENTAL HEALTH
FINANCING IN THE UNITED STATES: A PRIMER
Resource Mapping
Worksheet
Strategies/
Activities
Available Resources
Source of Funds
and In-Kind
Contributions
Training and
Consultation
Evaluation/Data
Collection
Management &
Administration
Amount
Restriction on
Uses of Funds,
if any
Expected Timeframe
Funding is Available
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
$
Funding Gap Analysis
Worksheet
Strategies/
Activities
2011-12
Total
Costs
Available
Resources
2012-13
Gap
Total
Costs
Available
Resources
2013-14
Gap
Total
Costs
Available
Resources
Gap
Staff Positions
Training and
Consultation
Evaluation/
Data Collection
Management &
Administration
27
Questions?
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unmute your line.
When you are finished, please
press *6 to remute.
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 SelfManagement
 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 • Braided Funding
(e.g. flex funds)
(example: Arizona ‘s
Therapeutic Foster
• Case Rates (examples:
Care)
Wraparound Milwaukee,
Impact SOC, MI)
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!
Questions?
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unmute your line.
When you are finished, please
press *6 to remute.
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