State Legislation Allowing Community Collaboratives to

Human Services Reform Project

State Legislation Allowing Community Collaboratives to Pool Funding and Maximize Federal Funds.

by Susan Robison

Introduction

This report provides information on state legislative initiatives that support community efforts to integrate services and funding streams and to leverage additional federal dollars in order to improve outcomes for children and families. Legislators in California and Minnesota have authorized local collaboratives to develop integrated service delivery systems and funding streams. Because both California and Minnesota have strong county-based governance systems, local jurisdictions traditionally contribute funds to human services, have some control over the use of resources, and have existing capacity to handle accounting and fiscal management functions. These initiatives build on that capacity and allow communities greater flexibility.

In California’s Youth Pilot Projects, funds are pooled at the state level in accordance with negotiated agreements between the state and each local collaborative. Counties participating in California’s Interagency Pilot Projects negotiate arrangements for reallocating and pooling funds to facilitate service integration. In Minnesota, each community collaborative creates its own pooled fund.

Both states also expect communities participating in these service integration initiatives to maximize federal funds. The legislative language authorizing Minnesota’s Family Services and Community-Based Collaboratives is most explicit. It requires participating communities to maximize federal and private funds, match federal or private funds with local dollars, and design services to meet requirements for state or federal reimbursement. Legislation allows collaboratives to seek targeted case management funds for child welfare services. Starting with one pilot county, the state and community carefully developed a process for local agencies to claim Medicaid reimbursement, which has resulted in substantial new federal revenue.

Pooling Funds to Meet the Mental Health Needs of Children

A number of states (including Indiana, Texas and Virginia) and local jurisdictions (including Franklin County, Ohio; Multnomah County, Oregon; and Milwaukee, Wisconsin) have developed initiatives aimed at coordinating services and integrating funding in order to meet the needs of children with serious mental health problems. These initiatives are similar to Iowa’s decategorization in two ways: (1) they focus on services for children in out-of-home placement or at risk of placement, rather than broader prevention and early intervention efforts, and (2) they allow flexible use of categorical funds. Funding dollars are not tied to specific agencies but instead can "follow" families into different service areas to provide or purchase services as needed. This arrangement requires local agencies to make collective decisions about how money is spent and what services will be provided -- decisions they formerly made separately. For the most part, children with multiple needs who require assessment, planning and services provided by more than one agency are the targets for these initiatives.

State legislative initiatives include the Indiana Dawn Project (Indiana Code 12-22-4), Texas Integrated Funding Initiative (Texas Government Code 531 Subchapter G), and the Virginia Comprehensive Services Act (Code of Virginia, Sections 2.2-212, 2.2-2648, 2.2-5200 to 2.2-5214). All focus on pooling funds to provide "wraparound" services for children with serious emotional disturbance.

State Initiatives

Minnesota Family Services and Community-Based Collaboratives

Minnesota Statutes, Section 124D.23

In 1993, the Minnesota Legislature created local collaboratives to design an integrated local service delivery system that integrates funding streams and coordinates the delivery of services between existing agencies.

Legislation directs collaboratives to design and implement an integrated local service delivery system for children and their families that coordinates services across agencies and is client centered. The delivery system is to provide a continuum of services for children birth to age 18, or birth through age 21 for individuals with disabilities. The collaborative must describe the community plan for serving pregnant women and children from birth to age six. Responsibilities for each collaborative include: establish goals and outcomes indicators to measure progress, conduct a local needs assessment and develop a comprehensive plan, integrate funding sources to obtain effective services for children and families, coordinate to avoid duplicative intake and services, identify federal, state and local barriers to coordination and suggest strategies for removing barriers.

Legislation also requires that each collaborative establish an integrated fund to provide an integrated service system and fund additional supplemental services. The integrated fund may consist of federal, state, local, or private resources. A collaborative must seek to maximize federal and private funds by designating local expenditures for services that can be matched with federal or private grant funds and by designing services to meet the requirements for state or federal reimbursement. Collaboratives may seek to maximize federal reimbursement of child welfare targeted case management funds.

Funding for state grants to the collaboratives is provided through increased federal Medicaid payments to the state for services delivered in communities. The state created a streamlined process by which many of its local public agencies could file administrative claims for case coordination and outreach services delivered to Medicaid-eligible children. Claiming capacity was expanded to include public schools, public health and corrections programs. The new claims generated significant new federal revenue without additional cost to the state, since the state’s own state and local non-Medicaid funds have already paid the cost of services. Instead of directly channeling federal Medicaid funds back to communities that generated them, the state pools all matching funds in the integrated state fund, which is distributed to community collaboratives to accomplish their local plans.

California Youth Pilot Programs (YPP)

1993 Cal. Statutes, Chap. 951; 1994 Cal. Statutes, Chap. 686; 1995 Cal. Statutes, Chap. 471; 1995 Cal. Statutes, Chap. 532; 1996 Cal. Statutes, Chap. 1011

Also known as AB1741 programs, the California Youth Pilot Project (YPP) was authorized by the California Legislature in 1993. The YPP authorizes six counties to blend various categorical funds to provide integrated, comprehensive service delivery systems, focusing on service outcomes. Originally due to sunset in 2002, the programs have been extended until July 2004. The target population for these services include low-income, high-risk, multi-problem youth and their families. The pilot counties - Alameda, Contra Costa, Fresno, Marin, Placer and San Diego - act in partnership with multiple state departments and local community based agencies. There is no new funding appropriated for the YPP. Instead, legislation authorizes the counties to blend public and private child and family services funds to more efficiently use existing resources.

The legislation authorizes the pilot counties to transfer some or all funds for the following: adoption services, child abuse prevention services, child welfare services, delinquency prevention services, drug and alcohol services, eligibility determination, employment and training services, foster care services, health services, housing, juvenile facilities, mental health services, probation services, youth development services, and any other appropriately identified and targeted services for children and families.

In an effort to assist the pilot counties in blending these funds, the Legislature created the Youth Pilot Project Fund legislation. Based on a negotiated agreement between state and county, a pilot county identifies which state funds to blend. Each affected department then transfers the approved funds into the special fund. In addition, counties are allowed to transfer some of their state general funds into the YPP Fund. The county can then draw funds for its pilot from the YPP Fund to use for various integrated services.

This blended fund provides counties with increased flexibility in the use of their funds and decreases the administrative burden associated with claiming and accounting for them when compared with traditional categorical fund requirements. The Fund also allows counties to reimburse dollars saved in administration to improve outcomes for children.

California Interagency Children’s Services Act

1991 Cal. Statutes, Chap. 994

This legislation encourages the development of a comprehensive and collaborative service delivery system by offering fiscal incentives in the form of waivers and negotiated contracts. Placer County was designated as a pilot county in 1996 (1996 Cal. Statutes, Chap.899) and Solano County received legislative designation in 1997 (1997 Cal. Statutes, Chap. 265). State-county negotiated contracts must specify the net amount of resources to be reallocated and pooled. Pooled funding supports integrated case management and service delivery.

Indiana’s Dawn Project

The Dawn Project developed a state-level consortium of agencies for pooling mental health treatment dollars (including Medicaid, child welfare, juvenile justice, education, mental health, substance abuse and other funding) to serve seriously emotionally disturbed children and adolescents through a capitated care management entity. The project was piloted in Marion County (Indianapolis), where the consortium identified and addressed state and local operational issues of implementation for future statewide replication. It also tracked outcome measures for the children served by the project’s care management entity, documenting results such as decreases in length of stay in residential care, length of stay for successful graduates, and a reduction by 50% in the cost of residential treatment. The consortium managed costs while using existing community resources to provide the needed care, advanced the abilities of families and parents to participate in community-based teams, and moved clients to less restrictive levels of care without compromising their care.

Texas Integrated Funding Initiative (TIFI)

This initiative began as a pilot project funded by the Robert Wood Johnson Foundation and the Texas Department of Mental Health and Mental Retardation. The purpose of the project was to develop local organized service delivery systems for children with multiple needs, which are family based, accountable for outcomes and which maximize all funding sources, including state, local and federal dollars. After the foundation grant ended, the 76th (1999-2000) Texas Legislature passed S. B. 1234 which created TIFI. Seven state agencies along with family advocates and youth representatives form a state level consortium, and the state agencies pool resources to fund six new pilots through a request for proposal process.

Virginia Comprehensive Services Act

A 1993 Virginia law provides for the pooling eight specific funding streams used to purchase services for high-risk youth, including:

Department of Social Services

State and Local Foster Care

Foster Care Purchased Services

Department of Juvenile Justice

286 Special Placements

239 Special Placements

Department of Education

Private Tuition

Interagency Assistance

Department of Mental Health, Mental Retardation and Substance Abuse Services

Purchased Beds for Adolescents

These funds are returned to the localities with a required state/local match and are managed by local interagency teams. The purpose of the act is to provide high quality, child centered, family focused, cost effective, community-based services to high-risk youth and their families.

A state trust fund also was established to provide grants to community policy and management teams for (1) prevention and early intervention services for young children and their families who are at risk for developing problems or (2) community services for children with emotional or behavior problems and their families.