IV - Los Angeles Unified School District



Financing School-Based Health Centers:

Current methods and alternate approaches in Los Angeles Unified School District

By

Kimberly Uyeda, M.D.

Paper prepared for LAUSD Student Health and Human Services Division,

Office of Health Partnerships

September 15, 2000 (Draft II)

Financing School-Based Health Centers:

Current methods and alternate approaches in Los Angeles Unified School District

Executive Summary

School-based health clinics (SBHC) have emerged as a method of health delivery that offers accessible and affordable care to those in need. Los Angeles Unified School District houses many SBHCs, growing out of efforts to address the increasing physical and mental health risks faced by children and youth today. Funding for these clinics comes from a variety of sources and attests to the individual arrangements fashioned by each school, provider and community. This study found that the majority of clinics receive significant in-kind support from Providers (hospitals, community clinics, County departments). Some SBHCs benefit from the direct support of the District and some rely heavily of external grants. Although most clinics are capable of billing, third party payment through insurers such as Medi-Cal accounts for a small fraction of the operating budget in most SBHCs. This heavy reliance on in-kind support makes many clinic administrators skeptical about the ability of sponsors to continue to fund clinics in a cost-effective manner. They are in turn looking for different approaches to funding clinics in a more sustainable fashion.

SBHCs in other areas of the country have traditionally enjoyed private grant and state government support. Many states have created mechanisms to directly fund SBHCs using general fund or Title V (MCH) dollars. Furthermore, state governments have intervened to varying degrees making it relatively easy for some clinics to finance operations using Medicaid reimbursements. However, the advent of Medicaid managed care has ushered in an era of increased restrictions on allowable billing and provision of care. As SBHCs across the nation are finding less direct state and grant assistance, they are forced to look to patient care revenue (which includes managed care arrangements) for support.

With the current funding situation of SBHCs changing and evolving, there are several approaches to clinic financing that should be explored in Los Angeles (see Table 3 on page 13 for a listing and explanation of approaches).

1) Current operations could should be maximized in efficiency. This could include redistribution of staff to areas of highest need and co-locating providers on campus to increase ease of accessing these services. Efficiency also refers to redeployment of resources (monetary or personnel) into more preventative, lower-cost programs. A strategic audit on current community need and existing capacity would be a prerequisite in guiding any efforts to redistribute or redeploy staff or resources.

2) Public and private revenue sources should be maximized. The District is already able to draw down matching funds for services rendered under the LEA Billing Option and Medi-Cal Administrative Activities. Increased utilization of these methods and other leveraging tools need further exploration. There are also certain block grants (ie. Title V, MCH) and discretionary grants (ie. Healthy Start) which have potential to further support the efforts of SBHCs. The key is to recognize program eligibility for these funds or consider natural partnerships with organizations to better meet the service and eligibility requirements that qualify for funding.

3) Increased flexibility of categorical funding would allow easier financing of comprehensive programs. Methods of increasing flexibility range from local coordination of funds at a program level to negotiating “master contracts” with state agencies to essentially pool funds from multiple funding streams. Flexible financing mechanisms work most effectively in supporting integrated services that require funding from multiple sources. Flexibility may not represent more absolute money, but more money that is available for needed services as determined by the local community.

4) Public, private and community partnerships are critical to financial sustainability. Partnerships allow greater access to some funding mechanisms, such as the block and discretionary grants. Perhaps more importantly in the current economic environment, are the partnerships that increase the ability to access certain billing mechanisms (PPP, FQHC* and managed care organizations). Finally, partnerships should always revolve around mutual benefit and bring organizations together that can offer not only monetary resources, but leadership, public notice, technical assistance and information exchange.

There are no standard solutions for the financial challenges faced by the various SBHCs in the LAUSD. Each clinic has its own arrangements with Providers, the District and private funding agencies. However, the District does have an overall responsibility to optimize the learning opportunities of its students, which in many cases entails sponsoring health and human services. The current financing mechanisms could be improved and built upon to support a more financially stable SBHC system within the District. However, there may be greater long-term gains by pursuing more far-reaching and radical methodological changes in financing. New and strategic partnerships, working toward service integration and the flexible funding mechanisms that are required to support such efforts should be the areas of greatest focus. Schools represent an ideal platform for expanded service delivery, beyond basic health care, to students and surrounding communities. The method by which the system is financed will ultimately determine which services are provided, how needs are met, and the organization of the entire delivery system. LAUSD and its SBHC network have the knowledge and experience to foster leadership at many levels, without which the ideas of local partnering and integration cannot succeed. This is a critical time for SBHCs, one where financial decisions will determine future clinic viability and subsequently overall student and community well being

TABLE OF CONTENTS

I. Introduction ……………………………………………………………… 6

A. Los Angeles and LAUSD……………………………………………… 6

B. School-Based Health Centers………………………………………… 6

II. State of SBHC Financing: local and national models…………………….. 7

A. SBHCs in Los Angeles………………………………………………… 7

Provider in-kind support

LAUSD support

External grants

Third-party billing

B. SBHCs across the nation……………………………………………… 10

Boston, Massachusetts

New York State

Dallas, Texas

III. Approaches to financing SBHCs………………………………………… 12

A. Maximize efficiency of current operations…………………………… 14

Redistribution and co-location of staff

Redeployment of resources

Strategic audit

Recommendations

B. Maximize public and private revenues………………………………… 16

Leverage and refinance (HSP, LEA Billing Option, block grants)

Administrative claiming (MAA)

Maximize subsidies and pursuit of discretionary grants

Recommendations

C. Increase flexibility of categorical funds………………………………. 20

Pooling

Coordination

Decategorization

Recommendations

D. Public, private and community partnerships………………………… 23

Partner to access public and private grants

Partner to effectively access billing mechanisms (PPP, FQHC, MCOs)

Partner to provide mutual benefits

Partner to provide increased community and political support

Recommendations

IV. Discussion………………………………………………………………. 27

V. Conclusion………………………………………………………………… 30

Appendix 1: School-Based Health Clinics’ Financing Puzzle…………… 31

Appendix 2: Grant programs that may be used in SBHC funding……… 32

References………………………………………………………………… 33

I. INTRODUCTION

A. Los Angeles and LAUSD

The Los Angeles Unified School District (LAUSD or the District) is one of the largest school districts in the nation. Situated in Los Angeles County, the District is home to some of the most underserved areas in the state. County data indicates that over 850,000 children live in families that earn incomes less than the Federal Poverty Level (FPL). One in four children in the County are uninsured and certain populations have even higher rates (33% of Latino children have no health coverage).[i] Non-insured status has been repeatedly documented as a barrier to receiving preventative health services or timely medical care.[ii]

Over 700,000 students attend the District’s 790 K-12th grade schools.[iii] The student population reflects the health and social trends seen in the County. LAUSD data indicate that many schools or complexes have alarmingly high poverty and uninsurance rates. Health indicators in 1997 showed a district with 3,562 teenagers with sexually transmitted diseases, 18,619 youth mental health cases, and high rates of unmet need.[iv] On average, 10% of children in the District are not getting needed medical care based on their parents’ report.[v] Similarly, academic performance indicators have also been discouraging, with LAUSD students consistently scoring below the national and state average on standardized tests.

The lack of access to health services and the generally poor student health and academic status has lead to changes on many fronts. The District has worked diligently at raising the rate of Medi-Cal* insured students from 30% of the student body to figures approximating 38%.[vi] Educational reform efforts have resulted in encouraging trends in standardized test scores. Although still below national averages, the Stanford 9 scores of LAUSD students have shown relative improvements in all subjects and across all grade levels over the last two years.[vii] This academic year the District has embarked upon a plan to decentralize operations and place more decision making power into eleven smaller sub-districts. Increasing emphasis has been placed on bringing more services to students and their families either at school or linked to school though the community. Administrators and policy makers realize the need for non-academic supports in order to achieve educational goals. However, many are dissuaded by the financial and logistical hurdles that must be overcome in order to offer comprehensive school-based services. School health centers have emerged as just one of the possible components of the integrated service network needed to foster healthy students that are ready to learn.

B. School-Based Health Centers

School-based health services are not new entities in the context of educational history. From the early 20th century Progressive Era reformist to the activists of the 1960’s “War on Poverty,” schools have been a venue for health and social services.[viii] What might be called the modern era of school-based services began in the 1970’s with comprehensive programs appearing on school campuses in Dallas, Texas and St. Paul, Minnesota. These programs sought to address the shortcomings of our health and educational systems’ ability to address the “new morbidities” faced by teens, namely violence, unsafe sex, and drugs and alcohol.[ix] In addition, secondary schools offered a unique venue for services in terms of confidentiality, convenience and integration with educational curriculum for this hard to reach adolescent age group. In the late 70’s and early 80’s, the Robert Wood Johnson Foundation (RWJF) began to support several innovative sites through its School Health Services Program, Community Care Funding Partners Program, and School-Based Adolescent Health Care Program.[x] Three of the RWJF grantees were housed in LAUSD high schools.

Over the last decade there has been a relative explosion in school-based health centers (SBHC), many of which include allied health and social services on campuses. There are reportedly over 1100 SBHCs in the United States.10 Los Angeles has dozens, with LAUSD alone housing 26 functioning clinics. Three of the original RWJF sponsored clinics (San Fernando High School, Jordan High School and Los Angeles High School) now have over 15 years of service experience. But the future of SBHCs is not clear in a quickly changing and tightly managed medical market. This paper will first look at the mechanisms used to finance clinics in Los Angeles, as well as in other areas of this country. The second part of the paper will look at various finance strategies and realistic approaches to reform that can be used to optimize the fiscal outlook of the SBHCs. It is hoped that through review and analysis a sustainable financial plan can be formulated that will allow SBHCs in the District to continue to provide needed services for children, families and their communities.

II. STATE OF SBHC FUNDING: LOCAL AND NATIONAL MODELS

A. SBHCs in Los Angeles

There are multiple methods of financing school clinics in LAUSD. The challenge is to characterize the techniques that are currently in place in order to make any recommendations for future reform. Interviews were conducted with 21 clinic coordinators and providers to represent all 26 SBHCs in the District. The interviews were structured to determine the extent of funding that has been derived from different sources. The participants had opportunities to express their opinions and offer suggestions for methods of future clinic financing. The results of the interviews are summarized in Table 1. The majority of funding and support for SBHCs came from four sources: Provider agency in-kind support, District (LAUSD) support, external grants and third party billing revenue.

1. Provider in-kind support. School based clinics in Los Angeles have grown out of relatively independent arrangements between schools and health agencies (Providers). “Providers” represent the sponsoring medical agency for the SBHC. In Los Angeles these have been not-for-profit hospitals, medical corporations, community clinics and in some cases the County Department of Health Services. Many of the clinics rely heavily on the support of the Provider. Twelve out of 21* clinics reported that Provider in-kind support accounted for “half” to the “majority” of the clinic operating budget. Most of the in-kind service is realized through staff time (physicians, nurse practitioners, medical assistants and clerical staff). Providers offer follow-up services, laboratory and radiographic evaluation and they will often supply the clinic with medical equipment and other medical supplies.

|Table 1: Summary of LAUSD School-Based Health Clinic Financing Sources |

|School/Provider |Provider In-Kind |LAUSD |External Grants |3rd Party billing |

|Bell HS/ |Majority- staff and |Some— |CCG |None— |

|CHFELA[1] |services |LEA grant[2] |(others in past) | |

|Carson HS/ |Majority- staff and |Some— |None— |None— |

|S. Bay Free Clinic |services | | | |

|Columbus MS/ |1/3-staff and services |Majority— |Kaiser |CHDP—thru LAUSD |

|El Proyecto del Barrio |(2d/wk) |Staff | |(o/w None) |

| | |LEA grant | | |

|Lawrence MS/ |Some- staff and services |Some— |Majority- |None— |

|El Proyecto |(8 hrs/wk) |Coord’s salary | | |

|Elizabeth LC/ |Half- |Some |None- |Half- CHDP Medi-Cal |

|St. Francis MC | | |(Kellogg in past) | |

|Foshay LC/ |Majority- staff and |None |One (1/2 budget) |Medi-Cal (15%) |

|CA Hospital |services | | | |

|Gage MS/ |Majority- staff and |None |HS grant +3 others (help |Some-- thru provider (CHFELA) |

|CHFELA |services | |peripherally) | |

|Gardena HS/ |Majority- staff and |Some— |HS grant[3] |None |

|Harbor UCLA |services |LEA grant |Teen Preg grant | |

|Hollywood HS/ |Some- staff and services |Some- staff, |Majority- Hoag, Eisner, |CHDP, Dept MH (Medi-Cal), Preg |

|CHLA[4] | |LAUSD Fund |Queenscare | |

|Manual Arts HS/ |Some- staff and services |Some- staff, |Majority- Hoag, Eisner, |CHDP, Dept MH (Medi-Cal), Preg |

|CHLA | |LAUSD Fund |Queenscare | |

|Los Angeles HS/ |Some- staff and services |Some- staff, |Majority- Preg, |CHDP, Dept MH (Medi-Cal), = 5% |

|CHLA | |LAUSD Fund |Queenscare, (HS) | |

|Holmes Ave/ |None- precepted by County|Majority (NP salary), LEA|None |CHDP |

|LAUSD Nursing |DHS |grant | | |

|Murchison Street/ |None- precepted by County|Majority (NP salary), LEA|None |CHDP |

|LAUSD Nursing |DHS |grant | | |

|Jordan HS/ |Majority- staff and |Some- |Some |CHDP/Medi-Cal (18%) |

|Watts Health Fnd |services |LAUSD Fund |(RWJF in past) | |

|Kennedy HS/ |Majority- staff and |Some- |None |Some |

|LA DHS[5] |services |LEA grant | | |

|Vaughn Elem/ |Some- staff and services |Majority- (charter school|Some- Uni-health, Kaiser,|None |

|LA DHS | |funds) |etc. | |

|Melrose/Vine/WH |Small amount supplies |? |Majority- |None |

|Rosewood/CSMC[6] | | | | |

|Roosevelt HS/ |Half |Half |(Half- Queenscare thru |CHDP/Medi-Cal |

|White Memorial | |LAUSD Fund |provider) | |

|Second Street/ |Majority- staff and |None |None |Very little |

|White Memorial |services | | | |

|San Fernando HS/ |Half |Half |None now |CHDP/Medi-Cal (up to 30%) |

|Northeast Valley | |LAUSD Fund |(RWJF in past) | |

|Wilson HS/ |Half |? |Half |CHDP/Medi-Cal |

|ELA Health Task Force | | | |(State contracts make billing up|

| | | | |to 50%) |

|Totals: |12/21 |5/21 |5/21 |6/21 |

| |“half”- “majority” |“half”- “majority” |“majority” |“none” |

There are many potential motivations behind these in-kind services. First, all of the Provider hospitals, corporations and clinics have certain commitments to their communities. They have an interest in serving those with unmet medical need and have chosen schools as a method of reaching this population. Their non-profit status requires a certain amount of demonstrated “community benefit.” Second, some of the Providers are hospitals that support training programs for physicians, nurses, assistants and social workers. SBHCs offer a unique training opportunity to work directly in a community setting. Third, Providers may view SBHCs as an opportunity for early interventions and screenings in a convenient location for patients (students), as well as a method of fulfilling performance indicators such as HEDIS* that measure activities such as immunization rates and well-child care to report to funding agencies. A final motivation for Providers may be the potential for outreach and enrollment at the school-based site. SBHCs are relatively high profile clinics within the community that could act as an entry point for enrollment to health plans and provider agencies. There is no current method for tracking enrollment trends through SBHCs, but the competitive marketplace for patients in Los Angeles County makes this a significant potential incentive for Provider participation.

2. LAUSD support. The District provided the majority of support in only a few of the SBHCs; these were the cases where a District employed nurse practitioner was stationed to work. Other clinics reported that the District supported approximately half of the expenses through salaries for personnel and through the LAUSD SBHC Support Fund. The Fund was created to directly support the operations of the original RWJF sponsored clinics (San Fernando, Los Angeles, and Jordan High Schools). Three additional schools are now supported, making a total of six SBHCs that receive direct annual District funding. Other resources from the District include the Local Education Agency Medi-Cal billing option revenues which are distributed through a grant process to clinics and other health programs (ie. Healthy Start). The District also provides the physical space, as well as utilities, maintenance, clerical assistance and office supplies in some cases. These expenses can be significant sources of cost to programs that do not have access to District resources.

3. External grants. Five of the clinics derived the majority of their support from grants from outside agencies. On the other hand, seven clinics reported no grant support at present. As mentioned before, much of the initial funding for the older clinics had come from national agencies (ie. RWJF). Many of the grants today are from local agencies (Queenscare or Kaiser) and many clinics benefit both directly and indirectly from state Healthy Start grants. The majority of clinics have had grant support at some point in their development; however, the competition for local support will continue to increase as more clinics are established (nine clinics are being planned in LAUSD alone). When the Banning High School Clinic opens in Wilmington, it will be almost fully supported by grants from the community and local organizations. Grant support is normally time-limited and does not guarantee sustainable funds for the life of the clinic. Coordinators and providers realize this and the majority have started to pursue billing options.

4. Third party billing. The amount of successful billing of third parties by the District’s clinics was quite variable. The majority of billing revenue came from CHDP+ and Medi-Cal reimbursement. Clinics claimed anywhere from 5% to 50% of their operating budget came from third party reimbursements. The majority of clinics had mechanisms of billing, but most reported that revenue from these reimbursements accounted for a minority of the clinic expenses. Six SBHCs do not bill at this time, although many of these had plans to bill in the future. Even with a billing mechanism in place, the national experience with third party payments is that it rarely recoups more than 25% of operating budgets for SBHCs.[xi] The issue of billing as a revenue source will be revisited in the section on “Partnerships to effectively access billing mechanisms.”

There is no way to adequately generalize the different SBHC’s financial arrangements in the District. Their methods of funding have grown out of different local economic, clinical and business forces that have resulted in unique and variable strategies of funding. The contribution of various resources is quite complex and creates a funding stream “puzzle” that each clinic struggles to solve in order to remain financially viable (Appendix 1).

B. SBHCs across the nation

As with the different financial arrangements within LAUSD, there are numerous models of financing SBHCs in different cities across the nation. Traditionally, SBHCs have been heavily grant and state government supported. Large private sponsors such as the Robert Wood Johnson Foundation and the W.K. Kellogg Foundation have been integral in early and continuing efforts to create model systems of care. State derived funds are often a source of sustainable support for those clinics that have state backing. Most states use general fund dollars ($29.6 million in 1998) or draw from their Maternal and Child Health (MCH) block grant ($9.3 million in 1998) to support school clinics. The breakdown of funding sources from national SBHC data in the early 1990’s is shown in Table 2.

|Table 2: Funding Sources of SBHCs, 1991[xii] |

|State Health Department |24% |

|Private Foundations |18% |

|MCH Block Grants |17% |

|Local Government |12% |

|School Districts |8% |

|Community Health Centers |7% |

|State Human Services |3% |

|Title XX |3% |

|Medicaid |2% |

|Other |7% |

However, state and local governments are feeling increasing fiscal strain of health service sector growth. There has been a significant increase in the Medicaid population and consequently skyrocketing expenditures. Medicaid is now a 104 billion-dollar industry, almost five times the expenditures in 1988.[xiii] States have been forced to decrease funding for innovative programs such as SBHCs and concentrate on cost saving, typically through Medicaid managed care. It is in this environment that SBHCs have shifted their focus from private and government sponsors to patient care revenues. Even when Medicaid was strictly fee-for-service (FFS), reimbursement mechanisms were cumbersome and inefficient. Now with the managed care dominated system, SBHCs find it increasingly difficult to participate without state government or direct local system support. The following three examples are used to illustrate different approaches to financing in different state and local environments.

Boston, Massachusetts. The Boston Department of Health and Hospitals (DHH) sponsors most of the SBHCs in the Boston area. Although most of the students receiving service from the clinics (50%) were uninsured, the clinics estimated they were receiving approximately 23% of their operating budget from Medicaid FFS billing. The advent of Medicaid managed care in 1992 brought about significant funding changes, with SBHCs unable to collect through traditional reimbursement mechanisms. A state task force was convened to foster communication and develop quality standards for ease of negotiations. The state did not require managed care organizations to contract with SBHCs, but encouraged linkages. Medicaid managed care participants have had the option of joining a capitated (HMO) system or a primary care provider (PCP) that works on a “managed” FFS schedule. The arrangements had become very complex, with many different contracts and complicated billing and approval mechanisms between the HMOs and SBHCs. After eight years of negotiating the situation has turned almost full circle, since Medicaid managed care has not taken hold in the state. Where there were originally 12 HMOs participating, there are now only three. Furthermore, most patients (estimated 80%) have elected to use the PCP program that allows easier billing through the FFS system. The health and economic climate is very supportive, with increasing numbers of children covered by Medicaid expansion under the CHIP program. Massachusetts uses tobacco settlement money to directly fund each SBHC ($80,000 per year) and the City of Boston uses public health money to support the clinics under DHH. The substantial support from state and local government makes pursuing patient revenue less critical at this juncture.[xiv]

New York. The state of New York has the largest SBHC system in the country, with 160 clinics reported in 1999. The government contributes heavily to the budgets of the clinics as long as they meet the standards and criteria set forth by the state. Traditionally the SBHCs have been supported by over $10 million in state grant funds (at least $4 million from MCH funds). There are significant in-kind contributions made by sponsoring institutions, and the clinics billed for over $6 million in Medicaid FFS revenues in 1998. The state has recently grappled with the issue of managed care and SBHCs. New York has shifted Medicaid and placed S-CHIP enrollees in managed care plans. This has lead to some problems with SBHCs that typically rely on Medicaid billing as a substantial revenue source. For example, the North Shore University Hospital and Montefiore Ambulatory Care Center reported Medicaid revenues totaling 29% and 67% of their respective operating budgets in 1997. Since managed care organizations have refused to pay the hospital outpatient rate that SBHCs typically receive for services ($70 per visit), the state has had to intervene with a temporary “carve-out” that allows SBHCs to use special Medicaid codes to receive reimbursement, regardless of the patient’s managed care standing. What was a temporary “carve-out” has been extended twice since 1998, and the future of the New York SBHCs financial arrangements remains in question. [xv]

Dallas, Texas. One of the first “modern” SBHCs was established in Dallas in the 1970’s, and since then clinics have enjoyed a long history of support from the local government and the Dallas Public School System. The school district has partnerships with County hospitals and the Department of Mental Health to provide services to students. The total operating budget for the 10 SBHCs is approximately $4 million annually. Local support from the city, county and school district amounts to 87% of that budget. The funds come from various sources, including Title XI moneys used for coordinating services. The state of Texas also spends $1.4 million of its MCH grant on SBHCs. Managed Care as a mainstream provider network has recently reached Dallas. School clinics had never traditionally participated in third party billing, but the District and providers are now evaluating mechanisms to pursue these types of revenue. The Dallas system has been fortunate to have strong local community support, but the changing medical environment will determine how sustainable these sources of funding prove to be in the near future.[xvi]

The examples above make it clear that other parts of the country face similar funding challenges as those in Los Angeles. In fact, California has had a relatively long track record of managed care influence on the health marketplace. This experience and the generally small financial and regulatory support from state government makes Los Angeles’ SBHCs potential leaders in alternate methods of clinic financing. The following section looks at various approaches to financing and finance reform, pointing out areas where LAUSD clinics excel and making recommendations for improvement.

III. APPROACHES TO FINANCING SBHCs

There are numerous ways to approach the subject of financing reform for entities such as school-based health clinics. On one level there is the need for funding of basic health care services at the clinic. Many of the sources of revenue discussed in Section II aim to meet this need. Unfortunately in many cases funding falls short of coordinator and provider expectations, and sustainability of clinics comes into question. Beyond the level of basic health care funding is the idea of expanded services. Some of the programs already incorporate a variety of services (education, social services, mental health, etc.). In this light the school becomes a platform for multidisciplinary services, services that work toward the common goals of student health, well being and subsequent school readiness.

Expanding school-based services beyond the traditional academic scope can be both beneficial and burdensome in terms of financing. With more services and a wider scope of work, more sources of funding may be tapped. However, falling outside the narrow eligibility requirements of categorical funding streams creates problems for programs that approach service through unconventional methods. Understanding integrated services allows program planners to utilize new approaches in not only infrastructure and implementation, but financing mechanisms as well.

The following sections look at different approaches to financing health and other services in schools (Table 3). These approaches focus on realistic steps that can be taken (or have been taken) in the current political and economic atmosphere. Most of the approaches can be examined to some degree at different levels of implementation (school/district, county, or state) and attempts will be made to explore the topics from these differing perspectives. However, certain financing methods lend themselves naturally to local efforts, while others need broader state and federal government actions.

|Table 3: Approaches to Financing School-Based Services |

|Approach |Definition |Examples (see text for abbr.) |

|Maximize efficiency |

|Redistribution/ |Strategic placement of key staff in areas of |CHAMP |

|co-location |high need or at sites alongside staff from |FRC |

| |other agencies. | |

|Redeployment |Shift of funding from high-cost or inefficient |Preventative services (CHDP, screening |

| |programs to lower cost and efficient service |programs) vs. disease treatment |

| |provision. | |

|Strategic audit |Comprehensive data collection on the needs, |LAUSD Health and Strategic Mapping Project |

| |gaps, local resources, and community capacity | |

| |to guide District planning. | |

|Maximize public and private revenue |

|Leveraging public |Strategy to draw down public funds for which |HSP |

|funds |program participants are eligible; usually |MCH block grant (in other states) |

| |using program or local expenditures as “match” | |

| |money to qualify. | |

|Refinancing |Type of leveraging that describes using funds |LEA Medi-Cal billing |

| |displaced by public monies (drawn down) for | |

| |expanding base of program funding. | |

|Administrative |Program reimbursement for certain |MAA |

|claiming |administrative activities pertaining to federal| |

| |programs (Medicaid and Child Welfare). | |

|Maximizing subsidies & |Recognizing and helping families and programs |Encouraging student/family enrollment in |

|discretionary grants |pursue the subsidies and grant programs for |Medicaid or program in pursuing grants |

| |which they are eligible. |(also see external grant section) |

|Increase flexibility of funding |

|Pooling |Combining funds across (state) agency lines to | |

| |allow less restrictive and more comprehensive | |

| |funding. | |

|Master contracting |Negotiating a single contract from multiple |The Door (NYC) |

| |funding agencies to create efficiency and allow| |

| |greater response to local need. | |

|Approach |Definition |Examples (see text for abbr.) |

|Coordination |Aligning categorical funds at the program level|ELC |

| |to create comprehensive services. |Hope Street Family Center |

|Decategorization |Elimination of categorical nature of funding, | |

| |allowing maximal flexibility for local | |

| |initiative financing. | |

|Public, private and community partnerships |

|Partner to access public |Meeting certain grant or initiative eligibility|21st Century Learning |

|and private grants |may require partnerships between different |Center |

| |organizations. |Healthy Start |

|Partner to effectively |Provider organizations often provide the means |PPP |

|access billing |of billing for health services. |FQHC |

|mechanisms | |MCO |

|Partner to provide mutual |Partnerships grow out of need or incentive. | |

|benefit |Both partners should have potential gains from | |

| |collaboration. | |

|Partner to increase |Partners can bring increased notoriety, | |

|community and |leadership and support from different public | |

|political support |and private factions. | |

A. Maximize efficiency of current operations

Significant resources are currently invested in the health (and social) services offered to students through the District and other public and private local programs. An initial step in financing reform would be to revisit the organization of these programs in an effort to make more efficient use of existing resources. One of the key aspects to maximizing efficiency is having the data at hand to make well-informed decisions on distribution and allocation of resources. This project was not intended to collect specific data needed to guide such decision making. However, it was observed during the course of interviews that certain steps have already been taken to increase efficiency and conserve resources, while other efforts are underway. The issue of information collection will be revisited at the end of this section.

1. Redistribution and co-location of staff. LAUSD has numerous personnel dedicated to the health of students. There are approximately 500 school nurses, 21 nurse practitioners, 9 physicians, 350 mental health counselors, and numerous ancillary health staff.21 This does not include the provider-sponsored staff members located at SBHCs or providing services at campuses through alternate means (ie. mobile van clinics). These critical personnel investments by the District and Providers need to be evaluated and optimized in their distribution. The District could benefit from data collection (ie. a strategic audit) to determine exact needs and resources in a community. Projects such as the LAUSD Health Mapping Project contain data that could be used in conjunction with other District and County data to guide resource distribution planning.

Beyond the school district personnel, redistribution of staff could also include county and even state level personnel. By co-locating some of the services offered at County offices on school campuses it may be possible to operate more efficiently by providing clients “one-stop shopping” access points.[xvii] One example of this has occurred to some degree through the Children’s Health Access and Medi-Cal Program (CHAMP). This district program provides outreach and enrollment into medical insurance programs using a cadre of trained staff and volunteers that partners with other County departments and organizations (DHS, DPSS*, Healthy Start). By locating on school campuses easier exchange of information takes place and convenience is optimized for clients. CHAMP has resulted in increased enrollment rates, which translates into better health services for the child and potential reimbursement for medical providers.

Other examples of co-location are the various Family Resource Center (FRC) initiatives in Los Angeles Country. County workers from various departments (ie. health services, mental health, public and social services, children and family services, probation, and local school districts) are housed under one roof to promote convenience and integration for families that utilize multiple public services. Given the physical proximity and status as a community institution, schools prove to be optimal sites for this type of staff redistribution effort.

2. Redeployment of resources. Redeployment refers to the transfer of resources (usually monetary funds) from high cost or inefficient programs to lower cost undertakings. Often the programs that are preventative in nature show greater cost-benefit ratios.[xviii] One of the fundamental goals of school-based programs is to focus on primary, preventative care in order to identify students’ problems early before they become exacerbated conditions with high morbidity and costs. The District already has many examples of screening programs that focus on prevention and early detection (CHDP exams, vision and hearing screening, communicable disease prevention, etc.). However, it can still be argued that the District experiences high costs associated with decreases in student productivity and educational attainment secondary to preventable medical, dental and mental health disease sequelae.

Preventative services and early intervention represent areas where the District should focus larger investments. It is easy to voice support for such a cause, but much more difficult to shift money away from crisis-driven services to preventative health. One of the glaring examples of high costs “downstream” is the problem of dental caries. A survey of California children in 1994 reported over 2/3 of elementary and high school children had experienced tooth decay. One out of five 10th graders was in need of “urgent dental care for extensive decay, pain or infection.”[xix] This has lead to millions of lost school hours and high restorative costs to the insurer or family. Investment in school-based or linked dental programs, including screening, sealants and early referral for treatment, would not only be cost effective, but makes sense when the majority of students suffer from this “epidemic.” In this case, the redeployment of resources may need to take place at the County provider level, where much of the treatment costs are incurred. Other student disease processes that could benefit from early intervention and prevention include asthma and certain mental health conditions.

3. Strategic audit. As stated in the beginning of this section, many of these recommendations rely on accurate data collection and analysis. Without information on the exact needs and resource capacity of specific areas, planning and effective program implementation is difficult. Currently, the District and Providers are engaged in developing a SBHC Management Information Report (MIR) to gather data from the clinics on an annual basis. The drafted form includes information on utilization (number of encounters), health insurance status, service provider type, diagnoses and services rendered. This will be a first step in District clinic data collection. But further efforts are needed to compile comprehensive health data for the entire District, including information on the many individuals that do not attend a school with a SBHC. In 1999, the District compiled extensive local community resource information in the Health and Strategic Mapping Project.4 Updated information on service providers, organizations and facilities in the District complexes would prove valuable in the ongoing efforts to determine community capacity and local area need. In some of the following sections, the issue of accurate data collection will continue to present a formidable issue when considering financing and policy making.

( Recommendations to maximize efficiency of current operations:

• Analyze staffing situation in schools and SBHCs to determine optimal use of District and Provider personnel. Consider placing staff in key areas of high need and bringing clients to central locations/clinics when necessary.

• Encourage schools to function as “one-stop shopping” resource centers. This requires redistribution and co-location of District, County and possibly State staff to areas of greatest need and potential utilization as key access points.

• Analyze areas of high cost for the District and where possible shift funding to programs that are lower cost and preventative in nature (ie. prevention, early detection and intervention of dental caries, asthma and mental health conditions). Encourage Providers to undertake these types of analyses within their own systems of care.

• Perform a comprehensive strategic audit on District populations, their health and service needs and the resources available to fill those needs. Collect ongoing data to guide future programmatic change.

B. Maximize public and private revenues

The government at the state and federal level has numerous programs to benefit students, families and communities. An understanding of the general types of programs and their eligibility requirements is critical for effective financing of specific programs. The general trend in governmental regulation has been one of devolution, taking the responsibility and decision making away from centralized, federal government and putting it into the hands of states.13 This has been evident in the expansion of block grant appropriation of funds and federal initiatives such as the State Children’s Health Insurance Program (S-CHIP, 1997), which is designed and implemented by the states. Certain federal funds are entitlement funds, which are uncapped sources available to all who meet the eligibility requirements (ie. Medicaid). Government agencies also support two types of grants: block and discretionary or competitive. Block grants are formula based, fixed sums of money granted to states for deployment (ie. MCH). Discretionary grants are competitive capped appropriations that usually require a demonstrated need for a targeted population (ie. Head Start). All three of the above funding types may require matching funds from the local or state agency. If a local agency is already paying for services (ie health), then it would be prudent to determine if any of the recipients are eligible for federal, state, or local programs and make efforts to maximize enrollment in these programs. Making the most of these opportunities (both public and private) is the subject of this section.

1. Leverage and refinance programs with public funds. Leveraging describes a strategy to “draw down” eligible funds for a particular population. These funds are usually obtained from entitlement or block grant programs and require that the program demonstrate a certified public expenditure (CPE) under state or federal guidelines. Refinancing is a corollary to leveraging, it expands the funding base by substituting program expenditures with drawn down government funds. For example, a local program spends one dollar on a service for a client that is eligible for a federally funded entitlement program. The local program should claim the service as a CPE and receive government reimbursement (if the rate is 50%, then the program gets 50 cents); this leaves half the original program money (50 cents) available to refinance other programs that may not be eligible for federal match. In some instances leveraging requires new monies to be invested in order to realize the maximum federal funding allocation. Local leveraging can also occur in securing the maximum block grant allocations, if the state does not put up enough money to draw down the maximum federal allotment.[xx]

Healthy Student Partnership. The most obvious federal source from which health entitlement dollars flows is the Medicaid program. In 1999, Los Angeles County, LAUSD, and other participating districts made an attempt at leveraging significantly more Medicaid dollars for services provided to students in the County’s school districts. The Healthy Student Partnership (HSP) Program was proposed as an amendment to the Los Angeles County Medicaid Demonstration project under the existing 1115 waiver. The County’s demonstration project has been shifting service of Medicaid recipients out of the expensive inpatient arena to more efficient comprehensive outpatient settings. The HSP amendment essentially requests matching federal dollars for the health service expenditures (considered CPEs) incurred by the districts. These services extend reimbursable care to all Medi-Cal eligible children, not just those with special health care needs. Furthermore, the proposal sought to expand health services through school-based and school-linked models of care, complementing the County’s existing Public-Private Partnership program. Given Los Angeles County school districts’ expenditures of $174 million in 1998/99, it was possible to claim up to $87 million in federal match.[xxi] Unfortunately, the County’s Medicaid waiver expired this year and the extension granted provides a significantly smaller proportion of Federal aid. The HSP amendment was not approved with the waiver extension. Many districts, providers and SBHCs held high hopes that the HSP would bring new life to dwindling health funds for students, now the proposal is viewed my many advocates as “dead.”

Although the formal request to leverage federal dollars directly through the HSP proposal has not been realized at this current juncture, it does not mean that Medicaid dollars are out of the SBHCs’ reach. It may be necessary to continue to pursue claiming expenditures through more traditional means, namely billing for reimbursement. Although S-CHIP (Healthy Families) is not an entitlement program, it receives an enhanced federal match rate. Any reimbursement through Medi-Cal or Healthy Families is essentially drawing down federal dollars (albeit one at a time) and is worth pursuing if substantial numbers of students fall under the eligibility criteria for these programs. The drawback of this type of billing (leveraging) is the fact that only enrolled children will receive reimbursable care. Under HSP, Medi-Cal eligibility was presumptive based on other means-tested criteria (ie. free and reduced price lunch program) which would allow “bulk” enrollment of large numbers of uninsured children.21 If a student actually has to sign-up (with parental consent) and be able to identify the school as a primary care provider, then the numbers of eligible, enrolled participants quickly dwindles. Clearly, increased outreach and enrollment in health insurance plans will continue to play an important role in leveraging entitlement funds. Traditional means of collecting Medi-Cal and Healthy Families reimbursement is explored further in the section on partnerships.

LEA Billion Option. This billing option represents a method of refinancing school health programs using leveraged Medicaid funds. The state of California recognizes that Medi-Cal services are provided in many different forms to students in the many school districts. Therefore, in 1993 the Department of Health Services allowed Local Education Agencies (LEAs, school districts) to bill for health services provided to Medi-Cal enrolled students by qualified Medi-Cal providers. Most services claimable are health assessments and rehabilitative services to children with chronic illnesses.[xxii] This LEA Billing Option is a leveraging tool that generates $6 million a year for LAUSD, which is used to refinance SBHCs through a grant process that allocates $75,000 (on average) to reporting clinics.[xxiii]

Block grants. Another possible area from which federal funds are leveraged is through block grants, the largest for health services to children is the Maternal and Child Health Service Block Grant (Title V). California does not use Title V monies for SBHCs, although many states do (including North Carolina, New York, Louisiana, and at least 22 others).[xxiv] There may be opportunities to change this if state policy makers can be convinced of the need to appropriate MCH dollars to fund SBHCs. Other block grant programs from which it may be possible to claim some of the services that occur in SBHCs are the Special Education Grants to States (IDEA, part B, D), Community Services Block Grant (Title VI), Social Services Block Grant (Title XX), Title I Grants to LEAs, and Temporary Assistance to Needy Families (TANF, CalWorks).13, 17 Some of these block grants may be accessed by partnering with agencies and offering the services for which the funds are specifically designated. More on partnering and pooling of funds in the following sections.

2. Administrative claiming. Some programs, such as Medicaid and Foster Care (Title IV-E) allow for reimbursement for activities such as case management, outreach and eligibility determination, referrals, transportation, interagency planning and coordination.20 For Medicaid, administrative activities are matched at a federal rate of 50%, while training activities are matched at 75% of expenditures.13 Since schools provide many of these services to Medicaid eligible children and families, claims can be made for federally matched reimbursements. One of the drawbacks to administrative claiming is the requirement of accurate documentation of activities rendered. This is accomplished through a one-month time survey study, which many LEAs find too burdensome for the amount of dollars eventually claimed. With a large absolute number of Medi-Cal eligible families, LAUSD is embarking upon Medi-Cal administrative activities (MAA) and expects to claim approximately $4 million yearly in reimbursements.23 Continued or expanded administrative claiming should be explored, with great care taken to follow federal regulations and avoid making claims under different programs (“double dipping”). The key to both leveraging and administrative claiming is not only the amount can be claimed, but that the local funds that were displaced by federal dollars are reinvested in programs that benefit the target population.18 Unfortunately, this will not be the case for the first year of MAA reimbursements where dollars will flow to general district funds, earmarked for salary negotiations.

3. Maximize subsidies and pursuit of discretionary grants. Maximizing subsidies describes a processes which should occur naturally: individuals eligible for public assistance programs should be enrolled and receiving services from these programs. Unfortunately, this is not always the case and programs need to help outreach, enroll and enable children (and their families) to benefit from the services for which they are entitled. An example of an underutilized federal program is Medicaid, and numerous previous examples in financing SBHCs have depended on student enrollment in this program. Program staff need to be knowledgeable about the clients they serve and the numerous programs targeted to specific populations. This may also require communication or cross training of personnel to recognize families that are eligible for programs across disciplines. In the SBHC setting, knowledge of a child’s eligibility for the Free or Reduced Lunch Program could lead staff to encourage enrollment in other programs (ie. Medi-Cal or Healthy Families).

Maximizing subsidies goes beyond the individual and also applies to programs that serve these individuals. Besides federal and state funds that are entitlements or block grants, advocates have always had the option of pursing discretionary or competitive grants. These grants are offered by all levels of government, as well as through private foundations and agencies (see Appendix 2). Obviously, many of those involved in SBHCs are very adept at securing funds in this manner, as seen by the prevalence of external grant support for clinics. In Los Angeles, the earliest SBHCs were supported by national grants from the Robert Wood Johnson Foundation, which have since expired. In 1991, the state of California, through the Department of Education, instituted a grant program called Healthy Start (SB 620, Presley). Healthy Start is not necessarily a direct funding mechanism of services, but rather a method of fostering collaborative provider arrangements and community participation. The state allocated $39 million in grants during FY1999 ($50,000 for planning and $100,000 for operational activities).[xxv] LAUSD houses approximately 120 Healthy Start sites, making this grant program a significant direct and indirect funding source for the health activities in the District.21

Another source of funding specific for the LAUSD has been the previously mentioned SBHC Support Fund. Support comes from philanthropic groups and paycheck contributions. The Fund has limited revenue and currently supports six clinics, granting $100,000 to $185,000 per year. There has been increasing need for both operating budget and start-up support for all of the District’s 37 functioning and pending clinics. The Fund advisory board should re-evaluate its direct role in the day-to-day operations of the various clinics. Since the Fund is the one block of money over which the District has complete control for school-based health services, efforts should be made to optimize this limited resource. Some of the strategies described in this paper could be employed as methods to meet this end. Furthermore, enhancement of the Fund through increased revenue generation would help the District in supporting all of the clinics in a more strategic and equitable manner.

( Recommendations to maximize public and private revenue:

• Maximize leveraged federal Medicaid dollars through existing reimbursable mechanisms: Medi-Cal LEA Billing Option and Administrative Activities (MAA).

• Re-evaluate methods of claiming Medi-Cal expenditures (CPEs) provided to students through the District and its providers. Continue to push policy makers on the need to recognize school health services as a significant system of care for the underserved and uninsured, and requires compensation that is granted to other county providers.

• Encourage state policy and lawmakers to allocate part of the state MCH block grant to support health services in school, such as SBHCs.

• Determine ability to leverage other block grant and entitlement programs through the services provided at SBHCs (ie. Social Services or Community Services Block Grants).

• Continue to maximize subsidies for eligible populations through aggressive outreach and enrollment into programs such as Medi-Cal and Healthy Families.

• Pursue discretionary grants to the maximum ability according to eligibility and program need.

• Encourage supporters of the LAUSD SBHC Fund to increase support for the growing number of clinics in the District. Consider reallocating funds in order to maximize effectiveness as both short and long term investments.

D. Increase flexibility of categorical funds

One of the stumbling blocks to greater reform in the current system is the categorical nature of funding. Historically, funds from most government and private parties are earmarked for specific services for specific populations. However, this narrowly defined allocation method drives the system into polarized categories or camps. The categorical nature of the established service system can be seen in the training of personnel, the physical location of programs, and the eventual delivery of services. This type of system fosters specialization, duplication of efforts, inconvenience and ineffectiveness. Since programs and personnel are compensated based on the delivery of a narrowly defined service to a specific population, they would do well to stay within the boundaries of their allocated funding stream description. Thus, the services are ultimately driven by the funding system, and not necessarily by the immediate needs of the child, family, or community. Increased flexibility would allow programs to deliver services that are needed by the population and could encourage increased coordination and integration between providers, working for a more comprehensive system of care.

1. Pooling. Pooling describes a strategy to increase flexibility for local program discretion by comingling funds across agency or service sector lines.[xxvi] Pooling of funds typically occurs at the state level20 and can include monies from federal block grants or other funding sources. This strategy becomes most effective where multiple services are offered under one comprehensive program. Instead of negotiating separate arrangements with different state or county agencies a program may effectively pool resources under a “master contract.” This master contract allows greater flexibility for programs to provide needed services in the manner they see fit while streamlining the administrative burden of negotiations, payments and reporting under one contracting state agency. One example of master contracting is found in the New York City program, the Door. This youth service program houses comprehensive health, education, career, substance abuse prevention and treatment and other support services under one roof.20 The Door has negotiated a master contract with the State of New York, bypassing the need for complicated and repetitive contracting with different agencies.

As schools incorporate more health and social services, the issue of multiple funding sources becomes more burdensome. School districts already have contracts or funding arrangements in place to provide education and certain health and social services for the State. Packaging a comprehensive set of services for school-based utilization presents an attractive and proactive method of service distribution. These packages of services could encourage pooled funding, with master contracts as a logical financing mechanism. Schools and districts need to work with County and State officials in order to open the doors for negotiations that may ultimately create standard funding pools to better serve multiple needs populations.

2. Coordination. While pooling describes a strategy to increase categorical funding flexibility at the state level, coordination refers to a similar strategy at the program or local level. Coordinating involves garnering separate categorical funds and using them to support comprehensive services in a seamless manner. Coordination has also been termed “back office brokering”[xxvii] since it requires a high degree of behind the scenes organization, record keeping, and skill to effectively deploy money for services while maintaining accountability to funding agencies. Two examples of coordination funding follow, one in an LAUSD school, the other in a community hospital.

Elizabeth Learning Center (ELC) houses a pre-K to 12th grade school with multiple health and human services on-site for students, their families and the community. Over the years ELC has partnered with multiple agencies and received several grants to support the array of offered services. Administrators now coordinate close to 20 sponsors and funding streams, including LAUSD funds, Head Start, state pre-school, Medi-Cal, CHDP, Healthy Start and numerous grants and in-kind support all in an effort to provide a seamless model of care for students and community.34

Hope Street Family Center also provides coordinated services that revolve around development and educational social services for students ages infancy to high school and their parents in an impoverished neighborhood of Los Angeles. The comprehensive, hospital-based center combines funds from multiple sources such as LAUSD, Head Start, Childcare and Development Fund, Early Head Start, Adult Literacy programs and LA County DHS. The Center is also linked with many resources sponsored by the California Medical Center, including the SBHC at Foshay Learning Center. The multiple needs of the families in the area require that the Center creatively coordinate different funding streams in order to provide blanket services to all of the participating families. This type of coordination takes significant skill and resources from the Hope Street Center administrators as they attempt to provide the most convenient and comprehensive services for this grossly underserved neighborhood.

3. Decategorization. Decategorization goes one step beyond pooling by essentially removing restrictive eligibility requirements and programmatic boundaries that separate funding streams.20 The end result is maximized spending flexibility by locally driven initiatives without the narrow limitations and accountability restrictions of traditional government programs. This strategy usually requires state administrative approval since much of the funding allocation plans occur at this level of government. As more latitude is given to the states through increased devolution and block grant funding, opportunities become available to encourage policy makers to develop state plans with the maximum amount of flexibility to simplify the pursuit of comprehensive, community-driven service programs.

A final note about the strategies of pooling, coordination and decategorization, they all require some degree of integration. This implies that entities such as SBHCs must look beyond the single issue of health care and envision a more comprehensive service system. Furthermore, the subject of service integration opens up many more issues beyond strict financing. One of the critical issues that emerges with increased funding flexibility is different forms of accountability and need for broader results-based indicators.18 Decategorization and pooling initiatives do not occur in a financing vacuum, they require system-level changes across many disciplines. These strategies challenge SBHC administrators to broaden the scope of their services and pursue partnerships that will recognize the multifaceted needs of LAUSD students.

← Recommendations to increase flexibility in funding:

• Encourage strategic coordination of funding comprehensive service programs. This may include making District funds flexible and available for planning and filling in any gaps in service provision.

• Work with state officials and policy makers to develop methods for pooling funds between agencies. The district should pursue creative contracting methods (master contracts) with state or county agencies for services that are comprehensively packaged for school-based distribution.

• Recognize the need for larger system changes that come with increased funding flexibility. The District and County should examine the issue of results-based accountability rather than relying on old performance indicators that are not congruent with integrated system change.

E. Public, private and community partnerships

Service integration has come to the forefront as a mechanism for providing for today’s children and their families. But integration starts with partnerships. The idea behind partnering is the fact that some services can be provided more efficiently when agencies with similar or overlapping goals work together toward those objectives. The prime example in this instance is health and education. The concept of housing health services on a school campus speaks to the need to make services easily accessible and “user-friendly.” Moreover, the partnership between a public institution (school) and community or private clinics or hospitals makes for new and creative financing mechanisms. Each entity brings their own resources to the table, and the partnership may make more funds accessible though a collaborative process.

1. Partnership to access public and private grants. Government agencies realize the importance of collaborative relationships. Many of the newer funding opportunities require or encourage agencies to seek partners in the local community to help initially fund (match) or sustain the program beyond the terms of the grant. The 21st Century Community Learning Center grants were formulated to assist schools in inner cities to collaborate with community organizations and provide an array of services to students, families and their communities.13 The California Healthy Start grants also embrace collaboration and grantees are required to partner with other organizations in order to deliver selected services and plan for post-grant sustainable resources. Public programs are not alone in the pursuit of partnership building initiatives, national and local private organizations also make funding available to programs that demonstrate collaborative arrangements (ie. Pew Charitable Trust, Carnigie Corporation, Stuart Foundation, Foundation Consortium).17

2. Partnership to effectively access billing mechanisms. School-based health clinics were not created to generate substantial revenue from third party payers. Many clinics have avoided any billing due to the technical logistics involved and the issues that surround billing (need for enrollment, documentation and confidentiality of teen services). However, with shrinking government and external grant support, clinics have been forced to seriously consider third party billing as a mechanism for future sustainability. Considering the clientele of SBHCs, there are at least three types of provider partnerships that warrant discussion in Los Angeles County: Public-Private Partnership, Federally Qualified Health Centers and Managed Care Organizations.

Public-Private Provider Partnership (PPP). The PPP was created as a mechanism of garnering federal fiscal relief for the County system that had experienced massive expenses from uninsured, indigent populations. Under the 1115 Medicaid waiver, providers (public and private) can contract with the County to provide care for uninsured poor patients for a modest, all-inclusive reimbursement rate (approximately $62 per visit).[xxviii] In this way, the PPP system has allowed Medi-Cal providers to continue to provide care for the County’s burgeoning uninsured and underserved population. The County has over 150 partnerships and has stopped any further PPP contracting. Although most of the non-hospital providers for LAUSD’s SBHCs are in the PPP system, schools are not considered part of the network. Therefore, reimbursement for services only occurs if patients are referred to the Provider’s community clinic for further care. This defeats the purpose of a school-based clinic in terms of convenience and accessibility. Building on the work of the HSP, LAUSD and providers should continue to explore options for SBHC reimbursement under the Medicaid waiver. Government policy-making agencies need to consider the patients served at these clinics and re-evaluate their commitment to providing services to truly underserved populations.

Federally Qualified Health Centers (FQHC). Clinics that are FQHCs are designated to provide services to high-risk populations in underserved areas. FQHCs meet certain governance, financial status and clinical requirements set forth by federal law. In return for their services to Medi-Cal enrolled patients, clinics are paid on a cost-based reimbursement (CBR) scale which is considerably more lucrative than straight Medi-Cal (approximately $83 per visit vs. less than $20 per visit). Furthermore, federal grant money is allocated to certain FQHCs that meet criteria of serving specific populations (migrant, homeless, American Indian, etc.). FQHC “lookalikes” are more commonly found in areas that do not serve these designated populations but meet the other federal criteria. “Lookalikes” are entitled to CBR for Medi-Cal services, but do not receive federal grants.[xxix] San Fernando High School’s SBHC is designated as a FQHC lookalike since its Provider (NEV) has FQHC status. This allows the SBHC to receive substantially more reimbursement from Medi-Cal, which is reflected in the relatively large amount of the operating budget (30%) that is accounted for by reimbursements.[xxx] Although the clinics can bill for CBR services, to truly maximize the status depends heavily on ensuring optimum enrollment of Medi-Cal eligible patients. Furthermore, there is discussion as part of the current Medicaid waiver extension to make all of the County PPPs into FQHCs. This will make school clinics and FQHC partnerships more commonplace in the future.

Managed Care Organizations (MCO). The final partnership to consider for reimbursement purposes is that with managed care organizations. As mentioned before, SBHCs have remained largely outside the mainstream health financing mechanisms. However, as the District, County and State agencies work to increase the enrollment of children and their families into Medi-Cal and now Healthy Families (California’s S-CHIP), reimbursement increasingly flows through MCOs. Managed care partnerships vary across the nation: Connecticut requires MCOs to contract with SBHCs as providers; Colorado encourages partnerships, but does not require them; New York has created a “carve out” of SBHC services apart from the traditional managed care contracts.[xxxi] Some arrangements involve full capitated payment to the SBHC, others are a partial capitation arrangement between the SBHC and the primary care provider. Still others SBHCs function on a negotiated fee schedule with plans and providers. The variety of stages of negotiation around the country indicates that this process is quite malleable and administrators will be looking for best practices to model their agreements. In Los Angeles, San Fernando High School has been in negotiations with its Provider organization (North East Valley Health Corporation) and L.A. Care (the County’s major Medicaid managed care plan), to function as the primary care provider for eligible students and receive capitated payments for their care. Those involved with these negotiations realize the numerous issues that need resolution before successful contracting. One of the more successful states with MCO and SBHC partnerships is Colorado. Their experience is illustrative of the process that is needed before and during successful contracting.

The Colorado political climate is one of an anti-regulatory state. The governor and legislature majority are Republican and although relationships between MCOs and SBHC are encouraged, they are not required. Plans must make a “good faith effort” to establish relations.[xxxii] Medicaid managed care is expected to reach the year 2000 goal of 75% enrollee participation. Furthermore, the S-CHIP in Colorado relies heavily on MCOs. In 1999, the state had 31 SBHC, of which 20 had managed care contracts. The agreements take on various forms, but the Kaiser arrangement is used to illustrate the process.

Kaiser (and two other contracting plans) agreed to a 30-month pilot (1/97-7/99) which it called “Kaiser School Connections”. This was a subsidized premium program where SBHCs identified uninsured children who met income criteria ( ................
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