The FastPass Theory: Family First Act, Medicaid and Speed

The Family First Prevention Services Act requires the establishment of an evidence-based clearinghouse

Youth Services Insider continues this week’s geek-out on the recently released Family First Act guidance with a look at what may end up being the most complicated part of it: how this law interacts with other federal programs, namely Medicaid.

The program instruction (PI), issued by the Children’s Bureau (CB) at the Department of Health and Human Services, lay out a tricky hierarchy for when Family First Act can pay for services, and when the funds must come from another stream. This could muddy the waters on the potential for Family First to be a more agile funder of time-sensitive intervention.

Here is a breakdown of what last week’s PI envisions on the subject of payment priorities,  followed by a few thoughts on why this is an important part of the discussion on Family First.

Back of the Line

The front end of the Family First Act affords states the ability to use the Title IV-E entitlement, currently reserved for foster care and adoption costs, to pay for services aimed at keeping families together during a child welfare intervention. Three types of service are permitted: substance abuse treatment, mental health services and parenting skills.

Medicaid already allows states to draw down federal dollars for certain models of service within those categories. That does not mean every state does, though: some state Medicaid plans offer expansive coverage of addiction treatment, and others offer very little. And even in states with good coverage, there can often be a waiting list to receive treatment.

Per CB’s instructions last week, the new IV-E foster care prevention services should be considered a “payer of last resort” in the hierarchy of federal funding streams. The text, directly from the PI:

If public or private program providers (such as private health insurance or Medicaid) would pay for a service allowable under the Title IV-E prevention program, those providers have the responsibility to pay for these services before the Title IV-E agency would be required to pay.

For example, if a parent with Medicaid coverage is receiving mental health services that would be covered by Medicaid, and that are also allowable under the Title IV-E prevention program, Medicaid must pay for the service before the Title IV-E portion (if any) is paid. This provision in effect makes title TV-E the payer of last resort for Title IV-E prevention services in this instance.

Translation: If a state’s Medicaid plan can pay for it, the Medicaid plan should pay for it. Youth Services Insiderheard from one adviser, helping several states parse through the law, that the “payer of last resort” guidance will be very complicated for some states.

For example: under Family First, states must spend 50 percent of their IV-E prevention funds on models with the highest rating of evidence, “well-supported.” But those are the most likely programs to have Medicaid approval. So, can a state’s Medicaid expenditures on those models count toward the well-supported quota?

That adviser suggested it was pretty surprising to see that level of bureaucracy written into a program instruction, as opposed to a proposed rulemaking process. The rule promulgation process allows states and other stakeholders to weigh in before anything becomes finalized.

Most states, this person posited, would prefer to have the option of choosing a payer for a given service, as opposed to a directive on hierarchy. For the first several years of Family First, any state that had the choice of spending through Medicaid or IV-E would probably choose Medicaid for financial reasons. Until 2026, the IV-E federal share is 50 percent, lower than the Medicaid match in every state. After 2026, the two match rates are even.

The PI’s language seems to make the usage of Family First prevention services more likely in states with relatively restrictive Medicaid plans. The less Medicaid covers, the more likely it is that IV-E is the only offer of federal reimbursement for services.

FastPass Theory

It was actually an exception carved into the Payer of Last Resort clause that caught Youth Services Insider’s eye, because it addresses a key element of the Family First Act’s framework: timeliness.

Here’s the exception in the PI:

A state may use Title IV-E prevention program funding … to pay a provider for these services to prevent delaying the timely provision of appropriate early intervention services (pending reimbursement from the public or private source that has ultimate responsibility for the payment).

This means that if a child welfare agency needs to use IV-E to ensure a service happens quickly, it can use Family First to pay, even if that service was billable through Medicaid. And in that circumstance, the agency would then be responsible for “billing” Medicaid, or private insurance, to fund the IV-E expenditure.

Our aforementioned adviser described that as an incredibly complex process that states will be challenged to master. IV-E and Medicaid are totally different beasts when it comes to government purchasing and contracting. States would put in a IV-E claim one day, then reconcile its books on good faith that Medicaid or private insurance would pay it back.

“I’m a financial consultant to states, so my business does well when the feds lay out difficult rules,” the adviser said. “But this would be a significant change to billing infrastructure.”

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This complicates what might, in YSI’s humble opinion, be the most impactful aspect of Family First: its potential to connect people to services quickly.

Call it the FastPass Theory. You can take your kids to Disney World, and spend hours waiting in lines for rides. Or you can go for the FastPass and get priority access, maximizing your time on Space Mountain and all the other fun rides.

Let’s say a child welfare agency was dealing with a mom struggling with drug addiction, and absent treatment and a support system, the caseworkers would not be comfortable keeping the family together.

If Medicaid was available for that mom’s drug treatment, they could connect her that way. But it might take months on a waiting list to get her a bed. If workers are truly worried about the safety of the home situation, can they really keep kids at home during that wait time?

Under Family First, an agency could establish a separate IV-E contract for treatment beds, only available for referrals made by the agency through the IV-E prevention plan. Assuming it contracted for enough beds, there would be no competing with every other Medicaid-eligible person in need of a spot. That mom could get into treatment immediately.

YSI has run that theory by several sources in the field, and on Capitol Hill, and all agree that it is entirely plausible. One former county mental health director in California called it “targeted universalism.”

“It’s a workaround to a dysfunctional benefit,” said Alex Briscoe, former director of the Alameda County Health Care Services Agency, who is currently leading a campaign to reform California’s child mental health services. “If we actually administered Medicaid well, if we actually cared enough about poor people, we wouldn’t be having this conversation. But because that’s not reality … I understand why you’d want this.”

The “FastPass” analogy works much better as a binary choice: using IV-E instead of using Medicaid. In a state where Medicaid plans don’t offer much in the way of substance abuse or mental health, the IV-E offer will be relatively attractive.

In states where Medicaid is in play, this PI sets IV-E prevention up behind Medicaid and any other possible payer, which means states will have more to think about.

Join us on Thursday, December 13 for a webinar where Publisher Daniel Heimpel and Editor-in-Chief John Kelly will discuss the Family First Act. Click here to register!

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