Integrated funding streams across the health and human services continuum

This blog series “Uniting funding streams for health and social innovation” is a collaboration between the Urban Institute’s Pay for Success Initiative (PFSI) and The Brookings Institution-hosted Braiding and Blending Working Group. Though not every post is focused on pay for success, the working group and this blog series aligns with the PFSI mission of researching and supporting innovative financing solutions to today’s most pressing challenges. This series highlights the research of experts in healthcare financing focused on creative approaches.

Health and human services agencies aim to support families and protect children. People that receive health and human services (H/HS)—such as Medicaid, child welfare, cash assistance (TANF), “food stamps” (SNAP), and child care—face challenges with multiple root causes. To successfully address these root issues, it is important to bridge programmatic H/HS siloes. Program and agency integration promotes multi-faceted solutions for individuals and families and is anchored in seamless information exchanges, which facilitate coordinated care delivery, efficiency, and holistic payment models that reward outcomes rather than inputs.

H/HS agencies at all levels are working to shift from siloed, program-centric models toward ones that put people, families, and communities first. Funding and technical mechanisms for such work exist, such as the A-87 cost allocation exception described below, and they have laid the foundation for comprehensive program and case management to better serve families. 

Federal Funding for State IT

Innovative, integrated funding streams can incentivize improved coordination and information sharing between agencies. Most funding opportunities are tied explicitly to individual programs, such as singling out some dollars for the exclusive use of the Medicaid program or other dollars to be used only for child welfare. But an example of a braided funding stream that has existed since 2011—and that is expected to sunset at the end of this year—is the A-87 Cost Allocation Exception.

The A-87 Exception presents an opportunity to transform the H/HS delivery system. It allows states to build integrated technology systems, without having to allocate the costs of developing shared information system services to human services programs. Instead, the costs are allocated to Medicaid, offering a fiscal incentive for states to take on large-scale IT projects that would otherwise be funded and guided by multiple federal agencies. This integrated funding mechanism allows good business design to apply across a broad range of programs and services. It also contains costs; improves customer service; enhances security, privacy, and program integrity; and improves outcomes for children and families.

State Examples: Indiana & Connecticut

Approximately 30 states have taken advantage of the A-87 Exception in some form. In Indiana, 1 in 7 adults under the age of 65 is covered by Medicaid. In addition, 1 in 2 low-income individuals, 2 in 5 children, 3 in 5 nursing home residents, and 2 in 5 people with disabilities are covered. Through Indiana’s Family and Social Services Administration’s (FSSA), Temporary Assistance for Needy Families (TANF), the Supplemental Nutrition Assistance Program (SNAP), and Developmental Disability programs, these individuals and others have benefited from the A-87 Exception due to the state’s new integrated eligibility and enrollment (E&E) system. The E&E’s components are designed to be universally helpful to all of these program participants because of the interconnectedness of clients’ needs and associated programs. In addition, individual program dollars that would have been used to build out, and possibly duplicate, functionalities are now directed at program-specific contributions to address cross-cutting challenges, such as the opioid epidemic. Indiana is currently engaged in a multi-faceted, integrated response to the addiction crisis, greatly enhanced as a result of the A-87 Exception. The eligibility infrastructure has also been leveraged to support projects that identify and address critical health issues in the state. For example, Indiana collected and disseminated data on naloxone administration locations, which can help identify local trends on suspected opioid overdoses specific to a given timeframe.

Connecticut has successfully leveraged the A-87 Exception across several key initiatives that are important to the state’s “no wrong door” approach to integrated eligibility determination and customer support. Specific initiatives benefitting from the Exception include replacing the Department of Social Services’ (DSS) case and eligibility management system. The project integrated assets from the state health insurance exchange to increase collaboration between the Medicaid insurance exchange and DSS for serving its residents.  Most importantly, this project succeeded in adding economic assistance programs that support the nutritional and economic wellbeing of families accessing Medicaid. 

States and federal agencies alike hope to increase interoperability and integration, not just to address specific benefit applications, but also to reach root cause issues and the social determinants of health (SDoH). The more we wrap services around individuals who access many of the same programs, the more capable we are of holistically addressing the SDoH. None of that is possible without the nuts and bolts of integrated case management and linked data systems. And neither of those are possible without some funding stream like the A-87 Exception that cuts across artificial program boundaries. Although the A-87 Exception will sunset at the end of this year, state and federal leaders should develop other incentives to reorient our health and human services systems toward integrated health and wellbeing outcomes for communities, rather than solely on check lists and compliance.

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The views expressed in the series are those of the authors; as an organization, the Urban Institute does not take positions on issues. Experts are independent and empowered to share their evidence-based views and recommendations shaped by research. Photo via Shutterstock.