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JLARC Examines CSB Funding, STEP-VA Implementation

As part of its enhanced role in evaluating health and human resources programs, the Joint Legislative Audit and Review Commission (JLARC) received two reports on June 17, both dealing with aspects of the state’s publicly-funded behavioral health system. JLARC staff reported on the implementation to date of the System Transformation, Excellence and Performance (STEP-VA) initiative, which, when complete, will establish a standard array of services at each Community Services Board (CSB). JLARC staff also briefed Commission members on a review of the current system for funding CSBs, which was undertaken at the request of the Joint Subcommittee to Study Mental Health Services in the Commonwealth in the 21st Century.

CSB Funding
JLARC staff discussed the complexity of the current funding structure for CSBs, pointing out that CSBs receive the majority of their funding from Medicaid reimbursements, state General Funds, and local contributions. The report notes that the Department of Behavioral Health and Developmental Services (DBHDS) allocates the majority of the state General Funds to the individual CSBs based on historical funding levels, which often reflect funding models that were developed in the past to support particular services or initiatives. JLARC staff note that DBHDS does not take Medicaid reimbursements, which can vary among CSBs, into account when allocating state funding.

The report also points out that DBHDS does not factor local ability to pay into its methodology of distributing state General Funds, unlike other state-local funding formulae, such as the Local Composite Index, used to determine state and local shares for funding the K-12 Standards of Quality, or the funding formula for local health departments. Currently, Virginia law provides that the state’s contribution to a CSB may not exceed 90 percent of the CSB’s total state/local funding; the CSB is required to obtain the remaining 10 percent, which is typically provided by the local governing body. Should the local match be revised so that it varied based on local ability-to-pay, such a change would create “winners” and “losers” among localities in the absence of additional state funding to hold CSBs harmless.

JLARC staff note that under the existing funding structure, local support for CSBs varies. Some localities struggle to provide the required local matching funds, and in these cases, DBHDS may grant a waiver to the CSB instead of reducing state funding; some localities far exceed the required 10 percent contribution, with local shares ranging as high as 88 percent. The report suggests revisiting the statutory cap on state funding to specify that the locality, rather than the CSB, is responsible for contributing the 10 percent match, as well as limiting the issuance of waivers. VACo has historically advocated to preserve the Department’s ability to grant waivers, as some localities struggle to fund core services within their limited taxing authority. In earlier discussions of localities’ contributions to the behavioral health system, VACo has also pointed out that local governments make significant commitments to behavioral health in addition to their contribution to their CSBs, such as local support for services funded through the Children’s Services Act and local spending on behavioral health care in local and regional jails.

JLARC staff suggest that CSB funding could be allocated by different methods, each with advantages and drawbacks. Formula funding typically relies on data indicating communities’ need for services and generally allows for budget predictability from year to year. Although some CSB programs are funded through formulae now, switching to a formula basis for all funds would likely also create winners and losers among CSBs in the absence of increased state funding. The report suggests that a gradual phase-in of a new funding formula would also mitigate effects on CSBs. Reimbursement models use state funds to pay providers based on services provided, similar to a fee-for-service model used in some insurance programs. Grant-based models fund specific projects and thus meet identified community needs, but can require significant administrative work.

The report notes that certain fundamental questions must be answered before the state opts for any of these funding models. It suggests that the General Assembly contemplate the degree to which state funding should support a standard array of services provided in all CSBs or services tailored to individual communities’ needs. The report’s other recommendations deal with Medicaid revenues, suggesting that DBHDS calculate revenues that CSBs should be collecting from Medicaid and private insurance payments and determine whether CSBs are maximizing Medicaid reimbursements.

STEP-VA Implementation
STEP-VA was enacted in 2017 and seeks to establish a statewide set of services to be offered at all 40 CSBs. As currently specified in statute, the nine “steps” are required to be initiated by July 1, 2021. Thus far, the first step, same-day access to behavioral health assessment, has been fully implemented, and CSBs are preparing to implement the second step, primary care screening, in July. The remaining seven steps include outpatient behavioral health services, peer/family support, and veterans’ services, among others.

JLARC’s report notes that same-day access has required significant work to implement, including the services of a consultant contracted by DBHDS, but has largely met its goal of reducing wait times for assessments. CSBs are concerned about their ability to provide timely follow-up services, however, and JLARC staff suggested further exploration of whether the CSBs are offering same-day access during sufficient hours and in enough locations to meet local needs.

Primary care screening will be implemented in two phases. The first, which involves taking blood pressure and calculating body-mass index for adults with serious mental illness and children with serious emotional disturbance, will begin in July. The second phase, which expands these screenings to all behavioral health consumers, is of more concern to CSBs, as it will significantly increase the number of screenings and follow-up assistance that will be required. JLARC staff suggest implementing this second phase as a pilot program before instituting it in all CSBs.

The report advocates for delaying the initiation of the remaining steps by one year in order to ensure that funding is distributed in a manner that factors in demand for services as well as individual CSBs’ capacity, and that requirements and performance measures are fully vetted before funding is allocated. JLARC staff encouraged the General Assembly to improve DBHDS’s capacity to oversee the programs and communicate with CSBs, perhaps by appropriating some funding for administrative costs.

VACo Contact: Katie Boyle

(Photo from Fairfax County YouTube)

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