Performance Based Grant by joannecinc


									Department of Health and Social Services

           Behavioral Health

       Performance Based Grants

            Funding Report

           To the Legislature

             January 28, 2008
                          Performance Based Funding
Legislative Intent Language: Performance Based Granting
It is the intent of the legislature that the department continues developing polices and
procedures surrounding the awarding of recurring grants to assure that applicants are
regularly evaluated on their performance in achieving outcomes consistent with the
expectations and missions of the Department related to their specific grant. The recipient's
specific performance should be measured and incorporated into the decision whether to
continue awarding grants. Performance measurement should be standardized, accurate,
objective and fair, recognizing and compensating for differences among grant recipients
including acuity of services provided, client base, geographic location and other factors
necessary and appropriate to reconcile and compare grant recipient performances across the
array of providers and services involved.

This provides an update on the DHSS/ Behavioral Health efforts to comply with the
legislative intent language for Performance Based Granting. The structure outlines the
methodology, FY 08 funding impacts, successes and challenges, and provider participation.
Also discussed is the role of performance based funding (PBF) and the national accreditation
initiative within the broader effort by DHSS/BH to redefine more effective business practices.
Characteristics of behavioral health services are broken out into categories of
Prevention/Early Intervention and Treatment & Recovery Services.

Prevention/Early Intervention Services
DHSS / Behavioral Health (BH) Prevention & Early Intervention Services has worked
diligently to develop a fair, equitable and objective assessment tool to identify outcomes,
performance measures and documented program results. Grantee agencies were included in a
review of the initial document, assisted with revisions, and supported the PBF process for
FY08. Grantees were included in both statewide teleconference meetings and in a 2-day all
grantee face-to-face meeting in March, 2007. Prevention staff worked with the BH Research
Analyst to hone the process and develop a statistically valid tool. Outcomes for prevention
programs are very different than treatment programs and the indicators of “success” are
defined in the categories of “Documented Project Outcomes,” “Agency Performance,” and
“Documentation of behavioral health conditions for the target population(s).”

The Assessment tool section on “Documented Project Outcomes” followed the 5-step
planning process all of our grantees must follow—the Strategic Prevention Framework (SPF).
Step 1 is data collection/analysis; Step 2 is assessment/analysis of community resources; Step
3 is selection of strategies/programs related to the needs identified in Steps 1-2; Step 4 is
implementation; and Step 5 is evaluation of data, outcomes and the level of change occurring
from the strategy employed. The methodology for scoring and thresholds for adjustments to
funding are as follows:

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    •   Scored each grantee using a PBF assessment tool with a total of 110 points.
    •   Grantees with a score of 95% or above (or a score of 105 or more) received a 5%
        increase in their requested budget
    •   Grantees with a score of 59% or below (or a score of 65 or less) received a 5%
        reduction to their requested budget.

Using the SPF planning process and the PBF assessment tool has required a more focused
approach to training and technical assistance with the community-based grantees. Behavioral
Health has continued this training and technical assistance, most recently at a 3-day grantee
meeting in January, utilizing technical assistance from the Western Center for Applied
Prevention Technology and JBS, both contractors with the federal Center for Substance
Abuse Prevention (SAMHSA).

Treatment & Recovery Services
The DHSS / BH have invested significant resources into the ongoing development of a
Performance Based Funding system (PBF) for the allocation of treatment grants. The
development of PFB has several phases. The Phase I of PBF for Treatment and Recovery
Services focused on addressing an immediate $1 million dollar shortfall for SFY 08. In order
to allow time for providers and BH to work together to develop the methodology, the decision
was made to maintain the current funding of grantees for quarters one and two of FY 08. The
shortfall would be applied to funding of grantees in quarters 3 and 4 of FY 08. The method of
distributing funds would include both an “across the board” cut of 1.17% applied to all
grantees, and the application of PBF measures for grantees with certain levels of scoring from
“grant performance”, “unit cost”, and “residential utilization”.

To insure that appropriate comparison of scores would account for different provider “types”,
preparation steps for FY 08 PBF measures included categorizing providers into the following
groupings (numbers of grantees in parentheses) : Multi-program Grants(5); Urban Providers
(24); Rural Providers (19); and, Substance Abuse Residential Providers (18).

The Grant Performance methodology included the following steps:
   1. Complete Grant Review and Progress Scores for each Grantee
   2. Separate into “Provider Categories” for comparing similar programs.
   3. Rank order the grantees within each group – highest to lowest
   4. Providers with a score lower that 70% received a 3.51% funding decrease.

The Unit Cost methodology included the following steps:
   1. Calculate total clients served by priority population in each grant in FY 07
   2. Admin Managers calculate total grant funding for FY 07
   3. Unit Cost calculated by dividing Funding by Clients Served
   4. Average cost was rank-ordered within each provider group to determine the simple
      average across all providers.
   5. Providers that exceeded 1.5 times the average unit cost received 1.5% funding

The Residential Utilization methodology included the following steps:
   1. Rates of residential utilization were calculated by
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          a. Total Beds Purchased x Total Days in Year = Available Beds
          b. Total Beds Provided in FY 07 /Available Bed = Utilization Rate Calculation
    2. Providers with residential utilization over 85% were returned 1.0% of any Unit Cost
       funding decrease to that agency.

Phase II of the PBF effort is looking ahead to SFY 09. Using the Performance Based
Funding Work Group, Behavioral Health has collaborated with grantee providers in
establishing the foundation of a PBF methodology for the allocation of grant dollars in SFY
09. This workgroup has been convened, and is meeting once a month. The State is drawing
on expertise from national resources in the development of a framework for performance
measures. The framework of the SFY09 PBF measures continues to be defined, and
preliminary planning is considering regional level performance measures and provider level
performance measures. The measures will include data quantity and quality submitted by
providers (minimal data set) and outcomes, using the Client Status Review of Life Domains
(CSR). Additionally, by using prevalence estimations, indicators will also be focused on
identified needs of services, the degree to which services meet or do not meet the local need,
and cost of service delivery.

The Phase II of PFB is going to draw primarily from data submitted by providers through the
Alaska Automated Information Management System (AKAIMS) and agencies who have
opted to use an Electronic Data Interface (EDI). To that end, DHSS / Behavioral Health have
been collaborating with providers to insure that their respective data entry meets the
requirements of the “minimal data set”.

FY 08 Performance Based Funding Impacts
Prevention/Early Intervention Services
All comprehensive prevention grant programs were reviewed, using the PBF Assessment tool
described above, and scored prior to refunding for FY08. Because FY08 was a continuation
year all programs also submitted a continuation funding application. Both documents were
reviewed and used to make FY08 continuation funding recommendations. Total possible
points for the Prevention PBF Assessment were 110. The high score was 109 and the low
score was 41. Results included:

    •   Five (5) grantees received a scored of 95% or above, receiving a 5% increase in their
        FY08 funding award (a total dollar increase of $17,775).
    •   Three (3) grantees received a score of 59% or below, receiving a 5% reduction in their
        FY08 funding award (a total dollar decrease of $12,340)
    •   One grantee received a score of 41 (or 37%)—they received a conditional award of
        50% of their FY07 funding award, specifically as a planning and improvement grant
        to allow them the opportunity to complete their community needs assessment,
        planning document and development of an evaluation plan. The BH Project
        Coordinator is providing the grantee with specific technical assistance to meet the
        identified special conditions.
    •    Two grantees did not reapply for FY08 funding

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    •   One grantee was unable to comply with FY07 grant conditions and their grant award
        was terminated.

It is noteworthy that no grantee organization utilized the appeal process for funding decisions
Overall, the PBF process has provided BH Prevention grantees with clearer parameters about
performance expectations and the technical assistance to assist in their outcome/evaluation

Treatment & Recovery Services
The Phase I of PBF for Treatment and Recovery Services coincided with, and therefore
focused on addressing an immediate $1 million dollar shortfall for SFY 08. The method of
distribution of funds for SFY 08 included both an “across the board” cut and PBF measures
using scoring methodology with” grants performance” and a “unit cost”, and “residential
utilization rates”.

The application of a 1.17% across the board reduction was applied to all 63 grantees,
accounting for $498,991 of the SFY 08 budget shortfall. The application of PBF measures for
grants performance”, “unit cost” and “residential utilization” was applied to all grantees,
resulting in 27 grantees receiving additional reductions in their SFY 08 funding, accounting
for the remaining $431,129 of the 08 budget shortfall. For those providers receiving
additional reductions over and above the 1.17 %, reductions ranged from 1.6% to 6.1%. Due
to funds available from unanticipated program closures in FY 08, we were able to only cut
$930,120 funding to make our budget shortfall.

   • Grantees were rank ordered from highest to lowest within each group. Score ranges
             Rural Providers                                   92-52
             Urban Providers                                   97-55
             Multi-program Grants                              95-60
             Substance Abuse Residential Providers             95-48

    •  Average Unit costs for each region were
             Rural Providers                                        $2,284
             Urban Providers                                        $2,617
             Multi-program Grants                                   $2,479
             Substance Abuse Residential Providers                  $6,042

                      Measures                     Provider   % Impact           $
        1. “Across the board” reductions              66       -1.17%          $498,991
        2. Grant Performance                          15       -3.51%          $367,176
        3. Average Unit Cost                          12        -1.5%          $109,424
        4. Residential Utilization Rate                5         +1%          + $45,471
        Total Funding Change                                                   $930,120
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Three agencies formally appealed the findings.
   • Two agencies were found to be correct in their premise that their Unit Cost was
       miscalculated and they were given a reprieve from a potential 1.5% decrease in
   • One agency was not successful in its appeal – and no changes were made to their

For Phase II of PBF of Treatment and Recovery Services, with very few exceptions, it is
anticipated that all grant funds will be allocated for SFY 09 with the application of PBF
measures. The schedule is to begin to review PBF measures relative to each provider grantee
in April, 2008.

Successes and Challenges
Prevention/Early Intervention Services
Performance Based Funding was the logical “next step” for our Comprehensive Prevention
grantees. Beginning in FY06, our Request for Proposals focused specifically on the need for
grantees to report outcomes, not just outputs. We stressed the question, “Is anyone better off
because of the service you provided or the strategy you employed?” Through FY06 and
FY07 the Prevention Project Coordinators worked closely with all grantees to assist them in
identifying their long-term and short-term outcomes (via the required development of a logic
model) and to develop appropriate evaluation tools to begin documenting the outcomes. With
the addition of Performance Based Funding, it has taken the drive for outcomes to the next
level. While it continues to be a struggle for some grantees to understand the importance of
outcomes measures and how this information can be used to improve their prevention
strategies, much progress has been made and PBF has assisted in reinforcing the importance
of outcomes.

Treatment & Recovery Services
The DHSS / Behavioral Health has actively been moving forward in redefining a new
business model that reorients away from compliance related activity, towards quality of
services and outcomes. Performance Based Funding provides a mechanism to further
structure and organizes division business practices with a focus and value on outcomes.
The effort in developing meaningful PBF measures is driven, and dependent upon data. An
identified success resulting from the PBF effort includes grantee organizations giving greater
value to the quality and quantity (i.e. minimal data set requirements) of data that is submitted
to Behavioral Health. This has also resulted in provider grantees diligently seeking out
AKAIMS training for their staff. A corresponding challenge for Behavioral Health is that the
reliance on AKAIMS as the primary data source for PBF has further highlighted the current
and historical lack of necessary resources to adequately address longstanding deficiencies that
prevent the system from realizing its full potential.

It is important to note that the Phase I of PBF was framed by the $1 million budget shortfall
for FY08. This created an urgency of planning in a tight timeframe that could only draw upon

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very limited options in defining measures for SFY 08 funding decisions. As a result, it is
acknowledged that the Phase I PBF measures are not representative of an ideal or mature PBF

Provider Participation
Prevention/Early Intervention Services
Prevention grantees are working closely with the BH Project Coordinators in the ongoing
development of the PBF process. Prevention grantees were included in the assessment tool
development and refinement during the past year. Once the PBF assessments were
completed, Project Coordinators met with each grantee to go over the individual scoring to
develop a plan of action to assist grantees in improving their scores and better defining and
reporting their outcomes. Behavioral Health Prevention Project Coordinators are working
closely with all BH Prevention grantees to provide training and skill development to improve
community-based program and activity outcomes. Training has been offered in the five
Strategic Prevention Framework steps; program evaluation; data collection; outcomes vs.
outputs; selecting and implementing evidence-based programming; community readiness; and
developing and using a logic model planning tool. Training and Technical Assistance are
offered through group training (all grantee meeting); teleconference training; training
materials; online training opportunities; and onsite visits. We anticipate this increased level
of training and technical assistance will provide grantees with the knowledge and technical
skills necessary to successful document program outcomes as required by a performance
based funding model.

Treatment & Recovery Services
 DHSS / Behavioral Health and Treatment and Recovery Services grantees have worked in
collaboration since the introduction of PBF efforts in January, 2007. The efforts to date have
included methods of communication, as well as planning efforts.

DHSS / Behavioral Health used the two-day Change Agent Conferences held in February,
2007 and September, 2007 as opportunities to communicate with statewide behavioral health
providers about expectations relative to a performance based system. A longstanding
External Task Force, held monthly with stakeholders has been another mechanism of
communication and exchange with providers. The Outcomes Identification and Systems
Performance workgroup has been active since June, 2005, and engages stakeholders in issues
related to performance measures, data collection and analysis, as well. Additional exchange
opportunities exist during monthly teleconferences with Behavioral Health regional staff and
grantee providers. Relative to data submission necessary for PBF, the AKAIMS User Group
meets on a monthly basis and routinely is represented by as many as 30 provider
organizations, at any given time.

A Performance Based Funding Work Group has been meeting since April 2007, involving
grantee provider stakeholder input and collaboration in this effort. The PBF workgroup has
included representation from the following: The Alaska Mental Health Trust Authority, urban
and rural mental health/substance abuse providers, the Alaska Behavioral Health Provider
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Association, the Cook Inlet Tribal Council, the Advisory Boards, and Rural Comprehensive
Alaska Native BH provider.

The intent is to utilize a planning process that is transparent, and contributes to the
development of a Performance Based Funding system that is fair, equitable, defensible and

Related Initiatives: New Business Practices and National Accreditation
It is important to emphasize that the development of Performance Based Funding is related to
a larger DHSS / Behavioral Health effort in redefining “new business practices”. Historically,
the division focused on oversight and compliance. In its new effort, DHSS/BH will focus on
the delivery of high quality services and improving treatment outcomes. This approach allows
for the reduction of administrative burden to both the state and its grantees, and allows for
improved collaboration and partnership. The role of DHSS/BH converts to the provision of
technical assistance from that of enforcement. Performance Based Funding is one mechanism
to support and reinforce quality services and an improvement in treatment outcomes.

The DHSS / BH recently initiated another important method that lays the groundwork for
establishing consistent standards for all behavioral health grantees, through “National

The purpose of National Accreditation is to insure that organizations develop standardized
business practices and program operations. The overarching goal for the National
Accreditation Initiative is for DHSS/BH to assist its grantee organizations achieve
accreditation through one of a number of approved national accrediting agencies by 2013.
Currently, 28 of the 62 DHSS/BH grantee organizations are accredited through a recognized
accrediting organization. Reaching this goal will require on-going collaboration and
partnership with DHSS/BH, the provider organizations, the Alaska Mental Health Board, the
Advisory Board on Alcoholism and Drug Abuse and the Alaska Mental Health Trust
Authority. The intent is that with the assistance of necessary financial and technical
resources, all providers will succeed in this endeavor.

Adopting a uniform level of quality standards will have several beneficial results:
          • improved organizational management
          • abridged need for the state to establish and maintain equivalent standards
          • diminished need for state compliance reviews
          • enhanced promotion of quality services

Accreditation can help not-for-profit grantees organize and improve operations by
establishing policies and procedures based on industry standards that are continuously
updated. The result of accreditation is typically improved business practices through quality
management. Organizations improve their risk management as well as position themselves
for increased funding opportunities. The standards established by accrediting agencies help
assure the best possible consumer care. Additionally, accrediting agencies provide technical
assistance to help organizations maintain these practices.
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Accreditation benefits community by assuring that organizations are providing quality
services efficiently and effectively. State government is relieved of the need to constantly
update regulations to govern grantee operations, and to conduct costly site reviews. The
overall behavioral health service delivery system becomes more standardized in a sustainable
manner that is not politically or personality driven.

By including “Performance Based Funding” and “National Accreditation” as components of
the new business practices of DHSS / BH, consistent administrative, managerial, and service
standards for grantee organizations will contribute to quality services and improved treatment

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