Until recently, government grants accounted for around 75 percent of the budget at Jewish Family & Children’s Services. But after losing big chunks of federal, state and local funding over the past 18 months — bringing the government share of the agency’s budget down to about 50 percent — officials at JFCS had to figure out a plan to diversify and cut costs.
The main element of the strategic plan, says JFCS Executive Director Shira Ledman, was to accept health insurance payments instead of relying mainly on grants and sliding scale payments from clients.
Ledman, who came to JFCS two years ago from Georgia, where she was chief planning officer for the Jewish Federation of Greater Atlanta, explains that most nonprofit behavioral health agencies in Tucson did not accept insurance, probably because “government was really a primary funder.”
Becoming credentialed for insurance is a cumbersome process. “It’s not just the agency that gets credentialed, it’s the specific therapist,” Ledman explains. Each therapist has to meet licensing and experiential requirements to be eligible for each insurance company’s panel — and there are many, she says.
JFCS started the process in the past year, at first using in-house staff. Now it contracts with a company that does its insurance credentialing and billing.
While the agency, which provides services for Jewish and non-Jewish clients, has lost many government grant programs, says Ledman, some services have been folded into the agency’s general operations. For example, she says, “We had a specific targeted program for child and adolescent trauma, and while we still provide trauma services we do it as part of our broad counseling program.”
In a way, says Ledman, the government grants were limiting, because the agency could only help those who fell under the parameters of a particular government contract. If someone came to the agency with health insurance that would pay for counseling, “we couldn’t accept that.” People could pay out-of-pocket, she says, but it didn’t make sense for them to pay $80 to JFCS if they could use a private therapist who accepted insurance and would charge only a $20 or $25 co-pay.
Now, she says, if you are a new client calling in, a JFCS intake person figures out “under which header we can serve you, whether that’s through one of the government funded programs because you have AHCCCS (Access), or whether we take your insurance, or whether it’s one of our sliding scales,” such as a Jewish program funded by a Jewish Federation of Southern Arizona compelling needs grant.
One exciting result of the change is that JFCS can provide behavioral health services at Handmaker because it can bill Medicare, says Ledman. Beginning Oct. 6, a JFCS therapist will be at Handmaker twice a week for three or four hours a day. Art Martin, CEO of Handmaker, says he is “very happy” about the development.
JFCS is also developing a partnership with a pediatric clinic at University Medical Center, says Ledman. And, instead of renting satellite office space, such as the former location in northwest Tucson, JFCS is “co-locating” with groups of private practitioners. A JFCS therapist can use space at those offices, she explains, “so we can be really convenient and accessible to people” with little or no cost to the agency.
The agency has used a fee-for-service model for some of its other services, such as care management for the chronically ill or elderly. Now, by accepting insurance for counseling services, the agency hopes to increase its fee-for-service income from perhaps 4 percent of its revenue to 20 percent or more.
Overall, in the past five or six years, says Ledman, JFCS’s budget has decreased from a total of $4.5 million to some $2.6 or $2.7 million for next year.
In reorganizing its budget, JFCS has also reduced staff, but no therapist positions were cut, Ledman emphasizes. “We did some [reductions] primarily through attrition but also cut some other positions. We also did some furloughing last fiscal year,” she says. This year, the management structure was “compressed,” she says, to cut “a substantial number of dollars out of the budget,” with two full-time positions lost, “plus the entire senior management team took a 10-plus percent pay cut.”
As a Federation beneficiary agency, JFCS has drawn on Federation resources to “help us make the bridge to where we’re going,” says Ledman.
For example, says Stuart Mellan, JFSA president and CEO, the Federation used its banking relationships to help JFCS secure a new line of credit. The Federation also gave JFCS some of its annual allocation “a little early,” he said.
”When one of the Federation’s partners needs extra help, the inclination has been to want to be there to help them through a rough patch,” says Mellan, citing the example of Handmaker, to which the Federation provided $1 million when it was going through Chapter 11 financial reorganization from 2005 to 2007. That assistance — which may ultimately be part loan and part grant, says Mellan — “was critical to Handmaker reestablishing themselves on a solid financial footing.”
At JFCS,the Federation also has assisted the agency in advocating to retain some government-funded programs and helped it “connect to certain donors who have a particular passion for the work that we do,” says Ledman. Donations from both the Jewish and non-Jewish community account for around 15 percent of the agency’s budget, she says, and in the past year, “we actually saw a trend up in donations.”
More changes are likely in store for JFCS, says Ledman.
“I think the whole marketplace is going to change with health care reform and I think we’re all going to have to be ready to be pretty nimble. I think we’re positioning ourselves to be in a good place,” says Ledman, to continue delivering quality behavioral health services, as well as support services for Tucson’s growing aging population.
“It’s a tough transition, but it’s a good future,” she says.