HOW TO ORGANIZE AND MANAGE A SAMARITAN FUND Client Assistance Funding in Samaritan Counseling Centers

Transcription

1 HOW TO ORGANIZE AND MANAGE A SAMARITAN FUND Client Assistance Funding in Samaritan Counseling Centers Preamble Samaritan Counseling Centers have the mission of providing faith-based counseling and other services for as broad a range of clients as Centers can afford to serve. Most Centers fund their counseling ministry mainly by fees. In theory, if everyone paid the full fee, the Center would meet its budget exclusively through fees. In practice, many are helped who cannot afford the full cost of the services they receive. This puts the burden on the Center of finding and administering resources to supplement below-cost care. Client assistance funding can be done in a number of ways. The most common strategy is to designate a Samaritan Fund (the names for this fund vary) as a general account for contributions from a wide variety of sources earmarked for fee subsidies. Another increasingly popular program called Silent Samaritans solicits designated funds to help women who need fee assistance. In other instances, Centers have access to client assistance funding through congregations which choose to extend special help to their own members who need counseling. And in a growing number of Centers, endowments are being developed the proceeds of which are designated for client assistance. It is worth noting that fee assistance programs are different from write-offs for services that are not covered by the usual fee arrangements, or from fee adjustments responsive to managed care or other third-party contracts. Whatever fee assistance method is used, there are certain points they have in common that must be addressed: The source of funds and methods for attracting funding Polices governing the Center s overall strategy and plan for fee assistance Guidelines for staff to use in determining who can receive fee assistance, how much is allowable per client and per therapist, and how to deal with exceptions Procedures for bookkeeping and tracking fee transactions Reports showing how contributions for fee assistance have been used How fee assistance affects counselor compensation and third-party contracts The main focus of this paper is on what is usually called a Samaritan Fund, although much of what is described here will apply to other methods of fee assistance. Our aim is to present a model program that incorporates what the staff of the Samaritan Institute has learned over the years from Centers that do client assistance funding, and particularly from Centers that currently have successful Samaritan Fund operations. Some examples of effective programs will be summarized at the end. The Samaritan Institute 179

2 How to Organize and Manage a Samaritan Fund, page 2 SAMARITAN FUND ORGANIZATION AND MANAGEMENT Below is a description of a model Samaritan Fund program, and a step-by-step way of organizing and managing the program. Centers are free to adjust this design to fit their particular circumstances and opportunities, especially in setting policies for minimum fees, fee adjustment scales, and the limitations on the use of the fund. 1. Find a Name that Attracts Public Interest. The name, Samaritan Fund, has the advantages of connoting charity and of connecting with the Center itself. But if the source of funding for this project is from corporations and foundations, it may be that a more neutral name is needed, such as Client Assistance Fund. In any case, capitalize on the name in your publicity and solicitation. Explain what the fund is, who it will benefit, and how it will be used. Give reasons for people to contribute to the cause of extending counseling and education to those who need these services but cannot afford the full cost of paying for them. 2. Develop Funding Sources. There are many sources of money that can be put in a Samaritan Fund, for example, proceeds from annual appeals, individual donors, designated grants, bequests, contributions from congregations, corporate gifts, proceeds from endowments, and unsolicited gifts. The Center must first identify potential sources of funding and then decide which of these sources offer the best options for building their fund. Here are some options: Some Centers combine all of their contributions into one Samaritan Fund. They have no other designation for contributed income. This has the advantage of being simple and of making it clear to donors how their money will be used. Some Centers conduct annual appeals specifically for the Samaritan Fund, and add other contributions from churches, individuals, and businesses to the fund. Some Centers seek grants from foundations, corporations, and churches earmarked for client assistance, making these requests the major source of such funding. A Center with a large enough endowment may choose to make the main source of its Samaritan Fund the proceeds from the endowment. At least one Center has access to a large portion of the funds from a church endowment. Centers with successful Samaritan Fund programs without exception solicit funds; they do not leave it to chance. They develop a fundraising strategy based on their own and other Samaritan Center experience, on community values, and on opportunities that emerge as needs dictate. They learn to tell their story in person, through printed materials, and through the media. [In the text that follows, comments that explain the policies and procedures statements or that suggest alternatives are italicized.] 3. Articulate Board and Staff Policies Governing the Samaritan Fund. The Center needs to think through policy statements that govern the structure and use of the Fund. Here are the main elements of such policies: The Samaritan Institute 180

3 How to Organize and Manage a Samaritan Fund, page 3 The purpose of the fund is to enable clients through fee subsidies to use Samaritan services who otherwise could not be served by the Center. Contributions to the fund will be used for client assistance, not for Center development or for administration unrelated to providing services. The Center fee is. [The fee is based on community standards, competitive fee structures, and the Center s financial circumstances.] The minimum fee is. [This is the amount below which the Center cannot do business and stay healthy. Generally, Centers are putting their minimum fees at between $30 and $40. Minimum fees can be lower for interns or residents.] The amount up to which the Center will subsidize fees if it has funds to do so is. [We suggest that the maximum amount should be either the Center s average cost of service or the average cost for Samaritan Centers nationally, now around $70, whichever is lower. The principle underlying this policy is to establish an amount that the public can view as reasonable and that answers the donor s question, Is my money going primarily for direct care rather than to support high salaries and overhead? Raising funds for client assistance is much easier when this principle is clearly established in the minds of those asking for donations and those contributing.] The payment of fee assistance is contingent on the availability of funds; if funds run out, no subsidies can be issued until funds are replenished. The staff shall develop procedures for the following: the client s need for a subsidy, the limits on the amount of subsidy in each case, the limits on the amount of subsidy individual therapists may draw on, the effect of subsidies on insurance and managed care payments, and the roles and tasks of counselors and office staff in managing the fee assistance program. 4. Write Guidelines and Procedures to Implement Policies. Operational statements are needed to guide individual therapists and office staff in applying Samaritan Fund resources to the fee arrangements of clients who need assistance. Examples of General Guidelines: Clients who qualify for Samaritan Fund assistance are those whose financial resources are not sufficient to pay the cost of delivering service, and who are not covered by insurance or a managed care contract. In some instances, the Center may use Samaritan Fund resources to assist clients in paying the deductible (but not the co-payment) on their insurance, provided this does not conflict with the insurance company s regulations. The Center uses charts showing how client income, other resources, and family size affect the standard fee [sometimes called fee adjustment scales]. Every client, or representative of the client, will pay at least the minimum fee. The Samaritan Institute 181

4 How to Organize and Manage a Samaritan Fund, page 4 If the fee is determined to be the cost figure or higher, no subsidy will apply, and the Center will write off the difference between this amount and the full fee. [Some Centers subsidize up to the full fee, not the cost figure. In these cases, the Center is depending on a large stream of donated income, on proven fundraising, on the community s trust in the quality and cost-effectiveness of its services, and on the willingness of therapists to keep their compensation at levels the community can accept as reasonable. Because most Centers cannot meet these criteria, we think it best to subsidize at a lower amount.] If the fee is determined to be in the range of $35 to $75, it will be subsidized up to $75, subject to the availability of funds. [Necessity may require a $60 maximum.] A client s fee may be subsidized up to a maximum of sessions or dollars. The client s therapist may request an extension if circumstances warrant. [The maximum number of sessions or dollar amount allowable will vary, depending on the size of the Samaritan Fund.] If the Center pays its counselors on a percentage basis, the subsidized fee is included in calculating compensation. Examples of Fee Setting Procedures: Therapists will decide who should get fee subsidies based on client disclosure of financial information and family size matched to the Center s fee charts. Therapists will fill out the Center s fee payment form, and submit this form to the office. The form requires the therapist to state the basis of the fee, and the client s signed acceptance of the contracted fee. Here is an example of determining a contracted fee using hypothetical numbers. If more fee options than the ones listed here are available, add them to the list. Length of Session ½ Hour 1 Hour 1 ½ Hours 2 Hours Standard Fee $50 $100 $150 $ Samaritan Fund 2. Managed Care/ EAP 3. Insurance Payment 4. Adjustments 5. Write-off Contracted Fee The Samaritan Institute 182

5 How to Organize and Manage a Samaritan Fund, page 5 This chart assumes that therapy sessions can be contracted in half-hourly segments. When the therapist completes the chart for a given client, the numbers in whatever column is chosen must add up to the standard fee. An example: The Center subsidizes from $30 to $70. The therapist agrees to see the client for hourly sessions. The client s sliding scale fee is $40, recorded on the Contracted Fee line in the 1 Hour column. The therapist writes $25 on the Samaritan Fund line, and $25 on the Write-off line. These items add up to $90. Another example: the client is seen on a managed care/eap contract that pays $60 an hour. The Center treats this as an adjusted fee; no Samaritan Fund money can be used to subsidize it. $60 is written on the Managed Care/EAP line, and $30 on the Adjustments line, equaling $90. Note: Some Centers have their office staff make the fee arrangement. The advantage of this is that there can be more objectivity and consistency in gathering financial information and in setting fees. The main disadvantages are that it adds administrative overhead expense and that it separates fee-setting from the process of therapy where many believe this transaction belongs. Administrative Procedures: The office staff [some Centers use a client services coordinator for this task] receives the fee payment form from the therapists and enters the data in the computer. The office staff [financial manager in some Centers] monitors the Samaritan Fund for the following purposes: a) to determine the sufficiency of funds to cover subsidies; b) to alert the executive director when the Fund is depleted to a certain level; c) to alert therapists when their fee arrangements do not comply with Center policies, e.g., overuse by a particular therapist. Item c) may lead to supervisory or executive director intervention. The client s bill will show only the contracted fee and the balance due, not the amount of the subsidy. [Some Centers do show the subsidy on the bill.] The transactions pertaining to the Samaritan Fund are included in monthly financial statements. Routinely, the Board of Directors sees and reviews these reports. The Center publishes an annual report distributed to donors which shows how contributions to the Samaritan Fund have been used on behalf of clients. The Board also has a vital interest in these reports, because its members help to attract donations. The executive director shall have overall responsibility for the management of the Samaritan Fund. How to Organize and Manage a Samaritan Fund, page 6 The Samaritan Institute 183

6 Some Points to Consider 1. A Samaritan Fund is a vital way for a Center to further its mission. It addresses the Center s desire to keep an open door to the community where those who need help can receive it. Further, these kinds of giving offers donors and opportunity to be good Samaritans to respond in kindness and generosity to those caught in life s struggles and to make a difference. 2. A Samaritan Fund will not solve the Center s financial problems. The Centers that have the best Samaritan Fund programs are generally the ones which already have achieved organizational and financial viability. The accent is on enabling people to gain access to the help they need, rather than on increasing Center revenues. But having acknowledged this priority, a Samaritan Fund program can make a real difference in a Center s ability to increase services and improve staff morale. The Fund can help to solve the problem so many Centers face, namely losing money by seeing people who cannot pay the cost of services, or denying services to disadvantaged people because of economic necessity. Subsidizing fees through donations adds more clients and furthers mission without incurring financial suicide. 3. A Samaritan Fund can contribute to a better balance between therapists productivity and compensation. Suppose the Center finds itself paying therapists more than they bring in. An example would be compensating at a rate of 75% of collections, whereas administrative costs are at least 30%. The problem compounds for both parties when caseloads are filled with people who cannot pay the full fee. Suppose, for instance, that the therapist s compensation is lowered to 65%: if the caseload remains the same, the Center will benefit but the therapist will lose. A Samaritan Fund, by subsidizing fees, can right the balance, allowing more people to be seen at higher fees. Both the Center and the therapists will benefit. Also, this arrangement strengthens the hand of those asking the public for contributions for client assistance; because the case can be made more easily that contributed money is being used for client care, not overhead. 4. All of the staff should participate in learning about Samaritan Fund operations. It is not enough to hand out policy and procedure statements, expecting staff members to know how to use the system. Training is needed in at least three areas: a) proper fee setting, so that services are not under-priced; b) the concept of the Samaritan Fund how funds are raised, the amount that is available, how clients and therapists are benefited; and c) the mechanics of fund operations client and counselor limits, exceptions, paper work, bookkeeping, etc. The staff also should be involved in solving problems that arise in administrating the Fund. For example, it makes sense that therapists being paid on a percentage basis who serve economically disadvantaged people should have greater access to these funds than therapists who serve more affluent people. 5. Keep the system as simple as possible. For example, avoid setting up too many designated accounts. Some donors like to designate how their gifts will be used, the result being a child care fund, a divorce counseling fund, a geriatrics care fund, etc. How to Organize and Manage a Samaritan Fund, page 7 The Samaritan Institute 184

7 In most instances, donors will understand that creating too many separate funds creates administrative headaches, and that clients can better be served through a general account that is parceled out in a systematic way. Many Centers are now finding that their two main structures for client assistance are the Samaritan Fund and the Silent Samaritan Fund, each having a special appeal to a particular group. It makes sense to keep them separate, and differentiating their use is not difficult. [For a description of Silent Samaritans, see Management Resources Notebook, I.K.4] 6. Don t neglect consistent oversight and tracking of the Samaritan Fund and its operations. Someone needs to watch over the fund and its use, and that person usually is the executive director. For one thing, the executive working closely with the board is the one most likely to be involved in fundraising for the Samaritan Fund, especially in identifying and nurturing new donors. Beyond that, the executive director is the point person for the Center s accountability to the public for contributed income, and is generally the one who reports to the board and to donors how contributed funds are being used. 7. The reputation of the Center for quality services and organizational vitality are the best means of raising money for the Samaritan Fund. Some Centers are able, year in and year out, to make their appeals to a receptive public, because they have earned the trust of their communities. The Samaritan Funds of these Centers rarely run dry, and if they do, they can be replenished because the appeal rings true. EXAMPLES OF SUCCESSFUL CLIENT ASSISTANCE FUNDING PROGRAMS These examples are from the years listed. Numbers may have since changed. Samaritan Counseling Center, Lancaster, Pennsylvania (data from 2002) Name of Fund: Samaritan Fund, for general use goal $ ,000 Silent Samaritan Fund, for women goal $25 30,000 Sources of Funds: Samaritan Fund from Partner in Ministry partnership fees, an Easter appeal to churches, a May appeal to corporations, and a year-end community appeal. A Partner in Ministry church is one that contributes $1.50 per member to a maximum of $1,200 in exchange for services by the Center offered in the form of vouchers that pay for counseling visits and other services. Silent Samaritan Fund from solicitation in October. Funding is solicited mostly through written appeals by Center staff. General Policies: Full fee, $80. Minimum fee for those using the Samaritan Fund, $30; for those using the Silent Samaritan Fund, $15. The full fee for partnership churches is $72 (10% discount). Any client can be subsidized except those covered by managed care contracts and those seeing a psychiatrist. Subsidies are used to bring the fee up to $80 (full fee). How to Organize and Manage a Samaritan Fund, page 8 The Samaritan Institute 185

8 The maximum subsidy from the Samaritan Fund is $50 per session and from the Silent Samaritan fund, $65. After 10 sessions, the contract is re-negotiated if needed. Family income and size are factored into the fee. In addition, the financial vulnerability of women who are divorced, single parents, etc., is factored in. Staff that is paid salaries is not affected by the subsidy. For staff paid on a percentage basis, the subsidized fees are included. Part-time staff use of subsidies is problematic. Procedures: The therapist determines the fee and the subsidy according to the Center s Adjusted Fee Scale, using a form to confirm these data which both the therapist and client sign. The Client Services Coordinator in the office receives the forms and makes data entries. The client s bill states the Center fee, client s portion of the fee, and the Center subsidy. The Financial Manager tracks the funds, and alerts staff therapists to the status of the funds and anticipated depletions. Year-round funding generally covers what is needed. Transactions are included in monthly financial reports. The Center publishes an annual report distributed to donors showing the use of contributions for fee subsidies. Comments: This program is exemplary both for the amount of its subsidy funding, and for its organization and efficiency in expending funds to assist clients. The Center s positive relations in the religious and business communities create an environment in which the required level of funding can be sustained through solicitations. There are relatively few problems in working with insurance and managed care companies, because the Center consciously chooses not to depend on these sources. There is sufficient financial and clinical oversight to make the system work effectively. Samaritan Counseling Center, Denver, Colorado (data from 2000) Now called CENTUS Counseling, Consulting & Education Name of Funds: Samaritan Fund; Silent Samaritan Fund; Designated Samaritan Fund. Sources of Funds: General fundraising from individual donors Designated grants Church funding, which sometimes designates money for the church s members and staff General Policies: Full fee, $95. Minimum fee, $35 with the exception of two below minimum fee clients per therapist. Fee subsidized up to a maximum of $60. Maximum subsidy of $25 per session including below minimum fee clients, reviewed after 12 sessions. No insurance or managed care cases are subsidized. How to Organize and Manage a Samaritan Fund, page 9 It is expected that therapists serving economically disadvantaged areas will draw on the funds more frequently than therapists serving more affluent settings. The Samaritan Institute 186

9 Therapists are paid on a percentage basis; subsidized fees are included in the percentage. Procedures: The therapist who does the intake negotiates the fee and subsidy, using a Therapy/Payment Record form. The form lists the standard fee and five adjustment options, which include the Samaritan funds. The contracted fee and the adjustments must add up to the full fee. [See the form on page 4 of this paper which is based on the Denver form]. Office staff enters fee and subsidy data in the computer, do billings that reflect these data, and track the Samaritan Funds. The executive director is alerted when funds near depletion or if anomalies in fund use occur. Financial reports show these transactions. The Center reports back to donors how their contributions have been used. Comments: Until recently the Center invited designated gifts, each of which was kept in a separate Good Samaritan Funds account. An effort is now being made to consolidate these accounts under a single umbrella with three main funds: Samaritan Fund, Silent Samaritan Fund, and Designated Samaritan Fund. There is still the issue of individual churches having their own subsidy arrangements, which adds significant administrative labor. Experience has shown the importance of executive director and supervisor monitoring of fund use: to ensure equitable distribution of subsidy resources among all the therapists, and to guard against therapists setting unrealistically low fees. The system allows therapists to see clients with varying abilities to pay the full fee without loss of compensation. Experience shows that subsidy funding enhances staff morale. Kilgore Samaritan Counseling Center, Louisville, Kentucky (data from 2000) Name of Fund: Samaritan Scholarship Fund Sources of Funds: Proceeds from fundraising events earmarked for the Samaritan Fund Thanksgiving appeal thanking donors and giving the opportunity for year-end giving Board member contributions, and other contributed dollars In 1999, $32,000 was put in the scholarship fund; the goal for 2000 is $40,000 General Policies: Full fee, $80. No minimum fee, although everyone is expected to pay at least $5. A sliding fee scale determines fees from $5 to $80, based primarily on income and family size. How to Organize and Manage a Samaritan Fund, page 10 There are two main ways that the Center draws on its Samaritan Fund: 1) the Center matches the contracted fee of clients who pay $30 or over, up to a maximum of $80; 2) for The Samaritan Institute 187

10 clients who pay less than $30, the Center brings the fee up to $30. The Center must receive no less than $30 from what the client pays plus the scholarship. Clients paying less than $20 are limited to five sessions. This number can be extended if the therapist can justify it. For clients paying more than $20, there is no limit. Clients with insurance may receive Samaritan Fund assistance in two ways: by continuing under the sliding scale rubric following the completion of the sessions authorized by the insurance company; through assistance with co-payments and deductibles in some cases. Therapists on commission are paid a percentage of what they bring in, not the subsidized fee; but the Center pays the therapist at least $20 per visit. Salaried staffs are not affected by the subsidy program. Procedures: Therapists negotiate the fee and subsidies with their clients, using the Center s fee scales. The therapist submits a written form to the executive director who has final authorization for the fee and the subsidy, and the amount of visits allowed. The office receives the director s authorization, does data entry, and passes in back to the therapist. Bills show only the client s fee and balance, not the subsidy. These transactions are tracked on monthly financial statements and in year-end reporting. Comments: The program works well. To date, income for the Samaritan Fund has been sufficient for the subsidies that are offered to clients. This is a clear example of a Center that positions the executive director as the one who authorizes fees and subsidies. The result is exemplary accountability. The sources of funding for the program have changed over the years. There used to be a May appeal letter. To increase income, several fundraising events have been added, and the May appeal is now a Thanksgiving appeal. Board members also make significant contributions. Virtually all contributions to the Center go into the Samaritan Scholarship Fund. Samaritan Counseling center, Midland, Texas (data from 2000) Name of Fund: Client Assistance Fund Sources of Funds: Grant requests to foundations, corporations, and churches: $85,000 per year Other individual and church donations: $20,000 General Policies: Full fee, $90. Minimum fee, $30. Fee subsidized up to $90 (full fee). The subsidy usually is in the $40 to $50 range. How to Organize and Manage a Samaritan Fund, page 11 Most therapists are paid a salary, so this does not affect compensation. Insurance and managed care cases are not subsidized. In some cases, assistance funds are used to help pay the client s deductible. The board authorizes these policies. The Samaritan Institute 188

11 Procedures: Office personnel do telephone intakes where general information about insurance coverage and the client s financial position is gathered. At the first visit, the business manager makes the final determination about fees and subsidies. The clients must submit copies of their tax returns to establish their need for assistance. A tracking system is used to show write-offs and adjusted fees, and the amounts of subsidy. Donors are sent the Center newsletter and the annual report, both of which give information about the use of client assistance funds. Comments: This system works well, although it requires significant administrative input and time. The system requires year in and year out fundraising at a high level, over $100,000, but the Center has learned how to do this kind of solicitation and grant-writing. The Center has in recent years upgraded its tracking system, improving the Center s ability to inform donors about the use of their contributions. The efficiency of the system depends on the administration rather than the therapists. This is a clear example of fees and subsidies being determined by office staff rather than therapists If your Center has found a way to do client assistance funding different from the examples given in this paper, the staff of the Samaritan Institute would like to hear about it. Your experience may be of help to other Centers who want to develop programs that fit their particular circumstances. The Samaritan Institute 189