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Product Management Office: Benefits for WIC state agencies

By: Danni Ricks,

Erica is a Project Coordinator in BerryDunn’s State Government Practice Group. Based in Charleston, WV, she provides project coordination for a multi-state consortium of WIC agencies as well as other public health projects including Electronic Death Records System (EDRS) implementation and Health Disparities grant management. 

Erica Hoffman
01.12.22

Is your Women, Infants, and Children (WIC) agency struggling with Maintenance and Enhancement (M&E) vendor management? Here are some approaches to help improve your situation: 

  • Product Management Office (PdMO): Product management can help you manage your WIC system by coordinating and planning releases with the M&E vendor, prioritizing enhancements, reviewing workflows, and providing overall vendor management.
  • Project Management Office (PMO): Project management can help with budgeting, resource management, risk management, and organization. 
  • A blend of product and project management is a great partnership that can relieve some of the responsibilities of WIC agency staff and allows a third party to provide support in all areas of product and project management.

Whether you are an independent WIC State Agency (SA) or a multi-state consortium (MSC), having a PMO and/or PdMO can help alleviate some of the challenges facing WIC today. While an MSC may present significant cost savings, managing an M&E contract for multiple states can be overwhelming. Independent state agencies (SAs) may not have multiple states to coordinate with, but having the staff resources for vendor facilitation and implementing federal changes can be challenging. A PMO/PdMO can aid in improving business and technology outcomes for SAs and MSCs by bringing a level of coordination and consistency that otherwise might not happen. 

As federal changes grow in complexity, evidenced by the many changes to WIC stemming from the American Rescue Plan Act, coupled with workforce challenges in government, the importance of a PMO/PdMO has never been greater. Here are six ways a PMO/PdMO can help you:

  1. Facilitate the vendor relationship
    A PMO/PdMO not only holds the vendor accountable but also takes some of the workload off the SA by facilitating meetings, providing meeting notes, and tracking action items and decisions.
  2. Manage centrally located data
    A PMO/PdMO keeps all documents and data in a centralized location, fostering a collaborative environment and ease of access to needed information. A centralized location of data allows SAs to be on the same page for consistency, quality control, and to support the state’s need for clean, reliable information that is current and accurate.
  3. Track and mitigate risks 
    Effective risk management requires a substantial commitment of time and resources. The PMO/PdMO identifies, tracks, and assesses the severity of risks and suggests approaches to manage those risks. Some PMO/PdMOs assess all risks based on a severity index to help clients determine which risks need immediate action and which need monitoring.
  4.  Assist in the creation of Implementation Advanced Planning Document Updates (IAPDUs) 
    Creating and implementing an IAPDU can be time-consuming, confusing, and requires attention to detail. A PMO/PdMO alleviates time and pressure on SAs by helping to ensure that an IAPDU or funding request clearly outlines a plan of action to accomplish the activities necessary to reach an organization’s goal. PMO/PdMOs can draft IAPDUs to determine the need, feasibility, and projected costs and benefits for service. 
  5. Provide an unbiased, third-party opinion 
    A PMO/PdMO will offer an unbiased, third-party opinion to help avoid misunderstanding and frustration, decision stalemates, inadequate solutions, and unpleasant relationships between WIC agencies and M&E vendors. 
  6. Provide the right combination of business and technical expertise
    Staffing challenges (exacerbated by COVID-19), difficulties finding expertise managing software change management for WIC, and a retiring workforce knowledgeable in WIC system implementation have in some cases left SAs without critical resources. Having the right combination of skills from a third party can resolve some of these challenges.

Independent SAs or MSCs would benefit from having a PMO/PdMO to help meet the challenges WIC agencies face today, whether it is an unplanned funding change or updates to the risk codes. With the help of a PMO/PdMO developing standard practices and methodologies, SAs and MSCs can deliver and implement high-quality services more consistently and efficiently. The role of the PMO/PdMO is far-reaching and positively impacts WIC by providing backbone support for WIC’s overarching goal, to “safeguard the health of low-income women, infants, and children who are at nutrition risk.”

If you have questions about PMOs or PdMOs and the impact they can have on your agency, please contact us. We're here to help.

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Read this if you are at a Medicaid agency.

After attending this year’s NASHP Conference, I realized Seattle wasn’t the only gem I found. The city welcomed a record number of NASHP attendees, including many first timers, who brought with them a passion for the vital work they do to support Medicaid and health and human services agencies across the nation. Executive Director Tewarson led her first conference with finesse, and the entire conference exemplified her team’s passion and dedication to state health policy. 
 
The 35th annual conference was full of fresh ideas and a collaborative spirit. As I reflect over the three days of the conference, some ideas I am taking back to my team include:

  • Workforce challenges are here to stay—and are only becoming more severe, requiring states to rethink hiring, training, and staffing among healthcare providers at all levels. Actions to consider:
    • Work to help ensure we allocate appropriate funding for behavioral health and clinical staff. 
    • Encourage more diversity in the field. This means having more representation in the workforce for new hires to identify with, including recruiting and training staff, so they feel welcome and encouraged to join.
    • Increase support for highly skilled jobs like CNAs and childcare workers. Our system cannot work without these staff, and the skills they bring to the table are crucial to the field, developed over time, and indispensable.
    • Start planning now to address the potential loss of childcare dollars to avoid exacerbating the workforce shortage challenges.
    • Identify other ways to help the workforce with benefits and support that can go a long way toward recruiting and retaining experienced caregivers. 
  • Disparities in health equity were always there, and the pandemic laid them bare. 
    • We need to assess the impact of all initiatives to help ensure they aren’t creating additional health inequities and develop strategies to rectify existing barriers.
    • We should bring those experiencing health inequities to the table, listen to their struggles, and let them lead us to solutions.
    • We need to build a diverse workforce that will bring more voices and ideas into the room in this arena.
  • There is a lot of innovative work going on in child behavioral health that can impact outcomes:
    • Providing youth mental health first-aid training and trauma-informed training to school-based, nonclinical staff is crucial to addressing the children’s behavioral health crisis. Children spend so much time at school and build trust in teachers, bus drivers, custodians, and administrative staff.
    • Training school staff on the use of mobile crisis units to avoid children inappropriately becoming involved in the juvenile justice system or being treated in emergency rooms.
    • Putting clinical staff in schools, even via telehealth or part-time, has shown positive outcomes for child behavioral health.
  • We may not know when the Public Health Emergency will end. Still, we can spend this time developing and improving our plans for unwinding, setting consistent expectations with our members and meeting them where they are, developing strategies to make successful emergency provisions permanent, and engaging our legislatures now to prepare for the upcoming federal funding gap.
  • The most significant success factor in every session I attended was breaking down silos across health and human services agencies. We need to continue working across programs, agencies, and states to help ensure we are innovating, growing, and providing the best care for those our policies and programs serve.
  • Lastly, as a foster-adopt mom, I was heartened to hear the speakers consistently bring the topic back to focus on some of our most vulnerable youth: children in foster and kinship care and our justice-involved youth. The call to collaboration and partnerships across child welfare, juvenile justice, public health, county health departments, and Medicaid agencies to impact change was not lost on me, and I found my passion for improving our foster care system invigorated by the passion of those around me.

I am thankful for organizations like NASHP that help us come together to innovate and collaborate on the biggest problems facing our industry today. NASHP’s mission to support the development of policies that promote and sustain healthy people and communities, advance high-quality and affordable health care, and address health equity is needed now more than ever. The 2022 conference allowed us to collaborate and share innovations that can be used to help propel us in our essential work to improve the health and lives of the individuals we serve.
 
My biggest takeaway was that we are stronger when we work together. I’m excited to hear what your biggest takeaways were this year. It has energized me to continue this critical work to help Medicaid agencies improve the health and lives of our residents. I do not doubt that this group will take back all the lessons and work to improve the lives of the residents of their states, and we will all gather in Boston next year, excited to hear of all the new successes. See you next year!

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NASHP meets the Emerald City

Read this if you are at a state agency looking to implement or improve your 988 Suicide & Crisis Lifeline. 

Between 2015 and 2020, one in four fatal police shootings involved a person with a mental illness, and an estimated 44% of people incarcerated in jail and 37% of people incarcerated in prison had a mental health condition. In addition, the recent COVID-19 pandemic has adversely impacted the mental health situation in the country. 

Many people experiencing mental health distress call 911 because it is a widely known emergency number and easy to use. Recent data has shown that people using 911 to get help with serious mental illness do not get the right care at the right time and some even end up in law enforcement custody, rather than being seen by a mental health professional.

The 988 Suicide & Crisis Lifeline (formerly known as the National Suicide Prevention Lifeline) is the new three-digit, nationwide phone number that is locally operated and offers 24/7 access via call, text, and chat to trained crisis counselors who can help individuals experiencing mental health-related distress. Mental health-related distress can include substance use crisis, suicidal thoughts, depression, or any emotional distress. The 988 Suicide & Crisis Lifeline is also available for individuals worried about a loved one who might need crisis support services. Its goal is to provide accessible and immediate crisis intervention and support to every individual in need. 

988 state implementation and top challenges

As of August 2022, 23 states have passed legislation to facilitate the implementation of the 988 Suicide & Crisis Lifeline. Colorado, Nevada, and Washington enacted legislation with user fees to support 988 operations and provide financial sustainability for the system. Several states have established advisory groups or planning committees with representatives from state agencies, health providers, law enforcement, emergency medical services, and other partners to better coordinate the system and identify policy levers. 

Implementing a three-digit number for behavioral health emergencies in every state and providing 24/7 primary coverage through in-state call centers have presented certain challenges to states across the nation. As states prepare to launch the 988 hotlines, they have encountered key issues around infrastructure, workforce, 911 integration, readiness of the crisis care continuum, cultural competence, and performance management.  

Solutions for state agencies

To address these key issues, states should consider the following to aid in the successful implementation of the 988 Suicide & Crisis Lifeline:

Assess the states’ needs to successfully implement the 988 Suicide & Crisis Lifeline

Despite meeting baseline requirements for the implementation of the 988 Suicide & Crisis Lifeline, state agencies are struggling to implement the 988 Suicide & Crisis Lifeline. 

By performing a structured needs assessment, state agencies can evaluate their infrastructure, policies and procedures, funding, and workforce needs to better understand their readiness to implement and capability to sustain the 988 Suicide & Crisis Lifeline. This assessment provides insight for state agencies to understand their strengths, challenges, and areas of opportunity, and it should evaluate: 

  • State infrastructure
    Behavioral health leaders acknowledge that infrastructure supports are necessary to make the 988 Suicide & Crisis Lifeline work across the continuum of care. It is important to assess the infrastructure across the crisis care continuum to help ensure a smooth transition for individuals who need care quickly. Successful implementation should take certain considerations into account during the planning process, such as including all the interested parties representing diverse populations.
  • Workforce
    In the current labor market, workforce availability and retention are top concerns for sustainable and effective 988 Suicide & Crisis Lifeline operations. States are struggling to hire the extra staff needed to launch the 988 Suicide & Crisis Lifeline as well as to recruit qualified persons. To realistically implement the system, innovative workforce development and supporting wages to recruit and retain a specialized workforce are critical considerations for the states. Critical components to include in the assessment should include, but are not limited to:
    • Training
      Staff training and proper supervision will be crucial to effectively manage the 988 Suicide & Crisis Lifeline, and states need best practices models for how to best train crisis responders and the call center staff. States should assess the existing training infrastructure to identify ways early on to support the mental health of their 988 Suicide & Crisis Lifeline counselors to reduce the risk for burnout and post-traumatic stress disorder. 
    • Capacity
      Adequate capacity is a key factor to workforce. The assessment should identify the number of qualified workforce available for in-person staffing. In the current labor market, it will also be important to consider including the identification of the number of qualified staff able to work remotely. If states would like to consider remote capabilities for the call centers, it will also be important to assess the available technology necessary, as well as the development of standards and expectations, including strong communication. 
  • Readiness of the crisis care continuum
    Apprehension about the readiness of the crisis care continuum (e.g., mobile crisis teams through diversion services and lower levels of care) exist. Federal officials have stated they expect up to 12 million calls/texts/chats in the first year of the 988 Suicide & Crisis Lifeline, and research suggests approximately 20% of those calls/texts/chats will require some level of in-person response. States are questioning whether mobile crisis teams are prepared for the increased demand while also identifying connections and access to upstream services. In addition, states can consider the needs and experiences of the system’s end users to help address equity. The assessment can help to assess the readiness of the various components across the crisis care continuum.

Establish a strategic plan of action to implement the 988 Suicide & Crisis Lifeline 

With the implementation of the 988 Suicide & Crisis Lifeline, state agencies have an opportunity to strengthen crisis care. The best way to begin strengthening crisis care is to develop and implement strategic plans that optimize the 988 Suicide & Crisis Lifeline and the following services. Building on the strengths and opportunities identified in the needs assessment and the associated recommendations, strategic plans can establish priorities and identify sustainable solutions that build capacity, promote equitable access to care, and promote continuous quality improvement. Collaborating with key stakeholders to develop a strategic plan can help identify a roadmap for how the state should approach the implementation, maintenance, and sustainability of the 988 Suicide & Crisis Lifeline, including, but not limited to, the following areas:

  • Data and performance management
  • Stakeholder engagement
  • Health equity
  • Voice of the customer
  • Financial sustainability

Maximize available funding streams

Historically, behavioral health has not had sufficient funding to adequately address mental health and substance use disorder prevention, treatment, and recovery services across the continuum of care. The COVID-19 pandemic exacerbated behavioral health challenges for many individuals struggling and highlighted the challenges with the infrastructure and workforce. In the last couple of years, the federal administration has continued to allocate additional funding to supplement existing and ongoing federal funding. States should begin by evaluating the existing federal funding opportunities to support the implementation of the 988 Suicide & Crisis Lifeline. According to the Substance Abuse and Mental Health Services Administration’s (SAMHSA) 988 Convening Playbook for States, Territories, and Tribes, below are a few examples of funding sources that can be leveraged for the implementation of the 988 Suicide & Crisis Lifeline. 

  • SAMHSA 
    • Transformation Transfer Initiative
    • Community Mental Health Services Block Grant
    • Substance Abuse and Treatment Block Grant
    • Mental Health Block Grant Set-aside
    • State Opioid Response Grant
    • Tribal Opioid Response Grants
  • American Rescue Plan Act (ARPA) of 2021—for Mobile Crisis and Crisis Line Services
  • Medicaid
    • Early, Periodic, Screening, Diagnosis, and Treatment (known as EPSDT)
    • 1915(a) waivers
    • 1915(b) waivers
    • 1115 SMI/SED Service Delivery Waiver

The implementation of the 988 Suicide & Crisis Lifeline is critical to supporting the community and meeting their needs at a time where they need community support the most. If you have any questions, please contact BerryDunn’s behavioral health consulting team. We’re here to help.

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Components of successful implementation of the 988 Suicide & Crisis Lifeline

Read this if you are at a state Medicaid agency.

The uncertainty surrounding the end date of the COVID-19 Public Health Emergency (PHE) has made it difficult for state Medicaid agencies to plan and prepare to transition to pre-pandemic operations. Upon the federal declaration of the PHE, states and territories were forced to react quickly to reduce the impact on the Medicaid program and its enrollees. Many states and territories took advantage of the emergency authorities through the Centers for Medicare and Medicaid Services (CMS) to implement temporary policy changes such as the removal of prior authorization requirements, increased payments to providers, removal of cost-sharing, and the expansion of telehealth services. 

While many of the emergency authorities will terminate on or around the end of the PHE, states and territories may elect to make those temporary changes permanent due to the positive impact for both enrollees and providers. Take telehealth, for example. The broad flexibilities allowed during the PHE permitted providers to meet the healthcare needs of enrollees in a time where in-person visits were not recommended, nor available. To increase access to testing and vaccinations in pharmacies, pharmacy technicians and interns were permitted to administer COVID-19 vaccinations when supervised by an immunizing pharmacist.

So what comes next for states and territories once the PHE ends? Taking a proactive approach to plan out next steps will assist states and territories to be better prepared upon conclusion of the PHE. The US Department of Health and Human Services (HHS) has committed to providing at least a 60-day notice prior to the official end date of the PHE. CMS encourages states and territories to communicate changes to enrollees, managed care plans, counties, providers, and other stakeholders.

As we await the declared end date of the PHE or notification of another extension, states and territories can begin taking actions to prepare for the resumption of normal operations. We have learned new ways to prevent disruptions in meeting the needs of enrollees, developed enhanced methods of communication to stay in touch, and used technology to its fullest capacity. While our new normal is very different than pre-pandemic times, we can all use what we have learned to strengthen our tactics for any future PHEs. BerryDunn is here to assist and support states and territories as they prepare for the eventual end of the PHE.

If you have questions or would like to discuss further, please contact the Medicaid consulting team. We're here to help. You can also read more BerryDunn articles on the PHE unwinding here.

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Looking beyond the Public Health Emergency: What's next for states

Read this if you are a Medicaid agency or attended MESC 2022.

As I depart Charlotte and fly home and MESC 2022 closes out, I understand why Charlotte is referenced as the Queen City. The people make it so, as we were welcomed with open arms in this beautiful place. Our appreciation and gratitude go out not only to Charlotte, but also to NESCSO for providing us with a place to meet, share ideas, get inspired, and deepen our relationships.

In the coming months, our team can sift through what we learned during our four days at MESC. It will be up to us to transform the ideas spawned from presentations and conversations into tangible action, and grow the new relationships we developed. Here are my key takeaways and themes from the conference that I will continue to ponder:

  • The conference is in full swing on the other side of the pandemic. MESC was sold out, as 1,700 people attended.
    • MESC established a new annual award for collaboration. This year the award went to the Public Sector Technology Group's (PSTG) Medicaid Information Technology Architecture (MITA) workgroup. CMS is optimistic that the MITA workgroup's efforts will help improve Medicaid and that the resulting toolkit will be the future of MITA. Thank you to this group, and congratulations on a well-deserved award!
  • Modernization efforts:
    • The reality of managing modernization efforts is settling in. States and territories are beginning to get clear on their approach, acknowledging that each has unique needs, and consequently, can customize their approach. It will be a long haul requiring good upfront strategizing, planning and execution.
    • Many states and territories recognize a need to examine and adjust their internal structures to manage multiple procurements and strategies.
    • Data and data governance is foundational to the modularization and modernization effort.
  • Unwinding is weighing on everyone's mind, but participants discussed other forward-looking topics. 
  • CMS continues to solicit input from states, territories, and vendors
    • This was CMS' first in-person conference since the pandemic's start—it was so great to have their energy and participation.
    • It was fantastic to be in sessions where CMS asked: How can they do better? 
    • Efforts on outcomes, streamlining certification, consistency, and accountability continue to be CMS themes
    • Brent Weaver, CMS' new Data and Systems Group Director, outlined four of CMS' goals at MESC:
      • Strengthen state and territory partnerships
      • Get input from vendors on unwinding
      • Identify ways to improve data quality
      • Find ways that will help CMS become better partners
  • Ensuring health equity and leveraging social determinants for health is a priority for states and territories.
  • New solution vendors are coming into the Medicaid space, and want to learn about Medicaid and the broader enterprise as they look for ways to adapt their systems.  
  • There continues to be mergers and re-shuffling of the more established vendors as they look to adapt to and serve the needs in the Medicaid space.
    • This was BerryDunn's 17th conference. We have broadened our services and maintained our values. I'm grateful that BerryDunn continues to have a stable presence at the conference.  
  • Our Medicaid Practice Group mission statement (see below) aligns with the CMS Data and Systems Group Director's reason for being in his role. 

Additional thoughts: Asking "why," change, and education

I also appreciated conversations within our Medicaid community based on the “why": Why are we doing what we do? Why focus on modernization? Health equity? Social determinants of health? 
The "why" drives what we do by providing us with our North Star, helping us with strategy, and giving us our roadmaps for proceeding. By starting with the purpose and outcome we strive for, we can align the changes we need to make.  

Change can be a source of fear, and there is a risk of venturing into the unknown. Medicaid leaders understand that the work they are responsible for is critical to their members, providers, and taxpayers. Lives depend upon our work, and the potential of "change" can have positive or negative consequences. Effective planning can mitigate the risks and help alleviate staff, member, and provider fears about change. 

Education also plays a big part in the mitigation equation. After tying the purpose to the vision, roadmap, and phased plans to modernize our programs, there needs to be an education plan to bring everyone up to speed and build confidence in those who will be impacted.

Conclusion

I am grateful that the BerryDunn Medicaid Practice Group's mission complements the goals of CMS and the direction in which states and territories are moving. We are honored to participate in this vital work and join all in the Medicaid community as we work on the initiatives before us. I leave you with our mission statement and invite you to share your organization's mission with us.

BerryDunn's Medicaid Practice Group helps Medicaid agencies improve the health and lives of individuals by empowering, inspiring, and partnering with our clients—we innovate, share deep expertise, and provide an independent perspective to resolve challenges. We are the success partner for Medicaid agencies, building healthier communities and stronger futures.

I look forward to seeing you all again next time in Denver! Let's make it a great year!

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MESC 2022: Reflections from 30,000 feet

Read this if you are at a state Medicaid agency.

The COVID-19 PHE has raised many questions for Medicaid programs across the country. The Centers for Medicare & Medicaid Services (CMS) and other healthcare organizations have been providing guidance on how to best manage the PHE since it began. In particular, CMS has provided recommendations on how Medicaid programs can implement new processes and rules into their Medicaid Enterprise Systems (MES) for individuals to remain under continuous enrollment until the end of the PHE. 

Strategies for MES

BerryDunn has been working with many states and territories to develop strategic plans to comply with specific rules and requirements throughout the PHE. Some of these strategies involve changes to the original designs of the MES. Examples include:

  • Updating system rules to maintain individuals enrolled in continuous coverage throughout the PHE
  • Retesting system rules to confirm systems are working properly once PHE rules are removed
  • Revamping system notifications so reminders keep individuals informed about ongoing changes
  • Training staff on the new system updates so they can manage calls and orient individuals on changes regarding their eligibility

CMS continues to release updated guidance on how Medicaid programs can best prepare for the end of the PHE in order to resume normal operations. These recommendations indicate that Medicaid programs adopt strategies to maintain coverage of eligible individuals as the continuous enrollment requirements come to an end, following the conclusion of the PHE, while allowing coverage for ineligible individuals to terminate. Medicaid programs must ensure their systems are prepared for the transition, but some of these updates and changes to the systems may pose greater challenges: 

  • Since there are no precedents to compare with the current PHE unwinding event, Medicaid programs will need to execute changes within a limited timeline and work with the issues that may arise as they execute unwinding
  • For some Medicaid programs, system rules, both current and updated ones, are not able to run simultaneously
  • Medicaid programs may need to hire additional staff, train new employees, and retrain or cross train current employees within a small window of time
  • Medicaid programs will need to perform additional MES testing to confirm those systems are working as required
  • Medicaid programs will incur additional costs to cover additional operational efforts
  • System vendors will incur extra work that may affect project timelines and other priorities

If you have any questions or would like to learn more about how BerryDunn can assist you with the PHE unwinding efforts, please contact the Medicaid consulting team.

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Design, Development, and Implementation (DDI) and project impacts resulting from the Public Health Emergency (PHE)

Read this if you work for a not-for-profit organization. 

Our annual not-for-profit Recharge event provides attendees with an opportunity to hear about hot button issues in the not-for-profit industry. We polled registrants from across the country to see where they are focusing their attention in the current landscape. 

Employee retention

Overwhelmingly, employee retention is a number one concern for organizations, with 78% of respondents saying they were strongly focused on it in 2022. Not surprisingly, financial stability (67%), cybersecurity (50%) and concerns about access to government funding (43%) were of common concern among respondents.


 
Remarkably, employee retention in 2022 weighed more heavily on respondents than concerns around the remote workplace in 2021. While over 57% of respondents were concerned about the remote workforce in 2021, employee retention did not even make it into the top four concerns for organizations. This shift is consistent with what we are seeing in our client base, as organizations embraced hybrid and remote working arrangements and are well into codification of and adherence to the policies in place. Organizations reported taking significant efforts toward employee retention, most commonly looking at increasing salaries and allowing hybrid and flexible work arrangements as methods to help retain employees.

Financial stability

The concern around financial stability is slowly starting to decline. While financial stability was a top concern for 83% of organizations in 2021, that percentage dropped to 67% of respondents listing it as a top concern in 2022, While multiple factors certainly contribute to these results (availability of COVID relief funds, for example), the decline is significant, especially in this time of inflationary growth and demands on the labor market. This decline may be reflective of the continued transition away from short-term emergency response and toward a more future-oriented mindset. 

Other concerns

Both cybersecurity and government funding concerns held relatively steady in 2022 compared to 2021, with 45% of respondents concerned with cybersecurity and government funding in 2021, compared to 50% and 43% in 2022, respectively. 

Participants also reflected on the perceived top concerns for their board members, with employee retention and recruitment and overall financial stability leading in top importance. These mirrored concerns are of no surprise, but speak to the continued need for regular and reliable reporting to boards to allow for continued rapid response by those charged with governance.

If you have any questions about your specific concerns or situation, please don’t hesitate to contact our not-for-profit team. We’re here to help.

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Employee retention and other concerns: NFP outlook for the year ahead

What the C-Suite should know about CECL and change management

Read this if you are at a financial institution. 

Some institutions are managing CECL implementation as a significant enterprise project, while others have assigned it to just one or two people. While these approaches may yield technical compliance, leadership may find they fail to realize any strategic benefits. In this article, Dan Vogt, Principal in BerryDunn’s Management and IT Consulting Practice, and Susan Weber, Senior Manager and CECL expert in BerryDunn’s Financial Services Practice, outline key actions leaders can take now to ensure CECL adoption success.  

Call it empathy, or just the need to take a break from the tactical and check in on the human experience, but on a recent call, I paused the typical readiness questions to ask, “How’s the mood around CECL adoption – what’s it been like getting others in the organization involved?” The three-word reply was simple, but powerful: “Kicking and screaming.”  

Earlier this year, by a vote of 5-2, the FASB (Financial Accounting Standards Board) closed the door to any further delays to CECL adoption, citing an overarching need to unify the industry under one standard. FASB’s decision also mercifully ended the on-again off-again cycle that has characterized CECL preparation efforts since early 2020. One might think the decision would have resulted in relief. But with so much change in the world over the past few years, is it any wonder institutions are instead feeling change-saturated?  

Organizational change

CECL has been heralded as the most significant change to bank accounting ever, replacing 40+ years of accounting and regulatory oversight practices. But the new standard does much more than that. Implementing CECL has an effect on everything from executive and board strategic discussions to interdepartmental workflows, systems, and controls. The introduction of new methods, data elements, and financial assets has helped usher in new software, processes, and responsibilities that directly affect the work of many people in the organization. CECL isn’t just accounting—it’s organizational change. 

Change management

Change management best practices often focus on leading from optimism—typically leadership and an executive sponsor talk about opportunities and the business reasons for change. Some examples of what this might sound like as it relates to CECL might include, by converting to lifetime loss expectations, the institution will be better prepared to weather economic downturns; or, by evolving data and modeling precision, an institution’s understanding and measure of credit risk is enhanced, resulting in more strategic growth, pricing, and risk management. 

But leading from optimism is sometimes hard to do because it isn’t always motivating—especially when the change is mandated rather than chosen.  

Perhaps a more judiciously used tactic is to focus on the risk, or potential penalty, of not changing. In the case of CECL, examples might include, your external auditor not being able to sign-off on your financials (or significant delays in doing so), regulatory criticism, inefficient/ineffective processes, control issues, tired and frustrated staff. These examples expose the institution to all kinds of key risks: compliance, operational, strategic, and reputational, among them.

CECL success and change management

With so much riding on CECL implementation and adoption going well, some organizations may be at heightened risk simply because the effort is being compartmentalized—isolated within a department, or assigned to only one or two people. How effectively leadership connects CECL implementation with tenets of change management, how quickly they understand, then together embrace, promote, and facilitate the related changes affecting people and their work, may prove to be the key factor in achieving success beyond compliance.  

One important step leaders can take is to perform an impact assessment to understand who in the organization is being affected by the transition to CECL, and how. An example of this is below. Identifying the departments and functions that will need to be changed or updated with CECL adoption might expose critical overlaps and reveal important new or enhanced collaborations. Adding in the number of people represented by each group gives leaders insight into the extent of the impact across the institution. By better understanding how these different groups are affected, leaders can work together to more effectively prioritize, identify and remove roadblocks, and support peoples’ efforts longer term.           

 
No matter where your institution is currently in its CECL implementation journey, it is not too late to course-correct. Leadership—unified in priority, message, and understanding—can achieve the type of success that produces efficient sustainable practices, and increases employee resilience and engagement.

For more information, visit the CECL page on our website. If you would like specific answers to questions about your CECL implementation, please visit our Ask the Advisor page to submit your questions. For more tips on documenting your CECL adoption, stay tuned for our next article in the series, revisit past articles, or tune in to our CECL Radio podcast. You can also follow Susan Weber on LinkedIn.

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Implementing CECL: Kicking and screaming

Read this if your organization offers health insurance through a health insurance exchange.

When the Affordable Care Act (ACA) was passed in 2010, it contained a known gap which made healthcare premiums unaffordable for some families covered under Medicare or employer-sponsored health insurance plans. The gap in the law, commonly referred to as the family glitch, was formalized in 2013 as the result of a Final Rule issued by the IRS. 

The “family glitch” calculates the affordability of an employer-sponsored health insurance plan based on the cost for the employee, not additional family members. An article published in April 2022 on healthinsurance.org estimated that the cost of health insurance for a family covered by an employer-sponsored plan could end up being 25% or more of the household’s income, even if the plan was considered affordable (less than 9.61% of the household’s income) for the employee alone. Almost half of the people impacted by the family glitch are children.

The family glitch was allowed to stand in 2013 partly because of concerns that resolving the issue could push more people off employer-sponsored plans and onto marketplace qualified health plans, ultimately raising the cost of subsidies. Since then, several attempts have been made to fix the issue, which affects around five million Americans. The most recent attempt was an executive order issued by President Biden soon after taking office in January 2021. The Office of Management and Budget has been reviewing regulatory changes proposed by the Treasury Department and IRS, details of which were published in April 2022. 

These regulatory changes would alter the way health insurance exchanges calculate a family’s eligibility for subsidies when the family has access to an employer-sponsored health insurance plan. If the changes go into effect in 2023 as proposed, audits of the 2023 fiscal year will need to account for the new regulations and potentially conduct different testing protocols for different parts of the year. 

Our team is closely following these proposed changes to help ensure our clients are prepared to follow the new regulations. Earlier this week, we attended a public hearing held by the Treasury Department, where representatives of various groups spoke in support of, or in opposition to the proposed regulatory change. Supporters noted that families with plans that offer expensive coverage for dependents would benefit from this change through reduced costs and more coverage options, including provider networks that may more closely align with the family members’ needs. Those in favor of the change anticipate that families with children would see the most benefit. 

Those opposed to the change expressed that due to the way the law is currently written, they do not see the regulatory flexibility for the administration to make this change through administrative action. Additionally, concerns were raised that families covered by multiple health insurance plans could be faced with higher out-of-pocket-costs due to having separate deductibles that must be met on an annual basis. Lastly, not all families that have unaffordable insurance would see financial relief under this proposal. 

The Treasury Department is expected to announce its decision in time for open enrollment for plan year 2023 which is scheduled to begin on November 1, 2022. Our team will continue to monitor the situation closely and provide updates on how the changes may impact our clients. 

For more information

If you have more questions or have a specific question about your situation, please reach out to us. There is more information to consider when evaluating the effects these changes will have on the landscape of healthcare access and affordability, and we’re here to help.

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Fixing the "family glitch": How a proposed change to the ACA will affect healthcare subsidies