State of Play: Pay for Success and Evidence-Based Policy (New Profit)

The following post was written by Nicole Truhe, America Forward’s Director of Government Affairs.

It was a very productive 2015 for Pay for Success and evidence-based policy as the 114th Congress on a bi-cameral and bi-partisan basis introduced over a dozen pieces of legislation, amendments, or budget authorities that supported Pay for Success, evidence, and innovation policy and practice in just its first session. With the second session of this Congress already underway, America Forward held our first Pay for Success and Evidence-Based Policy Network call last week to discuss the current “State of Play” in Pay for Success and evidence-based policy. This post reflects the major updates provided and additional resources to access more detail about each major piece of legislation, Administration initiative or state level effort underway.

This year, in addition to the Congressional updates that we regularly provided in 2015, we are adding substantive Administration updates along with state level updates that reflect some of the most significant reforms in the Pay for Success and evidence space to date. The most notable update is the number of Pay for Success projects launched in just the last few weeks coupled with the introduction and passage of important pieces of Pay for Success state legislation resulting in many to label February 16th as #NationalPFSDay. In addition, President Obama released his Fiscal Year 2017 budget on February 9th and continued his Administration’s steadfast support of innovation, evidence, and data access to advance a federal agenda that focuses on what works and rewards the measurement and achievement of positive outcomes across many federal programs.

Congressional Updates

1. Evidence-Based Policymaking Commission Act: Representative Paul Ryan (R-WI) and Senator Patty Murray (D-WA) reintroduced legislation that would create a commission to develop practices and processes for ensuring the use of outcomes and evidence when making federal policy and budget decisions.  Known as the Evidence-Based Policymaking Commission Act, the Commission would be tasked with identifying data access and inventory needs and making recommendations for how best to incorporate outcomes into federal program design. There is no update to the current status of the legislation.

Current Status:

  • House: The legislation has been successfully voted out of the full House.
  • Senate: The legislation was successfully voted out of committee and action is still pending for approval by the full Senate with noted potential movement any day.

2. Social Impact Partnership Act: Introduced in both the House and Senate, this legislation (H.R. 1336/S. 1089) would direct federal resources to states and local communities to support innovative Pay for Success arrangements. The bills aim to tackle social and public health challenges while evaluating programs more closely in order to achieve desired outcomes for those in need and more effectively use taxpayer dollars. There was an attempt to move the House bill last year by including it in the welfare reform/TANF reauthorization legislation that the Ways and Means committee was moving. However, that effort stalled. The Senate continues to find ways to fund the bill and avenues for moving the legislation.

Current Status:

 

  • House/Senate: Neither bill passed in either chamber last year and thus continues to be up for debate in this 2nd session of the 114th Congress.

 

3. Budget/Appropriations: The Fiscal Year 2017 Appropriations process is underway. President Obama released his Fiscal Year 2017 budget on February 9th and this marked the beginning of the budget and appropriations process. The President’s budget contained a number of evidence and innovation related priorities that are outlined here. The process now turns to Congress where some indications have already been made about where Congressional members will be focusing their priority funding requests and hearings have been scheduled in both the House and Senate for public discussion about funding levels for the upcoming Fiscal Year.

Current Status:

  • House/Senate: Neither bill passed in either chamber last year and thus continues to be up for debate in this 2nd session of the 114th Congress.

Agency Updates

1. Every Student Succeeds Act (ESSA): Last year, Congress successfully passed the Every Student Succeeds Act, which is the first update to the Elementary and Secondary Education Act since No Child Left Behind was signed into law 14 years ago. The negotiated bill included Pay for Success and evidence-based language in a number of provisions. With passage of the law, efforts now pivot to the Administration to develop regulations and other guidance to support states and local education agencies in their implementation of the law.

Current Status: The Department of Education has a dedicated site to ESSAwhere FAQ documents are available and steps are outlined related to the negotiated rulemaking process. The immediate next step is the nomination of individuals to serve on the negotiated rule committee, which will convene starting in late March.

 

2. Housing and Urban Development (HUD) Pay for Success Demonstration: Bi-partisan, bi-cameral legislation was introduced and successfully passed out of last year Congress that authorizes a Pay for Success multifamily energy and water conversation Pay for Success demonstration in affordable housing. HUD is now authorized to test energy efficiency solutions in HUD-assisted, multi-family housing with the goal of reducing costs to the federal government.

Current Status: HUD is poised to release guidance regarding implementation of the demonstration project, which will include an RFP sometime in 2016 for an intermediary or intermediaries to implement the demonstration.

3. Social Innovation Fund Pay for Success Competition: The Corporation for National and Community Service (CNCS) released its 2016 SIF PFS Competition Notice of Funding Availability last year for those interested in supporting the structuring and enabling of Pay for Success projects. Applications were due mid-February and awards will be announced in April. In addition, a number of current SIF PFS grantees announced open competitions for state and local governments or nonprofits to receive sub awards for Pay for Success feasibility studies, capacity building, or transaction structuring support in the last couple of months. Those announcements will be made in the March/April timeframe adding to the over 50 current Pay for Success studies and support activities underway across the country.

4. HUD DOJ Pay for Success Demonstration NOFA: The Department of Justice (DOJ) and the Department of Housing and Urban Development (HUD) are working together to advance Pay for Success by allocating funds to launch a Pay for Success initiative implementing the permanent supportive housing model. In particular, the demonstration seeks to test the use of Pay for Success using this model for a population continuously cycling between the criminal justice and homeless systems. HUD released a NOFA for implementation of this demonstration last year and applications were due February 12th. In the coming months, we expect HUD to announce the six awards being made for the funds available and for efforts to get underway in those jurisdictions to implement the projects over the course of the next four years.

 

5. Grant/Contract Pay for Success Preference: The Administration is identifying ways to support the use of Pay for Success and evidence through its contract forecast opportunities. The Department of Education has included Pay for Success support in its Career and Technical Education program for potential release in Q3. The Health Resources and Services Administration (HRSA) included exploration of Pay for Success as a desired approach in its Early Comprehensive Childhood Systems Impact funding announcement.

States Updates

1. Launched Pay for Success Projects: On February 16th, also known as#NationalPFSDay, three separate Pay for Success projects were launched in red and blue states and cities across the country. Social Finance, Corporation for Supportive Housing, and Enterprise Community Partners, all America Forward Coalition members, are serving as intermediaries on these three important new projects that for the first time integrate Medicaid funding into Pay for Success arrangements and focus on new issues such as substance abuse.

2. State Level Pay for Success Legislation: A number of states have already advanced Pay for Success legislation through their state legislatures in the last few years. Highlighted during our call were legislative efforts underway in New Hampshire and Iowa. In New Hampshire, legislation is making its way through the General Court that would establish a commission to extend RFPs to provide pre-kindergarten services using Pay for Success. In Iowa, a similar piece of legislation was introduced by the Legislature but recently failed to move out of Committee so is no longer being considered.

If you are interested in learning more about Pay for Success or America Forward’s Pay for Success advocacy efforts, please contact America Forward’s Government Affairs Director, Nicole Truhe at Nicole_truhe@newprofit.org.