Funding School-Based Health Centers

There is no single funding stream for SBHCs in California, and no dedicated state funding. Instead, California SBHCs are funded through a variety of sources that depend on their lead agencies, student populations, communities and local resources.

These funding sources include: reimbursement from Medi-Cal and other third party payers; local, state, and federal grants; private foundation or corporate grants; subsidies from their lead organizations; donations; and/or in-kind contributions from schools districts and other partners. 

Third-Party Reimbursement

SBHCs run by community clinics, hospitals, and other licensed health care providers can bill public and private health insurance programs for many of the services they provide. This includes Medi-Cal, Medi-Cal managed care, Family PACT, Minor Consent Medi-Cal, County Specialty Mental Health Services, and the Child Health and Disability Prevention (CHDP) program. 

About half of children in California are covered by Medi-Cal, and most of these children are enrolled in managed care plans run by local initiatives (e.g., Partnership Health Plan of California) or commercial carriers (e.g., Anthem Blue Cross). In order to bill Medi-Cal managed care plans, the largest payer for health care for children and California, the provider needs to have a contract with that plan and individual clinicians may need to be “credentialed” with it. 

A few other things to know:

  • SBHCs run by community health centers or FQHCs have access to enhanced, cost-based Medi-Cal reimbursement rates when compared to other provider types. This makes them a good option for operating SBHCs. 
  • SBHCs run by school districts may currently only bill under the CHDP, LEA Medi-Cal, and School-based MAA programs. For more information on school district funding options, see our Education Funding web page.
  • As of April 2020, recent changes to the LEA Medi-Cal Billing Option Program will make it a more attractive option for many school districts. These changes include adding practitioners and services to the program and expanding services to all Medi-Cal enrolled students, not just those in special education. 
  • Most billing is now done electronically, with a few exceptions, and Electronic Practice Management (EPM) systems are commonly linked to Electronic Health Records (EHRs) to support a streamlined process. 
  • An effective revenue cycle includes not only submitting the initial claim for services rendered but also a mechanism to track and reconcile payments, correct and re-submit claims, and manage any payer denials in a timely manner. 

Although billing and capturing third-party reimbursement is complex, it is one of the most important factors in developing a sustainable SBHC. Fortunately, most community health providers have billing systems in place and can use these systems to support their SBHCs in securing reimbursement. 

This brief guide on maximizing third-party billing, covers best practices for the Child Health and Disability Prevention Program (CHDP), FamilyPACT Program, Medi-Cal Managed Care, and Minor Consent Medi-Cal.

Read more in our Third-Party Billing Manual

Grant Funding & Other Support

Very few SBHCs can be sustained by third-party reimbursement alone. Strong SBHCs typically provide some services that can’t be reimbursed, including outreach, case management, classroom education, health fairs, peer health education or other youth development programs, food distribution, and/or support for school staff wellness. In addition, some clinical services may not be reimbursable due to the student’s coverage, medical necessity, or other barriers. 

Therefore, grant funding usually comprises a good segment of an SBHC budget. Ideally, SBHCs will be able to secure some portion of grant funding that is non-categorical and can be sustained over time to support the basics of its operations, including administration and management. Local health departments or hospital community benefits may provide such a source. 

However, it is more common for SBHCs to seek and secure a variety of short-term grants from foundations and government sources that require specific projects and deliverables. These may be organized around areas such as tobacco use prevention, asthma, trauma or teen pregnancy prevention or trauma, for example. It will benefit the SBHC to be creative and expansive in seeking grant funding, and to utilize what are often deficit-based approaches to funding into positive programs and services that build the innate strengths and assets of children, youth and communities. 

Read this fact sheet on how some school districts fund their SBHCs.

CSHA Resources

Third-Party Billing: A Manual for California’s School Health Centers

This manual is intended to help increase billing revenue and strengthen sustainability and to aid those starting a school health center in understanding potential sources of revenue. It provides tips on how to develop/improve billing practices and effectively submit billing claims. The manual covers billing for primary care services, reproductive health services, and services provided by school districts. Sample forms and effective practices for billing within the managed care system are also provided. The manual was developed jointly by CSHA and L.A. Care Health Plan.

Recommendations for Sustaining SBHCs

There are many factors that contribute to SBHC sustainability, such as strong school partnerships, family engagement, utilization and quality of SBHC services. As you seek new funding sources, be sure to also review this tip sheet.

Other Resources

Guide to Medi-Cal Programs

This easy-to-use Guide to Medi-Cal Programs from the California Health Care Foundation provides an orientation to Medi-Cal with information on immigration, disability, the application process, services covered – and includes an Aid Code Quick Reference Guide. The guide also provides a summary of each program; a description of who is eligible and how many recipients are covered; and a listing of the corresponding aid codes. 

Grant Alerts

The Center for Health and Health Care in Schools also offers this useful Grant Alerts for School Health Programs.