VIP Community Services

Transaction Profile

 

$2 Million Behavioral Health Working Capital Loan

Vital Healthcare Capital (V-Cap) provided critical financing for VIP Community Services (VIP) to expand integrated
substance use, mental health and primary care services for high-need individuals and families.

 
 

Fast Facts About Financing VIP

  • VIP is a multi-service provider at the forefront of the opioid crisis in the Bronx, NY

  • V-Cap’s working capital loan supported cash flow needs related to the expansion of programs

  • VIP’s expansion included start-up of a Certified Community Behavioral Health Clinic (CCBHC) pilot

  • The $2 million included a $1 million participation from The Nonprofit Finance Fund (NFF)

Borrower:
VIP Community Services (VIP)

  • Comprehensive care: primary care, substance use, mental health, and housing.

  • Serves 25,000 in Central Bronx

  • 90% of clients are at or below the poverty level, and one in five are homeless.

  • VIP’s substance use services take aim at the escalating opioid crisis affecting the Bronx.

  • VIP is pioneering a new model of comprehensive behavioral healthcare.

Financial Challenge

  • Like many behavioral health providers, years of reimbursement rates that did not reflect total cost of care left VIP without reserves that could be used to invest in growth and promising models of care.

  • To cope with this challenge, VIP’s efforts focused on coordinated, integrated care to better serve clients with complex needs, and to bring value to the healthcare delivery system.

  • However, an infusion of cash was still needed to take advantage of new funding streams.

Financial Solution

  • $2 million working capital loan

  • Investment needed to hire new staff for revenue producing programs, manage cash flow for managed care payment cycles, and reconfigure space for new programs.

  • 2-year loan to allow for ramp up of new programs, with option to extend.

  • Underwriting relied on the quality of the organization and the importance of its services to multiple stakeholders to mitigate past financial stress and uncertainty tied to future payments for new programs.

Investing in Comprehensive Behavioral Health at VIP

 

Curtis Rhodes struggled with addiction for 35 years – spending time in prison, living on the streets, losing his family, and revolving in an out of detox. But in 2009, at age 50, Rhodes found a path to recovery through VIP Community Services.

The Bronx agency takes a comprehensive approach to mental health and substance use treatment. The counselors there had a tremendous impact on Rhodes’ recovery. VIP, he says, saved his life and put him on a path to do something he was good at – giving back to others. Rhodes is now a peer recovery navigator at VIP, where he helps drug users get into care so they can recover, heal and get their lives back on track.

In 2016, more Bronx residents died of drug overdoses than in any other NYC borough. In the Tremont neighborhood, where VIP is based, the epidemic’s devastation is all around. VIP serves people with co-occurring disorders – many of whom suffer from physical health issues, including HIV/AIDS and other chronic illnesses. More than 90% of VIP’s 25,000 patients live in poverty and more than one in five are homeless.

Care Model

What makes VIP unique is its offering of an integrated model of care encompassing primary health care, mental health support, and treatment for substance use. VIP staff, including peers with lived experience of addiction, help clients find a pathway to care, and link clients to supportive services such as housing, jobs and a social network.

VIP is also one of 13 organizations in New York that was initially designated a Certified Community Behavioral Health Clinic (CCBHC) under the federal government’s Substance Abuse and Mental Health Services Administration. The national pilot aims to transform care by integrating a full range of mental health and addiction services.

About CCBHCs (Certified Community Behavioral Health Clinics)

  • Established through Excellence in Mental Health Act and created by SAMHSA, CCBHCs are designated to deliver comprehensive, outpatient mental health and substance abuse treatment services as well as care coordination.

  • The CCBHC model encourages a comprehensive approach to treatment and recovery.

  • The CCBHC program pays providers for services at cost – an important step towards parity.

  • In addition to New York; seven other states participated in the initial CCBHC demonstration.

To learn more about CCBHCs, visit https://www.samhsa.gov/section-223

The V-Cap Loan

V-Cap’s working capital loan gave VIP the funds it needed to address continuing cash-flow challenges tied to multiple factors, including the conversion of Medicaid coverage to managed care for substance use services. This conversion extended the period for getting paid, which affected liquidity and expanded the number of payers that VIP had to work with to get fully reimbursed for its services.

The additional $2 million enabled VIP to recruit more staff to accommodate increasing client flow (such as therapists or specialists who can help connect patients to housing), reconfigure space to serve patients more directly, and implement new programs that combine substance use treatment, mental health services, and primary care.

 

“Our clients often come to us with complex needs for treatment of addiction, mental illness, and chronic disease, so our goal is to treat the whole person. This investment will help us scale up and ensure that everyone we serve has all their physical, emotional and mental health needs addressed.”

— Debbie Pantin CEO of VIP Community Services