Designated agencies, school counselors warn Success Beyond 6 strained by staffing and funding pressures

Designated agency leaders and school counselors told the Vermont House Health Care Committee during a hearing that Vermont’s Success Beyond 6 school‑based mental health partnership is under pressure from workforce shortages and evolving school contracting choices, and that Medicaid billing rules and a required local match continue to shape who pays for services.

Matt Habenank, director of early childhood and school‑based services at Northwestern Counseling & Support Services (NCSS), said the program’s aim is early intervention in schools and “we're always sort of in to work ourselves out of a job, as quickly as we can.” He told lawmakers Success Beyond 6 provides a mix of fee‑for‑service, case‑rate clinicians, PBIS consultants and DA‑run independent school placements that reach roughly two‑thirds of Vermont schools.

Why it matters: Success Beyond 6 is structured so designated agencies bill Medicaid for covered services and the school district pays a local match that NCSS cites currently as a 42.17% federal match component. When districts hire clinicians or behavior staff directly rather than contracting with a designated agency, NCSS leaders said the district must carry the full cost on its education budget rather than the partial Medicaid match—shifting budget pressure to local taxpayers and changing how services are delivered.

DA financing and the local match

Derek Hoy, chief financial officer for NCSS’s Franklin and Grand Isle counties region and acting CFO for Lamoille County Mental Health Services, described how the funding works: designated agencies bill Medicaid for the full Medicaid rate, he said, but agencies must account for an obligation to have the school pay back the match portion. “There’s the federal match component, which is right now 42.17%,” Hoy said. He emphasized that the match must be “clean local dollars,” such as local tax revenue, and cannot be federal funds used to match federal funds.

Habenank and Hoy said the Success Beyond 6 model is intended to be cost‑effective because agencies deliver specialized clinical oversight and scale across many schools, but that the model is strained by labor shortages that surfaced during the pandemic and by rising service costs that sometimes exceed Medicaid reimbursement rates.

“When Medicaid pays you $100 for a service but it costs you $110 to provide that service, you’ve had to build the edge the school, not only the $42 but an additional $10 on top of it,” Habenank said, describing how contract rates sometimes must rise to reflect real labor costs.

Workforce and contractual choices

Committee members and witnesses discussed how districts sometimes hire private contractors or school employees directly because those options deliver staff faster or with less documentation burden. Hoy and Habenank said DA employment includes more Medicaid documentation, treatment plans and billing requirements; some candidates prefer roles with fewer administrative requirements. Hoy noted the legislature has recently provided funding increases to designated agencies that have helped hiring, but that workforce shortages remain.

Abby Allen, a school counselor and member of the Vermont School Counselor Association Advocacy Committee, described rising student need and the limits of current counseling ratios. “There is still an increase in social, emotional, and mental health needs amongst our student populations,” Allen said, citing higher anxiety, depression, self‑harm and housing insecurity. Allen urged more school counselors to provide prevention and early intervention and to reduce staff burnout.

Private insurance and non‑Medicaid students

Witnesses noted that Medicaid covers many school‑based services but private insurers do not uniformly pay for the same services. “Private insurers’ rates are kind of all over the place,” Habenank said; Hoy added that some services, such as one‑on‑one behavior intervention, are often not reimbursed by private commercial payers. When students lack Medicaid, schools can still contract for services at non‑Medicaid rates, but that raises the district’s cost.

What witnesses asked of lawmakers

DA leaders urged continued funding and policy attention to ensure the Success Beyond 6 model remains viable, to make Medicaid billing as manageable as possible for staff, and to consider how broader health care reimbursement reforms (including CCBHC‑related changes) interact with school‑based funding. School counselors asked for more counseling positions and systemic supports so staff can focus on prevention rather than emergency response.

There were no formal votes recorded on the topic during this hearing; committee members said they would accept written testimony and continue to gather information at later sessions.