14. Results-Focused Contracting

South Carolina

A 2021 state law established a trust fund in the State Treasury for the purpose of making Pay for Success contracts. Each agency entering into a Pay for Success contract must provide funding into the trust to cover 100% of the potential success payment. Upon written authorization by the state agency head whose state agency has entered a Pay for Success contract, the state treasurer will make payments from the trust fund.

From 2016-2020, South Carolina carried out a Pay for Success project to expand home visiting services to 4,000 additional low-income mothers and their children. South Carolina’s Department of Health and Human Services (SCDHHS) used the contract to deliver preventive services to first-time mothers in the state’s Medicaid program with the goal of improving the health outcomes of mothers and their babies. As part of the project agreement, South Carolina will make up to $7.5 million in success payments to sustain Nurse-Family Partnership’s services only if independent evaluators find positive results. In order to incentivize implementing agencies to enroll low-income mothers who may have more risk factors, project partners made enrollment from low-income zip codes a payable outcome. Additional payable outcomes for the project include reductions in child injury rates, preterm births, and rapid repeat pregnancies. In 2021, short-term and long-term outcomes were still being studied and evaluated.

Issue Areas: Child Welfare, Health