Roche_Kenneth_Masters_Paper_2020.docx

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The Earned Income Tax Credit meets Clinical Care: A Simple and

Direct Approach to Improve the Lives of Vulnerable Populations

By

Kenneth William Roche

A Master’s Paper substitute submitted to the faculty of the University of North Carolina at Chapel Hill

in partial fulfillment of the requirements for the degree of Master of Public Health in

the Public Health Leadership Program

Chapel Hill Spring 2020

Sarah Brill Thach

Sarah B. Thach May 5, 2020

Date Anne S. Salter

Anne S. Salter May 5, 2020

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Abstract

Poverty is a known risk factor for poor health outcomes, yet healthcare providers have traditionally felt limited in their ability to affect patients’ income. Healthcare providers are increasingly tasked with improving individual health while also addressing the social

determinants. In 2018, the Medical-Legal Partnership between Mountain Area Health Education Center’s medical practice and Pisgah Legal Services started providing free tax preparation services for qualifying patients and helping them take advantage of the Earned Income Tax Credit. MAHEC screens and refers patients and staff to have their returns prepared by PLS volunteers who have been trained and certified to do tax preparation by the IRS, through its Volunteer Income Tax Assistance program. This EITC Program has returned in excess of $175,000 dollars with over $30,000 being EIC benefits to the most vulnerable people in the community. Replicating the program in a medical practice requires partnership and adaptability, and is an innovative approach to address social determinants of health.

Introduction

Medical providers understand that patient health goes beyond clinical walls with social factors influencing health. Addressing financial wellbeing in the clinical setting is a simple and direct approach to improve the lives of vulnerable populations. This EITC Program utilizes the Volunteer Income Tax Assistance (VITA) program developed by the IRS to aid low income taxpayers with tax preparation and increase awareness and accessibility of the Earned Income Tax Credit (EITC or EIC). The IRS reports that 1 in 5 people eligible for the EIC do not claim this refundable credit1. The status of the EIC as a refundable credit means that a taxpayer will

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receive a refund. This paper shares the history and health benefits of the EIC, results of an established EITC Program, and strategies for replication.

Background

According to the U.S. Census, 14% of North Carolinians live in poverty2; children, African

Americans, and Latinx families have much higher rates. Many more are susceptible; fully 1/3 of all North Carolinians are living paycheck to paycheck and are one accident, mishap, or

unexpected emergency away from poverty3. Poverty is a predictor of poor health, inter alia,

reduced access to services, safe households and safe neighborhoods, food availability, and medication access. Poverty is also a result of poor health that presents challenges to work and afford medication, access safe housing, and utilize non-emergent health care. According to the North Carolina Department of Health and Human Services, more than 1.2 million North Carolinians cannot find affordable housing and one in 28 NC children under age 6 is homeless. North Carolina has the 8th highest rate of food insecurity in the United States, with more than one in five children living in food insecure households (up to one in three children in some counties). Almost half (47%) of North Carolina women have experienced intimate partner violence and nearly a quarter of North Carolina children have experienced adverse childhood experiences (ACEs)4.

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1). According to the Center on Budget and Policy Priorities, the federal EITC program lifted 5.8 million people above the federal poverty level in 20166. Across the nation in 2019, 25 million

eligible workers and families received a total of $61 billion, an average of $2,476 per family. North Carolinians received $2.2 billion dollars in 20196. Over 22% of all North Carolina

households received an average of an additional $2,517. People who have not filed taxes but are eligible for the EIC can file current and two past years of taxes, meaning some families will receive over $10,000. The program leverages federal tax dollars and IRS-trained volunteer tax preparers to support low-income families.

The Volunteer Income Tax Assistance (VITA) program is crucial to ensure eligible people receive the EIC. The IRS created the VITA program in 1971 to aid underserved populations with free tax preparation assistance. VITA provides resources, tax materials, technical assistance and support to volunteer tax preparation partners across the country. The IRS pairs VITA sites with an IRS Wage and Investment, Stakeholder Partnerships, Education & Communication

representative (SPEC rep) to navigate obstacles of implementation, such as IRS compliance requirements and the tax software, TaxSlayer, among other things. A key feature of VITA is the emphasis on the EIC for taxpayers. The income eligibility for free tax preparation through the VITA program is set by the IRS to match the ceiling for EIC eligibility (around $56,000). In 2018 over 1.3 million tax returns were prepared at 3,700 VITA sites across the country, resulting in over $1.8 billion dollars for those households7.

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Figure 1 represents the amount of dollars refunded by the government based on marital status, dependents, and amount earned in the tax year.

Example: A patient of MAHEC, single mother of two, participated in the EITC Program to have her taxes filed. This was the first time in three years that she had filed her taxes. Due to her low annual income she had not been required to file. This patient works 35 hours per week making $8.25 per hour. Her annual salary is about $15,000. This patient was able to secure $5,700 dollars in EIC, and after filing her back taxes the total amount increased to over $15,000 dollars.

The EIC continues to have a sweeping impact across the country and has an exceptionally high return on investment. The cost of administering an earned income credit ratio to claims paid is less than one percent.1 In addition to the federal earned income tax credit, many states have

adopted an earned income credit, compounding its impacts.

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The EIC has been shown to improve measures of maternal and child health, poverty,

employment, stress, and academic achievement. Multiple studies conclude positive relationships with receiving the ETIC and birth weight, with black mothers seeing the greatest benefit8–10;

gestation10; maternal smoking8,9,11–13; first prenatal visit, alcohol consumption during pregnancy,

and being seen for a well-child check in the first month after birth13. The greatest impact of the

EIC is the recorded quantity of individuals that move beyond the federal poverty level after receipt. The nature of the EIC is to give tax credit to individuals who are currently participating in the work force and multiple studies conclude that this incentive structure increases labor work force participation and earnings especially among single mothers, ultimately reducing

poverty14,15. Increased earnings and employment can improve health through the purchase of

insurance and increase spending on healthy groceries such as fresh fruits and vegetables16,17,

improve housing18, and reduce rates of suicide for adults 25 or older19.

Children benefit from the EIC in other ways. A 2017 study suggests that a refundable EIC, and policies that increase household income, may prevent serious abusive head trauma20, improve

child development21, and increase academic achievement across multiple grade levels. Increases

include reading and math scores in elementary and middle grades and higher standardized test scores, graduation rates, and college enrollment rates22,23.

The literature available demonstrates that benefits from the EIC positively influence individual behaviors and social determinants linked to housing and academics. The EIC improves health by allowing people to address their most pressing financial needs. Despite these important

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Three Models for Integrating an EITC Program into a Healthcare Setting

StreetCred was started at Boston Hospital in 2015; it provides on-site tax preparation as patients wait for their medical appointment. As of 2019 the StreetCred program has returned over $5.3 million to more than 2,700 families24,25. This model requires funding for a Site Coordinator and

space for an on-site tax preparation program; without adequate capital this model is difficult to replicate.

Another model is having providers and staff refer to off-site VITA services provided by

organizations such as AARP or local/regional entities such as OnTrack Financial Education and Counseling in Western North Carolina. Although referrals to external organizations benefit patients, the potential barriers to accessing offsite services may reduce participation rates. The Medical-Legal Partnership (MLP) between Pisgah Legal Services (PLS) and Mountain Area Health Education Center’s (MAHEC) medical practices in Asheville, North Carolina offers a third model. MAHEC staff and providers screen and refer both patients and moderate-income staff to Pisgah Legal Services’ volunteers who are trained and certified by the IRS VITA program to prepare taxes and help people get the EIC. The volunteers see patients either onsite during regularly scheduled sessions or offsite at PLS’s office. MAHEC runs residencies and provides care in Family Medicine, Ob/Gyn, Community Psychiatry, General Surgery, Dentistry, and Pharmacy. PLS provides free civil legal aid to low income people in Western North

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Program was instituted during the 2017 tax season. Initially modeled after the StreetCred program, it was soon modified due to lack of space for walk-in services in the health center. PLS already had a strong volunteer base upon which to draw and the embedded attorney at MAHEC coordinates the EITC Program, including organizing volunteer training. This model shields the healthcare provider from the administrative burden of administering the program and from liability related to tax preparation. The primary institutional challenges of starting the EITC Program involved (1) the creation of a HIPAA compliant referral form and (2) developing and implementing a systematic plan for screening and making referrals that capitalizes on patients’ adherence to provider recommendations but does not overburden providers.

Methods

Patients are screened at MAHEC Family Health Center and MAHEC Ob/Gyn offices with a 2-question informational flyer at check in for their appointment. The flyer was originally inherited from StreetCred’s materials. Patients are invited to sign the consent portion of the flyer and the flyer is scanned and sent to PLS. PLS contacts the patient directly to further screen them for program eligibility and schedule appointments for tax preparation. PLS/VITA-trained volunteers at MAHEC or at PLS then prepare and e-file the patients’ taxes.

The responsibility of screening and referral is divided into three tasks, to minimize disruption to patient workflow (See Table 1.).

1) During initial check in, front desk staff gives patients the flyer, along with the other documents patients will carry with them throughout the appointment.

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3) Providers emphasize that financial health is a part of a person’s overall health and wellbeing, provide context on why this is happening in the exam room, and reinforce program participation.

Table 1: Example workflow with staff scripts

Front Desk

 Flyers are visibly located at the check in desk and can be acquired by anyone.

 Front desk staff hands the patient the flyer as part of the initial check in phase for their appointment.

 This staff member then draws attention to the program,

“Here is some information about receiving free tax

preparation this tax season. These informational sheets will

tell you more about the requirements and documents to bring

if you are interested. Our EITC Program is a free service for

those who qualify and focuses on getting you the biggest tax

refund possible. Please review this information and ask your

provider if you have any questions.”

Medical Assistants  Medical Assistants remind the patient that they have the form. “I see you received our EITC Program flyer. I would like to review the document with you and see if you are

interested in receiving free tax preparation. All you do is

sign this paper and someone from Pisgah Legal Services will

contact you to see if you are eligible and set an appointment.

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every week. The goal of their certified tax volunteers is to get

you the most money back on your refund. I am happy to take

the signed paper and send it off, if you have any more

questions please ask your provider.”

 They send forms to PLS after securing a signature. Providers  Providers reinforce the benefits of the program and

encourage the patient to participate. “I see that you heard about our partnership with PLS--where our patients can get

free tax help for filing taxes and enroll in Earned Income

Tax Credit. We at MAHEC are interested in serving you and

your family’s overall health and wellbeing. We recognize

that your financial wellbeing directly impacts your physical

health. This program can help to make sure you get all

possible dollars you are eligible for back when you file your

tax return this year. This is a completely free service and

trained/certified volunteers will help with filing your taxes.

By signing the consent form, a PLS staff member/tax

coordinator will reach out to you to review your eligibility

and schedule an appointment. If you have specific questions

the tax coordinator at PLS can answer them. You can also

reach out to them by calling the number on the sheet. I

highly encourage you to follow up with this program as it is

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your family are eligible for this year.”

Results

In the first year of the program, tax year 2017, only 28 medical partner referrals were made. Of those 28 referrals 15 returns were prepared resulting in $22,215 tax return dollars and $8,781 dollars being EIC dollars. Following the conclusion of year one, program leaders and champions met to determine where improvements could be made to increase program efficacy. Strategies implemented as a result included marketing the EITC Program to qualifying staff members, offering a preparation site at MAHEC to aid in patient convenience and adding an additional clinical site for screening. These improvement strategies resulted in significant increases across all program outcomes. The 2018 tax year saw 68 returns filed resulting in $127,675 tax return dollars and $47,058 dollars in EIC. With only 53 more returns than the previous year the

program saw a 436% increase in secured EIC dollars and a 475% increase in total return dollars for patients. Gaps still existed in clinical workflow integration. New iteration strategies to the program for the 2019 tax year included direction from the newly formed MLP Operations team and preparation of staff to market the program earlier to start screening and scheduling patients before tax documents were officially released. Implementation of this program for the 2019 tax year was interrupted by the COVID-19 pandemic. 106 patient referrals were already generated prior to the suspension in mid-March by executive order.

Table 2: EITC Expansion in Second Year of Program

2017 Tax Year 2018 Tax Year % Increase

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Total EIC dollars refunded $8,781 $47,058 436% Total tax dollars refunded $22,215 $127,675 475%

Table 3: Addressing Challenges/Iterations

Challenges Solutions/Actions

Staff missing referrals for interested patients.

Use green paper for the flyer: green is the color of money and is easily identified by other staff, and serves as a reminder to discuss the program.

Staff hesitancy/discomfort to discuss tax program with patients due to poor tax experience or personal nature of finances.

Have eligible staff participate in the program for first-hand account of ease and familiarity with the process.

Have direct supervisors provide formal training to staff members to adequately inform elements of the program. Establish clear expectations for staff members and provide a script they can share with the patients.

Have all staff members practice scripts and roleplay scenarios.

Participation among patients is low.

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to answer all your questions.” If patients are still hesitant, invite them to call PLS directly.

Try different types of marketing, such as text alerts, emails, patient portal promotion, monitor/screen advertising.

Experiment to figure out when and where is most conducive to give this information/obtain consent during a typical patient visit. This program uses a 3 step approach- initial information (front desk), reminder (MAs), and provider reinforcement. Referral process does not fit

into existing workflow.

Establish a quality improvement team comprised of staff from differing departments to resolve logistical challenges in the referral process.

Lack of institutional support to implement program.

Identify/recruit departmental champions to oversee various elements of program implementation.

Conclusion

This program presents a strategy for providers to improve their patients’ income and quality of life through a refundable tax credit, the EIC. Individuals and families are entitled to these refundable dollars regardless of what they owe or whether they are required to file their taxes. This intervention provides a concrete way for physicians to help patients beyond their presenting medical needs and it can easily be replicated in numerous medical settings.

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internal infrastructure and existing relationships, working together on an EITC project could alleviate many challenges. Additionally, check whether a VITA site is operating in your community. There are over 3,700 VITA sites across the country and the IRS provides a VITA Locator Tool on their website27. This tool allows one to search for VITA sites by zip code with a

radius between 5-100 miles. If a medical practice has enough resources to host a preparation site then the next step would be to connect with the IRS via their website to find a SPEC

representative to navigate IRS compliance and program development28.

Institutional support and in-house champions are vital for this program to succeed. Culture is not instilled after one successful program cycle. It takes time, practice, and effort. The EITC

Program’s metrics improved drastically after each cycle. As time passed, MAHEC’s staff awareness improved leading to more referrals and more return dollars for the people in the community. There are numerous obstacles to implementation along the way for each clinical practice and through iterative processes, your program will likely look different.

The EITC is the single most effective anti-poverty program in the country and 20% of eligible people do not claim the money they are entitled. The likelihood is high that many of your patients can benefit from an EITC Program. Incorporating a patient’s financial wellbeing into clinical practice via an EITC intervention is a key strategy to improve patient health beyond the clinical setting.

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