Braid them

See how a braid works

Here’s one example of four funding streams braided into a single state system.

1. 01CCDF quality set-asideCenter-based and family child care consultation
2. 02Medicaid administrative claiming and CHIP HSIsChild and population health consultation infrastructure
3. 03State line items and leviesDurable state and county infrastructure and local hubs
4. 04Philanthropic grantsSeed grants, innovation, IT builds, and local matches

State braided financing architecture

Sustainable IECMHC across settings

Braiding protects state agencies from federal audit disallowances. Consultants can still serve classrooms with mixed funding.

Your braid so far

Three moves for state leaders

1. 01

   Build shared governance

   Convene your Early Childhood Advisory Council, Children’s Cabinet, Medicaid leaders, and Head Start Collaboration Director. Give early childhood mental health leadership a permanent role with each.

   Many states, tribes, and communities expand the role of an existing council or form a new group to oversee consultation. Table 1 in our Overview of the IECMHC Approach(opens in a new tab) lists potential partners.

2. 02

   Combine funding streams

   Align your CCDF 3-year plan, CHIP Health Services Initiatives, Medicaid administrative claiming, and General Fund line items under a single cross-agency cost-allocation agreement.

3. 03

   Focus on key state goals

   Frame consultation around the outcomes your policymakers are accountable for: workforce retention, school readiness, expulsion prevention, and health system integration.

Go deeper

• What braiding and blending mean

  Braiding coordinates two or more funding sources to support the total cost of services. Revenues are allocated and expenditures are tracked by funding source.

  Blending wraps dollars from two or more sources into one program budget that pays for a unified set of services. Costs aren’t necessarily allocated and tracked by individual source.

  Blending merges each fund’s identity and reporting requirements into one co-mingled account. Braiding keeps strict cost allocation and tracks where each dollar came from.

• What the 2026 Head Start proposal shows about single-source risk

  A rule proposed in August 2026 would change the Head Start performance standards in four ways:

  • It would cut the cap on administrative costs from 15% to 5%. That shifts about $754M out of administration.
  • It would eliminate the requirement for mental health consultation at least once a month.
  • It would remove the prohibitions on suspension and expulsion and the mandatory mental health consult before a suspension.
  • It would revert classroom ratios to state licensing floors. That worsens ratios for 80% of children aged 5 and under in Head Start.

  Head Start funds can still legally be spent on mental health consultation under the Head Start Act. The lesson is that relying on a single federal grant or compliance rule leaves consultation vulnerable to policy shifts.

  This rule is a proposal.

• How Illinois works across systems

  Illinois created a leadership team across its early childhood and family support systems. The team includes the Maternal, Infant, and Early Childhood Home Visiting program, the state board of education’s early childhood block grant, and the Child Care and Development Block Grant quality set-aside.

  Read Illinois’s Approach to Building and Sustaining IECMHC (opens in a new tab).

• Five questions for your state team

  1. Does your state Medicaid plan, or other federal funding such as Indian Health Services, allow reimbursement for promotion and prevention activities such as programmatic consultation? What about dyadic work with both the child and the caregiver or family?
  2. How are you using the Centers for Medicare and Medicaid Services Information Bulletin on maternal depression screening within primary care to link families for consultation?
  3. How might providers receive payment for consultation services delivered to a child without a mental health diagnosis and who is ineligible for Medicaid?
  4. In your state or tribe, which services are reimbursable through Part C for children with social and emotional delays?
  5. Does your state or tribe offer differentiated reimbursement for mental health consultants with specialized training, education, or endorsement in this field?

To see which streams other states braid, open State Profiles. Our national scan covers 39 states and DC so far.

Check your readiness