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The Legal Department articles are not intended to serve as legal advice and are offered for educational purposes only. The information provided should not be used as a substitute for independent legal advice and it is not intended to address every situation that could potentially arise. Please be aware that laws, regulations and technical standards change over time. As a result, it is important to verify and update any reference or information that is provided in the article.
CalAIM is a multi-year effort to transform and reform the Medi-Cal system. This article provides information about major components of the CalAIM framework such as the new requirements for Medi-Cal Managed Care Plans (MCPs) and a multitude of behavioral health reforms.
By Sara Jasper, JD
More than 14 million Californians, or roughly one out of three, are covered by Medi-Cal. Medi-Cal is California’s version of Medicaid, the national program that provides health care coverage for low-income adults, children, pregnant women, elderly adults, and people with disabilities.1 Patients who receive behavioral health care services through Medi-Cal and the providers who serve them often engage with a system that is outdated and disjointed. In January, with approval from the Centers for Medicare and Medicaid Services (CMS), the California Department of Health Care Services (DHCS) launched the California Advancing and Innovating Medi-Cal (CalAIM) initiative, a multi-year effort to transform and reform the Medi-Cal system.
CalAIM will create a more flexible, integrated, patient-centered, whole-person-focused system for Medi-Cal members through a series of initiatives that will be implemented from now until 2027. New requirements for Medi-Cal managed care plans (MCPs) and a multitude of behavioral health reforms are major components of the CalAIM framework. This article will review these components and offer a brief overview of the recent DHCS report Assessing the Continuum of Care for Behavioral Health Services in California, which will inform the state’s future efforts to more fully support the behavioral health needs of Californians.
An Overview of CalAIM
CalAIM has three main goals:
To achieve these goals, CMS approved DHCS’s plans for new statewide services as well as the waivers needed to implement major Medi-Cal program changes.3 CalAIM’s revisions to the Medi-Cal system impact all its aspects, spanning across managed care, behavioral health, dental, and other county services. Below are brief descriptions of the new statewide services and a thorough review of the changes to managed care and behavioral health.
New Statewide Approaches Under CalAIM
Population Health Management
Managed care plans will be required to implement a whole-system, person-centered approach to care that includes assessments of each member’s health concerns and social needs with an emphasis on prevention and wellness, care management, and care transitions.
Enhanced Care Management
Enhanced Care Management is a person-centered approach for high-need Medi-Cal members. This type of management style requires in-person engagement with a commitment to meet the members where they live and access services.
Medi-Cal MCP partners will begin offering “community supports” such as housing supports and meals, which will help meet members’ health care needs and provide health-related services.
Behavioral Health Delivery System Transformation
DHCS will improve the state’s “behavioral health continuum of care” for Medi-Cal members and promote its integration with physical health care. CalAIM will streamline policies to improve access to behavioral health services, simplify how these services are funded, and support administrative integration of mental illness and substance use disorders treatment.
Services and Supports for Justice-Involved Adults and Youth
These CalAIM initiatives serve to address poor health outcomes, risk of illness, and accidental death among Medi-Cal members who are justice-involved. The goal is to assist these members as they transition out of the justice system and reenter communities.
Transition to Statewide Dual Eligible Special Needs Plans and Managed Long- Term Services and Supports
CalAIM will implement a statewide expansion of a special kind of managed care plan that coordinates all Medicare and Medi-Cal benefits. The “dual eligible” plan is for members who are eligible for both programs. CalAIM will transition Medi-Cal to statewide managed long-term services and supports to simplify administrative efforts and to coordinate and integrate care.
Standard Enrollment and Consistent Managed Care Benefits
CalAIM will more heavily rely on managed care plans while standardizing benefits within the MCP system to ensure access to services and enhance the member experience.
Providing Access and Transforming Health (PATH)
CalAIM will increase the capacity of its partners, including community-based organizations (CBOs), public hospitals, county agencies, tribes, and others.
Delivery System Transformation
Through this program, CalAIM will consider other options for enhancing care. These include developing a long-term action plan for foster youth, pursuing a federal waiver for short-term residential treatment for members with a serious mental illness or serious emotional disturbance (SMI/ SED), and piloting full integration of physical health, behavioral health, and dental health into one managed care plan. Under the current system, Medi-Cal members are forced to navigate a number of complex delivery systems to address all their health care-related needs. For example, a member may receive physical health care and treatment for mild-to-moderate mental health conditions from MCPs while also receiving care for severe mental illness (SMI) and substance use disorders (SUD) from the county and dental care from a separate fee-for-service or managed care delivery system.4 Under the Full Integration Plan proposal, DHCS would test the effectiveness of the full integration of physical health, behavioral health, and oral health under one contracted managed care entity.
More About the New Requirements for Medi-Cal Managed Care Plans and Contracted Providers
The transformation of Medi-Cal relies heavily on Medi-Cal managed care plans (MCPs). By 2024, 99 percent of Medi-Cal members will be enrolled in MCPs.5 A Request for Proposal (RFP) from the system’s commercial MCP contractors confirms the state’s high expectations for its MCP partners. Some of the new changes are as follows:
More About CalAIM’s Behavioral Health initiatives
As mentioned, CalAIM’s implementation is bringing about a myriad of program and policy changes within Medi-Cal’s behavioral health system. Concerns about inequities in access to care are the impetus for these initiatives. The intent is that these system-wide changes will support person-centered, culturally competent, whole-person, integrated care that reduces disparities.
Criteria for and Medical Necessity of Specialty Mental Health Services
Specialty mental health services (SMHS) are offered by 56 county mental health plans (MHPs) that cover the 58 counties in California. DHCS revised SMHS requirements for adults and Medi-Cal members under 21 to ensure and standardize access to these services. The criteria for beneficiary access to SMHS was updated.7 New regulations related to the criteria for access to SMHS care will be in place by January 2024. For more specifics on these changes, see DHCS’s Behavioral Health Information Notice (BHIN) 21-073 at https://www.dhcs.ca.gov/Documents/ BHIN-21-073-Criteria-for-Beneficiary-to- Specialty-MHS-Medical-Necessity-and-Other- Coverage-Req.pdf.
Behavioral Health Document Redesign
To improve Medi-Cal members’ experience and more effectively document treatment goals and outcomes, DHCS modified its behavioral health documentation requirements. Effective July 1, 2022, the new requirements are consistent with CMS’s national coding standards and physical health care documentation practices. The new requirements do not apply to non-specialty behavioral health services in fee-for-service and Medi-Cal managed care. For more specifics on these changes, see BHIN 22-019 at https:// www.dhcs.ca.gov/Documents/BHIN-22-019- Documentation-Requirements-for-all-SMHSDMC- and-DMC-ODS-Services.pdf.
No Wrong Door and Co-OccurringTreatment
As of July 1, 2022, a “no wrong door” approach makes it possible for Medi-Cal members to access services for mental health and substance use disorders swiftly and easily, regardless of the delivery system they used to initiate care. Whether members initially sought services through County Behavioral Health, an MCP, or the fee-for-service system, they are entitled to an assessment and mental health services. Their providers will be reimbursed for those services by the member’s contracted plan even in cases where the member is transitioned to another delivery system because of their level of impairment and needs. Through this policy, DHCS will also make clear that patients who have co-occurring mental health and substance use disorder conditions may be served by providers in each of the behavioral health systems as long as services are not duplicated and appropriate steps are taken. For more specifics about the No Wrong Door policy, see BHIN 22-011 at https://www.dhcs.ca.gov/ Documents/BHIN-22-011-No-Wrong-Doorfor- Mental-Health-Services-Policy.pdf.
Standardized Screening and Transition-of-Care Tools
The tools used to screen and transition care for adults and youth within Medi-Cal’s behavioral health system vary widely. Since these tools are used to make referrals to either MHPs or MCPs and those referrals result in different levels and types of care, inconsistencies must be addressed. With stakeholder input, DHCS has developed new tools for use by MHPs and MCPs. These standardized tools will better ensure appropriate referrals and timely, coordinated care when members are transitioning from one delivery system to another or receiving additional services. The new standardized adult and youth screening and transition-of-care tools will be used statewide beginning in January 2023.
Behavioral Health Payment Reform
Per CalAIM’s payment reform policies, DHCS is moving counties from a cost-based reimbursement system to a value-based (aka outcome, quality, and equity) reimbursement system. The new payment policies under development will go into effect July 1, 2023.
Behavioral Health Regional Contracting
Behavioral health regional contracting will give counties options for optimizing resources. These options include establishing a Joint Powers Authority to render services to members in multiple counties within the region, partnering with other counties to pool resources, and contracting with administrative services organizations or third-party administrators/other entities such as MCPs or County Medical Services Programs. This will help create administrative efficiencies for multiple counties.
Administrative Behavioral Health Integration
Under the Section 1915(b) waiver slated to take effect in January 2027, DHCS will propose administrative integration of specialty mental health and substance use disorder services into one behavioral health managed care program in each county or region. This plan will allow counties and regions to optimize resources and provide more coordinated care.
Section 1115 Waiver—Serious Mental Illness (SMI)/Serious Emotional Disturbance (SED) Demonstration
The SMI/SED 1115 waiver will expand care for adults who are living with SMI and for children and youth who are living with SED. CMS’s approval of the waiver would enable the state to obtain federal Medicaid matching funds for additional behavioral health treatment options, specifically services through residential and community settings.
An Overview of and Takeaways from DHCS’s Report on the Continuum of Care for Behavioral Health Services
Even before the COVID-19 PHE, the administration and the legislature had prioritized the transformation of the Medi- Cal system and committed to the expansion of behavioral health services and supports across the state. The onset of the pandemic further highlighted the need for an evaluation of behavioral health services and resources in California. As a result, in late 2021 DHCS produced Assessing the Continuum of Care for Behavioral Health Services in California: Data, Stakeholder Perspectives, and Implications.8 This report outlines the range of behavioral health services available, as well as the inequities in and strains on the system, to better identify what services and supports need to be available for the overall well-being of Californians. The assessment is timely, as DHCS is in the midst of implementing major behavioral health initiatives and acting on new federal funding opportunities. While the assessment includes information about California’s behavioral health system generally, it focuses on the services and supports available to Medi-Cal members who are dealing with serious mental illness and substance use disorders.
DHCS will use information from the report to guide its work and to strengthen California’s behavioral health system as a whole. The information compiled for the report will direct DHCS’s efforts on the Behavioral Health Continuum Infrastructure Program (BHCIP) and the serious mental illness/ serious emotional disturbance (SMI/SED) 1115 waiver application. BHCIP gives DHCS the funding to award competitive grants to qualified entities that will construct, acquire, and rehabilitate real estate assets or invest in mobile crisis infrastructure to expand the community continuum of behavioral health treatment resources. DHCS will also use the report to consider issues relevant to specific populations, such as children, adolescents, youth, American Indian/Alaska Native individuals, and those who are involved with the justice system. Below is a high-level summary of the assessment. The full assessment can be found at https://www.dhcs. ca.gov/Documents/Assessing-the-Continuum-of-Care-for-BH-Services-in-California.pdf.
Core Continuum of Behavioral Health Services
The assessment begins by defining a core continuum of behavioral health services, i.e., the elements of a strong and effective behavioral health system, as identified with input from subject matter experts, stakeholders, and others:
The data gathered for the report regarding the state of behavioral health shows the following:
The report’s data reveals that the state of behavioral health in California is also defined by the following realities:
The report evidences the need for and recommends the following:
With respect to prevention efforts, the report indicates that the state’s county behavioral health agencies want California to prioritize the development of crisis services and resources. Counties want to establish prevention models that offer 24/7 services 365 days a year. They believe that services and resources should be directly connected to, and work in concert with, the new 988 line for suicide prevention that went into effect in July 2022.
The importance of culturally responsive services that meet the needs of people with all types of gender, sexual orientation, and ethnicity, and from every race, is also heavily emphasized in the report. The assessment suggests using California’s workforce initiatives to ensure that there is a strong focus on recruiting and retaining a diverse population of providers.
Many of the recommendations made in the report are reflected in the goals of CalAIM. DHCS is taking steps to promote better community supports and integration of care for behavioral and physical health issues. Through CalAIM, DHCS will support administrative integration of mental health and substance use disorder systems, offer enhanced care management for high-need individuals, adopt a “no wrong door” approach to help members access mental health and substance use disorder services through statewide screening and transition tools, implement modified criteria for accessing specialty mental health services, and reform behavioral health payment methodologies. All of these steps will reduce fragmentation and other barriers to care, resulting in a more robust continuum of care.
Medi-Cal is a major provider of behavioral health services in California. The state is committed to investing in and strengthening the Medi-Cal system, particularly its behavioral health components, for the sake of its members. CalAIM’s initiatives and programs have the potential to create opportunities for MFTs to provide holistic, coordinated care within the Medi-Cal system. CAMFT will continue to monitor developments within the Medi-Cal system and provide information as it becomes available.
Sara Jasper, JD, CAE, is a staff attorney for CAMFT. Sara is available to answer member calls regarding legal, ethical, and licensure issues.
1Medicaid is administered by states in accordance with federal requirements and a state plan. A state plan is an agreement between a state and the federal government (i.e., the Centers for Medicare and Medicaid Services, or CMS) that describes how a state will administer its Medicaid program. States submit State Plan Amendments or SPAs to CMS to request program changes, make corrections, or update their Medicaid plans with new information. California’s Medicaid program, Medi-Cal, has been in place since 1966 and was expanded under the Affordable Care Act (ACA) in 2014. Medi-Cal is operated by the California Department of Health Care Services in conjunction with its federal Medicaid partner and approval agency, CMS. California has the nation’s largest Medicaid program. Medi-Cal enrollments significantly increased because of the system expansion that followed passage of the ACA. As a result of that expansion, people with slightly higher incomes are able to receive Medi-Cal regardless of disability, family status, financial resources, or other factors that once influenced eligibility decisions.
2Instead of volume and cost, the focus is on outcomes, quality, and equity.
3The state’s authority to implement CalAIM initiatives comes, in part, from CMS’s approval of two different kinds of waivers: Section 1115 or “demonstration” waivers and Section 1915(b) waivers. Section 1115 waivers support Medi-Cal’s experimental demonstration projects. Section 1915(b) waivers relate mainly to state implementation of Medicaid managed care delivery systems. These waivers, together with State Plan Amendments (SPAs), give the state the flexibility required to create a Medicaid system that is capable of meeting the specific needs of California’s Medi-Cal members.
4For several decades, Medi-Cal has been shifting from a fee-forservice (FFS) payment and delivery system to a system that relies on managed care. Under the FFS system, beneficiaries could see any provider who accepted Medi-Cal, and providers were reimbursed for each individual service or visit.
5The exception is for those for whom managed care enrollment is not appropriate because of the limited scope of benefits or the limited time enrolled.
6In an effort to further streamline and standardize the Medi-Cal system, DHCS is requiring that all MCPs and their contracted providers gain accreditation from the National Committee for Quality Assurance (NCQA) by 2026. The state will use the NCQA’s findings to determine whether MCPs are meeting state and federal Medicaid requirements.
7The updated criteria are the result of AB 133, and they are set forth in Cal. Wel. and Inst. Code §§14184.402(c) and 14184.402(d). Medical necessity for SMHS services is defined in Cal. Wel. and Inst. Code §14059.5.
8DHCS prepared the report between July and November 2021 using data from California reports, surveys, national databases, and a review of Medi-Cal administrative claims. Information from a survey of County Behavioral Health Directors, stakeholders, and focus group interviews is also included in the report.
This article is not intended to serve as legal advice and is offered for educational purposes only. The information provided should not be used as a substitute for independent legal advice and it is not intended to address every situation that could potentially arise. Please be aware that laws, regulations and technical standards change over time. As a result, it is important to verify and update any reference or information that is provided in this article.
CalAIM Implementation Timeline
During the COVID-19 public health emergency (PHE), the California Department of Health Care Services (DHCS) implemented policy changes regarding the use of telehealth to provide greater flexibility and access to care within the Medi-Cal system.1 These temporary policy changes accomplished the following:
To develop rules for the practice of telehealth within the Medi-Cal system after the PHE, the legislature directed DHCS to convene a Telehealth Advisory Workgroup. The workgroup’s recommendations informed the governor’s 2022-23 budget.2 Effective January 1, 2023, the following provisions determine the use of telehealth and the coverage of those services under Medi-Cal:
The glaring difference between Medi-Cal’s PHE and post-PHE telehealth requirements is that providers will no longer be able to establish new patient relationships via means other than in-person assessment sessions or synchronous video telehealth assessment sessions. According to DHCS, exceptions may be made upon consultation with stakeholders, but any further policy developments will be offered through and published in, department guidance.
Medi-Cal providers who have questions about Medi-Cal’s telehealth policy or who experience issues with claims processing may use the following resources:
1These policy changes were the result of the Families First Coronavirus Response Act (FFCRA); the Coronavirus Aid, Relief, and Economic Security (CARES) Act; and the release of federal waivers and flexibilities. DHCS implemented additional flexibilities for telehealth methods through blanket waivers and Disaster Relief State Plan Amendments (SPAs).
2Per AB 133, the Telehealth Advisory Workgroup consisted of subject matter experts and stakeholders who aided DHCS in establishing and adopting billing and utilization management protocols for telehealth to increase access and equity as well as to reduce disparities within the Medi-Cal system
3SB 184 and California W&I Code §§ 14132.100, 14132.725, 14132.731, 14197, and 14197.04.
4 DHCS may provide additional exceptions as a result of consultation with stakeholders. These additional exceptions will be published in department guidance.
5 DHCS may provide exceptions to this requirement if technology barriers exist. These exceptions will be developed in consultation with stakeholders. Any additional exceptions will be published in department guidance.
6In consultation with stakeholders, DHCS will develop an informational notice outlining this information that will be distributed to Medi-Cal members.
The state’s budget for fiscal year 2022-23 reflects the significance of the Medi-Cal transformation as well as the intention of this administration, in partnership with the legislature, to make behavioral services and supports for Californians a top priority. The following are budgetary highlights:
For more on the governor’s 2022-23 budget, visit https://www.ebudget.ca.gov/ FullBudgetSummary.pdf.