California promised to boost mental health in schools. Why one key program is behind schedule

California made a huge one-time investment in youth mental health during the COVID-19 pandemic as rates of depression, anxiety and eating disorders surged among children and teens. One piece of the state's plan included a way to keep money flowing for schools that wanted to expand mental health services for students.

It involved allowing K-12 schools and colleges to charge Medi-Cal and private health insurance for behavioral health care provided on campus, a change that would allow them to provide more services and hire additional mental health staff.

But that effort — among the first of its kind in the country — is off to a slow start, delaying dollars and resources for schools to help students with mental health challenges.

Only 14 school districts and county offices of education have begun billing for behavioral health services under the Children and Youth Behavioral Health Initiative Fee Schedule Program, according to state health officials. Forty six school districts and county offices of education started the implementation process in January 2024 and were supposed to start billing last July. A total of 494 school districts, county offices of education and colleges have signed up to participate in the new billing program.

Some school officials are frustrated over program delays. They say the state was slow to release guidance and necessary training to submit claims for mental health services provided. Officials at schools that hired mental health staff say they may soon have to lay off recent hires because payments for services provided are not coming in as expected. This means students could lose newly gained access to services.

"There are so many unknowns and the timelines just keep getting pushed," said Trina Frazier, assistant superintendent of student services at the Fresno County Office of Education. "And that's really sad because it has so much potential."

The California Department of Health Care Services, which is overseeing implementation of the program, told CalMatters in an email that while the target was to begin billing in mid-2024, "the scale and complexity of implementation required adjustments to provide additional flexibilities to schools."

"Major reforms of this kind require time, coordination, and phased implementation," the department said in its email.

The department said it continues to work with schools to address any outstanding challenges. Its new goal is for that first group of 46 districts and education offices to start billing by the end of the current school year.

A boost for mental health in schools

California and the nation have seen a surge in mental health disorders among students. For example, about 284,000 California children and teens deal with major depression, and two-thirds of them do not receive treatment, according to state estimates.

Despite the slow start for the new school billing program, other mental health efforts are underway through other components of the state's $4.7 billion Children and Youth Behavioral Health Initiative that launched in 2021. That money has paid for mental health apps, education campaigns, and mental health workforce training programs, among a number of other efforts. About $400 million of that money was allotted in the form of one-time grants to education institutions to hire providers and prepare for this new billing program.

In response to delays in the billing program, a group of lawmakers recently sent Gov. Gavin Newsom a letter requesting bridge funding that they say would allow schools to keep building mental health services while the program comes up to speed. The letter does not specify a dollar amount.

For the last 30 years and through a separate program, California schools have been able to get reimbursed by Medi-Cal, the state's Medicaid program for low-income residents, for certain physical and mental health services. But there's long been a gap for children with private insurance. This new billing program is supposed to address that, as well as allow schools to expand the types of mental health services they can provide and charge for.

Mental health experts regard school as an ideal setting for children to receive help. It's where they spend most of their weekdays and generally feel safe. It's also a "logistics problem solver" because schools resolve some potential barriers to care, like transportation to appointments, said Sarah Broome, a school Medicaid consultant. Also, teachers and staff see children every day and can notice when things are off.

Broome said that the challenges that the state and schools are facing in rolling out this new fee schedule program are somewhat predictable, partly because what California is doing is new. "So it's not even like you can call your peer states and be like, 'Hey, how did you guys figure out how to do this?' You are creating a lot of this as you go. So there's absolutely real pain there."

What's behind the delays?

State legislators are hearing from frustrated local officials about the billing delays. The Fresno County Office of Education filed its first claim for reimbursement on Feb. 28, but as of last week continued to face challenges, according to Frazier.

Frazier told lawmakers in a hearing last week that the program rollout "feels like building the plane while flying it."

In Santa Clara County, the local office of education established 25 wellness centers across its schools and hired 50 new mental health workers, including clinicians and wellness coaches. But the delays prompted the office to notify its new staff about possible layoffs, Amanda Dickey, executive director of government relations for the Santa Clara County Office of Education, told lawmakers during the hearing.

"Because we didn't receive reimbursement for a single claim until 15 months after (starting program implementation) … as of March we were forced to pink slip 27 of our staff. So 27 of the approximately 50 that we hired," she said.

Dickey told legislators that the state and the third party administrator contracted to process claims, Carelon Behavioral Health, did not give schools access to or training for the billing software used to file claims until late last year.

Meanwhile, the Los Angeles County Office of Education told CalMatters that one of the challenges has been collecting students' health insurance information – a new task for schools, and one that requires parents and caregivers to cooperate in sharing information about their health plan. (Mental health care provided at schools under this program should not result in any out-of-pocket costs for families, according to the state.)

Tanya Ward, a project director at the Los Angeles County Office of Education, said her office has yet to file mental health claims under this new program, but expects to do so later this month.

The California Department of Health Care Services attributes the delays to a "learning curve" for both the state and schools.

According to the department, a number of factors contributed to the delays, including the fact that some schools requested edits to the contractual documents to participate in the program and that others expressed confusion about the process and needed additional support.

The department said that districts are allowed to submit claims retroactively for dates of service back to July 1, 2024, as long as those claims are submitted by June 30.

The 14 districts and education offices that are now able to file claims are starting to do so in larger numbers, Autumn Boylan, deputy director of the Office of Strategic Partnerships at the state health department, told lawmakers in last week's hearing.

"This is a significant change for the entire system, and changes of this magnitude take time," Boylan told lawmakers.

"There is still work to be done, but I do think we are making progress," she said.

Testifying next to each other at last week's hearing, Boylan and Frazier from Fresno couldn't agree on how much in claims had actually been paid out to the Fresno County Office of Education.

Of the first 40 claims that had been processed for Fresno, 21 were denied, Frazier said. Boylan said that some claims are being denied because they are incomplete or not properly filed. Lawmakers questioned whether schools are filing claims incorrectly because they have not been adequately taught how to do so.

"This is brand new for schools," Sen. Caroline Menjivar, a Van Nuys Democrat, said during the hearing. "It is imperative on us, as government, to lead them in the right path if we want them to take on something that's completely out of their scope."