Will plan fix California health care?

A year has passed since a massive statewide effort called CalAIM began rolling out. Among several significant changes CalAIM promised: An overhaul of the availability of mental health care for young people insured by Medi-Cal, the public insurance program for low-income Californians.

Advocates for youth mental health say they remain enthusiastic about CalAIM’s potential, using words like “game-changing” and “transformational.”

But they also say the new framework is being born at a tricky time. Three years into the pandemic, provider burnout and escalating patient need have combined to create a severe mental health workforce shortage. Meanwhile, community-based organizations that provide many of the mental health services outlined under CalAIM say they feel left out of the loop in important conversations about coming payment reforms.

Gov. Gavin Newsom’s budget proposal — which would delay certain behavioral health investments to combat a projected $22 billion deficit — also risks hampering progress for CalAIM.

“Our members are really panicked right now,” said Adrienne Shilton, director of public policy for the nonprofit California Alliance of Child and Family Services. In September 2022, hers was one of a dozen organizations that signed a letter to the state Department of Health Care Services expressing concerns about a lack of transparency around the new rate structure. “Providers must have the ability to plan and prepare alongside their county partners,” it said.

Shilton’s organization also co-authored a letter Wednesday to legislators, decrying the proposed budget delays.

Shilton told CalMatters earlier that other is

sues CalAIM is meant to address, including alleviating burdensome documentation requirements, have yet to change the on-the-ground reality for many providers.

CalAIM is about much more than mental health. The initiative, short for California Advancing and Innovating Medi-Cal, is a five-year plan that began rolling out a year ago. It aims to provide children and adults insured by Medi-Cal with better access to a range of health and mental health services. It also strives to use a “whole person care” approach to address social issues that impact health, including housing and food insecurity.

It also redesigns the payment system to more seamlessly integrate the county mental health plans and managed care organizations that pay for those services.

The relevance and urgency of addressing children’s mental health is especially clear: Racism. School closures. Online bullying. Climate disaster. A pandemic pocked with grief, loss and fear.

All of these factors have aggravated a youth mental health crisis that’s been raging for more than a decade. Incidence of self-harm for young people, which increased dramatically even before the pandemic, has spiked further in the past few years.

CalAIM has not yet significantly shifted the on-the-ground reality for many of these young people, experts say, but a number of important policy changes are officially underway:

About 40% of the state’s children and youth are insured by Medi-Cal. They no longer need a formal diagnosis to access specialty mental health services.

The state has simplified behavioral health documentation requirements.

A “No Wrong Door Policy” should make it easier for children and adults to receive behavioral health care no matter where they enter the system, replacing what can feel like a bureaucratic maze that varies by county.

An “enhanced care management” benefit provides services and case management to members of priority populations, including those who are homeless, experiencing early psychosis or involved with the child welfare or criminal justice systems.

Other efforts, including changing the way mental health services are paid for, are also rolling out this year.

Newsom’s administration, which early on made behavioral health a signature issue, is simultaneously unveiling several other ambitious initiatives, all of which require additional staffing and funding: a statewide program to set up new court systems to address the needs of people with severe mental illness, known as CARE Court; expanded crisis response services through state funding for a 988 hotline; and a major initiative to improve mental health care for children and youth, parts of which will be affected by the proposed budget delays.

Despite belt-tightening in other areas of the governor’s proposed January budget, CalAIM continues to be funded. Newsom’s proposal would dedicate more than $10 billion to CalAIM implementation, including $6.1 billion over five years to improve local treatment services and pay for short-term stays in treatment facilities for people with serious mental and behavioral health illnesses.

“We’re committed. We’re not touching that,” he said in a press conference earlier this month.

The budget proposal does, however, delay more than $1.1 billion in other behavioral health investments over the next two years, including money intended to increase treatment capacity for adults and kids in crisis, and money for workforce development. These investments were intended in part to shore up CalAIM’s goals, according to state documents.

“We’re concerned about the delays,” Shilton said. “This is funding outside of CalAIM but … the system is so stressed. Having this additional investment from the state was really beneficial.”

The governor’s office did not respond to questions about the proposed funding delays. He will revise his budget proposal in May, based on actual state revenue, and hammer out a final funding deal with legislators in June.

While CalAIM is an important step toward meeting the mental health needs of vulnerable young people, experts say staffing shortages, especially, are complicating the picture. As a result, some say, it’s not yet clear how and when official policy changes will translate into better mental health treatment for individuals. The proposed budget would delay nearly $400 million for health care workforce training, including some social work and behavioral health pipeline programs.

“Where are the people who are going to be delivering these services?” Shilton said.

Michelle Cabrera, executive director of the County Behavioral Health Directors Association, calls CalAIM “an uber-ambitious reform agenda that’s sitting on top of a system that’s really been through the storm.”

Counties are being asked to implement “ambitious, sweeping new reforms on top of the worst workforce crisis we’ve ever seen,” she said.

In an emailed response to CalMatters, the Department of Health Care Services said the Newsom administration is committed to “collaborating closely” with counties, health plans and others to plan, implement, and monitor the various “unprecedented and intersecting initiatives.”

Still, community-based organizations that contract with counties and managed care organizations to provide mental health services say they are worried about the payment they will receive for their services and how that could affect their ability to recruit and retain necessary staff.

Jodi Kurata, chief executive officer of the Association of Community Human Service Agencies, which represents nonprofit organizations in Los Angeles, said the groups she works with are too overwhelmed dealing with workforce shortages to focus on the administrative transformation underway.

“The system right now is just so depleted,” she said.

She said she worries that inadequate rates could lead to a further exodus of nonprofit mental health providers from the Medi-Cal system, a concern others have echoed.

The state says a preliminary draft of revised payment rates has been shared with counties. The Department of Health Care Services said it has committed to publishing a fee schedule in the first few months of this year.