Redesigning California's Behavioral Health System

California’s shortage of at least 6,000 behavioral health beds contributes to the growing crisis of homelessness for those with mental illness and substance use disorders, and 55% of homeless veterans suffer from mental health issues and 70% are affected by substance use disorders.

AB 531 proposes a $.4.7 billion bond on the March 2024 ballot to:

1. Build Behavioral Health Treatment and Residential Settings
   • Multi-Property Settings: Residential campus-style settings where multiple individuals can live, attend groups, recover, and further stabilize with a number of onsite supportive services available to meet individually tailored care plans.
   • Cottage Settings: Smaller residential settings, where many services will be available but that will also allow individuals to access existing services in the community.
2. Build Permanent Supportive Housing
   • Permanent supportive housing for people experiencing or at risk of homelessness or those transitioning from residential settings who have behavioral health conditions. Estimated 1,800 units
   • Interim, transitional and permanent supportive housing options for veterans experiencing or at risk of homelessness who have behavioral health conditions. Estimated 1,800 units

Together, building this range of residential options is intended to ensure that individuals can transition to the level of care they need while remaining connected to their communities. 

• The Mental Health Services Act (MHSA) has fundamentally changed how we deliver mental health care in California. For those with the most serious and persistent needs, the MHSA requires every county in the state to offer a core set of services through a program called Full-Service Partnerships (FSP) that helps keep some individuals off the streets, out of jails, and out of expensive hospital care. Today, over 80,000 Californians are enrolled in FSP programs.

  MHSA currently funds 30% of the state’s mental health system. But the MHSA has never undergone full scale reform. Since its initial passing in 2004, the Affordable Care Act and parity laws have significantly shifted the landscape, and this proposal is intended to modernize MHSA to account for expanded coverage under Medi-Cal.

  SB 326 proposes a comprehensive set of reforms, many of which will require March 2024 Ballot initiative. Key proposed reforms include:

  1. Rename the MHSA to the Behavioral Health Services Act (BHSA)
  2. Broaden the target population to include those with debilitating substance use disorders
  3. Focus on the most vulnerable and most at-risk
  4. Update Local Categorical Funding Buckets
     • 30% for Housing Interventionsfor individuals with serious mental illness/serious emotional disturbance and/or substance use disorder.
       • Counties will manage and direct the funds toward local priorities that meet designated purposes including but not limited to rental subsidies, operating subsidies, capital investments and nonfederal share for transitional rent.
     • 35% for Full Service Partnershipswhich should be optimized to leverage Medicaid as much as is allowable.
     • 30% for Behavioral Health Services and Supports(Behavioral Health Services and Supports (non FSP), Early Intervention, Capital Facilities and Technological Needs, Workforce Education and Training, innovative pilots, and prudent reserve).
       • A majority of the Behavioral Health Services and Supports allocation must be spent on Early Intervention.
     • 5% for Population-Based Preventionfor mental health and substance use disorder prevention programming.
     • Counties may pilot and test behavioral health models of care programs, community defined practices or promising practices for the programs specified in all the above. The goal is to build the evidence base for the effectiveness of new statewide strategies to implement an equitable behavioral system.
  5. Allocate 3% of total BHSA funds for state directed initiatives to expand the behavioral health workforce, including braiding $36 million with BH-CONNECT (1115 demonstration waiver) for workforce investments of $480 million annually and $2.4 billion total for the five-year demonstration period, pending federal approval.
  6. Redesign the county MHSA planning process through an Integrated Plan for Behavioral Health Services and Outcomes
  7. Increase transparency and accountability for behavioral health funding and outcomes

Increased Transparency and Accountability for BH Funding and Outcomes so Californians can know how their government programs are performing.  The information collected and assessed would be presented publicly for the purpose of demonstrating a commitment to transparency and accountability to  Californians on the value of these critical resources. 

Create the County Behavioral Health Outcomes, Accountability, and Transparency Report

Align county Behavioral Health (BH) plans (including MHPs and DMC-ODS) and Medi-Cal Managed Care Plan contract requirements when the same requirements exist across programs.

Over the next year, DMHC and DHCS will develop a plan for achieving parity between commercial and Medi-Cal mental health and substance use disorder benefits. This may include, but is not limited to, phasing in alignment of utilization management, benefit standardization, and covered services.

DMHC and DHCS will establish a stakeholder process that will include health plans, and other system partners to develop framework.