CHA News

Federal Funding Will Bolster Medi-Cal Reimbursement for Inpatient Psychiatric Care

What’s happening: On Dec. 16, California was approved for the large BH-CONNECT behavioral health demonstration project, which is estimated to bring $5 billion of new federal Medicaid dollars for California over the next five years.  

What else to know: During this time, BH-CONNECT will use the funds to test new approaches to behavioral health treatment, housing, and workforce development.  

The federal Centers for Medicare & Medicaid Services’ (CMS) approval of California’s BH-CONNECT waiver allows the state Department of Health Care Services and counties to begin rolling out nearly a dozen new BH-CONNECT initiatives supported by federal funding. 

Many parts of BH-CONNECT will directly or indirectly benefit hospitals and the patients they serve — including a new Serious Mental Illness (SMI) Program that would reimburse participating counties for 50% of their expenditures on adult inpatient psychiatric services in free-standing acute psychiatric hospitals considered to be “Institutions for Mental Disease” (IMDs).  

What’s Next  

  • The state must submit to CMS an implementation plan for the SMI Program within 90 calendar days (by March 16).  
  • Counties must decide whether to opt in to participate in the SMI Program by agreeing to offer five distinct evidence-based services, ranging from supported employment to enhanced community health worker services.   
  • Future CHA News articles will provide additional details and information about other components of BH-CONNECT, including new transitional rent benefits and a $1.9 billion investment in the behavioral health workforce.