Here’s What The State And Advocates Have In Mind To Change CA’s Mental Health Care System

While unveiling his budget proposal last Friday, California Gov. Gavin Newsom called the state’s homelessness crisis “the issue that defines our times.” He also turned the spotlight on barriers to mental health treatment — an issue that advocates say goes hand in hand with homelessness and has been pushed aside for too long.

The budget proposal lays out several long-term changes to the way the state delivers and pays for mental health services, both for publicly and privately insured Californians. Mental health leaders commended Newsom’s ideas, but raised questions about missing or underfunded initiatives. And lawmakers are also introducing bills addressing these topics.

Here’s an overview of some of the big mental health initiatives on the table this year:

Mental Health Parity

There are existing federal and state policies around mental health parity — the requirement that insurance benefits for mental health and substance use disorders are equal to coverage for other types of health care. 

But last year a federal judge in Northern California ruled that insurer UnitedHealth Group was unfairly rejecting claims from tens of thousands of people seeking coverage for mental health and substance use disorder treatment. And mental health advocates say people are regularly denied psychiatric care because insurers don’t want to pay for it.

“If you’re bleeding, you have to be patched up right then and there,” said Sen. Jim Beall (D- San Jose) at a press conference about the new mental health parity bills. “If you have a mental health crisis you have to be dealt with right then and there. It’s common sense medicine. We have a system that’s not doing that because of stigma and discimination, and it is a civil rights issue.”

Current state law only requires that commercial insurers cover treatment for nine severe mental illnesses, including major depression, schizophrenia and bipolar disorder. Beall co-authored SB 855, which would extend that coverage to all medically necessary mental health and substance use disorder treatments. 

In his budget, Newsom proposed addressing parity by creating the Behavioral Health Task Force in the Health and Human Services Agency. The task force would convene county representatives, consumers, health plans and providers to “improve the quality of care and coordinate system transformation efforts” for mental illness and substance use disorders. 

At the press conference, Sacramento Mayor Darrell Steinberg said that “the debate that really needs to be had in California is about parity,” noting that patients who are denied preventive mental health care often require much more expensive crisis care later on.

“[Parity] is whether or not these for-profit providers are going to actually cover the kinds of innovation and benefits that are going to ensure that we are bringing more resources to serve more people,” Steinberg said. “And to free up some of these public dollars to be able to focus, for example, on unsheltered homelessness. That’s what’s at stake.”

Reforming Mental Health Care on Medi-Cal   

Medi-Cal, the state’s low-income health program, could be getting restructured under Newsom’s new budget plan. There aren’t many details on his proposed overhaul, but it aims to “move Medi-Cal to a more consistent and seamless system by reducing complexity and increasing flexibility,” according to his budget summary.

Experts often describe the Medi-Cal system as “fragmented.” A patient might need to access treatments for substance use, mental health and home care from three different state agencies with three different payment mechanisms, which can make bills and medical paperwork difficult to manage.

Maggie Merritt with the Steinberg Institute, a mental health policy nonprofit, described it as “an effort to streamline this whole process, so no matter what door you walk in you get served.” She said the system can also be difficult for local governments to navigate.

“Funds that pay for substance use disorder don’t cover mental health care, and vice versa,” she said. “So counties have to scramble to make sure clients receive the care they need.”

The plan would take effect Jan. 1, 2021 with $695 million, expected to grow to $1.4 billion in the two years after that. There isn’t a ton of detail on how it will be executed, but the goals include:

• More advanced care management
• Expanding statewide wraparound social services and housing assistance
• Supporting changes to county-run behavioral health and substance use disorder treatment systems
• Identifying and managing member needs
• Improving quality outcomes through system modernization and payment reform

The state will be model the strategy after waiver demonstration programs such as Whole Person Care, Coordinated Care Initiative and Health Homes, according to the budget summary. All three programs aim to better serve patients with complex needs by connecting the various health services they access. 

The governor has also proposed changes to Proposition 63, known as the Mental Health Services Act, which was approved by voters in 2004. The 1% tax on personal income over $1 million is distributed to county behavioral health departments for mental illness prevention and treatment. It currently can’t be used for patients who are primarily diagnosed with a substance use disorder, but the budget proposal hints at changing that rule to better serve people with mental illness who are also experiencing homelessness. The act brings in roughly $2.4 billion a year. 

Supportive Housing for the Homeless

Another key proposal for mental health intervention is supportive housing, with built-in staff to help residents navigate health care and other services. But there are some differing opinions on what it looks like and how it should be funded. 

The governor’s budget creates the California Access to Housing and Services Fund: $750 million for developing affordable housing units, rental subsidies, and stabilizing board and care homes. Board and care is a type of supportive housing where staff are available 24/7 to help with medication, independent living skills and recreational activities. These are not locked facilities, but residents are expected to follow house rules. 

The model is facing challenges in California’s changing housing market. According to data from the California Department of Social Services, 1,426 of these facilities have closed over the past five years. Advocates cite low reimbursement rates from the state, resistance from new housing developers and complicated licensing regulations as primary factors in the decline.

“Board and care operators are closing their doors because they, like many others are getting priced out of the market,” said Michelle Doty Cabrera, director of the California Behavioral Health Directors Association. 

Her group and other mental health organizations are asking the administration for $500 million explicitly set aside for board and care homes. The governor’s office says the $750 million from the proposed supportive housing fund would be distributed to county governments to use for board and care stabilization or any other housing project they see as a crucial need.

Improving Access to Addiction Treatment

As part of a continued effort to combat California’s opioid crisis, some lawmakers are pushing to make it easier for people to get medication-assisted treatment, which involves using a less addictive opioid such as buprenorphine to treat opioid addiction. 

The governor’s budget includes continued funding for the Medication Assisted Treatment Expansion Project, which helps treat opioid addiction using buprenorphine and other medications in hospitals, clinics and criminal justice facilities. Newsom also put aside funding for a program that expands substance use treatment coverage for Medi-Cal beneficiaries.

But there are also barriers to accessing medication assisted treatment on the private side of health care, lawmakers say. Sen. Beall, Sen. Scott Wiener (D-San Francisco) and Sen. Cecilia Aguiar-Curry (D-Winters) recently introduced SB 854, which would prevent health plans from requiring prior authorization or step therapy when a patient is in need of medication assisted treatment or other substance use services. Prior authorization is the practice of requiring doctors to get special permission from health plans before writing a script, and step therapy is when insurers make patients try a cheaper generic medication before approving a pricier drug that may be better suited for their diagnosis. 

Child Psychiatric Services

Almost all of the mental health innovations listed in the budget proposal were targeted for homeless adults.

Ann-Louise Kuhns, director of the California Children’s Hospital Association, says that’s important, but children need mental health help, too. 

“If we don’t make those investments at the front end, we’re going to be dealing with the consequences on the back end,” she said. 

She and other advocates note that half of mental health conditions set in before age 14, but the state lacks pediatric therapists and psychiatrists. They recommended the budget include funding for the following changes: 

• Investing in community-based prevention and early intervention programs that identify and treat behavioral health problems early.
• Requiring counties to cover all types of evidence-based treatments when appropriate, streamline the licensing process, and increase Medi-Cal rates to providers.
• Making it easier for primary care physicians to obtain support from behavioral health specialists through tele-consultation.
• Working with behavioral health providers to make sure they can serve California youth in a culturally appropriate way.

The governor did include $10 million to develop training and awareness campaigns to help screen children for adverse childhood experiences such as verbal and physical abuse, which have been shown to cause chronic health problems later in life. 

But Kuhns said screenings only go so far without treatment.

“Otherwise we’re kind of cutting doorways into empty buildings, right? We’re identifying folks but then we’re not providing the follow-up services,” she said. 

The governor’s office says mental health care for kids will be addressed by the Medi-Cal restructuring. 

Mental Health Workforce

California has long dealt with a shortage of mental health professionals, particularly in rural areas. Experts predict it will get worse as more people become insured and older therapists and psychiatrists retire. 

While the state works to raise reimbursement rates and recruit more providers, mental health advocates say there are other ways to help mentally ill adults. Cabrera from the behavioral health director’s association and other advocates are pushing for peer mental health workers. 

“These are individuals who serve clients by sharing their lived experience, and they’ve been proven to be extremely effective in getting people into mental health and substance use disorder services,” she said. 

Peer workers can go a long way toward preventing crises. But in California these individuals are not certified, which means their services are not reimbursable by Medi-Cal. A bill that would have created a certification for them got to the governor’s desk last year, but he vetoed it. Advocates were hopeful that it would show up in the budget, but it didn’t.

The newly introduced SB 803 is similar to last year’s peer worker bill, and would establish a statewide certification. According to the bill authors, at least 48 states use a standard certification for peer support services.