State Secures Federal Approval and Unprecedented Support to Help Californians with Behavioral Health Challenges

What you need to know: The Biden-Harris Administration just approved California’s BH-CONNECT Initiative, which allows California to provide eligible people receiving behavioral health treatment up to 6 months of transitional rent to support their recovery and initiates a new $1.9 billion behavioral health workforce initiative.

Sacramento, California - Governor Gavin Newsom, today announced that the state has received approval from the federal Centers for Medicare & Medicaid Services (CMS) for its proposed Behavioral Health Community-Based Organized Networks of Equitable Care and Treatment (BH-CONNECT) demonstration waiver. The waiver comes after Governor Newsom traveled to Washington, DC to advocate for its approval.  

“Californians will soon have more support and more people providing support thanks to the approval by the Biden-Harris Administration of California’s innovative efforts to transform our state’s mental health system for better care and a more accountable system in every community.” - Governor Gavin Newsom

Why this is important

Mental illnesses are among the most common health conditions faced by Californians, with nearly a 1 in 26 residents experiencing serious mental illnesses. In 2022, two-thirds of adults with mental illness did not receive treatment. These individuals have historically faced expansive challenges when leaving treatment settings or while experiencing homelessness and stand the most to gain in terms of recovery and community stabilization by accessing services provided through BH-CONNECT. This initiative will help Medi-Cal members — of which there are more than 14 milliona Californians — with significant behavioral health needs. 

About the transformative BH-CONNECT initiative

BH-CONNECT represents a strategic shift in how California addresses behavioral health care. In partnership with county behavioral health plans, BH-CONNECT strengthens California’s behavioral health workforce, incentivizes measurable outcomes, and fills critical service gaps to create a more equitable and effective system of care — including up to $5 Billion in federal investments. Key features include:

• Workforce Investments: Supports a $1.9 billion robust and diverse behavioral health workforce initiative that includes scholarships, loan repayment programs, recruitment incentives, residency and fellowship expansions, and professional development. The workforce initiative will be managed by the Department of Health Care Access and Information (HCAI).
• Transitional Rent Assistance: Provides up to six months of rental support, through a member’s Managed Care Plan, for eligible Medi-Cal members transitioning from certain health care facilities, congregate settings, or homelessness. This housing support is crucial in stabilizing individuals during vulnerable periods, significantly reducing the risk of returning to institutional care or experiencing homelessness. Transitional Rent will serve as a bridge to permanent housing for members who need it. For members with significant behavioral health needs, other program funding dedicated to housing interventions would provide permanent rental subsidies and housing following Transitional Rent, providing seamless continuity and supporting members in achieving long-term housing stability as they recover.
• Support for Foster Children and Youth: Includes funding to improve access and outcomes for youth involved in the child welfare system who receive specialty mental health services.
• Incentives for Counties: Supports a $1.9 billion Access, Reform, and Outcomes Incentive Program to reward county behavioral health plans for improving access, reducing disparities, and strengthening behavioral health quality improvement.
• Community Transition In-Reach Services: Supports members transitioning from long-term institutional stays to ensure continuity of care and successful reintegration into the community.
• Short-term Inpatient Psychiatric Care: Provides new flexibility for federal Medi-Cal funding for short-term mental health care provided in inpatient and residential treatment settings that meet the federal institution for mental diseases (IMD) criteria.

How we got here

In 2022, DHCS commissioned Assessing the Continuum of Care for Behavioral Health Services in California to study and make recommendations about the missing gaps in access and infrastructure needed to create a more seamless, coordinated network of behavioral health care — ensuring that communities that have historically faced barriers to accessing care can navigate a full spectrum of services easily, ultimately improving health outcomes for all members. 

The BH-CONNECT waiver application, submitted to CMS in October 2023, focused on closing key service gaps along the continuum of behavioral health care, such as increasing evidence-based treatment options for vulnerable populations, including children and youth involved in child welfare, members at risk of or experiencing homelessness, and members with justice system involvement, and increasing equity for Medi-Cal members.

Getting results in Washington, DC

Today’s announcement comes after Governor Newsom travelled to Washington, DC this year and last to advocate for these new tools and resources on behalf of Californians.

Bigger picture

BH-CONNECT is a key pillar of Governor Newsom’s Mental Health for All initiative, and is strategically aligned with Behavioral Health Transformation efforts underway as part of Proposition 1 to modernize California’s behavioral health system, expand access to evidence-based service models on a statewide basis, and address the housing needs of Californians with significant behavioral health conditions. BH-CONNECT builds on nearly $15 billion in state investments and aligns with transformative initiatives such as Behavioral Health Transformation-Proposition 1, the Children and Youth Behavioral Health Initiative,  Behavioral Health Continuum Infrastructure Program, Behavioral Health Bridge Housing program, Justice-Involved Reentry Initiative,  Behavioral Health Payment Reform, Medi-Cal Transformation, 988 expansion, and more.

Learn more about today’s announcement HERE.