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SACRAMENTO, Calif. - Gov. Gavin Newsom announced today that California has obtained federal approval for an ambitious $5 billion behavioral health initiative aimed at transforming mental health care access and delivery across the state.
The Centers for Medicare & Medicaid Services approved California's Behavioral Health Community-Based Organized Networks of Equitable Care and Treatment demonstration waiver, known as BH-CONNECT. The program represents a major overhaul of the state's mental health system, targeting support for more than 14 million Medi-Cal members with significant behavioral health needs.
"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," Newsom said.
Studies show that nearly one in 26 Californians experience serious mental illness. According to state data, in 2022, two-thirds of adults with mental illness did not receive treatment, highlighting substantial gaps in care access.
The federal approval unlocks up to $5 billion in federal investments to strengthen California's behavioral health workforce, provide housing assistance, and improve treatment outcomes. A cornerstone of the program is a $1.9 billion investment in workforce development, which includes scholarships, loan repayment programs, recruitment incentives, and expanded residency and fellowship opportunities.
The Department of Health Care Access and Information will manage these workforce initiatives, which are designed to build a more robust and diverse behavioral health workforce across the state.
The program introduces transitional rent assistance, offering up to six months of rental support through Managed Care Plans for eligible Medi-Cal members transitioning from healthcare facilities, congregate settings, or homelessness. This housing component aims to serve as a bridge to permanent housing, reducing the risk of individuals returning to institutional care or experiencing homelessness.
BH-CONNECT allocates an additional $1.9 billion for an Access, Reform, and Outcomes Incentive Program. This component rewards county behavioral health plans that demonstrate improvements in access, reduction in disparities, and strengthened behavioral health quality.
The initiative emerged from a 2022 state-commissioned study that identified gaps in California's behavioral health care system. The subsequent waiver application, submitted to CMS in October 2023, outlined strategies to address these gaps, particularly focusing on vulnerable populations including children and youth in child welfare, individuals at risk of homelessness, and those involved in the justice system.
The program introduces new flexibility in federal Medi-Cal funding for short-term mental health care in inpatient and residential treatment settings that meet federal institutions for mental disease criteria. It also establishes community transition services to support members moving from long-term institutional stays back into their communities.
BH-CONNECT represents a key component of Newsom's Mental Health for All initiative and aligns with the state's Proposition 1 efforts to modernize California's behavioral health system. The program builds upon nearly $15 billion in existing state investments and coordinates with other transformative initiatives, including the Children and Youth Behavioral Health Initiative, Behavioral Health Bridge Housing program, and Justice-Involved Reentry Initiative.
The federal approval follows Newsom's advocacy efforts in Washington, D.C., where he traveled to make the case for these new resources on behalf of California residents. The program aims to create a more equitable and coordinated network of behavioral health care, ensuring communities that historically faced barriers to access can navigate services more effectively.
