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BH Connect waiver approved; DHCS outlines multi‑year rollout, including optional Medi‑Cal transitional rent benefit
Summary
DHCS described federal approval of the BH Connect waiver and a phased implementation through 2026 of new community‑based services, workforce initiatives and an optional transitional rental assistance benefit administered by Medi‑Cal managed care plans.
Deputy Director Paula Wilhelm of the Department of Health Care Services told the subcommittee that California's Behavioral Health Community‑Based Organized Networks of Equitable Care and Treatment initiative (BH Connect) received federal approvals in December 2024 and that DHCS is implementing a phased, multi‑year rollout.
Wilhelm said some BH Connect components require Medicaid Section 1115 waiver authority while others use state plan or other authorities. She said the department is developing a multi‑year funding plan to be included in the May revision that will detail projected expenditures and the share of federal, state and county funds for each component.
Key near‑term elements Wilhelm described include an Access Reform and Outcomes Incentive Program that could make up to $1.9 billion available for behavioral health plans that improve performance on quality metrics, optional coverage for several adult evidence‑based practices (for example, assertive community treatment and coordinated specialty care) with an IMD funding opportunity tied to quality milestones, and a transitional rental assistance benefit DHCS said Medi‑Cal managed care plans may begin implementing on an optional basis in July 2025 with mandatory coverage for eligible members phased in by January 2026.
Wilhelm said the workforce initiative authorized $1.9 billion over five years and will be funded with a combination of Behavioral Health Services Act funds and approved mechanisms that enable federal match. DHCS said it planned to publish additional guidance and finalize implementation details for several components in the coming weeks and months and is contracting with centers of excellence to provide technical assistance to counties and providers.
Committee members pressed DHCS on the timing and operational readiness for managed‑care plans to administer transitional rent assistance. DHCS said it will release final guidance to plans and expects plans to submit plans of care describing how they will deliver transitional rent assistance; the department noted the assistance is limited to six months per eligible member and must be tied to housing plans and supports after the rental subsidy expires.
Wilhelm said BH Connect implementation dates range from spring 2025 through July 2026 depending on component; she said budget projections and a more granular funding breakdown would be included in the May revision.
