DraftCalifornia Department of Health Care ServicesPolicy N/A

CalAIM Renewal and 2027 Trailer Bill Provisions

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Proposed amendments to the Welfare and Institutions Code to renew and extend CalAIM, enumerate initiative years through 2031, add a CalAIM 2027 Renewal section (Employment Supports, BridgeCare) with implementation timelines beginning 2027, and require county behavioral health contracting consolidation; affects DHCS, counties, Medi‑Cal managed care plans, behavioral health delivery systems, designated public hospitals, and other CalAIM participants.

Policy Summary

PayerCalifornia Department of Health Care Services

PolicyCalAIM Renewal and 2027 Trailer Bill Provisions

Policy CodePolicy N/A

Change TypeStatutory additions and amendments (definitions, new section, contracting requirements)

Effective DateJan 1, 2027

Next Review DateN/A

Key ActionCounties must consolidate and administer covered behavioral health Medi‑Cal benefits under a single Medi‑Cal behavioral health delivery system contract (single PIHP if in DMC‑ODS) effective January 1, 2027.

SourceLink

POLICY UPDATE CHANGES

Section 14184.900 (CalAIM 2027 Renewal) is added, requiring implementation of Employment Supports and BridgeCare beginning no sooner than January 1, 2027.

Commencing January 1, 2027, counties (or counties acting jointly) must provide and administer covered behavioral health Medi-Cal benefits under a single Medi-Cal behavioral health delivery system contract and, if participating in DMC-ODS, deliver benefits through a single PIHP.

Initiative years 6 through 10 (2027–2031) are explicitly listed as Initiative years 6–10.

CalAIM Terms and Conditions period references updated to show initiative effective period through December 31, 2026 (previously 2031 struck in fragment).

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DraftCalifornia Department of Health Care ServicesPolicy N/A

CalAIM Renewal and 2027 Trailer Bill Provisions

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Sign up for all California Department of Health Care Services policy alerts

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Policy Summary

PayerCalifornia Department of Health Care Services

PolicyCalAIM Renewal and 2027 Trailer Bill Provisions

Policy CodePolicy N/A

Change TypeStatutory additions and amendments (definitions, new section, contracting requirements)

Effective DateJan 1, 2027

Next Review DateN/A

SourceLink

POLICY UPDATE CHANGES

Section 14184.900 (CalAIM 2027 Renewal) is added, requiring implementation of Employment Supports and BridgeCare beginning no sooner than January 1, 2027.

Initiative years 6 through 10 (2027–2031) are explicitly listed as Initiative years 6–10.

CalAIM Terms and Conditions period references updated to show initiative effective period through December 31, 2026 (previously 2031 struck in fragment).

CalAIM 2027 Coverage and Implementation Criteria

CalAIM 2027 coverage and implementation criteria

Coverage stance and implementation criteria introduced or reaffirmed in the proposed trailer bill:

Implementation of the following CalAIM 2027 components is subject to the conditions and timelines below; implementation must be in accordance with the CalAIM Terms and Conditions and subdivision (f) of Section 14184.102, and is subject to obtaining any necessary federal approvals and availability of federal financial participation.

Employment Supports: Department shall implement Employment Supports commencing no sooner than January 1, 2027, in accordance with the CalAIM Terms and Conditions and subdivision (f) of Section 14184.102.

BridgeCare (near-dual Medicare enrollees HCBS and caregiver supports): Department shall implement BridgeCare commencing no sooner than January 1, 2027 to provide home- and community-based services and caregiver supports to Medicare-enrolled individuals who meet the near-dual eligibility criteria outlined in the CalAIM Terms and Conditions, in accordance with subdivision (f) of Section 14184.102.

Behavioral health contracting consolidation: Commencing January 1, 2027, an individual county, or counties acting jointly, shall provide and administer covered behavioral health Medi-Cal benefits under a single Medi-Cal behavioral health delivery system contract and, if participating in DMC-ODS, shall deliver those benefits through a single Prepaid Inpatient Health Plan (PIHP), in accordance with the CalAIM Terms and Conditions; the department shall conduct planning and issue guidance to facilitate implementation.

Reimbursement maintenance and increases: Notwithstanding any other law, the department shall maintain reimbursement rates for primary care, obstetric care, and behavioral health services and shall increase reimbursement rates for those service codes as necessary to meet federally imposed minimum requirements specified in the CalAIM Terms and Conditions for dates of service on or after January 1, 2024; this requirement applies to fee-for-service claims paid by the department and to claims paid by Medi-Cal managed care plans to the extent required by the CalAIM Terms and Conditions.

Federal approval and funding condition: Implementation actions are subject to obtaining necessary federal approvals and the availability of federal financial participation; General Fund moneys equal to the federal financial participation that may be claimed are appropriated to the Health Care Deposit Fund for departmental use as described in the statute.

Reimbursement and Effective Date Coding Rules

Reimbursement rate requirementsmixedCovered

Reimbursement rate maintenance and increases required for primary care, obstetric care, and behavioral health service codes as necessary to meet federally imposed minimum requirements specified in the CalAIM Terms and Conditions for dates of service on or after January 1, 2024; applies to fee-for-service claims paid by the department and to claims paid by Medi-Cal managed care plans to the extent required by the CalAIM Terms and Conditions.

Effective date threshold for rate increases

Threshold dateDate of service on or after January 1, 2024

Applies toPrimary care, obstetric care, and behavioral health service codes

Scope of applicationApplies to claims paid in fee-for-service and by Medi-Cal managed care plans to the extent required by the CalAIM Terms and Conditions

Implementation Authority and County Behavioral Health Contracting

Documentation Required

Implementation authority and administrative actions — issue guidance, contract and IT changes, and seek federal approvals

The Department may implement, interpret, or make specific this article or the CalAIM Terms and Conditions by means of all‑county letters, plan letters, provider bulletins, information notices, or other similar instructions without taking any further regulatory action; it must use appropriate processes to ensure affected stakeholders are timely informed and that guidance remains publicly available until all payments related to the applicable CalAIM component are finalized. The Department may enter into or amend exclusive or nonexclusive contracts (bid or negotiated) and implement changes to IT systems for implementation, and those contracts, amendments, and IT changes are exempt from specified provisions of the Government Code, Public Contract Code, and Department of General Services review. Implementation is subject to obtaining any federal approvals the Department deems necessary and availability of federal financial participation; the Department shall report conflicts with the CalAIM Terms and Conditions to the Legislature and may consult stakeholders and submit recommended amendments as described.

Authority to issue all‑county letters, plan letters, provider bulletins, information notices, or similar instructions without further regulatory action; guidance must remain publicly available until related payments are finalized.
Permission to enter into or amend contracts and make IT system changes for implementation; such contracts and IT changes are exempt from Chapter 6 of Part 5.5 of Division 3 of Title 2 of the Government Code, Section 19130 of the Government Code, Part 2 of Division 2 of the Public Contract Code, and DGS review.

Key Definitions (CalAIM, Initiative Years, Contract Terms)

CalAIM

CalAIM definitionCalAIM means the components of the California Advancing and Innovating Medi-Cal initiative authorized by this article and approved by CMS in the CalAIM Terms and Conditions

CalAIM termThe entire period during which an applicable CalAIM component is in effect as approved by CMS, including any extension period

CalAIM Terms and ConditionsThe CMS‑issued terms and conditions (including attachments, appendices, and amendments) that govern implementation of CalAIM components

CalAIM year / Initiative Year

Initiative years enumeratedInitiative years 1–10 correspond to calendar years 2022 through 2031 as listed in statute

Year 1January 1, 2022 – December 31, 2022

Prior Authorization

Behavioral health contracting consolidation — single county delivery system contract and single PIHP for DMC‑ODS

Commencing January 1, 2027, an individual county, or counties acting jointly, must provide and administer covered behavioral health Medi‑Cal benefits under a single Medi‑Cal behavioral health delivery system contract and, if participating in DMC‑ODS, must deliver those benefits through a single Prepaid Inpatient Health Plan (PIHP); the Department will conduct planning and issue guidance to facilitate implementation and may authorize eligible noncounty organizations to perform this role under contract.

Effective date: January 1, 2027 (subject to subdivision (f) of Section 14184.102).
Requirement applies per county or jointly acting counties; single PIHP required for counties participating in DMC‑ODS.
Department to conduct necessary planning activities and issue implementation guidance pursuant to Section 14184.102(d).
Department may authorize noncounty organizations under Sections 14712 or 14124.21 to provide/administer covered behavioral health Medi‑Cal benefits under a single delivery system contract.