CurrentCalifornia Department of Health Care ServicesPolicy N/A

Medi-Cal Mental Health and Substance Use Disorder Benefits — Coverage Criteria

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Overview of Medi-Cal coverage, delivery systems, and initiatives for mental health and substance use disorder (SUD) services in California for providers, plans, and county agencies.

Policy Summary

PayerCalifornia Department of Health Care Services

PolicyMedi-Cal Mental Health and Substance Use Disorder Benefits — Coverage Criteria

Policy CodePolicy N/A

Change TypeNo material changes

Effective DateN/A

Next Review DateN/A

Key ActionEnsure county DMC-ODS programs assess beneficiaries using nationally recognized criteria and coordinate referrals to appropriate SUD treatment levels.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

$3B+Projected spending for mental health & SUD (FY18-19)

5%Beneficiaries driving 51% of spending

40/58Counties in DMC-ODS

24DMC-ODS counties active (Jan 1, 2019)

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CurrentCalifornia Department of Health Care ServicesPolicy N/A

Medi-Cal Mental Health and Substance Use Disorder Benefits — Coverage Criteria

Customize your policy alerts

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

Know when California Department of Health Care Services releases new policies or updates existing guidance.

Monitor payer policy activity

Receive email alerts as soon as relevant payer policies are published or updated.

Overview of Medi-Cal coverage, delivery systems, and initiatives for mental health and substance use disorder (SUD) services in California for providers, plans, and county agencies.

Policy Summary

PayerCalifornia Department of Health Care Services

PolicyMedi-Cal Mental Health and Substance Use Disorder Benefits — Coverage Criteria

Policy CodePolicy N/A

Change TypeNo material changes

Effective DateN/A

Next Review DateN/A

Key ActionEnsure county DMC-ODS programs assess beneficiaries using nationally recognized criteria and coordinate referrals to appropriate SUD treatment levels.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

$3B+Projected spending for mental health & SUD (FY18-19)

5%Beneficiaries driving 51% of spending

40/58Counties in DMC-ODS

24DMC-ODS counties active (Jan 1, 2019)

97%Anticipated access when fully implemented

Coverage Criteria and Service Responsibilities

Service delivery responsibilities

Allocation of coverage responsibility by service intensity and delivery system:

MMCP responsibility for mild-to-moderate: MMCPs are responsible for providing mental health services to members with mild to moderate impairment of mental, emotional, or behavioral functioning, including individual and group psychotherapy, psychological testing when clinically indicated, outpatient services for monitoring medication therapy, outpatient laboratory/medications/supplies, and psychiatric consultation when provided by licensed mental health care professionals acting within the scope of their license.mild-to-moderate impairment

DHCS requirement beginning in 2014

MHP responsibility for specialty and inpatient care: County Mental Health Plans (MHPs) are responsible for specialty mental health services for patients with impairment in functioning, and for emergency and inpatient behavioral health services for all Medi-Cal beneficiaries. County MHP outpatient specialty services include assessment, plan development, therapy, rehabilitation, medication support services, day treatment intensive, day rehabilitation, crisis residential and stabilization, targeted case management, and intensive care coordination/home-based services/therapeutic foster care.specialty mental health / impaired functioning

MHP-delivered specialty services

DMC-ODS SUD service package

DMC-ODS counties must provide the following SUD services as part of the expanded benefit set:

DMC-ODS covered SUD services: Early intervention; outpatient services; intensive outpatient services; short-term residential services (up to 90 days); withdrawal management; recovery services; case management; physician consultation; additional medication-assisted treatment (MAT) when the county elects to provide it; and optional partial hospitalization and recovery residences where the county elects to provide these services.per DMC-ODS implementation

counties set internal payment rates and contracting arrangements

Traditional Drug Medi-Cal historically provided a limited set of services and faced access barriers for both Managed Care and FFS beneficiaries. Low Medi‑Cal FFS reimbursement rates and the constrained benefits package reduced provider participation and limited availability of SUD treatment. To address these limitations, DHCS pursued a Section 1115 demonstration waiver (the DMC‑ODS) to expand the SUD benefit package and require standardized assessment and referral to appropriate levels of care.

This document does not enumerate specific conditions or situations that are explicitly deemed not medically necessary for covered services.

Provider Requirements, Documentation, and Program Rules

Prior Authorization

DMC-ODS county program requirements

Counties that participate in the Drug Medi-Cal Organized Delivery System (DMC-ODS) operate as the managed care entity for SUD treatment: they set internal payment rates for each covered service and must contract with providers; counties must also assess beneficiaries using nationally recognized criteria and refer them to the appropriate level of SUD treatment under the DMC-ODS model.

Participating counties operate as a managed care plan for SUD treatment and set their own internal payment rates for each covered service.
Counties contract with providers to deliver DMC-ODS services.
Counties must assess beneficiaries according to nationally recognized criteria and refer them to appropriate levels of treatment.

Step Therapy

Step therapy

This document does not impose any step therapy requirements for behavioral health or SUD services; no explicit step therapy rules are stated.

Key Programs and Plan Definitions

Medi‑Cal Managed Care Plan (MMCP) — definition and responsibilities

DefinitionMedi‑Cal Managed Care Plan (MMCP): a managed care plan responsible for arranging and paying for mild‑to‑moderate mental health services when provided by licensed mental health care professionals acting within the scope of their license.

Covered services (examples)Individual and group mental health evaluation and treatment (psychotherapy); psychological testing when clinically indicated; outpatient medication monitoring; outpatient labs, medications, supplies; psychiatric consultation.

Scope limitationMMCPs are responsible for members with mild to moderate impairment of mental, emotional, or behavioral functioning (DHCS requirement beginning in 2014).

FFS interactionBeneficiaries remaining in Medi‑Cal fee‑for‑service (FFS) continue to access similar mild‑to‑moderate services through community and county providers.

County Mental Health Plan (MHP) — definition and responsibilities

Level of Care: Outpatient, Specialty Mental Health, and DMC-ODS

Outpatient / Specialty mental health / SUD (DMC-ODS)

Criteria for admission, continued stay, and discharge for outpatient/specialty mental health and DMC-ODS SUD services:

Admission to specialty mental health or DMC-ODS SUD services: Admission is based on documented clinical need: for specialty mental health, impairment in functioning as determined by county MHP protocols; for DMC-ODS, assessment according to nationally recognized criteria with referral to an appropriate SUD treatment level per county protocol.clinical assessment per county/plan

DMC-ODS requires assessment using nationally recognized criteria; MHP admission based on impairment in functioning

Continued stay: Continued provision of services is based on ongoing clinical need, documented progress toward treatment goals, and applicable county or plan-defined program requirements; care coordination between MMCP and MHP should occur when members require specialty services.ongoing clinical need

not operationalized in this document

Permitted Treatment Modalities

Psychotherapy / Psychological testing

Psychotherapy and psychological testing are covered when clinically indicated and delivered by licensed mental health professionals within their scope of practice:

Psychotherapy and related services: Individual and group mental health evaluation and treatment (psychotherapy) and psychological testing when clinically indicated to evaluate a mental health condition are included services when delivered by licensed mental health care professionals acting within the scope of their license.clinically indicated

applies to MMCP and FFS contexts for mild-to-moderate services and to MHP specialty services

Medication-assisted treatment (MAT)

Medication-assisted treatment (MAT) within DMC-ODS:

MAT availability under DMC-ODS: Medication-assisted treatment is included as an additional DMC-ODS service when the county elects to provide it; physician consultation is also a component of the DMC-ODS service package. Counties that participate in DMC-ODS operate as a managed care plan for SUD treatment and determine internal payment rates and contracting arrangements for MAT services.

Service Duration and Visit Limit Guidance

Short‑term residential SUD services (DMC‑ODS) — limits and context

Service descriptionShort‑term residential SUD services under DMC‑ODS: residential treatment provided as part of the expanded DMC‑ODS benefit package.

Length limitUp to 90 days per episode (no facility bed limit specified in this document).

Placement within DMC‑ODS benefitsIncluded alongside outpatient, intensive outpatient, withdrawal management, recovery services, case management, physician consultation, and optional MAT/partial hospitalization/recovery residences where counties elect to offer them.

Policy Background and Context

Mental health and substance use disorders are common among Medi‑Cal beneficiaries and frequently co-occur with physical health conditions, contributing to fragmented care and poorer outcomes. The Drug Medi‑Cal program historically struggled to connect physical and mental health systems serving the same beneficiaries; DHCS has implemented initiatives such as the DMC‑ODS demonstration to improve access, require assessment using nationally recognized criteria, and expand available SUD services to better address co‑occurring needs.

Policy Summary

PayerCalifornia Department of Health Care Services

PolicyMedi-Cal Mental Health and Substance Use Disorder Benefits — Coverage Criteria

Policy CodePolicy N/A

Change TypeNo material changes

Effective DateN/A

Next Review DateN/A

Key ActionEnsure county DMC-ODS programs assess beneficiaries using nationally recognized criteria and coordinate referrals to appropriate SUD treatment levels.

SourceLink

On This Page

Documentation Required

Scope-of-license documentation

Providers must deliver covered mental health services only within the scope of their license as defined in the Medi-Cal provider bulletin, and documentation should support that the specific services provided (for example, psychotherapy, psychological testing, or medication monitoring) fall within that licensed scope.

Ensure provider license authorizes the specific service provided per the Medi‑Cal provider bulletin definition.
Maintain clinical documentation demonstrating the service (e.g., psychotherapy, testing, medication monitoring) was within scope of practice.

Denial Risk

Care coordination and information exchange requirement

Counties' MHPs and their corresponding Medi‑Cal Managed Care Plans (MMCPs) must have a memorandum of understanding that delineates care coordination and information exchange requirements; health plan care coordination staff must work with county MHP staff to ensure members needing specialty behavioral health services can access those services.

Execute and adhere to a memorandum of understanding between MHP(s) and MMCP(s) specifying care coordination and information exchange expectations.
Ensure health plan care coordination staff collaborate with county MHP staff when members are identified as needing specialty behavioral health services so needed services are accessed.

DefinitionCounty Mental Health Plan (MHP): county agencies responsible for specialty mental health services, including outpatient and inpatient services for beneficiaries with impairment in functioning, and emergency and inpatient behavioral health services.

Specialty services includedOutpatient specialty mental health services: assessment, plan development, therapy, rehabilitation; medication support services; day treatment intensive and rehabilitation; crisis residential and stabilization; targeted case management; intensive care coordination, home‑based services, and therapeutic foster care.

Responsibility scopeMHPs remain responsible for specialty and inpatient care for patients with impairment in functioning and for emergency/inpatient behavioral health services for all Medi‑Cal beneficiaries.

Drug Medi‑Cal Organized Delivery System (DMC‑ODS) — definition and program model

DefinitionDrug Medi‑Cal Organized Delivery System (DMC‑ODS): a Section 1115 waiver pilot program in which participating counties operate a managed‑care model for SUD treatment, requiring standardized assessment and referral to appropriate levels of care.

Core requirementsMedi‑Cal beneficiaries in need of SUD services must be assessed according to nationally recognized criteria and referred for treatment based on individual need.

County roleParticipation is voluntary; participating counties operate as the managed care entity for SUD treatment, setting internal payment rates and contracting with providers.

Implementation statusAs of Jan 1, 2019, 24 of 40 participating counties had begun providing services; when fully implemented nearly 97% of Medi‑Cal enrollees will have access to DMC‑ODS.

county option for MAT

county decides to provide additional MAT services; participation in DMC-ODS is voluntary