California May Withhold Millions of Dollars From Counties For Being Short On Mental Health Providers

Correction: A previous version of this story inaccurately stated that the Department of Health Care Services has begun withholding funds from counties. That is not correct. The department has issued sanction warnings but not withheld any funding to date.

The state may withhold funding from 10 California counties because their mental health workforces aren’t meeting federal requirements.

But providers disagree with the way the state plans to roll out the standards, and worry it could make care more difficult to access in smaller, more rural counties that might be affected by the sanctions. 

All California counties manage their own specialty mental health plans, which cover mental health services for Medi-Cal beneficiaries with serious mental illness. The counties are responsible for making sure provider networks for the plans are adequate.

The California Department of Health Care Services sent warnings last September to counties that weren’t retaining enough mental health providers, based on federal standards. Then in April, they sent sanction notices to 10 counties that still hadn’t complied. The state planned to begin withholding federal funding from these counties in June, but says it has not done so yet.

The potential penalty amounts vary. San Bernardino County could lose $4 million a month for lacking more than 500 child mental health providers, while Tehama County could lose just $97,000 a month for being short 12 mental health professionals.

The sanctions are based on federal rules created in 2016, but the department didn’t start certifying the networks of county mental health plans until last year. The requirements focus on preparing for anticipated Medi-Cal enrollment and the expected use of services in the future.

“DHCS is committed to ensuring that there is appropriate and timely access to high-quality, medically necessary specialty mental health services for California's Medi-Cal beneficiaries,” department spokesperson Anthony Cava said in an email. “DHCS is also committed to ensuring the state's compliance with federal rules for the Medicaid program.”

But county behavioral health directors say they didn’t get enough information about the provider-patient ratios set forth in the standards, and that the requirements aren’t realistic given limited resources and the challenges of retaining physicians in rural areas. 

“I wish that we had more of a coordination and partnership with the state on really trying to map out where we know there are significant workforce shortages, where we need to make investments,” said Michelle Doty Cabrera, executive director of the County Behavioral Health Directors Association.

The shortage of medical professionals across California, particularly in rural areas, has been the focus of a new commission studying the state's health workforce shortage. Without major changes, they estimate that in 10 years California will have only two-thirds of the psychiatrists it needs. 

Seven of the 10 counties are appealing the sanctions. 

“Even just reviewing some of these filings, it takes a long time,” Doty Cabrera said. “And that’s time where money is not getting into a system that obviously desperately needs it.”

The state would withhold the funds until the county comes into compliance with the new standards, Cava said, after which they’ll release the withheld funds back to the county.

These 10 counties received sanction letters from the state. Here’s what the state could be withholding from them each month:

• Fresno County: $2,182,885.20
• Kern County: $2,313,301.14
• Kings County: $220,097.30 
• Lake County: $123,587.49
• Madera County: $222,749.35
• Merced County: $567,722.49
• San Bernadino County: $ 4,021,503
• San Joaquin County: $1,314,625.31
• Stanislaus County: $929,781.49
• Tehama County: $97,136.76