Projects / Drug Medi-Cal Organized Delivery System

Drug Medi-Cal Organized Delivery System

California’s pilot to overhaul substance use disorder treatment in Medi-Cal

Why This Work Matters

California’s Medi-Cal program is modernizing its system for treating people with substance use disorders (SUDs). This effort to expand access and improve quality is sorely needed and stands to help millions of people get care.

SUD is a common chronic illness. Nearly three million people — more than 8% of California’s residents — reported meeting criteria for an SUD in the past year. The most common SUD is alcohol use disorder, which affects three in four Californians who have an SUD. About one in three people with an SUD meets criteria for misuse of, or dependence on, illicit or prescription drugs. Young people are especially hard hit, with 18- to 25-year-olds having dramatically higher rates of SUD than other age groups.


Appropriate SUD treatment in Medi-Cal, as in the private health care system, has long been difficult to access. In Medi-Cal, SUD treatment is run by individual counties through a program separate from medical care called Drug Medi-Cal. This program provides a limited set of treatment services. Access is poor, reimbursement rates are low, and quality is highly variable.

To overhaul its SUD treatment system, California’s Department of Health Care Services applied for and received the nation’s first Medicaid Section 1115 waiver to implement an SUD demonstration program. This undertaking, named the Drug Medi-Cal Organized Delivery System (DMC-ODS) pilot program, means that for the first time, Medi-Cal patients needing treatment are being assessed according to nationally recognized criteria and referred for treatment according to their individual needs. Other states are making similar efforts. Vox profiled Virginia’s program, which is similar to DMC-ODS.


The goal of DMC-ODS is to reorganize the SUD treatment system using a continuum of care modeled on the American Society of Addiction Medicine criteria for SUD treatment. First developed in 1991, these criteria are used by SUD specialists across the country to create individualized, comprehensive treatment plans. The range of services provided by DMC-ODS is much broader than what has been available under the Drug Medi-Cal program, and requires evidence-based treatment from providers.

While participation in DMC-ODS is voluntary, a majority of counties are participating.  As of August 2020, 37 of California’s 58 counties were actively implementing DMC-ODS, representing 96% of the Medi-Cal population statewide. Counties that choose to participate operate as a managed care plan for SUD treatment, setting their own rates for each covered service and contracting with providers to deliver care.

DMC-ODS has been described as a once-in-a-generation opportunity to advance SUD treatment by organizing care, expanding services, and integrating treatment into the larger health care system. CHCF is proud to be working with state agencies, county governments, and other partners to help launch the county DMC-ODS pilots, understand what works, and address remaining challenges to increasing access for people in need of these critical health care services. Our work in this area is described below.

Landscape and Publications

Technical Assistance

CHCF’s work on DMC-ODS is part of our focus on improving access to care and coverage. It also complements CHCF’s effort to address the opioid epidemic, a component of which focuses on increasing access to integrated addiction treatment.

For more information, please contact Catherine Teare, associate director of people-centered care at CHCF.

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