The COVID‑19 pandemic has created immense challenges for California’s community behavioral health care system and the people it serves. Traditional in-person services for mental health and substance use disorders presented a risk of contagion as the pandemic took hold. At the same time, deferring care for weeks or months created grave risks for individual health, particularly as pandemic-related stressors drove an increase in the prevalence and severity of behavioral health conditions. Recognizing these challenges, both the federal and California state governments implemented numerous legal reforms aimed at supporting providers’ efforts to preserve access to needed services in a time of social distancing and economic crisis.

This report discusses the impact of those legal reforms on outpatient and residential behavioral health services in California. First, the authors review legal changes that were implemented during the early months of the COVID-19 pandemic (January to July 2020). Although focused primarily on Medi-Cal, the report also addresses legal changes that affected the Medicare program and commercial health plans. The complete compendium of legal changes is available under Document Downloads.

Second, the authors conducted interviews with four stakeholders with a deep and diverse set of experiences in California’s behavioral health system and asked them to identify the temporary response measures that should be preserved after the pandemic subsides.

In the report, the authors outline both the temporary measures that were most important in supporting access to high-quality community behavioral health services, as well as those that are the most promising opportunities for long-term reform. Many of these candidates have long been supported by advocates in pursuit of a more accessible and effective community behavioral health system. These reforms fall into four general categories, as follows:

Coverage for Telehealth Services

• Enhance coverage across all payers for established telehealth modalities (video and telephone) when clinically appropriate
• Evaluate additional remote modalities, such as text-based services
• Establish telehealth reimbursement policies that promote patient choice and incentivize the right care at the right place at the right time
• Eliminate unnecessary administrative barriers to telehealth access, such as restrictions on originating and distant sites, and requirements for written consent
• Develop an expedited licensure pathway for out-of-state psychiatrists seeking to deliver telepsychiatry services to California residents

Medi-Cal’s Cost-Based Reimbursement System

• Move away from a cost-based system toward a more flexible system that minimizes administrative burden, incentivizes value-based care, and supports financial stability for counties and providers in times of crisis

Controlled Substances and Prescription Drugs

• Evaluate policies to decrease the number of required in-person interactions in narcotic treatment programs, such as increased use of telehealth and take-home dosing in appropriate circumstances

Provider Licensure and Operating Standards

• Reconsider California’s documentation requirements for behavioral health services, particularly with respect to patient signature requirements, treatment plans, and progress notes
• Streamline the procedures for Medi-Cal provider certification
• Align Medi-Cal’s provider certification and service delivery standards across mental health and substance use disorder services
• Increase the use of desk reviews and virtual inspections in lieu of on-site provider surveys, when appropriate

Readers of this paper may also be interested in another recently published CHCF report, Reimbursing FQHCs for Telehealth Post-COVID-19 Pandemic: Medi-Cal’s Options. It examines the choices and considerations for California policymakers to extend Medi-Cal coverage and reimbursement for telehealth provided by Federally Qualified Health Centers — even after the COVID-19 pandemic.

About the Authors

This paper was prepared for the California Health Care Foundation by the law firm of Manatt, Phelps & Phillips. Robert Belfort, JD, is a partner at Manatt who focuses on the representation of health care providers, health plans, and other health care companies on regulatory and transactional matters. Julian Polaris, JD, is an associate at Manatt who advises health care providers, state governments, and other industry stakeholders on issues related to health care coverage, licensure, and service delivery.