Approve 3.09% increases in Medi-Cal behavioral health rates to be passed through to contracted network providers for Medi-Cal services and delegate authority for the Health and Human Services Agency (HHSA) Director to approve future pass-through rates increases, not to exceed 4% per fiscal year. (No general fund impact) (Planell)

In 2023, the California Department of Health Care Services (DHCS) implemented behavioral health payment reform as a part of its larger California Advancing and Innovating Medi-Cal (CalAIM) initiative. Effective July 1, 2023, changes were made to the way DHCS reimburses counties for Specialty Mental Health Services (SMHS), Drug Medi-Cal (DMC), and Drug Medi-Cal Organized Delivery System (DMC-ODS) services, including changes to reimbursement methodologies, fees/rates, and coding/claiming requirements.

Annually, DHCS sets the County’s Medi-Cal behavioral health rates (Yolo Medi-Cal rates.) These rates set the amounts that the County can draw down for claimed services. The County is required to provide a 50% match for the non-federal share transferred via an IGT. Based on a fiscal analysis, HHSA set a general standard of maintaining negotiated network provider contracted rates within 60-65% of the Medi-Cal behavioral health rates, with limited exceptions. 

In 2024, DHCS increased the FY2024-25 Yolo Medi-Cal rates by 3.09%.  HHSA elected to pass-through these rate increases to our contracted network providers and processed amendments to the related contracts signed in conformance with the Yolo County Procurement Policy, increasing the contracted provider rates by 3.09%.  DHCS is proposing an additional 3.09% rate increase for FY2025-26. In an effort to support transparency and to ensure HHSA leadership has the appropriate authority to authorize decisions regarding passing through rate increases for SMHS and DMC-ODS network provider agreements, HHSA requests BOS approval for the 3.09% rate increases for FY2025-26 Yolo Medi-Cal rates to be passed-through to our contracted network providers. The rate increases are necessary to stay market competitive with neighboring counties who have more favorable rates with DHCS and because inflation is increasing costs for providers. 

Because of the match/billing process, this has a net zero or positive impact on the revenues generated by the County. Each network provider agreement will be amended in accordance with the Yolo County Procurement policy rules regarding contractual signing authority.

HHSA regularly collaborates with CalMHSA, CBHDA and other agencies regarding the CalAIM initiatives and impacts to the behavioral health systems in Yolo County.