Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is in part governed by, and funded pursuant to, federal Medicaid program provisions.

Existing law, subject to implementation of the California Advancing and Innovating Medi-Cal (CalAIM) initiative, requires the department to implement an enhanced care management (ECM) benefit designed to address the clinical and nonclinical needs on a whole-person-care basis for certain target populations of Medi-Cal beneficiaries enrolled in Medi-Cal managed care plans. Under existing law, target populations include, among others, high utilizers with frequent hospital admissions, short-term skilled nursing facility stays, or emergency room visits, and individuals experiencing homelessness.

This bill would recast the definition of ECM, referring to community-based, high-touch coordination and comprehensive care management services, as specified. The bill would delete certain provisions that designate 2022 or 2023 timelines for commencing ECM coverage, depending on whether or not a Medi-Cal managed care plan operates in a county in which the Whole Person Care pilot program or the Health Home Program was implemented.

Existing law, subject to CalAIM implementation, authorizes a Medi-Cal managed care plan to elect to cover community supports. Under existing law, community supports that the department is authorized to approve include, among others, housing transition navigation services and medically supportive food and nutrition services.

This bill would require the department to publish and maintain policy guides and all-plan letters on its internet website that define model coverage standards and policy for each community support, to engage stakeholders, to provide ongoing technical assistance, and to establish a standard timeline and process for regular updates to community supports policy guides, as specified. The bill would require a Medi-Cal managed care plan to adopt community supports policies, and to educate its in-network community support providers, as specified.

The bill would require the department to publish certain information on ECM and community supports utilization data on the departments internet website on a quarterly basis, to the extent feasible, until January 1, 2032. The bill would require the department, by March 31, 2029, to provide to the legislative committees specified information in writing necessary to inform legislative consideration of transitioning community supports to benefits that are required to be covered under the Medi-Cal program. The bill would make other technical changes to the ECM and community support provisions.

Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is in part governed by, and funded pursuant to, federal Medicaid program provisions.

Existing law, subject to implementation of the California Advancing and Innovating Medi-Cal (CalAIM) initiative, requires the department to implement an enhanced care management (ECM) benefit designed to address the clinical and nonclinical needs on a whole-person-care basis for certain target populations of Medi-Cal beneficiaries enrolled in Medi-Cal managed care plans. Under existing law, target populations include, among others, high utilizers with frequent hospital admissions, short-term skilled nursing facility stays, or emergency room visits, and individuals experiencing homelessness.

This bill would recast the definition of ECM, referring to community-based, high-touch coordination and comprehensive care management services, as specified. The bill would delete certain provisions that designate 2022 or 2023 timelines for commencing ECM coverage, depending on whether or not a Medi-Cal managed care plan operates in a county in which the Whole Person Care pilot program or the Health Home Program was implemented.

Existing law, subject to CalAIM implementation, authorizes a Medi-Cal managed care plan to elect to cover community supports. Under existing law, community supports that the department is authorized to approve include, among others, housing transition navigation services and medically supportive food and nutrition services.

This bill would require the department to publish and maintain policy guides and all-plan letters on its internet website that define model coverage standards and policy for each community support, to engage stakeholders, to provide ongoing technical assistance, and to establish a standard timeline and process for regular updates to community supports policy guides, as specified. The bill would require a Medi-Cal managed care plan to adopt community supports policies, and to educate its in-network community support providers, as specified.

The bill would require the department to publish certain information on ECM and community supports utilization data on the departments internet website on a quarterly basis, to the extent feasible, until January 1, 2032. The bill would require the department, by March 31, 2029, to provide to the legislative committees specified information in writing necessary to inform legislative consideration of transitioning community supports to benefits that are required to be covered under the Medi-Cal program. The bill would make other technical changes to the ECM and community support provisions.

Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is in part governed by, and funded pursuant to, federal Medicaid program provisions.

Existing law, subject to implementation of the California Advancing and Innovating Medi-Cal (CalAIM) initiative, requires the department to implement an enhanced care management (ECM) benefit designed to address the clinical and nonclinical needs on a whole-person-care basis for certain target populations of Medi-Cal beneficiaries enrolled in Medi-Cal managed care plans. Under existing law, target populations include, among others, high utilizers with frequent hospital admissions, short-term skilled nursing facility stays, or emergency room visits, and individuals experiencing homelessness.

This bill would recast the definition of ECM, referring to community-based, high-touch coordination and comprehensive care management services, as specified. The bill would delete certain provisions that designate 2022 or 2023 timelines for commencing ECM coverage, depending on whether or not a Medi-Cal managed care plan operates in a county in which the Whole Person Care pilot program or the Health Home Program was implemented.

Existing law, subject to CalAIM implementation, authorizes a Medi-Cal managed care plan to elect to cover community supports. Under existing law, community supports that the department is authorized to approve include, among others, housing transition navigation services and medically supportive food and nutrition services.

This bill would require the department, by July 1, 2027, to produce model managed care coverage standards and policy, reflecting best practices, for each community support provided for plan years beginning on January 1, 2028. If a managed care plan deviates from the standards and policy, the bill would require the plan to provide to the department a specific explanation and justification for that deviation. The bill would require the department to provide ongoing technical assistance to managed care plans and to require the plans to continue to provide technical assistance to providers of community supports. The bill would require the department to publicly post any policy changes for stakeholder input, and to publicly release written updates to the departments policy guidance, as specified. department to publish and maintain policy guides and all-plan letters on its internet website that define model coverage standards and policy for each community support, to engage stakeholders, to provide ongoing technical assistance, and to establish a standard timeline and process for regular updates to community supports policy guides, as specified. The bill would require a Medi-Cal managed care plan to adopt community supports policies, and to educate its in-network community support providers, as specified.

The bill would require a managed care plan to track and report to the department certain quantitative data regarding nonprofit community providers, as defined, and would require the department to publish a report on these data not less than annually. The bill would require the department to continue to publish certain information on its internet website on a quarterly basis through December 31, 2031. the department to publish certain information on ECM and community supports utilization data on the departments internet website on a quarterly basis, to the extent feasible, until January 1, 2032. The bill would require the department, by March 31, 2029, to provide to the legislative committees specified information in writing necessary to inform legislative consideration of transitioning community supports to benefits that are required to be covered under the Medi-Cal program. The bill would make other technical changes to the ECM and community support provisions.

Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is in part governed by, and funded pursuant to, federal Medicaid program provisions.

Existing law, subject to implementation of the California Advancing and Innovating Medi-Cal (CalAIM) initiative, requires the department to implement an enhanced care management (ECM) benefit designed to address the clinical and nonclinical needs on a whole-person-care basis for certain target populations of Medi-Cal beneficiaries enrolled in Medi-Cal managed care plans. Under existing law, target populations include, among others, high utilizers with frequent hospital admissions, short-term skilled nursing facility stays, or emergency room visits, and individuals experiencing homelessness.

This bill would recast the definition of ECM, referring to community-based, high-touch coordination and comprehensive care management services, as specified. The bill would delete certain provisions that designate 2022 or 2023 timelines for commencing ECM coverage, depending on whether or not a Medi-Cal managed care plan operates in a county in which the Whole Person Care pilot program or the Health Home Program was implemented.

Existing law, subject to CalAIM implementation, authorizes a Medi-Cal managed care plan to elect to cover community supports. Under existing law, community supports that the department is authorized to approve include, among others, housing transition navigation services and medically supportive food and nutrition services.

This bill would require the department, by July 1, 2027, to produce model managed care coverage standards and policy, reflecting best practices, for each community support provided for plan years beginning on January 1, 2028. If a managed care plan deviates from the standards and policy, the bill would require the plan to provide to the department a specific explanation and justification for that deviation. The bill would require the department to provide ongoing technical assistance to managed care plans and to require the plans to continue to provide technical assistance to providers of community supports. The bill would require the department to publicly post any policy changes for stakeholder input, and to publicly release written updates to the departments policy guidance, as specified.

The bill would require a managed care plan to track and report to the department certain quantitative data regarding nonprofit community providers, as defined, and would require the department to publish a report on these data not less than annually. The bill would modify a requirement for require the department to continue to publish a public report on ECM and community supports utilization data, populations served, and demographic data, from annual to quarterly publications instead. certain information on its internet website on a quarterly basis through December 31, 2031. The bill would require the department, by March 31, 2029, to provide to the legislative committees information in writing necessary to inform legislative consideration of transitioning community supports to benefits that are required to be covered under the Medi-Cal program.

The bill would require the department, until January 1, 2032, to continue to convene the CalAIM Implementation Advisory Group that is in effect on January 1, 2026, and as most recently updated. For purposes of the above-described provisions on ECM and community supports coverage, the bill would remove references to their implementation in accordance with CalAIM Terms and Conditions.

Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is in part governed by, and funded pursuant to, federal Medicaid program provisions.

Existing law, subject to CalAIM implementation, authorizes a Medi-Cal managed care plan to elect to cover community supports. Under existing law, community supports that the department is authorized to approve include, among others, housing transition navigation services and medically supportive food and nutrition services. Existing law requires the department to annually publish a public report on reported community supports utilization data, populations served, and demographic data, as specified.

Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is in part governed by, and funded pursuant to, federal Medicaid program provisions.

Existing law, the California Advancing and Innovating Medi-Cal (CalAIM) Act, subject to any necessary federal approvals, establishes the CalAIM initiative in order to, among other things, improve quality outcomes, reduce health disparities, and transition and transform the Medi-Cal program to a more consistent and seamless system by reducing complexity and increasing flexibility. Under existing law, the CalAIM initiative ends on December 31, 2026. Existing law authorizes the department to seek to extend the payment methodologies or programs set forth in CalAIM, as specified, consistent with applicable federal requirements.

Existing law, subject to CalAIM implementation, authorizes a Medi-Cal managed care plan to elect to cover community supports. Under existing law, community supports that the department is authorized to approve include, among others, housing transition navigation services and medically supportive food and nutrition services. Existing law requires the department to annually publish a public report on reported community supports utilization data, populations served, and demographic data, as specified.

This bill would authorize a Medi-Cal managed care plan to continue to cover those community supports approved by the department as cost effective and medically appropriate, as specified. Under the bill, this continued coverage would commence on January 1, 2027, would be conditioned on the availability of federal financial participation, and would be set forth as part of a CalAIM successor program.

The bill would require the department to continue to publish the above-described public report, but on a quarterly basis. The bill would require the department to provide ongoing technical assistance to Medi-Cal managed care plans and providers of community supports to enhance their ability to effectively provide these services.

The bill would require the department to produce a model Evidence of Coverage document that contains comprehensive and detailed instructions on model eligibility and coverage policies, and to develop related policies for each community support provided, as specified. The bill would require the department to solicit and accept feedback in developing the Evidence of Coverage document, as specified. The bill would require the department to regularly review and update its policy as needed until a specified date. The bill would require the department to publicly release written updates to its community supports policy guidance no later than 6 months prior to the effective date of the update, subject to limited exceptions. The bill would require Medi-Cal managed care plans to track and report to the department the number and percentage of their providers that are community providers, and would define community provider for these purposes. The bill would require the department to continue to convene the currently established CalAIM Implementation Advisory Group until a specified date.

Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is in part governed by, and funded pursuant to, federal Medicaid program provisions.

Existing law, the California Advancing and Innovating Medi-Cal (CalAIM) Act, subject to any necessary federal approvals, establishes the CalAIM initiative in order to, among other things, improve quality outcomes, reduce health disparities, and transition and transform the Medi-Cal program to a more consistent and seamless system by reducing complexity and increasing flexibility. Under existing law, the CalAIM initiative ends on December 31, 2026. Existing law authorizes the department to seek to extend the payment methodologies or programs set forth in CalAIM, as specified, consistent with applicable federal requirements.

Existing law, subject to CalAIM implementation, authorizes a Medi-Cal managed care plan to elect to cover community supports. Under existing law, community supports that the department is authorized to approve include, among others, housing transition navigation services and medically supportive food and nutrition services. Existing law requires the department to annually publish a public report on reported community supports utilization data, populations served, and demographic data, as specified.

This bill would authorize a Medi-Cal managed care plan to continue to cover those community supports approved by the department as cost effective and medically appropriate, as specified. Under the bill, this continued coverage would commence on January 1, 2027, would be conditioned on the availability of federal financial participation, and would be set forth as part of a CalAIM successor program.

The bill would require the department to continue to publish the above-described public report, but on a quarterly basis. The bill would require the department to provide ongoing technical assistance to Medi-Cal managed care plans and providers of community supports to enhance their ability to effectively provide these services.

Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is in part governed by, and funded pursuant to, federal Medicaid program provisions.

Existing law, the California Advancing and Innovating Medi-Cal (CalAIM) Act, subject to any necessary federal approvals, establishes the CalAIM initiative in order to, among other things, improve quality outcomes, reduce health disparities, and transition and transform the Medi-Cal program to a more consistent and seamless system by reducing complexity and increasing flexibility. Under existing law, the CalAIM initiative ends on December 31, 2026. Existing law authorizes the department to seek to extend the payment methodologies or programs set forth in CalAIM, as specified, consistent with applicable federal requirements.

Existing law, subject to CalAIM implementation, authorizes a Medi-Cal managed care plan to elect to cover community supports. Under existing law, community supports that the department is authorized to approve include, among others, housing transition navigation services and medically supportive food and nutrition services. Existing law requires the department to annually publish a public report on reported community supports utilization data, populations served, and demographic data, as specified.

This bill would authorize a Medi-Cal managed care plan to continue to cover those community supports approved by the department as cost effective and medically appropriate, as specified. Under the bill, this continued coverage would commence on January 1, 2027, would be conditioned on the availability of federal financial participation, and would be set forth as part of a CalAIM successor program.

The bill would require the department to continue to publish the above-described public report, but on a quarterly basis. The bill would require the department to provide ongoing technical assistance to Medi-Cal managed care plans and providers of community supports to enhance their ability to effectively provide these services.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2348

Author:(Bonta)

As Amended Ver:August 18, 2026

Majority vote

SUMMARY

Authorizes Medi-Cal managed care plans to continue to cover Community Supports (services meant to address non-health care related barriers to health) in the Medi-Cal program, and creates associated processes and requirements to promote transparency, accountability, consistency and stability in the delivery of these services. Requires, by March 31, 2029, the Department of Health Care Services (DHCS) to provide to the fiscal and policy committees of the Legislature information in writing necessary to inform legislative consideration of transitioning Community Supports to Medi-Cal benefits. Codifies definitions of Enhanced Care Managements (ECM) within the Medi-Cal program in alignment with current practice definitions in guidance, and makes minor technical cleanup, updates, and changes.

Senate Amendments

1. Require DHCS to publish ECM and Community Supports utilization data on a quarterly basis, to the extent feasible.
2. Recast the requirement to define model coverage standards and policy for Community Supports to align with DHCS’s current processes and guidance documents, and require a Medi-Cal managed care plan to adopt community supports policies consistent with DHCS guidance.
3. Recast requirements related to the standard timeline and process for seeking public input to clarify that exception processes apply to all aspects of the requirements. Specifies a minimum period of two weeks, versus one month, of public input.
4. Specify plans shall educate, versus provide technical assistance to, their in-network providers.
5. Make additional minor and technical changes.

COMMENTS

California Advancing and Innovating Medi-Cal (CalAIM). CalAIM is a collection of major initiatives spearheaded by DHCS to improve Medi-Cal, including addressing social drivers of health, reducing program complexity and increasing flexibility, and modernizing payment structures to promote better outcomes. The majority of CalAIM proposals were put forward in 2021 through two comprehensive applications to the federal government for a "Section 1115 demonstration" and "Section 1915(b) waiver." Although CalAIM expires at the end of 2026, the administration has signaled its intention to continue Community Supports beyond 2026. ECM, which was created through CalAIM, is now a permanent Medi-Cal benefit.

Community Supports. One component of CalAIM that addresses social drivers of health is called Community Supports. Community Supports are services that can be provided by Medi-Cal managed care plans as cost-effective alternatives to traditional medical services or settings. DHCS has a pre-approved list of 14 Community Supports, based on experience in prior demonstration programs to address health-related social needs. These supports are designed to provide flexibility to address specific needs of complex populations.

Federal Guidance on "In Lieu of Services" (ILOS). Every Medicaid program has a Medicaid State Plan that specifies the benefits and services covered by that program. ILOS can be covered if the state determines they are medically appropriate and cost-effective substitutes or settings for a service specified in the State Plan. Community Supports, as defined through CalAIM, are considered ILOS. ILOS is a permanent option for state Medicaid programs enshrined in federal Medicaid managed care regulations and, as required by the federal Centers for Medicare & Medicaid Services (CMS), memorialized in approved managed care plan contracts.

The general idea behind ILOS is that prevention of an illness or injury, or the mitigation of a condition through lower-intensity services is both cost-saving and more beneficial to an individual’s health. If higher-intensity services, like skilled nursing facility, emergency department, or inpatient services can be avoided, resources are freed up to be redirected to lower-intensity and preventive care in a virtuous cycle. For instance, home modifications and adaptations can support individuals in maintaining or improving their health and reduce emergency department visits and inpatient stays by reducing falls.

Next Steps for Community Supports after the Five-Year "CalAIM Term." According to DHCS, after December 31, 2026, the date the defined 5-year CalAIM term expires, Community Supports will continue to be covered under ILOS authority and will not need to be approved under waiver authority. The 12 Community Supports covered as ILOS are not dependent on DHCS' current CalAIM Section 1115 or 1915(b) waiver approvals. The community supports not allowable under ILOS authority are being pursued through Section 1115 demonstration authority. These include recuperative care (short-term residential setting in which members recover from an injury or illness while obtaining access to primary care, behavioral health services, case management, and other supportive social services) and short-term post-hospitalization housing (ongoing supports necessary for recuperation and recovery after exiting an institution).

Cost-Effectiveness of Community Supports. According to DHCS, all 12 Community Supports that are under ILOS authority are, or will likely be proven to be, cost-effective in the remaining years of the waiver demonstration period if current trends continue. An independent evaluator is conducting a rigorous independent evaluation of all Community Supports by 2028. DHCS evaluated the cost-effectiveness of Community Supports based on data from July 2022 to June 2024. According to DHCS, this early data already shows promising results, with nine of the 12 services already demonstrating cost-effectiveness. For example, a Community Support that assists with Housing Deposits demonstrated a 36.6% reduction in inpatient services costs, 34.6% reduction in outpatient services costs, 21.2% reduction in emergency room services costs, 34.3% reduction in long-term care services costs, and a 2.3% reduction in outpatient mental health services costs. When accounting for the costs of the Community Supports plus the reduction in spending for other services noted above, DHCS reports the net impact is an overall reduction in spending of 31.6%.

ECM. ECM is a statewide Medi-Cal benefit created as part of CalAIM. It is available through Medi-Cal plans to provide care management to Medi-Cal enrollees with the highest needs. ECM identifies these enrollees as "Populations of Focus." Enrollees have a single lead care manager who coordinates all their health and health-related care, including physical, mental, and dental care, and social services. The lead care manager role is designed to "meet enrollees where they are" to meet their needs, build a trusting relationship, and provide intensive coordination of health and health-related services. DHCS estimated that between 3% and 5% of all Medi-Cal plan members statewide are potentially eligible for ECM.

Utilization of Community Supports and ECM. At this time and under ILOS authority, Community Supports are only available through Medi-Cal managed care plans and are optional for the plans to implement. Nearly 5,000 Community Supports providers and over 4,000 ECM providers are contracted by Medi-Cal MCPs to offer these services.

According to DHCS, all 58 counties in California offer at least 8 Community Supports. Twenty-four counties (representing 41% of all Medi-Cal MCP members) have access to all 14 Community Supports. In Quarter 2 of 2025, about 188,000 unique members have used one or more Community Supports services, a 51% increase from a year prior. In Quarter 2 of 2025, about 206,000 unique members received ECM, an increase of 61% from a year prior.

Successes and Challenges. CalAIM providers, plans, advocates, and other stakeholders have mixed and varied opinions based on their unique experience with implementation of CalAIM. Although CalAIM is in the last year of the 5-year implementation period, implementation of Community Supports and ECM has yet to reach a steady state, and DHCS continues to make policy adjustments and refinements, engage with stakeholders, and provide technical assistance to plans and providers. In conducting stakeholder outreach in fall 2025 throughout the state on the impacts of federal Medicaid cuts, the author reports being struck by the frequency with which stakeholders in every part of the state independently brought up the importance of continuing the effective parts of CalAIM, largely related to Community Supports and ECM. Based on further stakeholder outreach to a variety of CalAIM providers and advocates for these services, the author has noted that the following issues have been identified, some of which are addressed in this bill: certainty about coverage, inconsistency among plans on eligibility criteria and benefits policy, unpredictable policy processes, insufficient technical assistance and focus on best practices to support plans to successfully implement some Community Supports, and lack of robust outcomes data.

According to the Author

CalAIM has been a transformative journey for the Medi-Cal program, challenging entities throughout the state to collaborate, innovate and improve care so that Medi-Cal enrollees stay healthier and get the right care, from the right provider, in the right setting and at the right time.. This bill requires a continued commitment to timely public data reporting, promotes consistency and best practices for coverage policy by requiring DHCS to publish a model "Evidence of Coverage" document and implements other provisions designed to enhance transparency, accountability, stability, consistency, and continuous improvement in Community Supports. This bill will cement Community Supports for the long term and help the state truly realize the promise of CalAIM.

Arguments in Support

This bill is supported by health and children's advocates and providers of CalAIM and Medi-Cal services. Supporters note this bill provides a clear, consistent framework for the continuation of vital services that address the social drivers of health, such as assisted living, housing transition navigation, medically supportive food, and other community-based supports that have proven to improve health outcomes and reduce avoidable utilization of higher-cost care. Supporters note this bill ensures that progress made under CalAIM is not lost. Supporters cite DHCS reports that show Community Supports have reduced avoidable emergency department visits, hospital stays, and long-term care use while showing strong early signs of cost savings. Additionally, supporters note this bill aims to enhance transparency, consistency, and stability in the implementation of these CalAIM services.

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Senate Appropriations Committee:

1. Unknown ongoing costs, potentially hundreds of thousands, for DHCS for state administration (General Fund and federal funds).
2. Unknown ongoing cost pressures to increase Medi-Cal plan rates in order for plans to comply with required standards (General Fund and federal funds).

VOTES:

ASM HEALTH: 16-0-0

YES: Bonta, Chen, Addis, Aguiar-Curry, Ahrens, Caloza, Carrillo, Mark González, Johnson, Patel, Patterson, Rogers, Sanchez, Schiavo, Sharp-Collins, Stefani

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Hoover, Aguiar-Curry, Calderon, Caloza, Dixon, Fong, Mark González, Krell, Pacheco, Pellerin, Sharp-Collins, Solache, Ta, Tangipa

ASSEMBLY FLOOR: 78-0-2

YES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Johnson, Kalra, Krell, Lackey, Lee, Lowenthal, Macedo, McKinnor, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas

ABS, ABST OR NV: Muratsuchi, Celeste Rodriguez

SENATE FLOOR: 40-0-0

YES: Allen, Alvarado-Gil, Archuleta, Arreguín, Ashby, Becker, Blakespear, Cabaldon, Caballero, Cervantes, Choi, Cortese, Dahle, Durazo, Gonzalez, Grayson, Grove, Hurtado, Jones, Laird, Limón, McGuire, McNerney, Menjivar, Niello, Ochoa Bogh, Padilla, Pérez, Reyes, Richardson, Rubio, Seyarto, Smallwood-Cuevas, Stern, Strickland, Umberg, Valladares, Wahab, Weber Pierson, Wiener

UPDATED

VERSION: August 18, 2026

CONSULTANT: Lisa Murawski / HEALTH / (916) 319-2097 FN: 0004085

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2348

Author:(Bonta)

As Amended Ver:August 18, 2026

Majority vote

SUMMARY

Authorizes Medi-Cal managed care plans to continue to cover Community Supports (services meant to address non-health care related barriers to health) in the Medi-Cal program, and creates associated processes and requirements to promote transparency, accountability, consistency and stability in the delivery of these services. Requires, by March 31, 2029, the Department of Health Care Services (DHCS) to provide to the fiscal and policy committees of the Legislature information in writing necessary to inform legislative consideration of transitioning Community Supports to Medi-Cal benefits. Codifies definitions of Enhanced Care Managements (ECM) within the Medi-Cal program in alignment with current practice definitions in guidance, and makes minor technical cleanup, updates, and changes.

Senate Amendments

1. Require DHCS to publish ECM and Community Supports utilization data on a quarterly basis, to the extent feasible.
2. Recast the requirement to define model coverage standards and policy for Community Supports to align with DHCS’s current processes and guidance documents, and require a Medi-Cal managed care plan to adopt community supports policies consistent with DHCS guidance.
3. Recast requirements related to the standard timeline and process for seeking public input to clarify that exception processes apply to all aspects of the requirements. Specifies a minimum period of two weeks, versus one month, of public input.
4. Specify plans shall educate, versus provide technical assistance to, their in-network providers.
5. Make additional minor and technical changes.

COMMENTS

California Advancing and Innovating Medi-Cal (CalAIM). CalAIM is a collection of major initiatives spearheaded by DHCS to improve Medi-Cal, including addressing social drivers of health, reducing program complexity and increasing flexibility, and modernizing payment structures to promote better outcomes. The majority of CalAIM proposals were put forward in 2021 through two comprehensive applications to the federal government for a "Section 1115 demonstration" and "Section 1915(b) waiver." Although CalAIM expires at the end of 2026, the administration has signaled its intention to continue Community Supports beyond 2026. ECM, which was created through CalAIM, is now a permanent Medi-Cal benefit.

Community Supports. One component of CalAIM that addresses social drivers of health is called Community Supports. Community Supports are services that can be provided by Medi-Cal managed care plans as cost-effective alternatives to traditional medical services or settings. DHCS has a pre-approved list of 14 Community Supports, based on experience in prior demonstration programs to address health-related social needs. These supports are designed to provide flexibility to address specific needs of complex populations.

Federal Guidance on "In Lieu of Services" (ILOS). Every Medicaid program has a Medicaid State Plan that specifies the benefits and services covered by that program. ILOS can be covered if the state determines they are medically appropriate and cost-effective substitutes or settings for a service specified in the State Plan. Community Supports, as defined through CalAIM, are considered ILOS. ILOS is a permanent option for state Medicaid programs enshrined in federal Medicaid managed care regulations and, as required by the federal Centers for Medicare & Medicaid Services (CMS), memorialized in approved managed care plan contracts.

The general idea behind ILOS is that prevention of an illness or injury, or the mitigation of a condition through lower-intensity services is both cost-saving and more beneficial to an individual’s health. If higher-intensity services, like skilled nursing facility, emergency department, or inpatient services can be avoided, resources are freed up to be redirected to lower-intensity and preventive care in a virtuous cycle. For instance, home modifications and adaptations can support individuals in maintaining or improving their health and reduce emergency department visits and inpatient stays by reducing falls.

Next Steps for Community Supports after the Five-Year "CalAIM Term." According to DHCS, after December 31, 2026, the date the defined 5-year CalAIM term expires, Community Supports will continue to be covered under ILOS authority and will not need to be approved under waiver authority. The 12 Community Supports covered as ILOS are not dependent on DHCS' current CalAIM Section 1115 or 1915(b) waiver approvals. The community supports not allowable under ILOS authority are being pursued through Section 1115 demonstration authority. These include recuperative care (short-term residential setting in which members recover from an injury or illness while obtaining access to primary care, behavioral health services, case management, and other supportive social services) and short-term post-hospitalization housing (ongoing supports necessary for recuperation and recovery after exiting an institution).

Cost-Effectiveness of Community Supports. According to DHCS, all 12 Community Supports that are under ILOS authority are, or will likely be proven to be, cost-effective in the remaining years of the waiver demonstration period if current trends continue. An independent evaluator is conducting a rigorous independent evaluation of all Community Supports by 2028. DHCS evaluated the cost-effectiveness of Community Supports based on data from July 2022 to June 2024. According to DHCS, this early data already shows promising results, with nine of the 12 services already demonstrating cost-effectiveness. For example, a Community Support that assists with Housing Deposits demonstrated a 36.6% reduction in inpatient services costs, 34.6% reduction in outpatient services costs, 21.2% reduction in emergency room services costs, 34.3% reduction in long-term care services costs, and a 2.3% reduction in outpatient mental health services costs. When accounting for the costs of the Community Supports plus the reduction in spending for other services noted above, DHCS reports the net impact is an overall reduction in spending of 31.6%.

ECM. ECM is a statewide Medi-Cal benefit created as part of CalAIM. It is available through Medi-Cal plans to provide care management to Medi-Cal enrollees with the highest needs. ECM identifies these enrollees as "Populations of Focus." Enrollees have a single lead care manager who coordinates all their health and health-related care, including physical, mental, and dental care, and social services. The lead care manager role is designed to "meet enrollees where they are" to meet their needs, build a trusting relationship, and provide intensive coordination of health and health-related services. DHCS estimated that between 3% and 5% of all Medi-Cal plan members statewide are potentially eligible for ECM.

Utilization of Community Supports and ECM. At this time and under ILOS authority, Community Supports are only available through Medi-Cal managed care plans and are optional for the plans to implement. Nearly 5,000 Community Supports providers and over 4,000 ECM providers are contracted by Medi-Cal MCPs to offer these services.

According to DHCS, all 58 counties in California offer at least 8 Community Supports. Twenty-four counties (representing 41% of all Medi-Cal MCP members) have access to all 14 Community Supports. In Quarter 2 of 2025, about 188,000 unique members have used one or more Community Supports services, a 51% increase from a year prior. In Quarter 2 of 2025, about 206,000 unique members received ECM, an increase of 61% from a year prior.

Successes and Challenges. CalAIM providers, plans, advocates, and other stakeholders have mixed and varied opinions based on their unique experience with implementation of CalAIM. Although CalAIM is in the last year of the 5-year implementation period, implementation of Community Supports and ECM has yet to reach a steady state, and DHCS continues to make policy adjustments and refinements, engage with stakeholders, and provide technical assistance to plans and providers. In conducting stakeholder outreach in fall 2025 throughout the state on the impacts of federal Medicaid cuts, the author reports being struck by the frequency with which stakeholders in every part of the state independently brought up the importance of continuing the effective parts of CalAIM, largely related to Community Supports and ECM. Based on further stakeholder outreach to a variety of CalAIM providers and advocates for these services, the author has noted that the following issues have been identified, some of which are addressed in this bill: certainty about coverage, inconsistency among plans on eligibility criteria and benefits policy, unpredictable policy processes, insufficient technical assistance and focus on best practices to support plans to successfully implement some Community Supports, and lack of robust outcomes data.

According to the Author

CalAIM has been a transformative journey for the Medi-Cal program, challenging entities throughout the state to collaborate, innovate and improve care so that Medi-Cal enrollees stay healthier and get the right care, from the right provider, in the right setting and at the right time.. This bill requires a continued commitment to timely public data reporting, promotes consistency and best practices for coverage policy by requiring DHCS to publish a model "Evidence of Coverage" document and implements other provisions designed to enhance transparency, accountability, stability, consistency, and continuous improvement in Community Supports. This bill will cement Community Supports for the long term and help the state truly realize the promise of CalAIM.

Arguments in Support

This bill is supported by health and children's advocates and providers of CalAIM and Medi-Cal services. Supporters note this bill provides a clear, consistent framework for the continuation of vital services that address the social drivers of health, such as assisted living, housing transition navigation, medically supportive food, and other community-based supports that have proven to improve health outcomes and reduce avoidable utilization of higher-cost care. Supporters note this bill ensures that progress made under CalAIM is not lost. Supporters cite DHCS reports that show Community Supports have reduced avoidable emergency department visits, hospital stays, and long-term care use while showing strong early signs of cost savings. Additionally, supporters note this bill aims to enhance transparency, consistency, and stability in the implementation of these CalAIM services.

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Senate Appropriations Committee:

1. Unknown ongoing costs, potentially hundreds of thousands, for DHCS for state administration (General Fund and federal funds).
2. Unknown ongoing cost pressures to increase Medi-Cal plan rates in order for plans to comply with required standards (General Fund and federal funds).

VOTES:

ASM HEALTH: 16-0-0

YES: Bonta, Chen, Addis, Aguiar-Curry, Ahrens, Caloza, Carrillo, Mark González, Johnson, Patel, Patterson, Rogers, Sanchez, Schiavo, Sharp-Collins, Stefani

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Hoover, Aguiar-Curry, Calderon, Caloza, Dixon, Fong, Mark González, Krell, Pacheco, Pellerin, Sharp-Collins, Solache, Ta, Tangipa

ASSEMBLY FLOOR: 78-0-2

YES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Johnson, Kalra, Krell, Lackey, Lee, Lowenthal, Macedo, McKinnor, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas

ABS, ABST OR NV: Muratsuchi, Celeste Rodriguez

UPDATED

VERSION: August 18, 2026

CONSULTANT: Lisa Murawski / HEALTH / (916) 319-2097 FN: 0004085

 THIRD READING  

Bill No: AB 2348

Author: Bonta (D)

Amended: 8/18/26 in Senate

Vote: 21

SENATE HEALTH COMMITTEE: 11-0, 6/24/26

AYES: Weber Pierson, Valladares, Caballero, Durazo, Gonzalez, Grove, Menjivar, Padilla, Pérez, Rubio, Smallwood-Cuevas

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/13/26

AYES: Cervantes, Seyarto, Cabaldon, Dahle, Grayson, Richardson, Wahab

ASSEMBLY FLOOR: 78-0, 5/26/26 - See last page for vote

SUBJECT: Medi-Cal: enhanced care management and community supports

SOURCE: Author

DIGEST:

This bill: 1) requires the Department of Health Care Services (DHCS) to publish model managed care coverage standards and policy for the California Advancing and Innovating Medi-Cal initiative’s community supports benefits, submit information to the Legislature on the feasibility of transitioning the community supports benefits to permanent Medi-Cal benefits; and 2) makes other technical changes to the community supports and Enhanced Care Management (ECM) benefits.

Senate Floor Amendments of 8/18/26 make the following changes to this bill:

1. Limit the ECM target populations to those enumerated in statute.
2. Delete the requirement for DHCS to produce model managed care coverage standards for each community support and replace it with a requirement to publish and maintain policy guides and all-plan letters that define model coverage standards and policy.
3. Replace the requirement for a managed care plan to provide specific justification for each deviation from the model managed care coverage standards and policy with a requirement for managed care plans to adopt policies consistent with DHCS guidance and federal regulation.
4. Replace the requirement for managed care plans to provide technical assistance to its community supports providers with a requirement to educate in-network community support providers on Medi-Cal; shorten the public input period for DHCS community supports policy changes from one month to two weeks; and delete the requirement for plans and DHCS to publicly report data on nonprofit community providers and the services they provide.
5. Limit the requirement that DHCS publish ECM and community supports utilization data on its website on a quarterly basis only to the extent feasible.
6. Specify that the information DHCS is required to provide to legislative committees on the feasibility of transitioning community supports to full Medi-Cal benefits is to be drawn from a final community supports evaluation already required by federal Centers for Medicare and Medicaid Services (CMS).
7. Delete the requirement to continue to convene the CalAIM Implementation Advisory Group until January 1, 2032.

ANALYSIS:

Existing law:

1. Establishes the Medi-Cal program, administered by the DHCS, and under which qualified low-income individuals receive health care services. [Welfare and Institutions Code (WIC) §14000, et seq.]
2. Authorizes the DHCS director to contract, on a bid or nonbid basis, with any qualified individual, organization, or entity to provide services to, arrange for, or case manage the care of Medi-Cal beneficiaries and establishes managed care models that DHCS contracts within each county. [WIC §14087.3, §14089, §14087.98, §14087.967 and §14087.5]
3. Defines a Medi-Cal plan as any individual, organization, or entity that enters into a comprehensive risk contract with DHCS to provide covered full-scope health care services to enrolled Medi-Cal beneficiaries. [WIC §14184.101]
4. Establishes California Advancing and Innovating Medi-Cal (CalAIM) initiative effective from January 1, 2022 until December 31, 2026. The goals of CalAIM are to identify and manage the risk and needs of Medi-Cal beneficiaries through whole-person-care approaches and addressing social determinants of health; transition and transform the Medi-Cal program to a more consistent and seamless system by reducing complexity and increasing flexibility; and, improve quality outcomes, reduce health disparities, and drive delivery system transformation and innovation through value-based initiatives, modernization of systems, and payment reform. [WIC §14184.100]
5. Includes in the CalAIM initiative the requirement for Medi-Cal plans to offer Enhanced Care Management (ECM) benefits designed to address the clinical and nonclinical needs on a whole-person care basis for Medi-Cal recipients who meet the criteria outlined in the CalAIM Terms and Conditions for a target population, as determined by DHCS. [WIC §14184.205]
6. Specifies that the ECM target populations must include children or youth with complex needs; individuals experiencing homelessness; high utilizers with frequent hospital admissions, short-term skilled nursing facility stays, or emergency room visits; individuals at risk for institutionalization and eligible for long-term care services; nursing facility residents who want to transition to the community; individuals with serious mental illness, and children with serious emotional disturbance or substance use disorder; and, individuals transitioning from incarceration requiring immediate transition of services to the community. [WIC §14184.205]
7. Requires DHCS to develop, in consultation with the Medi-Cal plans and other appropriate stakeholders, a monitoring plan and reporting template for the implementation of ECM and to publish an annual report on ECM utilization data. [WIC §14184.205]
8. Includes in the CalAIM initiative the authority for a Medi-Cal plan to elect to cover those Community supports approved by DHCS as cost effective and medically appropriate substitutes for the applicable covered Medi-Cal benefit. [WIC §14184.206 and 42 CFR §438.3]
9. Requires Medi-Cal plans to include information on the Community supports offered by that plan in its member handbook and plan website, including any limitations on Community supports on the plan website. [WIC §14184.206]
10. Permits DHCS to approve Community supports, including but not limited to housing support services, services to help individuals transition out of hospital or other institutional care, personal care services, environmental accessibility adaptations, medically supportive food and nutrition services, sobering centers, and asthma remediation. [WIC §14184.206]
11. Requires DHCS to develop in consultation with the Medi-Cal plans and other appropriate stakeholders a monitoring plan and reporting template for the implementation of Community supports and to publish an annual report on Community supports utilization data. [WIC §14184.206]
12. Requires DHCS to take into account the utilization and actual cost of Community supports in developing capitation rates. [WIC §14184.206]

This bill:

1. Adds to the definition of ECM “community-based, high touch coordination and comprehensive care management services” and specifies that ECM services include access to a lead care manager, outreach and engagement, comprehensive assessment and care management planning, coordination of care, health promotion, comprehensive transitional care, member and family support, and coordination of and referral to community and social support services. Authorizes the exclusion of Medi-Cal recipients eligible for other high-intensity care management services, as defined by DHCS.
2. Requires DHCS and after engaging stakeholders, including Medi-Cal plans and providers of each community support, to publish and maintain policy guides and all-plan letters that define model coverage standards and policy in a manner sufficiently comprehensive and detailed to allow a Medi-Cal plan to adopt DHCS’s guidance as a whole as the plan’s coverage policy. Requires Medi-Cal plans to adopt community supports policies consistent with DHCS’s guidance and federal regulation.
3. Requires DHCS to provide ongoing technical assistance to Medi-Cal plans on community supports and requires Medi-Cal plans to educate their in-network community support providers on Medi-Cal policies in order to effectively deliver community supports services.
4. Requires DHCS to establish a standard timeline and process to regularly update community supports policy guides that includes a minimum of two weeks for public input before finalizing policy changes, publication of written policy changes six months prior to the effective date of the policy changes and to designate January 1 or July 1 as the effective date for policy changes of an applicable year. Authorizes exceptions to these requirements should DHCS need to ensure the effective delivery of community supports, as determined by DHCS. Requires DHCS to notify interested stakeholders with a rationale for the irregular update should an exception be invoked.
5. Defines “nonprofit community provider” as a locally available community-based nonprofit organization that has direct experience with providing services to Medi-Cal beneficiaries in the county or region where the organization operates.
6. Specifies that DHCS continue to publish quarterly ECM and community supports data until January 1, 2032, to the extent feasible.
7. Requires DHCS to provide in writing to the appropriate policy and fiscal committees of the Legislature information necessary to inform legislative consideration of transitioning community supports to benefits that are required to be covered under the Medi-Cal program including information on cost, effectiveness, and provider availability by March 31, 2029. Specifies that this information is to be drawn from the final community supports evaluation provided to CMS by December 31, 2028.
8. Deletes obsolete references to the CalAIM waiver terms and conditions, obsolete language regarding populations to be transitioned into the ECM benefit, and obsolete commencement dates.

Background

According to the author of this bill:

CalAIM has been a transformative journey for the Medi-Cal program, challenging entities throughout the state to collaborate, innovate and improve care so that Medi-Cal enrollees stay healthier and get the right care, from the right provider, in the right setting, and at the right time. Although CalAIM was originally proposed for a five-year waiver period from 2021 to 2026, many aspects of the transformation, including Community supports and ECM, were explicitly intended to outlast the initial five-year period and eventually transition into permanent Medi-Cal benefits. As the state transitions from implementing these services to sustaining them, this bill is intended to remove unnecessary variation in delivery of Community supports; establish a predictable, transparent public process when DHCS makes policy changes; codify ECM consistent with current policy; ensure continued timely data reporting; and make necessary technical updates. In addition, it ensures DHCS provides the Legislature information necessary to consider transitioning Community supports to full Medi-Cal benefits. As we move from building CalAIM to refining it, this bill makes needed adjustments to Community supports and ECM for the long term and helps the state truly realize the promise of CalAIM.

CalAIM. CalAIM is a collection of Medi-Cal initiatives aimed at addressing social drivers of health, reducing program complexity, increasing program flexibility, and modernizing payment structures to promote better outcomes. The CalAIM proposals were originally intended to start in 2021, but given the COVID-19 public health emergency and considerable stakeholder input, CalAIM did not start until January 1, 2022. CalAIM was authorized by AB 133 (Committee on Budget, Chapter 143, Statutes of 2021), which incorporated two policy bills introduced in 2021 and the approval of a federal Section 1115 demonstration waiver and a Section 1915(b) waiver. Both waivers require that changes to the state program be consistent with the objectives of the Medicaid program. DHCS received approval on December 29, 2021 for both waivers, effective through December 31, 2026. Some elements of CalAIM were also added to California’s Medicaid state plan as ongoing program changes which do not need to be reauthorized when the waivers end.

ECM. ECM is a statewide Medi-Cal benefit available through Medi-Cal plans to provide care management to Medi-Cal enrollees with the highest needs. ECM identifies these enrollees as “Populations of Focus,” which includes people experiencing homelessness, people at risk of avoidable hospital care, people with serious mental health or substance use disorder needs, adults at risk for long term care institutionalization, adults in nursing homes transitioning to the community, children enrolled in California Children’s Services with additional needs, children involved in child welfare, people transitioning from incarceration, and specific pregnant and postpartum individuals. As described by DHCS, enrollees are to have a single lead care manager who coordinates all their health and health-related care, including physical, mental, and dental care, and social services. In the most recently published data on utilization, in the third quarter of 2025, 227,000 Medi-Cal enrollees received ECM (out of 14.89 million total enrollees).

Community supports. Community supports are optional Medi-Cal plan services offered as cost-effective alternatives to traditional medical services or settings. DHCS has a pre-approved list of 15 Community supports, building off previous pilot programs such as Whole Person Care, Health Homes, and a medically tailored meals pilot program. These services address health-related social needs of Medi-Cal enrollees such as support to secure and maintain housing, access to medically tailored meals, and various transitional services when moving out of specific facilities. While DHCS encourages Medi-Cal plans to offer all of the Community supports services, these services are not entitlements, but are offered at the option of the plan to any eligible Medi-Cal enrollee.

In obtaining federal approval for the Community supports, DHCS was required to show that these services would allow Medi-Cal enrollees to avoid higher, costlier levels of care. For example, with regards to the Medically Tailored Meals/Medically Supportive Food benefit, DHCS presented findings that the average annualized health care expenditure was $1,863 greater for individuals assessed as food insecure relative to those not found to be food insecure, and cited literature of specific patient populations showing significant reductions in emergency department visits, inpatient hospitalizations, reductions in readmissions, and improvements in health outcomes and well-being. Data from the 2024 Community Support annual report shows that 9 out of first 12 services (two were added later) were already demonstrating cost effectiveness ranging from an 11.7% net cost reduction for sobering centers to a 61.3% in net cost reduction for respite services for people experiencing homelessness who are transitioning from hospital care. The remaining three services included in the report were expected to demonstrate their cost effectiveness over a longer timeline.

Next steps for CalAIM. As the current CalAIM waivers expire at the end of 2026, DHCS has submitted renewals for both the 1115 and 1915b waivers. Although done as part of the CalAIM package, the ECM benefits and most of the community supports do not require waiver authority. According to DHCS, ECM is authorized under federal Medicaid managed care regulations regarding care coordination and continuity of care responsibilities of managed care plans. Twelve of the 15 community supports were authorized under managed care authority known as In Lieu of Services, which authorizes these benefits at the option of the plans. These services can continue under the Medicaid state plan. The recuperative care and short-term post-hospitalization housing community supports will be recast into this authority as well, while a final community support on rent payments is part of another behavioral health waiver that is not up for renewal at this time.

When CalAIM was initially conceived, DHCS stated during the planning process that it intended for the community supports benefits to be permanent, statewide Medi-Cal benefits, but that plan capacity and provider availability at that time did not exist. The CalAIM waivers also contained funding to help start these benefits, funding which is not being continued in the current waiver renewal process. As such, the community supports are continuing at the Medi-Cal plans’ option. Because many of the community supports likely require waiver authority to turn into full benefits, continuing them under existing In Lieu of Services authority may be the only option given the current federal administration’s views on social determinants of health and Medicaid spending in general. This bill would require DHCS to give the Legislature an assessment of making these benefits permanent in 2029, along with a number of other technical changes on DHCS’s obligations with regards to reporting, stakeholder inclusion, and the issuance of guidance.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee, unknown ongoing costs, potentially hundreds of thousands, for DHCS for state administration (General Fund and federal funds); unknown ongoing cost pressures to increase Medi-Cal plan rates in order for plans to comply with required standards (General Fund and federal funds).

SUPPORT: (Verified 8/18/26)

18 Reasons

AIDS Healthcare Foundation
Alameda County Community Food Bank
Alliance for Children's Rights
Alzheimer's Association
Alzheimer's Greater Los Angeles
Alzheimer's Orange County
Alzheimer's San Diego

California Advocates for Nursing Home Reform
California Alliance of Child and Family Services
California Assisted Living Association
California Association of Medical Product Suppliers

California Association of Nonprofits
California Chapter of the American College of Emergency Physicians

California Children’s Hospital Association
California Community Action Partnership Association
California Housing Consortium

California Primary Care Association Advocates

California Respite Association
California Retired Teachers Association
Ceres Community Project
Community-Based Organization Medi-Cal Coalition

DoorDash
Downtown Women's Center
East Bay Asian Local Development Corporation
East Bay Innovations
Eden Housing

El Sol Neighborhood Education Center
Emergency Food Bank of Stockton/San Joaquin County
Episcopal Community Services of San Francisco
Esperanza Community Farms
Everyone's Harvest
Food As Medicine Collaborative
Foodwise Community
Fresh Approach
FullWell
Health Access California
Homestyle Direct, LLC.

Institute on Aging
Jamboree Housing Corporation
LeadingAge California
Linc Housing

Los Angeles LGBT Center
Meals on Wheels Orange County
National Core
Open Source Wellness

Pair Team
Partners in Care Foundation

Purfoods
Reinvestment Partners

San Diego Wellness Collaborative
San Francisco-Marin Food Bank
Santa Barbara County Food Action Network
Second Harvest Food Bank of Santa Cruz County
Sunterra Health, Inc.
Western Center on Law & Poverty, Inc.

One individual

OPPOSITION: (Verified 8/18/26)

None received

ARGUMENTS IN SUPPORT: The Community-Based Organization Medi-Cal coalitions write as documented by DHCS and echoed by providers and communities across the state, the ECM and Community supports benefits are improving outcomes for Medi-Cal members while simultaneously delivering measurable cost savings to California. By addressing unmet social and nonmedical needs, Community supports reduce avoidable emergency department visits, inpatient stays, and institutional care, allowing the health care system to intervene earlier, more effectively, and more humanely. By strengthening the foundation for these benefits and charting a path toward making Community supports permanent, required Medi-Cal coverage, this bill affirms California’s commitment to whole-person care, health equity, and smart public investments.

ASSEMBLY FLOOR: 78-0, 5/26/26

AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Johnson, Kalra, Krell, Lackey, Lee, Lowenthal, Macedo, McKinnor, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas

NO VOTE RECORDED: Muratsuchi, Celeste Rodriguez

Prepared by: Jen Flory / HEALTH / (916) 651-4111

8/19/26 10:58:15

**** END ****

 THIRD READING  

Bill No: AB 2348

Author: Bonta (D)

Amended: 6/29/26 in Senate

Vote: 21

SENATE HEALTH COMMITTEE: 11-0, 6/24/26

AYES: Weber Pierson, Valladares, Caballero, Durazo, Gonzalez, Grove, Menjivar, Padilla, Pérez, Rubio, Smallwood-Cuevas

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/13/26

AYES: Cervantes, Seyarto, Cabaldon, Dahle, Grayson, Richardson, Wahab

ASSEMBLY FLOOR: 78-0, 5/26/26 - See last page for vote

SUBJECT: Medi-Cal: enhanced care management and community supports

SOURCE: Author

DIGEST:

This bill 1) requires the Department of Health Care Services (DHCS) to publish model managed care coverage standards and policy for the California Advancing and Innovating Medi-Cal initiative’s community supports benefits, submit information to the Legislature on the feasibility of transitioning the community supports benefits to permanent Medi-Cal benefits; and 2) makes other technical changes to the community supports and Enhanced Care Management benefits.

ANALYSIS:

Existing law:

1. Establishes the Medi-Cal program, administered by the DHCS, and under which qualified low-income individuals receive health care services. [Welfare and Institutions Code (WIC) §14000, et seq.]
2. Authorizes the DHCS director to contract, on a bid or nonbid basis, with any qualified individual, organization, or entity to provide services to, arrange for, or case manage the care of Medi-Cal beneficiaries and establishes managed care models that DHCS contracts within each county. [WIC §14087.3, §14089, §14087.98, §14087.967 and §14087.5]
3. Defines a Medi-Cal plan as any individual, organization, or entity that enters into a comprehensive risk contract with DHCS to provide covered full-scope health care services to enrolled Medi-Cal beneficiaries. [WIC §14184.101]
4. Establishes California Advancing and Innovating Medi-Cal (CalAIM) initiative effective from January 1, 2022 until December 31, 2026. The goals of CalAIM are to identify and manage the risk and needs of Medi-Cal beneficiaries through whole-person-care approaches and addressing social determinants of health; transition and transform the Medi-Cal program to a more consistent and seamless system by reducing complexity and increasing flexibility; and, improve quality outcomes, reduce health disparities, and drive delivery system transformation and innovation through value-based initiatives, modernization of systems, and payment reform. [WIC §14184.100]
5. Includes in the CalAIM initiative the requirement for Medi-Cal plans to offer Enhanced Care Management (ECM) benefits designed to address the clinical and nonclinical needs on a whole-person care basis for Medi-Cal recipients who meet the criteria outlined in the CalAIM Terms and Conditions for a target population, as determined by DHCS. [WIC §14184.205]
6. Specifies that the ECM target populations must include children or youth with complex needs; individuals experiencing homelessness; high utilizers with frequent hospital admissions, short-term skilled nursing facility stays, or emergency room visits; individuals at risk for institutionalization and eligible for long-term care services; nursing facility residents who want to transition to the community; individuals with serious mental illness, and children with serious emotional disturbance or substance use disorder; and, individuals transitioning from incarceration requiring immediate transition of services to the community. [WIC §14184.205]
7. Requires DHCS to develop, in consultation with the Medi-Cal plans and other appropriate stakeholders, a monitoring plan and reporting template for the implementation of ECM and to publish an annual report on ECM utilization data. [WIC §14184.205]
8. Includes in the CalAIM initiative the authority for a Medi-Cal plan to elect to cover those Community supports approved by DHCS as cost effective and medically appropriate substitutes for the applicable covered Medi-Cal benefit. [WIC §14184.206 and 42 CFR §438.3]
9. Requires Medi-Cal plans to include information on the Community supports offered by that plan in its member handbook and plan website, including any limitations on Community supports on the plan website. [WIC §14184.206]
10. Permits DHCS to approve Community supports, including but not limited to housing support services, services to help individuals transition out of hospital or other institutional care, personal care services, environmental accessibility adaptations, medically supportive food and nutrition services, sobering centers, and asthma remediation. [WIC §14184.206]
11. Requires DHCS to develop in consultation with the Medi-Cal plans and other appropriate stakeholders a monitoring plan and reporting template for the implementation of Community supports and to publish an annual report on Community supports utilization data. [WIC §14184.206]
12. Requires DHCS to take into account the utilization and actual cost of Community supports in developing capitation rates. [WIC §14184.206]

This bill:

1. Adds to the definition of ECM “community-based, high touch coordination and comprehensive care management services” and specifies that ECM services include access to a lead care manager, outreach and engagement, comprehensive assessment and care management planning, coordination of care, health promotion, comprehensive transitional care, member and family support, and coordination of and referral to community and social support services. Authorizes the exclusion of Medi-Cal recipients eligible for other high-intensity care management services, as defined by DHCS. Clarifies that DHCS may include other ECM target populations.
2. Requires DHCS, by July 1, 2027 and after engaging stakeholders and soliciting feedback in the development of, to produce model managed care coverage standards and policy for each community support provided for plan years beginning on January 1, 2028. Requires the standards and policy to reflect best practices and provide detailed instructions on model eligibility and coverage policies sufficient for a Medi-Cal managed care plan to adopt, in whole, as its coverage policy. Requires Medi-Cal plans to provide to DHCS a specific explanation and justification for any deviation from model managed care coverage standards and policy.
3. Requires DHCS to provide ongoing technical assistance to Medi-Cal plans on community supports and requires Medi-Cal plans to provide technical assistance to the community supports providers.
4. Requires DHCS to publicly post any updates to its community supports guidance for a minimum of one month to allow for stakeholder input and to release updates to the community supports guidance six months before the effective date and limits the effective dates to July 1 or January 1. Authorizes exceptions to these requirements should DHCS need to address urgent issues, as determined by DHCS, including changes in federal approvals or the availability of federal financial participation. Requires DHCS to notify interested stakeholders with a rationale for the irregular update should an exception be invoked.
5. Defines “nonprofit community provider” as a locally available community-based nonprofit organization that has direct experience with providing services to Medi-Cal beneficiaries in the county or region where the organization operates. Requires Medi-Cal plans to track and report to DHCS the number and percentage of the plan’s providers that fit the definition of “nonprofit community provider” and the number and percentage of services provided by these community providers. Requires DHCS to publish this data by plan no less than annually. Clarifies that these tracking requirements do not restrict plans from contracting with providers that are not nonprofit community providers.
6. Specifies that DHCS shall continue to publish quarterly ECM and community supports data through December 31, 2031.
7. Requires DHCS to continue to convene the CalAIM Implementation Advisory Group that is in effect on January 1, 2026, and as most recently updated. Sunsets this requirement on January 1, 2032.
8. Requires DHCS to provide in writing to the appropriate policy and fiscal committees of the Legislature information necessary to inform legislative consideration of transitioning community supports to benefits that are required to be covered under the Medi-Cal program including information on cost, effectiveness, and provider availability by March 31, 2029.
9. Deletes obsolete references to the CalAIM waiver terms and conditions, obsolete language regarding populations to be transitioned into the ECM benefit, and obsolete commencement dates.

Background

According to the author of this bill:

CalAIM has been a transformative journey for the Medi-Cal program, challenging entities throughout the state to collaborate, innovate and improve care so that Medi-Cal enrollees stay healthier and get the right care, from the right provider, in the right setting, and at the right time. Although CalAIM was originally proposed for a five-year waiver period from 2021 to 2026, many aspects of the transformation, including Community supports and ECM, were explicitly intended to outlast the initial five-year period and eventually transition into permanent Medi-Cal benefits. As the state transitions from implementing these services to sustaining them, this bill is intended to remove unnecessary variation in delivery of Community supports; establish a predictable, transparent public process when DHCS makes policy changes; codify ECM consistent with current policy; ensure continued timely data reporting; and make necessary technical updates. In addition, it ensures DHCS provides the Legislature information necessary to consider transitioning Community supports to full Medi-Cal benefits. As we move from building CalAIM to refining it, this bill makes needed adjustments to Community supports and ECM for the long term and helps the state truly realize the promise of CalAIM.

CalAIM. CalAIM is a collection of Medi-Cal initiatives aimed at addressing social drivers of health, reducing program complexity, increasing program flexibility, and modernizing payment structures to promote better outcomes. The CalAIM proposals were originally intended to start in 2021, but given the COVID-19 public health emergency and considerable stakeholder input, CalAIM did not start until January 1, 2022. CalAIM was authorized by AB 133 (Committee on Budget, Chapter 143, Statutes of 2021), which incorporated two policy bills introduced in 2021 and the approval of a federal Section 1115 demonstration waiver and a Section 1915(b) waiver. Section 1115 waivers generally test innovating program improvements in a budget neutral manner, while Section 1915(b) waivers allow for the use of a managed care delivery system provided it is cost effective. Both waivers require that changes to the state program be consistent with the objectives of the Medicaid program. DHCS received approval on December 29, 2021 for both waivers, effective through December 31, 2026. Some elements of CalAIM were also added to California’s Medicaid state plan as ongoing program changes which do not need to be reauthorized when the waivers end.

ECM. ECM is a statewide Medi-Cal benefit available through Medi-Cal plans to provide care management to Medi-Cal enrollees with the highest needs. ECM identifies these enrollees as “Populations of Focus,” which includes people experiencing homelessness, people at risk of avoidable hospital care, people with serious mental health or substance use disorder needs, adults at risk for long term care institutionalization, adults in nursing homes transitioning to the community, children enrolled in California Children’s Services with additional needs, children involved in child welfare, people transitioning from incarceration, and specific pregnant and postpartum individuals. As described by DHCS, enrollees are to have a single lead care manager who coordinates all their health and health-related care, including physical, mental, and dental care, and social services. That lead care manager is to meet enrollees where they are to meet their needs, build a trusting relationship, and provide intensive coordination of health and health-related services. In the most recently published data on utilization, in the third quarter of 2025, 227,000 Medi-Cal enrollees received ECM (out of 14.89 million total enrollees).

Community supports. Community supports are optional Medi-Cal plan services offered as cost-effective alternatives to traditional medical services or settings. DHCS has a pre-approved list of 15 Community supports, building off previous pilot programs such as Whole Person Care, Health Homes, and a medically tailored meals pilot program. These services address health-related social needs of Medi-Cal enrollees such as support to secure and maintain housing, access to medically tailored meals, and various transitional services when moving out of specific facilities. While DHCS encourages Medi-Cal plans to offer all of the Community supports services, these services are not entitlements, but are offered at the option of the plan to any eligible Medi-Cal enrollee.

In obtaining federal approval for the Community supports, DHCS was required to show that these services would allow Medi-Cal enrollees to avoid higher, costlier levels of care. For example, with regards to the Medically Tailored Meals/Medically Supportive Food benefit, DHCS presented findings that the average annualized health care expenditure was $1,863 greater for individuals assessed as food insecure relative to those not found to be food insecure, and cited literature of specific patient populations showing significant reductions in emergency department visits, inpatient hospitalizations, reductions in readmissions, and improvements in health outcomes and well-being. Data from the 2024 Community Support annual report shows that 9 out of first 12 services (two were added later) were already demonstrating cost effectiveness ranging from an 11.7% net cost reduction for sobering centers to a 61.3% in net cost reduction for respite services for people experiencing homelessness who are transitioning from hospital care. The remaining three services included in the report were expected to demonstrate their cost effectiveness over a longer timeline.

Next steps for CalAIM. As the current CalAIM waivers expire at the end of 2026, DHCS has submitted renewals for both the 1115 and 1915b waivers. Although done as part of the CalAIM package, the ECM benefits and most of the community supports do not require waiver authority. According to DHCS, ECM is authorized under federal Medicaid managed care regulations regarding care coordination and continuity of care responsibilities of managed care plans. Twelve of the 15 community supports were authorized under managed care authority known as In Lieu of Services, which authorizes these benefits at the option of the plans. These services can continue under the Medicaid state plan. The recuperative care and short-term post-hospitalization housing community supports will be recast into this authority as well, while a final community support on rent payments is part of another behavioral health waiver that is not up for renewal at this time.

When CalAIM was initially conceived, DHCS stated during the planning process that it intended for the community supports benefits to be permanent, statewide Medi-Cal benefits, but that plan capacity and provider availability at that time did not exist. The CalAIM waivers also contained funding to help start these benefits, funding which is not being continued in the current waiver renewal process. As such, the community supports are continuing at the Medi-Cal plans’ option. Because many of the community supports likely require waiver authority to turn into full benefits, continuing them under existing In Lieu of Services authority may be the only option given the current federal administration’s views on social determinants of health and Medicaid spending in general. This bill would require DHCS to give the Legislature an assessment of making these benefits permanent in 2029, along with a number of other technical changes on DHCS’s obligations with regards to reporting, stakeholder inclusion, and the issuance of guidance.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee, unknown ongoing costs, potentially hundreds of thousands, for DHCS for state administration (General Fund and federal funds); unknown ongoing cost pressures to increase Medi-Cal plan rates in order for plans to comply with required standards (General Fund and federal funds).

SUPPORT: (Verified 8/13/2026)

18 Reasons

AIDS Healthcare Foundation
Alameda County Community Food Bank
Alliance for Children's Rights
Alzheimer's Association
Alzheimer's Greater Los Angeles
Alzheimer's Orange County
Alzheimer's San Diego

California Advocates for Nursing Home Reform
California Alliance of Child and Family Services
California Assisted Living Association
California Association of Medical Product Suppliers

California Association of Nonprofits
California Chapter of the American College of Emergency Physicians

California Children’s Hospital Association
California Community Action Partnership Association
California Housing Consortium

California Primary Care Association Advocates

California Respite Association
California Retired Teachers Association
Ceres Community Project
Community-Based Organization Medi-Cal Coalition

DoorDash
Downtown Women's Center
East Bay Asian Local Development Corporation
East Bay Innovations
Eden Housing

El Sol Neighborhood Education Center
Emergency Food Bank of Stockton/San Joaquin County
Episcopal Community Services of San Francisco
Esperanza Community Farms
Everyone's Harvest
Food As Medicine Collaborative
Foodwise Community
Fresh Approach
FullWell
Health Access California
Homestyle Direct, LLC.

Institute on Aging
Jamboree Housing Corporation
LeadingAge California
Linc Housing

Los Angeles LGBT Center
Meals on Wheels Orange County
National Core
Open Source Wellness

Pair Team
Partners in Care Foundation

Purfoods
Reinvestment Partners

San Diego Wellness Collaborative
San Francisco-Marin Food Bank
Santa Barbara County Food Action Network
Second Harvest Food Bank of Santa Cruz County
Sunterra Health, Inc.
Western Center on Law & Poverty, Inc.

One individual

OPPOSITION: (Verified 8/13/2026)

None received

ARGUMENTS IN SUPPORT: The Community-Based Organization Medi-Cal coalitions write as documented by DHCS and echoed by providers and communities across the state, the ECM and Community supports benefits are improving outcomes for Medi-Cal members while simultaneously delivering measurable cost savings to California. By addressing unmet social and nonmedical needs, Community supports reduce avoidable emergency department visits, inpatient stays, and institutional care, allowing the health care system to intervene earlier, more effectively, and more humanely. By strengthening the foundation for these benefits and charting a path toward making Community supports permanent, required Medi-Cal coverage, this bill affirms California’s commitment to whole-person care, health equity, and smart public investments.

ASSEMBLY FLOOR: 78-0, 5/26/26

AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Johnson, Kalra, Krell, Lackey, Lee, Lowenthal, Macedo, McKinnor, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas

NO VOTE RECORDED: Muratsuchi, Celeste Rodriguez

Prepared by: Jen Flory / HEALTH / (916) 651-4111

8/15/26 14:03:30

**** END ****

SENATE COMMITTEE ON

Senator Sabrina Cervantes, Chair

2025 - 2026 Regular Session

AB 2348 (Bonta) - Medi-Cal: enhanced care management and community supports

Bill Summary:

AB 2348 would add requirements in the Medi-Cal program related to Enhanced Care Management and Community Supports.

Fiscal Impact:

• Unknown ongoing costs, potentially hundreds of thousands, for the Department of Health Care Services (DHCS) for state administration (General Fund and federal funds).
• Unknown ongoing cost pressures to increase Medi-Cal plan rates in order for plans to comply with required standards (General Fund and federal funds).

Background:

The California Advancing and Innovating Medi-Cal (CalAIM) is a collection of Medi-Cal initiatives aimed at addressing social drivers of health, reducing program complexity, increasing program flexibility, and modernizing payment structures to promote better outcomes. Under the CalAIM initiative, Medi-Cal plans must offer Enhanced Care Management (ECM) benefits designed to address the clinical and nonclinical needs on a whole-person care basis for Medi-Cal recipients who meet certain criteria. The CalAIM initiative also includes the authority for a Medi-Cal plan to elect to cover Community Supports approved by DHCS as cost-effective and medically appropriate substitutes for a covered Medi-Cal benefit.

ECM is a statewide Medi-Cal benefit available through Medi-Cal plans to provide care management to Medi-Cal enrollees with the highest needs. These enrollees include people experiencing homelessness, people at risk of avoidable hospital care, people with serious mental health or substance use disorder needs, adults at risk for long term care institutionalization, adults in nursing homes transitioning to the community, children enrolled in California Children’s Services with additional needs, children involved in child welfare, people transitioning from incarceration, and specific pregnant and postpartum individuals. A lead care manager is responsible for providing intensive coordination of health and health-related services.

Community Supports are optional Medi-Cal plan services offered as cost-effective alternatives to traditional medical services or settings. DHCS has a pre-approved list of Community Supports, building off previous pilot programs such as Whole Person Care, Health Homes, and a medically tailored meals pilot program. These services address health-related social needs of Medi-Cal enrollees such as support to secure and maintain housing, access to medically tailored meals, and various transitional services when moving out of specific facilities. While DHCS encourages Medi-Cal plans to offer all of the Community Supports services, these services are not entitlements, but are offered at the option of the plan to any eligible Medi-Cal enrollee.

Proposed Law:

Specific provisions of the bill would:

• Specify that ECM services comply with the ECM service model, as defined by the DHCS, and include access to a lead care manager, outreach and engagement, comprehensive assessment and care management planning, coordination of care, health promotion, comprehensive transitional care, member and family support, and coordination of and referral to community and social support services.
• Require DHCS, by July 1, 2027, to produce model managed care coverage standards and policy for each community support provided, for plan years beginning on January 1, 2028, as specified.
• Require DHCS to provide ongoing technical assistance to Medi-Cal managed care plans and require Medi-Cal managed care plans to continue to provide technical assistance to providers of these services.
• Require DHCS to post any policy changes publicly for stakeholder input for a minimum of one month before making updates to its community supports policy guidance.
• Require DHCS to publicly release written updates to its community supports policy guidance, including the model managed care coverage standards and policy, no later than six months prior to the effective date of the policy update, as specified.
• Require Medi-Cal managed care plans to track and report to the DHCS the number and percentage of the plan’s providers that fit the definition of “nonprofit community provider,” as defined, and the number and percentage of services provided by these community providers; and require DHCS to organize these data by plan and publish a report on these data not less than annually.
• Require DHCS, by March 31, 2029, to provide to the appropriate policy and fiscal committees of the Legislature information in writing necessary to inform legislative consideration of transitioning community supports to benefits that are required to be covered under the Medi-Cal program, including information on cost, effectiveness, and provider availability.
• Require DHCS to continue to publish specified information regarding ECM and Community Supports on the department’s internet website on a quarterly basis through December 31, 2031.
• Require DHCS to continue to convene the CalAIM Implementation Advisory Group that is in effect on January 1, 2026, and as most recently updated; and repeal this requirement on January 1, 2032.

Related Legislation: SB 164 (Committee on Budget and Fiscal Review, Chapter 27, Statutes of 2026), the health budget trailer bill, extends the end of the CalAIM initiative from December 31, 2026 to December 31, 2031.

-- END --

SENATE COMMITTEE ON HEALTH

Senator Akilah Weber Pierson, Chair

BILL NO: AB 2348

SUBJECT: Medi-Cal: enhanced care management and community supports

SUMMARY:

Requires the Department of Health Care Services to publish model managed care coverage standards and policy for the California Advancing and Innovating Medi-Cal initiative’s community supports benefits, submit information to the Legislature on the feasibility of transitioning the community supports benefits to permanent Medi-Cal benefits, and makes other technical changes to the community supports and Enhanced Care Management benefits.

Existing law:

1. Establishes the Medi-Cal program, administered by the Department of Health Care Services (DHCS), and under which qualified low-income individuals receive health care services. [WIC §14000, et seq.]
2. Authorizes the DHCS director to contract, on a bid or nonbid basis, with any qualified individual, organization, or entity to provide services to, arrange for, or case manage the care of Medi-Cal beneficiaries and establishes managed care models that DHCS contracts within each county. [WIC §14087.3, §14089, §14087.98, §14087.967 and §14087.5]
3. Defines a Medi-Cal plan as any individual, organization, or entity that enters into a comprehensive risk contract with DHCS to provide covered full-scope health care services to enrolled Medi-Cal beneficiaries. [WIC §14184.101]
4. Establishes California Advancing and Innovating Medi-Cal (CalAIM) initiative effective from January 1, 2022 until December 31, 2026. The goals of CalAIM are to identify and manage the risk and needs of Medi-Cal beneficiaries through whole-person-care approaches and addressing social determinants of health; transition and transform the Medi-Cal program to a more consistent and seamless system by reducing complexity and increasing flexibility; and, improve quality outcomes, reduce health disparities, and drive delivery system transformation and innovation through value-based initiatives, modernization of systems, and payment reform. [WIC §14184.100]
5. Includes in the CalAIM initiative the requirement for Medi-Cal plans to offer Enhanced Care Management (ECM) benefits designed to address the clinical and nonclinical needs on a whole-person care basis for Medi-Cal recipients who meet the criteria outlined in the CalAIM Terms and Conditions for a target population, as determined by DHCS. [WIC §14184.205]
6. Specifies that the ECM target populations must include children or youth with complex needs; individuals experiencing homelessness; high utilizers with frequent hospital admissions, short-term skilled nursing facility stays, or emergency room visits; individuals at risk for institutionalization and eligible for long-term care services; nursing facility residents who want to transition to the community; individuals with serious mental illness, and children with serious emotional disturbance or substance use disorder; and, individuals transitioning from incarceration requiring immediate transition of services to the community. [WIC §14184.205]
7. Requires DHCS to develop, in consultation with the Medi-Cal plans and other appropriate stakeholders, a monitoring plan and reporting template for the implementation of ECM and to publish an annual report on ECM utilization data. [WIC §14184.205]
8. Includes in the CalAIM initiative the authority for a Medi-Cal plan to elect to cover those Community supports approved by DHCS as cost effective and medically appropriate substitutes for the applicable covered Medi-Cal benefit. [WIC §14184.206 and 42 CFR §438.3]
9. Requires Medi-Cal plans to include information on the Community supports offered by that plan in its member handbook and plan website, including any limitations on Community supports on the plan website. [WIC §14184.206]
10. Permits DHCS to approve Community supports, including but not limited to housing support services, services to help individuals transition out of hospital or other institutional care, personal care services, environmental accessibility adaptations, medically supportive food and nutrition services, sobering centers, and asthma remediation. [WIC §14184.206]
11. Requires DHCS to develop in consultation with the Medi-Cal plans and other appropriate stakeholders a monitoring plan and reporting template for the implementation of Community supports and to publish an annual report on Community supports utilization data. [WIC §14184.206]
12. Requires DHCS to take into account the utilization and actual cost of Community supports in developing capitation rates. [WIC §14184.206]

This bill:

1. Adds to the definition of ECM “community-based, high touch coordination and comprehensive care management services” and specifies that ECM services include access to a lead care manager, outreach and engagement, comprehensive assessment and care management planning, coordination of care, health promotion, comprehensive transitional care, member and family support, and coordination of and referral to community and social support services. Authorizes the exclusion of Medi-Cal recipients eligible for other high-intensity care management services, as defined by DHCS. Clarifies that DHCS may include other ECM target populations.
2. Requires DHCS, by July 1, 2027 and after engaging stakeholders and soliciting feedback in the development of, to produce model managed care coverage standards and policy for each community support provided for plan years beginning on January 1, 2028. Requires the standards and policy to reflect best practices and provide detailed instructions on model eligibility and coverage policies sufficient for a Medi-Cal managed care plan to adopt, in whole, as its coverage policy. Requires Medi-Cal plans to provide to DHCS a specific explanation and justification for any deviation from model managed care coverage standards and policy.
3. Requires DHCS to provide ongoing technical assistance to Medi-Cal plans on community supports and requires Medi-Cal plans to provide technical assistance to the community supports providers.
4. Requires DHCS to publicly post any updates to its community supports guidance for a minimum of one month to allow for stakeholder input and to release updates to the community supports guidance six months before the effective date and limits the effective dates to July 1 or January 1. Authorizes exceptions to these requirements should DHCS need to address urgent issues, as determined by DHCS, including changes in federal approvals or the availability of federal financial participation. Requires DHCS to notify interested stakeholders with a rationale for the irregular update should an exception be invoked.
5. Defines “nonprofit community provider” as a locally available community-based nonprofit organization that has direct experience with providing services to Medi-Cal beneficiaries in the county or region where the organization operates. Requires Medi-Cal plans to track and report to DHCS the number and percentage of the plan’s providers that fit the definition of “nonprofit community provider” and the number and percentage of services provided by these community providers. Requires DHCS to publish this data by plan no less than annually. Clarifies that these tracking requirements do not restrict plans from contracting with providers that are not nonprofit community providers.
6. Changes the requirement for DHCS to produce an annual report for ECM and community supports services from annual to quarterly.
7. Requires DHCS to continue to convene the CalAIM Implementation Advisory Group that is in effect on January 1, 2026, and as most recently updated. Sunsets this requirement on January 1, 2032.
8. Requires DHCS to provide to the appropriate policy and fiscal committees of the Legislature information necessary to inform legislative consideration of transitioning community supports to benefits that are required to be covered under the Medi-Cal program including information on cost, effectiveness, and provider availability by March 31, 2029.
9. Deletes obsolete references to the CalAIM waiver terms and conditions, obsolete language regarding populations to be transitioned into the ECM benefit, and obsolete commencement dates.

FISCAL EFFECT:

According to the Assembly Appropriations Committee, one-time and ongoing costs of an unknown amount, potentially in the hundreds of thousands of dollars for DHCS to engage stakeholders and develop the Evidence of Coverage and related policies for every community support, regularly update policies, and continue convening the CalAIM Implementation Advisory Group. There are additional cost pressures of an unknown amount, potentially in the hundreds of thousands of dollars, for DHCS to maintain some of its current activities related to community supports (General Fund, federal funds).

PRIOR VOTES:

COMMENTS:

1. Author’s statement. According to the author, CalAIM has been a transformative journey for the Medi-Cal program, challenging entities throughout the state to collaborate, innovate and improve care so that Medi-Cal enrollees stay healthier and get the right care, from the right provider, in the right setting, and at the right time. Although CalAIM was originally proposed for a five-year waiver period from 2021 to 2026, many aspects of the transformation, including Community supports and ECM, were explicitly intended to outlast the initial five-year period and eventually transition into permanent Medi-Cal benefits. As the state transitions from implementing these services to sustaining them, this bill is intended to remove unnecessary variation in delivery of Community supports; establish a predictable, transparent public process when DHCS makes policy changes; codify ECM consistent with current policy; ensure continued timely data reporting; and make necessary technical updates. In addition, it ensures DHCS provides the Legislature information necessary to consider transitioning Community supports to full Medi-Cal benefits. As we move from building CalAIM to refining it, this bill makes needed adjustments to Community supports and ECM for the long term and helps the state truly realize the promise of CalAIM.
2. CalAIM. CalAIM is a collection of Medi-Cal initiatives aimed at addressing social drivers of health, reducing program complexity, increasing program flexibility, and modernizing payment structures to promote better outcomes. The CalAIM proposals were originally intended to start in 2021, but given the COVID-19 public health emergency and considerable stakeholder input, CalAIM did not start until January 1, 2022. CalAIM was authorized by AB 133 (Committee on Budget, Chapter 143, Statutes of 2021), which incorporated two policy bills introduced in 2021 and the approval of a federal Section 1115 demonstration waiver and a Section 1915(b) waiver. These waivers, named for the section of the Social Security Act authorizing each, allow DHCS to waive certain federal Medicaid and Children’s Health Insurance Program requirements. Section 1115 waivers generally test innovating program improvements in a budget neutral manner, while Section 1915(b) waivers allow for the use of a managed care delivery system provided it is cost-effective. Both waivers require that changes to the state program be consistent with the objectives of the Medicaid program. DHCS received approval on December 29, 2021 for both waivers, effective through December 31, 2026. Some elements of CalAIM were also added to California’s Medicaid state plan as ongoing program changes which do not need to be reauthorized when the waivers end.
3. ECM. ECM is a statewide Medi-Cal benefit available through Medi-Cal plans to provide care management to Medi-Cal enrollees with the highest needs. ECM identifies these enrollees as “Populations of Focus,” which includes people experiencing homelessness, people at risk of avoidable hospital care, people with serious mental health or substance use disorder needs, adults at risk for long term care institutionalization, adults in nursing homes transitioning to the community, children enrolled in California Children’s Services with additional needs, children involved in child welfare, people transitioning from incarceration, and specific pregnant and postpartum individuals. As described by DHCS, enrollees are to have a single lead care manager who coordinates all their health and health-related care, including physical, mental, and dental care, and social services. That lead care manager is to meet enrollees where they are to meet their needs, build a trusting relationship, and provide intensive coordination of health and health-related services. In the most recently published data on utilization, in the second quarter of 2024, just under 126,000 Medi-Cal enrollees received ECM (out of 14.89 million total enrollees).
4. Community supports. Community supports are optional Medi-Cal plan services offered as cost-effective alternatives to traditional medical services or settings. DHCS has a pre-approved list of 15 Community supports, building off previous pilot programs such as Whole Person Care, Health Homes, and a medically tailored meals pilot program. These services address health-related social needs of Medi-Cal enrollees such as support to secure and maintain housing, access to medically tailored meals, and various transitional services when moving out of specific facilities. While DHCS encourages Medi-Cal plans to offer all of the Community supports services, these services are not entitlements, but are offered at the option of the plan to any eligible Medi-Cal enrollee.

In obtaining federal approval for the Community supports, DHCS was required to show that these services would allow Medi-Cal enrollees to avoid higher, costlier levels of care. For example, with regards to the Medically Tailored Meals/Medically Supportive Food benefit, DHCS presented findings that the average annualized health care expenditure was $1,863 greater for individuals assessed as food insecure relative to those not found to be food insecure, after adjusting for age, gender, race/ethnicity, education, income, insurance, and residence area. For persons who have been recently discharged from hospitals or with chronic conditions, the report cited literature of specific patient populations showing significant reductions in emergency department visits, inpatient hospitalizations, reductions in readmissions, and improvements in health outcomes and well-being such as improved control of diabetes or fewer falls when provided meal delivery services. Data from the 2024 Community Support annual report shows that nine out of first 12 services (two were added later) were already demonstrating cost effectiveness ranging from an 11.7% net cost reduction for sobering centers to a 61.3% in net cost reduction for respite services for people experiencing homelessness who are transitioning from hospital care. The remaining three services included in the report were expected to demonstrate their cost-effectiveness over a longer timeline.

1. Next steps for CalAIM. As the current CalAIM waivers expire at the end of 2026, DHCS has submitted renewals for both the 1115 and 1915b waivers. Although done as part of the CalAIM package, the ECM benefits and most of the community supports do not require waiver authority. According to DHCS, ECM is authorized under federal Medicaid managed care regulations regarding care coordination and continuity of care responsibilities of managed care plans. Twelve of the 15 community supports were authorized under managed care authority known as In Lieu of Services, which authorizes these benefits at the option of the plans. These services can continue under the Medicaid state plan. The recuperative care and short-term post-hospitalization housing community supports will be recast into this authority as well, while a final community support on rent payments is part of another behavioral health waiver that is not up for renewal at this time.

When CalAIM was initially conceived, DHCS stated during the planning process that it intended for the community supports benefits to be permanent, statewide Medi-Cal benefits, but that plan capacity and provider availability at that time did not exist. The CalAIM waivers also contained funding to help start these benefits, funding which is not being continued in the current waiver renewal process. As such, the community supports are continuing at the Medi-Cal plans’ option. Because many of the community supports likely require waiver authority to turn into full benefits, continuing them under existing In Lieu of Services authority may be the only option given the current federal administration’s views on social determinants of health and Medicaid spending in general. This bill would require DHCS to give the legislature an assessment of making these benefits permanent in 2029, along with a number of other technical changes on DHCS’s obligations with regards to reporting, stakeholder inclusion, and the issuance of guidance.

1. Prior legislation. SB 324 (Menjivar of 2025) would have required Medi-Cal managed care plans to contract with community providers for delivery of ECM and Community supports, and required DHCS to increase monitoring, reporting, and technical support for these benefits. SB 324 was held on the Assembly Appropriations suspense file.

AB 804 (Wicks and Stefani of 2025) would have made the CalAIM housing supports community supports benefits and fully covered by Medi-Cal, rather than benefits provided at the plan option. AB 804 was held on the Assembly Appropriations Committee suspense file.

AB 1975 (Bonta of 2024) would have made the medically supportive food Community supports benefit a Medi-Cal covered service. AB 1975 was vetoed by Governor Newsom, who stated: “Increasing access to nutritious foods and encouraging healthy eating habits contributes to the prevention and treatment of chronic conditions. However, this bill would result in significant and ongoing General Fund costs for the Medi-Cal program that are not included in the budget. I encourage the Legislature to explore this policy next year as a part of the annual budget process.”

AB 1085 (Maienschein of 2023) was substantively similar to AB 804. AB 1085 was vetoed by Governor Newsom, who stated: “My Administration has made significant investments to combat homelessness and provide housing supports. While I appreciate and share the author's goal to support those who are experiencing homelessness, new Medi-Cal benefits must be considered as part of the annual budget process...With our state facing continuing economic risk and revenue uncertainty, it is important to remain disciplined when considering bills with significant fiscal implications, such as this measure.”

AB 1644 (Bonta of 2023) was substantively similar to AB 1975. AB 1644 was held on the Assembly Appropriations Committee suspense file.

AB 133 (Committee on Budget, Chapter 143, Statutes of 2021) establishes the CalAIM initiative and the CalAIM ECM and Community supports benefit, among other things.

1. Support. The Community-Based Organization Medi-Cal coalitions write as documented by DHCS and echoed by providers and communities across the state, the ECM and Community supports benefits are improving outcomes for Medi-Cal members while simultaneously delivering measurable cost savings to California. By addressing unmet social and nonmedical needs, Community supports reduce avoidable emergency department visits, inpatient stays, and institutional care, allowing the health care system to intervene earlier, more effectively, and more humanely. By strengthening the foundation for these benefits and charting a path toward making Community supports permanent, required Medi-Cal coverage, this bill affirms California’s commitment to whole-person care, health equity, and smart public investments.
2. Amendments. The author and committee have agreed to the following amendments on aspects of the bill requiring DHCS to produce information:

The quarterly reporting requirement will be changed back to annual to avoid the resources needed to prepare a formal report, but additional language will be added to specify that quarterly data should still be publicly produced:

Section 1, 14184.205(g):

(g) The department shall develop, in consultation with Medi-Cal managed care plans and other appropriate stakeholders, a monitoring plan and reporting template for the implementation of ECM pursuant to this section. Until December 31, 2031, the department shall continue to publish quarterly ECM utilization data on a public data dashboard.   The department shall quarterly annually publish a public report on reported ECM utilization data, populations served, and demographic data, stratified by age, sex, race, ethnicity, and languages spoken, to the extent statistically reliable data are available.

Section 2, 14184.206(g)

(g) The department shall develop, in consultation with Medi-Cal managed care plans and other appropriate stakeholders, a monitoring plan and reporting template for the implementation of community supports pursuant to this section. Until December 31, 2031, the department shall continue to publish quarterly community supports utilization data on a public data dashboard.   The department shall quarterly annually publish a public report on reported community supports utilization data, populations served, and demographic data, stratified by age, sex, race, ethnicity, and languages spoken, to the extent statistically reliable data are available.

Although the author intends to give DHCS flexibility in how DHCS should give the Legislature the information it needs to determine whether to transition community supports to permanent benefits, this information should at least be in writing, even if not a formal report or other document:

Section 2, 14184.206(n)

(n) By March 31, 2029, the department shall provide to the appropriate policy and fiscal committees of the Legislature information in writing necessary to inform legislative consideration of transitioning community supports to benefits that are required to be covered under the Medi-Cal program, including information on cost, effectiveness, and provider availability.

SUPPORT AND OPPOSITION:

Support: 18 Reasons

AIDS Healthcare Foundation
Alameda County Community Food Bank
Alliance for Children's Rights
Alzheimer's Association
Alzheimer's Greater Los Angeles
Alzheimer's Orange County
Alzheimer's San Diego

California Advocates for Nursing Home Reform
California Alliance of Child and Family Services
California Assisted Living Association
California Association of Medical Product Suppliers

California Association of Nonprofits
California Chapter of the American College of Emergency Physicians
California Community Action Partnership Association
California Housing Consortium

California Primary Care Association Advocates
California Retired Teachers Association
Ceres Community Project
Community-Based Organization Medi-Cal Coalition

DoorDash
Downtown Women's Center
East Bay Asian Local Development Corporation
East Bay Innovations
Eden Housing

El Sol Neighborhood Education Center
Emergency Food Bank of Stockton/San Joaquin County
Episcopal Community Services of San Francisco
Esperanza Community Farms
Everyone's Harvest
Food As Medicine Collaborative
Foodwise Community
Fresh Approach
FullWell
Health Access California
Homestyle Direct, LLC.

Institute on Aging
Jamboree Housing Corporation
LeadingAge California
Linc Housing

Los Angeles LGBT Center
Meals on Wheels Orange County
National Core
Open Source Wellness
Partners in Care Foundation

Purfoods
Reinvestment Partners

San Diego Wellness Collaborative
San Francisco-Marin Food Bank
Santa Barbara County Food Action Network
Second Harvest Food Bank of Santa Cruz County
Sunterra Health, Inc.
Western Center on Law & Poverty, Inc.

Oppose: None received

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2348

Author:(Bonta)

As Amended Ver:April 20, 2026

Majority vote

SUMMARY

Authorizes Medi-Cal managed care plans to continue to cover Community Supports (services meant to address non-health care related barriers to health) in the Medi-Cal program, and creates associated processes and requirements to promote transparency, accountability, consistency and stability in the delivery of these services.

Major Provisions

COMMENTS

California Advancing and Innovating Medi-Cal (CalAIM). CalAIM is a collection of major initiatives spearheaded by the Department of Health Care Services (DHCS) to improve Medi-Cal, including addressing social drivers of health, reducing program complexity and increasing flexibility, and modernizing payment structures to promote better outcomes. The majority of CalAIM proposals were put forward in 2021 through two comprehensive applications to the federal government for a "Section 1115 demonstration" and "Section 1915(b) waiver." Although CalAIM expires at the end of 2026, the administration has signaled its intention to continue Community Supports beyond 2026. Enhanced Care Management (ECM), which was created through CalAIM, is now a permanent Medi-Cal benefit.

Community Supports. One component of CalAIM that addresses social drivers of health is called Community Supports. Community Supports are services that can be provided by Medi-Cal managed care plans as cost-effective alternatives to traditional medical services or settings. DHCS has a pre-approved list of 14 Community Supports, based on experience in prior demonstration programs to address health-related social needs. These supports are designed to provide flexibility to address specific needs of complex populations.

Federal Guidance on "In Lieu of Services" (ILOS). Every Medicaid program has a Medicaid State Plan that specifies the benefits and services covered by that program. ILOS can be covered if the state determines they are medically appropriate and cost-effective substitutes or settings for a service specified in the State Plan. Community Supports, as defined through CalAIM, are considered ILOS. ILOS is a permanent option for state Medicaid programs enshrined in federal Medicaid managed care regulations and, as required by the federal Centers for Medicare & Medicaid Services (CMS), memorialized in approved managed care plan contracts.

The general idea behind ILOS is that prevention of an illness or injury, or the mitigation of a condition through lower-intensity services is both cost-saving and more beneficial to an individual’s health. If higher-intensity services, like skilled nursing facility, emergency department, or inpatient services can be avoided, resources are freed up to be redirected to lower-intensity and preventive care in a virtuous cycle. For instance, home modifications and adaptations can support individuals in maintaining or improving their health and reduce emergency department visits and inpatient stays by reducing falls.

Next Steps for Community Supports after the Five-Year "CalAIM Term." According to DHCS, after December 31, 2026, the date the defined 5-year CalAIM term expires, Community Supports will continue to be covered under ILOS authority and will not need to be approved under waiver authority. The 12 Community Supports covered as ILOS are not dependent on DHCS' current CalAIM Section 1115 or 1915(b) waiver approvals. The community supports not allowable under ILOS authority are being pursued through Section 1115 demonstration authority. These include recuperative care (short-term residential setting in which members recover from an injury or illness while obtaining access to primary care, behavioral health services, case management, and other supportive social services) and short-term post-hospitalization housing (ongoing supports necessary for recuperation and recovery after exiting an institution).

Cost-Effectiveness of Community Supports. According to DHCS, all 12 Community Supports that are under ILOS authority are, or will likely be proven to be, cost-effective in the remaining years of the waiver demonstration period if current trends continue. An independent evaluator is conducting a rigorous independent evaluation of all Community Supports by 2028. DHCS evaluated the cost-effectiveness of Community Supports based on data from July 2022 to June 2024. According to DHCS, this early data already shows promising results, with nine of the 12 services already demonstrating cost-effectiveness. For example, a Community Support that assists with Housing Deposits demonstrated a 36.6% reduction in inpatient services costs, 34.6% reduction in outpatient services costs, 21.2% reduction in emergency room services costs, 34.3% reduction in long-term care services costs, and a 2.3% reduction in outpatient mental health services costs. When accounting for the costs of the Community Supports plus the reduction in spending for other services noted above, DHCS reports the net impact is an overall reduction in spending of 31.6%.

Three of the remaining services show utilization and cost reductions in Medicaid-covered services, such as emergency department or long-term care services, and are expected to be cost effective over time. These include housing tenancy and sustaining services, medically tailored meals, and asthma remediation.

ECM. ECM is a statewide Medi-Cal benefit created as part of CalAIM. It is available through Medi-Cal plans to provide care management to Medi-Cal enrollees with the highest needs. ECM identifies these enrollees as "Populations of Focus." Enrollees have a single lead care manager who coordinates all their health and health-related care, including physical, mental, and dental care, and social services. The lead care manager role is designed to “meet enrollees where they are” to meet their needs, build a trusting relationship, and provide intensive coordination of health and health-related services. DHCS estimated that between 3% and 5% of all Medi-Cal plan members statewide are potentially eligible for ECM.

Utilization of Community Supports and ECM. At this time and under ILOS authority, Community Supports are only available through Medi-Cal managed care plans and are optional for the plans to implement. Nearly 5,000 Community Supports providers and over 4,000 ECM providers are contracted by Medi-Cal MCPs to offer these services.

According to DHCS, all 58 counties in California offer at least 8 Community Supports. Twenty-four counties (representing 41% of all Medi-Cal MCP members) have access to all 14 Community Supports. In Quarter 2 of 2025, about 188,000 unique members have used one or more Community Supports services, a 51% increase from a year prior. In Quarter 2 of 2025, about 206,000 unique members received ECM, an increase of 61% from a year prior.

Successes and Challenges. CalAIM providers, plans, advocates, and other stakeholders have mixed and varied opinions based on their unique experience with implementation of CalAIM. Although CalAIM is in the last year of the 5-year implementation period, implementation of Community Supports and ECM has yet to reach a steady state, and DHCS continues to make policy adjustments and refinements, engage with stakeholders, and provide technical assistance to plans and providers. In conducting stakeholder outreach in fall 2025 throughout the state on the impacts of federal Medicaid cuts, the author reports being struck by the frequency with which stakeholders in every part of the state independently brought up the importance of continuing the effective parts of CalAIM, largely related to Community Supports and ECM. Based on further stakeholder outreach to a variety of CalAIM providers and advocates for these services, the author has noted that the following issues have been identified, some of which are addressed in this bill: certainty about coverage, inconsistency among plans on eligibility criteria and benefits policy, unpredictable policy processes, insufficient technical assistance and focus on best practices to support plans to successfully implement some Community Supports, and lack of robust outcomes data.

According to the Author

CalAIM has been a transformative journey for the Medi-Cal program, challenging entities throughout the state to collaborate, innovate and improve care so that Medi-Cal enrollees stay healthier and get the right care, from the right provider, in the right setting and at the right time. Although CalAIM was originally proposed in the context of a five-year waiver period from 2021 to 2026, many aspects of the transformation, including Community Supports, were explicitly intended to outlast the initial 5-year period and eventually transition into Medi-Cal benefits. Current CalAIM authorizing statute, implemented in 2021, provides DHCS significant authority to flexibly implement CalAIM programs, and provides DHCS the discretion to continue these programs. As the state, local governments, Medi-Cal managed care plans, health care providers and other stakeholders have steadily worked toward robust implementation of Community Supports, most parties have lessons learned, and there are emerging best practices as well as known pain points and uncertainties that threaten to unwind years of progress and billions of dollars of investment. This bill requires a continued commitment to timely public data reporting, promotes consistency and best practices for coverage policy by requiring DHCS to publish a model "Evidence of Coverage" document and implements other provisions designed to enhance transparency, accountability, stability, consistency, and continuous improvement in Community Supports. This bill will cement Community Supports for the long term and help the state truly realize the promise of CalAIM.

Arguments in Support

This bill is supported by health and children's advocates and providers of CalAIM and Medi-Cal services. Supporters note this bill provides a clear, consistent framework for the continuation of vital services that address the social drivers of health, such as assisted living, housing transition navigation, medically supportive food, and other community-based supports that have proven to improve health outcomes and reduce avoidable utilization of higher-cost care. Supporters note this bill ensures that progress made under CalAIM is not lost. Supporters cite DHCS reports that show Community Supports have reduced avoidable emergency department visits, hospital stays, and long-term care use while showing strong early signs of cost savings. Additionally, supporters note this bill aims to enhance transparency, consistency, and stability in the implementation of these CalAIM services.

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Assembly Committee on Appropriations:

One-time and ongoing costs of an unknown amount, potentially in the hundreds of thousands of dollars for DHCS to engage stakeholders and develop the Evidence of Coverage and related policies for every community support, regularly update policies, and continue convening the CalAIM Implementation Advisory Group. There are additional cost pressures of an unknown amount, potentially in the hundreds of thousands of dollars, for DHCS to maintain some of its current activities related to community supports (General Fund, federal funds).

VOTES

ASM HEALTH: 16-0-0

YES: Bonta, Chen, Addis, Aguiar-Curry, Ahrens, Caloza, Carrillo, Mark González, Johnson, Patel, Patterson, Rogers, Sanchez, Schiavo, Sharp-Collins, Stefani

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Hoover, Aguiar-Curry, Calderon, Caloza, Dixon, Fong, Mark González, Krell, Pacheco, Pellerin, Sharp-Collins, Solache, Ta, Tangipa

UPDATED

VERSION: April 20, 2026

CONSULTANT: Lisa Murawski / HEALTH / (916) 319-2097 FN: 0002983

Date of Hearing: May 6, 2026

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2348

Author:(Bonta) – As Amended Ver:April 20, 2026

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill authorizes Medi-Cal managed care plans to continue to cover community supports (services meant to address non-health care related barriers to health) approved by the Department of Health Care Services (DHCS) in the Medi-Cal program and creates processes and requirements to promote transparency, consistency, and stability in the delivery of these services.

Specifically, this bill:

1. Authorizes a Medi-Cal managed care plan to continue to cover community supports approved by DHCS.
   
2. Requires DHCS to continue to publish a quarterly public report on community supports utilization data.
     
3. Requires DHCS to provide ongoing technical assistance to Medi-Cal managed care plans and providers to enhance their ability to effectively provide community supports. 
   
4. Requires DHCS, by July 1, 2027, to engage stakeholders, including providers of each community support, to develop and produce a model “Evidence of Coverage” document and related policies for each community support.
   
5. Requires the Evidence of Coverage document and related policies provide comprehensive and detailed instructions on model eligibility and coverage policies sufficient for a Medi-Cal managed care plan to adopt as its coverage policy.
6. Requires DHCS, until December 1, 2030, to regularly review and update the document and policy guidance as needed.
   
7. Establishes a regular process and timeline for policy updates. 
   
8. Requires a Medi-Cal managed care plan track and report to DHCS the number and percentage of providers that are community providers, and the number and percentage of services that are provided by community providers, and report this information by plan at least annually.
   
9. Requires DHCS to continue to convene a currently established California Advancing and Innovating Medi-Cal (CalAIM) Implementation Advisory Group. 
10. Defines "community provider" as a locally available community-based nonprofit organization that has direct experience with providing services to Medi-Cal beneficiaries in the county or region where the organization operates.

FISCAL EFFECT:

One-time and ongoing costs of an unknown amount, potentially in the hundreds of thousands of dollars for DHCS to engage stakeholders and develop the Evidence of Coverage and related policies for every community support, regularly update policies, and continue convening the CalAIM Implementation Advisory Group. There are additional cost pressures of an unknown amount, potentially in the hundreds of thousands of dollars, for DHCS to maintain some of its current activities related to community supports (General Fund, federal funds).

COMMENTS:

1. Purpose. According to the author:

CalAIM has been a transformative journey for the Medi-Cal program, challenging entities throughout the state to collaborate, innovate and improve care so that Medi-Cal enrollees stay healthier and get the right care, from the right provider, in the right setting and at the right time. As the state, local governments, Medi-Cal managed care plans, health care providers and other stakeholders have worked toward robust implementation of Community Supports,…there are emerging best practices as well as known pain points and uncertainties that threaten to unwind years of progress and billions of dollars of investment. This bill requires a continued commitment to timely public data reporting, promotes consistency and best practices…by requiring DHCS to publish a model “Evidence of Coverage” document and implements other provisions designed to enhance transparency, accountability, stability, consistency, and continuous improvement in Community Supports. As we move from building CalAIM to refining it, this bill will cement Community Supports for the long term and help the state truly realize the promise of CalAIM.

1. Background. CalAIM is a collection of major initiatives DHCS spearheaded to improve Medi-Cal, including addressing social drivers of health, reducing program complexity and increasing flexibility, and modernizing payment structures to promote better outcomes. The majority of CalAIM proposals were put forward in 2021 through two comprehensive applications to the federal government for a “Section 1115 demonstration” and “Section 1915(b) waiver.” DHCS received approval on December 29, 2021, for both the demonstration and waiver, effective through December 31, 2026. Although CalAIM expires this year, the administration has signaled its intention to continue community supports, which were explicitly intended to outlast the initial 5-year period, beyond 2026. The CalAIM authorizing statute provides DHCS the discretion to continue these programs.
   
   Community supports are one component of CalAIM that addresses social drivers of health and that Medi-Cal managed care plans can provide as cost-effective alternatives to traditional medical services or settings. DHCS has a pre-approved list of 14 community supports that are designed to provide flexibility to address specific needs of complex populations:
   1. Housing transition navigation services.
   2. Housing deposits.
   3. Housing tenancy and sustaining services.
   4. Short-term post-hospitalization housing.
   5. Recuperative care or medical respite.
   6. Respite.
   7. Day habilitation programs.
   8. Nursing facility transition or diversion to assisted living facilities, including, but not limited to, residential care facilities for the elderly or adult residential facilities.
   9. Nursing facility transition to a home.
   10. Personal care and homemaker services.
   11. Environmental accessibility adaptations or home modifications.
   12. Medically supportive food and nutrition services, including medically tailored meals.
   13. Sobering centers.
   14. Asthma remediation.
2. Related Legislation. AB 804 (Wicks and Stefani), of the current legislative session, transitions CalAIM housing supports (a subset of community supports) to permanent covered benefits under Medi-Cal. AB 804 was held on this committee’s suspense file.

SB 324 (Menjivar), of the current legislative session, requires Medi-Cal managed care plans to contract with community providers for delivery of the Enhanced Care Management benefit and community supports, and requires DHCS to take other actions to support this requirement. SB 324 was held on this committee’s suspense file.

Analysis Prepared by: Allegra Kim / APPR. / (916) 319-2081

Date of Hearing: April 14, 2026

ASSEMBLY COMMITTEE ON HEALTH

Mia Bonta, Chair

ABPCA Bill Id:AB 2348

Author:(Bonta) – As Amended Ver:April 7, 2026

SUBJECT: Medi-Cal: community supports.

SUMMARY: Authorizes Medi-Cal managed care plans to continue to cover Community Supports (services meant to address non-health care related barriers to health) in the Medi-Cal program, and creates associated processes and requirements to promote transparency, accountability, consistency and stability in the delivery of these services. Specifically, this bill:

1. Authorizes a Medi-Cal managed care plan to continue to cover Community Supports. 
2. Requires the Department of Health Care Services (DHCS) to provide ongoing technical assistance to Medi-Cal managed care plans and providers to enhance their ability to effectively provide Community Supports. 
3. Requires DHCS to produce a detailed model Evidence of Coverage document and related policies for each Community Support, and engage stakeholders on the development of such a document.
4. Establishes a regular process and timeline for policy updates. 
5. Requires DHCS to continue to convene a currently established California Advancing and Innovating Medi-Cal (CalAIM) Implementation Advisory Group. 
6. Requires DHCS to continue to publish a public report on Community Supports utilization data, but makes this quarterly (consistent with current practice). 
7. Defines "community provider" as a locally available community-based nonprofit organization that has direct experience with providing services to Medi-Cal beneficiaries in the county or region where the organization operates, and requires plans and DHCS to track and report the number and percentage of providers that meet this definition, as well as information related to service utilization by community providers. 

EXISTING LAW:

1. Establishes the Medi-Cal program, administered by the DHCS, and under which qualified low-income individuals receive health care services. [Welfare and Institutions Code (WIC) § 14000, et seq.]
2. Authorizes the DHCS Director to contract, on a bid or nonbid basis, with any qualified individual, organization, or entity to provide services to, arrange for, or case manage the care of Medi-Cal beneficiaries and establishes managed care models that DHCS contracts within each county. [WIC §§ 14087.3, 14089, 14087.98, 14087.967, and 14087.5]
3. Defines a Medi-Cal plan as any individual, organization, or entity that enters into a comprehensive risk contract with the DHCS to provide covered full-scope health care services to enrolled Medi-Cal beneficiaries. [WIC § 14184.101]
4. Establishes the CalAIM initiative effective from January 1, 2022 until December 31, 2026. The goals of CalAIM are to identify and manage the risk and needs of Medi-Cal beneficiaries through whole-person-care approaches and addressing social determinants of health; transition and transform the Medi-Cal program to a more consistent and seamless system by reducing complexity and increasing flexibility; and improve quality outcomes, reduce health disparities, and drive delivery system transformation and innovation through value-based initiatives, modernization of systems, and payment reform. [WIC § 14184.100]
5. Defines “CalAIM” or “CalAIM initiative” as the respective components of the California Advancing and Innovating Medi-Cal initiative authorized in state law and approved by the federal Centers for Medicare and Medicaid Services (CMS) in the CalAIM Terms and Conditions. [WIC § 14184.101]
6. Defines “CalAIM Terms and Conditions” as those terms and conditions issued and approved by the federal CMS, including any subsequent amendments, that govern implementation of the respective components of the CalAIM initiative. [Ibid.]
7. Defines “CalAIM term” as the entire period during which an applicable component of the CalAIM initiative is in effect, as approved by the federal Centers for Medicare and Medicaid Services, including any applicable extension period. [Ibid.]
8. Defines “CalAIM year” or “Initiative Year” as the applicable effective period identified in the CalAIM Terms and Conditions that corresponds to a specific period of time in 2021-2026. Allows individual CalAIM programs or components to be operated on program years that differ from the years 2021-2026, or without regard to program years, as applicable. [Ibid.]
9. Requires DHCS, as appropriate and to the extent practicable, to consult with interested stakeholders with regard to implementation of applicable components of CalAIM in which they will participate, including, but not limited to, the issuance of guidance pursuant to subdivision 10) below. [WIC § 14184.102 (c)]
10. Allows DHCS to issue guidance to implement CalAIM or the CalAIM Terms and Conditions, in whole or in part, by means of all-county letters, plan letters, provider bulletins, information notices, or other similar instructions, without taking any further regulatory action. [WIC § 14184.102 (d)]
11. Requires DHCS to make use of appropriate processes to ensure that affected stakeholders are timely informed , and have access to, applicable guidance issued pursuant to authority described in 10) above, and that this guidance remains publicly available until all payments related to the applicable CalAIM component are finalized. [Ibid.]
12. Authorizes DHCS, during the course of the CalAIM term, to develop and implement successor payment methodologies or programs to continue to support entities participating in one or more components of CalAIM following the expiration of the CalAIM term and that further the goals set forth in CalAIM-related state law. Requires DHCS to consult with the entities participating in the payment methodologies or program components under CalAIM, affected stakeholders, and the Legislature in the development of any successor payment methodologies or program components pursuant to this authority. [WIC § 14184.102 (h)]
13. Authorizes DHCS to seek to extend the payment methodologies or programs described in CalAIM-related state law, or in the CalAIM Terms and Conditions, including modification thereto, through the CalAIM term or to subsequent time periods by way of amendment or extension of the relevant CalAIM Terms and Conditions, amendment to the Medi-Cal State Plan, or any combination thereof, consistent with the applicable federal requirements. Prohibits such extension from being implemented until DHCS consults with the entities participating in, or affected by, applicable methodologies or programs, and only to the extent that any necessary federal approvals are obtained and federal financial participation is available and is not otherwise jeopardized. [WIC § 14184.102 (i)]
14. Includes in the CalAIM initiative the requirement for a statewide Enhanced Care Management (ECM) benefit, designed to address the clinical and nonclinical needs on a whole-person-care basis, available to certain target populations of Medi-Cal beneficiaries to Medi-Cal recipients enrolled in a Medi-Cal plan, in the CalAIM Terms and Conditions, as determined by DHCS. [WIC § 14184.205]
15. Defines target populations for ECM and requires DHCS to develop, in consultation with the Medi-Cal plans and other appropriate stakeholders, a monitoring plan and reporting template for the implementation of ECM and to publish an annual report on ECM utilization data. [Ibid.]
16. Includes in the CalAIM initiative the authority for a Medi-Cal plan to elect to cover those Community Supports approved by DHCS as cost effective and medically appropriate substitutes for the applicable covered Medi-Cal benefit. [WIC § 14184.206 and 42 Code of Federal Regulations (CFR) § 438.3]
17. Requires Medi-Cal plans to include information on the Community Supports offered by that plan in its member handbook and plan website, including any limitations on Community Supports on the plan website. [WIC § 14184.206]
18. Permits DHCS to approve Community Supports, including but not limited to:
    1. Housing transition navigation services;
    2. Housing deposits;
    3. Housing tenancy and sustaining services;
    4. Short-term post-hospitalization housing;
    5. Recuperative care or medical respite;
    6. Respite;
    7. Day habilitation programs;
    8. Nursing facility transition or diversion to assisted living facilities, including, but not limited to, residential care facilities for the elderly or adult residential facilities;
    9. Nursing facility transition to a home;
    10. Personal care and homemaker services;
    11. Environmental accessibility adaptations or home modifications;
    12. Medically supportive food and nutrition services, including medically tailored meals;
    13. Sobering centers; and,
    14. Asthma remediation. [Ibid.]
19. Requires DHCS to develop in consultation with the Medi-Cal plans and other appropriate stakeholders a monitoring plan and reporting template for the implementation of Community Supports and to publish an annual report on Community Supports utilization data. [WIC § 14184.206]
20. Requires DHCS to take into account the utilization and actual cost of Community Supports in developing capitation rates. [Ibid.]

FISCAL EFFECT: Unknown. This bill has not been analyzed by a fiscal committee.

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, CalAIM has been a transformative journey for the Medi-Cal program, challenging entities throughout the state to collaborate, innovate and improve care so that Medi-Cal enrollees stay healthier and get the right care, from the right provider, in the right setting and at the right time. The author indicates that although CalAIM was originally proposed in the context of a five-year waiver period from 2021 to 2026, many aspects of the transformation, including Community Supports, were explicitly intended to outlast the initial 5-year period and eventually transition into Medi-Cal benefits. The author notes the current CalAIM authorizing statute, implemented in 2021, provides DHCS significant authority to flexibly implement CalAIM programs, and provides DHCS the discretion to continue these programs. The author explains that as the state, local governments, Medi-Cal managed care plans, health care providers and other stakeholders have steadily worked toward robust implementation of Community Supports, most parties have lessons learned, and there are emerging best practices as well as known pain points and uncertainties that threaten to unwind years of progress and billions of dollars of investment. This bill requires a continued commitment to timely public data reporting, promotes consistency and best practices for coverage policy by requiring DHCS to publish a model “Evidence of Coverage” document and implements other provisions designed to enhance transparency, accountability, stability, consistency, and continuous improvement in Community Supports. The author concludes that, as we move from building CalAIM to refining it, this bill will cement Community Supports for the long term and help the state truly realize the promise of CalAIM.
2. BACKGROUND.
   1. CalAIM. CalAIM is a collection of major initiatives spearheaded by the DHCS to improve Medi-Cal, including addressing social drivers of health, reducing program complexity and increasing flexibility, and modernizing payment structures to promote better outcomes. The majority of CalAIM proposals were put forward in 2021 through two comprehensive applications to the federal government for a “Section 1115 demonstration” and “Section 1915(b) waiver”—both named for the sections of the Social Security Act that authorize state and federal flexibility with Medicaid program rules to implement specific initiatives. DHCS received approval on December 29, 2021, for both the demonstration and waiver, effective through December 31, 2026. Although CalAIM expires at the end of 2026, the administration has signaled its intention to continue Community Supports beyond 2026, and ECM is now a permanent Medi-Cal benefit.
   2. Community Supports. One component of CalAIM that addresses social drivers of health is called Community Supports. Community Supports are services that can be provided by Medi-Cal managed care plans as cost-effective alternatives to traditional medical services or settings. DHCS has a pre-approved list of 14 Community Supports, based on experience in prior demonstration programs to address health-related social needs. These supports are designed to provide flexibility to address specific needs of complex populations. The full list of Community Supports is enumerated in 18) of Existing Law, above.
   3. Federal Guidance on “In Lieu of Services” (ILOS). Every Medicaid program has a Medicaid State Plan that specifies the benefits and services covered by that program. ILOS are alternative services to those covered under the Medi-Cal State Plan that are delivered by a different provider or in a different setting than is described in the State Plan. ILOS can only be covered if the state determines they are medically appropriate and cost-effective substitutes or settings for a State Plan service.

Community Supports, as defined through CalAIM, are considered ILOS. Although California received approval to cover Community Supports under the CalAIM 1115 and 1915(b) waivers, ILOS authority is now enshrined in federal regulation and 2023 CMS guidance, providing the state a more straightforward authority under which to continue covering these services. According to DHCS, ILOS authority is distinct from authority conferred by Section 1115 and 1915(b) waivers. ILOS is a permanent option for state Medicaid programs enshrined in federal Medicaid managed care regulations and, as required by CMS, memorialized in approved managed care plan contracts.

The general idea behind ILOS is that prevention of an illness or injury, or the mitigation of a condition through lower-intensity services is both cost-saving and more beneficial to an individual’s health. If higher-intensity services, like skilled nursing facility, emergency department, or inpatient services can be avoided, resources are freed up to be redirected to lower-intensity and preventive care in a virtuous cycle. For instance, home modifications and adaptations can support individuals in maintaining or improving their health and reduce emergency department visits and inpatient stays by reducing falls. Similarly, medically tailored meals can improve health through appropriate diet to avoid expensive, high-intensity health care services.

In its 2023 guidance, CMS has issued clarifying parameters for states’ use of ILOSs to ensure adequate assessment of the alternative services and settings prior to use, ongoing monitoring for appropriate utilization and enrollee protections, and financial guardrails to ensure accountability and prevent inappropriate use of Medicaid resources. CMS requires that ILOSs must advance the objectives of the Medicaid program; be cost effective; be medically appropriate; be provided in a manner that preserves enrollee rights and protections; be subject to appropriate monitoring and oversight; and be subject to retrospective evaluation, when applicable. ILOSs cannot account for more than 5% of a state’s total Medicaid spending.

• 1. Next Steps for Community Supports after the Five-Year “CalAIM Term.” According to DHCS, after December 31, 2026, the date the defined 5-year CalAIM term expires, Community Supports will continue to be covered under ILOS authority and will not need to be approved under waiver authority. The 12 Community Supports covered as ILOS are not dependent on DHCS’ current CalAIM Section 1115 or 1915(b) waiver approvals. The community supports not allowable under ILOS authority are being pursued through Section 1115 demonstration authority. These include recuperative care (short-term residential setting in which members recover from an injury or illness while obtaining access to primary care, behavioral health services, case management, and other supportive social services) and short-term post-hospitalization housing (ongoing supports necessary for recuperation and recovery after exiting an institution).
  2. Cost-Effectiveness of Community Supports. According to DHCS, all 12 Community Supports that are under ILOS authority are, or will likely be proven to be, cost-effective in the remaining years of the waiver demonstration period if current trends continue. An independent evaluator is conducting a rigorous independent evaluation of all Community Supports by 2028. DHCS evaluated the cost-effectiveness of Community Supports based on data from July 2022 to June 2024. According to DHCS, this early data already shows promising results, with nine of the 12 services already demonstrating cost-effectiveness. For example, a Community Support that assists with Housing Deposits demonstrated a 36.6% reduction in inpatient services costs, 34.6% reduction in outpatient services costs, 21.2% reduction in emergency room services costs, 34.3% reduction in long-term care services costs, and a 2.3% reduction in outpatient mental health services costs. When accounting for the costs of the Community Supports plus the reduction in spending for other services noted above, DHCS reports the net impact is an overall reduction in spending of 31.6%.

Three of the remaining services show utilization and cost reductions in Medicaid-covered services, such as emergency department or long-term care services, and are expected to be cost effective over time. These include housing tenancy and sustaining services, medically tailored meals, and asthma remediation.

• 1. ECM. ECM is a statewide Medi-Cal benefit created as part of CalAIM. It is available through Medi-Cal plans to provide care management to Medi-Cal enrollees with the highest needs. ECM identifies these enrollees as “Populations of Focus.” Enrollees have a single lead care manager who coordinates all their health and health-related care, including physical, mental, and dental care, and social services. The lead care manager role is designed to “meet enrollees where they are” to meet their needs, build a trusting relationship, and provide intensive coordination of health and health-related services. DHCS estimated that between 3% and 5% of all Medi-Cal plan members statewide are potentially eligible for ECM.
  2. Utilization of Community Supports and ECM. At this time and under ILOS authority, Community Supports are only available through Medi-Cal managed care plans and are optional for the plans to implement. Nearly 5,000 Community Supports providers and over 4,000 ECM providers are contracted by Medi-Cal MCPs to offer these services.

According to DHCS, all 58 counties in California offer at least 8 Community Supports. Twenty-four counties (representing 41% of all Medi-Cal MCP members) have access to all 14 Community Supports. In Quarter 2 of 2025, about 188,000 unique members have used one or more Community Supports services, a 51% increase from a year prior. In Quarter 2 of 2025, about 206,000 unique members received ECM, an increase of 61% from a year prior.

• 1. Successes and Challenges. CalAIM providers, plans, advocates, and other stakeholders have mixed and varied opinions based on their unique experience with implementation of CalAIM. Although CalAIM is in the last year of the 5-year implementation period, implementation of Community Supports and ECM has yet to reach a steady state, and DHCS continues to make policy adjustments and refinements, engage with stakeholders, and provide technical assistance to plans and providers.

In conducting stakeholder outreach in fall 2025 throughout the state on the impacts of federal Medicaid cuts, the author reports being struck by the frequency with which stakeholders in every part of the state independently brought up the importance of continuing the effective parts of CalAIM, largely related to Community Supports and ECM. Based on further stakeholder outreach to a variety of CalAIM providers and advocates for these services, the author has noted that the following issues have been identified, some of which are addressed in this bill.

• • 1. Certainty. Stakeholders describe a lack of clarity on future of Community Supports, and note current law simply provides DHCS authority to continue CalAIM programs. Even though DHCS has stated intent to eventually transition Community Supports to benefits, it is unclear when and how this will happen. The uncertainty increases risk and hesitancy for providers, which in turn makes it difficult for them invest sufficiently to achieve scale and efficiency, particularly in an era where there is additional federal disinvestment and state cost-cutting on the horizon.
    2. Inconsistency among plans on eligibility criteria and benefits policy. Differences in eligibility criteria by plan, or differences in the conditions of coverage for Community Supports by plan, can create non-value-added administrative complexity for providers, especially for those who work statewide. Stakeholders indicate eligibility criteria that are too narrow can exclude people who would benefit, resulting in missed opportunities for more effective and cost-effective care. Some providers believe some plans are narrowing eligibility criteria for certain Community Supports so significantly that it is no longer sustainable for them to continue providing the services. They note that plans’ ability to opt in or out of providing the services threatens the substantial investments made in infrastructure and capacity building for Community Supports across the state. Finally, providers and advocates note inconsistency can create inequity for Medi-Cal members in different plans, even within the same county.
    3. Unpredictable policy processes. Stakeholders note DHCS can change policy with maximum flexibility, leading to an unpredictable schedule of policy updates and insufficient public transparency. Plans can un-elect Community Supports for each plan year. Perception of instability increases risk and hesitancy for providers, as noted above. Stakeholders note it adds administrative burden and complexity to track changes and pivot service delivery without a defined process or timeline, and that poorly defined policy processes with such large implications are inconsistent with good government principles.
    4. Insufficient technical assistance and focus on best practices to support plans to successfully implement some Community Supports. Some stakeholders point out that plans may be more likely to opt out of providing low-utilization Community Supports, instead of investing in implementing best practices and shoring up the ability to successfully deliver services. This was presented as a particular problem for the Community Supports that transition an individual to the community from a skilled nursing facility or other institutional care.
    5. Outcomes data. Some stakeholders feel that specific data on the cost of services and health outcomes are not transparent or available from DHCS, which makes plans hesitant to invest in services and makes them more likely to restrict eligibility criteria. One stakeholder perceived that some plans are doing their own plan-specific analyses and calculations, some of them are not, and many of them are not sharing the information back with providers they work with, limiting the providers’ ability to understand what works well and to implement best practices.

1. SUPPORT. This bill is supported by health and children’s advocates and providers of CalAIM and Medi-Cal services. Supporters note this bill provides a clear, consistent framework for the continuation of vital services that address the social drivers of health, such as assisted living, housing transition navigation, medically supportive food, and other community-based supports that have proven to improve health outcomes and reduce avoidable utilization of higher-cost care. Supporters note this bill ensures that progress made under CalAIM is not lost. Supporters cite DHCS reports that show Community Supports have reduced avoidable emergency department visits, hospital stays, and long-term care use while showing strong early signs of cost savings. Additionally, supporters note this bill aims to enhance transparency, consistency, and stability in the implementation of these CalAIM services.
2. PREVIOUS LEGISLATION.
   1. AB 804 (Wicks and Stefani) of 2025, would have transitioned the CalAIM housing supports (a subset of Community Supports) to permanent covered benefits in Medi-Cal. AB 804 was held on the Assembly Appropriations Committee suspense file.
   2. SB 324 (Menjivar) of 2025, would have required Medi-Cal managed care plans to contract with community providers for delivery of ECM and Community Supports, and required DHCS to take other actions to support this requirement. AB 804 was held on the Assembly Appropriations Committee suspense file.
   3. AB 1975 (Bonta) of 2024, would have made the medically supportive food Community Supports benefit a Medi-Cal covered service. AB 1975 was vetoed by Governor Newsom, who stated: “Increasing access to nutritious foods and encouraging healthy eating habits contributes to the prevention and treatment of chronic conditions. However, this bill would result in significant and ongoing General Fund costs for the Medi-Cal program that are not included in the budget. I encourage the Legislature to explore this policy next year as a part of the annual budget process.”
   4. AB 1085 (Maienschein) of 2023, was substantively similar to AB 804. AB 1085 was vetoed by Governor Newsom, who stated: “My Administration has made significant investments to combat homelessness and provide housing supports. While I appreciate and share the author's goal to support those who are experiencing homelessness, new Medi-Cal benefits must be considered as part of the annual budget process. . . . With our state facing continuing economic risk and revenue uncertainty, it is important to remain disciplined when considering bills with significant fiscal implications, such as this measure.”
   5. AB 1644 (Bonta) of 2023 was similar to AB 1975 and was held on the suspense file of the Assembly Appropriations Committee.
   6. AB 133 (Committee on Budget), Chapter 143, Statutes of 2021, established statutory authority for various aspects of the CalAIM initiative, including authority to provide ILOS.

REGISTERED SUPPORT / OPPOSITION:

Support

18 Reasons
Alameda County Community Food Bank
Alliance for Children's Rights
Alzheimer's Association
Alzheimer's Greater Los Angeles
Alzheimer's Orange County
Alzheimer's San Diego
California Alliance of Child and Family Services
California Community Action Partnership Association
California Retired Teachers Association
Ceres Community Project
CPCA Advocates
Downtown Women's Center
East Bay Innovations
Emergency Food Bank of Stockton/San Joaquin County
Esperanza Community Farms
Everyone's Harvest
Food As Medicine Collaborative
Foodwise Community
Fresh Approach
Fullwell
LeadingAge California
Meals on Wheels Orange County
Open Source Wellness
Partners in Care Foundation
Reinvestment Partners
San Francisco-Marin Food Bank
Santa Barbara County Food Action Network
Second Harvest Food Bank of Santa Cruz County
Sunterra Health, INC. Dba Project Foodbox
Western Center on Law & Poverty
Wholesome Wave

One individual

Opposition

None on file

Analysis Prepared by: Lisa Murawski / HEALTH / (916) 319-2097