Existing law establishes the Children and Youth Behavioral Health Initiative, administered by the California Health and Human Services Agency and its departments, as applicable. Under existing law, the purpose of the initiative is to transform the states behavioral health system into an innovative ecosystem in which all children and youth 25 years of age and younger, regardless of payer, are screened, supported, and served for emerging and existing behavioral health needs.

Existing law requires, as a part of the initiative, the State Department of Health Care Services to develop and maintain a school-linked statewide fee schedule for outpatient mental health or substance use disorder treatment provided to a student who is 25 years of age or younger at a schoolsite. Existing law requires providers of medically necessary schoolsite services to be reimbursed by health care service plans, insurers, and Medi-Cal managed care plans, at a minimum, at the fee schedule rate or rates, regardless of network provider status.

This bill would establish the Fee Schedule Intensive Technical Support for Onboarding Program. The bill would require the State Department of Education, upon appropriation and subject to the terms of the appropriation, to select through a competitive process, and and, no later than July 1 of the year after an appropriation is made to fund the program, allocate funding to, a local educational agency that will serve as the lead entity that will administer the program over a 3-year period, as provided. The bill would require the lead entity, in coordination with the State Department of Education and the State Department of Health Care Services, to, no later than September 1, 2027, November 1 of the year after an appropriation is made to fund the program, select up to 25 entities to participate in the program and prioritize certain applicants, including, among others, applicants who will increase the number and amount of statewide fee schedule reimbursements. The bill would require that an entity meet specified criteria in order to be eligible to participate in the program, including, among other things, that the entity has past experience in serving children and youth that are of the age that the entity intends to serve. The bill would require a participating entity, as a condition of participation, to commit to increasing, among other things, the number of transition-age youth 16 to 25 years of age receiving behavioral health services. The bill would require the lead entity, starting on or before September 1, 2027, December 1 of the year after an appropriation is made to fund the program, and ending no earlier than September 1, 2030, 3 years after the program begins, to provide intensive technical assistance and support with regard to specified activities to the participating entities. The bill would require the lead entity to submit a progress report on or before September 1, 2029, 1 of the year that is 3 years after an appropriation is made to fund the program, and submit a summative report by January 1, 2031, 1 of the year that is 4 years after an appropriation is made to fund the program, regarding the program to the appropriate policy and fiscal committees of the Legislature.

Existing law establishes the Children and Youth Behavioral Health Initiative, administered by the California Health and Human Services Agency and its departments, as applicable. Under existing law, the purpose of the initiative is to transform the states behavioral health system into an innovative ecosystem in which all children and youth 25 years of age and younger, regardless of payer, are screened, supported, and served for emerging and existing behavioral health needs.

Existing law requires, as a part of the initiative, the State Department of Health Care Services to develop and maintain a school-linked statewide fee schedule for outpatient mental health or substance use disorder treatment provided to a student who is 25 years of age or younger at a schoolsite. Existing law requires providers of medically necessary schoolsite services to be reimbursed by health care service plans, insurers, and Medi-Cal managed care plans, at a minimum, at the fee schedule rate or rates, regardless of network provider status.

This bill would establish the Statewide Fee Schedule Pilot Intensive Technical Support for Onboarding Program. The bill would require the pilot lead, the Monterey County Office of Education, the State Department of Education, upon appropriation and subject to the terms of the appropriation, to select through a competitive process, and allocate funding to, a local educational agency that will serve as the lead entity that will administer the program over a 3-year period, as provided. The bill would require the lead entity, in coordination with the State Department of Education and the State Department of Health Care Services, to, no later than April September 1, 2027, select up to 25 entities to participate in the pilot program and prioritize certain applicants, including, among others, applicants who will increase the number and amount of statewide fee schedule reimbursements. The bill would require that an entity meet specified criteria in order to be eligible to participate in the program, including, among other things, that the entity has past experience in serving children and youth that are of the age that the entity intends to serve. The bill would require a participating entity, as a condition of participation, to commit to increasing, among other things, the number of transition-age youth 16 to 25 years of age receiving behavioral health services. The bill would require the pilot lead, lead entity, starting no later than April on or before September 1, 2027, and ending no earlier than July September 1, 2030, to provide intensive technical assistance and support with regard to specified activities to the participating entities in participating in the school-linked statewide fee schedule, including technical assistance and support with specified activities, including, among others, providing training and coaching for behavioral health service providers related to documentation of services, proper coding and noting procedures, obtaining required consents, applicable privacy laws and disclosure requirements, and referral protocols. entities. The bill would require the pilot lead entity to submit a progress report by January 1, 2028, on or before September 1, 2029, and submit a summative report by January 1, 2031, regarding the pilot program to the appropriate policy and fiscal committees of the Legislature. The bill would require the State Department of Education, upon appropriation and subject to the terms of the appropriation, allocate funds the pilot lead to administer the pilot program. By requiring the Monterey County Office of Education to serve as the pilot lead, this bill would impose a state-mandated local program.

Existing law establishes the California Health and Human Services Agency, under the direction of the Secretary of California Health and Human Services, which includes, among other departments, the State Department of Public Health and the State Department of Health Care Services. Existing law establishes the Children and Youth Behavioral Health Initiative, which is administered by the agency and its departments and declares the purpose of the initiative to be to transform the states behavioral health system into an innovative ecosystem in which all children and youth 25 years of age and younger, regardless of payer, are screened, supported, and served for emerging and existing behavioral health needs.

This bill would state the intent of the Legislature to enact future legislation that would increase access to behavioral health services for children and youth 25 years of age and younger.

SENATE COMMITTEE ON

Senator Sabrina Cervantes, Chair

2025 - 2026 Regular Session

AB 2704 (Addis) - Fee Schedule Intensive Technical Support for Onboarding Program

Bill Summary:

This bill establishes the Fee Schedule Intensive Technical Support for Onboarding Program to provide local educational agencies (LEAs) and institutions of higher education with technical assistance and support for their utilization of the Children and Youth Behavioral Health Initiative (CYBHI) Fee Schedule Program.

Fiscal Impact:

• While the bill’s provisions would be contingent upon an appropriation, it could result in one-time Proposition 98 General Fund cost pressure in the tens of millions of dollars to fund the program.
• The Department of Health Care Services (DHCS) estimates $311,000 in the 2027-28 fiscal year and $293,000 thereafter for 2.0 positions for administrative workload associated with coordinating with the California Department of Education (CDE), the program lead entity, and up to 25 program entities (General Fund and federal funds).
  
• The CDE estimates General Fund costs of $334,000 in the 2027-28 fiscal year and $327,000 thereafter and 2.0 positions to select the lead entity and administer the program.

Background:

Existing law establishes the CYBHI, administered by the California Health and Human Services Agency and its departments, to transform the state’s behavioral health system into an innovative ecosystem in which all children and youth 25 years of age and younger, regardless of payer, are screened, supported, and served for emerging and existing behavioral health needs.

Existing law requires the Department of Health Care Services (DHCS) to develop and maintain a school-linked statewide fee schedule for outpatient mental health or substance use disorder treatment provided to a student who is 25 years of age or younger at a schoolsite.

Existing law establishes the Office of School-Based Health at the CDE for the purpose of assisting LEAs regarding the current health-related programs under the purview of the CDE, and requires the scope of the Office to include collaborating with DHCS and other departments in the provision of school-based health services, and assisting LEAs with information on, and participation in specified school-based health programs.

Proposed Law:

This bill establishes the Fee Schedule Intensive Technical Support for Onboarding Program to address inconsistent access to the school-linked statewide fee schedule caused by the limited capacity and expertise of the education system in billing for behavioral health claims, and to reduce the burden of operationalizing the fee schedule for entities providing behavioral health services to communities and groups that are underrepresented in receiving fee schedule services, including children up to five years of age, pupils who attend small and rural schools, and transition-age youth.

This bill requires CDE, upon appropriation by the Legislature, to select through a competitive process, and, by July 1 of the year after an appropriation is made to fund the program, allocate funding to, a LEA that will serve as the lead entity and administer the program over a three-year period, upon meeting specified criteria such as having a minimum of ten years of experience in administering at least one other Medi-Cal reimbursement program.

This bill requires the LEA designated as the lead entity, no later than November 1 of the year after an appropriation is made to fund the program, to select up to 25 entities, in coordination with CDE and DHCS, to participate in the program for up to three years. It requires a participating entity, as a condition of participation, to commit to doing one or more of the following: increase the number of children up to five years of age receiving behavioral health services; increase the number of transition-age youth 16 to 25 years of age receiving behavioral health services; or, increase the number of children and youth enrolled in small school districts that receive behavioral health services.

This bill requires an entity, in order to participate, to be eligible to participate in the fee schedule; have past experience in serving children and youth that are of the age that the entity intends to serve; require intensive technical assistance and support to operationalize the fee schedule; and, when selecting participating entities, to prioritize participating entities that will do one or more of the following:

1. Increase the number and amount of fee schedule reimbursements;
2. Increase the number and amount of fee schedule reimbursements being used to support community schools;
3. Operate in communities with higher proportions of unduplicated pupils; or
4. Reflect the diversity of communities and geographic areas throughout the state.

This bill requires the lead entity to create and publish a brief application for entities interested in participating in the program by September 1 of the year after an appropriation is made to fund the program, as specified.

This bill requires the lead entity, by December 1 of the year after an appropriation is made to fund the program and ending no earlier than three years after the program begins, to provide intensive technical assistance and support to the participating entities.

This bill requires the lead entity, by September 1 of the year that is three years after an appropriation is made to fund the program, to submit a report to the appropriate policy and fiscal committees of the Legislature on the progress of the program toward the goals described in this bill. It also requires the lead entity, no later than January 1 of the year that is four years after an appropriation is made to fund the program, to submit a report to the appropriate policy and fiscal committees of the Legislature on the success of the program in achieving its goals.

Staff Comments:

The CYBHI is a multiyear, $4.7 billion effort at the core of the Master Plan for Kids’ Mental Health, aimed at overhauling the state’s mental health system and enhancing the pathways connecting families with the needed services. The initiative works across four strategic areas (workforce training and capacity, behavioral health ecosystem infrastructure, coverage and public awareness) and carries out 20 distinct workstreams. This bill would require a lead entity selected by the CDE to work in coordination with the DHCS to select up to 25 entities that indicate that they are in need of intensive technical assistance and support to operationalize the fee schedule. The lead entity would then be tasked with leveraging their expertise in utilizing the CYBHI Fee Schedule and other Medi-Cal reimbursement programs to provide targeted support to the selected entities. These supports would include training, coaching, and assistance on documentation of services, consent forms, insurance verification, electronic health recordkeeping, applicable privacy and disclosure laws, and billing procedures.

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SENATE COMMITTEE ON HEALTH

Senator Akilah Weber Pierson, Chair

BILL NO: AB 2704

SUBJECT: Fee Schedule Intensive Technical Support for Onboarding Program

SUMMARY:

Establishes the Fee Schedule Intensive Technical Support for Onboarding Program to provide certain local educational agencies and institutions of higher education with intensive technical assistance and support for their utilization of the Children and Youth Behavioral Health Initiative Fee Schedule Program. Requires the Department of Health Care Services, the California Department of Education, and a designated lead entity to select up to 25 entities to participate in the program.

Existing law:

1. Establishes the Medi-Cal program, administered by the Department of Health Care Services (DHCS), under which qualified low-income individuals receive health care services. [WIC §14000, et seq.]
2. Establishes the Children and Youth Behavioral Health Initiative (CYBHI), administered by the California Health and Human Services Agency and its departments, to transform the state’s behavioral health system into an innovative ecosystem in which all children and youth 25 years of age and younger, regardless of payer, are screened, supported, and served for emerging and existing behavioral health needs. [WIC) §5961]
3. Establishes a schedule of benefits in the Medi-Cal program. Requires specified services provided by local educational agencies (LEAs) to be covered Medi-Cal benefits, to the extent federal financial participation is available, and subject to utilization controls and standards adopted by DHCS, and consistent with Medi-Cal requirements for physician prescription, order, and supervision. This is referred to as the LEA Billing Option Program (LEA BOP). [WIC §14132.06]
4. Requires DHCS to amend its Medicaid state plan with respect to the billing option for services by LEAs, to ensure that schools are reimbursed for all eligible services that they provide that are not precluded by federal requirements. [WIC §14115.8]
5. Requires DHCS to examine methodologies for increasing school participation in the Medi-Cal billing option for LEAs so that schools can meet the health care needs of their students. Requires DHCS, to the extent possible, to simplify claiming processes for LEA billing. [WIC §14115.8]
6. Establishes the Office of School-Based Health at the California Department of Education (CDE) for the purpose of assisting LEAs for health-related programs under CDE’s purview, and requires the scope of the Office to include collaborating with DHCS and other departments in the provision of school-based health services, and assisting LEAs with information on, and participation in, specified school-based health programs. [EDC §49419]

This bill:

1. Establishes the Fee Schedule Intensive Technical Support for Onboarding Program (the program) to address inconsistent access to the school-linked statewide fee schedule caused by the limited capacity and expertise of the education system in billing for behavioral health claims, and to reduce the burden of operationalizing the fee schedule for entities providing behavioral health services to communities and groups that are underrepresented in receiving fee schedule services, including children up to five years of age, pupils who attend small and rural schools, and transition-age youth.
2. Requires CDE, upon appropriation by the Legislature and subject to the terms of the appropriation, to select through a competitive process, and, by July 1 of the year after an appropriation is made to fund the program, allocate funding to, a LEA that will serve as the lead entity and administer the program over a three-year period, upon meeting specified criteria such as having a minimum of ten years of experience in administering at least one other Medi-Cal reimbursement program.
3. Requires the LEA designated as the lead entity, no later than November 1 of the year after an appropriation is made to fund the program, to select up to 25 entities, in coordination with CDE and DHCS, to participate in the program for up to three years.
4. Requires a participating entity, as a condition of participation, to commit to doing one or more of the following: increase the number of children up to five years of age receiving behavioral health services; increase the number of transition-age youth 16 to 25 years of age receiving behavioral health services; or, increase the number of children and youth enrolled in small school districts that receive behavioral health services.
5. Requires an entity, in order to participate, to be eligible to participate in the fee schedule; have past experience in serving children and youth that are of the age that the entity intends to serve; require intensive technical assistance and support to operationalize the fee schedule; and, when selecting participating entities, to prioritize participating entities that will do one or more of the following:
   1. Increase the number and amount of fee schedule reimbursements;
   2. Increase the number and amount of fee schedule reimbursements being used to support community schools;
   3. Operate in communities with higher proportions of unduplicated pupils; or,
   4. Reflect the diversity of communities and geographic areas throughout the state.
6. Requires the lead entity to create and publish a brief application for entities interested in participating in the program by September 1 of the year after an appropriation is made to fund the program. Requires the application to request, at a minimum:
   1. The number and age of children and youth currently enrolled at the entity and currently receiving behavioral health services from the entity or an affiliated provider that the entity has designated;
   2. The number and qualifications of behavioral health service providers, including affiliated providers, currently offering behavioral health services to children and youth enrolled at the entity;
   3. The entity’s interest in, and capacity to, increase behavioral health services to children and youth in their community; and,
   4. Evidence of the entity’s current enrollment in the fee schedule or the completed fee schedule cohort readiness application created by DHCS.
7. Requires the lead entity, by December 1 of the year after an appropriation is made to fund the program and ending no earlier than three years after the program begins, to provide intensive technical assistance and support to the participating entities.
8. Requires the lead entity, by September 1 of the year that is three years after an appropriation is made to fund the program, to submit a report to the appropriate policy and fiscal committees of the Legislature on the progress of the program toward the goals described in this bill.
9. Requires the lead entity, no later than January 1 of the year that is four years after an appropriation is made to fund the program, to submit a report to the appropriate policy and fiscal committees of the Legislature on the success of the program in achieving its goals.

FISCAL EFFECT:

According to the Assembly Appropriation Committee:

1. Proposition 98 General Fund cost pressures of $50 million to fund the program. In its letter of support, Monterey County Office of Education, the sponsor of this bill, urges Members of the Assembly Committee on Health to appropriate $50 million one-time to support the program;
2. Costs to CDE would likely be less than the equivalent of a single staff position in the first year of implementation, mainly to select an LEA to serve as the lead entity. For its part, CDE estimates costs of about $203,500 to $273,500 in 2026-27 and $198,000 to $268,000 in 2027-28 for one or two staff positions, operating expenses and equipment, and Statewide Cost Allocation Plan (General Fund); and,
3. Minor and absorbable costs to DHCS to provide consultation.

The Legislative Analyst′s Office recently warned of General Fund structural deficits of around $35 billion per year in the 2027-28 fiscal year and ongoing.

PRIOR VOTES:

COMMENTS:

1. Author’s statement. According to the author, for too many families on the Central Coast and in rural communities, mental health care is limited or simply out of reach. This bill helps close that gap by giving schools a real pathway to deliver and sustain early behavioral health services.
2. CYBHI and the Fee Schedule Program.  According to DHCS’s website, CYBHI is a statewide effort to support the behavioral health of young people in California, making it easier for children, teens, and young adults to get help wherever they need it: at home, school, or in their community. As part of CYBHI, DHCS launched the Fee Schedule program, a first-of-its kind effort to make it easier for students and families to get outpatient mental health and substance use disorder support. This program creates a sustainable reimbursement pathway for LEAs and public institutions of higher education (IHE) to receive funding for services rendered at a school or school-linked site. The program sets the reimbursement rate for a certain set of outpatient, school-linked services rendered to children and youth who are under the age of 26; enrolled in public TK-12 schools or IHEs (such as community colleges) and covered by Medi-Cal managed care plans, Medi-Cal fee-for-service, health plans, and insurers. Children, youth, and families do not pay out-of-pocket expenses, and there is no impact to their existing insurance plan or deductibles.

DHCS published the following implementation data on its CYBHI Fee Schedule Program webpage as of June 1, 2026:

• 1. About 700 LEAs and public IHE are enrolled in the CYBHI Fee Schedule program;
  2. Nearly 3.6 million students are enrolled across participating school sites;
  3. 98% of counties in California are represented by current participants;
  4. 199 LEAs/IHEs (including 13 school-linked providers) have submitted claims;
  5. $12.76 million in unique clean claims (includes all in-process and approved claims) have been submitted to the third-party administrator for reimbursement;
  6. 232,092 claims have been reimbursed, totaling $11.37 million in new revenue for LEAs and IHEs;
  7. 172 LEAs/IHEs (including 11 school-linked providers) have received reimbursement;
  8. 48,821 unique students have received services submitted for reimbursement; and,
  9. 41 managed care plans/insurers are represented in the claims data.

1. Double referral. This bill was heard in the Senate Education Committee on June 24, 2026, and passed with a 7-0 vote.
2. Prior legislation. AB 133 (Committee on Budget, Chapter 143, Statutes of 2021) establishes the framework for the CYBHI and the Fee Schedule Program, among other components of CYBHI.

AB 2034 (O’Donnell of 2022) would have required DHCS to revise its audit process for the LEA BOP and provide technical assistance to LEAs. AB 2034 was not heard in the Senate Education Committee.

AB 130 (Committee on Budget, Chapter 44, Statutes of 2021) requires CDE to establish the Office of School-Based Health to assist LEAs regarding the current health-related programs under its purview. The scope of the office also includes collaborating with DHCS and other departments and offices involved in the provision of school-based health services.

1. Support. The Monterey County Office of Education (MCOE), as sponsor, states that in 2021, California established CYBHI in an effort to address the statewide youth mental health crisis. In addition to one-time grants, the CYBHI included the LEA Fee Schedule which allows LEAs to seek reimbursement from Medi-Cal and commercial managed care plans for the behavioral health services they provide to children ages 0 to 25. DHCS estimates that the Fee Schedule has the potential to generate $200 million+ annually to support school-based behavioral health services. MCOE says that with the help of DHCS, LEAs have made significant progress in implementing the Fee Schedule over the last five years. Without targeted intervention for under-resourced entities, the Fee Schedule will widen—not close—inequities in access to behavioral health services. MCOE states this bill would help to address this gap by establishing a three-year technical assistance program that is intentionally designed to correct the imbalance in participation among entities providing behavioral health services to children ages 0 to 5, small and rural schools, and community colleges. MCOE further argues that in addition to drawing down more federal dollars to support students, the technical assistance program would also help to address repercussions created by COVID-19’s disruption to early learning environments and social-emotional development. Since the pandemic, California has experienced significant increases in behavioral health challenges among children in preschool and early grades, as well as a surge in the identification of children for special education services. Increased access to the early intervention services covered by the Fee Schedule could help address these behavioral health challenges and mitigate rising special education costs. Other supporters largely echo MCOE’s sentiments.

SUPPORT AND OPPOSITION:

Support: Monterey County Office of Education (sponsor)

Alameda County Office of Education
California Association of School Counselors
California Teachers Association
California Youth Empowerment Network
County of Santa Clara
EveryChild California
First 5 California
Fresno County Office of Education
Kidango
The Children's Partnership

Oppose: None received

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SENATE COMMITTEE ON EDUCATION

Senator Sasha Renée Pérez, Chair

2025 - 2026 Regular

Bill No: Hearing Date: June 24, 2026

Subject:

NOTE: This bill has been referred to the Committees on Education and Health. A “do pass” motion should include referral to the Committee on Health.

SUMMARY

This bill establishes the Fee Schedule Intensive Technical Support for Onboarding Program to provide specified local educational agencies (LEAs) and institutions of higher education (IHEs) with intensive technical assistance and support to operationalize their utilization of the Children and Youth Behavioral Health Initiative (CYBHI) Fee Schedule Program.

BACKGROUND

Existing law:

1. Establishes the CYBHI, administered by the California Health and Human Services Agency and its departments, to transform the state’s behavioral health system into an innovative ecosystem in which all children and youth 25 years of age and younger, regardless of payer, are screened, supported, and served for emerging and existing behavioral health needs. (Welfare and Institutions Code (WIC) § 5961)
2. Requires the Department of Health Care Services (DHCS) to develop and maintain a school-linked statewide fee schedule for outpatient mental health or substance use disorder treatment provided to a student who is 25 years of age or younger at a schoolsite. (WIC § 5961.4)
3. Establishes the Office of School-Based Health at the California Department of Education (CDE) for the purpose of assisting LEAs regarding the current health-related programs under the purview of the CDE, and requires the scope of the Office to include collaborating with DHCS and other departments in the provision of school-based health services, and assisting LEAs with information on, and participation in specified school-based health programs. (Education Code (EC) § 49419)
4. Establishes the School Health Demonstration Project and appropriates $5 million to the CDE to expand comprehensive health and mental health services to public school pupils by providing LEAs with intensive assistance and support to build the capacity for long-term sustainability by leveraging multiple revenue sources. (EC § 49421)
5. Requires the CDE, by June 1, 2025, to develop model referral protocols for addressing student mental health concerns, in consultation with specified agencies and stakeholders, and authorizes these protocols to be used on a voluntary basis by schools. (EC § 49428.1)
6. Requires the governing boards or bodies of LEAs, by January 31, 2026, to adopt at a regularly scheduled meeting, a policy on referral protocols for addressing student behavioral health concerns of students in grades 7 to 12. (EC § 49428.2)

ANALYSIS

This bill:

1. Establishes the Fee Schedule Intensive Technical Support for Onboarding Program (Program) for the following purposes:
   1. To address inconsistent access to the school-linked statewide fee schedule, as specified, caused by the limited capacity and expertise of small and rural schools, early learning and care centers operated by, or under contract with, an LEA, and IHE serving transition-age youth in billing for behavioral health claims.
   2. To reduce the burden of operationalizing the fee schedule for entities providing behavioral health services to communities and groups that are underrepresented in receiving fee schedule services, including children 0 to 5 years of age, pupils who attend small or rural schools, and transition-age youth.
2. Requires the CDE, upon appropriation by the Legislature, to select through a competitive process, and allocate funding to, an LEA that will serve as a lead entity to administer the Program over a three-year period. Requires the CDE to ensure the lead entity meets all of the following minimum requirements:
   1. Currently employs behavioral health providers or has a contract with a behavioral health or a managed care plan, to provide behavioral health services to pupils at the schoolsites of the LEA.
   2. Is enrolled in the fee schedule in cohorts one, two, or three, and meets all applicable criteria to submit claims.
   3. Has significant experience leading a fee schedule consortium of LEAs of varying sizes and varying enrollments of unduplicated pupils, including, but not limited to, charter schools and schools located in rural or remote areas of the state.
   4. Has successfully submitted and received payment for claims through the statewide fee schedule for at least one year.
   5. Has a minimum of 10 years of experience in administering at least one other Medi-Cal reimbursement program, including, but not limited to, the Local Educational Agency Medi-Cal Billing Option Program, as specified, fee-for-service Medi-Cal program, or specialty mental health services.
3. Requires the lead entity, in coordination with the CDE and the DHCS, no later than September 1, 2027, to select up to 25 entities to participate in the Program for up to three years.
4. Requires a participating entity to commit to doing one or more of the following, as a condition of participation:
   1. Increase the number of children 0 to 5 years of age receiving behavioral health services.
   2. Increase the number of transition-age youth 16 to 25 years of age receiving behavioral health services.
   3. Increase the number of children and youth enrolled in small school districts, as specified, that receive behavioral health services.
5. Requires the entities to meet all of the following criteria in order to be eligible to participate in the program:
   1. Is eligible to participate in the fee schedule.
   2. Has past experience in serving children and youth that are of the age that the entity intends to serve.
   3. Requires intensive technical assistance and support to operationalize the fee schedule.
6. Requires the lead entity, when selecting participating entities, to prioritize those that will do one or more of the following:
   1. Increase the number and amount of fee schedule reimbursements.
   2. Increase the number and amount of fee schedule reimbursements being used to support community school, as specified.
   3. Operate in communities with higher proportions of unduplicated pupils, as specified.
   4. Reflect the diversity of communities and geographic areas throughout the state.
7. Requires the lead entity, on or before July 1, 2027, to create and publish a brief application for entities interested in participating in the program. Requires that the application, at minimum, request the following information:
   1. The number and age of children and youth currently enrolled at the entity.
   2. The number and age of children and youth currently receiving behavioral health services from the entity or an affiliated provider that the entity has designated.
   3. The number and qualifications of behavioral health service providers, including affiliated providers, currently offering behavioral health services to children and youth enrolled at the entity.
   4. The entity’s interest in, and capacity to, increase behavioral health services to children and youth in their community.
   5. Evidence of the entity’s current enrollment in the fee schedule or the completed fee schedule cohort readiness application created by DHCS.
8. Requires the lead entity, starting on or before September 1, 2027, to provide intensive technical assistance and support to the participating entities, including but not limited to, all of the following activities:
   1. Assisting with obtaining national provider identification numbers and completing the fee schedule credentialing process for employees and affiliated providers that will offer services within the scope of services covered by the fee schedule.
   2. Providing training and coaching to employees and affiliated providers that will offer services covered by the schedule that is related to documentation of services, proper coding and noting procedures, obtaining required consents, applicable privacy laws and disclosure requirements, and referral protocols, including escalation of services.
   3. Technical assistance in obtaining a suitable electronic health records system for the documentation and submission of claims, including offering participation in a multi-entity contract for electronic health records services that is centrally managed by the lead entity.
   4. Assistance with the applicability of privacy laws, including, but not limited to, the Family Educational Rights and Privacy Act (FERPA) and the Health Insurance Portability and Accountability Act (HIPAA), to each participating entity. This may include legal and technology supports necessary to adopt the policies, documents, and forms required by applicable privacy laws, including, but not limited to, all of the following:
      1. Consent forms, including forms to consent to services, consent to billing, consent to information sharing, and minor consent to outpatient mental health services, required pursuant to state law.
      2. Notice of privacy practices documents that address the right to withhold consent, the right to withdraw consent, the right to request records, and how confidential information may be shared and utilized.
      3. Data governance policies designating each entity as HIPAA-governed, FERPA-governed, or a hybrid entity.
      4. Data maintenance protocols and guidance documents for providers and administrators defining how and where to document and store information to ensure compliance with applicable privacy laws and release of information requirements, avoid unintentional disclosure of confidential information, and protect the privacy of individuals consenting to service.
      5. Other applicable forms and protocols, including, but not limited to, authorizations for ordering and referring physicians, referral protocols, and protocols regarding maintenance of documentation for audit purposes.
   5. Technical assistance with obtaining and maintaining health plan information for each individual receiving services, including developing a process for conducting insurance discovery and follow-up activities where information is absent.
   6. A targeted review of claims prior to submission to ensure services are appropriately coded, documented, and noted, with the goal of increasing the likelihood of submitting a clean claim.
9. Authorizes the lead entity to subcontract with additional experts, as needed, to fulfill the requirements of #8 above.
10. Requires the lead entity, on or before September 1, 2029, to submit a report to the appropriate policy and fiscal committees of the Legislature on the progress of the Program toward its goals. Requires that the report include, but not be limited to, all of the following information:
    1. The number of and names of entities accepted to participate in the program.
    2. The number of entities participating in the program that have completed training and onboarding with an electronic health records system, and adopted required data sharing policies, privacy notices, and disclosure and release forms.
    3. The number of employees and affiliated providers offering services within the scope of services covered by the fee schedule that have completed the statewide fee schedule certification process, including obtaining a National Provider Identifier.
    4. The number and percentage of children and youth with verified health plan information in an electronic health records system and completed consent forms, disaggregated by participating entity.
11. Requires the lead entity, no later than January 1, 2031, to submit a summative report to the appropriate policy and fiscal committees of the Legislature on the success of the program in achieving its goals. Requires that the report include, but not be limited to, all of the following:
    1. The number of claims submitted by participating entities from small and rural school districts.
    2. The number of claims submitted by participating entities for services provided to children 0 to 5 years of age, inclusive.
    3. The number of claims submitted by participating entities for services provided to transition-age youth.
    4. The total number of claims submitted by participating entities and the percent of claims that are approved and paid.
    5. The total value of claims submitted by participating entities.

STAFF COMMENTS

1. Need for the bill. According to the author, “For too many families on the Central Coast and in rural communities, mental health care is limited or simply out of reach. AB 2704 helps close that gap by giving schools a real pathway to deliver and sustain early behavioral health services.”
2. CYBHI. The CYBHI is a multiyear, $4.7 billion effort at the core of the Master Plan for Kids’ Mental Health, aimed at overhauling the state’s mental health system and enhancing the pathways connecting families with the needed services. The initiative works across four strategic areas (workforce training and capacity, behavioral health ecosystem infrastructure, coverage and public awareness) and carries out 20 distinct workstreams. Most workstreams are time-limited and focused on building the infrastructure and capacity of the behavioral health system for children.
3. CYBHI Fee Schedule Program. As part of the CYBHI, DHCS was tasked with establishing and maintaining a statewide multi-payer fee schedule for school-linked behavioral health (known as the CYBHI Fee Schedule), enabling LEAs and public IHEs to receive funding for outpatient services rendered at a school or school-linked site.

The CYBHI Fee Schedule program establishes the minimum rates at which managed care plans and insurers must reimburse LEAs and IHEs for the provision of covered services for a student at a school site or school-linked location, including on-campus, off-campus, and mobile clinic locations.

The CYBHI Fee Schedule also provides the appropriate billing codes, rates, and provider types for each service type billable as part of the CYBHI Fee Schedule program. Services provided as part of the fee schedule shall not be subject to copayment, coinsurance, deductible, or any other form of cost sharing. To be eligible for covered services, children and youth must be:

• Under the age of 26;
• Enrolled in public TK-12 schools or IHEs (e.g., California Community Colleges); and
• Covered by Medi-Cal managed care plans, Medi-Cal Fee-for-Service, health care service plans, and disability insurers.

In addition to establishing the CYBHI Fee Schedule, DHCS was tasked with developing and maintaining a school-linked statewide provider network of school-site behavioral health counselors.

To implement the fee schedule, DHCS has onboarded LEAs and IHEs in implementation “cohorts,” with each cohort selected based on operational readiness. The selection process considers a variety of factors including as Medi-Cal enrollment, service delivery infrastructure and capacity building, data collection and documentation, and billing infrastructure. In addition, the state has selected Carelon Behavioral Health as the third-party administrator (TPA) who serves as the statewide clearinghouse that receives and adjudicates claims from LEAs, and pays these claims on behalf of health plans. Carelon is also responsible for credentialing school-based providers for participation in the Fee Schedule on behalf of the state, as well as providing training and technical assistance to participating LEAs.

On February 27, 2026, DHCS announced its approval of Cohort 6 of the Fee Schedule Program, made up of 102 LEAs and 5 IHEs. These LEAs and IHEs will participate in a learning collaborative to inform state level policy and operational guidance for the CYBHI Fee Schedule program.

1. Fee Schedule Program implementation data.  The DHCS has published the following implementation data on its CYHBI Fee Schedule Program webpage as of June 1, 2026:
   1. ~700 LEAs and public IHEs are enrolled in the CYBHI Fee Schedule program;
   2. ~3.6 million students enrolled across participating schoolsites;
   3. 98% of counties in California are represented by current participants;
   4. 199 LEAs/IHEs (including 13 school-linked providers) have submitted claims.
   5. $12.76 million in unique clean claims (includes all in-process and approved claims) have been submitted to the TPA for reimbursement.
   6. 232,092 claims have been reimbursed, totaling $11.37 million in new revenue for LEAs and IHEs.
   7. 172 LEAs/IHEs (including 11 school-linked providers) have received reimbursement.
   8. 48,821 unique students have received services submitted for reimbursement.
   9. 41 Managed Care Plans/Insurers are represented in the claims data.
2. Ongoing delays in implementation. In the agenda for its May 4, 2026, hearing, the Assembly Budget Sub-Committee #1 on Health identified several ongoing challenges in Fee Schedule Program implementation. The process has been described by stakeholders as complex and hindered by technical, operational, and administrative barriers. Examples of these challenges include:

• Collection of Student Health Plan Information: LEAs have struggled to gather accurate and complete health plan data from students, making it difficult to process reimbursement claims.
• Delay in Receiving Technical Guidance from DHCS and Its TPA: Many LEAs and IHEs have noted issues obtaining the necessary technical guidance to implement the program, such as receiving policy and technical manuals outlining billing instructions and program compliance requirements.
• Navigating Complex Health and Education Regulations: These regulations were designed for separate sectors, making data-sharing and reimbursement coordination between schools and health plans difficult. Other compliance challenges include state Medicaid policies, provider credentialing rules, and administrative billing processes that do not align easily with educational settings

1. Existing technical assistance. Currently, DHCS and contractors provide LEAs and IHEs with technical assistance, training modules, responses to questions, toolkits, and other resources. Despite this support, as indicated in Comment 4, only 199 of the roughly 700 LEAs and public IHEs that are enrolled in the Fee Schedule Program have submitted claims since the program began in 2024. The bill’s sponsor, Monterrey County Office of Education, notes many LEAs lack the resources, expertise, capacity, and economies of scale required to implement medical billing infrastructure and that this inequity is particularly felt by entities providing behavioral health services to children ages 0 to 5, small and rural schools, and community colleges serving transition-age youth 16 to 25.

The bill would require a lead entity selected by the CDE to work in coordination with the CDE and DHCS to select up to 25 entities that indicate that they are in need of intensive technical assistance and support to operationalize the fee schedule. The lead entity would then be tasked with leveraging their expertise in utilizing the CYBHI Fee Schedule and other Medi-Cal reimbursement programs to provide targeted support to the selected entities. These supports would include training, coaching, and assistance on documentation of services, consent forms, insurance verification, electronic health recordkeeping, applicable privacy and disclosure laws, and billing procedures.

1. Timelines. This bill proposes a structured timeline for the establishment of the Fee Schedule Intensive Technical Support for Onboarding Program—presumably to ensure that struggling LEAs and IHEs will be able to get support as soon as possible. While the bill specifies dates by which a lead entity must establish an application process (on or before July 1, 2027) and subsequently select 25 LEAs to participate in the program (no later than September 1, 2027), it does not specify a deadline for when the CDE must select the lead entity itself, other than indicating that the selection of the lead entity would be subject to an appropriation for that purpose. The author may wish to consider that the envisioned timeline may need to be adjusted if an appropriation is not secured.
2. Prior and related legislation.

AB 121 (Committee on Budget, Chapter 8, Statutes of 2025) appropriates $20 million one-time Proposition 98 General Fund to the CDE to allocate the funds to Sacramento COE, in partnership with the Santa Clara COE, no later than October 2025. Specifies funds will be administered through the capacity grant infrastructure, as established by the CYBHI, to LEAs to support, in the order of priority: (1) to prevent the disruption of youth mental health services; and (2) to provide technical assistance to LEAs for the continued implementation of the statewide fee schedule.

SB 153 (Committee on Budget and Fiscal Review, Chapter 38, Statutes of 2024), requires the CDE, as of June 1, 2025, to develop model referral protocols for addressing student behavioral health concerns, for use, on a voluntary basis, by LEAs and requires LEAs to adopt a policy on referral protocols for addressing student behavioral health concerns in grades 7 to 12 by January 31, 2026.

AB 133 (Committee on Budget, Chapter 143, Statutes of 2021) establishes the framework for the CYBHI and the Fee Schedule Program, among other components of the CYBHI.

AB 2034 (O’Donnell, 2022) would have required DHCS to revise its audit process for the Local Education Agency Medi-Cal Billing Option Program and provide technical assistance to LEAs. This bill was held in the Senate Education Committee.

AB 2022 (Chu, Chapter 484, Statutes of 2018) requires each school of a school district or COE, and each charter school, to notify students and parents or guardians of students, at least twice per school year, about how to initiate access to available student mental health services on campus or in the community.

AB 130 (Committee on Budget, Chapter 44, Statutes of 2021) requires the CDE to establish the Office of School-Based Health by January 1, 2022, to assist LEAs regarding the current health-related programs under the purview of the department. The scope of the office also includes collaborating with the DHCS and other departments and offices involved in the provision of school-based health services; establishes the School Health Demonstration Project and appropriates $5 million in one-time funding to the CDE to establish a pilot project to expand comprehensive health and mental health services to public school pupils by providing LEAs with intensive assistance and support to build the capacity for long-term sustainability by leveraging multiple revenue sources.

SUPPORT

Monterey County Office of Education (co-sponsor)

Alameda County Office of Education

California Association of School Counselors

California Teachers Association

California Youth Empowerment Network

County of Santa Clara

OPPOSITION

None received

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2704

Author:(Addis)

As Amended Ver:April 27, 2026

Majority vote

SUMMARY

Creates a pilot program to provide intensive technical assistance and support to help small and rural school districts, and programs serving children under five years of age or transition-age youth, participate in the Children and Youth Behavioral Health Initiative (CYBHI) Fee Schedule, wherein those entities can receive reimbursement for behavioral health services provided to children and youth.

Major Provisions

COMMENTS

School-Based Behavioral Health Services. Universal behavioral health services for children and transition-age youth function can help avoid long-term or future unnecessary and costly mental health interventions, such as crisis stabilization, emergency department visits, or inpatient psychiatric hospitalization. Students are more likely to receive behavioral health services when they are provided on a school campus because it eliminates the need for transportation to off-site appointments, facilitates parent participation, encourages student self-referral, and increases the likelihood of completing treatment. In addition, school-based mental health professionals can better identify aggravating causal factors based on their more holistic knowledge of a student.

CYBHI Fee Schedule. The CYBHI is a multi-pronged initiative that began in 2021 and aims to promote the mental health and wellness of California′s children and teens. Most initiatives are time-limited and focused on building infrastructure and capacity of the behavioral health system for children. Of the various components of CYBHI, the CYBHI Fee Schedule is the only initiative designed to create an ongoing funding source to support the delivery of behavioral health in schools and in school-linked settings.

State law requires the Department of Health Care Service (DHCS) to develop and maintain a multi-payer, school-linked statewide fee schedule for medically necessary outpatient mental health or substance use disorder services provided to a student 25 years of age or younger at or near a school site. State law also requires Medi-Cal managed care and commercial plans and insurers to reimburse for such school site services designated by DHCS, at or above the fee schedule rate, regardless of whether the school site is a network provider, and without subjecting services to prior authorization or cost-sharing. This means plans are prohibited from applying any copayment, coinsurance, or deductible that would normally apply to the service rendered, based on the plan design.

The CYBHI Fee Schedule requires payers to reimburse local educational agencies (LEAs) or institutions of higher education (IHEs) for a set of behavioral health services provided at a school site, as defined. The services are provided by or arranged by the LEAs. Specifically, LEAs can provide the services ″in-house″ with their own staff or arrange for the provision of services through community-based providers that provide services at the school or otherwise partner with the LEA to provide services to students.

To implement the Fee Schedule, DHCS has onboarded LEAs and IHEs in implementation ″cohorts,″ with each cohort selected based on operational readiness. The selection process considers factors such as Medi-Cal enrollment, service delivery infrastructure and capacity, data collection and documentation, and billing infrastructure. In addition, the state has selected Carelon Behavioral Health as the third-party administrator who serves as the statewide clearinghouse that receives and adjudicates claims from LEAs, and pays these claims on behalf of health plans. Carelon is also responsible for credentialing school-based providers for participation in the Fee Schedule on behalf of the state, as well as providing training and technical assistance to participating LEAs.

Implementation of the Fee Schedule. DHCS and participating LEAs and IHEs have made significant, if slow, progress in implementing the Fee Schedule. The limited number of LEAs that have successfully submitted claims are disproportionately larger, better-resourced districts and county offices of education, which tend to have the staffing, administrative expertise, and economies of scale required to implement medical billing infrastructure. As one-time funds expire, the bill sponsor, Monterey County Office of Education, notes that under-resourced entities, including small and rural LEAs are at risk of being left without an ongoing funding source for behavioral health services.

Consortium Models. According to DHCS, LEAs and IHEs may enroll in the CYBHI Fee Schedule program individually, or as part of a consortium. Consortia are another option to support LEAs and IHEs who may lack the capacity to administer all of the activities related to the Fee Schedule. A consortium model allows an LEA and IHE to share administration services for claims submission and reimbursements. In a consortium, one Lead LEA or one Lead IHE serves as an intermediary between the participating Consortium members (participating member LEAs) and Carelon Behavioral Health, the third-party administrator. The specific consortium model may vary depending on which program requirements are delegated to a Lead LEA or IHE by its participating members.

Distinction Between this Bill and Other Technical Assistance Contracts and Materials. DHCS and its contractors have provided and continue to provide significant technical assistance, training, responses to questions, toolkits, and other resources, in addition to providing grant funding for capacity-building. However, the cultural and administrative differences between health care programs and education entities are vast, staffing and expertise to implement such a technically complex program as the Fee Schedule is limited, and in spite of all the resources and effort that has been expended on technical assistance thus far, many LEAs and IHEs are still struggling to operationalize the Fee Schedule. The sponsor of this bill explains that many LEAs and IHEs lack the capacity to process and make use of the available resources, and really just need hands-on, direct help operationalizing the various aspects of the Fee Schedule, which is what this bill would allow a lead entity to do.

According to the Author

For too many families on the Central Coast and in rural communities, mental health care is limited or simply out of reach. This bill helps close that gap by giving schools a real pathway to deliver and sustain early behavioral health services.

Arguments in Support

This bill is sponsored by the Monterey County Office of Education and supported by Alameda County Office of Education and children′s advocates. Supporters say that without targeted intervention for under-resourced entities, the Fee Schedule will widen, not close, inequities in access to behavioral health services. Supporters say this bill would help to address this gap by establishing a three-year program that is intentionally designed to provide the support certain LEAs and IHEs need to operationalize the Fee Schedule and fund behavioral health services for the children and youth they serve.

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Assembly Committee on Appropriations:

1. Proposition 98 General Fund cost pressures of $50 million to fund the program. In its letter of support, Monterey County Office of Education, the sponsor of this bill, urges Members of the Assembly Committee on Health to appropriate $50 million one-time to support the program.
2. Costs to the California Department of Education (CDE) would likely be less than the equivalent of a single staff position in the first year of implementation, mainly to select an LEA to serve as the lead entity. For its part, CDE estimates costs of about $203,500 to $273,500 in 2026-27 and $198,000 to $268,000 in 2027-28 for one or two staff positions, operating expenses and equipment, and Statewide Cost Allocation Plan (General Fund).
3. Minor and absorbable costs to DHCS to provide consultation.
4. The Legislative Analyst′s Office recently warned of General Fund structural deficits of around $35 billion per year in the 2027-28 fiscal year and ongoing.

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 EDUCATION: 9-0-0

YES: Patel, Hoover, Alvarez, Bonta, Castillo, Garcia, Lowenthal, Pellerin, Zbur

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 27, 2026

CONSULTANT: Lisa Murawski / HEALTH / (916) 319-2097 FN: 0002992

Date of Hearing: May 13, 2026

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2704

Author:(Addis) – As Amended Ver:April 27, 2026

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

SUMMARY:

This bill creates a program to provide intensive technical assistance and support to help small and rural school districts and programs serving children under five years of age and transition-age youth (16 to 25 years) participate in the Children and Youth Behavioral Health Initiative (CYBHI) Fee Schedule. The bill requires the California Department of Education (CDE) to select and provide funding to a local education agency (LEA) that will serve as the lead entity to administer the program. The bill requires the lead entity, in coordination with CDE and the Department of Health Care Services (DHCS), to select up to 25 entities to participate in the program, subject to an appropriation.

FISCAL EFFECT:

1. Proposition 98 General Fund cost pressures of $50 million to fund the program. In its letter of support, Monterey County Office of Education, the sponsor of this bill, urges Members of the Assembly Committee on Health to appropriate $50 million one-time to support the program.
   
2. Costs to CDE would likely be less than the equivalent of a single staff position in the first year of implementation, mainly to select an LEA to serve as the lead entity. For its part, CDE estimates costs of about $203,500 to $273,500 in 2026-27 and $198,000 to $268,000 in 2027-28 for one or two staff positions, operating expenses and equipment, and Statewide Cost Allocation Plan (General Fund).
3. Minor and absorbable costs to DHCS to provide consultation.

The Legislative Analyst’s Office recently warned of General Fund structural deficits of around $35 billion per year in the 2027-28 fiscal year and ongoing.

COMMENTS:

1. Purpose. This bill is sponsored by the Monterey County Office of Education (COE). According to the author:

For too many families on the Central Coast and in rural communities, mental health care is limited or simply out of reach. [This bill] helps close that gap by giving schools a real pathway to deliver and sustain early behavioral health services.

1. Background. CYBHI. The CYBHI is a multi-pronged initiative that began in 2021 and aims to promote the mental health and wellness of California’s children and teens. The initiative works across four strategic areas (workforce training and capacity, behavioral health ecosystem infrastructure, coverage, and public awareness) and contains numerous individual programs and initiatives. Most CYBHI initiatives are time-limited and focused on building infrastructure and capacity of the behavioral health system for children.
   
   CYBHI Fee Schedule. Of the various components of CYBHI, the CYBHI Fee Schedule has the potential to have the most significant long-term impact on the provision of services because it is the only initiative designed to create an ongoing funding source to support the delivery of behavioral health in schools and in school-linked settings. State law requires DHCS to develop and maintain a multi-payer, school-linked statewide fee schedule for mental health or substance use disorder services provided to a student 25 years of age or younger at or near a school site​. State law also requires Medi-Cal managed care and commercial plans and insurers to reimburse for such school site services designated by DHCS, at or above the fee schedule rate, regardless of whether the school site is a network provider, and without subjecting services to prior authorization or cost-sharing. This means plans are prohibited from applying any copayment, coinsurance, or deductible that would normally apply to the service rendered.
   
   The CYBHI Fee Schedule requires payers to reimburse LEAs or institutions of higher education (IHEs) for a set of services provided at a school site, as defined. The services are provided by or arranged by the LEAs. Specifically, LEAs can provide the services “in-house” with their own staff or arrange for the provision of services through community-based providers that provide services at the school or otherwise partner with the LEA to provide services to students. In this context, “school site” means a facility or location used for public kindergarten, elementary, secondary, or postsecondary purposes. It also includes a community-based facility or location, if the school or school district provides or arranges for the provision of services to its students at that location, including off-campus clinics, mobile counseling services, and similar locations.
   
   Implementation of the Fee Schedule. DHCS and participating LEAs and IHEs have made significant, if slow, progress in implementing the Fee Schedule. The limited number of LEAs that have successfully submitted claims are disproportionately larger, better-resourced districts and COEs, which tend to have the staffing, administrative expertise, and economies of scale required to implement medical billing infrastructure. As one-time funds expire, the bill sponsor, Monterey COE, notes that under-resourced entities, including small and rural LEAs are at risk of being left without an ongoing funding source for behavioral health services.

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

Date of Hearing: April 22, 2026

ASSEMBLY COMMITTEE ON EDUCATION

Darshana R. Patel, Chair

ABPCA Bill Id:AB 2704 (

Author:Addis) – As Amended Ver:March 19, 2026

SUBJECT: Statewide Fee Schedule Pilot Program

SUMMARY: Creates a pilot program to provide intensive technical assistance and support to help small and rural school districts, and programs serving children under five years of age or transition-age youth, participate in the Children and Youth Behavioral Health Initiative (CYBHI) Fee Schedule, wherein those entities can receive reimbursement for behavioral health services provided to children and youth. Requires the California Department of Education (CDE) to provide funding to the Monterey County Office of Education (COE) to administer the pilot, subject to appropriation. Specifically, this bill:

1. Establishes the Statewide Fee Schedule Pilot Program to serve the following purposes:
2. To address inconsistent access to the statewide fee schedule caused by the limited capacity and expertise of small and rural schools, early learning and care providers, and institutions of higher education serving transition-age youth in billing for behavioral health claims;
3. To increase the number of behavioral health services provided to children who are 0 to 5 years of age, students attending small and rural schools, and transition-age youth; and
4. To reduce the burden of participating in the school-linked statewide fee schedule for entities providing behavioral health services to underserved communities and groups.
5. Requires the pilot lead, in coordination with the Department of Health Care Services (DHCS), to select 25 entities to participate in the pilot program for up to 3 years and requires the prioritization of applicants who will do one or more of the following:
6. Increase the number of children 0 to 5 years of age receiving behavioral health services;
7. Increase the number of transition-age youth 16 to 25 years of age receiving behavioral health services;
8. Increase the number of children and youth enrolled in small school districts that receive behavioral health services;
9. Increase the number and amount of statewide fee schedule reimbursements;
10. Increase the number and amount of statewide fee schedule reimbursements being utilized to support community schools;
11. Provide diverse representation of communities and geographic areas throughout the state;
12. Operate in communities with higher proportions of unduplicated students; and
13. Ensure behavioral health service providers have past experience, and specialize in serving children and youth of the age that the entity intends to serve.
14. Requires by February 1, 2027, the pilot lead to create and publish a brief application for those interested in participating in the pilot program, including the following information:
15. The number and age of children and youth currently enrolled at the entity;
16. The number and age of children and youth currently receiving behavioral health services from the entity or an affiliated provider that the entity has designated;
17. The number and qualifications of behavioral health service providers, including affiliated providers, currently offering behavioral health services to children and youth enrolled at the entity;
18. The entity’s interest in, and capacity to, increase behavioral health services to children and youth in their community; and
19. The entity’s current ability to meet the minimum qualifications required to participate in the school-linked statewide behavioral health provider network and the completed fee schedule cohort readiness application created by the DHCS.
20. Requires the pilot lead, between April 1, 2027, and July 1, 2030, to provide intensive technical assistance and support to the entities participating in the statewide fee schedule pilot program, including, but not limited to, technical assistance and support with the following activities:
21. Obtaining national provider identification numbers and completing the statewide fee schedule credentialing process for all employees and affiliated providers that will offer services within scope of services covered by the statewide fee schedule;
22. Obtaining an easy to navigate and integrate electronic health records system that is made available to all pilot participants, at no charge, for documentation and submission of claims;
23. Assistance in determining the applicability of privacy laws, including, but not limited to, the Family Educational Rights and Privacy Act (FERPA) and the Health Insurance Portability and Accountability Act (HIPAA), to each participating entity. This may include legal and technology supports necessary to adopt the policies, documents, and forms required by applicable privacy laws, including, but not limited to, consent forms, privacy notices, and data policies;
24. Providing training and coaching for behavioral health service providers related to documentation of services, proper coding and noting procedures, obtaining required consents, applicable privacy laws and disclosure requirements, and referral protocols, including escalation of services;
25. Obtaining and maintaining health plan information for each individual receiving services, including conducting insurance discovery and follow up activities where information is absent;
26. Review of all claims prior to submission to ensure services are appropriately coded, documented, and noted, with the goal of increasing the likelihood of submitting a clean claim; and
27. Submission of claims on the entities’ behalf, including providing assistance to the entity to resolve any potential issues or missing documentation causing the denial of a claim.
28. Authorizes the pilot lead to subcontract with additional experts, as needed, to fulfill the requirements of this pilot program.
29. Requires the pilot lead, by January 1, 2028 to submit a report to the Legislature on the progress of the statewide fee schedule pilot program, including but not limited to, all of the following:
30. The number of and names of entities accepted to participate in the pilot program;
31. The number of entities that have completed the minimum qualifications required to participate in the school-linked statewide behavioral health provider network, established pursuant to Section 5961.4, and the fee schedule cohort readiness application created by the State Department of Health Care Services;
32. The number of entities participating in the pilot program that have completed training and onboarding with an electronic health records system, and adopted required data sharing policies, privacy notices, and disclosure and release forms;
33. The number of behavioral health service providers that have completed the statewide fee schedule certification process, including obtaining a National Provider Identifier;
34. The number of children and youth, disaggregated by age, that have been enrolled in an electronic health records system; and
35. The percentage of children and youth with verified health plan information in an electronic health records system and completed consent forms.
36. Requires the pilot lead, by January 1, 2031, to submit a summative report to the Legislature on the success of the pilot program in achieving the specified goals, including but not limited to all of the following:
37. The number of claims submitted by pilot participants from small and rural school districts;
38. The number of claims submitted by pilot participants for services provided to children 0 to 5 years of age, inclusive;
39. The number of claims submitted by pilot participants for services provided to transition-age youth;
40. The total number of claims submitted by pilot participants and the percent of claims that are approved and paid;
41. The total value of claims submitted by pilot participants; and
42. The total number of behavioral health services providers, including affiliated providers, authorized by pilot participants to provide services.
43. Requires the CDE to allocate funds to the Monterey COE to administer the fee schedule pilot program over a three-year period, upon an appropriation by the Legislature.

EXISTING LAW:

1. Establishes the CYBHI, administered by the California Health and Human Services Agency and its departments, to transform the state’s behavioral health system into an innovative ecosystem in which all children and youth 25 years of age and younger, regardless of payer, are screened, supported, and served for emerging and existing behavioral health needs. (Welfare and Institutions Code (WIC) 5961)
2. Requires the DHCS to develop and maintain a school-linked statewide fee schedule for outpatient mental health or substance use disorder treatment provided to a student who is 25 years of age or younger at a schoolsite. (WIC 5961.4)
3. Requires the CDE to establish the Office of School-Based Health by January 1, 2022 to assist local educational agencies (LEAs) regarding health-related programs and to collaborate with the DHCS and other departments and agencies involved in the provision of school-based health services. (Education Code (EC) 49421)
4. Establishes the School Health Demonstration Project and appropriates $5 million to the CDE to expand comprehensive health and mental health services to public school pupils by providing LEAs with intensive assistance and support to build the capacity for long-term sustainability by leveraging multiple revenue sources. (EC 49421)
5. Requires the CDE, by June 1, 2025, to develop model referral protocols for addressing student mental health concerns, in consultation with specified agencies and stakeholders, and authorizes these protocols to be used on a voluntary basis by schools. (EC 49428.1)
6. Requires the governing boards or bodies of LEAs, by January 31, 2026, to adopt at a regularly scheduled meeting, a policy on referral protocols for addressing student behavioral health concerns of students in grades 7 to 12. (EC 49428.2)

FISCAL EFFECT: The Office of Legislative Counsel has keyed this bill as a possible state-mandated local program.

COMMENTS:

Need for the bill. According to the author, “For too many families on the Central Coast and in rural communities, mental health care is limited or simply out of reach. AB 2704 helps close that gap by giving schools a real pathway to deliver and sustain early behavioral health services.”

This bill would establish a pilot program to provide additional intensive technical assistance to increase participation in the CYBHI by educational entities serving children from 0-5, those in small or rural communities, and those serving transition age youth.

CYBHI. The CYBHI is a multi-pronged initiative that began in 2021 and aims to promote the mental health and wellness of California’s children and teens. The initiative works across four strategic areas (workforce training and capacity, behavioral health ecosystem infrastructure, coverage and public awareness) and contains numerous individual programs and initiatives. Most initiatives are time-limited and focused on building infrastructure and capacity of the behavioral health system for children.

CYBHI Fee Schedule. Of the various components of CYBHI, the CYBHI Fee Schedule has the potential to have the most significant long-term impact in the provision of services because it is the only initiative designed to create an ongoing funding source to support the delivery of behavioral health in schools and in school-linked settings.

State law requires DHCS to develop and maintain a multi-payer, school-linked statewide fee schedule for mental health or substance use disorder services provided to a student 25 years of age or younger at or near a school site​. State law also requires Medi-Cal managed care and commercial plans and insurers to reimburse for such schoolsite services designated by DHCS, at or above the fee schedule rate, regardless of whether the school site is a network provider, and without subjecting services to prior authorization or cost-sharing. This means plans are prohibited from applying any copayment, coinsurance, or deductible that would normally apply to the service rendered, based on the plan design.

The CYBHI Fee Schedule requires payers to reimburse LEAs or institutions of higher education (IHEs) for a set of services provided at a school site, as defined. The services are provided by or arranged by the LEAs. Specifically, LEAs can provide the services “in-house” with their own staff or arrange for the provision of services through community-based providers that provide services at the school or otherwise partner with the LEA to provide services to students.

In this context, “school site” means a facility or location used for public kindergarten, elementary, secondary, or postsecondary purposes. It also includes a community-based facility or location, if the school or school district provides or arranges for the provision of services to its students at that location, including off-campus clinics, mobile counseling services, and similar locations.

To implement the fee schedule, DHCS has onboarded LEAs and IHEs into implementation “cohorts,” each selected based on operational readiness. The selection process considers factors such as Medi-Cal enrollment, service delivery infrastructure and capacity, data collection and documentation, and billing infrastructure. In addition, the state has selected Carelon Behavioral Health as the third-party administrator who serves as the statewide clearinghouse that receives and adjudicates claims from LEAs, and pays these claims on behalf of health plans. Carelon is also responsible for credentialing school-based providers for participation in the statewide fee schedule, as well as providing training and technical assistance to participating LEAs.

Implementation of the Fee Schedule. DHCS and participating LEAs and IHEs have made significant, if slow, progress in implementing the Fee Schedule. As of March 30, 2026:

1. 700 LEAs and IHEs are enrolled in the CYBHI Fee Schedule program;
2. 3.6M students enrolled across participating schoolsites;
3. 169 LEAs/IHEs (including 8 school-linked providers) have submitted claims;
4. $7.35 million in unique clean claims (includes all in-process and approved claims) have been submitted for reimbursement;
5. 121,397 claims have been reimbursed, totaling $6.84 million in new revenue for LEAs and IHEs;
6. 31,567 unique students have received services submitted for reimbursement; and,
7. 36 Managed Care Plans/Insurers are represented in the claims data.

The limited number of LEAs that have successfully submitted claims are disproportionately larger, better-resourced districts and COEs, which tend to have the staffing, administrative expertise, and economies of scale required to implement medical billing infrastructure. As one-time funds expire, the bill sponsor, Monterey COE, notes that under-resourced entities, including small and rural LEAs are at risk of being left without an ongoing funding source for behavioral health services.

Significant mental health problems in young children. Children can exhibit characteristics of anxiety disorders, attention-deficit/hyperactivity disorder, depression, post-traumatic stress disorder, and neurodevelopmental disabilities at an early age. Research suggests that approximately 9 to 14% of children from birth to 5-years-old experience emotional or behavioral disorders.

Factors such as persistent poverty, recurrent abuse or chronic neglect, exposure to domestic violence, parental mental health issues or substance abuse, as well as poor childcare conditions, increase the risk of serious mental health problems among young children.

Left untreated, early mental health disorders can impact every aspect of a child’s development, including physical, cognitive, communication, sensory, emotional, social, and motor skills. These negative impacts can affect a child’s ability to succeed in school and in life and increase the risk of poor educational outcomes, ill health, and juvenile delinquency later in life. (Harvard University, 2013).

Early intervention is critical in addressing early mental health concerns. Research finds that early prevention and treatment of mental health disorders is considered more beneficial and cost-effective than attempting to treat emotional difficulties and their effects on learning and health after they become more serious. During the infant and toddler years, there are opportunities to treat mental health problems before they manifest into more severe problems later in life. It is critical to treat young children’s mental health issues within the context of their families, homes, and communities. The emotional well-being of young children is directly connected to the functioning of their families and caregivers.

School-Based Behavioral Health Services. Behavioral health services for children and transition-age youth function as forms of early intervention and preventive care, which can help avoid long-term or future unnecessary and costly mental health interventions, such as crisis stabilization, emergency department visits, or inpatient psychiatric hospitalization. Students are more likely to receive behavioral health services when they are provided on a school campus because it eliminates the need for transportation to off-site appointments, facilitates parent participation, encourages student self-referral, and increases the likelihood of completing treatment. In addition, school-based mental health professionals can better identify aggravating causal factors based on their more holistic knowledge of a student.

Consortium Models. According to DHCS, LEAs and IHEs may enroll in the CYBHI Fee Schedule program individually or as part of a consortium. Consortia are another option to support LEAs and IHEs who may lack the capacity to administer all of the activities related to the fee schedule. A consortium model allows one or more LEAs and an IHE to share administration services for claims submission and reimbursements. In a consortium, one Lead LEA or one Lead IHE serves as an intermediary between the participating Consortium members (participating member LEAs) and Carelon Behavioral Health, the third-party administrator. The specific consortium model may vary depending on which program requirements (e.g., data sharing, submitting claims, receiving reimbursement) are delegated to a Lead LEA or IHE by its participating members. For example, the Lead LEA or IHE may be responsible for collecting and submitting required pre-requisite documentation and claims, as well as receiving and distributing payments on behalf of consortium members.

Distinction between this bill and other technical assistance contracts and materials. DHCS and its contractors have provided and continue to provide technical assistance, training, responses to questions, toolkits, and other resources, in addition to grant providing funding for capacity-building. However, the cultural and administrative differences between health care programs and education entities are vast, staffing and expertise to implement such a technically complex program as the fee schedule is limited, and in spite of all the resources and effort that has been expended on technical assistance thus far, many LEAs and IHEs are still struggling to operationalize the fee schedule. The sponsor of this bill explains that many LEAs and IHEs lack the capacity to process and make use of the available resources, and really just need hands-on, direct help operationalizing the various aspects of the fee schedule, which is what this bill would allow a lead entity to do.

Recommended Committee Amendments. Committee staff recommend the bill be amended as follows:

1. Change the name of the pilot to “The Statewide Fee Schedule Intensive Technical Support for Onboarding Program”;
2. Clarify who is eligible to participate in the pilot;
3. Specify that up to 25 entities may participate in the pilot;
4. Remove Monterey COE as lead entity and provide qualifications to be considered by the CDE in selecting the lead entity;
5. Adjust the timelines to provide time for CDE to solicit applications, select, and contract with the lead entity;
6. Clarify the scope of the technical assistance to be provided by the lead entity; and
7. Other technical and conforming changes.

Arguments in support. The Monterey County Office of Education writes, “With the help of the DHCS, LEAs have made significant progress in implementing the Fee Schedule over the last 5 years. However, as of March 2026 less than 10% of LEAs had submitted claims and just $4.9 million had been reimbursed to LEAs for behavioral health services. Of those LEAs who have submitted claims, nearly all are larger and better-resourced districts and county offices of education, which have the staff, expertise, and economies of scale required to implement medical billing infrastructure. Meanwhile, no claims have been submitted for services provided to children ages 0 to 5 and few have been submitted by small and rural schools or community colleges.

Without targeted intervention for under-resourced entities, the Fee Schedule will widen—not close—inequities in access to behavioral health services. AB 2704 would help to address this gap by establishing a three-year Fee Schedule Pilot Program that is intentionally designed to correct the imbalance in participation among entities providing behavioral health services to children ages 0 to 5, small and rural schools, and community colleges. The Pilot Lead would provide intensive technical assistance to help entities surmount barriers currently preventing participation in the Fee Schedule, including meeting Medi-Cal pre-requisites, adopting necessary disclosures and releases, determining the applicability of various privacy laws, conducting insurance discovery, training staff on privacy and billing requirements, and implementing an EHR to support billing and documentation.

In addition to drawing down more federal dollars to support students, the Fee Schedule Pilot would also help to address repercussions created by COVID-19’s disruption to early learning environments and social-emotional development. Since the pandemic, California has experienced significant increases in behavioral challenges among children in preschool and early grades, as well as a surge in the identification of children for special education services. Increased access to the early intervention services covered by the Fee Schedule could help address these behavioral challenges and mitigate rising special education costs.

As Members of the Committee consider policy and budget priorities this year, we urge you to support AB 2704 and appropriate $50 million one-time dollars to fund the Pilot Program.”

Related legislation. AB 2429 (B. Rubio) of the 2025-26 Session would require the early childhood mental health consultation service used in a childcare setting to employ an early care and education classroom observation tool once per year to inform the specific activities and support the consultant will provide.

AB 121 (Committee on Budget), Chapter 8, Statutes of 2025, appropriates $20 million one-time Proposition 98 General Fund to the CDE to allocate the funds to Sacramento COE, in partnership with the Santa Clara COE, no later than October 2025. Specifies funds will be administered through the capacity grant infrastructure, as established by the CYBHI, to LEAs to support, in the order of priority: (1) to prevent the disruption of youth mental health services; and (2) to provide technical assistance to LEAs for the continued implementation of the statewide fee schedule.

SB 153 (Committee on Budget and Fiscal Review) Chapter 38, Statutes of 2024, requires the CDE, as of June 1, 2025, to develop model referral protocols for addressing student behavioral health concerns, for use, on a voluntary basis, by LEAs and requires LEAs to adopt a policy on referral protocols for addressing student behavioral health concerns in grades 7 to 12 by January 31, 2026.

AB 133 (Committee on Budget) Chapter 143, Statutes of 2021, establishes the framework for the CYBHI and the Fee Schedule Program, among other components of the CYBHI.

AB 2052 (Jones-Sawyer) of the 2023-24 Session would have updated and expanded the School-based Health Center Support Program, requiring the CDPH, in collaboration with the Office of School-Based Health Programs at the CDE, to provide technical assistance to school-based health centers (SBHCs). The bill also would have increased funding for new and existing SBHC facilities, contingent upon an appropriation. The bill was held in the Assembly Appropriations Committee.

AB 2034 (O’Donnell & Wood) of the 2021-22 Session would have required DHCS to revise its audit process for the Local Education Agency Medi-Cal Billing Option Program (LEA BOP) and provide technical assistance to LEAs. This bill was held in the Senate Education Committee.

AB 438 (Muratsuchi & Wood) Chapter 527, Statutes of 2023 modifies and imposes new requirements related to timelines, reporting, technical assistance, stakeholder engagement, and guidance for the LEA BOP, a program that allows schools to claim reimbursement for a portion of the cost of delivering health services to Medi-Cal eligible students.

AB 2022 (Chu) Chapter 484, Statutes of 2018, requires each school of a school district or COE, and each charter school, to notify students and parents or guardians of students, at least twice per school year, about how to initiate access to available student mental health services on campus or in the community.

AB 130 (Committee on Budget) Chapter 44, Statutes of 2021 requires the CDE to establish the Office of School-Based Health by January 1, 2022 to assist LEAs regarding the current health-related programs under the purview of the department. The scope of the office also includes collaborating with the DHCS and other departments and offices involved in the provision of school-based health services; establishes the School Health Demonstration Project and appropriates $5 million in one-time funding to the CDE to establish a pilot project to expand comprehensive health and mental health services to public school pupils by providing LEAs with intensive assistance and support to build the capacity for long-term sustainability by leveraging multiple revenue sources.

AB 586 (O’Donnell, Salas, & Wood) of the 2021-22 Session, would have established, subject to an appropriation for this purpose, the School Health Demonstration Project to provide intensive technical assistance to selected LEAs to enable the long-term sustainable provision of health and mental health services to pupils. This bill was held in the Senate Education Committee.

REGISTERED SUPPORT / OPPOSITION:

Support

Alameda County Office of Education

California Youth Empowerment Network

EveryChild California

First 5 Association of California

Fresno County Office of Education

Kidango

Monterey County Office of Education

The Children's Partnership

Opposition

None on file

Analysis Prepared by: Debbie Look / ED. / (916) 319-2087

Date of Hearing: April 14, 2026

ASSEMBLY COMMITTEE ON HEALTH

Mia Bonta, Chair

ABPCA Bill Id:AB 2704

Author:(Addis) – As Amended Ver:March 19, 2026

SUBJECT: Statewide Fee Schedule Pilot Program.

SUMMARY: Creates a pilot program to provide intensive technical assistance and support to help small and rural school districts, and programs serving children under five years of age or transition-age youth, participate in the Children and Youth Behavioral Health Initiative (CYBHI) Fee Schedule, wherein those entities can receive reimbursement for behavioral health services provided to children and youth.

EXISTING LAW:

1. Establishes the CYBHI, administered by the California Health and Human Services Agency and its departments, to transform the state’s behavioral health system into an innovative ecosystem in which all children and youth 25 years of age and younger, regardless of payer, are screened, supported, and served for emerging and existing behavioral health needs. [Welfare and Institutions Code (WIC) § 5961, et seq.] 
2. Requires Department of Health Care Services (DHCS) to develop and maintain a school-linked statewide fee schedule for outpatient mental health or substance use disorder treatment provided to a student who is 25 years of age or younger at a schoolsite. [WIC § 5961.4]
3. Establishes the Department Managed Health Care (DMHC) to regulate health plans under the Knox-Keene Health Care Service Plan Act of 1975 and California Department of Insurance (CDI) to regulate health insurers. [Health and Safety Code (HSC) § 1340, et seq. and Insurance Code (INS) § 106, et seq.]
4. Establishes the Medi-Cal program, which is administered by DHCS, and under which qualified low-income individuals receive health care services. [WIC § 14000, et seq.]
5. Requires providers of medically necessary schoolsite services to be reimbursed by health care service plans, insurers, and Medi-Cal managed care plans, at a minimum, at the fee schedule rate or rates, regardless of network provider status. [HSC § 1374.722; INS § 10144.53; and WIC § 5961.4.]

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

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, for too many families on the Central Coast and in rural communities, mental health care is limited or simply out of reach. The author states this bill helps close that gap by giving schools a real pathway to deliver and sustain early behavioral health services.
2. BACKGROUND.
   1. School-Based Behavioral Health Services. Behavioral health services for children and transition-age youth function as forms of early intervention and preventive care, which can help avoid long-term or future unnecessary and costly mental health interventions, such as crisis stabilization, emergency department visits, or inpatient psychiatric hospitalization. Students are more likely to receive behavioral health services when they are provided on a school campus because it eliminates the need for transportation to off-site appointments, facilitates parent participation, encourages student self-referral, and increases the likelihood of completing treatment. In addition, school-based mental health professionals can better identify aggravating causal factors based on their more holistic knowledge of a student.
   2. CYBHI. The CYBHI is a multi-pronged initiative that began in 2021 and aims to promote the mental health and wellness of California’s children and teens. The initiative works across four strategic areas (workforce training and capacity, behavioral health ecosystem infrastructure, coverage and public awareness) and contains numerous individual programs and initiatives. Most initiatives are time-limited and focused on building infrastructure and capacity of the behavioral health system for children.
   3. CYBHI Fee Schedule. Of the various components of CYBHI, the CYBHI Fee Schedule has the potential to have the most significant long-term impact, because it is the only initiative designed to create an ongoing funding source to support the delivery of behavioral health in schools and in school-linked settings.

State law requires DHCS to develop and maintain a multi-payer, school-linked statewide fee schedule for medically necessary outpatient mental health or substance use disorder services provided to a student 25 years of age or younger at or near a school site​. State law also requires Medi-Cal managed care and commercial plans and insurers to reimburse for such schoolsite services designated by DHCS, at or above the fee schedule rate, regardless of whether the school site is a network provider, and without subjecting services to prior authorization or cost-sharing. This means plans are prohibited from applying any copayment, coinsurance, or deductible that would normally apply to the service rendered, based on the plan design.

The CYBHI Fee Schedule requires payers to reimburse local educational agencies (LEAs) or institutions of higher education (IHEs) for a set of services provided at a school site, as defined. The services are provided by or arranged by the LEAs. Specifically, LEAs can provide the services “in-house” with their own staff or arrange for the provision of services through community-based providers that provide services at the school or otherwise partner with the LEA to provide services to students. Key design details of the CYBHI Fee Schedule are shown on the next page.

*“School site” means a facility or location used for public kindergarten, elementary, secondary, or postsecondary purposes. It also includes a community-based facility or location, if the school or school district provides or arranges for the provision of services to its students at that location, including off-campus clinics, mobile counseling services, and similar locations.

** Applies to plans and insurers to the extent the plan or insurer is required to provide coverage for medically necessary treatment of mental health and substance use disorders.

To implement the fee schedule, DHCS has onboarded LEAs and IHEs in implementation “cohorts,” with each cohort selected based on operational readiness. The selection process considers factors such as Medi-Cal enrollment, service delivery infrastructure and capacity, data collection and documentation, and billing infrastructure. In addition, the state has selected Carelon Behavioral Health as the third-party administrator who serves as the statewide clearinghouse that receives and adjudicates claims from LEAs, and pays these claims on behalf of health plans. Carelon is also responsible for credentialing school-based providers for participation in the Fee Schedule on behalf of the state, as well as providing training and technical assistance to participating LEAs.

1. Implementation of the Fee Schedule. DHCS and participating LEAs and IHEs have made significant, if slow, progress in implementing the Fee Schedule. As of March 30, 2026:
   • 1. ⁓700 LEAs and IHEs are enrolled in the CYBHI Fee Schedule program;
     2. ⁓3.6M students enrolled across participating schoolsites;
     3. 169 LEAs/IHEs (including 8 school-linked providers) have submitted claims;
     4. $7.35 million in unique clean claims (includes all in-process and approved claims) have been submitted for reimbursement;
     5. 121,397 claims have been reimbursed, totaling $6.84 million in new revenue for LEAs and IHEs;
     6. 31,567 unique students have received services submitted for reimbursement; and,
     7. 36 Managed Care Plans/Insurers are represented in the claims data.

The limited number of LEAs that have successfully submitted claims are disproportionately larger, better-resourced districts and county offices of education, which tend to have the staffing, administrative expertise, and economies of scale required to implement medical billing infrastructure. As one-time funds expire, the bill sponsor, Monterey County Office of Education, notes that under-resourced entities, including small and rural LEAs are at risk of being left without an ongoing funding source for behavioral health services.

1. Consortium Models. According to DHCS, LEAs and IHEs may enroll in the CYBHI Fee Schedule program individually, or as part of a consortium. Consortia are another option to support LEAs and IHEs who may lack the capacity to administer all of the activities related to the Fee Schedule. A consortium model allows an LEA and IHE to share administration services for claims submission and reimbursements. In a consortium, one Lead LEA or one Lead IHE serves as an intermediary between the participating Consortium members (participating member LEAs) and Carelon Behavioral Health, the third-party administrator. The specific consortium model may vary depending on which program requirements (e.g., data sharing, submitting claims, receiving reimbursement) are delegated to a Lead LEA or IHE by its participating members. For example, the Lead LEA or IHE may be responsible for collecting and submitting required pre-requisite documentation and claims, as well as receiving and distributing payments on behalf of consortium members.
2. Distinction Between this Bill and Other Technical Assistance Contracts and Materials. DHCS and its contractors have provided and continue to provide significant technical assistance, training, responses to questions, toolkits, and other resources, in addition to grant providing funding for capacity-building. However, the cultural and administrative differences between health care programs and education entities are vast, staffing and expertise to implement such a technically complex program as the Fee Schedule is limited, and in spite of all the resources and effort that has been expended on technical assistance thus far, many LEAs and IHEs are still struggling to operationalize the Fee Schedule. The sponsor of this bill explains that many LEAs and IHEs lack the capacity to process and make use of the available resources, and really just need hands-on, direct help operationalizing the various aspects of the Fee Schedule, which is what this bill would allow a lead entity to do.
3. SUPPORT. This bill is sponsored by the Monterey County Office of Education and supported by Alameda County Office of Education and children’s advocates. Supporters say that without targeted intervention for under-resourced entities, the Fee Schedule will widen, not close, inequities in access to behavioral health services. Supporters say this bill would help to address this gap by establishing a three-year program that is intentionally designed to provide the support certain LEAs and IHEs need to operationalize the Fee Schedule and fund behavioral health services for the children and youth they serve.
4. PREVIOUS LEGISLATION.
   1. AB 121 (Committee on Budget), Chapter 8, Statutes of 2025, appropriates $20 million one-time Proposition 98 General Fund to the Department of Education to allocate the funds to Sacramento County Office of Education, in partnership with Santa Clara County Office of Education, no later than October 2025. Specifies funds will be administered through the capacity grant infrastructure, as established by the CYBHI, to local educational agencies to support, in the order of priority: (1) to prevent the disruption of youth mental health services; and (2) to provide technical assistance to local educational agencies for the continued implementation of the statewide fee schedule.
   2. AB 133 (Committee on Budget), 2021) establishes the framework for the CYBHI and the Fee Schedule Program, among other components of the CYBHI.
5. POLICY COMMENTS. It is clear that certain entities will need additional support to participate in the Fee Schedule and commence receiving reimbursements for behavioral health services provided to students, consistent with the vision of the CYBHI Fee Schedule. To ensure clarity in operation, in consultation with the Assembly Education Committee, this bill should be amended to address several issues, including:
   1. Rename the program to provide clarity about the program’s purpose, such as calling it the “Statewide Fee Schedule Intensive Technical Support for Onboarding Program”;
   2. Re-draft in an appropriate Education Code section and clearly designate California Department of Education as the department overseeing the program;
   3. Strike the designation of Monterey County Office of Education as the lead entity and instead require a request for proposals (RFP) and establish appropriate criteria for such an entity;
   4. Ensure realistic time frames for program milestones aligned with the timeline required to issue an RFP;
   5. Clarify that the program is intended to provide intensive, temporary technical support to “onboard” participants in the Fee Schedule, including clarifying which activities are direct services to support Fee Schedule implementation versus technical assistance;
   6. Restructure some of the criteria for entities to be selected as participating LEAs or IHEs as factors to prioritize, versus requirements;
   7. Require participating entities to be an LEA or IHE; and,
   8. Other minor, clarifying, and conforming amendments.

Because this bill is double-referred to the Assembly Education Committee, amendments will be adopted in that committee.

REGISTERED SUPPORT / OPPOSITION:

Support

Monterey County Office of Education (sponsor)
Alameda County Office of Education
California Youth Empowerment Network
Everychild California
First 5 Association of California
Kidango
The Children's Partnership

Opposition

None on file

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