Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan contract or health insurance policy issued, amended, renewed, or delivered on or after January 1, 2024, that provides coverage for medically necessary treatment of mental health and substance use disorders to cover the provision of those services to an individual 25 years of age or younger when delivered at a schoolsite.

This bill would expand the definition of schoolsite to additionally require a contract or policy that provides coverage for medically necessary treatment of mental health and substance use disorders to cover the provision of those services to an individual 25 years of age or younger when delivered at a qualified youth drop-in center. Because a violation of this requirement relative to health care service plans would be a crime, the bill would create a state-mandated local program.

Existing law provides for the Medi-Cal program, administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions. Existing law requires a Medi-Cal managed care plan or Medi-Cal behavioral health delivery system to reimburse providers of medically necessary outpatient mental health or substance use disorder treatment provided at a schoolsite to a student 25 years of age or younger who is an enrollee of the plan or delivery system, as specified.

Because of the expansion of the definition of schoolsite to include qualified youth drop-in centers, this bill would expand the above-described reimbursement requirement to those services when provided at a qualified youth drop-in center, as specified.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan contract or health insurance policy issued, amended, renewed, or delivered on or after January 1, 2024, that provides coverage for medically necessary treatment of mental health and substance use disorders to cover the provision of those services to an individual 25 years of age or younger when delivered at a schoolsite.

This bill would additionally require a contract or policy that provides coverage for medically necessary treatment of mental health and substance use disorders to cover the provision of those services to an individual 25 years of age or younger when delivered at a qualified youth drop-in center. Because a violation of this requirement relative to health care service plans would be a crime, the bill would create a state-mandated local program.

Existing law provides for the Medi-Cal program, administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions. Existing law requires a Medi-Cal managed care plan or Medi-Cal behavioral health delivery system to reimburse providers of medically necessary outpatient mental health or substance use disorder treatment provided at a schoolsite to a student 25 years of age or younger who is an enrollee of the plan or delivery system, as specified.

This bill would expand the above-described reimbursement requirement to those services when provided at a qualified youth drop-in center, as specified.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan contract or health insurance policy issued, amended, renewed, or delivered on or after January 1, 2024, that provides coverage for medically necessary treatment of mental health and substance use disorders to cover the provision of those services to an individual 25 years of age or younger when delivered at a schoolsite.

This bill would additionally require a contract or policy that provides coverage for medically necessary treatment of mental health and substance use disorders to cover the provision of those services to an individual 25 years of age or younger when delivered at a qualified youth drop-in center. Because a violation of this requirement relative to health care service plans would be a crime, the bill would create a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan contract or health insurance policy issued, amended, renewed, or delivered on or after January 1, 2024, that provides coverage for medically necessary treatment of mental health and substance use disorders to cover the provision of those services to an individual 25 years of age or younger when delivered at a schoolsite.

This bill would additionally require a contract or policy that provides coverage for medically necessary treatment of mental health and substance use disorders to cover the provision of those services to an individual 25 years of age or younger when delivered at a qualified youth drop-in center. Because a violation of this requirement relative to health care service plans would be a crime, the bill would create a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Date of Hearing: August 20, 2025

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

SBPCA Bill Id:SB 812

Author:(Allen) – As Amended Ver:July 17, 2025

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

SUMMARY:

This bill defines a “qualified youth drop-in center” as a type of provider that may directly bill Medi-Cal and commercial health plans and insurers for services provided pursuant to the Children and Youth Behavioral Health Initiative (CYBHI) fee schedule published by the Department of Health Care Services (DHCS).

Specifically, this bill:

1. Defines, for the purposes of Medi-Cal and commercial health plans and insurers, a “qualified youth drop-in center” to mean a center that provides behavioral health and wellness services to youth up to and including 25 years of age or to youth 12 through 25 years of age, and meets the following criteria:
   
   1. Provides at least one or more additional youth services, including health services, services to support youth education and employment, and services to assist families to support youth.
      
   2. Has the capacity to provide services before and after school hours.
      
   3. Has been designated by or embedded with a local educational agency (LEA) or institution of higher education (IHE) for the purposes of this section.
      
   4. Has a physical location and offers face-to-face services.
      
   5. Is operated by a nonprofit entity, local government agency, or a federally recognized Indian tribe, tribal organization, urban Indian organization, or other tribal entity as designated by the department.
      
2. Expands the definition of “schoolsite” to include qualified youth drop-in centers.
   
3. Requires a student’s health plan or insurance directly reimburse an affiliated provider who is designated by an LEA or IHE to directly submit claims and receive reimbursement for fee schedule services.

FISCAL EFFECT:

Costs to DHCS of an unknown amount, potentially hundreds of thousands of dollars or more per year for DHCS to (1) add the ability to directly reimburse a qualified youth drop-in center for behavioral health services and (2) reimburse for an increased number of services provided through the addition of youth drop in centers. There could be additional cost pressures to the extent Medi-Cal managed care plans incur higher costs if this bill expands access to services (General Fund, federal funds).

Minor and absorbable costs to the Department of Managed Health Care.

No costs to the Department of Insurance.

COMMENTS:

1. Purpose. This bill is sponsored by Beach Cities Health District. According to the author:

Many young Californians face serious mental health challenges and innovative programs like [CYBHI] have made critical progress for young people to access outpatient mental health and substance use disorder support when, where, and how they need it. CYBHI-affiliated youth drop-in centers provide a trusted location for young people to access confidential care and build community. The CYBHI has a reimbursable Fee Schedule funding model which allows schools to charge insurers for services provided. However, youth centers face additional bureaucratic barriers to access the Fee Schedule. SB 812 would allow CYBHI-affiliated youth drop-in centers to directly access the Fee Schedule, providing a sustainable funding source for these centers and expanding access to confidential and stigma-free care.

1. Background. To address the crisis in children’s mental health, the Budget Act of 2021 included a $4.4 billion investment in CYBHI to transform behavioral health services for children and youth. The CYBHI fee schedule is designed to create a sustainable funding source to support the delivery of behavioral health in schools and school-linked settings. The law requires DHCS develop and maintain the 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. The law also requires Medi-Cal managed care and commercial plans and insurers to reimburse for schoolsite services designated by DHCS, at or above the fee schedule rate, regardless of whether the schoolsite is a network provider, and without subjecting services to prior authorization or cost-sharing (such as copayments or deductibles) that would normally apply to the service rendered. An LEA or IHE may 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 or IHE to provide services to students.
   
   Health plans and insurers were to begin reimbursing pursuant to the fee schedule on January 1, 2024, although LEAs and IHEs were not able to submit claims until this year. Some program infrastructure is still being built, and some guidance from DHCS is still pending. According to DHCS’ website, approximately 500 LEAs and public IHEs have enrolled in the CYBHI fee schedule program, representing approximately 3.6 million students.
2. Concerns. The California Association of Health Plans (CAHP) and the Association of California Life and Health Insurance Companies (ACLHIC) write that while they support efforts to enhance mental health services for youth, given the challenges in implementing the CYBHI fee schedule, they believe it is premature to expand the fee schedule. Further, CAHP and ACLHIC argue the focus should be on leveraging existing networks and processes for LEAs to contract with youth drop-in centers.

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

Date of Hearing: July 15, 2025

ASSEMBLY COMMITTEE ON HEALTH

Mia Bonta, Chair

SBPCA Bill Id:SB 812

Author:(Allen) – As Amended Ver:May 5, 2025

SENATE VOTE: 35-0

SUBJECT: Qualified youth drop-in center health care coverage.

SUMMARY: Defines and adds “qualified youth drop in centers” as a type of provider that be reimbursed for services provided pursuant to the Children and Youth Behavioral Health Initiative (CYBHI) fee schedule published by the Department of Health Care Services (DHCS). Specifically, this bill:

1. Defines “qualified youth drop-in center” as a center providing behavioral or primary health and wellness services to youth 12 to 25 years of age, inclusive, with the capacity to provide services before and after school hours that has been designated by or embedded with a local educational agency (LEA) or institution of higher education (IHE) for mental health and substance use disorder (SUD) services included in the CYBHI fee schedule.
2. For purposes of Medi-Cal and commercial health plans and insurers, adds a qualified youth drop-in center as an entity authorized to provide or arrange for, and be reimbursed for, a CYBHI fee schedule service. Also designates a qualified youth drop-in center as a setting where CYBHI fee schedule services can be delivered.

EXISTING LAW:

1. Establishes the Department of Managed Health Care (DMHC) to regulate health plans under the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act) and the California Department of Insurance (CDI) to regulate health insurance, and the Department of Health Care Services (DHCS) to administer the Medi-Cal program. [Health and Safety Code (HSC) § 1340, et seq., Insurance Code (INS) § 106, et seq. and Welfare and Institutions Code (WIC) § 14000, et seq.]
2. Establishes a schedule of benefits in the Medi-Cal program, which includes:
3. The Early and Periodic Screening, Diagnostic, & Treatment (EPSDT) program for any individual under 21 years of age, consistent with federal requirements;
4. Mental health services included in the essential health benefits adopted by the state; and,
5. Specified services provided by a LEA, to the extent federal financial participation is available, subject to utilization controls and standards adopted by DHCS, and consistent with Medi-Cal requirements for physician prescription, order, and supervision (also known as the LEA Billing Option Program). [WIC §§ 14132, 14132.03, 14132.06, and 14115.8.]
6. Requires DHCS to establish a school-linked statewide fee schedule for outpatient mental health or SUD treatment provided to a student 25 years of age or younger at a school site and a school-linked statewide provider network of behavioral counselors. [WIC § 5961.4]
7. Defines “school site” as a facility or location used for public kindergarten, elementary, secondary, or postsecondary purposes, including a location not owned or operated by a public school, or public school district, if the school or school district provides or arranges for the provision of medically necessary treatment of a mental health or SUD to its students at that location, including off-campus clinics, mobile counseling services, and similar locations. [WIC § 5961.4, HSC § 1374.722 and INS § 10144.53]
8. Requires health plan contracts and health insurance policies, that are required to provide coverage for medically necessary treatment of mental health and SUDs for an individual 25 years of age or younger, as specified, to cover the provision of the services identified in DHCS’ fee-for-service reimbursement schedule when those services are delivered at school sites, regardless of the network status of the LEA, institution of higher education, or health care provider, and without requiring prior authorization for the services provided. Prohibits imposing cost-sharing for these services. [HSC § 1374.722 and INS § 10144.53]
9. Requires a health plan or health insurer to provide reimbursement for services provided to students under these requirements at the greater of either of the following amounts:
10. The health plan’s contracted rate with the LEA, IHE, or health care provider, if any; or,
11. The fee-for-service reimbursement rate published by DHCS for the same or similar services provided in an outpatient setting. [HSC § 1374.722 and INS § 10144.53]
12. Requires each Medi-Cal managed care plan and Medi-Cal behavioral health delivery system to reimburse providers of medically necessary outpatient mental health or SUD treatment provided at a school site to a student 25 years of age or younger who is an enrollee of the plan or delivery system, but only to the extent the Medi-Cal plan or Medi-Cal behavioral health delivery system is financially responsible for those services under its approved managed care contract with DHCS. Requires Medi-Cal plans and Medi-Cal behavioral health delivery system to reimburse providers of medically necessary school site services at the fee schedule rate or rates developed by DHCS regardless of network provider status. [WIC § 5961.4]
13. Allows a provider of medically necessary school site services with a direct agreement established with a health care service plan, insurer, or Medi-Cal managed care plan that covers medically necessary school site services outside of the school-linked statewide all-payer fee schedule, to bill for services provided directly under the terms of the established agreement. [WIC § 5961.4]
14. Requires every health plan contract and disability insurance policy that provides hospital, medical, or surgical coverage to provide coverage for medically necessary treatment of mental health and SUD disorders under the same terms and conditions applied to other medical conditions, as specified. [HSC § 1374.72 and INS § 10144.4]

FISCAL EFFECT: According to the Senate Committee on Appropriations:

1. DMHC indicates minor and absorbable costs for state administration.
2. CDI indicates no fiscal impact for state administration.
3. Unknown potential costs to Medi-Cal plans to provide reimbursements (General Fund and federal funds).

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, many young Californians face serious mental health challenges, and CYBHI has helped young people access outpatient mental health and substance use disorder support when, where, and how they need it. The author explains youth drop-in centers provide a trusted location for young people to access confidential care and build community. The author notes the CYBHI has a reimbursable fee schedule funding model which allows schools to charge Medi-Cal and private insurers for services provided, but that youth drop-in centers face bureaucratic barriers to access this funding. The author concludes that this bill would allow school-linked youth drop-in centers to access the fee schedule, providing a sustainable funding source for these centers and expanding access to confidential and stigma-free care.
2. BACKGROUND.
   1. Youth Mental Health. In the 2021, American Academy of Pediatrics, American Academy of Child and Adolescent Psychiatry and Children’s Hospital Association declared a National State of Emergency in Children’s Mental Health, asserting as health professionals that they were witnessing soaring rates of depression, anxiety, trauma, loneliness, and suicidality that will have lasting impacts. In December 2021, former U.S. Surgeon General, Vivek Murthy issued a National Advisory on the youth mental health crisis, stating that the challenges today’s generation of young people face are unprecedented and uniquely hard to navigate. Dr. Murthy further states the effect these challenges have had on their mental health is devastating, and the prevalence of mental health challenges varies across subpopulations. Girls are much more likely to be diagnosed with anxiety, depression, or an eating disorder, while boys are more likely to die by suicide or be diagnosed with a behavior disorder, such as attention deficit hyperactivity disorder. Children and adolescents growing up in poverty are two to three times more likely to develop mental health conditions than peers with higher socioeconomic status. In a 2023 advisory, Dr. Murthy also called attention to a national “epidemic” of loneliness and social isolation. According to a 2024 National Health Statistics Report issued by the issued by the Centers for Disease Control and Prevention (CDC), while almost 2 in 5 teens said they were not getting the social and emotional support they needed, 93% of parents believed their child received adequate support.
   2. CYBHI Fee Schedule. To address the crisis in children’s mental health, the 2021-2022 Budget Act included a $4.4 billion investment in CYBHI, aimed at transforming behavioral health services for children and youth. 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 a sustainable funding source to support the delivery of behavioral health in schools and in school-linked settings.

State law requires DHCS to develop and maintain the 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 schoolsite 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 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 and IHEs 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 or IHE to provide services to students. Key design details of the CYBHI Fee Schedule are shown below.

* “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.

Health plans and insurers were required to begin reimbursing pursuant to the fee schedule on January 1, 2024, although LEAs and IHEs were not able to submit claims until this year. Some program infrastructure is still being built out, and some guidance is still pending from DHCS; however, claims are now being paid. According to DHCS’ website, approximately 500 LEAs and public institutions of higher education have enrolled in the CYBHI fee schedule program, representing approximately 3.6 million students. DHCS is actively working with fee schedule participants to offer technical assistance and is now enrolling their fifth cohort of LEAs and IHEs.

DHCS released guidance in April 2025 to facilitate the participation of community-based, school-linked providers who are designated as part of a LEA or IHE’s network of providers and practitioners. If the LEA or IHE refers students for services without a formal agreement with a designated affiliated provider, the designated affiliated provider may submit claims directly and receive reimbursement as the affiliated provider. Alternatively, community-based providers can also be “embedded” within an LEA or IHE, i.e., contracted with and paid by an LEA or IHE to provide services on their behalf.

• 1. Youth Drop-In Centers. According to DHCS, research indicates half of all lifetime mental health conditions are evident in youth by age 14, with the number growing to 75% by age 24, but, only a small percentage of young people get the help they need early enough. Youth drop-in centers are designed to provide a youth-friendly, maximally accessible place for youth 12 to 25 years of age and their families to seek mental health support and other services. According to San Mateo County’s 2024 Innovation Plan for Mental Health Services Act (MHSA) funds, the model proposes a new approach to prevention and early intervention health and wellbeing services that are open, accessible, and acceptable to young people and their families. It aims to remove historical barriers that have traditionally stopped youth from accessing prevention and early intervention services. The plan notes youth drop-in centers are an integrated youth mental health program that has been successful in other countries and is being adapted to local communities in the U.S.
  2. “allcove®” Centers. The allcove® model is a specific model of youth drop-in center, In August 2018, the state Commission for Behavioral Health (CBH; formerly the Mental Health Services Oversight and Accountability Commission) approved Santa Clara County’s Innovation Plan for MHSA funds, totaling $15 million over a four-year period, to launch allcove®. Services offered at an allcove® center include mental health, physical health, SUD services, supported education and employment, peer support, family support, and linkage to other services. The Center for Youth Mental Health and Wellbeing in Stanford’s Department of Psychiatry and Behavioral Sciences developed allcove®, which builds upon Australia’s headspace© model, with input and leadership from Santa Clara County youth. The design of the allcove® centers is youth-driven, with ongoing participation from youth through the establishment of Youth Advisory Groups.

The CBH owns the allcove® trademark and licenses the allcove® name to counties, cities, or other local entities at no cost. Use of the allcove® trademark requires strict adherence to the licensing agreement, but some youth drop-in centers operate outside of the allcove® brand, and do not have to strictly adhere to allcove® program requirements.

• 1. Significant One-Time Investments in allcove Centers. In addition to the $15 million mentioned above, the Budget Act of 2019 included $14.6 million in one-time MHSA funding over a four-year period to support the establishment or expansion of integrated mental health youth drop-in centers and adapt allcove® statewide, with a focus on vulnerable and marginalized youth and populations of youth with known disparities including, but not limited to, LGBTQ+, unhoused and Indigenous youth. The CBH allocated $10 million for grants to expand allcove® centers and $4.6 million to contract with Stanford as the exclusive implementation support provider for allcove® to provide technical assistance to grantees and other interested counties or program providers. In May 2020, the following centers were awarded funding:
     1. Beach Cities Health District (Los Angeles County);
     2. Peninsula Health Care District (San Mateo County);
     3. Sacramento County Behavioral Health Services; and,
     4. University of California – Irvine & Wellness and Prevention Center

In December 2023, the CBH awarded $11 million to six (6) new allcove® centers funded through separate grant awards under CYBHI and awarded $4 million to the existing four allcove centers (Beach Cities, San Mateo, Sacramento, and UC Irvine) to expand their services.

The CBH also awarded grants to the following six highest scoring applicants:

• • 1. Chinatown Service Center (Los Angeles County);
    2. Coastpride, Inc. (San Mateo County);
    3. Pajaro Valley Community Health Trust (Monterey County);
    4. Restorative Pathways (formerly Ruby’s Place; Alameda County);
    5. The Yurok Youth Center (Del Norte County); and,
    6. Yuba County Office of Education.

The sponsor of this bill, Beach Cities Health District, was also awarded $6.3 million in additional funding to build a new allcove® center though Round 4 of the state’s Behavioral Health Continuum Infrastructure Program (BCHIP).

• 1. Centers Have No Long-Term Financing Plan. According to technical experts at Stanford University, one of the most important principles of the allcove® model is that services at the centers are available for free or low cost for all youth. Centers are distinguished by provision of rapid, easy, and affordable access to mental health care. As these centers were being developed, it was expected that they would have to allocate or raise funds to cover their expenses for the first few years of operations. However, there is no designated, ongoing funding in the state budget to sustain these services. Centers are seeking a variety of funding sources to sustain services when one-time funds run out. The variety of services offered and the design of the model means a center that is financially sustainable may need to be funded from a number of funding sources. These funding sources could include the CYBHI fee schedule, but could also include county Behavioral Health Services Act Early Intervention funding targeted for children and youth, or other governmental or philanthropic grants or other programmatic funds, including funds related to youth development, education, employment, or social services.

1. SUPPORT. This bill’s sponsor, Beach Cities Health District, notes that they operated a youth drop-in center that was initially one of 11 state-funded pilot locations funded to offer integrated, youth-driven programming for behavioral health services. The sponsor writes adding such centers to the CYBHI fee schedule will preserve and enhance the significant advancements that have been made in expanding access to vital behavioral health services for young people in the community. The American Academy of Pediatrics write in support that youth drop-in centers offer accessible, stigma-free environments where youth can seek support without the barriers often associated with traditional mental health facilities and state that studies show that drop-in centers showed significant positive impacts on participants’ mental health and quality of life.
2. CONCERNS. The California Association of Health Plans and the Association of California Life and Health Insurance Companies write with concerns that while they support efforts to enhance mental health services for youth, they believe that given the challenges in implementing the CYBHI fee schedule, it is premature to expand the fee schedule. Further, they argue the focus should be on leveraging existing networks and processes for LEAs to contract with youth drop-in centers.
3. PREVIOUS LEGISLATION.
   1. AB 552 (Quirk-Silva) of 2022 would have established the Integrated School-Based Behavioral Health Partnership Program to provide behavioral health services for students with serious behavioral health conditions or at risk of developing a serious behavioral health condition and would have required commercial health plans to reimburse county behavioral health providers for specified services provided to these students. AB 552 was vetoed by Governor Newsom, who cited concerns with duplicating provisions of CYBHI.
   2. SB 229 (Dahle) of 2021 would have required DHCS to provide up to $500 million in grants annually to LEAs and private schools, to provide mental health services for pupils affected by school closures and distance learning requirements resulting from the COVID-19 pandemic. SB 229 was held in the Senate Appropriations Committee.
   3. SB 508 (Stern) of 2021 would have required specified health care service plans, health insurers, and Medi-Cal plans to enter into a memorandum of understanding (MOU) with all LEAs where 15% or more of the pupils are insured by the plan or insurer; authorized the LEA to bill for mental health and SUD services provided if the plan or insurer fails to enter into a MOU with the LEA; approved telehealth as an approved modality for provision of specified services by an LEA; and authorized a school district to require parents provide information on a pupil’s health care coverage. SB 508 was referred to Senate Health Committee and not heard.
   4. AB 133 (Committee on Budget), Chapter 143, Statutes of 2021, established the CYBHI, including the fee schedule.
   5. AB 586 (O’Donnell) of 2021 would have established the School Health Demonstration Project to expand comprehensive health and mental health services to students by providing intensive assistance and support to selected LEAs to build the capacity for long-term sustainability through leveraging multiple funding streams and partnering with county mental health plans, Medi-Cal managed care plans, and community-based providers. The contents of AB 586 were included in the budget trailer bill, AB 130 (Committee on Budget), Chapter 44, Statutes of 2021.
   6. SB 75 (Committee on Budget and Fiscal Review), Chapter 51, Statutes of 2019, established the Mental Health Student Services Act as a mental health partnership competitive grant program for establishing mental health partnerships between a county’s mental health or behavioral health departments and school districts, charter schools, and the county office of education within the county.
   7. AB 258 (Jones-Sawyer) of 2019 would have established the School-Based Pupil Support Services Program Act, to provide grants to LEAs for increasing the presence of school health professionals at school sites and providing programs that prevent and reduce substance abuse among pupils. AB 258 was vetoed by Governor Newsom, who stated the bill attempts to change the fund allocation process specified by Proposition 64, which the Legislature is not authorized to do, and that the funds are already allocated.
4. POLICY COMMENT. The state has made a significant investment in standing up a number of youth drop-in centers, which have the potential to provide a range of helpful services for children and youth who may not engage with typical health, behavioral health, or even school-based providers. However, the state has not coupled this one-time investment with a financing model that is able to sustain these centers. The CYBHI fee schedule aligns with behavioral health services offered by youth drop-in centers; thus, the fee schedule could be a partial, though important, source of funding to sustain youth drop-in center services.
5. AMENDMENTS. In consultation with the committee, to simplify and clarify the application of this bill, the author has agreed to the following amendments:
   1. Refine the definition of “qualified youth drop-in center” to more clearly describe what characterizes a youth drop-in center, including specifying that such a center:
      1. Provides behavioral health and wellness services;
      2. Provides one or more additional youth services, including but not limited to health services, services to support youth education and employment, and services to assist families to support youth;
      3. Serves youth 12 to 25 years of age, inclusive, or a subset of youth who are between the ages of 12 and 25;
      4. Has a physical location and offers face-to-face services; and,
      5. Is operated by a nonprofit, tribal, or local government entity.
   2. Restructure the bill language to clarify the status of qualified youth drop-in centers as providers that can participate in the fee schedule if they are designated by an LEA or IHE to do so; and,
   3. Make necessary technical and conforming changes.

REGISTERED SUPPORT / OPPOSITION:

Support

Beach Cities Health District (sponsor)

Alum Rock Counseling Center

American Academy of Pediatrics, California

Ask Dr. Mom

Association of California Healthcare Districts (ACHD)

Body Project

California Behavioral Health Planning Council

California Special Districts Association

California Youth Empowerment Network

Centinela Valley Union High School District

Chinatown Service Center

Clear Behavioral Health

Coast Pride

Creative Life Mapping

Da Vinci Schools

El Segundo Unified School District

Environmental Charter Schools

Hawthorne School District

Hazel Health

Hermosa Beach City School District

Indivisible Arts

Lawndale Elementary School District

Lennox School District

Manhattan Beach Unified School District

Nami South Bay Los Angeles County

Pajaro Valley Community Health Trust

Palos Verdes Peninsula Unified School District

Redondo Beach Unified School District

Sacramento; County of

South Bay Children's Health Center

Southbay Families Connected

Stanford School of Medicine

Taking Time

Thelma Mcmillen Recovery Center

Torrance Unified School District

UCLA Health

Venice Family Clinic

Volunteer Center South Bay, Harbor and Long Beach

Wiseburn Unified School District

Opposition

None on file

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

 THIRD READING  

Bill No: SB 812

Author: Allen (D)

Amended: 5/5/25

Vote: 21

SENATE HEALTH COMMITTEE: 9-0, 4/30/25

AYES: Menjivar, Durazo, Gonzalez, Limón, Padilla, Richardson, Rubio, Weber Pierson, Wiener

NO VOTE RECORDED: Valladares, Grove

SENATE APPROPRIATIONS COMMITTEE: 6-0, 5/23/25

AYES: Caballero, Seyarto, Cabaldon, Grayson, Richardson, Wahab

NO VOTE RECORDED: Dahle

SUBJECT: Qualified youth drop-in center health care coverage

SOURCE: Beach Cities Health District

DIGEST:

This bill adds “qualified youth drop in centers” as a type of provider that can use the school-linked statewide fee schedule established by the Department of Health Care Services (DHCS) for reimbursement of outpatient mental health or substance use disorder treatment provided to a student 25 years of age or younger by Medi-Cal and commercial health plans and insurance provided the center is designated by or embedded with a local education agency or institution of higher education.

ANALYSIS:

Existing law:

1. Establishes the Department of Managed Health Care (DMHC) to regulate health plans under the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act) and the California Department of Insurance (CDI) to regulate health insurance, and the Department of Health Care Services (DHCS) to administer the Medi-Cal program. (Health and Safety Code (HSC) §1340, et seq., Insurance Code (INS) §106, et seq. and Welfare and Institutions Code (WIC) §14000, et seq.)
   
2. Establishes a schedule of benefits in the Medi-Cal program, which includes:
3. The Early and Periodic Screening, Diagnostic, and Treatment program for any individual under 21 years of age, consistent with the specified requirements federal Medicaid law;
4. Mental health services included in the essential health benefits adopted by the state, including individual and group psychotherapy, psychological testing, psychiatric consultation, and medication management; and,
5. Specified services provided by a local educational agency (LEA), to the extent federal financial participation is available, subject to utilization controls and standards adopted by DHCS, and consistent with Medi-Cal requirements for physician prescription, order, and supervision (also known as the LEA Billing Option Program). (WIC §14132, §14132.03 and §14132.06)
6. Requires DHCS to establish a school-linked statewide fee schedule for outpatient mental health or substance use disorder (SUD) treatment provided to a student 25 years of age or younger at a school site and a school-linked statewide provider network of behavioral counselors. (WIC §5961.4)
7. Defines “school site” as a facility or location used for public kindergarten, elementary, secondary, or postsecondary purposes, including a location not owned or operated by a public school, or public school district, if the school or school district provides or arranges for the provision of medically necessary treatment of a mental health or SUD to its students at that location, including off-campus clinics, mobile counseling services, and similar locations. (WIC §5961.4, HSC §1374.722 and INS §10144.53)
8. Requires each Medi-Cal managed care plan (Medi-Cal plan) and Medi-Cal behavioral health delivery system to reimburse providers of medically necessary outpatient mental health or SUD treatment provided at a school site to a student 25 years of age or younger who is an enrollee of the plan or delivery system but only to the extent the Medi-Cal plan or Medi-Cal behavioral health delivery system is financially responsible for those services under its approved managed care contract with DHCS. Requires Medi-Cal plans and Medi-Cal behavioral health delivery system to reimburse providers of medically necessary school site services at the fee schedule rate or rates developed by DHCS regardless of network provider status. (WIC §5961.4)
9. Requires every health plan contract and disability insurance policy that provides hospital, medical, or surgical coverage to provide coverage for medically necessary treatment of mental health and SUD disorders under the same terms and conditions applied to other medical conditions, as specified. (HSC §1374.72 and INS §10144.41)
10. Requires health plan contracts and health insurance policies, that are required to provide coverage for medically necessary treatment of mental health and SUDs for an individual 25 years of age or younger, as specified, to cover the provision of the services identified in DHCS’ fee-for-service reimbursement schedule when those services are delivered at school sites, regardless of the network status of the LEA, institution of higher education, or health care provider, and without requiring prior authorization for the services provided. (HSC §1374.722 and INS §10144.53)
11. Requires a health plan or health insurer to provide reimbursement for services provided to students under these requirements at the greater of either of the following amounts:
12. The health plan’s contracted rate with the LEA, institution of higher education, or health care provider, if any; or,
13. The fee-for-service reimbursement rate published by DHCS for the same or similar services provided in an outpatient setting. (HSC §1374.722 and INS §10144.53)
14. Allows a provider of medically necessary school site services with a direct agreement established with a health care service plan, insurer, or Medi-Cal managed care plan that covers medically necessary school site services outside of the school-linked statewide all-payer fee schedule, to bill for services provided directly under the terms of the established agreement. (WIC §5961.4)

This bill:

1. Adds “qualified youth drop in centers” as a type of provider that can use DHCS’ school-linked statewide fee schedule for reimbursement of outpatient mental health or SUD treatment provided to a student 25 years of age or younger.
2. Defines “qualified youth drop in center” as a center providing behavioral or primary health and wellness services to youth 12 to 25 years of age, with the capacity to provide services before and after school hours that has been designated by or embedded with an LEA or institution of higher education to provide services covered by the fee schedule.

Comments

According to the author of this bill:

Many young Californians face serious mental health challenges and innovative programs like CYBHI [Children and Youth Behavioral Health Initiative] have made critical progress for young people to access outpatient mental health and substance use disorder support when, where, and how they need it. CYBHI-affiliated youth drop-in centers provide a trusted location for young people to access confidential care and build community. The CYBHI has a reimbursable Fee Schedule funding model which allows schools to charge insurers for services provided. However, youth centers face additional bureaucratic barriers to access the Fee Schedule. This bill would allow CYBHI-affiliated youth drop-in centers to directly access the Fee Schedule, providing a sustainable funding source for these centers and expanding access to confidential and stigma-free care.

Background

Children and Youth Behavioral Health Initiative (CYBHI). The 2021-2022 California State Budget included a $4.4 billion investment aimed at transforming behavioral health services for children and youth. In addition to a number of grants and coordinating efforts, the initiative includes a new requirement that Medi-Cal, health plans, and insurers cover the provision of the behavioral health services identified in the reimbursement schedule published by DHCS, when those services are delivered at school sites, regardless of the network status of the LEA, institution of higher education, or health care provider. Health plans and insurers are prohibited from charging co-pays, deductibles, or other cost-sharing for services received at school sites, as well as from requiring prior authorization before services can be rendered. On the Medi-Cal side, this is different than the existing LEA Billing Option Program, as the school can be entirely reimbursed according to the fee schedule for services rendered. The LEA Billing Option Program requires schools to pay for the services rendered in anticipation of drawing down a federal match that would reimburse 50% of the cost. The CYBHI fee schedule also has a simpler reimbursement process based solely on claims, rather than interim reimbursement rates that are later reconciled based on the LEA’s total actual costs for the services. On the commercial plan and insurance side, the CYBHI fee schedule is the only way schools can bill a student’s private coverage absent contracts with each health plan or insurer.

This CYBHI fee schedule was scheduled to take effect on January 1, 2024, though it has just started rolling out in 2025 given delays in setting up the program and establishing the fee schedule itself. According to DHCS’ website, approximately 500 LEAs and public institutions of higher education have enrolled in the CYBHI fee schedule program. These school sites have approximately 3.6 million students enrolled. However, as January 2025 was the first month that schools could bill, the number of students that have actually received services that were reimbursed through the schedule is very limited. According to a call with DHCS on April 18, a total of 133 claims for services have been submitted by 12 LEAs. DHCS also stated they were giving continual technical assistance to LEAs in hopes of expanding use of the CYBHI fee schedule. DHCS also released a guidance in April 2025 to facilitate the participation of community-based school linked providers who are designated as part of a LEA’s network of designated providers and practitioners. If the LEA or public institution of higher education refers students for services without a formal agreement with the provider, the designated affiliated provider may submit claims directly and receive reimbursement as the affiliated provider.

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

According to the Senate Appropriations Committee, this bill would have the following fiscal impact:

• DMHC indicates minor and absorbable costs for state administration;
• CDI indicates no fiscal impact for state administration; and,
• Unknown potential costs to Medi-Cal plans to provide reimbursements (General Fund and federal funds).

SUPPORT: (Verified 5/23/25)

Beach Cities Health District (source)

Alum Rock Counseling Center

American Academy of Pediatrics, California

Association of California Healthcare Districts

Body Project

California Special Districts Association

California Youth Empowerment Network

Coast Pride

Community Trust of Pajaro

Conejo Valley Unified School District

El Segundo Unified School District

Hazel Health

Huntington Beach Elementary School District

Indivisible Arts

NAMI South Bay

Peninsula Health Care District

Redondo Beach Unified School District

Torrance Unified School District

Volunteer Center South Bay

Wellness and Prevention Center

OPPOSITION: (Verified 5/23/25)

None received

ARGUMENTS IN SUPPORT: Sponsor, Beach Cities Health District write that they operated a youth drop-in center that was initially one of 11 pilot locations funded by the Behavioral Health Services Oversight and Accountability Commission to offer integrated, youth-driven programming for behavioral health services. Adding such centers to the CYBHI fee schedule will preserve and enhance the significant advancements that have been made in expanding access to vital behavioral health services for young people in the community. By requiring health plans and insurance policies to cover services provided at qualified youth drop-in centers, this bill will remove the remaining barriers the CYBHI sought to remove and complement California’s efforts to further strengthen the mental and behavioral health safety net for young people. Supporters, the American Academy of Pediatrics write that youth drop-in centers offer accessible, stigma-free environments where youth can seek support without the barriers often associated with traditional mental health facilities and state that studies show that drop-in centers showed significant positive impacts on participants’ mental health and quality of life.

Concerns. The California Association of Health Plans and the Association of California Life and Health Insurance Companies submitted a letter stating that while they support efforts to enhance mental health services for youth, the approach in this bill raises concerns. They state that mandating coverage outside of the plan/insurer’s existing system without referral or coordination could lead to a significant fragmentation in care. In addition, given the challenges in implementing the CYBHI fee schedule, they believe the focus should be on leveraging existing networks and processes for LEAs to contract with youth drop-in centers to ensure that CYBHI fee schedule effectively addresses the needs of the LEAs and county offices of education.

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

5/26/25 16:09:19

**** END ****

SENATE COMMITTEE ON

Senator Anna Caballero, Chair

2025 - 2026 Regular Session

SB 812 (Allen) - Qualified youth drop-in center health care coverage

Bill Summary:

SB 812 would add “qualified youth drop-in centers” as a type of provider to be reimbursed by Medi-Cal plans, commercial health plans and health insurers for outpatient mental health or substance use disorder treatment provided to students, as specified.

Fiscal Impact:

• The Department of Managed Health Care (DMHC) indicates minor and absorbable costs for state administration.
• The California Department of Insurance (CDI) indicates no fiscal impact for state administration.
• Unknown potential costs to Medi-Cal plans to provide reimbursements (General Fund and federal funds).

Background:

Current law requires the Department of Health Care Services (DHCS) to develop and maintain a school-linked statewide fee schedule for reimbursements for outpatient mental health or substance use disorder treatment provided to a student 25 years of age or younger at a schoolsite. Current law also requires each Medi-Cal plan and Medi-Cal behavioral health delivery system to reimburse providers of medically necessary outpatient mental health or substance use disorder treatment provided at a school site to a student 25 years of age or younger who is an enrollee of the plan or delivery system but only to the extent the Medi-Cal plan or Medi-Cal behavioral health delivery system is financially responsible for those services under its approved managed care contract with DHCS. Medi-Cal plans and Medi-Cal behavioral health delivery systems must reimburse providers of medically necessary school site services, at a minimum, at the fee schedule rates developed by DHCS regardless of network provider status.

Current law requires health plan contracts and health insurance policies, that are required to provide coverage for medically necessary treatment of mental health and substance use disorders, to cover the provision of the services identified in the DHCS statewide fee schedule when those services are delivered at school sites, regardless of the network status of the local educational agency (LEA), institution of higher education, or health care provider. The health plan/insurer must reimburse for these services at the greater of either of the following amounts:

• The health plan’s/insurer’s contracted rate with the local educational agency, institution of higher education, or health care provider, if any.
• The DHCS fee schedule rate.

Proposed Law:

Specific provisions of the bill would:

• Add “qualified youth drop-in centers” as a type of provider to be reimbursed by Medi-Cal plans, commercial health plans and insurers, based on the school-linked statewide fee schedule established by the DHCS, for outpatient mental health or substance use disorder treatment provided to a student 25 years of age or younger.
• Define “a qualified youth drop-in center” to mean a center providing behavioral or primary health and wellness services to youth 12 to 25 years of age, inclusive, with the capacity to provide services before and after school hours that has been designated by or embedded with a local educational agency or institution of higher education for the purposes of these provisions.

-- END --

SB SENATE COMMITTEE ON HEALTH

Senator Caroline Menjivar, Chair

BILL NO: SB 812

SUBJECT: Qualified youth drop-in center health care coverage

SUMMARY:

Adds “qualified youth drop in centers” as a type of provider that can use the school-linked statewide fee schedule established by the Department of Health Care Services for reimbursement of outpatient mental health or substance use disorder treatment provided to a student 25 years of age or younger by Medi-Cal and commercial health plans and insurance.

Existing law:

1. Establishes the Department of Managed Health Care (DMHC) to regulate health plans under the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act) and the California Department of Insurance (CDI) to regulate health insurance, and the Department of Health Care Services (DHCS) to administer the Medi-Cal program. [HSC §1340, et seq., INS §106, et seq. and WIC §14000, et seq.]
   
2. Establishes a schedule of benefits in the Medi-Cal program, which includes:
3. The EPSDT program for any individual under 21 years of age, consistent with the specified requirements federal Medicaid law;
4. Mental health services included in the essential health benefits adopted by the state, including individual and group psychotherapy, psychological testing, psychiatric consultation, and medication management; and,
5. Specified services provided by a local educational agency (LEA), to the extent federal financial participation is available, subject to utilization controls and standards adopted by DHCS, and consistent with Medi-Cal requirements for physician prescription, order, and supervision (also known as the LEA Billing Option Program). [WIC §14132, §14132.03 and §14132.06]
6. Requires DHCS to establish a school-linked statewide fee schedule for outpatient mental health or substance use disorder (SUD) treatment provided to a student 25 years of age or younger at a school site and a school-linked statewide provider network of behavioral counselors. [WIC §5961.4]
7. Defines “school site” as a facility or location used for public kindergarten, elementary, secondary, or postsecondary purposes, including a location not owned or operated by a public school, or public school district, if the school or school district provides or arranges for the provision of medically necessary treatment of a mental health or SUD to its students at that location, including off-campus clinics, mobile counseling services, and similar locations. [WIC §5961.4, HSC §1374.722 and INS §10144.53]
8. Requires each Medi-Cal managed care plan (Medi-Cal plan) and Medi-Cal behavioral health delivery system to reimburse providers of medically necessary outpatient mental health or SUD treatment provided at a school site to a student 25 years of age or younger who is an enrollee of the plan or delivery system but only to the extent the Medi-Cal plan or Medi-Cal behavioral health delivery system is financially responsible for those services under its approved managed care contract with DHCS. Requires Medi-Cal plans and Medi-Cal behavioral health delivery system to reimburse providers of medically necessary school site services at the fee schedule rate or rates developed by DHCS regardless of network provider status. [WIC §5961.4]
9. Requires every health plan contract and disability insurance policy that provides hospital, medical, or surgical coverage to provide coverage for medically necessary treatment of mental health and SUD disorders under the same terms and conditions applied to other medical conditions, as specified. [HSC §1374.72 and INS §10144.41]
10. Requires health plan contracts and health insurance policies, that are required to provide coverage for medically necessary treatment of mental health and SUDs for an individual 25 years of age or younger, as specified, to cover the provision of the services identified in DHCS’ fee-for-service reimbursement schedule when those services are delivered at school sites, regardless of the network status of the LEA, institution of higher education, or health care provider, and without requiring prior authorization for the services provided. [HSC §1374.722 and INS §10144.53]
11. Requires a health plan or health insurer to provide reimbursement for services provided to students under these requirements at the greater of either of the following amounts:
12. The health plan’s contracted rate with the LEA, institution of higher education, or health care provider, if any; or,
13. The fee-for-service reimbursement rate published by DHCS for the same or similar services provided in an outpatient setting. [HSC §1374.722 and INS §10144.53 ]
14. Allows a provider of medically necessary school site services with a direct agreement established with a health care service plan, insurer, or Medi-Cal managed care plan that covers medically necessary school site services outside of the school-linked statewide all-payer fee schedule, to bill for services provided directly under the terms of the established agreement. [WIC §5961.4]

This bill:

1. Adds “qualified youth drop in centers” as a type of provider that can use DHCS’ school-linked statewide fee schedule for reimbursement of outpatient mental health or SUD treatment provided to a student 25 years of age or younger.
2. Defines “qualified youth drop in center” as a center providing behavioral or primary health and wellness services to youth 12 to 25 years of age, with the capacity to provide services before and after school hours, that received funding through the Children and Youth Behavioral Health Initiative (CYBHI) by January 1, 2025, or a center that has been approved by the LEA.

FISCAL EFFECT:

This bill has not yet been analyzed by a fiscal committee.

COMMENTS:

1. Author’s statement. According to the author, many young Californians face serious mental health challenges and innovative programs like CYBHI have made critical progress for young people to access outpatient mental health and substance use disorder support when, where, and how they need it. CYBHI-affiliated youth drop-in centers provide a trusted location for young people to access confidential care and build community. The CYBHI has a reimbursable Fee Schedule funding model which allows schools to charge insurers for services provided. However, youth centers face additional bureaucratic barriers to access the Fee Schedule. This bill would allow CYBHI-affiliated youth drop-in centers to directly access the Fee Schedule, providing a sustainable funding source for these centers and expanding access to confidential and stigma-free care.
2. Children and Youth Behavioral Health Initiative. The 2021-2022 California State Budget included a $4.4 billion investment aimed at transforming behavioral health services for children and youth. In addition to a number of grants and coordinating efforts, the initiative includes a new requirement that Medi-Cal, health plans, and insurers cover the provision of the behavioral health services identified in the reimbursement schedule published by DHCS, when those services are delivered at school sites, regardless of the network status of the LEA, institution of higher education, or health care provider. Health plans and insurers are prohibited from charging co-pays, deductibles, or other cost-sharing for services received at school sites, as well as from requiring prior authorization before services can be rendered. On the Medi-Cal side, this is different than the existing LEA Billing Option Program, as the school can be entirely reimbursed according to the fee schedule for services rendered. The LEA Billing Option Program requires schools to pay for the services rendered in anticipation of drawing down a federal match that would reimburse 50% of the cost. The CYBHI fee schedule also has a simpler reimbursement process based solely on claims, rather than interim reimbursement rates that are later reconciled based on the LEA’s total actual costs for the services. On the commercial plan and insurance side, the CYBHI fee schedule is the only way schools can bill a student’s private coverage absent contracts with each health plan or insurer.

This CYBHI fee schedule was scheduled to take effect on January 1, 2024, though it has just started rolling out in 2025 given delays in setting up the program and establishing the fee schedule itself. According to DHCS’ website, approximately 500 LEAs and public institutions of higher education have enrolled in the CYBHI fee schedule program. These school sites have approximately 3.6 million students enrolled. However, as January 2025 was the first month that schools could bill, the number of students that have actually received services that were reimbursed through the schedule is very limited. According to a call with DHCS on April 18, a total of 133 claims for services have been submitted by 12 LEAs. DHCS also stated they were giving continual technical assistance to LEAs in hopes of expanding use of the CYBHI fee schedule. DHCS also released a guidance in April 2025 to facilitate the participation of community-based school linked providers who are designated as part of a LEA’s network of designated providers and practitioners. If the LEA or public institution of higher education refers students for services without a formal agreement with the provider, the designated affiliated provider may submit claims directly and receive reimbursement as the affiliated provider.

1. Related legislation. AB 322 (Ward) requires the Department of Education to encourage school districts, county offices of education, and charter schools to participate in programs that offer reimbursement for school-based health services and school-based mental health services, including the CYBHI fee schedule. AB 322 passed the Assembly Appropriations Committee by a vote of 10-1 on April 9, 2025.
2. Prior legislation. AB 552 (Quirk-Silva of 2022) would have established the Integrated School-Based Behavioral Health Partnership Program to provide behavioral health services for students with serious behavioral health conditions or at risk of developing a serious behavioral health condition and would have required commercial health plans to reimburse county behavioral health providers for specified services provided to these students. AB 552 was vetoed by Governor Newsom, who stated in his veto message: “this bill would duplicate requirements for school-based behavioral health services being developed pursuant to CYBHI . . .”

SB 229 (Dahle of 2021) would have required DHCS to provide up to $500 million in grants annually to LEAs and private schools, to provide mental health services for pupils affected by school closures and distance learning requirements resulting from the COVID-19 pandemic. SB 229 was held in the Senate Appropriations Committee.

SB 508 (Stern of 2021) would have required specified health care service plans, health insurers, and Medi-Cal plans to enter into a MOU with all LEAs where 15% or more of the pupils are insured by the plan or insurer; authorized the LEA to bill for mental health and SUD services provided if the plan or insurer fails to enter into a MOU with the LEA; approved telehealth as an approved modality for provision of specified services by an LEA; and authorized a school district to require parents provide information on a pupil’s health care coverage. SB 508 was not heard in this Committee.

AB 133 (Committee on Budget, Chapter 143, Statutes of 2021) included the CYBHI, which requires a health care service plan contract or insurance policy that is required to provide coverage for medically necessary treatment of mental health and SUDs to cover the provision of specified services when delivered at school sites, regardless of the network status of the LEA or health care provider. AB 133 requires the plan, insurer to reimburse the entity that provided the services at the Medi-Cal rate and requires the services to be provided without prior authorization or cost sharing. AB 133 also requires DHCS to set a fee structure for behavioral health services provided at school sites for Medi-Cal plans and requires DHCS to set up an incentive program for qualifying plans providing those services at school sites.

AB 586 (O’Donnell of 2021) would have established the School Health Demonstration Project to expand comprehensive health and mental health services to students by providing intensive assistance and support to selected LEAs to build the capacity for long-term sustainability through leveraging multiple funding streams and partnering with county MHPs, Managed Care Organizations, and community-based providers. The contents of AB 586 were included in the budget trailer bill AB 130 (Committee on Budget, Chapter 44, Statutes of 2021).

SB 75 (Committee on Budget and Fiscal Review, Chapter 51, Statutes of 2019) established the Mental Health Student Services Act as a mental health partnership competitive grant program for establishing mental health partnerships between a county’s mental health or behavioral health departments and school districts, charter schools, and the county office of education within the county.

AB 258 (Jones-Sawyer of 2019) would have established the School-Based Pupil Support Services Program Act, to provide grants to LEAs for increasing the presence of school health professionals at school sites and providing programs that prevent and reduce substance abuse among pupils. AB 258 was vetoed by Governor Newsom stating that the bill attempts to change the fund allocation process specified by Proposition 64 which the Legislature is not authorized to do and these funds are already allocated.

1. Support. Sponsor, Beach Cities Health District write that they operated a youth drop-in center that was initially one of 11 pilot locations funded by the Behavioral Health Services Oversight and Accountability Commission to offer integrated, youth-driven programming for behavioral health services. Adding such centers to the CYBHI fee schedule will preserve and enhance the significant advancements that have been made in expanding access to vital behavioral health services for young people in the community. By requiring health plans and insurance policies to cover services provided at qualified youth drop-in centers, this bill will remove the remaining barriers the CYBHI sought to remove and complement California’s efforts to further strengthen the mental and behavioral health safety net for young people. Supporters, the American Academy of Pediatrics write that youth drop-in centers offer accessible, stigma-free environments where youth can seek support without the barriers often associated with traditional mental health facilities and state that studies show that drop-in centers showed significant positive impacts on participants’ mental health and quality of life.
2. Concerns. The California Association of Health Plans and the Association of California Life and Health Insurance Companies submitted a letter stating that while they support efforts to enhance mental health services for youth, the approach in this bill raises concerns. They state that mandating coverage outside of the plan/insurer’s existing system without referral or coordination could lead to a significant fragmentation in care. In addition, given the challenges in implementing the CYBHI fee schedule, they believe the focus should be on leveraging existing networks and processes for LEAs to contract with youth drop-in centers to ensure that CYBHI fee schedule effectively addresses the needs of the LEAs and county offices of education.
3. Policy comment. The CYBHI fee schedule forces health plans and insurers to pay a specific rate for behavioral health services outside of any sort of contracting arrangement. Such arrangements are rare in state law and generally saved for instances when the enrollee or insured has little control over which providers to use, such as for emergency services or for hospital-based providers when the various providers do not all contract with the same health plan or insurance. The sponsor of this bill is a publically-funded special district that has set up ancillary student behavioral health services not directly linked to a school or school district, and thus seeks to use the fee schedule as a means of stabilizing funding that previously came from one-time funds. The sponsor may also contract directly with Medi-Cal or commercial health plans or insurers, though that would be a more administratively difficult process, or with an LEA to serve as a provider. The recent DHCS guidance on affiliated providers appears to streamline this process. While the definition of a qualified youth drop-in center, would include only centers previously funded by CYBHI funds or otherwise designated by a LEA, thus not just any entity that sets up such services, it is worth considering whether the use of the CYBHI fee schedule should be expanded in this way or at this time when implementing this in the schools is still very much in process.
4. Amendments. The author and committee have agreed to the following amendment to the definition of “qualified youth drop-in center” used throughout the bill that would limit participation of qualified youth drop in centers to those that are designated by or contracting with an LEA or institute of higher education in alignment with recent DHCS guidance:

“Qualified youth drop-in center” means a center providing behavioral or primary health and wellness services to youth 12 to 25 years of age, inclusive, with the capacity to provide services before and after school hours, that received funding through the Children and Youth Behavioral Health Initiative by January 1, 2025, or a center that has been approved designated by or embedded with a the local educational agency or institution of higher education for the purposes of this section.

SUPPORT AND OPPOSITION:

Support: Beach Cities Health District (sponsor)

Alum Rock Counseling Center

American Academy of Pediatrics, California

Association of California Healthcare Districts

Body Project

California Special Districts Association

California Youth Empowerment Network

Coast Pride

Community Trust of Pajaro

Conejo Valley Unified School District

El Segundo Unified School District

Hazel Health

Huntington Beach Elementary School District

Indivisible Arts

NAMI South Bay

Peninsula Health Care District

Redondo Beach Unified School District

Torrance Unified School District

Volunteer Center South Bay

Wellness and Prevention Center

Oppose: None received

-- END --

SB SENATE COMMITTEE ON HEALTH

Senator Caroline Menjivar, Chair

BILL NO: SB 812

SUBJECT: Qualified youth drop-in center health care coverage

SUMMARY:

Adds “qualified youth drop in centers” as a type of provider that can use the school-linked statewide fee schedule established by the Department of Health Care Services for reimbursement of outpatient mental health or substance use disorder treatment provided to a student 25 years of age or younger by Medi-Cal and commercial health plans and insurance.

Existing law:

1. Establishes the Department of Managed Health Care (DMHC) to regulate health plans under the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act) and the California Department of Insurance (CDI) to regulate health insurance, and the Department of Health Care Services (DHCS) to administer the Medi-Cal program. [HSC §1340, et seq., INS §106, et seq. and WIC §14000, et seq.]
   
2. Establishes a schedule of benefits in the Medi-Cal program, which includes:
3. The EPSDT program for any individual under 21 years of age, consistent with the specified requirements federal Medicaid law;
4. Mental health services included in the essential health benefits adopted by the state, including individual and group psychotherapy, psychological testing, psychiatric consultation, and medication management; and,
5. Specified services provided by a local educational agency (LEA), to the extent federal financial participation is available, subject to utilization controls and standards adopted by DHCS, and consistent with Medi-Cal requirements for physician prescription, order, and supervision (also known as the LEA Billing Option Program). [WIC §14132, §14132.03 and §14132.06]
6. Requires DHCS to establish a school-linked statewide fee schedule for outpatient mental health or substance use disorder (SUD) treatment provided to a student 25 years of age or younger at a school site and a school-linked statewide provider network of behavioral counselors. [WIC §5961.4]
7. Defines “school site” as a facility or location used for public kindergarten, elementary, secondary, or postsecondary purposes, including a location not owned or operated by a public school, or public school district, if the school or school district provides or arranges for the provision of medically necessary treatment of a mental health or SUD to its students at that location, including off-campus clinics, mobile counseling services, and similar locations. [WIC §5961.4, HSC §1374.722 and INS §10144.53]
8. Requires each Medi-Cal managed care plan (Medi-Cal plan) and Medi-Cal behavioral health delivery system to reimburse providers of medically necessary outpatient mental health or SUD treatment provided at a school site to a student 25 years of age or younger who is an enrollee of the plan or delivery system but only to the extent the Medi-Cal plan or Medi-Cal behavioral health delivery system is financially responsible for those services under its approved managed care contract with DHCS. Requires Medi-Cal plans and Medi-Cal behavioral health delivery system to reimburse providers of medically necessary school site services at the fee schedule rate or rates developed by DHCS regardless of network provider status. [WIC §5961.4]
9. Requires every health plan contract and disability insurance policy that provides hospital, medical, or surgical coverage to provide coverage for medically necessary treatment of mental health and SUD disorders under the same terms and conditions applied to other medical conditions, as specified. [HSC §1374.72 and INS §10144.41]
10. Requires health plan contracts and health insurance policies, that are required to provide coverage for medically necessary treatment of mental health and SUDs for an individual 25 years of age or younger, as specified, to cover the provision of the services identified in DHCS’ fee-for-service reimbursement schedule when those services are delivered at school sites, regardless of the network status of the LEA, institution of higher education, or health care provider, and without requiring prior authorization for the services provided. [HSC §1374.722 and INS §10144.53]
11. Requires a health plan or health insurer to provide reimbursement for services provided to students under these requirements at the greater of either of the following amounts:
12. The health plan’s contracted rate with the LEA, institution of higher education, or health care provider, if any; or,
13. The fee-for-service reimbursement rate published by DHCS for the same or similar services provided in an outpatient setting. [HSC §1374.722 and INS §10144.53 ]
14. Allows a provider of medically necessary school site services with a direct agreement established with a health care service plan, insurer, or Medi-Cal managed care plan that covers medically necessary school site services outside of the school-linked statewide all-payer fee schedule, to bill for services provided directly under the terms of the established agreement. [WIC §5961.4]

This bill:

1. Adds “qualified youth drop in centers” as a type of provider that can use DHCS’ school-linked statewide fee schedule for reimbursement of outpatient mental health or SUD treatment provided to a student 25 years of age or younger.
2. Defines “qualified youth drop in center” as a center providing behavioral or primary health and wellness services to youth 12 to 25 years of age, with the capacity to provide services before and after school hours, that received funding through the Children and Youth Behavioral Health Initiative (CYBHI) by January 1, 2025, or a center that has been approved by the LEA.

FISCAL EFFECT:

This bill has not yet been analyzed by a fiscal committee.

COMMENTS:

1. Author’s statement. According to the author, many young Californians face serious mental health challenges and innovative programs like CYBHI have made critical progress for young people to access outpatient mental health and substance use disorder support when, where, and how they need it. CYBHI-affiliated youth drop-in centers provide a trusted location for young people to access confidential care and build community. The CYBHI has a reimbursable Fee Schedule funding model which allows schools to charge insurers for services provided. However, youth centers face additional bureaucratic barriers to access the Fee Schedule. This bill would allow CYBHI-affiliated youth drop-in centers to directly access the Fee Schedule, providing a sustainable funding source for these centers and expanding access to confidential and stigma-free care.
2. Children and Youth Behavioral Health Initiative. The 2021-2022 California State Budget included a $4.4 billion investment aimed at transforming behavioral health services for children and youth. In addition to a number of grants and coordinating efforts, the initiative includes a new requirement that Medi-Cal, health plans, and insurers cover the provision of the behavioral health services identified in the reimbursement schedule published by DHCS, when those services are delivered at school sites, regardless of the network status of the LEA, institution of higher education, or health care provider. Health plans and insurers are prohibited from charging co-pays, deductibles, or other cost-sharing for services received at school sites, as well as from requiring prior authorization before services can be rendered. On the Medi-Cal side, this is different than the existing LEA Billing Option Program, as the school can be entirely reimbursed according to the fee schedule for services rendered. The LEA Billing Option Program requires schools to pay for the services rendered in anticipation of drawing down a federal match that would reimburse 50% of the cost. The CYBHI fee schedule also has a simpler reimbursement process based solely on claims, rather than interim reimbursement rates that are later reconciled based on the LEAs total actual costs for the services. On the commercial plan and insurance side, the CYBHI fee schedule is the only way schools can bill a student’s private coverage absent contracts with each health plan or insurer.

This CYBHI fee schedule was scheduled to take effect on January 1, 2024, though it has just started rolling out in 2025 given delays in setting up the program and establishing the fee schedule itself. According to DHCS’ website, approximately 500 LEAs and public institutions of higher education have enrolled in the CYBHI fee schedule program. These school sites have approximately 3.6 million students enrolled. However, as January 2025 was the first month that schools could bill, the number of students that have actually received services that were reimbursed through the schedule is very limited. According to a call with DHCS on April 18, a total of 133 claims for services have been submitted by 12 LEAs. DHCS also stated they were giving continual technical assistance to LEAs in hopes of expanding use of the CYBHI fee schedule. DHCS also released a guidance in April 2025 to facilitate the participation of community-based school linked providers who are designated as part of a LEA’s network of designated providers and practitioners. If the LEA or public institution of higher education refers students for services without a formal agreement with the provider, they designated affiliated provider may submit claims directly and receive reimbursement as the affiliated provider.

1. Related legislation. AB 322 (Ward) requires the Department of Education to encourage school districts, county offices of education, and charter schools to participate in programs that offer reimbursement for school-based health services and school-based mental health services, including the CYBHI fee schedule. AB 322 passed the Assembly Appropriations Committee by a vote of 10-1 on April 9, 2025.
2. Prior legislation. AB 552 (Quirk-Silva of 2022) would have established the Integrated School-Based Behavioral Health Partnership Program to provide behavioral health services for students with serious behavioral health conditions or at risk of developing a serious behavioral health condition and would have required commercial health plans to reimburse county behavioral health providers for specified services provided to these students. AB 552 was vetoed by Governor Newsom, who stated in his veto message: “this bill would duplicate requirements for school-based behavioral health services being developed pursuant to CYBHI . . .”

SB 229 (Dahle of 2021) would have required DHCS to provide up to $500 million in grants annually to LEAs and private schools, to provide mental health services for pupils affected by school closures and distance learning requirements resulting from the COVID-19 pandemic. SB 229 was held in the Senate Appropriations Committee.

SB 508 (Stern of 2021) would have required specified health care service plans, health insurers, and Medi-Cal plans to enter into a MOU with all LEAs where 15% or more of the pupils are insured by the plan or insurer; authorized the LEA to bill for mental health and SUD services provided if the plan or insurer fails to enter into a MOU with the LEA; approved telehealth as an approved modality for provision of specified services by an LEA; and authorized a school district to require parents provide information on a pupil’s health care coverage. SB 508 was not heard in this Committee.

AB 133 (Committee on Budget, Chapter 143, Statutes of 2021) included the CYBHI, which requires a health care service plan contract or insurance policy that is required to provide coverage for medically necessary treatment of mental health and SUDs to cover the provision of specified services when delivered at school sites, regardless of the network status of the LEA or health care provider. AB 133 requires the plan or insurer to reimburse the entity that provided the services at the Medi-Cal rate and requires the services to be provided without prior authorization or cost sharing. AB 133 also requires DHCS to set a fee structure for behavioral health services provided at school sites for Medi-Cal plans and requires DHCS to set up an incentive program for qualifying plans providing those services at school sites.

AB 586 (O’Donnell of 2021) would have established the School Health Demonstration Project to expand comprehensive health and mental health services to students by providing intensive assistance and support to selected LEAs to build the capacity for long-term sustainability through leveraging multiple funding streams and partnering with county MHPs, Managed Care Organizations, and community-based providers. The contents of AB 586 were included in the budget trailer bill AB 130 (Committee on Budget, Chapter 44, Statutes of 2021).

SB 75 (Committee on Budget and Fiscal Review, Chapter 51, Statutes of 2019) established the Mental Health Student Services Act as a mental health partnership competitive grant program for establishing mental health partnerships between a county’s mental health or behavioral health departments and school districts, charter schools, and the county office of education within the county.

AB 258 (Jones-Sawyer of 2019) would have established the School-Based Pupil Support Services Program Act, to provide grants to LEAs for increasing the presence of school health professionals at school sites and providing programs that prevent and reduce substance abuse among pupils. AB 258 was vetoed by Governor Newsom stating that the bill attempts to change the fund allocation process specified by Proposition 64 which the Legislature is not authorized to do and these funds are already allocated.

1. Support. Sponsor, Beach Cities Health District write that they operated a youth drop-in center that was initially one of 11 pilot locations funded by the Behavioral Health Services Oversight and Accountability Commission to offer integrated, youth-driven programming for behavioral health services. Adding such centers to the CYBHI fee schedule will preserve and enhance the significant advancements that have been made in expanding access to vital behavioral health services for young people in the community. By requiring health plans and insurance policies to cover services provided at qualified youth drop-in centers, this bill will remove the remaining barriers the CYBHI sought to remove and complement California’s efforts to further strengthen the mental and behavioral health safety net for young people. Supporters, the American Academy of Pediatrics write that youth drop-in centers offer accessible, stigma-free environments where youth can seek support without the barriers often associated with traditional mental health facilities and state that studies show that drop-in centers showed significant positive impacts on participants’ mental health and quality of life.
2. Concerns. The California Association of Health Plans and the Association of California Life and Health Insurance Companies submitted a letter stating that while they support efforts to enhance mental health services for youth, the approach in this bill raises concerns. They state that mandating coverage outside of the plan/insurer’s existing system without referral or coordination could lead to a significant fragmentation in care. In addition, given the challenges in implementing the CYBHI fee schedule, they believe the focus should be on leveraging existing networks and processes for LEAs to contract with youth drop-in centers to ensure that CYBHI fee schedule effectively addresses the needs of the LEAs and county offices of education.
3. Policy comment. The CYBHI fee schedule forces health plans and insurers to pay a specific rate for behavioral health services outside of any sort of contracting arrangement. Such arrangements are rare in state law and generally saved for instances when the enrollee or insured has little control over which providers to use, such as for emergency services or for hospital-based providers when the various providers do not all contract with the same health plan or insurance. The sponsor of this bill is a publically-funded special district that has set up ancillary student behavioral health services not directly linked to a school or school district, and thus seeks to use the fee schedule as a means of stabilizing funding. The sponsor may also contract directly with Medi-Cal or commercial health plans or insurers, though that would be a more administratively difficult process, or with an LEA to serve as a provider. The recent DHCS guidance on affiliated providers appears to streamline this process. While the definition of a qualified youth drop-in center, would include only centers previously funded by CYBHI funds or otherwise designated by a LEA, thus not just any entity that sets up such services, it is worth considering whether the use of the CYBHI fee schedule should be expanded in this way or at this time when implementing this in the schools is still very much in process.

SUPPORT AND OPPOSITION:

Support: Beach Cities Health District (sponsor)

Alum Rock Counseling Center

American Academy of Pediatrics, California

Association of California Healthcare Districts

Body Project

California Special Districts Association

California Youth Empowerment Network

Coast Pride

Community Trust of Pajaro

Conejo Valley Unified School District

El Segundo Unified School District

Hazel Health

Huntington Beach Elementary School District

Indivisible Arts

NAMI South Bay

Peninsula Health Care District

Redondo Beach Unified School District

Torrance Unified School District

Volunteer Center South Bay

Wellness and Prevention Center

Oppose: None received

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