Section 9 - BHSA Oversight and Enforcement
A. Overview
One of the goals of Behavioral Health Transformation (BHT) is to increase accountability for publicly funded county-administered behavioral health services. This chapter describes the Department of Health Care Services’ (DHCS’) approach for monitoring county compliance with program requirements under the Behavioral Health Services Act (BHSA) and, where necessary, imposing administrative or monetary sanctions for noncompliance.
After describing DHCS’ guiding principles for BHSA oversight and enforcement, this chapter reviews DHCS’ policies and procedures for:
Periodic BHSA compliance reviews, including DHCS’ plans to streamline and align county compliance reviews across publicly funded behavioral health programs.
Enforcement mechanisms for county noncompliance, including administrative sanctions such as corrective action plans (CAPs) and monetary sanctions.
County oversight of BHSA-funded providers, including overarching provider standards and county monitoring of providers.
In addition, DHCS’ monitoring and oversight will draw on the new BHSA reports: the Integrated Plan (IP), the Annual Update (AU), the Intermittent Update (IU) (if applicable) and the Behavioral Health Outcomes, Accountability, and Transparency Report (BHOATR). Prior chapters discuss the contents for these reports, as well as the processes and timelines for county submission and DHCS review and approval.
B. Guiding Principles for BHSA Oversight
DHCS recognizes that counties are currently implementing ambitious reforms under BHT and other county-administered behavioral health programs. For BHSA, program requirements are set forth in state law, this Policy Manual, and the County Performance Contract (in accordance with Welfare and Institutions (W&I) Code section 5897).
DHCS’ oversight policies are informed by the following guiding principles.
DHCS will align BHSA oversight with existing Medi-Cal policies wherever it is legally permissible and programmatically appropriate to do so. In addition to capitalizing on lessons learned from the Medi-Cal context, standardizing oversight policies will enhance efficiency for both county and state officials, as well as behavioral health providers, consistent with BHT goals and recent amendments to W&I Code section 14197.7.
DHCS will lead with technical assistance and encourage proactive collaboration on implementation challenges, particularly in the early years of BHT implementation and when counties seek DHCS assistance to address concerns about appropriate implementation of program requirements. As with all county-administered programs, DHCS encourages counties to contact DHCS with questions about program requirements or concerns about county-specific issues. Additionally, counties may refer to DHCS resources and attend technical assistance webinars and other collaborative learning opportunities. When deciding whether to impose administrative or monetary sanctions for noncompliance, DHCS will consider whether counties proactively disclosed compliance concerns and worked with DHCS in good faith to resolve them (among other factors).
In various sections of the IP and the AU templates, DHCS has provided space for counties to disclose implementation challenges or concerns with certain requirements under BHSA, and other programs and funding sources administered by counties. These self-disclosures are optional, and DHCS does not view these disclosures as an automatic admission of noncompliance. Rather, DHCS seeks to gather data on common concerns to inform technical assistance efforts, whether targeted to specific counties or published as general guidance for all counties.
As with all DHCS communications, these IP and AU self-disclosures may inform DHCS’ oversight of each county, such as decisions about which issues to focus on in the county’s next scheduled compliance review. As noted, if DHCS does confirm instances of county noncompliance, DHCS’ decisions about administrative or monetary sanctions will take into account whether the county proactively disclosed that issue to DHCS, whether through the IP or other means.
These self-disclosures should focus on new information. For example, if the county is under an active CAP to address 24/7 access line issues, there is no need for the county to disclose those specific issues via the IP. However, if the county has identified emerging 24/7 access line issues beyond the scope of DHCS’s prior findings and the county’s existing CAP, the county may wish to self-disclose that emerging issue.
DHCS will escalate oversight and enforcement for serious or persistent violations. DHCS intends to lead with technical assistance, as noted above, and to begin with administrative sanctions before imposing temporary withholds or monetary sanctions for counties with persistent compliance issues (e.g., lack of good faith effort to implement an existing CAP). However, as described in the following sections, DHCS may move through these steps more quickly for serious violations that impair access to care, threaten individual health or safety, or create a risk of fraud or other program integrity concerns.
Note: Unlike in Medi-Cal, BHSA monetary sanctions imposed on a county will be returned to the county once it comes into compliance. For further discussion of monetary withholds and monetary sanctions, see Policy Manual Chapter 9, Section D.2 below.
C. Compliance Reviews
DHCS will conduct periodic reviews to assess each county's compliance with BHSA program requirements, as DHCS currently does for Mental Health Services Act (MHSA) and other county-administered behavioral health programs, and as required under W&I Code section 5897, subdivision (d).
DHCS currently anticipates conducting annual compliance reviews, with an onsite review occurring at least once every three years. DHCS anticipates beginning these routine compliance reviews no sooner than State Fiscal Year (SFY) 2027-2028, reviewing the reporting period of SFY 2026-2027 (the first program year under the 2026 IP). In addition, DHCS may initiate targeted ad hoc reviews at any time as necessary to address a serious or urgent compliance concern.
The process for BHSA compliance reviews is modeled on the existing process for Medi-Cal compliance reviews, as described in Behavioral Health Information Notice (BHIN) 23-044. These reviews encompass four phases, described further below:
Review Preparation, including pre-review planning, document submissions, and DHCS desk review.
Compliance Review, including an onsite or virtual component.
Post Review Evidence & Exit Process, including opportunity for discussion of draft findings.
Findings Report, including any recommended corrective actions needed to achieve compliance.
To the greatest extent possible, DHCS intends to align the timing and procedures for each county’s reviews across BHSA, Medi-Cal, the Community Mental Health Services Block Grant (MHBG), and the Substance Use Prevention, Treatment, and Recovery Services Block Grant (SUBG).
Currently, as outlined in Table C.1 below, DHCS conducts three separate compliance reviews for county behavioral health programs:
Medi-Cal Specialty Mental Health Services (SMHS): Once every three years.
Concurrent reviews for Drug Medi-Cal (DMC), DMC Organized Delivery System (DMC-ODS), and SUBG: Every year.
Concurrent reviews for MHBG and MHSA: Every three years.
Under the CalAIM initiative for Behavioral Health Administrative Integration, once counties adopt integrated Medi-Cal contracts, DHCS intends to conduct combined Medi-Cal compliance reviews for SMHS and DMC/DMC-ODS, plus concurrent review of SUBG.
Furthering that vision, DHCS is now considering the possibility of conducting a single compliance review for each county each year, either virtually or onsite. This concurrent review would simultaneously assess BHSA and the other county-administered programs listed above. By consolidating these reviews, DHCS aims to enhance efficiency at both the county and state level by avoiding duplicative requests for pre-review document submissions, aligning similar requirements across programs where feasible, and streamlining the review process itself to the extent possible.
As DHCS continues developing policies for combined and aligned reviews, DHCS will conduct additional stakeholder engagement and release further guidance.
Table C.1 Aligning Compliance Reviews Across County Behavioral Health Programs
Phase | Number of Reviews | Reviews |
Current State | 3 Reviews |
|
Intermediate State | 2 Reviews |
|
Future State | 1 Review |
|
SMHS = Specialty Mental Health Services; MHSA = Mental Health Services Act; DMC = Drug Medi-Cal; DMC-ODS = Drug Medi-Cal Organized Delivery System. Integrated, annual Medi-Cal reviews will begin the year after counties adopt integrated contracts under Behavioral Health Administrative Integration, to the extent DHCS resources allow. 17 counties voluntarily adopted integrated contracts effective January 1, 2025. The remaining counties will adopt integrated contracts effective January 1, 2027.
C.1 Review Preparation
In this phase, DHCS determines which issues to focus on in each county’s review, gathers the necessary documents, and performs a desk review ahead of the compliance review.
C.1.1 Review Planning
The BHSA compliance reviews may assess any program requirements that are defined under this Policy Manual, the County Performance Contract, and state laws, including:
Allocation of funds and other BHSA fiscal policies;
Stakeholder engagement;
Program requirements for each BHSA component (Behavioral Health Services and Supports (BHSS), Housing Interventions, and Full-Services Partnerships (FSPs));
Note: BHSA compliance reviews will not focus on assessing the fidelity of evidence-based practices under BHSA. Those fidelity assessments will be conducted by Centers of Excellence, as described in Chapter 7.
Coverage and authorization of services;
BHSA provider oversight, workforce strategy and availability of services, as defined under W&I Code section 5963.02, subdivisions (c)(8)(A), (C)–(G), and (I);
Program integrity;
Reporting requirements; and
Administration.
Prior to each county’s BHSA compliance review, DHCS will identify priority areas for review. DHCS aims to review all program areas at least once every three years but may review certain issues more frequently. DHCS identifies priority areas for each county based on factors such as:
The county’s compliance history under MHSA/BHSA and other programs (e.g., unresolved CAPs);
Issues identified based on DHCS’ review of the IP, AU, BHOATR, and other county reports; and
DHCS’ assessment of potential impacts on individuals receiving BHSA-funded services and risks to program integrity.
C.1.2 Document Collection
Prior to the review, DHCS will notify the county of the areas the review will focus on and the documentation that will be required. For example, required documentation may include county policies and procedures, evidence of practice, or sample language from BHSA provider contracts. Counties will submit all documentation to demonstrate compliance as requested to DHCS prior to the virtual or onsite review. In the future, as DHCS finalizes the policies for aligned compliance reviews across county-administered behavioral health programs, DHCS will release additional guidance regarding the timelines and procedures for submitting pre-review documents. To improve efficiency, DHCS will aim to reduce redundant document requests across various programs.
C.1.3 Desk Review
DHCS will review the documents submitted by the county, as well as additional documents available to DHCS (e.g., the IP and BHOATR), to determine which areas to focus on during the compliance review, and whether the compliance review should be conducted virtually or in person. As noted, DHCS anticipates conducting an onsite review at least once every three years but may conduct onsite reviews more often if deemed necessary.
C.2 Compliance Review (Virtual or Onsite)
During the BHSA compliance review, DHCS will interview key county personnel to assess compliance and evaluate the county’s administration of BHSA programs. DHCS may request additional supporting documents as needed throughout the interview portion and may include review of client charts to assess provider services.
Unlike the current MHSA review process, but consistent with current Medi-Cal reviews, DHCS’ compliance reviews will not generally include discussions with contracted service providers, program visits, client meetings, or housing visits. Counties will be responsible for monitoring their contracted providers, as described in Section E below. DHCS will review whether counties are effectively monitoring their providers for compliance. Effective monitoring will include adopting a monitoring schedule for BHSA-funded providers that includes periodic site visits; preserving provider monitoring records—including monitoring reports, county-approved provider CAPs, and confirmations of CAP resolutions; and providing monitoring records to DHCS at any time, upon DHCS’ request.
C.3 Post Review Evidence/Exit Process
At the conclusion of the review, DHCS will share draft review findings with the county, at which point the county has a formal opportunity to discuss the draft findings with DHCS.
Specifically, a county will have 15 business days after receipt of the draft findings to indicate whether they agree, disagree, or partially agree with the findings (including any recommended corrective action) via a DHCS-provided template, as well as to submit any additional information or documentation for DHCS’ review and consideration. This 15-day period is a formal timeframe available to counties in addition to the option to submit documentation at any time during the desk review or compliance review.
After a county submits the completed template and any additional information or documentation, DHCS will respond, make adjustments as it deems necessary and appropriate, and issue a final Findings Report, as described below.
C.4 Findings Report
DHCS will provide a final written Findings Report describing any findings of noncompliance and any recommended corrective actions. CAPs are discussed in Section D.1.1, below. DHCS will post all Findings Reports on the DHCS website.
To the extent possible, DHCS intends for the BHSA Findings Report to emphasize common issues identified across the county’s behavioral health programs, such as compliance findings relating to access to services, provider oversight, or documentation. DHCS will clearly distinguish between BHSA-specific compliance findings and cross-program themes.
D. Enforcement: Administrative and Monetary Sanctions
If DHCS determines that a county is out of compliance with BHSA requirements, as set forth in state law, this Policy Manual, and the County Performance Contract, DHCS may pursue various enforcement actions including:
Administrative sanctions, such as imposing a CAP or requiring a county to revise its IP or AU; and
Temporary monetary withholds or monetary sanctions.
These enforcement actions, which are described further below, are authorized by W&I Code section 5897, subdivision (e); section 5963.04, subdivision (e); and section 14197.7. DHCS may impose administrative or monetary sanctions based on findings from a routine compliance review and may also impose these sanctions on an ad hoc basis.
DHCS’ BHSA enforcement actions will generally follow the same procedures as under Medi-Cal, as described in BHIN 23-044 and BHIN 25-023 or subsequent guidance. However, there will continue to be certain differences in approach due to differences in DHCS’s legal authority and policy decisions. For example, for BHSA, DHCS has not developed an equivalent to the Medi-Cal Enforcement Tiers for network adequacy and timely access, as described in the Attachments to BHIN 25-023.
As noted above, in the early years of BHSA implementation, DHCS expects to focus on training, technical assistance, and administrative enforcement mechanisms rather than imposing monetary sanctions. In general, DHCS expects to begin with administrative sanctions before progressing to temporary monetary withholds and monetary sanctions; However, for serious or persistent violations, DHCS will consider imposing temporary monetary withholds and monetary sanctions in lieu of, or combined with, a CAP or other administrative sanctions.
D.1 Administrative Sanctions
D.1.1 Corrective Action Plans
When a county is out of compliance with BHSA requirements, DHCS may require the county to submit a CAP for DHCS’ review and approval or may impose a DHCS-defined CAP on the county. The following CAP requirements and procedures are consistent with current Medi-Cal practices as described in BHIN 23-044 and BHIN 25-023.
D.1.1.A Cap Contents
A BHSA CAP shall include the following information, in accordance with DHCS’ CAP template:
Description of corrective actions that will be taken by the county to address identified findings, including actions required of contracted providers when applicable, and incremental milestones the county will achieve in order to reach full compliance.
Timeline for implementation and/or completion of corrective actions.
In general, DHCS requires counties to resolve CAPs within 90 calendar days from the date of DHCS’ acknowledgment of receipt of the CAP or, if DHCS imposes a defined CAP, within 90 days of the date DHCS provides the CAP to the county. DHCS may approve an extended timeline for resolution if necessary and appropriate.
Proposed evidence of correction that will be submitted to DHCS.
If the county has evidence to support correction at the time the CAP is due, the county shall submit the actual evidence of correction to DHCS.
Mechanism for monitoring the effectiveness of corrective actions over time.
Behavioral Health Director or designee (e.g., compliance administrator) name, and the date of their approval of the CAP.
DHCS will publish all BHSA CAPs on its website, as required under W&I Code section 5897, subdivision (e)(2).
D.1.1.B CAP Process Following a Compliance Review
For CAPs following a compliance review, counties shall, within 60 calendar days of receipt of the Findings Report, submit a proposed CAP to DHCS for all identified findings. Upon receipt of the CAP, DHCS will provide an Acknowledgement Letter within five business days.
D.1.1.C CAP Resolution and Ongoing Monitoring Activities
DHCS will determine when the county has resolved the CAP and will issue a Resolution Letter to inform counties of the successful completion of the CAP. If CAPs are not resolved within the determined timeline for resolution, DHCS will consider heightened oversight including:
Monitoring calls;
Statewide/regional technical assistance and training;
Focused technical assistance; and
Focused ad hoc compliance review, which may be desk, virtual, or onsite, in addition to the county’s routine compliance reviews.
D.1.2 Directing Counties to Revise their IP or AU
In certain circumstances, DHCS may require a county to revise its IP or AU as an administrative sanction. Specifically, as authorized under W&I Code section 5963.04, subdivisions (e)(1) & (2), DHCS may require a county to revise its IP or AU if:
The submitted IP or AU fails to adequately address local needs, as described under W&I Code section 5963.02, subdivision (b)(2) and Policy Manual Chapter 3, Section E.4.2; or
The county has failed to make adequate progress in meeting performance measures under BHSA, Medi-Cal, or other county-administered behavioral health programs, as defined in W&I Code section 5963.04, subdivision (b).
DHCS does not intend to exercise this authority until DHCS releases “Phase 2” performance measures which, as described in Chapter 2, Section C.1.A of this Policy Manual, are intended to be used for monitoring and accountability purposes.
DHCS can exercise this authority outside the standard IP/AU submission timeline, including after BHOATR submission.
D.2 Monetary Withholds and Monetary Sanctions
DHCS has the authority to impose temporary monetary withholds and monetary sanctions for certain types of BHSA program violations. This section describes:
Potential bases for DHCS to impose temporary monetary withholds and monetary sanctions;
Maximum Temporary Monetary Withholds;
Maximum Monetary Sanctions;
Factors DHCS Will Consider When Imposing Temporary Withholds or Monetary Sanctions; and
Notice and Appeal Rights.
If DHCS imposes temporary monetary withholds or monetary sanctions on a county, the county shall continue to comply with all BHSA program requirements unless directed otherwise. Generally, DHCS intends to begin with temporary withholds, but may escalate to sanctions for severe or repeat violations.
D.2.1 Bases for Temporary Monetary Withholds and Monetary Sanctions
Pursuant to W&I Code section 5963.04, subdivision (e)(3), DHCS has express authority to impose BHSA withholds or monetary sanctions if a county:
Fails to follow stakeholder engagement requirements for the IP or the 30-day comment period for the AU and intermittent updates, as described in W&I Code section 5963.03 and Chapter 3, Section B of this Policy Manual.
Fails to allocate BHSA funds in accordance with statutory requirements, as set forth at W&I Code section 5892 and Chapter 6, Section B of this Policy Manual.
Fails to submit a complete, accurate, and timely BHOATR in accordance with W&I Code section 5963.04 and Chapter 4 of this Policy Manual. Specifically, if DHCS notifies a county of an overdue BHOATR and the county fails to submit the BHOATR within a reasonable time (as defined in DHCS’ notice to the county), DHCS may withhold 25 percent of the county’s monthly allocations from the Behavioral Health Services Fund (BHSF) until the county comes into compliance. This is consistent with DHCS’ current approach for MHSA withholds in response to a late Annual Revenue and Expenditure Report.
Spends BHSA funds in a manner that significantly varies from its budget in the IP, AU, or intermittent update. (This standard does not apply to any of the non-BHSA funding sources identified in the IP budget.)
In the short term, DHCS does not intend to define quantitative standards for “significant variance.” For example, if a county’s planned allocations to a particular service line over or underestimate actual spending, DHCS will not impose monetary sanctions. Rather, DHCS plans to use data from the initial IP period to inform a standard that reflects county experiences and spending patterns.
As a reminder, once approved in the IP, counties are not permitted to adjust their allocation of funding across BHSA components during the IP period except in emergencies, as described in Policy Manual Chapter 6, Section B.5.1. However, counties may adjust their suballocations within each component via an AU or any time needed outside of the submission timeframe for an AU or IP through an intermittent update (IU).
These sanction authorities apply over and above “any other applicable law that authorizes the department to impose sanctions or otherwise take remedial actions against a county” for BHSA violations, per W&I Code section 5963.04, subdivision (f).
D.2.2 Maximum Monetary Withholds
For a sanctionable violation, DHCS may temporarily withhold a portion of a county’s monthly BHSF allocations until the county comes into compliance, as authorized under W&I Code § 5963.04, subdivision (e)(3).
The statute authorizes DHCS to withhold an amount of funds that DHCS “deems necessary to ensure the county…comes into compliance,” pursuant to W&I Code § 5963.04, subdivision (e)(3)(C). To avoid undue financial hardship for the county, DHCS will withhold no more than 25 percent of a county’s monthly BHSF allocations; depending on the circumstances, DHCS may withhold less than 25 percent after considering the factors enumerated below in section D.2.4. This maximum aligns with the statutory cap on monetary sanctions.
Any payments from the sanctioned county’s BHSF shall be deposited into the Behavioral Health Services Act Accountability Fund. In accordance with W&I Code § 5963.04, subdivision (e)(3)(D), all monetary withholds imposed on a county shall be released to the county once DHCS determines that the county has come into compliance.
D.2.3 Maximum Monetary Sanctions
For a sanctionable violation, DHCS may impose monetary sanctions pursuant to W&I Code section 5963.04, subdivision (e)(3) and section 14197.7, subdivision (n)(5).
As under Medi-Cal, DHCS may impose monetary sanctions of up to $25,000 per violation for a first violation, up to $50,000 for a second violation, and up to $100,000 for each subsequent violation, in accordance with W&I Code section 14197.7, subdivision (f); depending on the circumstances, DHCS may impose smaller monetary sanctions after considering the factors enumerated below in section D.2.4.
For a deficiency that impacts individuals receiving BHSA-funded services, each member impacted constitutes a separate violation.
DHCS may separately and independently assess a monetary sanction for each day the county fails to correct an identified deficiency.
DHCS may collect monetary sanctions by withholding up to 25 percent of the county’s monthly allocations from the BHSF. DHCS shall continue to offset the amount attributable to the sanction each month until it collects the full amount of the sanction. Any payments from the sanctioned county’s BHSF shall be deposited into the Behavioral Health Services Act Accountability Fund.
In accordance with W&I Code § 5963.04, subdivision (e)(3)(B), all monetary sanctions imposed on a county shall be returned to the county once the county comes into compliance.
D.2.4 Factors DHCS Will Consider When Imposing Temporary Withholds or Monetary Sanctions
In alignment with current Medi-Cal practices under BHIN 25-023 and W&I Code section 14197.7, subdivision (g), when determining the amount of a temporary withhold or monetary sanction, DHCS will consider the following non-exhaustive factors:
The nature, scope, and gravity of the violation, including the potential harm or impact on individuals eligible for BHSA-funded services.
The good or bad faith of the county.
The willfulness of the violation.
The nature and extent to which the county:
Cooperated with DHCS’ investigation;
Aggravated or mitigated any injury or damage caused by the violation; and
Has taken corrective action to ensure the violation will not recur.
The county’s financial status, including whether the sanction will affect the county’s ability to come into compliance.
The financial cost of the health care service that was denied, delayed, or modified, if applicable.
Whether the violation is an isolated incident.
The county’s history of violations under BHSA and MHSA, including unresolved CAPs. In addition, for BHSA only, DHCS will take into account the county’s history of similar violations under other behavioral health programs.
The amount of the penalty necessary to deter similar violations in the future.
Other mitigating factors presented by the county.
In connection with these factors, DHCS will consider whether the county proactively disclosed implementation challenges through the IP or other means, as described above in Section B. Although not required by statute, DHCS expects to consider similar factors when deciding whether to progress from administrative sanctions to monetary sanctions.
D.2.5 Notice and Appeal Rights
The notice and appeal rights for BHSA temporary withholds and monetary sanctions are identical to the current Medi-Cal procedures outlined in W&I Code § 14197.7, subdivisions (h), (k), (l) and (m) and BHIN 25-023.
D.2.5.A Notice
Except in exigent circumstances when DHCS determines that there is an immediate risk to the health of individuals receiving BHSA-funded services, DHCS will send a notice of sanction at least 30 calendar days before the sanction’s effective date. The notice will identify the sanction’s effective date, duration, and rationale, as well as details of county appeal rights.
A county may request to meet and confer with DHCS regarding a proposed sanction. DHCS shall grant all requests submitted no later than two business days after a county’s receipt of DHCS’ notice of intent to impose a temporary withhold or monetary sanction.
DHCS, at its discretion, may alert other persons and organizations that may be impacted or interested in the sanction.
D.2.5.B Filing an Appeal
A county has the right to appeal a temporary withhold or monetary sanction by filing a written appeal, with a copy of the sanctions notice, to the address specified in the notice.
For an appeal of a temporary withhold, the county must file the appeal within 30 calendar days from the date it receives notice of the withhold (or if the county requests a meet and confer with DHCS, within 30 calendar days from the date the county receives the final sanction notice following the meet and confer). The appeal shall be conducted in accordance with Health & Safety (H&S) Code section 100171 and W&I Code section 14197.7, subdivisions (k).
For a monetary sanction, the county must request a hearing within 15 working days after the date the county receives the notice of the sanction (or if the county requests a meet and confer with DHCS, within 15 working days from the date the county receives the final sanction notice following the meet and confer). The appeal shall be conducted in accordance with H&S Code section 100171.
D.2.5.C Stay of Temporary Withhold or Monetary Sanction
Temporary withholds and monetary sanctions shall be stayed until the hearing is completed and DHCS has made a final determination, in accordance with W&I Code section 14197.7, subdivision (k)(7) (temporary withholds) and subdivision (I)(2) and (3) (sanctions).
E. BHSA Provider Standards and County Oversight
Each county must “ensure its county and noncounty contracted behavioral health workforce is well-supported and culturally and linguistically concordant with the population to be served, and robust enough to achieve the statewide and local behavioral health goals and measures,” as described in W&I Code section 5963.02(c)(8). In support of that function, counties are responsible for ensuring that their BHSA-funded providers comply with applicable requirements. This applies to non-county providers that contract with the county as well as providers that are owned or operated by the county. This section discusses:
The contracts that counties execute with non-county BHSA providers (i.e., providers that are not owned or operated by the county), as well as the corresponding policies and procedures for county providers.
Overarching requirements for BHSA providers, beyond the program requirements that apply to specific BHSA-funded services.
County monitoring of BHSA providers.
As with BHSA compliance reviews and enforcement, DHCS seeks to promote alignment with Medi-Cal standards and processes wherever it is feasible and appropriate to do so.
E.1 BHSA Provider Contracts and Policies
E.1.1 Contracts with Non-County Providers
Counties must execute a contract with each non-county provider (i.e., providers that are not owned or operated by the county) that receives BHSA funds, consistent with historical MHSA practices. These written agreements play an important role in counties’ oversight of BHSA providers, and in DHCS’ oversight of counties to ensure appropriate use of BHSA funds. The county must also maintain records of actual expenditures sufficient to comply with BHOATR requirements. These provider contracts must:
Specify the services for which the provider is receiving BHSA funds, as described in Chapter 7 of this Policy Manual.
Require the provider to comply with:
All program requirements applicable to the provider’s BHSA-funded services;
The BHSA fiscal policies on Medi-Cal participation and seeking reimbursement from Medi-Cal and other payers (if applicable to the provider’s services), as set forth in Chapter 6, Section C of this Policy Manual;
The general provider standards described below in section E.2;
The county’s BHSA provider monitoring activities, as discussed below in section E.3; and
Any requests for records, information, or onsite access by the county, DHCS or their designees for purposes of BHSA oversight. (In general, DHCS expects that counties will monitor BHSA providers, while DHCS monitors counties. However, DHCS reserves the right to directly monitor BHSA providers as needed.)
Counties must make a good faith effort to execute a provider’s contract before the provider begins delivering BHSA-funded services. If a county is unable to execute a contract before the delivery of BHSA-funded services—e.g., due to good-faith delays in contract execution, or when a non-contracted provider has delivered emergency services eligible for BHSA funding—the county must execute the contract within 120 calendar days from the commencement of BHSA-funded services, consistent with the time limit for provisional SMHS provider contracts.
E.1.2 Policies and Procedures for County Providers
Counties are not required to execute BHSA contracts with providers owned or operated by the county because these providers are subject to all the same requirements as the county itself. Counties must, however, maintain records of expenditures sufficient to comply with BHOATR requirements, and must maintain policies and procedures to ensure compliance with all the same requirements enumerated above.
E.2 General Standards for BHSA Providers
In the IP, counties must describe how they will ensure that BHSA-funded providers are qualified to deliver services, comply with nondiscrimination requirements, and deliver services in a culturally competent manner, as specified under W&I Code 5963.02(c)(8)(C)–(F). To satisfy this requirement and promote alignment across programs, effective July 1, 2027, DHCS recommends that counties require BHSA-funded providers to comply with the same standards as Medi-Cal providers with respect to:
Minimum provider qualifications for licensure, certification, training, experience, and credentialing, as applicable for each type of service. This requirement focuses on minimum standards to provide BHSA-funded services, and so does not incorporate standards specific to Medi-Cal.
Nondiscrimination requirements, including ensuring physical access, reasonable accommodations, and accessible equipment for people with disabilities.
Delivering services in a culturally competent manner to all individuals, including those with limited English proficiency and diverse cultural and ethnic backgrounds and disabilities, regardless of age, religion, sexual orientation, and gender identity.
As a reminder, under state law, BHSA and Medi-Cal providers are already subject to many of the same standards on provider qualifications and nondiscrimination. In addition, by July 1, 2027, most BHSA providers that offer Medi-Cal coverable services should already be participating in the county Medi-Cal Behavioral Health Delivery System and should already be complying with Medi-Cal requirements. For additional details on this requirement, see Chapter 6, Section C.2 of this Policy Manual.
When filling out their IP, counties may check a box to indicate that they will require BHSA-funded providers to comply with the same Medi-Cal standards outlined above, either for all BHSA-funded providers or only for the subset of BHSA providers that also participate in Medi-Cal. If a county elects not to hold all BHSA providers to Medi-Cal standards, the county must describe its county-specific approach for ensuring provider qualifications, nondiscrimination, and cultural competence.
Regardless of the approach counties take, the applicable standards must be codified in counties’ BHSA provider contracts and policies and procedures, as described above under section E.1.
E.3 County Monitoring of BHSA Providers
In the IP, per W&I Code § 5963.02, subdivision (c)(8)(I), counties must describe how they will conduct oversight of BHSA providers to ensure compliance with all applicable federal and state laws, and as described in this Policy Manual. Effective July 1, 2027, counties must:
Adopt a monitoring schedule for BHSA-funded providers that includes periodic site visits;
Preserve provider monitoring records, including monitoring reports, county-approved provider CAPs, and confirmations of CAP resolutions; and
Provide monitoring records to DHCS at any time, upon DHCS’ request.
As with the provider standards discussed in the prior section, DHCS recommends that counties adopt the same provider monitoring schedule for BHSA and Medi-Cal. Consistent with the integrated SMHS/SUD Medi-Cal contracts that all counties will adopt effective January 1, 2027, this would entail:
Monitoring compliance at least annually for all BHSA provider locations; and
Performing onsite monitoring at least once every three years.
DHCS encourages counties to implement efficient monitoring processes that minimize administrative burden for contract providers. For example:
Under an aligned monitoring schedule, a county may simultaneously monitor providers for compliance with requirements under Medi-Cal, BHSA, and any other applicable programs.
If a provider furnishes BHSA-funded services in multiple counties, one county may rely on monitoring performed by another county, consistent with current practices for Medi-Cal provider monitoring.
When filling out their IP, counties may check a box to indicate that they will use the same provider monitoring schedule for BHSA and Medi-Cal, whether for all BHSA-funded providers or only for the subset of BHSA providers that also participate in Medi-Cal. If a county elects not to follow the Medi-Cal monitoring schedule for all BHSA-funded providers, the county must describe its county-specific monitoring approach, which must include the elements outlined above (periodic site visits and preservation of monitoring records).