California DHCS prepares to submit BH-CONNECT 1115 demonstration to strengthen behavioral health supports


Hannah Saunders


At the beginning of the month, California’s Department of Health Care Services (DHCS) opened a 30-day public comment period to gain feedback on its Section 1115 demonstration request for the California Behavioral Health Community-Based Organized Networks of Equitable Care and Treatment, or BH-CONNECT. The department hosted a forum to explain initiatives for the waiver demonstration, and to take in some feedback. 

Tyler Sadwith, deputy director of behavioral health for DHCS, highlighted the draft application that the department plans to submit to the Centers for Medicare and Medicaid Services (CMS) later this year.


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“Broadly speaking, BH-CONNECT aims to expand Medi-Cal coverage, improve performance, and support fidelity implementation for key interventions that are proven to improve outcomes for Medi-Cal members who are experiencing the greatest inequities in behavioral healthcare, including children and youth involved in child welfare, individuals who have experience with the justice system, and individuals who are or at risk of experiencing homelessness.”

— Sadwith

Sadwith said one in 20 Californians are living with a serious mental illness as of 2022, representing a nearly 50 percent increase over the past decade. He added that about one in four Californians experiencing homelessness have a serious mental illness, while about one in 13 children in the state are also living with a serious mental illness. 

“To address these growing challenges, the state has invested more than $10 billion, and is continuously implementing significant policy reforms to strengthen the continuum of behavioral healthcare in the state,” Sadwith said. 

The state is seeking about $6.98 billion from CMS over the five-year demonstration period, which would run from Jan. 1st, 2025, until Dec. 31st, 2029. 

The goals of BH-CONNECT include expanding the continuum of community-based care and evidence-based practices for behavioral health; strengthening family-based supports for children and youth in child welfare; connecting members living with serious mental illnesses to employment, housing, and other services; and addressing mental health needs to reduce individuals’ risk of entering or reentering the justice system.

Additional goals of BH-CONNECT include:

  • Providing resources to strengthen the behavioral health workforce and ensure access to treatment continues to improve
  • Providing resources to support counties and providers with practice transformation
  • Incentivizing performance and outcome improvements for children and youth who receive care from multiple services

“The department is designing BH-CONNECT to take advantage of federal 1115 expenditure authority and waiver authority where necessary; to take advantage of other Medicaid authorities, including 1915 (B) authorities and state plan authorities when necessary; and implementing components of BH-CONNECT using existing authority that we have for which no additional federal authority is required,” Sadwith said.

Statewide features of BH-CONNECT include a workforce initiative to invest in a diverse behavioral health workforce that would support Medi-Cal members living with significant behavioral health needs, and a statewide incentive program that would support behavioral health systems in strengthening quality infrastructure, improving performance on quality measures, and reducing disparities in behavioral health access and outcomes.

Other possible statewide features include a cross-sector incentive program to support children and youth who are involved in child welfare, and who are also receiving specialty mental health services, and activity stipends to ensure that children and youth involved in child welfare have access to community and school-based activities that support wellbeing and health.

Counties would have additional options, including an incentive program to support counties with implementing a robust continuum of community-based behavioral health services and evidence-based practices for Medi-Cal members. Counties would also have the option to opt-in to provide transitional rent services for up to six months for eligible members who are experiencing or at risk of experiencing homelessness. Counties could also receive federal financial participation for care provided during short-term stays in institutions for mental disease (IMD). 

“We intend to negotiate approval for the BH-CONNECT 1115 demonstration … through the remainder of 2023 and into 2024, and then the BH-CONNECT will be implemented on that staged implementation timeline. We want to emphasize above all that this is an ongoing conversation.”

— Sadwith

Samuel Jain, senior attorney at Disability Rights California, highlighted several areas of concern his organization had with the information presented about BH-CONNECT. 

“We have serious concerns about the IMD exclusion waiver, combined with recently passed laws and current proposals. We really feel that it represents a significant step towards reinstitutionalization. The proposal is at odds with half-century-plus old wisdom that we should not be financially incentivizing building these large, loft psychiatric institutions.”

— Jain 

Jain said Disability Rights California holds concerns about consumers not seeing benefits of the expanded suite of community-based services for counties that opt-in to an anti-exclusion waiver. Jain also emphasized concerns with capacity for intensive mental health services, even in counties that offer ongoing programs and services. He said DHCS needs to highlight the importance for members to ensure that programs and access to programs are available.

“If the department does move forward with the IMD exclusion waiver, we encourage strong performance incentives for these facilities. One of the reasons the IMD exclusion was originally implemented was widespread issues with abuse and neglect at these large psychiatric institutions, patients’ rights violations, excessive use of exclusion or restraint, and forced administration of emergency medications [which are] commonly encountered by consumers and advocates, and more frequently seen at larger facilities.”

— Jain

DHCS is accepting public comments until Aug. 31st and will review and analyze all comments to incorporate feedback into the draft application. It will submit an official application to CMS later this fall, which will be followed by a federal public comment period.