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Temporary Funding Withholds Reinforce Accountability for County Behavioral Health Plans that Failed to Meet State and Federal Provider Network and Timely Access Standards
SACRAMENTO —The Department of Health Care Services (DHCS) today announced new enforcement actions holding county Behavioral Health Plans (BHP) accountable to improve behavioral health access for Medi-Cal members. DHCS is implementing temporary funding withholds for 10 county BHPs that have not corrected repeated deficiencies in meeting state and federal standards for having enough providers to meet the needs of Medi-Cal members and/or ensuring timely access to behavioral health care.
“When someone needs help, waiting carries real consequences. Every day without care is a day of fear, confusion, and suffering that could have been eased. Care should meet people where they are: on time, close to home, and without hoops to jump through,” said DHCS Director Michelle Baass. “People deserve a path that is simple, steady, and kind, because mental health care isn’t paperwork, it’s help in the moment it matters.”
WHY THIS IS IMPORTANT: County BHPs are required to meet network adequacy (having enough qualified providers in a BHP to meet the needs of Medi-Cal members) and provide timely access to care. Each year, DHCS measures BHPs’ network adequacy, including provider-to-member ratios, appointment wait times, and geographic access. For years, DHCS has provided technical assistance and imposed corrective action plans to help BHPs address gaps and deficiencies with meeting established standards. Temporary funding withholds represent the next step to hold plans accountable. As California transforms its behavioral health delivery system, timely access to care remains essential.
“For several years, California has emphasized that timely, high-quality care is not optional—it’s fundamental to Medi-Cal’s mission. While several counties have made meaningful progress, others continue to have targeted gaps that need to close,” said State Medicaid Director Tyler Sadwith. “These temporary withholds underscore our commitment to accountability and ensure that every county moves decisively toward building the provider networks Californians need. By enforcing clear expectations and supporting counties to meet them, we are advancing a system where every member can rely on timely, equitable behavioral health care.
WHAT THIS MEANS: DHCS will temporarily withhold a portion of behavioral health funding from BHPs that remain out of compliance with one or more network adequacy standards for two consecutive certification cycles (2024-25 and 2025-26). Funds will be returned once a BHP demonstrates compliance. BHPs with deficiencies will also move into enhanced monitoring, including regular progress reporting and ongoing technical support. The imposition of temporary withholds represents the beginning point of a graduated enforcement framework that allows for further escalation as warranted, including ongoing temporary withholds and permanent monetary sanctions.
HOW THIS IMPROVES CARE: Holding counties accountable for meeting access standards helps ensure Medi-Cal members receive timely, medically necessary behavioral health services. Strong provider networks reduce wait times, improve access to care close to home, and support California’s broader behavioral health transformation through the California Advancing and Innovating Medi-Cal (CalAIM) initiative and Mental Health for All. By strengthening county provider networks, DHCS is improving access to quality mental health and substance use disorder treatment.
FINDINGS: During the 2025-26 certification cycle, DHCS assessed BHPs against 43 Specialty Mental Health Services (SMHS) and 46 Drug Medi-Cal Organized Delivery System (DMC-ODS) standards. Ten BHPs did not resolve deficiencies over two or more years and will have funds temporarily withheld:
DHCS will return withheld funds once a plan corrects its deficiencies. These actions follow state law and DHCS policies in Behavioral Health Information Notice (BHIN) 25-023 and BHIN 25-013.
ONGOING WORKFORCE INVESTMENTS: Alongside enforcement, DHCS continues to invest heavily in expanding California’s behavioral health workforce. Through the Behavioral Health Community-Based Organized Networks of Equitable Care and Treatment (BH-CONNECT) workforce initiative, the state is investing $1.9 billion over five years to support training, recruitment, and retention of behavioral health providers. Also, the Department of Health Care Access and Information is advancing statewide workforce development through its five-year Workforce Education and Training (WET) plan. Counties can supplement statewide efforts through the Behavioral Health Services Act.
MORE INFORMATION: For more information, please see the 2025-26 Behavioral Health Network Adequacy Compliance Report on the DHCS Network Adequacy webpage.
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CMS is intensifying its actions against California’s in-home care system, affecting children and adults with significant disabilities and seniors who rely on these services to remain safely at home.
CMS has deferred an additional $646.4 million from in-home care, which keeps Medi-Cal members with disabilities in their homes and out of institutions. This follows a previous $1.1 billion deferral from May, bringing the total to $1.7 billion deferred.
CMS is punishing the state for growing the program to serve the Californians who need it. In-home care growth reflects intentional, federally encouraged expansion, not improper spending. Growth in eligibility, increased wages for caregivers, and support for higher-acuity members are all in line with longstanding federal policy. In essence, CMS now seeks to penalize California for what was CMS’ own policy.
California’s approach, which had been long approved by CMS, saves federal and state taxpayers money. One year of in-home care saves state and federal taxpayers approximately $100,000 per person annually versus nursing facility care. A 2020 California State Auditor report found no program integrity concerns and recommended increasing reimbursement rates to grow the in-home care provider workforce and reduce reliance on costly institutional care. California did exactly that.
California is calling on CMS to stop threatening care for California’s most vulnerable residents.
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SACRAMENTO —As a result of Governor Newsom’s reforms to modernize and expand California’s behavioral health system, the Yurok Tribe yesterday broke ground on the Wah-Sekw-Won Treatment Center (Yurok Health and Wellness), a new 53-bed inpatient residential treatment facility that will significantly expand access to culturally grounded behavioral health care for Yurok Tribal members, other Native Americans, and eligible residents throughout Humboldt County and the surrounding region.
Once complete, the center will help address longstanding gaps in behavioral health services, reducing the need for Tribal and community members to travel far from home for treatment by supporting recovery and wellness in the region. The project is supported by a $26 million, California voter-approved Bond Behavioral Health Continuum Infrastructure Program (BHCIP) Round 1: Launch Ready award.
“The Yurok community will soon have access to culturally grounded behavioral health care close to home when they need it most,” said Department of Health Care Services (DHCS) Director Michelle Baass. “Without this center, many Tribal and local community members must continue to travel long distances away from their family and support network for care.”
ABOUT THE WAH-SEKW-WON TREATMENT CENTER (YUROK HEALTH AND WELLNESS): Located near Weitchpec, the 26,000-square-foot Wah-Sekw-Won Treatment Center will include:
WHAT THEY’RE SAYING: “Today’s groundbreaking is more than the start of a building. It is the continuation of our commitment to healing, wellness, and sovereignty,” said Dr. Jacqueline Bae, Director of Health Services, Yurok Tribe (Yurok Health and Wellness Center). “The Wah-Sekw-Won Treatment Center will provide culturally grounded care that honors the strength, resilience, and traditions of the Yurok people. This investment will save lives, strengthen families, and uplift our entire region for generations to come.”
“We are meticulously planning every aspect of this effort to provide high-quality, culturally centered health care services that help individuals restore balance to their lives,” said Chairman of the Yurok Tribe Joseph L. James. “This facility will provide a broad range of supportive care services as part of an expanding, sovereign, community-driven behavioral health system.”
“I want to express sincere gratitude to Governor Gavin Newsom, the California Health and Human Services Agency, and the Department of Health Care Services for their strong commitment to advancing health care access and outcomes in Tribal communities,” said Yurok Tribe Vice Chair Rose Sylvia.
“We fully support the Yurok Tribe’s vision to construct and operate a Tribal wellness center,” said Connie Beck, Director of the Humboldt County Department of Health and Human Services. “This project will bring lasting, positive changes to the region.”
WHY THIS MATTERS: More than 1.2 million adults in California live with a serious mental illness, and 1 in 10 residents meet the criteria for a SUD. Persistent shortages of treatment facilities contribute to rising rates of homelessness and incarceration among people with behavioral health needs. Investments like the Wah-Sekw-Won Treatment Center (Yurok Health and Wellness) help fill these gaps. The project will also support local job creation by expanding the behavioral health workforce in the region, contributing to long-term community stability.
BIG PICTURE: This project is one of 177 statewide, funded through Bond BHCIP resources to support both immediate needs and long-term behavioral health. Administered by DHCS, Bond BHCIP helps communities build, acquire, and expand crisis, residential, and outpatient treatment facilities. To date, the program has supported 333 facilities, adding 6,919 new residential and inpatient beds and 27,561 outpatient treatment slots statewide, surpassing statewide goals just two years after passage. Since 2021, BHCIP has awarded $5.8 billion to strengthen behavioral health care access.
The Yurok Tribe also received awards through BHCIP Round 1: Crisis Care and Mobile Units ($200,000), BHCIP Round 2: Planning Grants ($150,000), nearly $8 million through BHCIP Round 4: Children and Youth, and $12 million through Bond BHCIP Round 2: Unmet Needs to further strengthen the Tribe’s behavioral health infrastructure. The Yurok Youth Center, which broke ground in April 2026, will develop four facilities dedicated to behavioral health services for children and youth, expanding outpatient behavioral health capacity and increasing access to care for thousands of individuals annually.
Backed by strong community partnerships, statewide investments, and new policies, California continues building a comprehensive, equitable behavioral health system that ensures people can access prevention, crisis support, treatment, and long-term recovery services.
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SACRAMENTO —The Department of Health Care Services (DHCS) today released the latest quarterly report on Enhanced Care Management (ECM) and Community Supports. These services help Medi-Cal members stay healthier and avoid other, costlier health care services, such as emergency department visits and hospital stays. These data from July through September 2025 (Q3 2025) and a recent report highlight the continued expansion and impact of these services for Medi-Cal members.
“The continued growth of ECM and Community Supports reflects the strength of our statewide partnerships and the dedication of the care managers, providers, and community organizations who show up for Medi-Cal members every day,” said DHCS Director Michelle Baass. “These services are strengthening stability, dignity, and health for members across the state.”
KEY FINDINGS FROM THE Q3 2025 REPORT:
ECM offers California’s highest level of care management, pairing members with a Lead Care Manager who coordinates physical, behavioral, and social services to support stability and improve health outcomes. Community Supports are cost-effective, optional services offered by Medi-Cal managed care plans that address health‑related needs, such as housing instability, nutrition, transitions from institutional care, and chronic condition management.
WHY THIS MATTERS: ECM and Community Supports are key pillars of California’s work to build a more coordinated, equitable, and prevention-oriented Medi-Cal system. These programs help members with complex needs connect to consistent, community‑based supports that stabilize health and reduce the need for higher levels of care. By emphasizing prevention and whole‑person care, ECM and Community Supports continue to improve health outcomes for Medi‑Cal members statewide.
Managed care plans have significantly expanded ECM provider networks, adding more providers serving adults at risk of long-term care and children and youth with the highest needs. DHCS continues to encourage plans to fully utilize contracted providers and ensure services are delivered at the appropriate level of intensity.
COST-EFFECTIVENESS AND LONG-TERM IMPACT: Findings from DHCS’ latest In Lieu of Services (ILOS) annual report show that Community Supports are helping members avoid costlier forms of care. The report studies service costs and utilization before and after members received at least one of the 12 Community Supports authorized as ILOS between January 2023 and June 2024. Ten of the 12 Community Supports studied are already demonstrating cost-effectiveness across applicable Medicaid State Plan service categories, such as emergency department visits, inpatient hospital stays, and nursing facility stays. Key findings include:
Early results underscore long-term value, demonstrating that investing in services that address social drivers of health not only improves member well-being, but also reduces costs across Medi-Cal’s delivery system. For more information, see this fact sheet.
ECM AND COMMUNITY SUPPORTS ARE HERE TO STAY: ECM is a statewide Medi-Cal managed care benefit for members with the most complex needs. Community Supports are also an option for state Medicaid programs, primarily grounded in federal Medicaid managed care regulations and memorialized in approved managed care contracts. Because these services are built into the core structure of Medi-Cal managed care—not temporary pilots—DHCS will continue to oversee implementation, expand provider networks, and support long-term program stability.
This permanency ensures that members, care managers, providers, and community partners can continue investing in relationships and care models that make ECM and Community Supports effective. It also guarantees continuity of intensive care coordination, housing and nutrition supports, behavioral health services, and other critical resources relied upon by hundreds of thousands of Californians.
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Office of Communications
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SACRAMENTO — The federal Centers for Medicare & Medicaid Services (CMS) has taken the extraordinary step of deferring $1.1 billion in federal funding tied to California’s In-Home Supportive Services (IHSS) program.
This action sends a troubling message about the value CMS places on the essential work IHSS caregivers perform every day and creates significant fiscal strain for California, as the State continues ensuring uninterrupted care for more than 900,000 older adults, people with disabilities, and children who rely on IHSS to live safely at home.
IHSS is a federally approved Home and Community-Based Services (HCBS) program and a cornerstone of California’s long-standing efforts to keep people safe at home and out of costly institutional settings, an approach CMS has consistently encouraged for decades. California has built one of the nation’s strongest HCBS systems, expanding access to in-home services in direct alignment with federal policy and the Americans with Disabilities Act’s mandate to support individuals in the most integrated setting appropriate.
“CMS has used what once was a routine payment reconciliation process with states to undermine exactly what federal HCBS policy has long sought to achieve: helping more people remain safely at home, rather than enter institutions for long-term care,” said State Medicaid Director Tyler Sadwith.
CMS asked why IHSS expenditures have grown in recent years. California immediately explained there are three main factors that have driven increases in IHSS program costs:
The IHSS caseload for individuals eligible for federal financial participation Medi-Cal increased from 613,764 in State Fiscal Year (SFY) 2022-23 to 720,988 in SFY 2024-25, a 17.5 percent increase. The average cost per hour went from $19.00 to $21.03 in the same period, representing an increase of 10.7 percent driven by statewide minimum wage increases and county-negotiated wage rates. Wage increases are a tool to recruit and retain qualified workers in a field experiencing a provider shortage. Finally, the average hours per case modestly increased over the same period due to the higher acuity needs of individuals receiving services in the program.
“The growth in IHSS expenditures over the last several years reflects intentional policy choices to expand access to IHSS,” Sadwith added. “It is the direct and foreseeable result of expanding eligibility, increasing hourly reimbursement rates, increasing utilization consistent with demographic change, and substituting home-based care for institutional placement—outcomes that CMS has repeatedly endorsed and promoted through federal approvals of California’s IHSS and HCBS programs because they deliver care at a fraction of institutional costs.”
Despite these longstanding federal policy goals and federal approvals for IHSS program growth, CMS’ deferral notice states that CMS is deferring these funds simply because the growth rate in California’s IHSS program is greater than other states.
In addition, CMS’ letter cites program-integrity concerns, but provides no specifics as to what these concerns are other than “statistical outliers.” Program integrity is a core Medi-Cal function focused on ensuring public dollars are spent the right way through extensive oversight, fraud prevention, and enforcement efforts. California maintains strong, longstanding IHSS oversight systems, including annual assessments, electronic timesheets, verification tools, and coordinated state-county review processes.
“IHSS caregivers help people get out of bed, prepare meals, bathe safely, and remain in their homes with dignity. We are grateful for the work they do every day,” Sadwith added. “CMS’ decision recklessly disregards the people who depend on IHSS and the individuals who care for them every day.”
In addition to the IHSS-related deferral, CMS also included roughly $200 million associated with long-standing administrative and technical claiming items that the state has already been working through with CMS. These items are expected, unrelated to IHSS services or caregiver payments, and part of ongoing federal review processes. DHCS voluntarily implemented a 15 percent reduction in administrative claims beginning in early 2025 as part of a comprehensive review to ensure federal funds are not used for state-only programs. These administrative claims are related to program administration and agency operation costs, not health care. DHCS has submitted comprehensive documentation to CMS demonstrating compliance with claiming processes and updated our reduction to account for this review. DHCS continues to work with CMS to provide support for these updated adjustments.
California calls on CMS to immediately restore IHSS funds and will take every step necessary to protect IHSS members and the caregivers who support them.
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SACRAMENTO — The Department of Health Care Services (DHCS) today released its 2025 BrightLife Kids and Soluna Impact Report, detailing how California’s free behavioral health platforms have reached more than 500,000 users, including children, youth, young adults, and families, across all 58 California counties. Launched in 2024, the platforms offer free confidential mental health support and resources to all Californians, regardless of insurance or immigration status.
“The data reinforce what we’ve heard from children and families across California: Soluna and BrightLife Kids are a key resource to support our youth,” said DHCS Director Michelle Baass. “By investing in easy to use, accessible tools, California is improving the mental health of children today so they can have the bright futures they deserve.”
WHY THIS MATTERS: BrightLife Kids and Soluna reduce barriers to mental health care, particularly for youth in rural areas, low-income communities, and underserved populations. Early data show the platforms are advancing equity, with most users coming from communities with the greatest social and health inequities.
The report highlights substantial growth resulting from community outreach and engagement: more than 112,000 coaching sessions delivered through January 2026, with 98 percent of participants reporting satisfaction. Half of Soluna users and three quarters of BrightLife Kids users report this is their first time accessing professional behavioral health support. Additionally, more than 5,000 Californians have been referred to community-based providers when they need a higher level of care or other social support.
Early evaluation data—now under peer review—from Northwestern University’s Lab for Scalable Mental Health show Soluna users experienced significant reductions in distress after one month, with benefits sustained at three months. BrightLife Kids users similarly reported progress, with parents noting improved ability to support their children.
WHAT THEY ARE SAYING: “Before Soluna, I didn’t really know where to start if I wanted to talk to someone professionally…There’s a lot of really quick, fast features that don’t require a lot of time, but do have a really strong impact,” said Sierra (below), a Soluna young adult ambassador.
“BrightLife Kids helps me so much by giving me the tools on how to be a better, more present mom,” said Lillian (below), parent of a 6-year-old daughter.
ABOUT THE PLATFORMS: BrightLife Kids and Soluna offer free coaching, peer communities, personalized goalsetting tools, and care navigation. Services are available online, in mobile app stores, in English and Spanish, and through telephone-based coaching available in 17 languages.
BIGGER PICTURE: The platforms are part of California’s CalHOPE program and the Children and Youth Behavioral Health Initiative (CYBHI), both of which represent key components of Governor Newsom’s Master Plan for Kids’ Mental Health, a historic statewide investment designed to strengthen mental health and well-being for children and youth using a comprehensive “whole child” approach.
DHCS encourages families and youth ages 0–25 to access free behavioral health support through BrightLife Kids and Soluna and invites partners to review the full 2025 impact report to learn more about statewide outcomes and impact.
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SACRAMENTO — The California Department of Health Care Services (DHCS) and the California Department of Justice (DOJ), working in close coordination with the California Department of Public Health (CDPH), have taken decisive action to dismantle a large-scale identity theft and hospice fraud scheme targeting the Medi-Cal program. This coordinated enforcement effort underscores California’s commitment to protecting Medi-Cal members and safeguarding taxpayer dollars from fraud, waste, and abuse.
Working together, DHCS and DOJ’s Division of Medi-Cal Fraud and Elder Abuse (DMFEA) confirmed that transnational criminal networks used stolen identities to fraudulently enroll individuals in Medi-Cal and bill for hospice services that were never provided. The scheme involved 14 fraudulent hospice providers and resulted in more than $267 million in improper billing. DHCS is working closely with federal partners to determine any required repayment obligations under Medicaid rules, and will pursue recovery from the fraudulent actors wherever possible, with recovery efforts already underway, including the recovery of more than $70 million to date in coordination with state and federal law enforcement.
“For years, California has led the charge to protect public programs from fraud and abuse. We hold accountable to the fullest extent of the law anyone who tries to rip off taxpayers and take advantage of public programs, particularly those as sensitive as hospice care. I thank DHCS and DOJ for their swift work to bring these charges forward. Since these are state charges, Donald Trump cannot pardon these individuals in exchange for campaign donations,” said Governor Gavin Newsom.
California acted swiftly to protect Medi-Cal and taxpayer dollars by:
“This investigation demonstrates what California can accomplish when our state agencies work together with urgency and purpose,” said California Health and Human Services Secretary Kim Johnson. “Protecting the millions of Californians who depend on Medi-Cal to meet their health needs is our priority, and we will not tolerate bad actors. DHCS moved swiftly to stop these payments, disenroll fraudulent accounts, and refer perpetrators for criminal prosecution. Our work is not done, and we will continue strengthening the safeguards that keep Medi-Cal sound and trustworthy for the people it was designed to serve.”
Large-scale fraud involving identity theft and coordinated criminal networks requires careful, evidence-based investigation. DHCS and its partners must confirm each affected identity, avoid alerting perpetrators, and build cases that meet legal standards for suspensions, license actions, and prosecution. DOJ has executed search warrants, made arrests, and filed criminal charges to dismantle the network and ensure the perpetrators face full accountability under state law. This deliberate approach protects legitimate Medi-Cal members and ensures enforcement actions are strong enough to hold bad actors fully accountable.
This action builds on California’s statewide hospice enforcement efforts, including the CDPH-led California Hospice Fraud Task Force, which strengthens coordination among state departments to identify fraud, share information, and act quickly to stop bad actors. These efforts have resulted in more than 280 hospice license revocations and hundreds of ongoing investigations.
“Fraud is a direct attack on the health and well‑being of Medi‑Cal members, and we will not hesitate to act,” said DHCS Director Michelle Baass. “Our safeguards worked quickly and effectively—identifying suspicious activity, stopping improper payments in their tracks, and prompting immediate suspension of the providers involved. In coordination with the California Department of Justice’s Division of Medi‑Cal Fraud and Elder Abuse, California’s Medicaid Fraud Control Unit, we are pursuing full accountability while reinforcing our oversight systems to protect Medi-Cal members and the taxpayers who fund this program.”
“This isn’t a political game for us. This is about protecting taxpayer dollars, protecting programs sick and vulnerable Californians rely on, and protecting our state,” said Attorney General Rob Bonta. “Over the life of this fraud scheme, not a single legitimate hospice service was ever provided, yet millions were billed in a brazen, calculated scheme that exploited the Medi-Cal system. This wasn’t a mistake or a loophole; it was deliberate fraud. This kind of abuse undermines trust, drains critical resources, and threatens care for those who truly depend on it. This is a perfect example that we have taken a firm stand to investigate, prosecute, and shut down hospice fraud wherever it exists.”
A MULTIPRONGED APPROACH TO FRAUD PREVENTION: DHCS’ program integrity safeguards were critical in detecting and stopping this scheme, and the Department is implementing additional measures to prevent similar fraud from occurring in the future. The comprehensive strategy includes:
DHCS manages more than $200 billion annually to serve more than 14 million Californians who rely on Medi-Cal. Protecting program integrity ensures that every dollar goes to those who truly need care. To proactively combat hospice fraud, Governor Gavin Newsom signed legislation in 2021 that banned new hospice licenses in California, a moratorium that remains in effect. He also created the statewide Hospice Fraud Task Force to ensure rapid information-sharing and support license revocation, payment suspension, and criminal case development. Learn more about DHCS program integrity.
REPORTING SUSPECTED FRAUD: DHCS encourages anyone who suspects Medi-Cal fraud to report it immediately:
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Office of Communications
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WHAT YOU NEED TO KNOW: California continues its multi-agency actions to protect Californians and taxpayer dollars from fraudulent or unsafe hospice activity. Yesterday, investigators from the California Department of Public Health (CDPH), California Department of Health Care Services (DHCS), and California Department of Tax and Fee Administration (CDTFA) conducted onsite compliance reviews in Los Angeles County.
LOS ANGELES – As part of ongoing efforts to protect patients and safeguard public health programs, approximately 80 surveyors and investigators from CDPH, DHCS, CDTFA, and partner agencies conducted compliance reviews at a Van Nuys location subject to “viral” videos regarding hospice care.
While online claims pointed to numerous hospices tied to potential fraud at this location, nearly 9 out of 10 entities that have utilized this address for their business cannot even bill the state-run Medi-Cal program for hospice care.
A review of state records tied to this location identified the following:
When some of the businesses sought to establish hospices, California stopped them. In 2021, California took decisive action to place a moratorium on new hospice licenses. The state’s prevention efforts worked: Upwards of 60 percent of hospice entities using the Van Nuys address were denied a license because of California’s moratorium.
PROTECTING THE HOSPICE SYSTEM: That hasn’t slowed enforcement. The state treats all reports of regulatory non-compliance, whether received in-person, through the mail, or online as complaints, from members of the public and is inspecting them under its purview as part of its everyday work to protect taxpayers, root out fraud, and increase the quality of hospice care.
“As part of our ongoing work, we are in Los Angeles County actively investigating hospice providers,” said CDPH Director and State Public Health Officer Dr. Erica Pan. “Protecting patients and safeguarding the integrity of our health care system remains our top priority, and we will continue to hold providers accountable.”
“DHCS is shoulder to shoulder with CDPH on this effort,” said DHCS Director Michelle Baass. “Whether our teams are in the field conducting reviews or verifying enrollment and billing, when we suspect fraud, we act. And when we determine there is a credible allegation of fraud, we refer cases to the California Department of Justice. Our shared commitment is protecting Medi Cal members, safeguarding taxpayer dollars, and ensuring hospice services are delivered safely, legally, and with integrity.”
“The Department of Tax and Fee Administration is happy to lend our expertise and support to our partner agencies to review concerns and verify compliance,” said CDTFA Director Trista Gonzalez. “Our focus is on ensuring businesses are operating within the law and that public funds are protected.”
HOLDING BAD ACTORS ACCOUNTABLE: Since Governor Newsom’s 2021 moratorium, California has revoked 280+ hospice licenses and placed 300 more under investigation — among the most aggressive enforcement actions in the nation. In addition to CDPH’s licensing enforcement, DHCS has strengthened hospice billing safeguards by requiring its own verification of hospice elections before any claim can process, using a DHCS issued indicator code that only appears after documentation is approved.
Under the Trump Administration, the Centers for Medicare & Medicaid Services (CMS) suspended implementation of the Hospice Special Focus Program, a federally required initiative designed to identify and increase scrutiny of poorly performing hospices. The program would have driven more frequent inspections and stronger federal enforcement.
CDPH licenses and oversees hospice providers and investigates complaints, and DHCS audits Medi-Cal billing. However, the federal government administers Medicare, which accounts for the vast majority of hospice spending, and they reimburse, monitor, and investigate federal Medicare payments. The state is not involved in Medicare billing or payment processing.
California welcomes continued partnership with CMS as the federal government advances its own hospice oversight efforts, and will continue to share information and coordinate where appropriate to support shared program integrity goals. California’s work to prevent and stop fraud and hold fraudsters accountable is ongoing, and further details regarding these ongoing investigations will remain confidential to protect the integrity of this critical law enforcement work.
See how California is fighting fraud in state programs at stopfraud.ca.gov, and view B-roll of hospice compliance reviews. For more information about the decisive actions California has taken in hospice fraud enforcement, please see the Governor’s March and January news releases.
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Office of Communications
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DHCSPress@dhcs.ca.gov
SACRAMENTO — The California Department of Health Care Services (DHCS) today released the impact report on the first year of California’s Justice-Involved Reentry Initiative. This first-in-the-nation program provides targeted Medi-Cal services to incarcerated individuals up to 90 days before release, closing critical gaps in care and supporting safer, more stable returns to communities.
“California is leading the way in implementing safer, more effective reentry strategies,” said DHCS Director Michelle Baass. “By connecting people to community-based care before they leave incarceration, we’re improving individual health, strengthening families, and building safer communities. This initiative shows what’s possible when agencies work together to create real, lasting change.”
IMPACT TO DATE: The report highlights significant progress in the first year of the initiative, including strong collaboration among state agencies, counties, managed care plans, and community partners. The report also provides stories of individuals who have benefited from these services. In its first year, the initiative delivered more than 159,000 billable pre-release services and prescriptions and enrolled more than 24,000 incarcerated individuals in Medi-Cal prior to release.
“Before this initiative, without consistent communication, medical and corrections teams, despite being in the same facility, weren’t always aligned,” said Yuba County Project Manager Stephanie Lucio. “This effort has truly brought everyone to the table. Collaborating, sharing expertise, and building a solid reentry plan together has been invaluable.”
October 2025 marked one year since the initiative launched, a milestone for this cross-agency effort involving DHCS, the California Department of Corrections and Rehabilitation (CDCR) and California Correctional Health Care Services (CCHCS), county agencies (including county behavioral health, public health, probation, social services, and sheriff’s offices), Medi-Cal managed care plans, and community-based organizations. Since October 2024, all 31 state prison facilities and 34 county jails and youth correctional facilities across 14 counties have launched pre-release services. Nearly two dozen additional facilities are preparing to begin offering services to their populations in the next few months. All correctional facilities statewide are required to go live before October 1, 2026.
WHY THIS IS IMPORTANT: People leaving incarceration often face untreated health conditions and lack access to care, increasing risks of overdose, hospitalization, and recidivism. By starting Medi-Cal before release and coordinating connections to care in the community, California is reducing these risks and improving health equity. The Justice-Involved Reentry Initiative includes:
“We initiate reentry planning and Medi-Cal coverage well before a patient is due to be released, ensuring a warm handoff to community services,” said Dawn Freeman, the CCHCS Chief Nurse Executive overseeing the Justice-Involved Reentry Initiative. “It’s provided enormous reassurance and a greater sense of stability among this population, a critical component for health care and substance use treatment. Individuals expressed they feel better prepared knowing they have available resources, someone to connect with, and are no longer alone.”
This focus on coordinated, person centered care was highlighted in a recent New York Times article, which examined how California is implementing systemic changes to support individuals returning to their communities. For more information, see the Justice-Involved Reentry Initiative webpage.
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SACRAMENTO — Continuing California’s work to expand and modernize its behavioral health system, the California Department of Health Care Services (DHCS), Homeboy Industries, and community partners today broke ground on Home of the Angels, a new campus in Los Angeles supported by California’s voter-approved Behavioral Health Infrastructure Bond Act and DHCS’ Behavioral Health Continuum Infrastructure Program (BHCIP).
The project was awarded nearly $25 million in Bond BHCIP Round 1: Launch Ready funding, significantly expanding residential, outpatient, and peer-based support for individuals seeking substance use disorder treatment, particularly those who are formerly incarcerated, returning from the justice system, and part of the Homeboy Industries community.
When completed, the Home of the Angels campus will include:
The campus brings together residential treatment, peer respite, and outpatient services in one integrated setting, allowing participants to move seamlessly through each level of care as their needs evolve. The project also introduces licensed residential treatment on a Homeboy Industries campus for the first time—an important innovation that strengthens continuity of care, reduces reliance on outside referrals, and expands the organization’s comprehensive and compassionate reentry‑focused support system.
“Home of the Angels reflects the community-rooted solutions that the Newsom Administration is advancing, bringing treatment and recovery services under one roof and closer to the people who need them,” said DHCS Director Michelle Baass. “This investment expands access to care for Californians returning home from the justice system, supporting dignity, stability, and long-term recovery.”
WHY THIS MATTERS: Founded in Los Angeles, Homeboy Industries is a nationally recognized nonprofit organization supporting formerly incarcerated and formerly gang-involved individuals. Its trauma-informed, culturally responsive services include behavioral health supports, substance use disorder treatment, case management, and reentry-focused wraparound services rooted in healing and community connection.
Home of the Angels supports DHCS’ broader reentry initiative efforts, including the Justice-Involved Reentry Initiative, by:
“Healing happens when people are received with tenderness and held in community,” said Father Greg Boyle, Founder of Homeboy Industries. “Home of the Angels reflects what we have always believed at Homeboy Industries: that people heal when they are seen, cherished, and given a place to belong. By creating spaces rooted in love and dignity, we make room for restoration, hope, and new beginnings.”
BIG PICTURE: Bond BHCIP is a statewide initiative administered by DHCS that helps communities build, acquire, and expand treatment facilities, filling in longstanding gaps in crisis, residential, and outpatient behavioral health care facilities. Proposition 1 has funded 177 projects across 333 facilities, supporting 6,919 new residential and inpatient beds and 27,561 outpatient treatment slots, surpassing statewide goals just two years after passage. Since 2021, BHCIP has awarded $5.8 billion to strengthen crisis, residential, and outpatient care across the state.
Backed by significant statewide investments, new policies, and strong community partnerships, California is building a comprehensive and equitable continuum of behavioral health care that ensures people can access prevention, crisis support, treatment, and long term recovery services when and where they need them.
BIGGER PICTURE: California’s investment in Home of the Angels is part of the broader transformation underway through Proposition 1 and Governor Gavin Newsom’s Mental Health for All strategy. Earlier this month, the Governor announced the redevelopment of six vacant state owned buildings into the new Los Angeles County Care Community, supported by a $65 million Proposition 1 investment to create 162 new housing and treatment beds. This project, alongside BHCIP funded efforts like Home of the Angels, reflects the Administration’s comprehensive work to expand access to behavioral health care, increase treatment capacity, and help Californians experiencing serious mental illness, substance use disorders, or homelessness get the care and stability they need.
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