Medi-Cal Mental Health Policy (MCMHP): Background
In 1957, California passed legislation creating the Short-Doyle Program, wherein counties were required to ensure delivery of mental health services utilizing a system of county operated and contract providers.
In 1965 the United States congress passed Title XVIII, the Medicare legislation for some disabled individuals and persons 65 years of age and over, and Title XIX, the Medicaid legislation that provided federal matching funds to states that implemented a comprehensive health care system for the poor under the administration of a single state agency.
Subsequently in 1966, California implemented the Medi-Cal program, based on the provisions of Title XIX. Mental health services for which there was federal reimbursement included psychiatric inpatient hospital services, nursing facility care, and professional services provided by psychiatrists and psychologists. Services were provided under a fee for service reimbursement arrangement with rates set by the Department of Health Services (DHS). This system came to be known as Fee for Service Medi-Cal (FFS/MC)
In 1971, legislation in California added Short-Doyle community mental health services into the scope of benefits of the Medi-Cal program enabling counties to obtain federal matching funds on their costs of providing certain mental health services to persons eligible for Medi-Cal.
These Short Doyle Medi-Cal (SD/MC) services consisted of inpatient hospital services delivered in acute care hospitals, individual, group or family therapy delivered in outpatient or clinic settings and various partial day or day treatment programs. Several service components were added via a state plan amendment (SPA) to the SD/MC array of services in subsequent years. These included Targeted Case Management approved in 1988 and the Rehabilitation Option in 1993. These additions broadened the scope of benefits, the range of personnel who could provide services and the location where services could be provided. Reimbursement under the SD/MC program is primarily based on allowable costs or negotiated rates approved by DMH, up to a statewide maximum allowance.
Thus, prior to the advent of Managed Care, California's Medi-Cal program consisted of two mental health delivery systems, the original program or FFS/MC and the county based SD/MC system.