Young Children's Mental Health

Our 0–5 “Who Pays?” Problem

The long-awaited rollout of California’s Behavioral Health Services Act (BHSA)—stacked on top of newly expanded Medi-Cal benefits like Dyadic Services, Family Therapy, Community Health Workers, and Enhanced Care Management—has created both opportunity and confusion. For the first time, we have an unprecedented range of Medi-Cal–covered supports for babies and toddlers (“0–5”). Yet this progress comes with a new operational and financial dilemma: unclear accountability across systems.

County Behavioral Health Plans (BHPs) and Medi-Cal Managed Care Plans (MCPs) are now simultaneously responsible for serving the same high-risk young children—those experiencing Adverse Childhood Experiences (ACEs) and related stressors that place them at elevated risk for future behavioral health challenges. These are the very children pediatricians have long identified as underserved: clearly in need of support, yet often without a formal diagnosis that traditionally determines who pays and who treats.

The BHP Mandate (BHSA)

Under state law and BHSA policy, County Behavioral Health Plans (BHPs) must fund “childhood trauma early intervention to address the early origins of mental health and substance use disorder treatment needs.” This includes young children with high ACE scores—even when they show no symptoms. Now that the California Department of Public Health (CDPH) controls BHSA Prevention funds, counties should no longer “shoehorn” public-health-oriented prevention services into BHP contracts. This shift allows BHSA Early Intervention (EI) and Full Service Partnership (FSP) funds to be used as intended: clinical interventions (including EI, confusingly labeled “Indicated Prevention” by the state), rather than universal prevention activities.

Counties will likely begin with Evidence-Based Practices (EBPs) for young children with trauma—many of which they already support through Mental Health Services Act (MHSA) dollars. When funding allows, providers offering EBPs such as Child-Parent Psychotherapy (CPP, ages 0–5) and Parent-Child Interaction Therapy (PCIT, ages 2–7) should see their MHSA contracts transitioned into BHSA contracts in time for the July 1, 2026 service launch.

The MCP Mandate (NSMHS)

Simultaneously, Medi-Cal’s NSMHS policy requires Managed Care Plans (MCPs) to fund Family Therapy, explicitly including CPP and PCIT, for children with the same ACEs and adversities—such as caregiver separation due to incarceration or immigration, domestic violence exposure, foster care involvement, and similar risks.

DHCS has thoughtfully expanded eligibility beyond traditional ACEs to include adversities such as bullying, discrimination, food insecurity, housing instability, parental job loss, and teen parenting. In this model, ACEs screening is not the intervention—it is the risk-stratification tool that directs a child to the appropriate payer, preventing “wrong-door” confusion before it occurs.

A “Golden Apple” of Overlap—And the Risk It Creates

This policy overlap has created a potential infant and early childhood mental health “golden apple”—where both systems, drawing on legacy practices and missions, could reasonably claim primary responsibility for young children with ACEs or trauma and position the other system as the “payer of last resort.”

We emphasize ACEs or trauma because BHSA explicitly allows Early Intervention funds (“Indicated Intervention”) to support children with either ACEs or trauma, based on the rationale that treating adversity early can prevent lifelong risks related to mental illness, addiction, suicide, and overdose. Yet historically, counties have favored services addressing trauma—the downstream impact, defined as a significant and lasting negative effect on mental, physical, social, or spiritual well-being. This has unintentionally restricted access for children with ACEs alone—the upstream cause—who lack measurable trauma symptoms.

In contrast, MCPs—guided by new ACEs screening benefits and the ACEs Aware initiative—have focused their networks on identifying children with ACEs, regardless of whether trauma symptoms (such as concerning behaviors or subtle disruptions in parent-child interaction) are already present. DHCS’ “Who Pays?” Screening Tool

A new State-issued Youth Screening Tool for Medi-Cal Mental Health Services was intended to clarify payer responsibility—but in practice, it may deepen the confusion. Its design does not reflect the complexity of the new 0–5 benefit landscape and contains “knockout” questions that automatically route any child in foster care to the County system—regardless of MCP obligations or covered benefits.

Recent state policy states that four or more ACEs qualify a child or youth for Specialty Mental Health Services (SMHS) and therefore Enhanced Care Management (ECM). Yet the new screening tool does not score ACEs in this way. It asks about a limited subset—such as abuse, neglect, or household mental illness or addiction—while omitting several key ACEs that state-approved trauma screening tools require consideration of for children and youth. Notably absent are domestic or intimate partner violence (DV/IPV), and caregiver separation due to immigration, incarceration, or divorce.

This creates a predictable conflict: If a child has four or more ACEs but scores “0–5” on the Youth Screening Tool and gets routed to the MCP for care, how will the county respond—knowing that state policy considers that child eligible for SMHS?

The Just Whole Care Solution: Fiscal Discipline Through Clinical Filtering

The path forward requires moving beyond debates about eligibility and instead building clear, shared criteria for clinical appropriateness—that is, which system should pay when, and how children should transition from one payer’s level of care to the next.

To support this, Just Whole Care (JWC) has developed a 3-Tier Framework for 0–5 wellbeing and behavioral health, paired with a parallel framework for overlapping care-navigation benefits. This model is designed to help counties, MCPs, Local Health Jurisdictions (LHJs), CBOs, and providers collaborate during BHSA’s required Integrated Planning process, ensuring young children receive timely, high-quality care.

Aligned with DHCS’ ongoing commitment to resource efficiency and program performance, the JWC framework assumes a core principle:every system should begin with the lowest-cost, clinically appropriate intervention and step up only as needed.

This approach creates a true continuum of care—fiscally responsible, clinically coherent, and responsive to the diverse needs of California’s youngest children.

Spotlight: Operationalizing Care and Consultation in Schools

Implications for MCPs and BHPs under the CYBHI Fee Schedule

Early education settings in California are often viewed primarily as prevention hubs (Tier 1) focused on social–emotional learning. However, the CYBHI Fee Schedule has effectively expanded the role of Local Education Agencies (LEAs)—including preschools—turning them into reimbursable clinical care sites capable of delivering Tier 2 services as well.

School-based Infant and Early Childhood Mental Health Consultation (IECMHC) programs—such as the TRiEE model in Los Angeles Unified School District—can now braid funding across settings:

• Tier 1 and Tier 2 clinical services (e.g., caregiver psychoeducation, family therapy, developmental and behavioral assessments) can be billed by MCPs through the CYBHI Fee Schedule. These services are designed for “no-hurdle” access—no prior authorization required and no need for MCP in-network contracting.
  

• Non-billable ecosystem supports—such as IECMHC activities, teacher coaching, reflective consultation, and staff training—should be supported through County BHSA Early Intervention dollars, consistent with state guidance.
  

The Parallel Navigation Framework

The clinical needs of young families frequently intersect with challenges navigating California’s complex systems—an issue intensified by historically low trust in healthcare among low-income, BIPOC, and immigrant communities. To address this, Medi-Cal has introduced multiple benefits that strengthen care coordination and ensure families receive the right care, in the right place, at the right time, from the right person.

Below is the recommended sequential escalation pathway for navigation and coordination supports across MCPs, BHPs, schools, and community providers:

1. Dyadic Comprehensive Community Supports (MCP / CYBHI Fee Schedule)

For licensed clinicians—physicians, NPs, psychologists, and therapists—to provide in-visit or telephonic support helping families access healthcare and community resources. This includes coordination with child welfare, housing, education systems, regional centers, justice partners, crisis programs, and other state agencies.

2. “Trusted Messengers” (MCP / CYBHI Fee Schedule & BHP)

Doulas, Community Health Workers (CHWs), and Peer Support Specialists serve as culturally rooted connectors who extend trust into the community. They support engagement, outreach, health education, and warm handoffs, complementing the work of licensed professionals.

3. Enhanced Care Management (ECM / TCS) (MCP)

For families with more intensive care coordination needs. ECM covers:

• Black and Indigenous-identifying mothers

• Parents with Serious Mental Illness or Substance Use Disorder

• Families involved with child welfare or the justice system

• Families who are homeless

• Children at risk of avoidable hospitalizations

For Latina or White-identifying mothers who may not meet ECM criteria, the new Transitional Care Services (TCS) benefit can extend navigation support through pregnancy and the first year postpartum.

4. Intensive Care Coordination (ICC) / High-Fidelity Wraparound (HFW) (BHP)

For children 0–5 at imminent risk of placement outside the home, referrals should be made directly to BHP-operated or contracted providers—or to county child welfare services—capable of assessing eligibility for this gold-standard approach to keeping young children safely with their families.

Recommendations for Key CalAIM and BHSA Stakeholders

For County BHPs: Champion the Continuum

Your leadership in designing and funding a true continuum of care is essential. During Integrated Planning, elevate the 3-Tier framework with your MCP and CBO partners and use it to jointly generate the clean, aligned data needed for the upcoming Behavioral Health Outcomes, Accountability, and Transparency Report (BHOATR).With Prevention now funded by CDPH, your BHSA–Early Intervention dollars can finally be reserved for the high-acuity Tier 3 services only counties can provide—such as IECMHC and trauma-responsive clinical models. This strategy keeps young children stable in school, reduces the likelihood of future home removal, and advances BHSA’s statewide Behavioral Health Goals.

For Local Health Jurisdictions (LHJs): Embrace Your Role as Strategic Convener

Under new CDPH BHSA Prevention guidance, LHJs will increasingly serve as key conveners of the local early childhood prevention ecosystem. Avoid letting this responsibility become a perfunctory compliance step.Use your convening power to map the escalation pathways outlined above and operationalize the “Two-Wallet” approach:

• Identify which CBOs require CDPH Prevention funding (Tier 1) to build infrastructure

• Position them to successfully bill MCPs for clinical care (Tier 2)Clarifying these lanes protects the community’s safety net from fiscal cliffs and ensures your community needs assessment leads to meaningful, sustainable investments.

For MCPs: Invest in Your Tier 2 Network

Your best path to improving early childhood outcomes—postpartum visits, well-child visits, maternal depression screening, developmental surveillance—is a robust Tier 1 and Tier 2 network.Partner with both CBOs and clinical providers to contract for and pilot integrated services including:

• CHWs

• Dyadic Services

• Family Therapy (CPP, PCIT, Triple P, etc.)

• ECM

Pay sustainable (ideally blended) rates that reflect the upstream value of these interventions. Leverage school-based access points to meet network adequacy and access standards—without the cost of building new clinical sites.These investments are not just regulatory requirements; they are your most cost-effective strategy to prevent mild concerns from escalating into ER utilization, specialty Tier 3 care, or unnecessary family separations.

For Schools (LEAs & COEs): Monetize Your Campus as a Care Hub

The CYBHI Fee Schedule has effectively turned schools into reimbursable clinical sites—yet many districts continue to fund wellness services from general education or county BH budgets.You now have the opportunity to function as the physical hub of the 3-Tier model.Partner with MCP-credentialed CBOs to bring Tier 1 (Dyadic) and Tier 2 (Family Therapy) services directly onto campus, enabling those providers to bill the CYBHI Fee Schedule for “no-hurdle” access.

This preserves your:

• Education dollars for academic supports

• County dollars for acute needs like mobile crisis response

And it ensures students receive needed care without leaving school grounds.

For CBOs: Diversify and Thrive

The redesigned Medi-Cal 0–5 landscape offers multiple pathways to long-term sustainability built on services you likely already provide—parent support, early relational health work, clinical care, and navigation.The era of operating solely under a DMH or MCP contract is ending.Adopt the Two-Wallet Strategy by pursuing parallel revenue streams:

1. Bill clinical services through MCP credentialing or subcontracting with LEAs under the CYBHI Fee Schedule (Dyadic Services, Family Therapy, CHWs, ECM).

2. Apply for CDPH’s upcoming 0–5 Prevention Grants (expected early 2026) to support Tier 1 infrastructure.

This dual-track approach stabilizes your revenue base and expands your ability to serve families at the right level of care.

For FQHCs: Operationalize the “Early Childhood Medical Home”

You sit at the natural intersection of Tier 1 and Tier 2, yet many clinics inadvertently lose revenue by referring out mild-to-moderate behavioral health concerns. FQHCs can maximize both impact and reimbursement by:

• Using same-day billing to deliver Dyadic Services (Tier 1) alongside well-child visits, generating additional FFS revenue

• Providing warm handoffs to in-house LCSWs for Family Therapy (Tier 2)

This integrated workflow reduces attrition, increases total per-visit reimbursement through “immigration-resilient benefits,” and positions the clinic as a true early childhood medical home—the primary care quarterback that keeps families from needing Tier 3 County specialty services later.

Fulfilling the Promise of a Unified Medi-Cal for Kids

Just Whole Care’s 3-Tier Framework for Early Childhood Wellbeing is designed to operationalize the shared understanding and cross-system collaboration urgently needed so that all children 0–5—and their parents—can truly thrive. The stakes are high: mounting family trauma driven by shifting immigration policies and unprecedented fiscal pressures demand coordinated, equitable action now.

CalAIM, BH-CONNECT, and BHSA promise a unified, whole-child continuum that meets families where they are and delivers care in the least punitive, most stable, and most nurturing environments. But promises alone do not sustain providers.

The path forward requires clarifying roles and aligning incentives:

• Empowering MCPs and CDPH to lead and invest in prevention and mild-to-moderate care through a Two-Wallet strategy, and

• Enabling County BHPs to focus their expertise and resources on complex specialty care.

  
  

With these roles clearly defined, California can finally build a sustainable, value-based system—one that rewards providers for meaningful impact rather than bureaucracy. This clarity also enables the data accuracy, interoperability, and shared analytics needed to achieve California’s new population-based statewide Behavioral Health Goals. Every dollar is maximized, every partner is valued, and every system contributes at the level where it delivers the greatest good.

California’s youngest children—and their families—will experience seamless, coordinated care only when we stop competing for funding and start organizing and paying for care based on need. This is how we fulfill the promise of a truly unified Medi-Cal for kids.