Medi-Cal reform causing worry in Santa Clara County as Momentum for Health shutters programs

David Mineta chokes up when talking about the roughly 1,500 individuals Momentum for Health — the nonprofit he runs — won’t be able to help this coming year.

Momentum is one of the largest nonprofit behavioral health service providers in Santa Clara County, serving more than 4,000 adults and children annually. But because of ripple effects from CalAIM — a multi-year plan to overhaul California’s Medi-Cal system — the nonprofit said it closed six of its programs and laid off 85 staff members at the end of December.

“It just breaks me,” said Mineta, the president and CEO of Momentum.

California Advancing and Innovating Medi-Cal, or CalAIM for short, was touted by Gov. Gavin Newsom as a “once-in-a-generation” opportunity to transform the state’s Medicaid system, which covers more than one-third of Californians. Launched in 2022, CalAIM will refocus Medi-Cal over the course of five years to more of what’s called a “whole person approach” that better integrates physical health, behavioral health and social services for low income residents.

CalAIM’s latest changes went into effect July 1 and dramatically reformed how organizations like Momentum bill for services and get reimbursed. While these providers used to get reimbursed for the actual costs of providing services, the new system only reimburses for a standardized set rate for each service. As a result, over the last six months, behavioral healthcare providers across the state have struggled to financially maintain more community-oriented services that put doctors, social workers and case managers out in the field — services that might not be completely covered by the new standardized model.

At Momentum, Mineta said they just couldn’t sustain all the red ink triggered by the payment reform. The decision to end certain outpatient addiction programs and other intensive mental health services, as well as reduce the nonprofit’s staff by 15% clearly weighs on the longtime social worker. He said it’s hard for him to even talk about it.

“This is the biggest thing I’ll ever do in my career is getting through this,” Mineta said.

Elisa Koff-Ginsborg, the executive director of the Behavioral Health Contractors’ Association of Santa Clara County, called the latest changes “the most seismic shift in the behavioral health system in over half a century.”

The association represents 30 nonprofits that make up 90 percent of the behavioral health services that Santa Clara County provides. Koff-Ginsborg said Momentum isn’t the only provider reeling from the effects of CalAIM — a recent survey conducted by the association found that of the 18 agencies in the county that responded, 16 had significantly lost money in the last six months.

“It treats all the programs the same,” Koff-Ginsborg said of CalAIM. “The danger of that long term is it incentivizes providers to only keep the services that will cover their costs and the services that don’t are often the ones folks who are served through the safety net really need.”

She called the new reforms a “one size fits all clinic-based model” that favors individuals who are able to come into an office and discourages agencies from serving populations that lack transportation, mistrust institutions or who are dealing with complex issues.

For Candace DeCou, Momentum closing programs and laying off staff is “frightening.” Her 44-year-old son, Graydon, has struggled with severe drug addiction for more than half his life. But under the care of Momentum, she’s started to see a “glimmer of hope.”

“What is the answer to that at the moment when you think there might be hope on the horizon?” she said of the new CalAIM changes. “If Momentum or any other community-based organization closes their doors, they’ll just take their existing clients and try to push them somewhere else. We already are lacking resources to even maintain some of the existing programs.”