News

• Photo by Loren Elliott for CalMatters
• Momentum for Health facilities in San Jose on Dec. 19, 2023. Momentum for Health provides behavioral health care for youth and adults in Santa Clara County.

David Mineta gets emotional when he talks about his organization’s decision to close six mental health programs serving about 650 children and adults in Santa Clara County by the end of December. 

“Talking about it really makes me want to cry,” he says.

Depending on who you ask, these mental health program closures are either an unfortunate aberration or a harbinger of more to come as the state transforms its Medi-Cal reimbursement system.

Venegas, executive director of Changing Tides Family Services in Eureka, and Mineta, president and CEO of Momentum For Health in San Jose, say their organizations are being forced to cut crucial mental health programs in order to keep the rest of their agencies afloat. They attribute that to CalAIM, a multi-year, multi-billion-dollar overhaul of Medi-Cal that dramatically changes how California’s public mental health care programs are funded. 

“I would love to invite Gov. Newsom and his team to come talk about what CalAIM is in an area like ours,” Venegas said. “Instead of making it better, I really think this has made it worse.”

CalAIM’s behavioral health initiative, which Gavin Newsom’s administration began rolling out in 2022, is designed to provide a more integrated approach to care. It offers a “no wrong door approach” so that people seeking help will have an easier time getting it. 

This past July, a new payment system kicked in for most counties. The goal? Increase efficiency, reduce paperwork and offer counties more flexibility.

The problem, some nonprofits say, is that their organizations are no longer reimbursed specifically for time spent traveling to see patients or filling out documentation. In addition, the state is giving counties latitude to decide how much Medi-Cal money they pass along to their nonprofit behavioral health contractors.

Los Angeles County is passing along about 85 percent of the funds it receives from the state, according to Adrienne Shilton, a senior policy advocate with the California Alliance of Child and Family Services, while others are providing less.

She shared survey data showing nonprofits in a dozen counties told the alliance they worried they might have to close programs.  

“There’s still a dire picture,” Shilton said. “We’re concerned about what this is going to look like in another three months.”

Amie Miller, executive director of the California Mental Health Services Authority, a state agency that works with counties to transform mental health services, said she hasn’t heard of programs closing directly as a result of payment reform.

Some providers are struggling with longstanding financial problems, Miller said, and others are “used to not having to be as attentive to the bottom line.”

“This is the next piece of our evolution,” she said.

Some providers have said they stand to do well under the new model, she added.

Still, some nonprofit organizations have been sounding the alarm since summer that the rates are too low and eventually will lead to program closures.  

Dozens of mental health providers in October penned a letter to the state Department of Health Care Services, warning of “potentially catastrophic consequences.”

Since the COVID-19 pandemic began, the number of nurses at the hospital dropped from just below 500 to 330 according to her union’s roster, said Hooks, who is 53.

“It wasn’t even this difficult during the height of the COVID pandemic,” she said. 

Hooks’ stress reflects pressure many California nurses are under because of steep understanding that she and others say is driving many professionals out of the industry.

According to the Hospital Association of Southern California, nursing vacancy rates among local hospitals exceed 30 percent. Prior to the pandemic the average vacancy rate was 6 percent.

“Within the last year and a half or so, it’s really gotten worse,” Hooks said.

Now the Legislature is looking at several ideas to address the nursing shortage by bringing more early-career nurses into the field. But so far, the groups with most to gain — or lose — are at odds over how to solve the staffing problems afflicting California’s health care workforce. 

Labor organizations and hospitals want nursing schools to prioritize certain applicants for admission, such as people who already have experience in the industry.

“We don’t have enough nurses entering the system as opportunities are opening up for them to leave the system,” said Peter Sidhu, a nurse and executive vice president of United Nurses Associations of California/United Health Care Professionals. 

But the schools say that won’t help them graduate more nurses. They need more faculty and more hands-on training opportunities to increase class sizes. 

Hospitals and unions say they don’t have much time to waste. Estimates show California faces a shortage of about 36,000 licensed nurses, according to the UC San Francisco Health Workforce Research Center on Long-Term Care.

• iStock
• A senior woman walking down a corridor with the assistance of a walker. view from rear

The nursing homes in question are owned by Los Angeles businessman Shlomo Rechnitz, who owns dozens of California facilities through a web of companies, including Humboldt County's four primary skilled nursing facilities. 

One of his main companies, Brius Healthcare, has been scrutinized for poor quality care and inadequate staffing, according to federal and state inspection reports, plaintiffs’ attorneys and press accounts. By 2015, government regulators decertified or threatened to decertify three of Rechnitz’s companies’ California nursing homes, a rare penalty that strips facilities of crucial Medicare and Medi-Cal funding.

One of those facilities, Wish-I-Ah Healthcare & Wellness Centre near Fresno, was closed following the death of a 75-year-old resident from a blood infection after staff left behind in her body a foam sponge used in dressing her mastectomy wound. Investigators also found toilets brimming with fecal matter and other serious problems, according to the state’s accusation.

The State Auditor’s office in a May 2018 report spotlighted Brius for its higher rate of federal deficiencies and state citations, compared to the rest of the industry in the state. 

It was via bankruptcy court that Rechnitz scooped up 18 Country Villa-branded nursing homes in 2014. Per state law, he then filed change-of-ownership applications seeking licenses to run those homes. The state didn’t approve or deny them, instead leaving them pending. In the meantime, Rechnitz continued to run the nursing homes for years without a formal license in his name – which isn’t technically illegal. 

A new law was supposed to close that loophole. But that law, co-authored by Democratic Assemblymembers Al Muratsuchi of Los Angeles and Jim Wood of Santa Rosa, doesn’t go into effect until July 1 — and it focuses on new license applications, rather than those that have been operating in the legal gray area for years.