California’s Medicaid Breakthrough: An Opportunity to Advance Children’s Social and Emotional Health

This post was originally published on the Center for the Study of Social Policy's blog.

Revamping Medicaid policies to improve young children’s social and emotional health and address health care inequities is particularly critical in California, where over half of children ages 0 to 5 have Medicaid coverage (known as Medi-Cal, in California), and two-thirds are children of color. California ranks near the bottom of the nation on most standard measures of child well-being and access to care. For example, the American Academy of Pediatrics recommends all children be screened for developmental concerns three times before age three, yet only 26% of children in California receive such screenings. In 2019, as Governor Newsom took office after campaigning on the need to strengthen supports for parents and young children, we saw a unique moment in time to push forward.

Medi-Cal Breakthrough: Parity for Children’s Preventive Behavioral Health Care

Two major health care policy initiatives—CalAIM (California Advancing Innovation in Medi-Cal, the multi-year initiative to implement broad delivery system, program and payment reforms) and the anticipated reprocurement of Medi-Cal managed care contracts—have presented opportunities for reshaping how Medi-Cal is delivered to California’s children. If successful, First 5’s and our partners could contribute to lasting health care delivery system reforms for California’s youngest Medi-Cal members and their families.

A critical breakthrough came when the California Department of Health Care Services (DHCS) issued a new policy that allows children, along with their parents, to benefit from Family Therapy with no prerequisite mental health diagnosis. This policy acknowledges that children, especially very young children, can (and should) have access to preventive behavioral health care before any concerns or symptoms emerge or become severe enough to warrant a behavioral health diagnosis. At the same time, it also acknowledges the need to support and strengthen the child-parent relationship. California’s Medi-Cal agency (the Department of Health Care Services, DHCS) clarified that Medi-Cal covers family therapy for children who may have a mental health diagnosis, as well as children without a diagnosis but who may be at risk for later concerns. A broad range of risk factors described in the policy manual include both child-oriented variables, such as trauma exposure and maltreatment, as well as caregiver-oriented variables, such as substance use disorder and history of incarceration.

The recognition that a wide variety of risk factors could prompt the need for family therapy could not have come at a more important moment, as the COVID-19 pandemic, its resulting economic upheaval, and the strain of longstanding structural racism are compounding the health and financial stressors on children and families of color. Risk factors such as food insecurity, housing instability, and death of a parent/guardian, reflect this understanding. In addition, a risk factor acknowledging that “the experience of discrimination based on race, ethnicity, gender identity, sexual orientation, religion, learning differences, or disability” can also affect child development and health status later in life is a critically important step toward addressing health disparities and advancing health equity.

In keeping with the children’s health benefit required under the federal Medicaid statute—Early and Periodic Screening, Diagnostic, and Treatment (EPSDT)—prevention is paramount, and California’s family therapy policy demonstrates that parity can be achieved across physical and behavioral preventive health care.

Opening the Door to More Sustainable Financing for Dyadic Care Models

Dyadic treatment is a form of therapy in which the infant or young child and caregiver are treated holistically. Both the caregiver and child have the chance to experience more positive ways to interact with each other, all while attending a regular well-child visit. Some also expand the care team by deploying “family specialists” or “peer navigators” to help prepare the parents for the well-child visit and to follow up on referrals to social supports and other community-based services. Several evidence-based models of dyadic treatment (e.g., HealthySteps, DULCE, Parent-Child Interaction Treatment, and Child-Parent Psychotherapy) have been operating at the local level in California for years, funded primarily by philanthropy and/or by local First 5 commissions.

When a California team was invited to join the Pediatrics Supporting Parents Medicaid and CHIP State Implementation Workgroup, a key objective was to learn more about how Medi-Cal financing strategies could help make dyadic care models more widely available and financially sustainable. The clarification of the family therapy benefit opened the door to exploring these questions. The PSP technical assistance team helped us by developing a detailed crosswalk that presents, for two of the dyadic care models, a side-by-side analysis showing how key Medi-Cal benefits (including the family therapy benefit and screenings that can help identify “risk factors”) align or do not. It will be a helpful tool for local early childhood partners to use to engage Medi-Cal managed care plans and providers, and hopefully help expand the use of the family therapy benefit as well as dyadic care more broadly.