AMENDED IN SENATE JUNE 25, 2026

AMENDED IN ASSEMBLY APRIL 27, 2026

AMENDED IN ASSEMBLY MARCH 19, 2026

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

96

Introduced by Assembly Member Addis

February 20, 2026

An act to add Section 49421.3 to the Education Code, relating to behavioral health.

Vote: majority   Appropriation: no   Fiscal committee: yes   Local program: no

LEGISLATIVE COUNSEL’S DIGEST

Existing law establishes the Children and Youth Behavioral Health Initiative, administered by the California Health and Human Services Agency and its departments, as applicable. Under existing law, the purpose of the initiative is to transform the state’s behavioral health system into an innovative ecosystem in which all children and youth 25 years of age and younger, regardless of payer, are screened, supported, and served for emerging and existing behavioral health needs.

Existing law requires, as a part of the initiative, the State Department of Health Care Services to develop and maintain a school-linked statewide fee schedule for outpatient mental health or substance use disorder treatment provided to a student who is 25 years of age or younger at a schoolsite. Existing law requires providers of medically necessary schoolsite services to be reimbursed by health care service plans, insurers, and Medi-Cal managed care plans, at a minimum, at the fee schedule rate or rates, regardless of network provider status.

This bill would establish the Fee Schedule Intensive Technical Support for Onboarding Program. The bill would require the State Department of Education, upon appropriation and subject to the terms of the appropriation, to select through a competitive process, and and, no later than July 1 of the year after an appropriation is made to fund the program, allocate funding to, a local educational agency that will serve as the lead entity that will administer the program over a 3-year period, as provided. The bill would require the lead entity, in coordination with the State Department of Education and the State Department of Health Care Services, to, no later than September 1, 2027, November 1 of the year after an appropriation is made to fund the program, select up to 25 entities to participate in the program and prioritize certain applicants, including, among others, applicants who will increase the number and amount of statewide fee schedule reimbursements. The bill would require that an entity meet specified criteria in order to be eligible to participate in the program, including, among other things, that the entity has past experience in serving children and youth that are of the age that the entity intends to serve. The bill would require a participating entity, as a condition of participation, to commit to increasing, among other things, the number of transition-age youth 16 to 25 years of age receiving behavioral health services. The bill would require the lead entity, starting on or before September 1, 2027, December 1 of the year after an appropriation is made to fund the program, and ending no earlier than September 1, 2030, 3 years after the program begins, to provide intensive technical assistance and support with regard to specified activities to the participating entities. The bill would require the lead entity to submit a progress report on or before September 1, 2029, 1 of the year that is 3 years after an appropriation is made to fund the program, and submit a summative report by January 1, 2031, 1 of the year that is 4 years after an appropriation is made to fund the program, regarding the program to the appropriate policy and fiscal committees of the Legislature.

The people of the State of California do enact as follows:

SECTION 1.

Section 49421.3 is added to the Education Code, to read:

49421.3.

(a) The Fee Schedule Intensive Technical Support for Onboarding Program (program) is hereby established for both of the following purposes:

(1) To address inconsistent access to the school-linked statewide fee schedule (fee schedule), established pursuant to Section 5961.4 of the Welfare and Institutions Code, caused by the limited capacity and expertise of small and rural schools, early learning and care centers operated by, or under contract with, a local educational agency or institution of higher education, and institutions of higher education serving transition-age youth in billing for behavioral health claims.

(2) To reduce the burden of operationalizing the fee schedule for entities providing behavioral health services to communities and groups that are underrepresented in receiving fee schedule services, including children 0 to 5 years of age, pupils who attend small and rural schools, and transition-age youth.

(b) (1) No later than September 1, 2027, November 1 of the year after an appropriation is made to fund the program, the lead entity designated pursuant to subdivision (e), in coordination with the State Department of Education and the State Department of Health Care Services, shall select up to 25 entities to participate in the program for up to three years.

(2) As a condition of participation, a participating entity shall commit to doing one or more of the following:

(A) Increase the number of children 0 to 5 years of age receiving behavioral health services.

(B) Increase the number of transition-age youth 16 to 25 years of age receiving behavioral health services.

(C) Increase the number of children and youth enrolled in small school districts, as defined in Section 17070.15, that receive behavioral health services.

(3) An entity shall meet all of the following criteria to be eligible to participate in the program:

(A) Is eligible to participate in the fee schedule.

(B) Has past experience in serving children and youth that are of the age that the entity intends to serve.

(C) Requires intensive technical assistance and support to operationalize the fee schedule.

(4) When selecting participating entities, the lead entity shall prioritize participating entities that will do one or more of the following:

(A) Increase the number and amount of fee schedule reimbursements.

(B) Increase the number and amount of fee schedule reimbursements being used to support community schools established pursuant to Section 8902.

(C) Operate in communities with higher proportions of unduplicated pupils, as defined in subdivision (b) of Section 42238.02.

(D) Reflect the diversity of communities and geographic areas throughout the state.

(5) The lead entity shall create and publish a brief application for entities interested in participating in the program on or before July 1, 2027. September 1 of the year after an appropriation is made to fund the program. The application shall request, at a minimum, all of the following information:

(A) The number and age of children and youth currently enrolled at the entity.

(B) The number and age of children and youth currently receiving behavioral health services from the entity or an affiliated provider that the entity has designated.

(C) The number and qualifications of behavioral health service providers, including affiliated providers, currently offering behavioral health services to children and youth enrolled at the entity.

(D) The entity’s interest in, and capacity to, increase behavioral health services to children and youth in their community.

(E) Evidence of the entity’s current enrollment in the fee schedule or the completed fee schedule cohort readiness application created by the State Department of Health Care Services.

(c) Starting on or before September 1, 2027, December 1 of the year after an appropriation is made to fund the program and ending no earlier than September 1, 2030, three years after the program begins, the lead entity shall provide intensive technical assistance and support to the participating entities, including, but not limited to, all of the following activities:

(1) Assisting with obtaining national provider identification numbers and completing the fee schedule credentialing process for employees and affiliated providers that will offer services within the scope of services covered by the fee schedule.

(2) Providing training and coaching to employees and affiliated providers that will offer services covered by the schedule that is related to documentation of services, proper coding and noting procedures, obtaining required consents, applicable privacy laws and disclosure requirements, and referral protocols, including escalation of services.

(3) Technical assistance in obtaining a suitable electronic health records system for the documentation and submission of claims, including offering participation in a multientity contract for electronic health records services that is centrally managed by the lead entity.

(4) Assistance with the applicability of privacy laws, including, but not limited to, the Family Educational Rights and Privacy Act (FERPA) and the Health Insurance Portability and Accountability Act (HIPAA), to each participating entity. This may include legal and technology supports necessary to adopt the policies, documents, and forms required by applicable privacy laws, including, but not limited to, all of the following:

(A) Consent forms, including forms to consent to services, consent to billing, consent to information sharing, and minor consent to outpatient mental health services, required pursuant to state law.

(B) Notice of privacy practices documents that address the right to withhold consent, the right to withdraw consent, the right to request records, and how confidential information may be shared and utilized.

(C) Data governance policies designating each entity as HIPAA-governed, FERPA-governed or a hybrid entity.

(D) Data maintenance protocols and guidance documents for providers and administrators defining how and where to document and store information to ensure compliance with applicable privacy laws and release of information requirements, avoid unintentional disclosure of confidential information, and protect the privacy of individuals consenting to service.

(E) Other applicable forms and protocols, including, but not limited to, authorizations for ordering and referring physicians, referral protocols, and protocols regarding maintenance of documentation for audit purposes.

(5) Technical assistance with obtaining and maintaining health plan information for each individual receiving services, including developing a process for conducting insurance discovery and followup activities where information is absent.

(6) A targeted review of claims prior to submission to ensure services are appropriately coded, documented, and noted, with the goal of increasing the likelihood of submitting a clean claim.

(7) The lead entity may subcontract with additional experts, as needed, to fulfill the requirements of this subdivision.

(d) (1) On or before September 1, 2029, 1 of the year that is three years after an appropriation is made to find the program, the lead entity shall submit a report to the appropriate policy and fiscal committees of the Legislature on the progress of the program toward the goals described in this section. The report shall include, but not be limited to, all of the following:

(A) The number of and name of entities accepted to participate in the program.

(B) The number of entities participating in the program that have completed training and onboarding with an electronic health records system, and adopted required data sharing policies, privacy notices, and disclosure and release forms.

(C) The number of employees and affiliated providers offering services within the scope of services covered by the fee schedule that have completed the statewide fee schedule certification process, including obtaining a National Provider Identifier.

(D) The number and percentage of children and youth with verified health plan information in an electronic health records system and completed consent forms, disaggregated by participating entity.

(2) No later than January 1, 2031, 1 of the year that is four years after an appropriation is made to fund the program, the lead entity shall submit a summative report to the appropriate policy and fiscal committees of the Legislature on the success of the program in achieving the goals described in this section. The report shall include, but not be limited to, all of the following:

(A) The number of claims submitted by participating entities from small and rural school districts.

(B) The number of claims submitted by participating entities for services provided to children 0 to 5 years of age, inclusive.

(C) The number of claims submitted by participating entities for services provided to transition-age youth.

(D) The total number of claims submitted by participating entities and the percent of claims that are approved and paid.

(E) The total value of claims submitted by participating entities.

(3) A report to be submitted pursuant to paragraph (1) or (2) shall be submitted in compliance with Section 9795 of the Government Code.

(e) The State Department of Education shall, upon appropriation by the Legislature and subject to the terms of the appropriation, select through a competitive process, and and, no later than July 1 of the year after an appropriation is made to fund the program, allocate funding to, a local educational agency that will serve as the lead entity to administer the program over a three-year period. In selecting a lead entity, the department shall ensure the lead entity is a local educational agency that meets all of the following minimum requirements:

(1) Currently employs behavioral health providers, or has a contract with a behavioral health or a managed care plan, to provide behavioral health services to pupils at the schoolsites of the local educational agency.

(2) Is enrolled in the fee schedule in cohorts one, two, or three, and meets all applicable criteria to submit claims.

(3) Has significant experience leading a fee schedule consortium of local educational agencies agencies, at least one-third of which are small school districts, and that are of varying sizes and varying enrollments of unduplicated pupils, including, but not limited to, charter schools and schools located in rural or remote areas of the state.

(4) Has successfully submitted and received payment for claims through the statewide fee schedule for at least one year. six months.

(5) Has a minimum of 10 years of experience in administering at least one other Medi-Cal reimbursement program, including, but not limited to, the Local Educational Agency Medi-Cal Billing Option Program pursuant to Section 14115.8 of the Welfare and Institutions Code, fee-for-service Medi-Cal program, or specialty mental health services.