By 2021, Julio Franco had wrestled with substance abuse for a decade. He was addicted to meth and in psychosis, struggling to tell what was real and what wasn’t. He cycled in and out of hospital emergency rooms.
“My body couldn’t take it no more,” Franco, 34, said.
The first step toward lasting sobriety for the Redwood City native was a detoxification facility run by the nonprofit Star Vista in Burlingame, where he stayed for three weeks and weaned himself off methamphetamine with the help of trained staff. Once stabilized, he entered inpatient rehabilitation. Franco said he’s been clean ever since and works as an addiction counselor for Star Vista.
Detox is a crucial spot to land for addicted people. But San Mateo County, the fifth-largest in the Bay Area, has only one operating detox facility after Star Vista closed its detox center in October.
The reason? The nonprofit no longer has enough funding from the state’s health care agency to keep its doors open, said Chief Clinical Officer Shareen Leland. Reforms to Medi-Cal, the health care provider for low-income Californians, changed the way it reimburses providers like Star Vista. That went into effect in San Mateo County in July.
“This is putting an unbelievable strain on the network of care,” Leland said. “It’s a big deal.”
A major funder of behavioral health services, Medi-Cal used to cover the detox’s costs. But due to CalAim, a massive expansion of the program, San Mateo County providers are no longer paid for outreach, meals and transportation for clients, or other costs they say are essential to programs.
CalAIM, launched in 2022, is an expansion of Medi-Cal that allows health insurance to pay for certain things that aren’t considered traditional medical care — such as services to help homeless Californians find and keep housing. Proponents say it’s brought a much-needed infusion of money into the state’s overburdened homeless services system.
While CalAim ramped up coverage for housing and social services, it also changed the way that treatment providers are paid for their services. That amounts to a funding cut for many, advocates and a county official said.
A spokesperson for the California Department of Health Care Services, which oversees CalAim, did not respond to a request for comment by press time.
The closures and cutbacks come as California prepares to implement Proposition 36, which went into effect Wednesday. The voter-approved measure toughens penalties for people repeatedly convicted of shoplifting and drug crimes, with the aim of diverting more people to behavioral health treatment. It’s widely expected to put more pressure on the Bay Area’s existing shortage of treatment providers.
Star Vista effectively experienced a $177,000 cut this summer, Leland said. In early December, the nonprofit Caminar shuttered a crisis home in Redwood City for severely mentally ill and addicted people who were newly discharged from jails and emergency rooms, said Chief Executive Officer Mark Cloutier.
Free at Last, a rehab program in East Palo Alto, is also planning to cut costs, said Executive Director Gaynell Mays. She said the nonprofit has an 80% gap between its cost of providing inpatient and outpatient programs and what Medi-Cal now pays.
“It’s leaving us very vulnerable, along with all the other providers,” Mays said. “No one is happy.”
The anxiety among providers in San Mateo County follows similar cuts in Santa Clara County last year due to CalAim. Momentum, one of the largest nonprofit behavioral health service providers in Santa Clara County, closed six of its programs and laid off 85 staff members at the end of December 2023.
Because counties are implementing the reform at different paces, the impact is uneven across the region and the state. But according to Cloutier, the new reimbursement rates under CalAim aren’t adequate for providers in other Bay Area counties, either.
“It’s really very sad,” Jei Africa, director of behavioral health and recovery services for San Mateo County, said of CalAim’s impacts. “The new state rates, due to the CalAim payment reform, has impacted many, many entities in the county.”
Africa said treatment options like the shuttered detox in Burlingame are sorely needed, and the county is helping providers adapt. His office has asked CalAim administrators to recalculate payment rates to better account for the county’s high cost of doing business, he said.
Still, Africa hopes the reform will make providers more efficient by cutting administration costs and operating “leaner.”
For instance, Africa said Star Vista’s detox was only 39% full between July and October this year. When county providers would refer potential clients their way, staff sometimes would refuse to take them because the facility was short-staffed, he said. That’s a nationwide challenge in behavioral health.
But Leland said the county didn’t refer enough clients to the detox. She said officials suggested that Star Vista should do more outreach with possible clients to fill beds.
The detox was small, with four beds in a warehouse-like building in a commercial neighborhood. Generally, two or three of those beds were filled at a time, Leland said.
Its clientele was men like Franco with longstanding addictions to fentanyl or meth, who often arrived from the San Mateo Medical Center. Many had overdosed and needed medication, counseling and emotional support before they were ready for residential treatment, Leland said.
When the detox closed in October, those clients were referred to other programs, she said. Due to the funding shortfall, Star Vista is also scaling back its addiction treatment program for women living “in really unsupportive situations” like homeless shelters, Leland said.
Ironically, the Medi-Cal reform that’s stressing San Mateo County providers is broadly ramping up state support for social services and vulnerable residents.
Under Gov. Gavin Newsom, CalAim launched a $12 billion expansion of Medi-Cal in 2022 to provide comprehensive services beyond what’s traditionally considered health care, such as housing. When the reform debuted, about half of Medi-Cal’s $133 billion annual budget was spent on 5% of its covered population: high-need individuals grappling with homelessness, poverty, substance abuse and mental illness, CalMatters reported.
Proposition 1, which voters narrowly approved in March, will release $6.4 billion in bonds to fund thousands of new mental health treatment beds. But Cloutier said that will support construction, not the ongoing finances of treatment providers. He called for officials to reexamine CalAim’s impact.
“There’s a systematic issue here,” Cloutier said. “The state needs to address this issue.”