In 2021, Julio Franco struggled with substance abuse for a decade. He was hooked on meth and suffered from psychosis. He had trouble distinguishing what was real and what wasn't. He rode his bike out and in of hospital emergency rooms.
“My body couldn’t take it anymore,” said Franco, 34.
The Redwood City native's first step toward lasting sobriety was a detox facility run by the nonprofit Star Vista in Burlingame, where he stayed for 3 weeks and weaned himself off methamphetamine with the assistance of trained staff. After he stabilized, he entered inpatient rehabilitation. Franco said he has since been clean and works as an addiction counselor for Star Vista.
Detoxification is a very important start line for addicts. But San Mateo County, the fifth largest within the Bay Area, has just one functioning detox facility after Star Vista closed its detox center in October.
The reason? The nonprofit now not has enough funding from the state health department to maintain its doors open, said Chief Clinical Officer Shareen Leland. Reforms to Medi-Cal, the health care provider for low-income Californians, modified the way in which providers like Star Vista are reimbursed. That went into effect in July in San Mateo County.
“This puts an incredible strain on the care network,” Leland said. “It’s a big deal.”
Medi-Cal, a serious funder of behavioral health services, used to cover the fee of cleansing. But due to CalAim, a large expansion of this system, providers in San Mateo County will now not be paid for outreach, meals and transportation for clients, or other costs they are saying are essential to programs.
Launched in 2022, CalAIM is an expansion of Medi-Cal that enables medical insurance to pay for certain things that are usually not considered traditional medical care — comparable to services that help homeless Californians find and maintain housing. Advocates say it has provided a much-needed injection of money into the state's overburdened homeless services system.
While CalAim increased coverage for housing and social services, it also modified the way in which treatment providers are paid for his or her services. For many, that will amount to a funding cut, advocates and a district official said.
A spokesman for the California Department of Public Health, which oversees CalAim, didn’t reply to a request for comment by press time.
The closures and cuts come as California prepares to implement Proposition 36, which took effect Wednesday. The voter-approved measure increases penalties for individuals with repeated shoplifting and drug convictions, with the goal of encouraging more people to hunt behavioral health treatment. This is widely expected to place much more pressure on the Bay Area's existing shortage of treatment providers.
According to Leland, Star Vista actually took a $177,000 cut this summer. In early December, Redwood City nonprofit Caminar closed a crisis shelter for severely mentally sick and addicted people just released from prisons and emergency rooms, Chief Executive Officer Mark Cloutier said.
Free at Last, a rehab program in East Palo Alto, also plans to chop costs, said executive director Gaynell Mays. She said the nonprofit has an 80% gap between the fee of providing inpatient and outpatient programs and what Medi-Cal pays now.
“It leaves us very vulnerable, like all other providers,” Mays said. “No one is happy.”
The concern amongst providers in San Mateo County follows similar cuts in Santa Clara County last yr as a result of CalAim. Momentum, certainly one of the most important nonprofit providers of behavioral health services in Santa Clara County, closed six of its programs and laid off 85 employees at the top of December 2023.
Because counties implement the reform at different speeds, the impact varies across the region and state. However, Cloutier said the brand new reimbursement rates under CalAim are also inadequate for providers in other Bay Area counties.
“It’s really, really sad,” Jei Africa, director of behavioral health and recovery services for San Mateo County, said of CalAim’s impact. “The new state rates resulting from CalAim payment reform have impacted many, many businesses in the county.”
Afrika said treatment options like closed detox in Burlingame are urgently needed and the county helps providers adapt. His office has asked CalAim administrators to recalculate payment rates to raised reflect the county's high costs of doing business, he said.
Still, Africa hopes the reform will make providers more efficient by reducing administrative costs and operating “leaner.”
For example, Africa said Star Vista's cleansing facility was only at 39% capability between July and October this yr. When county providers referred potential clients to them, staff sometimes refused to take them because the ability was short-staffed, he said. This is a nationwide behavioral health challenge.
But Leland said the county hasn't referred enough clients for detox. She said officials have suggested that Star Vista do more outreach to potential clients to fill beds.
The detox unit was small, with 4 beds in a warehouse-like constructing in a business district. Generally, two or three of those beds are occupied at a time, Leland said.
The clientele consisted of men like Franco with long-standing addictions to fentanyl or meth, who often got here from San Mateo Medical Center. Many had overdosed and needed medication, counseling and emotional support before they were ready for inpatient treatment, Leland said.
When the detox program led to October, those clients were referred to other programs, she said. Because of the funding shortfall, Star Vista can also be reducing its addiction treatment program for girls living “in really unsupportive situations” like homeless shelters, Leland said.
Ironically, Medi-Cal reform, which burdens providers in San Mateo County, broadly increases federal support for social services and vulnerable residents.
Under Gov. Gavin Newsom, CalAim launched a $12 billion expansion of Medi-Cal in 2022 to supply comprehensive services beyond what’s traditionally considered health care, comparable to housing. When the reform was implemented, about half of Medi-Cal's $133 billion annual budget was spent on 5% of the population covered: vulnerable individuals fighting homelessness, poverty, substance abuse and mental illness, reported CalMatters.
Proposition 1, which voters narrowly approved in March, would release $6.4 billion in bonds to fund hundreds of latest mental health treatment beds. But Cloutier said that can support construction, not the continued funds of treatment providers. He called on authorities to re-examine the impact of CalAim.
“There is a systematic problem here,” Cloutier said. “The state needs to address this problem.”
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