California schools still waiting on mental health billing program

QUINCY, Calif. — When Taletha Washburn and staff at Plumas Charter School first learned California was trying to help schools serve more students with mental health needs, the idea seemed like a promising answer for a rural community where families already had trouble finding care. Five years later, Washburn says the program has been far harder to use than expected. Her school spent two years getting ready, sitting through state webinars, completing forms, and researching electronic health record systems. When staff asked for help, she said they often waited months for a response.

Plumas Charter School received its first reimbursement check in April. Washburn said the school has been paid $8,000 and still has at least $12,000 in claims outstanding. What she had hoped would help support students after the covid-19 pandemic and recent wildfires has instead felt like a disappointment. Plumas Charter is one of roughly 1,000 public schools, community colleges, and universities participating in Gov. Gavin Newsom’s first-in-the-nation initiative that requires health insurance companies to reimburse campuses for behavioral health care delivered on site.

Across California, schools have been hiring counselors, therapists, and psychiatrists so young people can get help where they spend much of their day. The model was intended to make mental health treatment easier to reach for children whose families might otherwise wait months to see private providers. But school officials say the rollout has been slowed by weak guidance from the state, a billing system that is not fully built out, a lack of standardized forms, and delays in both enrollment and payment. More than half of California’s school systems and colleges do not take part in the billing program. Of those that do, fewer than one-fifth had submitted claims as of June 1, according to the latest state data.

The program has also fallen short of the half-billion dollars in expected revenue that was supposed to help pay for the salaries of thousands of counselors, therapists, and wellness coaches hired by schools using federal covid-era aid. As that funding has dried up, districts around the state have issued thousands of pink slips during local budget cuts. Dawn Addis, a state lawmaker and former special education teacher who has criticized the slow implementation, said government loses public trust when it makes a promise and cannot get the administrative work running well enough to deliver on it.

Newsom’s office declined to make the governor available for an interview. At a May press conference on his final state budget proposal, the Democratic governor called the initiative “unprecedented” and said no other state had done more. He said California still had much more work to do to address “the crisis of our time” and described investment in wellness, including mental health for children, as worthwhile. He did not say whether he considered the program a success when asked.

Tom Insel, the former head of the National Institute of Mental Health who has advised Newsom, said the rough rollout reflects how ambitious California’s effort is. Even so, he said the scale of the investment had led him to expect more obvious evidence of progress by now. He said California can spend the money and still not see the outcomes, and that it is sobering when the policy goals are in place but the execution is not.

Newsom introduced the $4.4 billion Master Plan for Kids’ Mental Health in 2021 after a national survey found that 1 in 10 high school students had attempted suicide and that suicide was then the second-leading cause of death for people ages 10 to 24. He said the overhaul of California’s behavioral health system would be transformative. Mental health experts called it the most ambitious state effort to confront a youth mental health crisis that worsened during the pandemic.

According to an analysis of program funding by KFF Health News, California has directed $730 million in one-time funding to workforce efforts, including recruitment campaigns and student loan repayment programs. Another $220 million has supported partnerships between local governments and school officials, while $381 million has gone to grants for schools and community groups for facilities or services. The state has spent about $532 million on digital apps meant to connect families with counseling and offer consultation for primary care physicians dealing with behavioral health issues outside their specialty. An additional $232 million has gone toward state operations and program evaluations.

California has added 1,855 school counselors since 2021, according to the American School Counselor Association. That remains far short of the 10,000 Newsom promised by the end of this year. The school-focused part of the Children and Youth Behavioral Health Initiative was designed to expand on-campus behavioral health services at no cost to families. Schools would bill insurers, and insurers would be required to reimburse them. About $1.3 billion, nearly a third of the total investment, has gone toward campus wellness centers, billing systems, and other school-based mental health support.

For many campuses, the claims process has been the hardest part. School staff who had never worked in medical billing found themselves dealing with a complicated system that required paperwork and detailed documentation. At Plumas Charter School, staff collected forms, webinar handouts, and other records over the two years it took to enroll and begin billing. In February 2025, when the Fresno County Office of Education began medical billing, assistant superintendent of student services Trina Frazier told lawmakers a few months later that it felt like building the plane while flying it.

Those delays became serious enough that lawmakers last year approved $20 million in grants for Fresno and 170 other school systems so they would not have to lay off newly hired mental health workers while waiting for reimbursements. In Orange County, Anaheim Elementary School District, which state officials described as a champion of the program, has recovered more than $1.1 million since its 23 campuses started billing student insurance in February 2025, said program specialist Shirley Diaz. But that is still less than 30% of the behavioral health services the district provided over that period.

Anaheim’s experience also showed that billing problems are not the only obstacle. In the district, where many residents are Latino, parents have been reluctant to provide health insurance details because of fears over immigration raids carried out by the Trump administration. To manage claims statewide, California signed a $65 million contract with Carelon Behavioral Health, a service run by Elevance Health, one of the country’s largest health insurers. Even so, schools have struggled to get claims approved, and many have paid outside vendors hundreds of thousands of dollars to help with troubleshooting and billing.

As of June 1, Carelon had approved about 232,100 claims totaling more than $11.3 million for 186 school districts and educational agencies, according to the Department of Health Care Services. That is only a small share of the entities the state had hoped would join the program and far below the $500 million a year state officials said it could eventually generate for school-based mental health services. Amy Blackshaw of the California School-Based Health Alliance said many schools expected the money to arrive faster, but instead have found themselves facing slow growth. State officials said they had adjusted deadlines, loosened onboarding rules, and held webinars and office hours, but said changes of this size take time.