Mental health providers and Local Education Agencies (LEAs) across California are facing a growing challenge: how to sustain critical behavioral health services for youth and families while navigating a maze of new funding sources. With new initiatives such as the Children and Youth Behavioral Health Initiative (CYBHI) and Enhanced Care Management (ECM) introduced through CalAIM, braiding funding from multiple revenue streams has become a pivotal strategy for financial sustainability and service expansion.  

This blog explores the concept of braided funding, detailing how it can be leveraged to sustain mental health services, enhance service delivery, and support organizations in California’s complex behavioral health ecosystem. 

Understanding Braided Funding and Its Benefits 

Braided funding combines multiple funding streams to support a single initiative or program, while keeping the identity and compliance requirements of each funding source intact. Unlike blended funding, where funds lose their identity, braided funding allows each source to retain identity and accountability requirements. 

For LEAs and mental health providers, this strategy offers the ability to: 

• Increase Financial Stability: By accessing diverse funding sources, organizations can reduce reliance on any single funding stream, creating a stronger financial foundation. 
  
  
• Expand Service Offerings: Multiple funding streams enable organizations to offer more comprehensive services and programs, including prevention, early intervention, and crisis management. 
  
  
• Ensure Continuity of Care: Braided funding helps organizations continue services during fluctuations or loss of any one-time funding source, ensuring uninterrupted care for clients. 

Funding Sources for the Children and Youth Behavioral Health Initiative (CYBHI) 

The CYBHI, established through the Budget Act of 2021, is a multi-year, multi-departmental effort to transform California’s behavioral health system for children and youth. The initiative focuses on integrating social, emotional, and mental health support into educational settings, expanding early intervention services, and improving health outcomes for children and youth up to age 25. 

Key Funding Opportunities and California CYBHI Grants  

The CYBHI offers several key funding opportunities that can be used in a braided funding approach. Here are a few examples: 

• Statewide Multi-Payer School-Linked Fee Schedule: This workstream aims to develop a fee schedule that brings together multiple payers, including private insurers and public funds, to reimburse school-based behavioral health services. This funding mechanism supports efforts to expand services in schools, providing a pathway for LEAs and mental health providers to bill for various services that support student well-being. 

• Medi-Cal Managed Care Plans (MCPs): Medi-Cal MCPs contract with the Department of Health Care Services (DHCS) to provide high-quality, accessible, and cost-effective health care through managed care delivery systems. The MCP Contract requires MCPs to build partnerships with Third- Party Entities to ensure member care is coordinated and members have access to community-based resources to support whole-person care.  

• AB 2698 California State Preschool Programs: Encourages subsidized preschool programs as places to provide early childhood mental health services and child development programs. The costs of providing these services are reimbursable under certain conditions. Additionally, a child’s days of enrollment can be multiplied by an adjustment factor of 1.05 for children in a Child State Preschool Program, or infants and toddlers in a general childcare and development program where early childhood mental health consultation services are provided. 

• Medi-Cal Specialty Mental Health Services (SMHS) for Children and Youth: DHCS administers the Medi-Cal SMHS waiver program, which provides SMHS to Medi-Cal beneficiaries through county mental health plans (MHPs). The MHPs must provide or arrange for the provision of SMHS to beneficiaries in their counties that meet medical necessity criteria, consistent with the beneficiaries' mental health treatment needs and goals.  

• School-Linked Partnership and Capacity Grants: California CYBHI grants, like the Evidence-Based Practices and Community-Defined Evidence Practices Grants, are one-time investments to build capacity and establish partnerships between LEAs and mental health providers. This funding also allows LEAs and mental health agencies to expand evidence-based and culturally relevant practices. Funds can support training, program implementation, infrastructure, and ongoing evaluation efforts. 

• Family First Prevention Services Act (FFPSA): Provides reimbursement for evidence-based, trauma-informed mental health prevention services to help children remain in their homes and support families. Prevention services also refer to substance abuse prevention and treatment, in-home parent skill-based programs, and kinship navigator programs. 

• Title IV E Stipend Program: This program provides financial support to full-time graduate social work students preparing for public child welfare careers. Students can receive a stipend of $25,000 per academic year for a total of $50,000 over the two-year program. 

These funding streams are particularly relevant to LEAs and mental health agencies looking to diversify their funding sources and enhance service capacity. By braiding CYBHI funds with local grants and federal reimbursements, organizations can build a sustainable financial model that supports long-term service delivery. 

Funding for Enhanced Care Management and Community Supports Under CalAIM 

Enhanced Care Management is a statewide Medi-Cal benefit that provides person-centered care management to high-need individuals, including those with severe mental health disorders, complex health conditions, and other vulnerabilities. ECM services are provided through Medi-Cal Managed Care Plans (MCPs) to address both the clinical and social needs of Medi-Cal Members. 

How ECM Supports Braided Funding Models 

ECM offers unique opportunities to blend clinical care management with community-based supports. Providers can bill Medi-Cal for care management activities while using other funding sources, such as Community Supports, to address non-clinical needs like housing support, medically tailored meals, and transportation services. 

Community Supports Services: These services, previously known as "In Lieu of Services," are funded through Medi-Cal but go beyond traditional health care. They include services such as housing transition support, personal care services, and respite care. By integrating Community Supports with ECM, providers can create comprehensive care plans that leverage multiple revenue streams, ensuring that all aspects of a client’s needs are met. 

Specific California Enhanced Care Management Grant Opportunities and Funding Mechanisms  

• PATH CITED Funding: The Providing Access and Transforming Health (PATH) Capacity and Infrastructure, Transition, Expansion, and Development (CITED) initiative provides funding to support capacity building and infrastructure development for ECM and Community Supports providers. This funding is crucial for organizations seeking ECM services while building their organizational capacity to handle complex care coordination. 

• Managed Care Plan Incentive Payment Program (IPP): Under CalAIM, MCPs can receive incentive payments to build up their ECM delivery systems, support provider capacity, and improve care quality and access. Providers participating in ECM should work closely with MCPs to align funding strategies and access these incentive payments. 

Implementing Braided Funding: Best Practices and Strategies 

To successfully implement a braided funding model, organizations should consider the following strategies: 

• Map Available Funding Sources: Identify all potential funding sources, including CYBHI workstreams, ECM reimbursements, local grants, and philanthropic funding. Create a funding map outlining which sources can be braided together to support various components of service delivery. 

• Create Collaborative Partnerships: Establish strong partnerships with LEAs, county mental health agencies, and community-based organizations. Collaborative planning ensures that each organization’s goals align, making coordinating funding and service delivery easier. 

• Invest in Data Management and Billing Infrastructure: Accurate billing and data tracking are critical to managing multiple funding sources. Utilize EHR software, like Exym, that supports multi-payer billing and can generate reports to meet compliance requirements for each funding source. 

• Monitor Compliance and Reporting Requirements: Each funding source will have its own compliance and reporting standards. Designate a team member to oversee compliance for each source to ensure that all funds are used appropriately and that reports are submitted accurately. 

Technology Solutions for Managing Braided Funding 

Leveraging braided funding is essential for agencies and LEAs looking to sustain services in California. However, adopting a braided funding approach requires strong infrastructure —especially regarding billing systems and service documentation. Agencies need tools to manage the complex requirements of multiple funding streams, and capacity-building funds can play a vital role in establishing this infrastructure. 

Exym’s EHR software supports agencies and LEAs navigating Medi-Cal initiatives by offering a highly customizable platform for billing and documentation. Trusted for over 20 years, our intuitive mental and behavioral health software empowers providers to improve client outcomes, manage revenue, and increase efficiency.  

Exym allows clinicians to create and manage personalized treatment plans, leverage data to support evidenced-based practices, and generate reports on program metrics. With strong security measures, seamless billing and auditing tools, and dedicated training and support, Exym ensures compliance so you can focus on what matters most- caring for others. 

Learn more about how Exym enhances finance outcomes for behavioral health organizations and schools by visiting our website.

Conclusion 

Braided funding offers a strategic pathway for agencies to sustain and expand their behavioral health services. By combining resources, organizations can create comprehensive care models that address the full spectrum of California communities’ mental and behavioral health needs. As the state’s behavioral health system continues to evolve, adopting a braided funding approach will be key to ensuring financial sustainability and the long-term viability of mental health services.