California received approval in December 2021 to add 14 community support services – to include recuperative care – to its 1115 Medicaid waiver to be implemented by the state’s California Advancing and Innovating Medi-Cal (CalAIM) Initiative (more details in our 2022 State of the States report). At the end of 2024, CMS approved a request to add six months of short-term rental support to its Medi-Cal program as a part of the BH-CONNECT 1115 demonstration waiver. Medi-Cal recipients are now eligible for up to six months of combined recuperative care, short-term post hospitalization housing, and short-term rental assistance within a rolling 12-month period, per CMS.
Notes: The addition of rental assistance, with the enhanced case management services already available to recuperative care clients, could add valuable resources for individuals who have recuperated and are ready for discharge. However, limiting recuperative care and rental assistance under the same guidelines for room and board supports limits the effectiveness of short-term post hospitalization housing and rental assistance for recuperative care patients.
In the past three years, hospitals, managed care plans and recuperative care providers have navigated significant challenges transitioning to third-party reimbursements. For more information about the transition, including perspectives from the three stakeholder groups, further action steps to consider, and advice for other states, see our issue brief “CalAIM Implementation of Recuperative Care Benefit: Lessons Learned.”
Next Steps: California’s CalAIM demonstration is scheduled to end on Dec. 31, 2026, unless the state asks for a waiver extension or amends their state Medicaid plan.
