DMC-ODS: California's County-Based Drug Medi-Cal System Under CalAIM

In this article▾

1. What is DMC-ODS?
2. DMC-ODS vs. traditional Drug Medi-Cal
3. Which California counties participate in DMC-ODS?
4. How CalAIM changed DMC-ODS
5. What services does DMC-ODS cover?
6. ASAM Criteria and level-of-care determination
7. Prior authorization under DMC-ODS
8. Provider enrollment and contracting: Why county relationships matter
9. Billing and claims: What providers need to manage
10. Documentation requirements under CalAIM
11. County-level differences: What is standardized and what varies?
12. A practical DMC-ODS workflow for SUD providers
13. Common DMC-ODS mistakes that affect provider operations
14. DMC-ODS compliance checklist for California SUD providers
15. Frequently asked questions about DMC-ODS
16. Final takeaway

California's Drug Medi-Cal Organized Delivery System (DMC-ODS) is the Medicaid delivery system for substance use disorder (SUD) treatment in participating counties. It gives Medi-Cal members access to a structured continuum of addiction treatment services, including outpatient treatment, medication services, withdrawal management, residential treatment, and recovery services.

For behavioral health and SUD practice administrators, the important detail is that DMC-ODS is not administered through one statewide health plan. California uses a county-based model. Participating counties contract with the state to operate the system, manage provider networks, and oversee services. Counties that do not participate in DMC-ODS continue to provide Drug Medi-Cal services through the traditional state-plan delivery system.

CalAIM has standardized many DMC-ODS requirements, including service definitions, documentation, and the use of American Society of Addiction Medicine (ASAM) Criteria. However, county-level differences remain in provider contracting, network administration, claims operations, and local workflows.

As of November 5, 2026, the California Department of Health Care Services (DHCS) participation page lists 41 county entries, including Madera, whose listed DMC-ODS go-live date is July 1, 2026. DHCS's page still describes the count as 40 counties as of January 1, 2025, so providers should use the county table and local implementation information rather than treating that older date as a newly certified statewide count.

This guide explains how DMC-ODS works, what CalAIM changed, how county participation affects providers, and what practices should verify before delivering or billing Medi-Cal SUD services.

What is DMC-ODS?

DMC-ODS stands for Drug Medi-Cal Organized Delivery System.

It is California's organized Medicaid delivery system for SUD treatment services. The program is designed to provide eligible Medi-Cal members with access to a continuum of care modeled on the ASAM Criteria.

DMC-ODS is a county opt-in program. Counties submit implementation plans to DHCS and must receive state and federal approval before they can begin operating the system.

The model gives participating counties greater local control and administrative oversight over SUD treatment, including provider networks, utilization management, and coordination with other systems of care.

DMC-ODS was initially approved as a Section 1115 Medicaid demonstration in 2015. In December 2021, CMS approved its reauthorization as part of CalAIM, shifting the managed care authority to the Section 1915(b) waiver and using the Medicaid State Plan to authorize most DMC-ODS benefits.

The 1115 demonstration continued to provide authority for reimbursable DMC-ODS services for members residing in Institutions for Mental Diseases (IMDs) through December 31, 2026.

The distinction matters because DMC-ODS is not simply a new name for traditional Drug Medi-Cal. It is an organized delivery model with a broader service continuum and county-level administrative responsibilities.

Official program information is available on the DHCS DMC-ODS page.

DMC-ODS vs. traditional Drug Medi-Cal

California has two related but different Drug Medi-Cal delivery arrangements.

The practical implication is that a provider cannot assume the same enrollment, contracting, authorization, and billing process applies in every California county.

A practice delivering services in a DMC-ODS county should understand the county's organized delivery system requirements. A practice serving a county that remains under traditional DMC should follow the applicable state-plan requirements instead.

Which California counties participate in DMC-ODS?

DHCS maintains a county participation table with the counties that have submitted applications and their listed go-live dates.

The current table contains 41 county entries:

Note: The participation table is reproduced from the DHCS county page. The page states that 40 counties participated as of January 1, 2025, while also listing Madera with a July 1, 2026 go-live date. The page does not provide a separately dated post-July 2026 statewide count. Confirm Madera's operational status and any subsequent changes with DHCS before relying on the count for contracting or billing decisions.

The counties not listed in the DMC-ODS participation table should not automatically be treated as DMC-ODS counties. Their applicable Drug Medi-Cal delivery arrangements must be confirmed separately.

DHCS also identifies some entries with the designation PHP. Do not assume that this means full county participation in every local service area. Check the county's implementation plan and contract for the applicable arrangement.

Use the DHCS County Plans and Contracts page as the authoritative reference for participation and implementation documents.

Why county participation matters to providers

The county determines which administrative structure the provider works with for DMC-ODS services.

For a practice, this affects:

• Which entity manages the DMC-ODS provider network.
• Where the organization applies for network participation.
• Which provider agreement and local requirements apply.
• How authorization requests are submitted.
• Which claims workflow and billing instructions to follow.
• Where to direct payment and service-delivery questions.

A provider operating across multiple counties may need to manage different county relationships even when the clinical services are similar.

How CalAIM changed DMC-ODS

CalAIM, or California Advancing and Innovating Medi-Cal, is a multi-year initiative to reform Medi-Cal delivery systems, improve care coordination, and make services more consistent.

Its behavioral health changes have affected DMC-ODS in several important areas:

• ASAM-based level-of-care determination.
• Standardized service definitions.
• Documentation requirements.
• No Wrong Door access principles.
• Screening and transition tools.
• Behavioral health payment reform.
• Greater alignment between behavioral health and physical health services.

Most of the major behavioral health policy changes were implemented between 2022 and 2023. Implementation of the broader CalAIM behavioral health initiative continues through 2027.

BHIN 24-001: The current DMC-ODS program guidance

Behavioral Health Information Notice (BHIN) 24-001, effective January 1, 2024, updated DMC-ODS requirements to align with CalAIM behavioral health initiatives. It superseded BHIN 23-001.

For providers, BHIN 24-001 is an important reference for:

• Covered DMC-ODS services.
• Provider qualifications.
• ASAM Criteria requirements.
• Residential and inpatient authorization.
• Clinician consultation.
• Care coordination.
• Recovery services.
• Program and documentation expectations.

Providers should not rely on older DMC-ODS manuals or county-specific documents without checking whether they have been updated to reflect BHIN 24-001.

Read the official BHIN 24-001 guidance.

The CalAIM transition is not a county-by-county replacement of DMC-ODS

It is important to understand what the waiver transition actually means.

DMC-ODS was initially authorized through a Section 1115 demonstration. Under CalAIM, most DMC-ODS benefits shifted to the Medicaid State Plan, while the managed care authority moved to the Section 1915(b) waiver.

This did not eliminate county administration or replace DMC-ODS with one statewide delivery system.

Instead, CalAIM established a more standardized policy framework while retaining the county-based organized delivery structure.

The current DHCS program page identifies the Section 1915(b) waiver and State Plan as the authority for most DMC-ODS benefits. It also identifies the 1115 demonstration as the authority for DMC-ODS services for members residing in IMDs through December 31, 2026.

Important waiver transition to watch in 2027

The current CalAIM Section 1915(b) waiver approval runs through December 31, 2026. DHCS published a proposed renewal summary for public comment in May 2026 and identified plans to submit the renewal request during the third quarter of 2026.

DHCS also submitted a five-year renewal request for the Section 1115 demonstration in May 2026.

As of November 5, 2026, the DHCS waiver resources reviewed for this article do not establish a final CMS approval extending the Section 1915(b) waiver beyond December 31, 2026. Providers should monitor DHCS updates rather than assume that the current approval automatically continues unchanged.

This is particularly important for residential providers and organizations serving members in IMDs, because the 1115 authority for those DMC-ODS services also has a December 31, 2026 end date under the existing approval.

The expiration of a waiver approval should not be interpreted as automatic termination of the underlying SUD benefit. The effect depends on the approved renewal, replacement authority, and applicable state-plan arrangements.

Official references:

• CalAIM 1115 Demonstration and 1915(b) Waiver
• DHCS Section 1915(b) Waiver Resources
• DHCS Waiver Updates

What services does DMC-ODS cover?

DMC-ODS provides a continuum of SUD treatment services modeled on ASAM Criteria.

The available services can include:

The exact covered service components, eligible provider types, and billing rules are defined by DHCS guidance and the applicable DMC-ODS service table.

Providers should use the current service table and billing manual rather than relying on an older summary of the service continuum.

ASAM Criteria and level-of-care determination

ASAM Criteria are central to DMC-ODS because the program is designed around matching treatment intensity to an individual's clinical needs.

The assessment considers dimensions such as:

• Acute intoxication and withdrawal potential.
• Biomedical conditions and complications.
• Emotional, behavioral, or cognitive conditions.
• Readiness to change.
• Relapse, continued use, or continued problem potential.
• Recovery and living environment.

The assessment supports a recommendation for the appropriate level of care. It is not simply a diagnostic checklist, and the level-of-care assessment guide walks through how the six dimensions are actually scored.

A provider should be able to explain why the selected level of care is appropriate and why a less intensive setting would not adequately address the individual's needs.

Does every member need a comprehensive ASAM assessment before starting DMC-ODS?

No. DHCS clarifies that a comprehensive ASAM assessment is not required for a member to begin receiving DMC-ODS services.

This distinction is important for access. Providers should not delay all treatment until a comprehensive assessment is completed if the applicable rules permit the member to begin services based on an initial assessment or other appropriate information.

However, this does not remove the need to assess clinical needs, document medical necessity, and follow the applicable requirements for the service being delivered.

Is a comprehensive ASAM assessment required for Recovery Services?

No. DHCS states that Recovery Services do not require a comprehensive ASAM assessment.

A member may access Recovery Services based on the member's self-assessment or a provider's assessment of relapse risk. The individual does not need to have a diagnosis of remission to receive these services.

Recovery Services can be delivered:

• As a standalone service.
• Separately but concurrently with other DMC-ODS levels of care.
• As a component of another covered DMC-ODS level of care.

Providers should use clinical judgment and follow the current service table and billing manual for the appropriate service and claim details.

For further background, see ASAM Criteria.

Prior authorization under DMC-ODS

Authorization requirements are an important difference between service categories.

DHCS distinguishes residential and inpatient treatment from non-residential services.

Residential and inpatient services

DMC-ODS plans must provide independent review of authorization requests for residential and inpatient services, excluding withdrawal management services.

The plan must notify the provider of its decision within 24 hours after the provider submits the request.

The plan does not require a complete assessment or definitive diagnosis before authorizing residential treatment. It must review sufficient clinical information, including relevant DSM and ASAM Criteria information, to determine whether the member meets the requirements for the service.

If a request is denied or approved for less than the requested amount, duration, or scope, the decision must be made by an individual with appropriate expertise in addressing the member's medical and behavioral health needs.

Non-residential services

DHCS does not require DMC-ODS plans to impose prior authorization for non-residential assessment and treatment services.

This includes withdrawal management services.

The absence of a prior authorization requirement does not mean that every service is automatically payable. Providers must still meet applicable coverage, medical necessity, documentation, provider qualification, and billing requirements.

Practical authorization matrix

County implementation and service-specific instructions should still be checked. The table describes the statewide DHCS policy, not every local administrative step a provider may encounter.

For more information, see DHCS's CalAIM Behavioral Health FAQ.

Provider enrollment and contracting: Why county relationships matter

A practice cannot assume that enrollment as a Medi-Cal provider automatically makes it an active DMC-ODS network provider in every participating county. This is the credentialing versus contracting versus enrollment distinction, with a county layer on top.

The county-based delivery model means that providers must understand the contracting and network requirements of the county or counties in which they intend to serve members.

A practice should confirm:

• Whether the county is participating in DMC-ODS.
• Which county department or contracted entity manages provider network operations.
• Whether the organization must complete a county-specific application.
• Which provider types and services are eligible for contracting.
• Whether the organization must hold a current DHCS license, certification, or designation.
• Which clinicians can render the contracted services.
• Which locations are included in the provider agreement.
• Whether additional network or quality requirements apply.

DHCS certification and ASAM level-of-care designation

Residential providers should pay particular attention to certification and designation requirements. Insurance credentialing for treatment centers covers the commercial-payer equivalent of this work.

Under BHIN 24-001 and the related guidance, providers delivering residential treatment at ASAM Levels 3.1, 3.3, or 3.5 within DMC-ODS must have the applicable DHCS Level of Care Designation and/or ASAM Level of Care Certification.

The applicable requirements differ by service and provider type. Residential withdrawal management providers should also review the relevant DHCS requirements.

Do not assume that a facility's state license alone establishes eligibility to deliver every DMC-ODS residential service.

Review the relevant DHCS guidance, including BHIN 21-001, and confirm the requirements with the county.

Billing and claims: What providers need to manage

DMC-ODS claims are processed through the applicable county and Short-Doyle Medi-Cal arrangements.

The county's administrative structure and the provider's contract determine the operational route for claims submission and follow-up.

Providers should maintain current instructions for:

• Claims submission and electronic billing.
• Provider identifiers and rendering-provider details.
• Procedure codes and modifiers.
• Diagnosis coding.
• Units, service dates, and documentation.
• Authorization references where required.
• Claim corrections and resubmissions.
• Payment reconciliation.
• Denial follow-up and appeals.

Use the current DMC-ODS Billing Manual

DHCS publishes Short-Doyle Medi-Cal Billing Manuals and service tables through its County Claims Customer Services Library.

The current library includes a DMC-ODS Billing Manual for State Fiscal Year 2026-27, revised September 2026, and a DMC-ODS Service Table revised October 2026.

These are more useful for current billing decisions than older county summaries or archived program documents.

The manual and service table should be reviewed together. The billing manual explains how to submit claims, while the service table identifies covered services and associated billing information.

Access the latest documents through the DHCS County Claims Customer Services Library.

Do not assume every county uses the same claims workflow

A provider working in two counties may encounter different administrative contacts, portals, claim-routing instructions, or payment workflows.

The underlying statewide DMC-ODS policy may be consistent, but county implementation and local systems can differ. Other states draw the line in other places: North Carolina uses three regional LME-MCOs, New Jersey splits behavioral health between fee-for-service and managed care, and Texas routes documentation through CMBHS.

For example, San Diego County routes its behavioral health provider information through County Behavioral Health Services, with contracted provider resources hosted separately by Optum San Diego.

Marin County provides its own DMC-ODS program information.

These examples illustrate why providers should use the local county's current instructions rather than copy a claims process from another region.

Documentation requirements under CalAIM

CalAIM introduced documentation redesign to reduce unnecessary administrative burden while maintaining clinical accountability.

For DMC-ODS providers, documentation should support the service delivered, the individual's needs, and the clinical decisions made.

Depending on the service, records may need to demonstrate:

• The individual's presenting needs and SUD-related symptoms.
• Assessment findings and clinical rationale.
• The selected level of care.
• Treatment goals and interventions.
• Medication-related services where applicable.
• Care coordination activities.
• Progress and response to treatment.
• Continued clinical need for the service.
• The reason for transitions between levels of care.

Are discharge plans and discharge summaries still required?

DHCS's CalAIM guidance states that DMC-ODS providers and plans should follow the documentation requirements in BHIN 23-068, which do not include discharge plans and discharge summaries as a general DMC-ODS documentation requirement.

Discharge planning is a component of Care Coordination and should be provided based on member need. It may include coordination with other SUD treatment providers, referrals to mental health providers, and transitions to primary or specialty medical care.

There are important exceptions. Certified-only programs have separate discharge plan and summary requirements under the applicable Alcohol and/or Other Drug (AOD) Certification Standards. Licensed residential programs also have recordkeeping and discharge-related obligations under California regulations.

Providers should therefore distinguish between the general DMC-ODS documentation rules and additional licensing or certification requirements.

Do not remove discharge documentation from a workflow without checking the facility's licensing and certification obligations.

County-level differences: What is standardized and what varies?

The central challenge of DMC-ODS is understanding which requirements are statewide and which depend on the county.

CalAIM has reduced variation in important clinical and administrative areas. But it has not eliminated the county's role in managing the organized delivery system.

What this means for multi-county practices

A provider operating in multiple counties should not maintain one generic DMC-ODS procedure and assume it works everywhere.

Instead, build a central statewide policy with county-specific operating instructions.

For example:

Statewide policy: Verify Medi-Cal eligibility, confirm the correct delivery system, document medical necessity, and follow the current DMC-ODS service and billing requirements.

County-specific procedure: Identify the local contracting contact, provider portal, claims submission channel, authorization contact, and payment escalation process.

This approach allows an organization to standardize its internal controls without overlooking local requirements.

A practical DMC-ODS workflow for SUD providers

A repeatable workflow can reduce administrative errors and prevent avoidable claim delays.

Step 1: Verify Medi-Cal eligibility

Before services begin, confirm the member's current Medi-Cal eligibility and identify the county responsible for the member's SUD treatment arrangement.

Do not assume that a member's county of residence, previous treatment location, or insurance card alone establishes the correct billing pathway.

Step 2: Confirm the delivery system

Determine whether the county operates DMC-ODS or uses the traditional DMC structure for the relevant services.

If the county participates in DMC-ODS, identify the entity managing the provider network and the member's treatment access.

Step 3: Confirm network participation

Check that the organization, facility, service location, and relevant clinicians meet the county's contracting and provider requirements.

Verify any required licenses, certifications, and ASAM level-of-care designations.

Step 4: Assess the member's needs

Complete the assessment and determine the clinically appropriate service and level of care.

Use ASAM Criteria as applicable, while following DHCS guidance on when a comprehensive assessment is required and when treatment can begin based on other available information.

Step 5: Confirm authorization requirements

Check the service category before requesting authorization.

Residential and inpatient treatment have independent review requirements. Non-residential assessment and treatment, including withdrawal management, are not subject to prior authorization under the DHCS DMC-ODS guidance.

Step 6: Deliver and document services

Document the clinical rationale, services provided, interventions, progress, and other required information.

Use current DHCS documentation guidance and any applicable licensing or county requirements.

Step 7: Submit and reconcile claims

Use the current DMC-ODS Billing Manual, Service Table, and county-specific claims instructions.

Reconcile submitted claims against remittance information and investigate rejections, denials, and payment discrepancies. How to read an EOB and ERA covers how to pull those fields apart.

Step 8: Monitor county and DHCS updates

Assign responsibility for monitoring DHCS notices, billing manual revisions, service table changes, and county communications.

This is particularly important during the 2026-27 waiver transition period.

Common DMC-ODS mistakes that affect provider operations

DMC-ODS compliance checklist for California SUD providers

County and delivery-system verification

• Confirm whether the county participates in DMC-ODS.
• Confirm the applicable county implementation plan and contract.
• Identify the entity managing provider network operations.
• Confirm the member's Medi-Cal eligibility and applicable delivery system.
• Maintain a current list of county contacts.

Provider readiness

• Confirm the organization's Medi-Cal enrollment.
• Complete applicable county contracting requirements.
• Verify service locations and rendering-provider information.
• Maintain current licenses and certifications.
• Confirm applicable DHCS Level of Care Designation or ASAM certification for residential services.

Clinical and authorization controls

• Use ASAM Criteria as applicable.
• Document medical necessity and the selected level of care.
• Confirm whether the service requires authorization.
• Track residential and inpatient authorization requests and decisions.
• Maintain records of approved services and dates.
• Follow current requirements for Recovery Services and Care Coordination.

Billing and documentation

• Use the current DMC-ODS Billing Manual.
• Check the latest DMC-ODS Service Table.
• Verify diagnosis, procedure code, modifiers, units, and provider identifiers.
• Maintain clinical records that support services delivered.
• Reconcile claims and remittances.
• Track corrections, denials, and appeals.

Ongoing compliance

• Monitor DHCS BHIN releases.
• Review county provider communications.
• Track changes to waiver authority and program requirements.
• Update internal policies when billing manuals or service tables change.
• Review local procedures separately for each county served.

Frequently asked questions about DMC-ODS

What does DMC-ODS stand for?

DMC-ODS stands for Drug Medi-Cal Organized Delivery System. It is California's county-based Medicaid delivery system for SUD treatment services in participating counties.

Is DMC-ODS available in all California counties?

No. DMC-ODS is a county opt-in program. Counties must submit an implementation plan and receive approval from DHCS and CMS before beginning DMC-ODS services. Other counties use the traditional Drug Medi-Cal delivery structure for applicable services.

How many counties participate in DMC-ODS?

The DHCS participation page lists 41 county entries and states that 40 counties participated as of January 1, 2025. The same table lists Madera with a July 1, 2026 go-live date. Because the published count is tied to an earlier date, providers should check the current DHCS county table and local implementation status rather than assume the dated count is a new November 2026 certification.

What is the difference between DMC and DMC-ODS?

Traditional Drug Medi-Cal provides covered SUD services under the state-plan delivery structure. DMC-ODS is an organized county-based system with a broader continuum of care modeled on ASAM Criteria and additional county-level network and utilization-management responsibilities.

Does DMC-ODS require ASAM Criteria?

DMC-ODS is designed around ASAM Criteria for SUD treatment and level-of-care determination. The applicable assessment requirements depend on the service. DHCS clarifies that a comprehensive ASAM assessment is not required before every DMC-ODS service or for Recovery Services.

Does DMC-ODS require prior authorization?

DMC-ODS plans must independently review residential and inpatient treatment authorization requests, excluding withdrawal management, and notify providers of their decision within 24 hours of submission. Plans may not impose prior authorization on non-residential assessment and treatment services, including withdrawal management, under DHCS guidance.

Can a provider work with multiple DMC-ODS counties?

Yes. A provider may serve members in multiple participating counties, but it must meet the applicable network and contracting requirements in each county. The provider should maintain county-specific operational instructions.

What is BHIN 24-001?

BHIN 24-001 is DHCS guidance that updated DMC-ODS program requirements effective January 1, 2024. It superseded BHIN 23-001 and aligned DMC-ODS with CalAIM behavioral health initiatives.

Are DMC-ODS providers required to submit discharge summaries?

DHCS guidance under BHIN 23-068 does not establish discharge plans and summaries as a general DMC-ODS documentation requirement. However, discharge planning is part of Care Coordination when needed, and separate licensing or certification rules may require additional documentation.

Where can providers find current DMC-ODS billing requirements?

DHCS publishes current Short-Doyle Medi-Cal Billing Manuals and DMC-ODS Service Tables through its County Claims Customer Services Library.

Final takeaway

DMC-ODS is California's organized delivery system for Medi-Cal SUD treatment in participating counties. CalAIM has standardized important parts of the program, particularly service definitions, ASAM-based care, documentation, and authorization policy. But county-level provider contracting, claims administration, and operational workflows still matter.

For practices, the first step is to identify whether the county operates DMC-ODS or traditional DMC. From there, confirm the local provider agreement, service requirements, authorization process, and claims workflow.

The most reliable operating model is to maintain one statewide compliance framework and a separate set of county-specific procedures. That gives administrators a consistent way to manage clinical documentation and billing without assuming that every county operates identically.

With the CalAIM waiver transition approaching its December 31, 2026 approval end date, providers should also monitor DHCS and CMS updates, particularly if they deliver residential or inpatient services.

Official resources to bookmark:

• DHCS DMC-ODS program overview
• DMC-ODS County Plans and Contracts
• BHIN 24-001
• CalAIM Behavioral Health FAQ
• Current DMC-ODS Billing Manual and Service Table
• CalAIM Waiver Updates

If you operate across several counties, the cost is usually not the clinical work but the reconciliation between county systems. Book a demo to see how Supa handles authorization tracking and denial follow-up across payers.

This article is for educational and operational purposes and is not legal or reimbursement advice. DMC-ODS requirements vary by service, provider type, county participation, and applicable contract. Verify current DHCS guidance and local county instructions before changing clinical, contracting, or billing workflows.