Navigating the Executive Order on Homelessness and Involuntary Psychiatric Holds: Implications for California Hospitals

President Trump recently declared a crime emergency in Washington, D.C., citing homelessness and violent crime as supporting the need to place the D.C. Metropolitan Police Department under federal control and deploy the National Guard to the city. This declaration followed President Trump's July 24 Executive Order on homelessness, which introduced the possibility of significant changes to federal funding and civil commitment policies. These actions signaled a heightened federal focus on homelessness and public safety, with implications that extend beyond the nation's capital and intersect with decades-long state-level efforts to reform behavioral health systems.

California provides a key case study of the commonalities and tension points between recent federal actions and ongoing state reform efforts.[1] There have been efforts both at the California state level, under Governor Newsom's leadership, and now federally, under the Trump Administration, to combat homelessness and broaden eligibility categories for involuntary psychiatric holds, although the approaches and methodologies differ. California's significant experience in this area (as demonstrated by its evolving provision of substance use disorder services and administration of behavioral healthcare under the Lanterman-Petris-Short Act, as well as the state's strategies to address homelessness) could offer valuable insights to inform future federal approaches. Nevertheless, reconciling these divergent requirements may be challenging for California hospitals, especially those with emergency departments that do not provide inpatient or outpatient psychiatric services.

This article provides an overview of (1) the Executive Order on homelessness, and (2) California's major behavioral health reforms over the past few years. It also discusses implications for California hospitals, with recommendations to support them as they reconcile the federal and state landscape.

Federal Enforcement: Executive Order 14321

On June 24, 2025, President Trump issued an Executive Order titled "Ending Crime and Disorder on America's Streets." This Executive Order focuses on "[s]hifting homeless individuals into long-term institutional settings for humane treatment through the appropriate use of civil commitment [to] restore public order." While the Executive Order does not change existing laws or include an enforcement mechanism, it requires federal agencies to take a series of regulatory and enforcement actions, including restricting federal grant funding, to meet the directives of the Executive Order.

While Executive Order 14321 focuses on the homeless population, its reach may be broader in that it contemplates the civil commitment of individuals who "are living on the streets and cannot care for themselves" and also "individuals with mental illness who pose risks to themselves or the public." Because the Executive Order does not provide specific definitions for these categories, states will need to look to guidance from the federal agencies tasked with implementation.

Several federal executive agencies, including the Department of Justice ("DOJ"), the Department of Health and Human Services ("HHS"), the Department of Housing and Urban Development ("HUD"), and the Department of Transportation ("DOT") have been tasked with implementing the Executive Order. Key directives relevant to healthcare providers include, but are not limited to, the following:

• Reversal of Judicial Precedents: DOJ and HHS are directed to challenge judicial rulings that limit civil commitment and to terminate consent decrees that are inconsistent with the Executive Order's goals.
• Forthcoming Technical Guidance: DOJ and HHS are directed to provide assistance to state and local governments via technical guidance and grants to identify and implement "maximally flexible civil commitment, institutional treatment, and 'step-down' treatment standards" to commit individuals "with mental illness who pose a danger to others or are living on the streets and cannot care for themselves."
• Grant Prioritization: Multiple agencies (DOJ, HHS, HUD, and DOT) are directed to take immediate steps to assess their discretionary grant programs and prioritize funding for jurisdictions that meet specific criteria, to the maximum extent permitted by law. These criteria include:
  • Enforcing prohibitions on open drug use, urban camping, and loitering;
  • Adopting standards for civil commitment or assisted outpatient treatment for "individuals who are a danger to themselves or others and suffer from serious mental illness or substance use disorder, or who are living on the streets and cannot care for themselves;" and
  • Complying with sex offender registration and notification obligations.

  This directive seemingly applies broadly to all discretionary grants under the purview of those agencies.

• SAMHSA Grant Restrictions: HHS is directed to ensure that SAMHSA discretionary grants for substance use disorder-related matters no longer fund harm reduction interventions or safe consumption efforts that "only facilitate illegal drug use and its attendant harm."
• Community Health Center and Clinic Funding: HHS is directed to ensure that federal funds for Federally Qualified Health Centers ("FQHCs") and Certified Community Behavioral Health Clinics ("CCBHCs") will, to the maximum extent permitted by law, support comprehensive services for individuals with serious mental illness and substance use disorder (e.g., crisis intervention services) in a way that "reduce[s] rather than promote[s] homelessness."
• Data Sharing with Law Enforcement: DOJ, HHS, and HUD are directed to require that recipients of grants awarded for homelessness assistance and transitional living programs share health-related information with law enforcement in circumstances permitted by law.

California's Behavioral Health System: Navigating Recent Changes to the Lanterman-Petris-Short ("LPS") Act

California's behavioral health system, and specifically the provision for short-term and longer-term involuntary psychiatric holds and conservatorships for individuals who are a danger to self or others or who are "gravely disabled," has significantly changed over the past few years. Most notably, California expanded the LPS Act in 2023 via Senate Bill ("S.B.") 43, which broadened the definition of gravely disabled to include individuals with severe substance use disorders or co-occurring severe substance use disorders and mental health disorders. The expanded definition also now encompasses the inability to meet basic personal needs for "personal safety" and "necessary medical care," in addition to food, clothing, and shelter. These changes are being implemented on a county-by-county basis, with many counties deferring adoption until January 1, 2026. Anecdotally, we understand that providers have struggled with determining whether a patient meets the expanded gravely disabled standard in the absence of specific guidance or clinical assessment criteria.

Additionally, in 2024, California's S.B. 1238 broadened the list of facilities eligible for LPS Act designation as mental health treatment facilities licensed for evaluation and treatment and eligible to involuntarily detain patients pursuant to the Act. This change was made in response to a state-wide shortage in step-down facilities, as well as long-term residential and long-term inpatient drug treatment care. In California, step-down facilities generally represent a level of care that is less intensive than care provided in the inpatient hospital setting but higher acuity than community-based services. This could include, for example, transitional care for patients moving from emergency department hospitalization to specialized facilities equipped for behavioral health treatment. These facilities can also bridge the gap between intensive care and/or hospital inpatient services and community reintegration by offering recovery-focused services such as outpatient care and sober living environments. While S.B. 1238's expansion of the list of potential "designated facilities" may help address the access challenges along the behavioral health continuum of care, this anticipated relief may not come until 2028 (since, pursuant to the bill, the California Department of Health Care Services ("DHCS") has until the end of 2027 to adopt relevant regulations). Until S.B. 1238 is fully implemented, California hospitals, and specifically those with emergency departments, will likely continue to face challenges finding access to the right level of care for behavioral health patients and specifically those who are a danger to themselves, others, or are gravely disabled. This is especially challenging in certain geographies and for rural hospitals with limited access to behavioral health services.

Reconciling Federal and State Policy Differences: Implications for California Hospitals

The use of federal funding as an enforcement mechanism as contemplated in Executive Order 14321 may increase pressure on California entities to reinterpret or advocate for changes to state-level legal standards regarding homelessness and involuntary psychiatric holds.

For example, the Executive Order prohibits federal funding for harm reduction programs (namely, public health interventions that seek to avoid the negative effects of drug use via incentives that lower the risks of contamination, infections, and overdoses), which have been a key component in California's behavioral health and substance use disorder strategy. This restriction may compel some counties to redesign their behavioral health and substance use disorder programs to align more closely with federal directives, prioritizing the preservation of federal funding over existing state strategies. California's major behavioral health initiatives and infrastructure expansion programs (including the Behavioral Health Continuum Infrastructure Program ("BHIP"), Proposition 1 funding, and the Behavioral Health Services Act ("BHSA")) are state-administered and state-funded, but counties and behavioral health projects often rely on braided funding streams that include federal sources. Consequently, disruptions at the county level due to the Executive Order could significantly impact downstream providers, especially in the designation of step-down facilities. Additionally, the increased pressure to impose involuntary psychiatric holds, particularly for homeless individuals, is likely to exacerbate the operational challenges that hospitals already face in finding appropriate care settings given insufficient resources for qualifying patients under the LPS Act.

Because the Executive Order included a directive to support funding for comprehensive behavioral health and substance use disorder services at FQHCs and CCBHCs, this directive may help to address some of the access issues highlighted above. While FQHCs and CCBHCs offer outpatient services (such as counseling, crisis stabilization, and addiction treatment), this funding could facilitate expansion of these outpatient services within the existing continuum of care. It may also help streamline the approval process for new crisis stabilization services and help address gaps in post-discharge care for patients with behavioral health needs either upon discharge from a hospital or in lieu of a hospital admission.

It is important for hospitals to keep in mind that any data sharing requested in response to the Executive Order should be evaluated in accordance with the protections that apply to protected health information, including the heightened standards that may apply under state and federal law to mental health and substance use disorder information.

We anticipate that the combined impact of the Executive Order and the expanded LPS Act framework will have the greatest impact on California hospitals with emergency departments. Such hospitals are likely to experience a rise in involuntary psychiatric holds, particularly involving individuals with substance use disorders and also as a result of the Executive Order's potential to incentivize encampment cleanouts and target homeless individuals.

Recommended Next Steps

While navigating the risks under the federal directives, hospitals must also ensure that their practices comply with state law, and specifically the state- and county-level due process requirements and patient civil rights protections under the LPS Act.

To address these challenges, hospitals should consider the following proactive measures:

1. Policy Review and Compliance: Hospitals should conduct a comprehensive review of their policies and procedures related to involuntary psychiatric holds to ensure compliance with both state and federal requirements. This includes updating protocols and clinical standards to reflect the expanded gravely disabled definition and ensuring that clinicians still independently assess and determine whether individuals meet California legal standards for involuntary holds and conservatorships. Any such determinations should be documented in the patient's medical record.
2. Staff Training: Hospitals should consider providing targeted, updated training for clinical and administrative staff on the current legal and clinical standards for involuntary psychiatric holds, including the expanded criteria under the LPS Act.
3. Infrastructure Enhancement: Hospitals should consider conversations and partnerships with local county health departments, hospital associations, FQHCs and CCBHCs, as well as other private entities, to increase access to LPS-designated facilities and other providers throughout the continuum of care. Hospitals may also wish to work closely with county behavioral health departments and payors in an effort to streamline patient transfers and ensure timely access to appropriate care. Hospitals and their advocates could also push for consistent implementation of the expanded gravely disabled definition across counties to reduce care disparities.
4. Legal Monitoring: Hospitals are also encouraged to stay up to date with state and federal guidance on civil commitment practices, including DHCS' forthcoming Medi-Cal reimbursement guidance for substance use disorder treatment.

Please reach out to the authors if you have any questions, or if you would like assistance with policy reviews, compliance strategies, or implementing any of the recommendations outlined above.