Cal. Welf. and Inst. Code § 14710
Except as otherwise provided in this section, in determining the amounts which may be paid, fees paid by persons receiving services or fees paid on behalf of persons receiving services by the federal government, by the Medi-Cal program set forth in Chapter 7 (commencing with Section 14000), and by other public or private sources, shall be deducted from the costs of providing services. However, a mental health plan may negotiate a contract that permits a specialty mental health care provider to retain unanticipated funds above the budgeted contract amount, provided that the unanticipated revenues are utilized for the specialty mental health services specified in the contract. If a provider is permitted by contract to retain unanticipated revenues above the budgeted amount, the specialty mental health provider shall specify the services funded by those revenues in the yearend cost report submitted to the mental health plan. A mental health plan shall not permit the retention of any fees paid by private resources on behalf of Medi-Cal beneficiaries without having those fees deducted from the costs of providing services. Whenever feasible, persons with mental illness who are eligible for specialty mental health services under the Medi-Cal program shall be treated in a facility approved for reimbursement in that program. General unrestricted or undesignated private charitable donations and contributions made to charitable or nonprofit organizations shall not be considered as "fees paid by persons" or "fees paid on behalf of persons receiving services" under this section and the contributions shall not be applied in determining the amounts to be paid. These unrestricted contributions shall not be used in part or in whole to defray the costs or the allocated costs of the Medi-Cal program.
Ca. Welf. and Inst. Code § 14710