REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
April 29, 2025
FROM
ANDREW GOLDFRACH, ARMC Chief Executive Officer, Arrowhead Regional Medical Center
SUBJECT
Title
Revenue Provider Services Agreement with Physician Health Network to Provide Outpatient Health Care Services
End
RECOMMENDATION(S)
Recommendation
1. Approve Revenue Provider Services Agreement with Physician Health Network, including non-standard terms, for the provision of outpatient health care services to Inland Empire Health Plan’s Medi-Cal Managed Care members, retroactively effective January 1, 2025 through December 31, 2027.
2. Direct the Clerk of the Board of Supervisors to maintain the confidentiality of the Revenue Provider Services Agreement pursuant to Health and Safety Code Section 1457(c)(1).
(Presenter: Andrew Goldfrach, ARMC Chief Executive Officer, 580-6150)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Operate in a Fiscally-Responsible and Business-Like Manner.
Provide for the Safety, Health and Social Service Needs of County Residents.
FINANCIAL IMPACT
Approval of this item will not result in the use of Discretionary General Funding (Net County Cost). This Revenue Services Agreement (Agreement) will be utilized to ensure reimbursement to Arrowhead Regional Medical Center (ARMC) from Physician Health Network (PHN) for providing outpatient healthcare services to Inland Empire Health Plan (IEHP) Medi-Cal managed care plan members who are assigned to PHN. Adequate appropriation and revenue have been included in the Arrowhead Regional Medical Center (ARMC) 2024-25 budget and will be included in future recommended budgets.
BACKGROUND INFORMATION
Health plans contract with Independent Practice Associations (IPA), such as PHN, for the provision of care for their Medi-Cal managed care members. The recommended revenue agreement will provide reimbursement from PHN to ARMC for outpatient care services provided by ARMC to IEHP Medi-Cal managed care plan members who are assigned to PHN.
An IPA is an association of independent physicians that contract with health plans to provide services to the health plan's members. Generally, under the contracts between the health plans and the IPAs, including PHN, the health plans pay the IPAs a capitated rate per member per month, and in exchange, the IPAs are required to directly provide healthcare services to their assigned members, or pay for the services when otherwise not available through the IPA. In cases where PHN is unable to provide healthcare services to the assigned member, PHN must contract and pay other healthcare providers to provide such care to the member.
The Agreement is retroactively effective January 1, 2025, due to the inadvertent expiration of the previous agreement on December 31, 2024. This Agreement is being presented to the Board of Supervisors for approval at the earliest available meeting after completion of the required financial and legal reviews.
The Agreement with PHN was negotiated by the parties that include the following non-standard contract terms and omits the following standard County contract terms:
1. PHN limits its indemnity obligations to claims that are proximately caused by the negligent or intentional acts or omissions of PHN.
• The County standard contract general indemnity provision requires the Contractor to indemnify, defend, and hold County harmless from third-party claims arising out of the acts, errors or omissions of any person.
• Potential Impact: PHN's indemnity obligation is more limited compared to the standard County general indemnity obligation. In the event a claim arises that falls outside the scope of PHN's limited indemnity obligation, the County could be financially responsible for the defense of the claim and any resulting judgment/settlement.
2. The County is required to indemnify PHN for claims that are proximately caused by the negligent or intentional acts or omissions of the County.
• The County standard contract does not include any indemnification or defense by the County of a contractor.
• Potential Impact: By agreeing to indemnify PHN, the County could be contractually waiving the protection of sovereign immunity. Claims that may otherwise be barred against the County, time-limited, or expense-limited could be brought against PHN without such limitations and the County could be responsible to defend and reimburse PHN for costs, expenses, and damages which could exceed the total Agreement amount.
3. The Agreement does not require PHN to meet the County’s insurance standards as required pursuant to County Policies 11-05, 11-07 and 11-07SP.
• County policy requires contractors to carry appropriate insurance at limits and under conditions determined by the County's Risk Management Department and as set forth in County policy and in the County standard contract.
• Potential Impact: The County has no assurance that PHN will be financially responsible for claims that may arise under the Agreement, which could result in expenses to the County.
ARMC recommends approval of the Agreement, including the non-standard terms, as it will ensure reimbursement to the County for outpatient services provided at ARMC to IEHP Medi-Cal members assigned to PHN, and allow ARMC to operate in a fiscally responsible and business-like manner.
PROCUREMENT
Not applicable.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Charles Phan, Supervising Deputy County Counsel, 387- 5455) on March 19, 2025; Risk Management (Stephanie Pacheco, Staff Analyst II, 386-9039) on March 27, 2025; ARMC Finance (Chen Wu, Finance and Budget Officer, 580-3165) on April 4, 2025; Finance (Jenny Yang, Administrative Analyst, 387-4884) on April 8, 2025; and County Finance and Administration (Valerie Clay, Deputy Executive Officer, 387- 5423) on April 9, 2025.