REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
December 19, 2023
FROM
VICTOR TORDESILLAS, Director, Department of Risk Management
SUBJECT
Title
Outcome Plan Contract with Paradigm Management Services, LLC for Complex Medical Management and Payment Services
End
RECOMMENDATION(S)
Recommendation
1. Approve the Outcome Plan Contract with Paradigm Management Services, LLC, including nonstandard terms, to provide complex medical management and payment services, in an amount not-to-exceed $3,367,714, retroactively effective July 25, 2023, through the later of the guaranteed 30-month minimum date of January 24, 2026, or the targeted outcome level achievement date.
2. Direct the Clerk of the Board of Supervisors to maintain the confidentiality of certain portions of the Outcome Plan Contract with Paradigm Management Services, LLC pursuant to Government Code § 7922.000 to protect private health information.
(Presenter: Victor Tordesillas, Director, 386-8623)
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 additional Discretionary General Funding (Net County Cost). The total cost of $3,367,714 for complex medical management and payment services will be paid from the Department of Risk Management (DRM) Countywide and Special Districts Workers’ Compensation fund. All medical costs related to the work injury deemed appropriate, necessary, and compensable in accordance with applicable statues, from the contract start date until the later of the guaranteed 30-month minimum contract length or the targeted outcome level are included in the not-to-exceed contract total of $3,367,714. All medical costs and care beyond the County’s $2,000,000 self-insurance retention are reimbursable expenses under the Workers Compensation excess insurance policy. Sufficient appropriation is included in the 2023-24 DRM budget and will be included in future recommended budgets.
BACKGROUND INFORMATION
On July 25, 2023, in the performance of their regular duties, a County employee (Employee) sustained severe and multiple trauma injuries requiring acute hospital care. The extent of the Employee’s injuries will necessitate lifetime medical treatment, including specialized services and care (Claim). Approval of the Outcome Plan Contract (Contract) with Paradigm Management Services, LLC (Paradigm) will transfer the Employee’s medical treatment to Paradigm’s network of services. The specialized services provided by Paradigm go beyond the scope and expertise of DRM and the existing contracted vendors. Paradigm will manage the Employee's care needs, payment of medical expenses, and medical and medication approval requests to provide the Employee with the highest functional outcome for the injuries sustained.
Paradigm provides specialized outcomes-focused care, referred to as an Outcome Plan, that includes inpatient, outpatient, and home-based rehabilitation treatments; ongoing physician and on-site nurse case management; requests for authorization; medical and medication coordination; medical intervention; psychological monitoring; pain management; implementation of care and supervision protocols; education and compliance support; medical records; and other services as outlined in the Contract.
Following negotiation with the County, Paradigm’s standard commercial Contract includes the following non-standard terms:
1. The County agrees to pay all invoices within 60 calendar days of the invoice date. Any invoice not paid within a 60-day period will be subject to a late payment charge of one and 1.5% each month for which any overdue balance remains outstanding.
• The County standard contract does not include additional charges for late payments.
• Potential Impact: If invoices are not paid within 60 days of the invoice date, the County could be required to pay additional charges in excess of the invoice amount for each month the payment is late. The invoiced amounts and the accrued late charges could exceed the total Contract amount.
2. The County agrees to indemnify, defend, and hold harmless Paradigm and its authorized officers, employees, and agents from any and all clams, actions, losses, damages, and/or liability arising out of the County’s breach of this Contract or the County’s gross negligence or willful misconduct, except where such indemnification is prohibited by law. This indemnification provision shall apply regardless of the existence or degree of fault of indemnitees.
• The County standard contract does not include any indemnification or defense by the County of a contractor.
• Potential Impact: By agreeing to indemnify Paradigm, the County could be contractually waiving the protection of sovereign immunity. Clams that may otherwise be barred against the County, time-limited, or expense-limited could be brought against Paradigm without such limitations and the County would be responsible for defending and reimbursing Paradigm for costs, expenses, and damages, which could exceed the total Contract amount.
3. Paradigm’s maximum liability to the County is limited to the Contract price.
• The County standard contract does not include a limitation of liability.
• Potential Impact: Claims could exceed the Contract amount leaving the County financially liable for the excess.
DRM recommends approval of the Contract, including non-standard terms, as the services provided by Paradigm will enable the Employee to achieve the highest possible level of functional independence both at home and in the community.
California Government Code, Section 7922.000, exempts certain files, such as personnel, medical, or similar files, from disclosure if doing so would constitute an unwarranted invasion of personal privacy. Therefore, pursuant to this exemption, it is recommended to direct the Clerk of the Board of Supervisors (Board) to maintain the confidentiality of the redacted information in the Contract.
The severity of the Employee’s injuries required immediate specialized care. Shortly after the Employee sustained the injury, Paradigm accepted responsibility for providing emergency services through the County’s insurance carrier while DRM worked with Paradigm to develop the agreed upon Contract, which was finalized on November 28, 2023. Paradigm has agreed to assume the costs of the claim beginning from the date of injury; therefore the Contract’s effective date will be retroactive to July 25, 2023.
PROCUREMENT
DRM oversees the County’s self-insured Workers’ Compensation Program and seeks to minimize the frequency and severity of financial loss to the County through an integrated Managed Medical Care Program. As part of this Managed Medical Care Program, DRM employs the services of contractors who provide specialized services that extend beyond the scope of the County’s expertise to effectively provide service to claimants.
Paradigm is the County’s insurance carrier’s subcontractor of choice and possesses the specialized expertise and experience for managing this specific claim. As a result of the insurance carrier’s recommendation of Paradigm and the immediate need to manage medical care and medical payments for an employee with severe and multiple traumas, DRM recommends moving forward without a competitive bidding process under County Policy 11-04, Section 8.B., which allows for non-competitive purchases for emergencies such as the preservation of life or property, or when immediate action is necessary and undue delay would cause substantial loss to the County. The Purchasing Department concurs with this non-competitive justification. In addition, this policy requires approval and confirmation by the Board for purchases exceeding $200,000.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Laura Feingold, Principal Assistant County Counsel, 387-5455) on November 28, 2023; Purchasing (Leo Gomez, Purchasing Manager, 387-2063) on November 30, 2023; Risk Management (Victor Tordesillas, Director, 386-8621) on December 8, 2023; Human Resources (Diane Rundles, Assistant Executive Officer, 387-5572) on November 28, 2023; Finance (Ivan Ramirez, Administrative Analyst, 387-4020) on December 5, 2023; and County Finance and Administration (Paloma Hernandez-Barker, Deputy Executive Officer, 387-5423) on December 5, 2023.