REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
April 23, 2024
FROM
WILLIAM L. GILBERT, Director, Arrowhead Regional Medical Center
SUBJECT
Title
Master Services Agreement with 3M Health Information Systems, Inc., for Clinical Document Improvement Management Services
End
RECOMMENDATION(S)
Recommendation
1. Approve Master Services Agreement, including non-standard terms, with 3M Health Information Systems, Inc., for professional services in support of the clinical documentation improvement program, in the not-to-exceed amount of $2,000,000, for the contract term beginning on April 23, 2024 and continuing until termination of the last schedule.
2. Direct the Clerk of the Board of Supervisors to maintain the confidentiality of Schedule 2-1 Appendix 2 Pages 25 - 27 in the Master Service Agreement with 3M Health Information Systems, Inc., for a period of three years, pursuant to Health and Safety Code Section 1457(c)(1).
(Presenter: William L. Gilbert, Director, 580-6150)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
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). The cost of $2,000,000 is funded by State Medi-Cal, Federal Medicare, private insurances, and other departmental revenue. Funding sources may change in the future pending any legislative activity related to the repeal and/or replacement of the Affordable Care Act. Adequate appropriation and revenue have been included in the Arrowhead Regional Medical Center (ARMC) 2023-24 budget and will be included in future recommended budgets.
BACKGROUND INFORMATION
The Master Service Agreement (Agreement) with 3M Health Information Systems, Inc. (3M) will provide ARMC with clinical documentation improvement (CDI) services including, but not limited to consulting, auditing, and training services in support of ARMC’s CDI program. Consulting services will encompass leadership support to ARMC CDI management staff, which includes regular performance reporting on program activities, successes, and milestones.
Audit activities provided by 3M will involve review of CDI practices, conducting risk assessments, investigation, and remediation, and providing ARMC leadership with corrective action plans and propose best practices.
3M will provide ARMC with CDI services that includes training focused on clinical documentation skillsets; reimbursement; reporting of physician and facility quality scores; and increased collaboration between providers, CDI professionals, and coding staff.
ARMC’s CDI program has expanded since its inception in 2018 to outpatient including emergency services. Successful CDI programs facilitate accurate representations of patients’ clinical status. Clinical status translates into coded data, which then transforms into quality reporting, physician report cards, reimbursement, public health data, and disease tracking and trending.
On July 25, 2023 (Item No. 9), the Board of Supervisors (Board) approved Agreement No. 23-797 with AE & Associates, LLC (AE), for CDI services, in the not-to-exceed amount of $2,000,000, for the contract term of August 1, 2023 through July 31, 2028.
On February 13, 2024, the County exercised its right to partially terminate the contract with AE for certain training and education services with a 30-day written notice. Due to performance issues, all services provided by AE will be terminated upon the full execution of a new agreement with 3M for the CDI services.
The Agreement is 3M’s standard commercial contract, which includes terms that differ from the standard County contract and omits certain County standard contract terms. While the parties negotiated certain contract terms to County standard, 3M would not agree to all County standard terms. The non-standard and missing terms include the following:
1. 3M may assign the Agreement without notice to the County and without the County’s approval.
• In the County standard contract the County must approve any assignment by the contractor.
• Potential Impact: 3M could assign the Agreement to a third party or business with which the County is legally prohibited from doing business due to issues of Federal debarment or suspension and conflict of interest, without the County’s knowledge. Should this occur, the County could be out of compliance with the law until it becomes aware of the assignment and terminates the Agreement.
2. The County is required to indemnify 3M against any negligent acts or omissions arising out of the Agreement and to defend itself and pay any judgments and costs arising out of such negligent acts or omissions.
• The County standard contract does not include any indemnification or defense by the County of a contractor.
• Potential Impact: By agreeing to indemnify 3M, 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 3M without such limitations and the County could be responsible to reimburse 3M for costs, expenses, and damages, which could exceed the total Agreement amount.
3. The Agreement does not require 3M 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 3M will be financially responsible for claims that may arise under the Agreement, which could result in expenses to the County that exceed the total Agreement amount.
4. 3M’s maximum liability to the County is limited to the fees paid for in the 12 months preceding the event giving rise to the claim, not to exceed $5,000,000, excluding 3M’s non-infringement indemnification obligations and breach of unsecured protected health information, but not excluding liability arising from 3M’s gross negligence, willful misconduct or violation of law.
• The County standard contract does not include a limitation of liability.
• Potential Impact: Claims could exceed the liability cap and the Agreement amount leaving the County financially liable for the excess.
5. The term of the Agreement is indefinite beginning upon execution of the Agreement and continuing until termination of all outstanding schedules, which provide a timeframe for start and completion of services being provided throughout the course of this Agreement.
• County Policies 11-05 and 11-06SP1 do not permit indefinite term or automatically renewing contracts except for end user license agreements, software/hardware licenses and subscriptions, and master service agreements or unless approved by the Board.
• Potential Impact: There is no end term to the Agreement and the County is indefinitely bound to the terms and conditions of the Agreement until the last outstanding schedule has been terminated.
ARMC recommends approval of this Agreement with 3M, including non-standard terms, as it will promote continuous growth for the hospital and provide ongoing support, allowing ARMC to continue provide high quality patient care to county residents and maintain a healthy revenue cycle.
PROCUREMENT
On December 20, 2022, Request for Proposal (RFP) No. ARMC123-ARMC-4790 for CDI services was released through the County’s Electronic Procurement (ePro) network. The company names and locations of all bidders who submitted a qualified proposal in response to the RFP are provided below:
|
Proposer |
Location |
|
3M Health Information Systems, Inc. |
Murray, UT |
|
Norwood Staffing Solutions LLC dba Norwood |
Sunset Valley, TX |
|
BHS Hospital Services, Inc. |
Teaneck, NJ |
|
AE & Associates, LLC |
Corona, CA |
|
Nuance Communications, Inc. |
Burlington, MA |
|
Managed Resources, Inc. |
Long Beach, CA |
All proposals were evaluated, and the evaluation panel (consisting of representatives from Information Technology, Medical Records, Compliance, Nursing Administration, Clinical Informatics, and Case Management Departments) originally recommended AE for award. ARMC partially terminated the agreement with AE on February 13, 2024, and is now pursuing an agreement with the next highest-rated vendor, 3M.
The Purchasing Department supports this competitive procurement based on the RFP above.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Bonnie Uphold, Supervising Deputy County Counsel, 387-5455) on March 18, 2024; Risk Management (Gregory Ustaszewski, Staff Analyst II, 386-9008) on April 10, 2024; Purchasing (Veronica Pedace, Buyer III, 387-2464) on April 5, 2024; Human Resources (Gina King, Assistant Director, 387-5571) on March 27, 2024; ARMC Finance (Chen Wu, Budget and Finance Officer, 580-3165) on April 1, 2024; Finance (Jenny Yang, Administrative Analyst, 387-4884) on April 4, 2024; and County Finance and Administration (Valerie Clay, Deputy Executive Officer, 387-5423) on April 8, 2024.