REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
January 14, 2025
FROM
ANDREW GOLDFRACH, ARMC Chief Executive Officer, Arrowhead Regional Medical Center
SUBJECT
Title
Agreement with Epic Nexus, Inc. for Participation in the Qualified Health Information Network
End
RECOMMENDATION(S)
Recommendation
Approve Agreement with Epic Nexus, Inc., including non-standard terms, for the participation in the Qualified Health Information Network, to exchange health information via the Trusted Exchange Framework and Common Agreement, a health information network sponsored by the Office of the National Coordinator for Health Information Technology, for a not to exceed amount of $39,000 annually effective the date of full execution until terminated by either party.
(Presenter: Andrew Goldfrach, ARMC Chief Executive Officer, 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 $39,000 annually 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) 2024-25 budget and will be included in future recommended budgets.
BACKGROUND INFORMATION
The Epic Nexus, Inc. (Epic Nexus) Quality Health Information Network (QHIN) Agreement will allow ARMC to participate in exchanging information via the Trusted Exchange Framework and Common Agreement (TEFCA). TEFCA, a health information network sponsored by the Office of the National Coordinator for Health Information Technology outlines a common set of principles, terms, and conditions to support the development of a Common Agreement that helps enable the nationwide exchange of electronic health information (EHI) across disparate health information networks (HINs). The TEFCA is designed to scale EHI exchange nationwide and help ensure that HINs, health care providers, health plans, individuals, and many more stakeholders have secure access to their electronic health information when and where it is needed. The Epic Nexus QHIN is one of five QHINs established as part of TEFCA.
The Epic Nexus QHIN Agreement is Epic Nexus’ standard commercial contract, which includes terms that differ from the standard County contract and omits certain County standard contract terms. Epic Nexus is unwilling to negotiate these terms. The non-standard and missing terms include the following:
1. Governing law is the State of Wisconsin.
• The County standard contract requires California governing law.
• Potential Impact: The Agreement will be interpreted under Wisconsin law. Any questions, issues or claims arising under this Agreement will require the County to hire outside counsel competent to advise on Wisconsin law, which may result in fees that exceed the total Agreement amount.
2. Epic Nexus may change the Agreement terms without notice at any time and the County’s continued participation in the QHIN is deemed consent to the terms of the amendment.
• County Policy 11-06 requires that any changes to the contract to be reduced to writing, executed and attached to the original contract and approved by the person(s) authorized to do so on behalf of the contractor and County.
• Potential Impact: The County could be agreeing to new terms without review by anyone, including County Counsel, and without approval of the new terms by the Board of Supervisors. County Counsel cannot advise on whether and to what extent Wisconsin law may affect the enforceability of unilateral changes to the terms.
3. The Agreement does not require Epic Nexus to indemnify the County, as required by County Policies 11-05 and 11-07, including for intellectual property infringement claims.
• The County standard contract 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. The standard contract provision for intellectual property indemnity is: Contractor will indemnify, defend, and hold harmless County and its officers, employees, agents and volunteers, from any and all third party claims, costs (including without limitation reasonable attorneys’ fees), and losses for infringement of any United States patent, copyright, trademark or trade secret (Intellectual Property Rights) by any goods or services.
• Potential Impact: Epic Nexus is not required to defend, indemnify or hold the County harmless from any claims, including indemnification for claims arising from Epic Nexus’s negligent or intentional acts and intellectual property infringement. If the County is sued for any claim, including intellectual property infringement based on its use of Epic Nexus’s software or services, the County may be solely liable for the costs of defense and damages, which could exceed the total Agreement amount. County Counsel cannot advise on whether and to what extent Wisconsin law may allow the County to require Epic Nexus to defend or indemnify it absent an express provision in the Agreement.
4. The Agreement does not require Epic Nexus to meet the County’s insurance standards as required pursuant to County Policies, 11-05, 11-07 and 11-07 SP.
• 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 Epic Nexus 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.
5. Venue is in Dane County, Wisconsin.
• County Policy 11-05 requires venue for disputes in Superior Court of California, County of San Bernardino, San Bernardino District.
• Potential Impact: Having a venue in Dane County, Wisconsin may result in additional expenses that exceed the amount of the Agreement.
6. Epic Nexus does not agree to be responsible for costs associated with a breach of electronic protected health information (ePHI).
• The County standard Business Associate Agreement (BAA) requires the business associate (BA) to be responsible for reasonable costs associated with a breach, including postage, alternative means of notice, media notification, and credit monitoring services.
• Potential Impact: The County may be liable for all costs associated with a breach of its ePHI caused by Epic Nexus, which may exceed the total amount of the underlying purchase Agreement.
7. Epic Nexus does not agree to indemnify for Epic Nexus’ Health Insurance Portability and Accountability Act (HIPAA) violations the County.
• The County standard Business Associate Agreement requires the BA to indemnify, defend and hold the County harmless from claims and expenses (including costs for reasonable attorney fees) that are caused by the BA with respect to the use, access, maintenance or disclosure of ePHI.
• Potential Impact: The County may not contractually require Epic Nexus to defend or reimburse the County for claims made against the County as a result of Epic Nexus’s actions resulting in a breach of ePHI, which may exceed the total amount of the underlying purchase Agreement.
8. Epic Nexus does not agree to provide appropriate liability insurance coverage for HIPAA violations.
• The County standard Business Associate Agreement requires the BA to provide appropriate liability insurance coverage to cover claims and demands made for loss to any person arising from the breach of the security, privacy, or confidentiality obligations of BA under the Business Associate Agreement and under HIPAA provisions.
• Potential Impact: The County has no assurance that Epic Nexus will be financially responsible for claims that may arise under the BAA, which could result in expenses to the County that exceed the total the total amount of the underlying purchase Agreement.
ARMC recommends approval of the Agreement, including non-standard terms, to provide for the health and safety of ARMC patients by providing healthcare providers secure access to patient health information when needed.
PROCUREMENT
The Purchasing Department supports this non-competitive procurement due to the sole source provider. Epic Nexus is a subsidiary of Epic Sales Corporation. The QHIN was developed for Epic’s Electronic Healthcare Record, which is used by ARMC.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Bonnie Uphold, Supervising Deputy County Counsel, 387- 5455) on December 12, 2024; Purchasing (Veronica Pedace, Buyer III, 387-2464) on December 12, 2024; Risk Management (Gregory Ustaszewski, Staff Analyst, 386-9008) on December 16, 2024; ARMC Finance (Chen Wu, Finance and Budget Officer, 580-3165) on December 17, 2024; Finance (Jenny Yang, Administrative Analyst, 387-4884) on December 19, 2024; and County Finance and Administration (Valerie Clay, Deputy Executive Officer, 387- 5423) on December 19, 2024.