REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
March 24, 2026
FROM
ANDREW GOLDFRACH, ARMC Chief Executive Officer, Arrowhead Regional Medical Center
SUBJECT
Title
Master Services Agreement, Order Form, and Business Associate Agreement with Mercury Healthcare, Inc., dba WebMD Ignite for the Purchase of Software Licenses
End
RECOMMENDATION(S)
Recommendation
1. Approve non-financial Master Services Agreement with Mercury Healthcare, Inc., dba WebMD Ignite license to access the WebMD Ignite platform of health, wellness, and nutrition-related materials, including text, audio, video, graphics, and other media for a period beginning March 24, 2026 and continuing until all orders have expired or terminated by either party.
2. Approve Order Form No.1 for Licensed Content and Services with Mercury Healthcare, Inc., dba WebMD Ignite, including non-standard terms, for the licensing of content and services and products in the total contract amount of $619,567.41 for the period of April 1, 2026 through March 31, 2031, thereafter automatically renewing for consecutive periods of five years unless written notice of non-renewal is given thirty days prior to the expiration of the then-current term.
3. Approve non-financial Business Associate Agreement with Mercury Healthcare, Inc., dba WebMD Ignite for the period beginning on March 24, 2026 and continuing until all Health Insurance Portability and Accountability Act protected health information is returned or destroyed.
(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). The total cost of $619,567.41 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) 2025-26 budget and will be included in future recommended budgets.
|
Annual Breakdown |
License Fees |
|
Year One |
$111,360.91 |
|
Year Two |
$117,909.92 |
|
Year Three |
$123,805.42 |
|
Year Four |
$129,995.69 |
|
Year Five |
$136,495.47 |
|
Total Amount: |
$619,567.41 |
BACKGROUND INFORMATION
The Master Service Agreement (MSA) and Order Form No. 1 (OF1) with Mercury Healthcare dba WebMD Ignite (WebMD) would allow ARMC to give patients access to peer-reviewed, high quality patient education content during their healthcare encounters. It is also designed to improve care continuity, close gaps, support population health goals, and enhance patient outcomes at every stage of their healthcare encounter.
WebMD will be providing ARMC with access to the WebMD Ignite platform, which includes a comprehensive library of health, wellness, and nutrition-related patient education materials delivered through text, audio, video, graphics, and other multimedia formats. The platform includes a library of thousands of Krames HealthSheets™, medication information sheets, WebMD Ignite patient education and health entertainment video libraries and associated video HealthSheets™. This product, Ignite on FHIR Distribution for Epic, is a flexible integration solution that allows ARMC to deliver the following licensed products and content at the point of care.
• Product
o Ignite On-Demand®
o Custom Content Builder
o Ignite on FHIR
o Patient Portal Integration for Ignite on FHIR
o Infobutton for Patient Portal
• Content
o Krames HealthSheets™
o Krames Exit-Writer™ (discharge instructions)
o HealthClips Video Collection
o SWARM 3D Animation - Gold Collection
These resources are integral for patient care and improved patient outcomes by providing both patients and care givers with up to date, peer-reviewed information that follow strict health literacy design principles. ARMC has used WebMD, previously Krames on Demand, since 2007. As ARMC uses the Epic system for Electronic Health Records, maintaining WebMD for Epic will allow our clinicians to optimize distribution of patient education to end users via print, patient portal, and digital platforms.
The MSA is WebMD’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 standards, WebMD would not agree to all County standard terms. The non-standard and missing terms include the following:
1. The MSA does not require WebMD 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 WebMD will be financially responsible for claims that may arise under the MSA, which could result in expenses to the County that exceed the total MSA amount.
2. WebMD’s maximum liability to the County is limited to $750,000, excluding its indemnification obligations.
• The County standard contract does not include a limitation of liability.
• Potential Impact: Claims could exceed the liability cap and the MSA amount leaving the County financially liable for the excess.
The Order Form (Order) is WebMD’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 standards, WebMD would not agree to all County standard terms. The non-standard and missing terms include the following:
1. The term of the Order is automatically renewing for 5-year periods.
• 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 Order and the County is indefinitely bound to the terms and conditions of the MSA and Order until the County gives notice of non-renewal of the Order at least 30 days prior to expiration.
2. The County may not terminate the Order for convenience and fees are non-cancelable and non-refundable.
• County Policy 11-05 requires that the County have the right to terminate the contract, for any reason, with a 30-day written notice of termination without any obligation other than to pay amounts for services rendered and expenses reasonably incurred prior to the effective date of termination.
• Potential Impact: The County cannot terminate the Order during the term. Any attempted termination by County could result in payment liability for the full Order amount, which could result in payment liability where no funds are available due to lack of allocation or loss of funding.
The Business Associate Agreement (BAA) is WebMD’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 standards, WebMD would not agree to all County standard terms. The non-standard and missing terms include the following:
1. WebMD does not agree to be responsible for costs associated with a breach of electronic Protected Health Information (ePHI).
• The County standard 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 WebMD, which may exceed the total amount of the underlying purchase contract.
2. WebMD does not agree to provide appropriate liability insurance coverage.
• The County standard BAA 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 BAA and under Health Insurance Portability and Protection Act (HIPAA) provisions.
• Potential Impact: The County has no assurance that WebMD will be financially responsible for claims that may arise under the BAA, which could result in expenses to the County that exceed the total amount of the underlying MSA.
3. WebMD’s liability to the County under the BAA is limited to $750,000 without exclusion.
• The County standard BAA does not include a limitation of liability.
• Potential Impact: Costs and expenses related to breach caused by WebMD could exceed the liability cap and the MSA amount leaving the County financially liable for the excess.
Approval of the BAA with WebMD is intended to protect the privacy and provide for the security of Personal Health Information (PHI) disclosed to or used by WebMD in compliance with HIPAA. The BAA will allow WebMD to perform or provide functions, activities or services to the County that require WebMD to create, access, receive, maintain, and/or transmit information that includes or may include PHI, as defined by the HIPAA Rules to provide such functions, activities or services.
ARMC recommends approval of this Agreement with WebMD, including the non-standard terms, to allow ARMC to continue providing high quality patient education while integrating such content with the new Epic system. In line with County Policy 11-06 SP1, software licenses and subscriptions are exempt from the five-year limit. This Agreement will auto renew to allow the ongoing use of this software licenses to give patients access to peer-reviewed and high-quality patient education content during their healthcare encounters, which advances the level of care and enhances outcomes.
PROCUREMENT
The Purchasing Department supports this non-competitive procurement based on functional specifications. The software licenses follow strict health literacy design principles, including customization for provider-specific learning content and is compatible with ARMC’s Epic system. This software is on the approved list of applications compatible with Epic, and it would be cost-prohibitive and may negatively impact ARMC by switching to another vendor. Implementation and training costs would impact ARMC’s ability to continue to provide this service to patients.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Bonnie Uphold, Supervising Deputy County Counsel, 387-5455) on March 4, 2026; Risk Management (Stephanie Pacheco, Staff Analyst II, 386-9039) on February 13, 2026; Purchasing (Veronica Pedace, Buyer III, 387-2464) on February 13, 2026; Innovation and Technology Department (Lynn Fyhrlund, Chief Information Officer, 388-5501) on February 20, 2026; ARMC Finance (Chen Wu, Finance and Budget Officer, 580-3165) on March 2, 2025; and County Finance and Administration (Jenny Yang, Administrative Analyst, 387-4884) on March 5, 2026.