REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
September 22, 2026
FROM
ANDREW GOLDFRACH, ARMC Chief Executive Officer, Arrowhead Regional Medical Center
SUBJECT
Title
Amendment to Internal Use License Agreement with the American Medical Association for License Access to Current Procedural Terminology Code Sets
End
RECOMMENDATION(S)
Recommendation
Approve Amendment No. 7 to Internal Use License Agreement No. 20-602 with the American Medical Association, effective September 22, 2026, including a non-standard term, for license access to Current Procedural Terminology code sets, defining use with third party artificial intelligence tools and updating code sets, increasing the agreement amount by $50,698.50, from $253,728 to $304,426.50, with no change to the agreement period beginning July 28, 2020, and continuing indefinitely 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 American Medical Association’s (AMA) royalty rates for the Current Procedural Terminology (CPT) code sets are updated annually, which changes the total agreement amount with each amendment. Amendment No. 7 (Amendment) to Internal Use License Agreement No. 20-602 (Agreement) will increase the total amount of the Agreement by $50,698.50 from $253,728 to $304,426.50. The cost of the Amendment is funded by State Medi-Cal, Federal Medicare, private insurance, 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) 2026-27 budget and will be included in future recommended budgets.
BACKGROUND INFORMATION
Approval of this Amendment will allow ARMC to access AMA’s most up-to-date edition of the CPT code sets, which provide uniform language for coding medical services and procedures. Access to CPT code sets offers doctors and health care workers the ability to streamline reporting and increase accuracy in the delivery of health care services.
AMA provides CPT royalty rates each January on an annual basis. Rates are determined each year by bed and billing provider formulas. As such, this Agreement requires an annual amendment reflecting updated licensing costs that correlate with the number of hospital end-users. Although this Agreement is indefinite, future amendments are anticipated and will reflect royalty fees in alignment with the bed and billing formula associated with that calendar year. Approval of the Amendment will allow ARMC to access the 2027 CPT code sets, starting January 1, 2027, for use with the Epic Corporation Electronic Healthcare System.
On July 28, 2020 (Item No. 7), as the result of a non-competitive procurement, the Board of Supervisors (Board) approved the Agreement with AMA, in the amount of $33,947, for the period of July 28, 2020, and continuing indefinitely for license access to CPT code sets.
On February 9, 2021 (Item No. 13), the Board approved Amendment No. 1 to the Agreement with the AMA, increasing the amount by $37,000 from $33,947 to $70,947 to cover the cost of the new CPT code sets for the period of February 9, 2021 and continuing indefinitely for license access to CPT code sets.
On January 25, 2022 (Item No. 10), the Board approved Amendment No. 2 to the Agreement with the AMA, retroactively effective on December 7, 2021, for license access to the new CPT code sets, increasing the annual amount by $33,964 from $70,947 to $104,911, with no change to the period beginning July 28, 2020 continuing indefinitely until terminated by either party.
On November 15, 2022 (Item No. 7), the Board approved Amendment No. 3 to the Agreement with the AMA, effective on December 7, 2022, for license access to CPT code sets, increasing the annual amount by $34,943 from $104,911 to $139,854, with no change to the period beginning July 28, 2020 continuing indefinitely until terminated by either party.
On November 14, 2023 (Item No. 10), the Board approved Amendment No. 4 to the Agreement with the AMA, effective on December 7, 2023, for license access to CPT code sets, increasing the annual amount by $35,939 from $139,854 to $175,793 through 2024, with no change to the period beginning July 28, 2020 continuing indefinitely until terminated by either party.
On September 24, 2024 (Item No. 9), the Board approved Amendment No. 5 to the Agreement with the AMA, effective on September 24, 2024, for license access to CPT code sets, increasing the agreement amount by $36,935 from $175,793 to f $212,728, with no change to the agreement period beginning July 28, 2020 and continuing indefinitely until terminated by either party.
On November 4, 2025 (Item No. 4), the Board approved Amendment No. 6 to Internal Use License Agreement No. 20-602 with the American Medical Association, effective as of November 4, 2025, for license access to Current Procedural Terminology code sets, increasing the agreement amount by $41,000 from $212,728 to $253,728 with no change to the agreement period beginning July 28, 2020 and continuing indefinitely until terminated by either party.
The Product Amendment to Internal End User License Agreement (Amendment) is the AMA’s standard commercial amendment, which includes terms that differ from the standard County contract and omits certain County standard contract terms. The AMA is unwilling to negotiate these terms. The non-standard and missing terms include the following:
The AMA disclaims all liability for the County’s use of any artificial intelligence tool used in conjunction with the CPT licensed content.
• The County standard contract does not include a limitation of liability.
• Potential Impact: The County will be financially liable for any claims arising from its use of artificial intelligence tools, whether provided by the AMA or not. Contract No. 20-602 is governed by Illinois law. County Counsel cannot advise on whether and to what extent Illinois law may limit or expand the exclusion of limits to the extent prohibited by applicable law.
ARMC recommends approval of the Amendment, including the non-standard term, to provide for the safety, health and social service needs of County residents and allow continued patient care.
PROCUREMENT
Not applicable.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Bonnie Uphold, Supervising Deputy County Counsel, 387-5455) on August 25, 2026; Risk Management (Stephanie Pacheco, Staff Analyst II, 386-9044) on August 28, 2026; ARMC Finance (Chen Wu, Finance and Budget Officer, 580-3165) on August 31, 2026; and County Finance and Administration (Jenny Yang, Administrative Analyst, 387-4884) on September 2, 2026.