REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
October 6, 2026
FROM
ANDREW GOLDFRACH, ARMC Chief Executive Officer, Arrowhead Regional Medical Center
SUBJECT
Title
Amendments to Hospital Services Agreement with Molina Healthcare of California
End
RECOMMENDATION(S)
Recommendation
1. Approve Amendment No. 7 to Agreement No. 19-837 with Molina Healthcare of California, including a non-standard term, to receive supplemental payments for Medi-Cal managed care capitation increases during the State-established claim period of January 1, 2025 through December 31, 2025, with no change to the agreement term of December 17, 2019 through December 31, 2026
2. Approve Amendment No. 8 to Agreement No. 19-837 with Molina Healthcare of California, effective January 1, 2027, to update the compensation schedule for Medi-Cal services and to extend the agreement term for two years, for a total term of December 17, 2019 through December 31, 2028.
3. Direct the Clerk of the Board of Supervisors to maintain confidentiality of the amendments in Recommendation Nos. 1 and 2 pursuant to Health and Safety Code section 1457(c)(1).
(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). Under the terms of Amendment No. 7, Arrowhead Regional Medical Center (ARMC) will be eligible to receive supplemental payments as the result of Medi-Cal managed care capitation rate increases paid to Molina Healthcare of California (Molina) as a managed care provider for the claim period of January 1, 2025 through December 31, 2025. Under Amendment No. 8, ARMC will receive reimbursement from Molina for eligible Medi-Cal services at the revised rates. Adequate appropriation and revenue have been included in the ARMC 2026-27 budget and will be included in future recommended budgets.
BACKGROUND INFORMATION
Amendment No. 7 to Agreement No. 19-837 (Agreement) with Molina will allow ARMC to continue participation in the Intergovernmental Transfer (IGT) program and receive funding for Medi-Cal managed care patients enrolled with Molina. The California Department of Health Care Services (DHCS) IGT program for Medi-Cal managed care permits counties or other government-run providers to contribute eligible non-federal funds to DHCS, which then uses the funds to draw federal matching dollars and increase managed care capitation rates to pay providers. Due to the time necessary for negotiations with representatives from California public hospitals regarding rate increases, DHCS submits IGT agreements and payments retroactively. DHCS adjusts the reimbursement rate to the renegotiated rate for patients seen within the designated claim period.
Molina provides Medi-Cal managed care coverage to residents of San Bernardino and Riverside Counties. ARMC contracts with Molina to provide healthcare services to its members. The recommended Amendment No. 7 updates the Agreement to incorporate the terms and conditions necessary for continued participation in the DHCS IGT program and receipt of supplemental payments for the applicable program period.
ARMC participates in the IGT program through DHCS for payments related to Medi-Cal beneficiaries in order to receive federal matching funds. To participate in the program, DHCS requires that 1) an IGT agreement regarding the transfer of public funds is in place with the County for each plan providing contracted managed care services, and 2) the agreements between the County and each plan identify the conditions of participation in the IGT program. Amendment No. 7 sets forth the terms and conditions under which Molina is to provide Medi-Cal managed care capitation rate increases to ARMC.
Amendment No. 7 is based on templates previously provided by the State to utilize for such transactions, and contains a non-standard contract term, as follows:
The County is required to indemnify Molina from any claims that occur due to any miscalculation by the State relating to the amounts payable to the County and any obligation to refund or reimburse the State for any payments for any reason under the program.
• The County’s standard contract does not require the County to indemnify vendors for any reasons.
• Potential Impact: By agreeing to indemnify Molina, 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 the health plan without such limitations and the County would be responsible to defend and reimburse the plan for costs, expenses, and damages, which could exceed the total agreement amount.
Amendment No. 8 will update the compensation schedule effective January 1, 2027 for Medi-Cal services provided by ARMC and extend the agreement term by two years.
On December 17, 2019 (Item No. 5), the Board of Supervisors (Board) approved the Agreement with Molina to provide reimbursement for healthcare services rendered to Molina members. The Board has subsequently approved six amendments for reimbursement updates, participation in the IGT program, and term extensions.
|
Amendment No. |
Approval Date |
Item No. |
|
1 |
October 6, 2020 |
12 |
|
2 |
December 7, 2021 |
9 |
|
3 |
February 27, 2024 |
8 |
|
4 |
March 26, 2024 |
16 |
|
5 |
October 8, 2024 |
9 |
|
6 |
August 5, 2025 |
14 |
Pursuant to Health and Safety Code section 1457(c)(1), records reflecting specific terms related to healthcare payment rates are not immediately subject to public disclosure. Therefore, the Clerk of the Board is directed to maintain the confidentiality of the amendments.
ARMC recommends approval of Amendment No. 7, including the non-standard term, to continue participation in the IGT program and receive supplemental Medi-Cal payments, and Amendment No. 8 to update Medi-Cal reimbursement rates and extend the agreement through December 31, 2028. The amendments will allow ARMC to continue receiving reimbursement for healthcare services provided to Molina members.
PROCUREMENT
Not applicable.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Charles Phan, Supervising Deputy County Counsel, 387-5455) on October 1, 2026; Risk Management (Stephanie Pacheco, Staff Analyst II, 386-9039) on August 10, 2026; ARMC Finance (Chen Wu, Finance and Budget Officer, 580-3165) on September 14, 2026; and County Finance and Administration (Jenny Yang, Administrative Analyst, 387-4884) on September 16, 2026.