REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
September 1, 2026
FROM
ANDREW GOLDFRACH, ARMC Chief Executive Officer, Arrowhead Regional Medical Center
JOSHUA DUGAS, Acting Director, Department of Behavioral Health
JANKI PATEL, Acting Director, Department of Public Health
SUBJECT
Title
Revenue Group Services Agreement with Molina Healthcare of California for Enhanced Care Management Services under the California Advancing and Innovating Medi-Cal Program
End
RECOMMENDATION(S)
Recommendation
1. Approve Revenue Group Services Agreement, including non-standard terms, with Molina Healthcare of California, establishing capitation and incentive payment rates for Enhanced Care Management Services, for the California Advancing and Innovating Medi-Cal Program, that will be provided by Arrowhead Regional Medical Center, the Department of Behavioral Health, and the Department of Public Health, for the contract term of September 1, 2026 through August 31, 2031.
2. Direct the Clerk of the Board of Supervisors to maintain confidentiality of the Group Services Agreement 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). This agreement will generate additional revenue from Molina Healthcare of California (Molina) to Arrowhead Regional Medical Center (ARMC), the Department of Behavioral Health (DBH), and the Department of Public Health (DPH) to offset the cost of providing Enhanced Care Management (ECM) services through the California Advancing and Innovating Medi-Cal (CalAIM) Program. Adequate appropriation and revenue have been included in the ARMC, DBH, and DPH 2026-27 budgets and will be included in future recommended budgets.
BACKGROUND INFORMATION
The California Department of Health Care Services established the CalAIM initiative to transform the Medi-Cal program into a more equitable, coordinated, and person-centered system of care. CalAIM aims to address the complex health and social needs of vulnerable Medi-Cal members by improving access to services, strengthening care coordination, and addressing the social factors that can impact health and well-being. As part of CalAIM, Enhanced Care Management (ECM) provides a whole-person, coordinated approach to addressing the medical, behavioral health, and social needs of eligible Medi-Cal members. ECM serves individuals with complex needs, including people experiencing homelessness, individuals with serious mental illness, children with complex medical conditions, justice-involved individuals with significant clinical needs, and older adults requiring complex care.
ECM provides individualized care coordination through a dedicated care manager who works closely with each member to develop and coordinate services based on their unique needs and circumstances. Members may receive support across physical health, behavioral health, dental care, and social services. By coordinating care and connecting members to appropriate resources and levels of support, ECM helps reduce barriers to care, improve health outcomes, and promote greater stability and overall well-being.
Since implementation of the County's ECM Program, ARMC, DBH, and DPH have worked collaboratively with Molina to negotiate an agreement that would expand ECM services to Molina members. The parties have successfully completed negotiations, and the Revenue Group Services Agreement (Agreement) is proposed to become effective September 1, 2026.
The proposed Agreement establishes the terms under which ARMC, DBH, DPH, and Molina will collaborate to provide ECM services to eligible Molina members participating in the ECM program. The Agreement also establishes capitation payments and performance-based incentive payments, for covered services.
The Agreement contains the following non-standard terms:
1. The Agreement imposes various insurance requirements on the County, including requiring the County to maintain general liability insurance with limits of $1 million/occurrence and $3 million aggregate, professional liability insurance with limits of $1 million/occurrence and $10 million aggregate, umbrella insurance with limits of $10 million. It also requires that the County name Molina as an additional insured, that the coverage be primary and non-contributory, that the County’s insurer waive subrogation rights, and that Molina be given at least 30 days’ notice prior to any policy cancellations or material changes in the County’s insurance policies.
• The standard County contract does not impose any insurance obligations on the County.
• Potential Impact: The County will need to be mindful of these insurance requirements and ensure that it complies to avoid a breach of the Agreement.
2. The Agreement does not require Molina 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 Molina 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.
3. The County may terminate the Agreement without cause with 90 days’ written notice.
• The standard County contract permits the County to terminate the contract with 30 days’ written notice.
• Potential Impact: The County will need to be mindful of the extended notice period in the event it seeks to terminate the Agreement without cause.
4. The County is required to indemnify Molina for claims that result from the duties and obligations of the County.
• The County standard contract does not impose an indemnity obligation on the County.
• 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 Molina without such limitations and the County could be responsible to defend and reimburse Molina for costs, expenses, and damages, which could exceed the total Agreement amount.
5. Molina’s indemnity obligation is limited to claims that result from its duties and obligations under the Agreement.
• The County standard contract general 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.
• Potential Impact: Molina's indemnity obligation is more limited compared to the standard County general indemnity obligation. In the event a claim arises that falls outside the scope of Molina's limited indemnity obligation, the County could be financially responsible for the defense of the claim and any resulting judgment/settlement.
6. Disputes must be resolved through binding arbitration.
• The County standard contract does not require arbitration.
• Potential Impact: The County is waiving its rights to a trial by jury/court. In addition, disputes that might otherwise be settled in small claims court would incur arbitration costs that could exceed the costs of a small claims action, and the Agreement amount.
7. Molina may unilaterally amend the Agreement to comply with legal or regulatory requirements without the County’s consent, leaving the County’s primary remedy as negotiating the change or terminating the Agreement.
• The County standard contract requires the written consent of both parties to amend the contract.
• Potential Impact: Molina is allowed to unilaterally amend the Agreement without the County’s consent whenever Molina determines an amendment is necessary to comply with applicable laws. Although the County has an opportunity to object, negotiate, and ultimately terminate the Agreement if the amendment is materially adverse, the County cannot prevent the amendment from taking effect if it chooses to remain in the Agreement, making termination its primary remedy.
Pursuant to Health and Safety Code section 1457(c)(1), contracts of a county hospital revealing negotiated payment rates are not public records subject to disclosure for three years after the contract is executed. Accordingly, the Clerk of the Board of Supervisors is directed to maintain the confidentiality of the Agreement.
ARMC, DBH, and DPH recommend approval of the Agreement, including the non-standard terms, as it will expand access to ECM services for eligible Molina members while supporting the County's goal of providing coordinated health and social services to vulnerable residents.
PROCUREMENT
Not applicable.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Charles Phan, Supervising Deputy County Counsel, 387-5455) on July 15, 2026; DBH County Counsel (Dawn Martin, Deputy County Counsel, 387-4322) on July 28, 2026; DPH County Counsel (Adam Ebright, Deputy County Counsel, 387-4229) on August 4, 2026; Risk Management (Stephanie Pacheco, Staff Analyst II, 386-9039) on August 5, 2026; ARMC Finance (Chen Wu, Finance Budget Officer, 580-3165) on August 7, 2026; DBH (Michael Shin, Administrative Manager) on August 12, 2026; DPH Administration (Shannon Bailey, Division Chief/Acting Assistant Director, 387-9148) on August 12, 2026; and County Finance and Administration (Iliana Rodriguez, 386-8392, and Jenny Yang, 387-4884, Administrative Analysts) on August 17, 2026.