REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
May 19, 2026
FROM
JOSHUA DUGAS, Acting Director, Department of Behavioral Health
SUBJECT
Title
Contract with California Psychiatric Transitions for Mental Health Rehabilitation Center Services
End
RECOMMENDATION(S)
Recommendation
Approve Contract with California Psychiatric Transitions, for Mental Health Rehabilitation Center services, incorporating the contract into the existing aggregate funding pool for Mental Health Rehabilitation Center services, in the amount not-to-exceed $13,417,652, for the contract period of May 19, 2026 through September 30, 2029.
(Presenter: Joshua Dugas, Acting Director, 252-5142)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Promote and Fulfill the Countywide Vision
Provide for the Safety, Health and Social Service Needs of County Residents.
FINANCIAL IMPACT
This item does not impact Discretionary General Funding (Net County Cost). A total amount of $39,730,164 was approved for Mental Health Rehabilitation Center (MHRC) services. Of that total, $13,417,652 was designated as an aggregate funding pool to be shared among all MHRCs. Approval of this item incorporates California Psychiatric Transitions (CPT) into the existing aggregate pool. Existing ongoing 1991 Realignment funds will fund the totality of these services. Adequate appropriation and revenue have been included in the Department of Behavioral Health’s (DBH) 2025-26 budget and will be included in future recommended budgets.
BACKGROUND INFORMATION
DBH is responsible for providing mental health and substance use disorder (SUD) services to county residents experiencing severe mental illness and/or SUD. MHRCs are locked, long-term licensed residential facilities serving adults ages 18 to 65 years. MHRCs are categorized as an Institution for Mental Disease providing services to individuals who suffer from severe and chronic behavioral health conditions and whose functioning is too low to be maintained in a licensed board and care facility. MHRCs provide a facility for high utilizers of acute psychiatric hospitals and the opportunity for continued stabilization as a step-down from an acute psychiatric hospital setting.
MHRCs specialize in providing comprehensively organized therapeutic activities, including skill building, small therapy groups, individual therapy, physical and recreational activities, and various types of supervised outings that include special events designed to promote improved functionality in daily living and social skills. MHRCs prepare the individual to return to a more flexible facility when appropriate, such as a licensed adult residential facility with enhanced services.
CPT has over 20 years of experience treating individuals with severe mental illness and has the ability to render constant and immediate attention to their clients. The Disruptive Behavioral Unit (DBU) is a unique unit at CPT and addresses residents with disruptive and/or inappropriate behaviors that inhibit successful rehabilitation and delay the progress of their peers’ rehabilitation. Residents in this program will have access to 24-hour nursing staff who provide medication as needed, as well as qualified personnel to encourage group and leisure events aimed at educating individuals of rehabilitative skills necessary for a quicker transition. This highly structured environment is provided to minimize distractions and focus on behavior modification and recovery. CPT has expanded the DBU to meet the increasing demand from counties to treat individuals requiring this type of higher level of care.
On August 20, 2024 (Item No. 30), as a result of a formal competitive procurement, the Board of Supervisors (Board) approved Contract No. 24-774 with Crestwood Behavioral Health, Inc. (Crestwood) and Contract No. 24-775 with Telecare Corporation, for a total amount of $39,730,164 for MHRC services for the period of August 20, 2024 through September 30, 2029. Crestwood, being an existing provider, maintained the previous contract with DBH for MHRC services, with 20 clients already placed at its facility prior to the procurement. To ensure continuity of care and prevent service disruption, $26,312,512 of the total funding was designated to guarantee 25 beds at Crestwood for current clients residing at the facility. The remaining $13,417,652 has been allocated as needed between the recommended providers once those guaranteed beds are fully utilized.
The combined MHRCs anticipate:
• Serving approximately 41 clients annually
• Estimated annual cost of $193,806 per client
MHRCs have established a strong track record of serving:
• 53 individuals in 2024-25
• 43 individuals in 2025-26
The contract was negotiated by the parties to include the following non-standard term:
1. In the event additional insurance coverage or higher insurance limits are requested by the County, the Contract adds a provision that if the parties cannot reach an agreement on such changes, either party may terminate the Contract upon 30 days’ written notice. During this time, the County would need to arrange for the removal of all County clients from Contractor’s facility.
• The County standard contract requires contractors to comply with requested changes for additional types of insurance coverage or higher coverage limits, without the ability to negotiate.
• Potential Impact: If the parties are unable to reach an agreement in the event changes to the insurance provisions are required, and the Contractor terminates the Contract, the County would be required to find a new facility to house the County clients.
DBH recommends the approval of the contract, including the non-standard terms, to add CPT to the existing MHRC aggregate amount not-to-exceed contract pool of $13,417,652 and help behaviorally volatile clients receive the appropriate level of care necessary. Without these services, clients would require multiple extended acute hospital stays and administrative days while awaiting long-term placement, such as at state hospitals, which can be up to a two-year wait.
DBH has implemented mechanisms to regularly review the current contracts in place. The Long Term Care (LTC) team, comprised of DBH staff including Clinic Supervisors, Social Workers, Clinical Therapists I/II, attend monthly site visits. During these visits they meet with clients and facility staff. Clients are provided with additional services and support, whereas the facility staff are provided with coordination to discuss client progress and address client level of care changes. Invoices are submitted monthly and reviewed for accuracy prior to payment processing. Site reviews are also conducted to complete an annual audit to confirm contract obligations are being met, number of clients served, services provided and discuss any areas that require improvement.
DBH will also implement mechanisms to regularly review CPT 1) client service data and progress, conduct site visits and annual monitoring to ensure performance and compliance standards of the contract(s) are met; and 2) provider invoices administratively and programmatically to ensure client and/or bed counts are accurate prior to payment processing
PROCUREMENT
The Purchasing Department supports the non-competitive procurement of MHRC services with CPT based on specialized credentials. CPT is a licensed adult mental health facility that is uniquely qualified to provide treatments such as dual-disorder programs, vocational rehabilitation, comprehensive medication management, and the only MHRC in the State to offer the DBU. Partnering with CPT supports timely access to specialized, coordinated care for individuals with the highest levels of need.
REVIEW BY OTHERS
This item has been reviewed by Behavioral Health (Diana Barajas, Administrative Supervisor I, 388-0862) on April 15, 2026; County Counsel (Kristina Robb, Deputy County Counsel, 387-5455) on April 28, 2026; Risk Management (Stephanie Pacheco, Staff Analyst II, 386-9008) on April 11, 2026; Purchasing (Jessica Barajas, Supervising Buyer, 387-2065) on May 4, 2026; and County Finance and Administration (Iliana Rodriguez, Administrative Analyst, 386-8392) on May 4, 2026.