REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
June 23, 2026
FROM
JOSHUA DUGAS, Acting Director, Department of Behavioral Health
SUBJECT
Title
Amendment to the Contract with Step Up on Second, Inc. for Full Service Partnership Program Services
End
RECOMMENDATION(S)
Recommendation
Approve Amendment No. 3 to Contract No. 21-439 with Step Up on Second, Inc., for the provision of Full Service Partnership program services, updating contract language, increasing the contract in an amount not to exceed $4,118,554, from $40,580,650 to $44,699,204, and extending the contract period by six months, from July 1, 2021 through December 31, 2026.
(Presenter: Joshua Dugas, Acting Director, 252-5142)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Improve County Government Operations.
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 recommended increase amount not to exceed $4,118,554, for Full Service Partnership (FSP) program services, is funded by Federal Financial Participation Medi-Cal and Mental/Behavioral Health Services Act (MHSA/BHSA). Adequate appropriation and revenue have been included in the Department of Behavioral Health’s (DBH) 2025-26 and 2026-27 budgets.
BACKGROUND INFORMATION
DBH is responsible for providing mental health and substance use disorder (SUD) services to San Bernardino County (County) residents experiencing severe mental illnesses and/or SUD. FSP provides permanent supportive housing for homeless individuals throughout County funded by the United States Department of Housing and Urban Development. Since 2016, DBH has maintained a unique partnership with Step Up on Second, Inc. (SUOS) for FSP program services to connect with chronically homeless individuals who suffer from mental illness. The FSP program services provided by SUOS promote adaptive functioning in the community to maintain housing and prevent unnecessary re-admission to acute psychiatric hospitals and reduce reincarceration.
The FSP program is a collaborative relationship between the FSP provider and clients which consists of both children and adults who live together as a family unit. SUOS plans and provides the full spectrum of community services inclusive of crisis intervention/stabilization, family education, peer support, and treatment programs that treat behavioral health conditions. These direct services are all conducted in collaboration with DBH, which offers 24/7 access to an interdisciplinary team of behavioral health professional staff and peer advocates. In addition, SUOS offers non-mental health services primarily consisting of providing housing with direct access to these services.
Since SUOS contract inception in 2021, SUOS provided FSP program services to:
• An estimated 444 unduplicated clients
• At an estimated cost of $13,712 per client
Over the course of this contract term, FSP program services are expected to continue serving:
• An estimated 603 unduplicated clients
• At an estimated cost of $6,830 per client
On June 8, 2021 (Item No. 27), the Board of Supervisors (Board) approved Contract No. 21-439 with SUOS, to provide FSP program services to chronically homeless individuals who suffer from mental illness in the amount of $30,442,150, for the period of July 1, 2021 through June 30, 2026.
On March 15, 2022 (Item No. 18), the Board approved Amendment No. 1 to Contract No. 21-439 with SUOS, for FSP program services, increasing the total contract amount by $12,082,500, from $30,442,150 to $42,524,650, with no change to the contract period of July 1, 2021 through June 30, 2026.
On June 18, 2025 (Item No. 28), the Board approved Amendment No. 2 to Contract No. 21-439 with SUOS, for FSP program services, decreasing the total contract amount by $1,944,000, from $42,524,650 to $40,580,650, with no change to the contract period of July 1, 2021 through June 30, 2026.
The FSP program services contract was identified for the fee-for-service (FFS) conversion. In April 2025, to assist DBH in establishing appropriate reimbursement rates, Optumas, a third-party consultant to the County, was engaged to evaluate current payments and reimbursements. DBH was advised of recommended rates at which providers should be reimbursed for services. At the rates determined by Optumas, with which DBH is moving forward, the current contract allocation of $40,580, 650, is not sufficient to allow the contractors to meet minimum utilization expectations. The recommended amendment will update provisional payment language to reflect the transition to FFS-payment methodology, update standard contract language to include BHSA compliance requirements, which will become effective July 1, 2026, and increase funding to allow the contractors to be reimbursed for both residential services and outpatient medication support and case management services.
Performance measures for FSP program services contracts focus on tracking service quality, timeliness, accessibility, and outcomes to ensure providers meet established standards. Contractors are required to submit regular reporting such as monthly service logs, outcome data, fiscal reports, and compliance documentation, which allows the department to monitor progress and identify trends or concerns. Accountability mechanisms, including performance audits, contract monitoring meetings, site visits, and corrective action plans, help ensure that services are delivered as intended and align with program goals. Together, these structures promote transparency, support continuous improvement, and ensure that community members receive high-quality, effective behavioral health services.
The recommended amendment to the FSP program service contract with SUOS will extend the contract term for six months, for the period of July 1, 2021 through December 31, 2026, increase the total contract amount by $4,118,554, and update the contract language to include FFS provisions. Approval of this item will allow sufficient time to complete a formal procurement for the new FSP program service contract to be effective November 1, 2026, limiting client disruption during the transition process. Due to contract negotiations, this amendment to the current contract is being requested at this time to ensure the continuity of services until the implementation of the new FSP contracts.
DBH will continue to regularly: 1) review client service data and progress, conduct site visits and perform annual monitoring to ensure the performance and compliance standards of the contract(s) are met; 2) review applicable reimbursement claims and claims data to ensure fidelity and accuracy of service billing and optimization of Medi-Cal reimbursement in alignment with Contract terms and Department of Health Care Services billing requirement; and 3) review provider invoices administratively and programmatically to ensure client and/or bed counts are accurate prior to payment processing.
PROCUREMENT
Not applicable.
REVIEW BY OTHERS
This item has been reviewed by Behavioral Health (Diana Barajas, Administrative Supervisor I, 383-0832) on May 18, 2026; County Counsel (Dawn Martin, Deputy County Counsel, 387-5455) on May 21, 2026; and County Finance and Administration (Iliana Rodriguez, Administrative Analyst, 386-8392) on June 4, 2026.