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 Agreements with Epic Systems Corporation and Epic Hosting, LLC
End
RECOMMENDATION(S)
Recommendation
1. Approve the following amendments to Agreement No. 19-557 with Epic Systems Corporation, for a fully integrated Electronic Health Records system at Arrowhead Regional Medical Center, and additional funding to cover increases in licensing volume, maintenance, and related support services, increasing the total combined agreement amount by $71,579,244, from $44,284,797 to $115,864,041, with no change to the term of August 6, 2019 until terminated by either party:
a. Amendment No. 8 for the subscriptions, implementation, and related services to add Voice over Internet Protocol for Clinicians to the licensed programs.
b. Amendment No. 9 to convert the Hello World short message service to a multichannel communication platform.
2. Approve Amendment No. 1 to Agreement No. 20-282 with Epic Hosting, LLC, including non-standard terms, to continue hosting services for the fully integrated electronic health record system, increasing the contract amount by $11,832,580, from $13,217,200 to a total not-to-exceed amount of $25,049,780, and extending the term by five years, for the total period of July 1, 2020 through October 11, 2031.
3. Authorize the ARMC Chief Executive Officer to approve and sign non-financial documents as they pertain to changes to or confirmation of the scope of work for Agreement No. 19-557, subject to review by County Counsel, so long as such documents do not increase the amount of $115,864,041 or change the duration of the Agreement No. 19-557.
4. Direct the Clerk of the Board of Supervisors to maintain the confidentiality of identified portions of terms and pricing, in the amendments in Recommendation Nos. 1 and 2 with Epic Systems Corporation and Epic Hosting, LLC, pursuant to California Government Code section 7930.205.
(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). The cost of $83,411,824 is funded by State Medi-Cal, Federal Medicare, private insurance, and other departmental revenue. The current estimated annual cost for licensing, maintenance, support services and hosting for the Electronic Health Records (EHR) system is approximately $6.5 million. Approval of these amendments is estimated to increase the annual costs to approximately $10 million. The incremental increase of $3.5 million annually is primarily due to increases in anticipated volume and additional Epic licenses and hosting for other county partners. 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 Amendment No. 8 to Agreement No. 19-557 will provide for Epic’s Voice over Internet Protocol (VoIP) for Clinicians, including annual recurring subscription fees and one-time implementation costs. These additions expand patient and clinical communication functionality within the Epic electronic health record system.
Approval of Amendment No. 9 to Agreement No. 19-557 will provide for Epic’s Hello World Multichannel Communication Platform (Hello World), including annual recurring subscription fees and one-time implementation costs. These additions expand patient and clinical communication functionality within the Epic electronic health record system.
Approval of the increase in funding to Agreement No. 19-557 with Epic Systems Corporation (Epic) will allow ARMC to provide additional funding for continued licensing, maintenance, and related services due to increased system utilization, expanded functionality, and vendor pricing changes for the Electronic Health Record (EHR) system. Epic provides the electronic health record system used by ARMC to support clinical, operational, and revenue cycle functions. The system is used daily by clinical staff, administrative teams, and leadership to support patient care and hospital operations. Approval will ensure uninterrupted system access and continued support of healthcare operations at ARMC.
The County originally entered into Agreement No. 19-557 on August 6, 2019. The agreement has been amended multiple times to support additional modules, licensing, and system needs. Epic remains a critical system required for patient care, documentation, billing, and regulatory compliance.
On August 6, 2019 (Item No. 9), as the result of formal solicitation No. ARMC117-ARMC-2510, the Board of Supervisors (Board) approved Agreement No. 19-557 with Epic for the purchase, installation and maintenance of a fully integrated EHR system at ARMC with an estimated five-year cost not to exceed $29,738,425 beginning August 6, 2019 and continuing until terminated with 90 days’ notice to the other party.
Since the approval of the Agreement, the Board and ARMC Chief Executive Officer has approved seven amendments to increase funding and incorporate additional services.
|
Amendment No. |
Approval Date |
Item No. |
|
1 |
March 9, 2021 |
3 |
|
2 |
October 5, 2021 |
15 |
|
3 |
April 25, 2023 |
N/A - executed via delegated authority by ARMC Chief Executive Officer (CEO) |
|
4 |
June 13, 2023 |
17 |
|
5 |
November 5, 2024 |
N/A - executed via delegated authority by ARMC CEO |
|
6 |
June 10, 2025 |
19 |
|
7 |
November 18, 2025 |
21 |
Pursuant to Agreement No. 19-557, the County is obligated to maintain the confidentiality of information that Epic identifies as confidential and proprietary, including its pricing. The County may incur liability from failing to disclose information pursuant to a California Public Records Act request or open public meeting requirements (Brown Act and County Sunshine Ordinance). This liability may be offset by the indemnification obligations that Epic has agreed to undertake. In addition, the County could be deemed in breach of agreement and incur liability to Epic for disclosure of Epic’s information, including non-redacted versions of the agreement, regardless of whether the disclosure is intentional or inadvertent, which could exceed the agreement amount.
On May 19, 2020 (Item No. 19), as the result of a non-competitive procurement, the Board approved Agreement No. 20-282 with Epic Hosting, LLC, for hosting services for the fully integrated Electronic Health Record system of ARMC, for the not-to-exceed estimated cost of $13,217,200 for period beginning July 1, 2020 through the earlier of December 31, 2026 and sixty months after the Technical Go Live.
Approval of Amendment No. 1 to Agreement No. 20-282 will allow ARMC to continue to provide certified remote hosting services to support the fully integrated EHR system for ARMC, including complete backup and disaster recovery capabilities as required by Centers for Medicare and Medicaid Services Conditions of Participation and enforced by the Joint Commission. Epic Hosting, LLC provides a robust server infrastructure and certified support services for the EHR system, including system redundancy and backup systems to ensure continuity of operations in the event of an emergency or disaster. Approval of this amendment will allow ARMC to continue these essential hosting services, as ARMC does not maintain the on-site infrastructure or capacity required to support the Epic EHR system independently.
Amendment No. 1 to Agreement No. 20-282 is Epic’s standard amendment form, which includes terms that differ from the standard County contract and omits certain County standard contract terms. While the parties negotiated certain terms to County Standards, Epic would not agree to all County standard terms. The non-standard and missing terms include the following:
Epic’s maximum liability to the County for all claims arising out of or related to any breaches of unsecured protected health Information during any period that the County is not in compliance with its security obligation is limited to the fees paid by the County to Epic for the services under this Agreement in the three months preceding the date claim was filed.
• The County standard contract does not include a limitation of liability.
• Potential Impact: Claims could exceed the liability cap and the Agreement amount leaving the County financially liable for the excess.
ARMC recommends approval of Amendment No. 1 to Agreement No. 20-282, including the non-standard term, to provide for the safety, health and social service needs of county residents by ensuring continued access to Epic software, licensing, maintenance, and related system support. These services support patient care operations, clinical workflows, and revenue cycle functions. The system is used daily by clinical staff, administrative teams, and leadership to support patient care, hospital operations, improve patient outcomes, and advance the County’s commitment to health equity and efficient healthcare delivery.
PROCUREMENT
Not applicable.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Bonnie Uphold, Supervising Deputy County Counsel, 387- 5455) on August 28, 2026; Purchasing (Veronica Pedace, Buyer III, 387-2198) on September 3, 2026; Risk Management (Stephanie Pacheco, Staff Analyst II, 386-9044) on September 3, 2026; Innovation and Technology (Don Le, Chief Information Officer, 388-5501) on September 9, 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 18, 2026.