REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
June 27, 2023
FROM
WILLIAM L. GILBERT, Director, Arrowhead Regional Medical Center
SUBJECT
Title
Agreements with Teladoc Health, Inc. for Two Clinical Point-of-Care Devices
End
RECOMMENDATION(S)
Recommendation
1. Approve non-financial Master Agreement with Teladoc Health, Inc., including non-standard terms, for software licenses, service, and equipment rental of clinical point-of-care devices, effective June 27, 2023 and remains in effect (i) in relation to the rented devices, for the duration of the rental set forth on the applicable Order Form, and (ii) in relation to the purchased devices, for the period set forth in the applicable Order Form; provided, that if no period is specified in the Order Form, then for a period of three years from the applicable Order Form date.
2. Approve the following Rental Agreements and Order Form with Teladoc Health, Inc., including non-standard terms, for rental of two clinical point-of-care devices, in the total amount of $178,019 for the three-year period commencing on the date of shipment:
a. Rental Agreement for InTouch Lite 4 Device, Teladoc Agreement No. 42135050
b. Rental Agreement for InTouch Lite 4 Device, Teladoc Agreement No. 42135051
c. Order Form for lease, one-time services, and subscription service related to the InTouch Lite 4 Devices
(Presenter: William L. Gilbert, Director, 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 $178,019 is funded by State Medi-Cal, Federal Medicare, private insurances, and other departmental revenue. 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) 2022-23 budget and will be included in future recommended budgets.
BACKGROUND INFORMATION
This Master Agreement (Contract) and two Rental Agreements (Rental Agreements) with Teladoc Health, Inc. (Teladoc) will allow ARMC to maintain patient care levels through the utilization of devices that support point-of-care visits and clinical collaboration between healthcare providers.
The InTouch Lit 4 Devices (devices) have touch screen capabilities with a camera that is attached to a mechanical arm and provides different angles for patient evaluation (boom camera). This assists ARMC healthcare providers who are working offsite to make efficient, informed clinical decisions and simulate face-to-face patient care. The touch screen allows patients to type or select responses to physician inquiries, if they are not able to communicate verbally. These devices have been particularly useful in examination of stroke patients due to the need for rapid evaluation and treatment to prevent extensive brain damage, and as a result, the devices help the hospital to maintain Stroke Center certification.
ARMC is certified by the Accreditation Commission for Health Care as a Comprehensive Stroke Center because the hospital has the capacity to stabilize and treat acute stroke patients safely and efficiently.
The Teladoc devices have been a critical part in reducing the timeframe between the arrival of stroke patients at the hospital and their treatment by expediting the patient evaluation process since 2017. The expedited evaluation process is necessary because studies have shown that treatment in the first three hours after the start of stroke symptoms significantly reduces the effects of stroke and lessen the chance of permanent disability.
The hospital earned the 2021 “Get with the Guidelines” Stroke Gold Plus Quality Achievement Award and other recognitions issued by the American Heart Association. The award and recognitions were received as the hospital met quality measures developed to reduce the time between a stroke patient’s arrival at the hospital and treatment with the only medication approved by the United States Food and Drug Administration to treat ischemic stroke, tissue plasminogen activator.
In July of 2017, the Purchasing Agent executed Rental Agreement No. 4400013175, in the amount of $176,620, for a three-year term commencing on date of shipment, with Teladoc, including its third-party financier Everbank (now known as TIAA Commercial Finance, Inc.), for the rental of clinical point-of-care devices used in neuro telemedicine. The equipment was required to maintain the hospital’s Stroke Center certification. In 2020, the Purchasing Agent authorized an extension of the term from three years to five years, ending June 30, 2023, and increased the total contract amount by $182,314 from $176,620 to $358,934.
The Contract is the County’s standard IT contract, which was negotiated between the parties and includes the following non-standard terms:
1. The Contract does not require Teladoc to meet the County’s insurance standards as required pursuant to County Policy 11-07.
• The County Policy requires contractors to carry appropriate insurance at limits and under conditions determined by the County’s Risk Management Department and set forth in the County standard contract.
• Potential Impact: The County has no assurance that Teladoc will be financially responsible for claims that may arise from the County’s use of the equipment, which could result in expenses to the County that exceed the total Contract amount.
2. The Contract requires the County to obtain and maintain Workers’ Compensation and Employer’s Liability Insurance, Commercial General Liability Insurance, Cyber Liability Insurance, and Physician Professional Liability Insurance under terms and conditions required by Teladoc, including the right of Teladoc to reject the County’s insurance carrier and to obtain insurance on the County’s behalf and assess the costs against the County.
• The County standard contract does not require the County to provide insurance.
• Potential Impact: Teladoc could reject the County’s insurance carrier or procure insurance on behalf of the County, which could result in expenses to the County that exceed the total Contract amount.
The Rental Agreements are Teladoc’s standard commercial contract, which includes terms that differ from the standard County contract and omits certain County standard contract terms. While the parties negotiated certain contract terms to County standard requirements, Teladoc was unwilling to agree to all standard terms. The non-standard and missing terms include the following:
1. The County is required to indemnify Teladoc against any losses, damages, claims, and actions, including attorney’s fees relating to the section, installation, ownership, use rental, or possession of the devices or any data stored within the devices.
• The County standard contract does not include any indemnification or defense by the County of a Contractor.
• Potential Impact: By agreeing to indemnify Teladoc, 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 Teladoc without such limitations and the County would be responsible to defend and reimburse Teladoc for costs, expenses, and damages, which could exceed the total amounts of the Rental Agreements.
2. The Agreements require the County to maintain property insurance for the devices and name Teladoc as a loss payee. The Agreements also require that Teladoc be notified at least 30 days in advance of any cancellation or material change, and in the event the County fails to maintain the required insurance, Teladoc may secure such insurant and charge the County for the premiums.
• The County standard contract does not impose any insurance requirements on the County.
• Potential Impact: The County is required to maintain property insurance on the devices and name Teladoc as a loss payee so that in the event that the equipment is damaged, lost, or stolen, Teladoc can recover under the County’s insurance policy.
3. In the event that Teladoc files a lawsuit against the County to enforce its rights under the agreements, the County must pay for Teladoc’s costs and reasonable attorney’s fees associated with such lawsuit.
• The County standard contract requires that each party bear their own attorney’s fees and costs in the event of a dispute.
• Potential Impact: The County may be responsible for Teladoc’s attorney’s fees and costs if Teladoc is forced to pursue legal action to enforce its rights under the Rental Agreements.
4. The Rental Agreements do not require Teladoc to meet the County’s insurance standards as required pursuant to County Policy 11-07.
• The County Policy requires contractors to carry appropriate insurance at limits and under conditions determined by the County’s Risk Management Department and set forth in the County standard contract.
• Potential Impact: The County has no assurance that Teladoc will be financially responsible for claims that may arise from the County’s use of the equipment, which could result in expenses to the County that exceed the total amounts of the Rental Agreements.
5. In the event the County fails to make payment within three days of its due date, the County will be charged a late charge of the greater of 5% of each late payment or $20.00.
• The County standard contract does not impose a late payment charge on the County.
• Potential Impact: In the event that the County is late in its payments by at least three days, a late payment will be assessed.
6. The County may not terminate the Rental Agreements for convenience.
• The County standard contract gives the County the right to terminate the Contract, for any reason, with a 30-day written notice of termination without any obligation other than to pay amounts for services rendered and expenses reasonably incurred prior to the effective date of termination.
• Potential Impact: The County cannot terminate the Rental Agreements for any reason, except when they are assigned to a debarred entity. Any attempted termination by County without cause would result in payment liability for the full agreement amount, which could result in payment liability where no funds are available due to lack of allocation or loss of funding.
7. Teladoc may assign the Rental Agreements with ten days’ prior written notice and the County may then terminate the Agreements, without penalty, where required by law.
• The County standard contract does not allow the contractor to assign the contract without the written approval of the County.
• Potential Impact: Teladoc may assign the Rental Agreements to a third-party without the County's approval. This could allow the Agreements to be assigned to a business with which the County is legally prohibited from doing business with due to issues of federal debarment or suspension and conflict of interest, but the County would then be able to terminate the Rental Agreements without penalty.
ARMC recommends approval of the Contract and Rental Agreements, including the non-standard terms, to ensure that its providers have the necessary devices to provide critical point-of-care patient evaluation services at the hospital for the health and safety of county residents.
PROCUREMENT
The Purchasing Department supports this non-competitive procurement based on the functional specifications of the equipment. The equipment meets the functional specifications required by the neurology physicians who utilize and are trained in the operations of the equipment for stroke patient evaluation. With unique rental financing options, Teladoc provides devices specifically tailored to the hospital environment with touch screen and boom camera that enables better vantage point for patient identification in crowded locations and more precise patient examination capabilities. The rental option enables the County to obtain the most up-to-date devices in a more fiscally prudent manner than an outright purchase of equipment.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Bonnie Uphold, Supervising Deputy County Counsel, 387-5455) on May 8, 2023; Purchasing (Ariel Gill, Buyer III, 777-0722) on May 15, 2023; Risk Management (Victor Tordesillas, Director, 386-8623) on April 11, 2023; ARMC Finance (Chen Wu, Finance and Budget Officer, 580-3165) on May 22, 2023; Finance (Jenny Yang, Administrative Analyst, 387-4884) on May 24, 2023; and County Finance and Administration (Valerie Clay, Deputy Executive Officer, 387-5423) on May 24, 2023.