REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
August 18, 2026
FROM
ANDREW GOLDFRACH, ARMC Chief Executive Officer, Arrowhead Regional Medical Center
SUBJECT
Title
Amendment Master Services Agreement Adding an Additional schedule for Clinical Documentation Improvement Services from Solventum Health Information Services, Inc.
End
RECOMMENDATION(S)
Recommendation
1. Approve Amendment No. 2, including a non-standard term, to Master Services Agreement 24-324 with Solventum Health Information Systems, Inc., for outsourced clinical documentation improvement services and coding services and extending the services for an additional five years, increasing the contract amount by $13,602,003, from $2,000,000 to $15,602,003, with no change to the contract period beginning April 23, 2024 and continuing until termination of the last schedule.
2. Direct the Clerk of the Board of Supervisors to maintain the confidentiality of identified portions of Schedule 2-2, in the Amendment with Solventum Health Information Systems, Inc., for a period of three years, pursuant to California Health and Safety Code section 1457(c)(1).
3. Authorize the Auditor-Controller/Treasurer/Tax Collector to post the necessary budget adjustments as detailed in the Financial Impact section (Four votes required).
(Presenter: Andrew Goldfrach, ARMC Chief Executive Officer, 580-6150)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
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 Costs). The additional cost of $13,602,003 is funded by State Medi-Cal, Federal Medicare, private insurance, and other departmental revenues. Funding sources may change in the future pending any legislative activity related to the repeal and/or replacement of the Affordable Care Act.
The recommended budget adjustments for Fiscal Year 2026-27, as reflected in the table below, are needed to provide Arrowhead Regional Medical Center (ARMC) with sufficient appropriation authority of $2,583,475 to fund the first year of the increase in professional services costs associated with recommended Amendment No. 2. This increase will be offset by additional Global Payment Program revenue, which is reimbursement received for indigent and uninsured patients from California Department of Health Care Services. The remaining contract costs will be included in future recommended budgets.
|
Fund Center |
Commitment Item/GL |
Description |
Action |
Amount |
|
9187004200 |
52002900 |
Other Professional Fees |
Increase |
$2,583,475 |
|
9110004200 |
40449610 |
Global Payment Program |
Increase |
$2,583,475 |
BACKGROUND INFORMATION
ARMC’s Clinical Documentation Improvement (CDI) program reviews patients’ medical records to ensure that diagnoses, treatments, and the severity of each patient’s condition are accurately and completely documented. CDI staff work with physicians and coding personnel to clarify incomplete or inconsistent documentation before claims are submitted. Accurate documentation supports appropriate medical coding, quality reporting, reimbursement, audit compliance, public-health reporting, and tracking of diseases and patient outcomes.
On April 23, 2024 (Item No. 8), as the result of solicitation No. ARMC123-ARMC-4790, the Board of Supervisors (Board) approved Master Services Agreement No. 24-324 (Agreement) with 3M Health Information Systems, Inc., for professional services in support of the clinical documentation improvement program, in the not-to-exceed amount of $2,000,000, for the contract term beginning on April 23, 2024 and continuing until termination of the last schedule.
On June 10, 2025 (Item No. 9) the Board approved Amendment No. 1 to the Master Services Agreement No. 24-324 with 3M Health Information Systems, Inc., changing the name of the contracting party 3M Health Information Systems, Inc. to Solventum Health Information Services, Inc. (Solventum), with no changes to the contract amount of $2,000,000 or contract period beginning April 23, 2024 and continuing until termination of the last schedule.
Amendment No. 2 to Master Services Agreement No. 24-324 with Solventum adds Schedule 2-2 (Schedule), significantly expanding the scope of services beyond the original consulting schedule to include outsourced CDI and Coding Services in support of ARMC’s inpatient and outpatient clinical documentation and coding functions. The additional funding of $13,602,003 supports these expanded operational services over a five-year period and will enhance ARMC’s existing CDI program by improving clinical documentation accuracy, coding accuracy, claim submission, audit outcomes, revenue cycle performance, and patient health outcomes. The Schedule contains terms applicable to the services provided that supersede the applicable provisions of the Agreement. Solventum asserts that the line-item pricing contained in the Schedule constitutes trade secret information that is exempt from disclosure pursuant to California Government Code section 7927.605.
Consulting services encompass leadership support to ARMC CDI management staff, which includes regular performance reporting on program activities, successes, and milestones. Audit activities provided by Solventum involve review of CDI practices, conducting risk assessments, investigation, and remediation, and providing ARMC leadership with corrective action plans and propose best practices. Training is focused on clinical documentation skillsets, reimbursement, reporting of physician and facility quality scores, and increased collaboration between providers, CDI professionals, and coding staff.
The Schedule applies to the services provided under the schedule and includes terms that differ from the standard County contract. Solventum is unwilling to negotiate these terms. The non-standard terms include the following:
1. The County may not terminate the Schedule for convenience, and during the five-year period covered by the Schedule, the County is required to fill any open positions for services provided under the Schedule with Solventum resources.
• County Policy 11-05 requires that the County have 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 can only terminate the Agreement during the term for an uncured material breach by Solventum. Any attempted termination by County without cause could 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. The requirement to fill any open positions for these services may impact the County’s ability to obtain these services for any County department through any other source.
ARMC recommends approval of the Amendment, including the non-standard term, to allow ARMC to continue its work with Solventum to improve CDI processes, operational efficiencies, and alignment with healthcare best practices. The audit, training and support services provided by Solventum will aid in increasing quality and continuity of care while promoting timely and accurate reimbursement for services rendered by ARMC, which in turn supports the County’s goal of meeting the safety, health, and social services needs of County residents.
PROCUREMENT
Not applicable
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Bonnie Uphold, Supervising Deputy County Counsel, 387-5455) on July 17, 2026; Auditor-Controller/Treasurer/Tax Collector (Charlene Huang, Auditor-Controller Manager, 382-7022) on August 5, 2026; Purchasing (Veronica Pedace, Buyer III, 387-2464) on July 24, 2026; Risk Management (Noel Cantrell, Administrative Supervisor, 386-8890) on July 29, 2026; ARMC Finance (Chen Wu, Finance and Budget Officer, 580-3165) on July 28, 2026; and County Finance and Administration (Jenny Yang, Administrative Analyst, 387-4884) on August 4, 2026.