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Approve 16 contracts to implement the Drug Medi-Cal Organized Delivery System for a total of $19,216,001 for terms beginning December 1, 2026; Delegate authority to the County Administrator or designee to execute the contracts, including those awaiting final execution by the vendor and any subsequent amendments, with Health and Social Services, Compliance and County Counsel concurrence, up to a fiscal year aggregate of $74,999 per contract; and Delegate authority to the Director of Health and Social Services to execute any contract amendments that are administrative or technical in nature and have no fiscal impact
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Published Notice Required? Yes ___ No X
Public Hearing Required? Yes ___ No X
DEPARTMENTAL RECOMMENDATION:
The Department of Health and Social Services recommends that the Board of Supervisors:
1. Approve 16 contracts to implement the Drug Medi-Cal Organized Delivery System for a total of $19,216,001 for terms beginning December 1, 2026;
2. Delegate authority to the County Administrator or designee to execute the contracts, including those awaiting final execution by the vendor and any subsequent amendments, with Health and Social Services, Compliance and County Counsel concurrence, up to a fiscal year aggregate of $74,999 per contract; and
3. Delegate authority to the Director of Health and Social Services to execute any contract amendments that are administrative or technical in nature and have no fiscal impact.
SUMMARY:
The California Department of Health Care Services (DHCS) Drug Medi-Cal Organized Delivery System (DMC-ODS) provides comprehensive substance use disorder treatment to Medi-Cal-covered residents in Solano County. Since 2019, Partnership HealthPlan of California (Partnership) has administered the DMC-ODS on behalf of Solano and six other northern California counties through a regional network of substance use programs. Under this model, Partnership directly contracted with Substance Use Disorder (SUD) programs and performed managed care functions and administrative oversight responsibilities for its network on behalf of the counties, including Solano. Partnership notified the County that it will no longer provide these services, effective December 31, 2026. Beginning January 1, 2027, Solano County Health and Social Services Department (H&SS), Behavioral Health Division, will directly manage the DMC-ODS and is working with DHCS on the transition of the administrative responsibility from Partnership to Solano County.
Behavioral Health will oversee all DMC-ODS operations, including maintaining an adequate network of treatment providers and ensuring timely access to appropriate care for residents. This includes contracting with a network of providers for residential treatment, withdrawal management, outpatient and intensive outpatient treatment, and narcotic treatment management.
Maintaining continuity of care is a central component of the transition; therefore the 16 contracts with 11 providers were selected based on their current status as contractors under the Partnership regional model to prevent disruption of substance use treatment services and meet DHCS network adequacy requirements. Once the county-administered system is operational and stabilized, H&SS anticipates conducting a competitive procurement for the DMC-ODS provider network, currently anticipated by June 30, 2028.
FINANCIAL IMPACT:
The total maximum costs for these contracts through June 30, 2028, are $19,216,001 with an estimated FY2026/27 cost of $7,000,446 and FY2027/28 cost of $12,215,555. Federal Drug Medi-Cal, State General Fund, 2011 Realignment, and Substance Use Block Grant (SUBG) revenue will fund the agreements. The FY2026/27 Working Budget includes appropriations and revenues based on the DMC-ODS Regional Model with Partnership for the full fiscal year. As the reimbursement structure for the DMC-ODS will change when the program transitions to the County, the program's actual revenue and expenditures may be different than current appropriations. The Department will monitor appropriations and, if needed, return to the Board at a later date.
DISCUSSION:
As presented to the Board of Supervisors on September 1, 2026, Solano County will assume responsibility for various functions currently supported through the Partnership regional model. To support this transition, on October 6, 2026, the Board approved 7.0 FTE positions to establish the necessary staffing infrastructure to assume administrative oversight of the DMC-ODS. In addition, the County intends to maintain the existing provider network through contracts while assuming functions previously performed through the regional model.
All 16 contracts are included in the contract list in Attachment A, with links to each contract. The list of contracts includes the vendor's name, a brief description of services, the contract amount, and the term end date for each contract. H&SS worked with General Services on obtaining an exception to the competitive bidding process to prevent disruption of medically necessary substance use disorder treatment during the transition. H&SS intends to conduct a competitive procurement for the DMC-ODS provider network before June 30, 2028.
Due to the compacted timeline for the DMC-ODS system, the contracts are all pending execution by the vendors. While reviews of the contracts are substantially complete, minor adjustments may be made prior to contract execution. In addition, two contracts, A.K Bean and Recovery Medical Group, are still undergoing review by the Department of Information Technology (DoIT) and H&SS Compliance for compliance with County network, HIPAA, and HITECH security requirements.
While Partnership’s administration of substance use disorder treatment services will cease on December 31, 2026, H&SS is requesting that the 16 contracts be executed effective December 1, 2026. The period from December 1 through December 31, 2026, will be used to onboard vendors following contract execution. Upon execution, vendors will gain access to the health record system to establish care episodes and link patients to treatment programs. H&SS will assume administration and reimbursement of substance use disorder treatment services effective January 1, 2027.
ALTERNATIVES:
The Board could choose not to approve these contracts. This is not recommended given Partnership's December 31, 2026, termination date and the limited time available to maintain the provider network and ensure continuity of care.
The Board may choose to address some or all of these contracts individually. This is not recommended because individual approval will lengthen the time for contracting and disrupt substance use disorder treatment services to Solano County Medi-Cal members.
OTHER AGENCY INVOLVEMENT:
County Counsel has reviewed and approved all contracts included on the list for legal sufficiency.
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION