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Health and Human Services Agency (HHSA) recommending the Board:
1) Make findings that the provision of services by Telecare Corporation, Inc. (Telecare) to operate and manage the County of El Dorado (County) Psychiatric Health Facility (PHF) are in the public's best interest and that there are specialty skills, qualifications, and equipment not expressly identified in County classifications involved in the performance of the work in accordance with El Dorado County Ordinance Code, Chapter 3.13.030(B);
2) Make findings in accordance with Procurement Policy C-17 Section 3.4(3) exempting the competitive bidding process, because “Competitive bidding would produce no economic benefit to the County”, which will allow continuity in services while the Request for Proposals (RFP) for the provision of services to operate the County PHF is in process;
3) Approve and authorize the Chair to sign Amendment III to competitively procured Agreement for Services 4330 with Telecare, to extend the term by six months through June 30, 2026 increasing the compensation by $3,550,000 for a new maximum obligation of $38,428,086, with the option to extend for another six months through December 31, 2026 and add another $3,550,000 for a total maximum obligation of $41,978,086 if that option is extended, if needed for the completion of the RFP, and update standard contract language;
4) Authorize the Purchasing Agent to execute amendments relating to Agreement 4330, contingent upon approval by County Counsel and Risk Management, which do not increase the maximum dollar amount or term of the Agreement; and
5) Authorize the HHSA Director, or the HHSA Chief Assistant Director, to execute programmatic, administrative, and fiscal documents relating to Agreement 4330.
FUNDING: 75% Medi-Cal, 5% Other County Revenue (i.e., other counties paying to place their clients in our PHF), and 20% Realignment.
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DISCUSSION / BACKGROUND:
The County’s 16-bed PHF is designed to provide 24-hour stabilization and treatment services countywide for those persons who meet criteria specified under the California Welfare and Institutions Code Section 5150, which defines by regulation that any person, as a result of a mental health disorder, is a danger to themselves or others, or gravely disabled, may be involuntarily detained for treatment. PHF services include but are not limited to psychiatry, medication, clinical treatment, nursing, and the required documentation and maintenance of health information in accordance with prevailing federal and state laws and regulations. Services at the PHF are provided upon referral by other agencies.
In 2013, a financial analysis of the then County operated PHF determined that privatization would ensure ongoing PHF services with a higher level of staffing at a cost substantially lower than a County operated PHF. Subsequently, in 2014, the County privatized the provision of services at the PHF through County issued RFP 14-918-072 from which Telecare was selected as the most successful proposer. On January 6, 2015, the award of the RFP to Telecare was approved by the Board and the Chair executed Operational Agreement (OA) 221-S1511 and a non-financial Facility Use Agreement (FUA) 227-O1511 with Telecare (Legistar File 14-0517, Version 3). The FUA specified the roles and responsibilities of Telecare in using the County’s PHF building. The OA was the County’s contract with Telecare to operate and manage the County PHF. As specified in the OA, the County would release an RFP after five years to solicit a PHF operator/manager.
On June 7, 2019, the County’s Procurement and Contracts Division (P&C) released RFP 19-918-083 for the solicitation of continued operations and management of the County’s PHF. In response to this RFP, Telecare was the only proposal received. On December 17, 2019, the Board approved the RFP award, the renewal OA 4330 in the amount of $30,149,966, and renewal non-financial FUA 4332 with Telecare, for the continued operation of the PHF, both for the term of five years from January 1, 2020, through December 31, 2025 (Legistar File 19-1397). On March 7, 2022, Amendment I to this Agreement was executed by the County Purchasing Agent to update language in the maximum obligation article with no change to the maximum contractual obligation, and updated the Health Insurance Portability and Accountability Act (HIPAA) Business associate agreement, named County Contract Administrator, and added Force Majeure language, with no increase to the term. Subsequently, on January 23, 2024, Amendment II was executed by the Chair of the Board to increase the maximum obligation to $34,878,086 while adding incentive payment options, updating standard contract language and making other updates to be compliant with the California Advancing and Innovating Medi-Cal (CalAIM) initiative (Legistar File 23-1635).
On behalf of HHSA’s Behavioral Health Division (BHD), P&C released RFP #2025-0104 for the solicitation of continued operations and management of the County’s PHF. In response to this RFP which closed on April 7, 2025, Telecare was the only proposal received. On May 6, 2025, following said RFP close date, HHSA BHD was notified of its award to the Bond Behavioral Health Continuum Infrastructure Program (BHQIP) Round 1 grant program, which was accepted by the Board on May 20,2025, that awarded HHSA funding to pursue a PHF infrastructure relocation and expansion project, and enables HHSA BHD to pursue a planned Support, Outreach, Accessibility, and Resilience (SOAR) Project as a component to the PHF expansion project, both designed to enhance mental health services (Legistar file 25-0939). Consequently, since the initial PHF Operations RFP #2025-0104 did not include the full scope of work for an expanded PHF service model or speak to the expanded SOAR Project, HHSA BHD worked with P&C, in accordance with Section 12.0 Item 5 in said RFP, to cancel the RFP in its entirety, with HHSA’s plan to reissue a new PHF RFP that included the enhanced scope of work at a later date, and P&C notified Telecare of this cancellation on June 23, 2025.
On October 8, 2025, at the request of HHSA, P&C released the new PHF Operations and Management RFP #2025-0145, which closes November 7, 2025. The re-release of this RFP has necessitated the extension of current Agreement for Services 4330 with Telecare, which is set to expire December 31, 2025. Accordingly, HHSA is requesting the Board to approve of this agenda item and is requesting to extend the expiration date of Agreement 4330 under the Policy C-17 exemption from competitive bidding Section 3.4(3) as "Competitive bidding would produce no economic benefit to the County."
Amendment III authorizes the Contract Administrator of Agreement 4330 to reallocate the maximum obligations listed from Operations Incentive Payments to Base Compensation for Operations, as needed, within the same Fiscal Year, which specifically would allow for reallocation of any portion, or the entirety thereof, of the Operations Incentive Payments to Base Compensation for Operations, in accordance with the language included in the amended Article III, titled “Compensation and Maximum Obligation” of this Amendment. This is being requested as Telecare’s costs have risen due to increased staffing, supplies, and overall operational costs of providing services over the past two years, and there has been no increase to Telecare’s base rates. This provision will allow HHSA to reallocate funds between these categories to provide Telecare a higher base compensation rate without any increase to the total maximum obligation in the Agreement. Any reallocation of funding will be prospective and not affect compensation for services rendered prior to the effective date of the reallocation.
ALTERNATIVES:
Should the Board decline to approve this recommendation, the current agreement for services with Telecare would likely lapse, leading to an interruption of services at the County PHF. El Dorado County residents, and residents of surrounding areas, in need of PHF services would have to be routed to other facilities.
PRIOR BOARD ACTION:
1) 08/26/14, 14-0517, Version 3, HHSA Psychiatric Health Facility RFP Award to Telecare
2) 11/04/14, 14-0517, Version 2, Psychiatric Health Facility Agreement with Telecare
3) 08/13/19, 19-1156, HHSA Psychiatric Health Facility RFP Award to Telecare
4) 12/17/19, 19-1397, PHF Telecare Agreements 4330 and 4332
5) 01/23/24, 23-1635, HHSA Telecare PHF C4330 A2
6) 05/20/25, 25-0939, HHSA Behavioral Health Continuum Infrastructure Program Resolution Round 1
OTHER DEPARTMENT / AGENCY INVOLVEMENT:
County Counsel, Human Resources, Procurement and Contracts, and Risk Management.
CAO RECOMMENDATION:
Approve as recommended.
FINANCIAL IMPACT:
There is no Net County Cost associated with this agenda item. Sufficient appropriations were included in the Fiscal Year (FY) 2025-26 Budget and will be included in future budgets for the term of the Agreement.
CLERK OF THE BOARD FOLLOW UP ACTIONS:
Clerk of the Board to obtain signature of Chair on original Amendment III to Agreement for Services 4330.
STRATEGIC PLAN COMPONENT:
N/A
CONTACT:
Olivia Byron-Cooper, MPH, Director, Health and Human Services Agency