Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Colleen Chawla, Chief, San Mateo County Health
Jei Africa, Director, Behavioral Health and Recovery Services
Subject: Agreement with 7th Ave Care Center LLC for Locked Psychiatric Care Services
RECOMMENDATION:
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Adopt a resolution authorizing an agreement with 7th Ave Care Center LLC for locked psychiatric care services, for the term of July 1, 2026 through June 30, 2027, in an amount not to exceed $2,331,500.
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BACKGROUND:
Mental Health Rehabilitation Centers (MHRCs), such as 7th Ave Care Center LLC (7th Avenue), provide locked psychiatric care for adults with serious and persistent mental illnesses. Counties are required by the State Department of Mental Health to pay a “basic rate” for skilled nursing/basic care for adults 18-64 years of age who are housed in MHRC facilities. The basic rates vary by geographic region and are set annually by the State Department of Health Care Services. Medi-Cal provides basic rate funding for individuals in locked facilities who are age 65 years and older. In addition to the basic rate, selected San Mateo County clients at MHRC facilities, such as 7th Avenue, may be authorized for supplemental payments, often referred to as “patches” or “enhanced rates” in order to provide augmented services based on the severity of an individual’s illness. Since 2002, 7th Avenue has contracted with Behavioral Health and Recovery Services (BHRS). This contract covers both the basic and enhanced rates.
DISCUSSION:
Under this agreement, 7th Avenue provides 18 locked beds for San Mateo County residents. BHRS funds two dedicated beds, which consistently maintain full occupancy. The remaining beds are utilized based on client need, with an average daily occupancy of 12 beds. 7th Avenue has demonstrated expertise in serving adults with serious and persistent mental illness, including individuals with co-occurring medical conditions who require a locked level of care. The program supports clients with complex behavioral health needs and has the capacity to accept individuals transitioning directly from state hospital placements.
The needs of the clients served by MHRC facilities, as well as the unique characteristics of the MHRC market, require specialized behavioral health services, coordinated care approaches, and providers with expertise in supporting individuals with complex mental health and long-term care needs. MHRC facilities like 7th Avenue have established expertise serving clients with complex behavioral health needs. However, California is currently confronting a shortage of MHRC facilities like 7th Avenue, which provides acute, psychiatric, and subacute beds within the State. This shortage results in high bed occupancy rates and long waitlists for placements, which means that clients stay at the more costly acute levels of care until an MHRC placement is available for them. San Mateo County clients continue to experience the detrimental effects of this MHRC bed shortage. 7th Avenue is one of the few MHRC providers in the greater Bay Area with the capacity and expertise to serve higher-acuity clients with complex behavioral health needs. As a result, access to these beds remains an essential component of relieving pressure on the County’s inpatient system and supporting timely transitions to appropriate levels of care.
Under Administrative Memorandum B-1, the selection of providers for residential services for mental health under Housing Services and Related Supports is exempt from the Request for Proposals requirement. A waiver request was reviewed by County Procurement, which recommended for submission to this Board for approval.
The resolution contains the County’s standard provisions allowing amendments of the County’s fiscal obligation by a maximum of $25,000 (in aggregate).
The agreement and resolution have been reviewed and approved by the County Attorney as to form.
It is anticipated that 77.8% of clients who receive locked psychiatric care will be maintained at the current level of care or discharged to a lower level of care.
PERFORMANCE MEASURE:
|
Measure |
FY 2025-26 Estimated |
FY 2026-27 Projected |
|
Percentage of clients who receive locked psychiatric care that are maintained at the current level of care or discharged to a lower level of care |
77.8% 14 of 18 clients |
77.8% 14 of 18 clients |
COMMUNITY IMPACT:
This contract will provide critical support to an underserved population of individuals with severe mental illness who require a secured, subacute rehabilitation setting to achieve stabilization and progress in their recovery. 7th Avenue has demonstrated a strong commitment to serving individuals with complex behavioral health needs and providing evidence-based, recovery-oriented treatment within a secure environment. Establishing this agreement will enhance the County’s continuum of care, improve client outcomes, and support broader system goals related to safety, recovery, and responsible stewardship of public resources.
FISCAL IMPACT:
The term of the agreement is July 1, 2026 through June 30, 2027. The amount of the agreement is not to exceed $2,331,500 for the one-year term. Funds in the amount of $2,331,500 have been included in BHRS FY 2026-27 Recommended Budget. Of that amount, it is anticipated that $2,098,350 will be funded by sales tax through realignment, and $233,150 will be Net County Cost.