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 Horizon Services, Inc. for Residential Substance Use Disorder Detoxification Services
RECOMMENDATION:
title
Adopt a resolution authorizing an agreement with Horizon Services, Inc. for residential substance use disorder detoxification services for the term of June 1, 2025 through June 30, 2027, in an amount not to exceed $8,438,078.
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BACKGROUND:
For over 35 years, Palm Avenue Detox (Palm Avenue), a program of Horizon Services, Inc. (Horizon), has been serving residents of San Mateo County. Horizon assists clients in connecting to ongoing substance use disorder (SUD) treatment programs, primary and psychiatric care, housing, and other health-related services.
In July 2019, Horizon began providing services under the Drug Medi-Cal Organized Delivery System (DMC-ODS) waiver, allowing Horizon and other providers to bill for many more services than they were previously able to.
In early 2021, the California Department of Health Care Services (DHCS) issued an Immediate Temporary Suspension Order (Order) on Palm Avenue’s license to operate for violations of the Health and Safety Code and applicable regulations and rules, subsequent to the death of a Palm Avenue client. In June 2021, DHCS and Horizon executed a Stipulated Settlement Agreement (SSA) to resolve all the issues pertaining to the Order. In the SSA, Palm Avenue agreed to remain closed through August 14, 2021, and could reopen thereafter under a probationary status for three years.
During the closure of Palm Avenue, Horizon completed an extensive reorganization and hired all new staff, from line staff to their Executive Director and Medical Director. Horizon also created new standard operating procedures, implemented new training requirements, and increased staffing levels to ensure client safety.
DISCUSSION:
Residential withdrawal management services are defined by DHCS as urgent. Clinically managed residential withdrawal management services, such as those offered by Palm Avenue, provide 24-hour support for moderate withdrawal symptoms that are not manageable in an outpatient setting. The services are medically necessary to protect life, to prevent significant illness or significant disability, or to alleviate severe pain. Behavioral Health and Recovery Services (BHRS) is required to provide these services per the DMC-ODS regulations.
The Palm Avenue program is a 22-bed co-ed residential withdrawal management treatment program facility with established expertise in serving clients who have SUD. It is the only program in San Mateo County offering this essential service, other than Our Common Ground, which has a six-person, male-only facility that is unable to sufficiently meet the needs of all San Mateo County residents.
Palm Avenue’s facility license was temporarily suspended by DHCS on May 22, 2024, and the facility was closed immediately due to DHCS finding violations of the Health and Safety Code and applicable regulations and rules. Horizon has appealed the suspension and requested an administrative hearing. During the appeal process, Palm Avenue remained closed.
During the closure of Palm Avenue, Horizon created enhanced safety and compliance standards to get their licensure reinstated. These improvements included the implementation of an updated safety plan, which focuses on rigorous staff training, enhanced monitoring protocols, and compliance with DHCS guidelines. These measures were designed to ensure the safety and well-being of both clients and staff. Palm Avenue’s licensure was reinstated due to these enhanced standards, and Palm Avenue reopened on October 28, 2024.
Effective January 29, 2024, Palm Avenue has become Incidental Medical Services certified within Drug Medi-Cal so that it can provide a higher quality of services to clients.
There continues to be a shortage of facilities in San Mateo County that specialize in residential services for SUD, leading BHRS to consider contracts with any and all qualified providers. These Housing Services and Related Supports are exempt from the competitive procurement process under Administrative Memo B-1.
The resolution contains the County’s standard provisions allowing amendment of the County’s fiscal obligations by a maximum of $25,000 (in aggregate).
The agreement and resolution have been reviewed and approved by the County Attorney as to form.
Successful discharge occurs when a program participant completes detoxification services and is in transition to the next appropriate level of care. Research shows that the longer participants are retained in an appropriate level of treatment, the more likely they are to achieve long-term recovery. A participant’s willingness to continue in treatment is a key element to successful stabilization and progress towards sustained recovery. It is anticipated that 95% of program participants will achieve a successful detoxification discharge.
PERFORMANCE MEASURE:
|
Measure |
FY 2024-25 Estimated |
FY 2025-26 Projected |
|
Percentage of program participants that achieve a successful detoxification discharge |
95% 629-638 Participants |
95% 629-638 Participants |
EQUITY IMPACT:
This contract will positively impact the behavioral health of low-income residents in need of SUD treatment services. Horizon offers bilingual and bicultural substance use treatment services in convenient locations across San Mateo County, with the aim of helping residents to achieve long-term wellness and recovery. Horizon is essential to assure equitable access to quality care for underserved and vulnerable people in San Mateo County. Most clients have co-occurring mental health needs and other complex needs, including homelessness, justice system involvement, and other physical health conditions.
To advance health equity, improve quality, and help eliminate health disparities, San Mateo County requires providers to comply with National Culturally and Linguistically Appropriate Services Standards. Each provider is required to submit an annual cultural competence plan that details current and future efforts to address the diverse needs of clients, families, and the workforce in San Mateo County.
FISCAL IMPACT:
The term of the agreement is June 1, 2025, through June 30, 2027. The amount of the agreement is not to exceed $8,438,078 for the 25-month term. For FY 2025-26 the maximum amount is $4,001,400 and is included in the BHRS FY 2025-26 Recommended Budget. Of that amount, it is anticipated that $2,019,790 is funded with Federal Financial Participation Medi Cal revenue, $630,323 with 2011 Realignment, $47,244 with Substance Use Prevention Treatment, and Recovery Services Block Grant, $209,000 with Mental Health Services Act and $1,095,043 with Net County Cost. Similar arrangements will be made for FY 2026-27.
BHRS is changing the methodology used to pay contracted providers that are currently paid on a 1/12th, monthly advance. Specifically, BHRS is changing the payment methodology for most contracts to fee-for-service and payments will be made in arrears. Additionally, in previous fiscal years, BHRS was granted an exception to pay providers during the accounting “blackout period” in July and August. This exception will no longer be available.
To facilitate these changes, BHRS has agreed to one three-month pre-pay for July-September of FY 2025-26 to qualifying providers. This payment will be reconciled in November. This payment must be made in June 2025. However, to make this payment, an ATR is needed. One ATR for all the impacted contracts will be submitted on the May 6th, 2025 Board agenda. There will be no pre-pays in subsequent fiscal years.