To: Board of Supervisors
From: Dr. Grant Colfax, Health Services Director
Report Title: Novation Contract #24-794-8 (40) with John Muir Behavioral Health
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
APPROVE and AUTHORIZE the Health Services Director, or designee, to execute on behalf of the County Novation Contract #24-794-8(40) with John Muir Behavioral Health, a non-profit corporation, in an amount not to exceed $3,200,000, to provide inpatient psychiatric hospital services to County-referred adults and adolescents, for the period July 1, 2025 through June 30, 2026, which includes a six-month automatic extension through December 31, 2026, in an amount not to exceed $1,600,000.
FISCAL IMPACT:
Approval of this Novation Contract will result in annual budgeted expenditures of up to $3,200,000 for Fiscal Year 2025-26 and will be funded 100% by Mental Health Realignment funds.
BACKGROUND:
This Contract meets the social needs of County’s population by providing inpatient psychiatric hospital services to County-referred adults and adolescents. There are a limited number of acute-care inpatient psychiatric beds in California and this Contractor is one of the facilities in the state with the qualifications and capabilities to provide acute inpatient psychiatric care and is selected for admissions when it is the closest facility. This Contractor has been a longstanding partner, fostering a deep understanding of our Behavioral Health Services Department (BHSD) and organization's mission, values, and long-term objectives since May 1, 2000.
This Contract is entered into under and subject to the following legal authorities: 42 U.S.C. §§1396, §300e; §1395; California Welfare and Institutions Code §§14000, et seq.; California Health and Safety Code, §§1340, et seq.; California Government Code §§ 25209.6, 26227, and 31000. This Contract was approved by Health Services Personnel to ensure there is no conflict with labor relations. The Behavioral Health’s Quality Management, Utilization Management and Contract Monitor Staff meet on a regular basis to ensure monitoring and performance measures in the Contract are upheld. Per Administrative Bulletin 600.3, BHSD Physician services are exempt from solicitation requirements.
On September 24, 2025, the Board of Supervisors approved Novation Contract #24-794-8(39) with John Muir Behavioral Health, in an amount not to exceed $1,500,000, for the provision of inpatient psychiatric hospital services, for the period July 1, 2024 through June 30, 2025, which included a six-month automatic extension in an amount not to exceed $750,000 through December 31, 2025.
Approval of Novation Contract #24-794-8(40) replaces the automatic extension in the prior Contract and will allow the Contractor to continue to provide inpatient psychiatric hospital services through December 31, 2026. This Contract includes a mutual indemnification provision to hold harmless both parties for any claims arising out of the performance of this Contract. The Contract also required the parties to resolve any disputes through arbitration.
CONSEQUENCE OF NEGATIVE ACTION:
If this Novation Contract is not approved, County’s access to needed inpatient psychiatric hospital services for mental health clients will be reduced, which may lead to a delay in patient care.
CHILDREN’S IMPACT STATEMENT:
This program supports the following Board of Supervisors’ community outcome: “Communities that are Safe and Provide a High Quality of Life for Children and Families”. Expected program outcomes include a decrease in the need for inpatient care and placement at a lower level of care.