To: Board of Supervisors
From: Dr. Grant Colfax, Health Services Director
Report Title: Contract #23-915 with Optum Insight, Inc.
Recommendation: Recommendation of the County Administrator
RECOMMENDATIONS:
APPROVE and AUTHORIZE the Health Services Director, or designee, to execute on behalf of the County a Pharmacy Services Agreement (County Contract #23-915) with Optum Insight, Inc., a Delaware corporation, in an amount not to exceed $6,000, to provide its pharmaceutical drug claims regulatory compliance software and services to Contra Costa Health Information Systems Unit for the period from November 3, 2026 through November 2, 2029, and for successive one (1) year terms thereafter until terminated pursuant to the terms of the agreement.
FISCAL IMPACT:
Approval of this Contract will result in contractual service expenditures of up to $6,000 over a three-year period and will be funded 100% by Hospital Enterprise Fund I revenues.
BACKGROUND:
This Contract meets Contra Costa Health (CCH)’s needs by enabling the submission of complete, accurate, and timely encounter data for services provided to CCH Detention Health’s Medi-Cal-enrolled beneficiaries by causing its transmission of prescription (Rx) claims for payment and reimbursement of covered drugs, specific medical supplies, and enteral nutrition products to be in accordance with the California Department of Health Care Services (DHCS) Medi-Cal Managed Care Encounter Data Reporting of procedures, data element standards, formats, codes, protocols and edits in accordance with National Council Prescription Drug Programs (NCPDP) standards and services specifications. Under federal regulations, DHCS contractually requires Medi-Cal Managed Care Plans to process encounter data using national standard transactions and NCPDP standards to meet state and federal Medicaid monitoring and reporting requirements and to accommodate receipt of ICD-10 diagnosis codes in accordance with Health Insurance Portability and Accountability Act (HIPAA) requirements. Currently, Epic Hosting, LLC, CCH’s Electronic Health Records (EHR) provider, pharmacy subsystem Epic Willow, can generate NCPDP-formatted claims but not claims to DHCS, which requires all Medi-Cal Rx claims to be routed through an approved pharmacy switch. Optum’s pharmacy switch, provided through its national transaction network, RxConnect, enables secure, compliant transmission of these claims to DHCS, ensuring regulatory compliance, supporting CCH Detention Health’s expanded billing responsibilities under the California Advancing and Innovating Medi-Cal (CalAIM) initiative, and enabling secure transmission of pharmacy claims to Medi-Cal Rx. This capability will also generate new reimbursement revenue for the County by enabling CCH to bill Medi-Cal for eligible pharmacy services provided under the CalAIM Justice-Involved (JI) Initiative.
This Contract supports CCH Detention Health Program’s implementation of the CalAIM JI Initiative, which expands Medi-Cal coverage for medical, re-entry, and pharmacy services delivered up to 90 days before an incarcerated individual's release, including medications dispensed at discharge. As such, a timely claim submission is essential for reimbursement under the initiative. A summary of service contract deliverables, including measurable outcomes required of the vendor to be monitored by the department in compliance with Section III(B)(6) of the Purchasing Policy (AB600.4), include implementation of the pharmacy switch and completion of successful transactions. This Contractor was approved by CCH Personnel to ensure there is no conflict with labor relations.
Under this new County Contract #23-915, the parties will execute a Pharmacy Services Agreement (including a HIPAA Business Associate Addendum) for the implementation of Optum’s pharmacy switch needed to transmit encounter data for services provided to CCH Detention Health’s Medi-Cal-enrolled beneficiaries, through November 2, 2029, and for successive one (1) year terms thereafter until terminated pursuant to the terms of the agreement. This Pharmacy Services Agreement limits the Contractor’s liability to the fees paid by the County in the twelve months preceding such claim, except for breaches of confidential or Protected Health Information. The Contract requires Optum to maintain $10,000,000 in cyber-liability insurance and obligates County to indemnify the vendor against any taxes imposed on the purchases under the Contract, except taxes based on vendor’s net income.
CONSEQUENCE OF NEGATIVE ACTION:
If this Contract is not approved, the County will not gain access to the Contractor’s support services and will therefore be unable to electronically transmit encounter data for services provided to CCH Detention Health’s Medi-Cal-enrolled beneficiaries to DHCS, causing regulatory non-compliance, loss of revenue concerning Medi-Cal for eligible pharmacy services provided under the CalAIM JI Initiative, and ultimately, a negative effect on patient care.