To: Board of Supervisors
From: Dr. Grant Colfax, Health Services Director
Report Title: Contract #77-822 with MedImpact Healthcare Systems, Inc.
☒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 Service Agreement (County Contract #77-822) with MedImpact Healthcare Systems, Inc., a corporation, in an amount not to exceed $250,000,000, to provide hosted prescription drug benefit management and administrative services, to Contra Costa Health Plan (CCHP) Commercial and Medicare Advantage Dual Eligible Special Needs Plan (D-SNP) members for the period from July 14, 2026, through December 31, 2029, and for successive two (2) year-terms thereafter until terminated per the terms of the agreement.
FISCAL IMPACT:
This Contract will result in contractual service expenditures of up to $250,000,000 over a 3.5-year period and will be funded 100% by CCHP Enterprise Fund II revenues.
BACKGROUND:
This Contract meets the needs of the County by delegating a Pharmacy Benefit Manager and prescription pharmacy administrator for CCHP’s Commercial and Medicare Advantage D-SNP members prescription benefits. CCHP currently delegates its prescription pharmacy benefit administration to PerformRx, which will cease operations in California as of December 31, 2026. CCHP, as a health plan, offers prescription drug coverage to members enrolled in the County’s CCHP Commercial Plan A and Plan B medical benefit plans, as well as its Medicare Advantage D-SNP benefit plan. To fulfill its regulatory obligations as promulgated by the Department of Managed Health Care (DMHC) and the Centers for Medicare and Medicaid Services (CMS), CCHP has identified Contractor as an alternative PBM beginning in calendar year 2027.
This Contractor was approved by the Public Works Department’s Purchasing Division on March 2, 2026.
A summary of service contract deliverables, including measurable outcomes required of the Contractor to be monitored by the department in compliance with Section III (B)(7) of the Purchasing Policy includes the implementation of; access to, and support services concerning the software system in compliance with Section III(B)(7) of County Purchasing Policy. CCH Personnel approved this Contract to ensure no conflict with labor relations.
Under this new County Contract #77-822 the parties will execute a Service Agreement (including mutual indemnification) giving the County right to access and use of the proprietary software system, (MedImpact Software System) used by MedImpact in processing Claims, and preparing reports including computer programs and applications, system and program documentation, and other related documentation and services on behalf of CCHP.
Under the Contract, MedImpact’s liability is limited to an amount not to exceed the total Claims processing fees paid to MedImpact by the County to the date the claim is asserted, except for its indemnification obligations, and any claims that an unauthorized party accessed protected health information in the MedImpact-hosted system, which is capped at $10,000,000. The Contract requires MedImpact to maintain $10,000,000 in cyber-liability insurance.
Approval of Contract #77-822 will allow the Contractor to provide its hosted prescription drug benefit management and administrative software system to CCHP through December 31, 2029. The agreement automatically renews for successive two (2) year term(s) thereafter until terminated under the terms of agreement.
CONSEQUENCE OF NEGATIVE ACTION:
Failure to approve this Contract will not delegate MedImpact for the administration of CCHP’s pharmacy benefit for Commercial and Medicare lines of business. This will cause CCHP to fall out of compliance with federal and state regulatory oversight and monitoring requirements set by DMHC and CMS, which will negatively affect Contra Costa Health funding, operations and ultimately patient care.