Lake County Behavioral Health Services (LCBHS) requests approval of an Agreement with Crestwood Behavioral Health Inc. for Fiscal Year 2026-2027 to provide adult residential support services and Specialty Mental Health Services for eligible Lake County clients.
Crestwood operates multiple specialized behavioral health facilities throughout California, including Adult Residential/Social Rehabilitation facilities, Skilled Nursing/Special Treatment Program facilities, Mental Health Rehabilitation Centers, and Psychiatric Health Facilities. These facilities provide structured residential, rehabilitation, psychiatric, and specialized behavioral health services for individuals with significant behavioral health and functional needs.
These services are necessary for clients with severe and persistent mental health needs who require structured residential or facility-based care that cannot be safely or appropriately provided in a lower level of care or through locally available outpatient or community-based services. The Agreement allows LCBHS to access specialized placements and levels of care based upon individual client need and County authorization.
Crestwood has historically provided residential and facility-based behavioral health placements for Lake County clients requiring specialized treatment, stabilization, and structured support. Prior contract history and utilization demonstrate the continued need for these services.
For Fiscal Years 2022-2025, Crestwood contract maximums totaled $1,200,000 across Adult Residential, Mental Health Rehabilitation Center, and Skilled Nursing/Special Treatment Program services. Actual expenditures totaled approximately $1,181,392.61, representing approximately 98.4% of the available contract maximum.
For Fiscal Year 2025-2026, the Crestwood contract maximum totaled $1,200,000 across Mental Health Rehabilitation Center and Skilled Nursing/Special Treatment Program services. Based on the fiscal worksheet reviewed in preparation for this Agreement, expenditures totaled approximately $515,799, with approximately $684,201 remaining at the time of review. Utilization data also reflected a decrease in total bed days from 6,494 in Fiscal Year 2023-2024 to 5,415 in Fiscal Year 2024-2025, a reduction of 1,079 bed days, or approximately 16.6%.
Based on recent utilization and expenditure trends, the proposed Fiscal Year 2026-2027 contract maximum has been reduced to $900,000, which is $300,000 less than the prior $1,200,000 contract maximum. The reduced maximum preserves access to necessary specialized placements while more closely aligning the Agreement with recent utilization and expenditure levels.
The Agreement requires prior written County authorization for placements, levels of care, bed holds, one-to-one supervision, private room conversions, patch levels, and other supplemental services. County authorization must identify the applicable client, facility, service or level of care, authorized duration, applicable rate, and other conditions of authorization. This provides the County with additional oversight of placement utilization and costs.
The Agreement also strengthens utilization review and discharge planning requirements. Crestwood must begin discharge and transition planning at admission and participate with the County in documented monthly utilization and level-of-care reviews. Continued placement beyond the County-authorized period requires prior written County authorization. These requirements are intended to ensure that clients remain at the authorized level of care only as long as clinically appropriate and that appropriate transition or lower-level-of-care options are actively pursued.
Crestwood is also required to provide monthly placement and utilization reporting that includes client census, admission and discharge information, authorized versus billed days, supplemental services, clinical review information, discharge and transition planning, incidents, grievances, appeals, Notices of Adverse Benefit Determination, and denied, disallowed, or voided claims. The County may withhold payment for incomplete invoices or missing required utilization documentation.
The Agreement includes fiscal controls requiring invoices and supporting documentation to identify the applicable client, facility, service, authorization, rate, billing classification, and other information necessary for the County to validate payment. The Agreement also includes audit, recoupment, compliance, and documentation provisions intended to protect the County from payment of unauthorized, unsupported, denied, or disallowed costs.
Funding for this Agreement will be provided through available Behavioral Health revenues and Realignment, as applicable to the services and individual placements provided. Certain Mental Health Rehabilitation Center and other IMD-related placement costs are identified in the Agreement as County-only expenditures. Certain Skilled Nursing/Special Treatment Program services may utilize applicable Medi-Cal or other third-party reimbursement, with the County responsible for authorized supplemental or County-only amounts as identified in the Agreement. Available client, Medi-Cal, Medicare, managed care, commercial insurance, or other third-party resources are required to be utilized when applicable. No additional County General Fund contribution is anticipated.
Due to the specialized nature of the residential, rehabilitation, and behavioral health services provided, this Agreement is exempt from formal competitive solicitation pursuant to Section 2-38.2(2) of the County Purchasing Policy/Code for specialized professional services.