Date: October 20, 2026
To: The Honorable Lake County Board of Supervisors
From: Elise Jones, Director of Behavioral Health Services
Subject: Approve Amendment No. 1 to Participation Agreement No. 3910-CMRCM-
2023-LC with the California Mental Health Services Authority (CalMHSA) to add Medi-Cal
Revenue Cycle Management Billing and Accounts Receivable Services through March 20,
2029, for a total additional cost of $194,870.13, and authorize the Chair to sign
Lake County Behavioral Health Services (LCBHS) requests approval of Amendment No. 1 to Participation Agreement No. 3910-CMRCM-2023-LC with the California Mental Health Services Authority (CalMHSA) to add Medi-Cal Revenue Cycle Management Billing and Accounts Receivable services through the remainder of the existing agreement term ending March 20, 2029, for a total additional cost not to exceed $194,870.13.
The County entered into the original Participation Agreement with CalMHSA in June 2023. The existing agreement provides State Reporting services on behalf of the County, including the preparation and submission of required California Department of Health Care Services (DHCS) reporting for mental health and substance use disorder programs. The original agreement remains in effect through March 20, 2029.
Amendment No. 1 expands the services provided under the existing Participation Agreement by adding Monthly Revenue Cycle Management - Billing and Accounts Receivable Cycle Support. These services are in addition to the State Reporting services already provided by CalMHSA and do not extend the term of the original agreement.
Under the expanded scope of services, CalMHSA will assist LCBHS with month-end billing and accounts receivable processes required by DHCS. Services include identification of pre-billing errors; coordination with County staff to resolve identified issues; generation of initial and supplemental claims; submission of Medicare and Medi-Cal claims; generation of applicable secondary payer claims; processing of electronic remittance information; denial management; rebilling; and staff training and support.
For Medi-Cal, CalMHSA will generate electronic claims for both mental health and substance use disorder programs and submit those claims directly to DHCS on behalf of the County. For Medicare, CalMHSA will generate and submit claims to the appropriate fiscal intermediary. CalMHSA will also generate claims for applicable secondary payers. Other Health Coverage CMS-1500 files will be prepared by CalMHSA for County staff to print and submit.
CalMHSA will obtain Medicare and Medi-Cal electronic remittance information and post the transactions into the County’s SmartCare Electronic Health Record. CalMHSA will also coordinate with County staff to address denied claims, generate and submit rebilled claims, and assist with managing denials through an appropriate conclusion.
The Amendment does not transfer all billing responsibility to CalMHSA. LCBHS remains responsible for ensuring that information entered by County staff is timely, accurate, and complete so that CalMHSA can successfully submit electronic claims and required files.
CalMHSA will provide training and support, review electronic submissions for HIPAA compliance, assist with denial monitoring, and work with County staff to establish procedures for the creation and posting of billing files.
The addition of Revenue Cycle Management services is intended to strengthen LCBHS billing and accounts receivable processes by providing dedicated support for claim generation, claim submission, remittance posting, denial resolution, and rebilling, while allowing County staff to remain focused on the accuracy and completeness of source documentation and billing data.
The estimated FY 2026-27 salary and benefit cost associated with the vacant 1.0 accountant position previously held by staff that retired earlier this year was approximately $120,366.12. The full annual FY 2026-27 cost of the CalMHSA Revenue Cycle Management services is $68,510.00, which is approximately $51,856.12 less than the estimated annual salary and benefit cost of filling the vacant position. CalMHSA will prorate the FY 2026-27 Revenue Cycle Management fee based on the effective date of the executed Amendment; therefore, the actual FY 2026-27 contract cost will be less than the full $68,510.00 annual amount depending on the date the Amendment becomes effective.
The Revenue Cycle Management services will be funded using available Behavioral Health resources, including salary and benefit savings associated with the vacant position and applicable Medi-Cal administrative reimbursement for eligible administrative activities. LCBHS will claim allowable administrative costs to DHCS in accordance with applicable Medi-Cal claiming requirements. Any portion of the contract cost that is not eligible for Medi-Cal administrative reimbursement will be supported by other available Behavioral Health revenues. There is no impact to the County General Fund associated with this item.
The total additional cost of Amendment No. 1 is not to exceed $194,870.13 for Revenue Cycle Management services provided through the remainder of the existing Participation Agreement term ending March 20, 2029. The Amendment establishes the following maximum costs:
• July 1, 2026 through June 30, 2027: $68,510.00, to be prorated based on the Amendment execution/effective date
• July 1, 2027 through June 30, 2028: $71,935.50
• July 1, 2028 through March 20, 2029: $54,424.63
Total Amendment No. 1 Cost: $194,870.13
The Revenue Cycle Management fee is subject to a five percent annual increase. The rate is also based on the County’s current transaction volume and may be adjusted if there are significant increases or decreases in the number of transactions. County staff support related to Medi-Cal claims and State Reporting, including communications with clinicians, issue resolution, and questions and inquiries, is included at no additional charge.
CalMHSA will invoice the County quarterly for the services provided under the Amendment, and payment is due within thirty days of receipt of each invoice. All other provisions of the existing Participation Agreement that are not modified by Amendment No. 1 remain in full force and effect.