Memorandum
Date: June 9, 2026
To: The Honorable Lake County Board of Supervisors
From: Elise Jones, Director of Behavioral Health Services
Subject: Approve Amendment No. 1 to the Agreement Between the County of Lake and Hilltop Recovery Services, Inc. for ASAM Residential Levels 3.1 & 3.5 and Intensive Outpatient Levels of Care 1.0 & 2.1 for Fiscal Year 2025-2026 increasing the compensation by $700,000, for a revised not-to-exceed amount of $2,700,000 and Authorize Chair of the Board to Sign
Executive Summary:
Lake County Behavioral Health Services is requesting approval of Amendment No. 1 to the Agreement between the County of Lake and Hilltop Recovery Services, Inc. for American Society of Addiction Medicine (ASAM) Residential Levels 3.1 and 3.5 and Outpatient/Intensive Outpatient Levels of Care 1.0 and 2.1 services for Fiscal Year 2025-2026. The original agreement was effective July 1, 2025, with a not-to-exceed amount of $2,000,000. Amendment No. 1 increases the agreement compensation by $700,000, for a revised not-to-exceed amount of $2,700,000.
Hilltop Recovery Services, Inc. provides medically necessary substance use disorder treatment services as part of Lake County Behavioral Health Services’ Drug Medi-Cal Organized Delivery System (DMC-ODS) continuum of care. These services include ASAM Level 1.0 outpatient treatment, ASAM Level 2.1 intensive outpatient treatment, and ASAM residential levels 3.1 and 3.5. These levels of care became increasingly important following Lake County’s implementation of DMC-ODS on July 1, 2024, which expanded the County’s responsibility to provide or arrange for a broader continuum of substance use disorder treatment services for eligible Medi-Cal beneficiaries.
The requested increase is due to higher-than-projected utilization of both residential and outpatient substance use disorder treatment services during Fiscal Year 2025-2026. Current invoiced and paid expenditures under the agreement total $1,990,422.27. Total projected expenditures through June 30, 2026, are estimated at approximately $2,022,875.04 based on current paid claims and average monthly invoiced amounts. The increased contract maximum provides sufficient expenditure authority to cover current paid claims, pending balances, claims in process, late-submitted claims, and final fiscal year-end reconciliation activity. Actual payment will remain limited to services rendered, documented, authorized when required, and payable under the agreement.
Fiscal year-to-date utilization data reflects significant service volume under this agreement. Through the Electronic Health Records dashboard we can report that Hilltop has served 137 clients, with 155 admissions, 164 discharges, and 12,800 total services. Services include both residential substance use disorder treatment facility services and independent clinic services. The dashboard reflects 7,359 services provided in a residential substance abuse treatment facility setting and 5,441 services provided in an independent clinic setting. By procedure group, services include assessment, care coordination, group counseling, individual counseling, peer support, residential DMC services, SUD crisis intervention, and non-billable but required service documentation activity.
Comparable historical expenditure trends demonstrate a significant increase in Hilltop utilization since implementation of the DMC-ODS continuum. Total expenditures for services provided by Hilltop Recovery Services, Inc. were approximately $560,298 in Fiscal Year 2023-2024 and approximately $1,775,075.69 in Fiscal Year 2024-2025. Average monthly expenditures increased from approximately $46,691 in FY 2023-2024 to approximately $147,922 in FY 2024-2025. This growth reflects increased utilization of medically necessary substance use disorder treatment services, including expanded use of residential and outpatient/intensive outpatient levels of care under DMC-ODS.
Lake County Behavioral Health Services continues to monitor utilization, medical necessity, and level-of-care appropriateness. Residential services require ASAM-based level-of-care determinations and authorization or continued stay review, as applicable. Clients are expected to transition to a lower level of care when clinically appropriate based on treatment progress, medical necessity, and available step-down options. The Department continues to work with providers to support appropriate movement across the continuum, including transitions from residential treatment to intensive outpatient, outpatient treatment, recovery supports, and other community-based services when clinically indicated.
Based on current projections, approximately $1,798,204 of the total contract expenditures are expected to be Medi-Cal reimbursable under the DMC-ODS program. Approximately $224,670 is anticipated to be funded through Substance Use Block Grant (SUBG) revenues based on average monthly invoiced amounts. The remaining non-federal share/local match obligation associated with Medi-Cal reimbursement will be supported through Behavioral Health realignment and other available Behavioral Health program revenues.
The estimated County Intergovernmental Transfer (IGT) or local share associated with the $700,000 amendment increase is approximately $350,000, assuming standard 50% federal financial participation for the Medi-Cal reimbursable portion. The estimated County IGT/local share associated with the full $2,700,000 agreement is approximately $899,102. Final local share costs may vary based on actual claims, aid-code mix, federal financial participation, denied or disallowed claims, and year-end reconciliation.
Costs associated with this amendment are already included within the approved Behavioral Health budget, and no additional budget adjustment is required. There is no impact to the County General Fund associated with this amendment. Costs associated with this agreement are funded through a combination of DMC-ODS Medi-Cal reimbursement, required County non-federal share/IGT supported by Behavioral Health realignment/program revenues, and allowable SUBG funding.
Approval of this amendment will allow Lake County Behavioral Health Services to maintain continuity of medically necessary residential, intensive outpatient, and outpatient substance use disorder treatment services for Lake County residents while supporting compliance with DMC-ODS access, medical necessity, authorization, documentation, and continuum-of-care requirements.
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FY 2025-26 YTD |
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Residential facility services |
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Independent clinic services |
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DMC Medi-Cal current balance |
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Recommended Action: Approve Amendment No. 1 to the Agreement Between the County of Lake and Hilltop Recovery Services, Inc. for ASAM Residential Levels 3.1 & 3.5 and Intensive Outpatient Levels of Care 1.0 & 2.1 for Fiscal Year 2025-2026 increasing the compensation by $700,000, for a revised not-to-exceed amount of $2,700,000 and Authorize Chair of the Board to Sign.