Memorandum
Date: July 8, 2025
To: The Honorable Lake County Board of Supervisors
From: Elise Jones, Director of Behavioral Health Services
Subject: Consideration of Approval of the Agreement Between County of Lake and Crestwood Behavioral Health, Inc. for Adult Residential Support Services and Specialty Mental Health Services for Fiscal Year 2025-26 in the Amount of $1,200,000.
Executive Summary:
Lake County Behavioral Health Services (LCBHS) is requesting Board approval to enter into an agreement with Crestwood Behavioral Health, Inc. for Fiscal Year 2025-2026. This agreement, not to exceed $1,200,000, provides essential access to Adult Residential Support Services and Specialty Mental Health Services (SMHS) for Lake County Medi-Cal beneficiaries with serious mental illness (SMI) and co-occurring disorders who require a structured, intensive treatment environment.
In Fiscal Year 2024-2025, Crestwood served 20 unduplicated Lake County clients across various levels of care, supporting complex discharge planning needs and offering a critical step-down option from inpatient psychiatric hospitalization. The vast majority of these individuals are on LPS Conservatorship. These placements reduce unnecessary hospitalization and help stabilize individuals in community-based settings appropriate to their level of need.
Crestwood operates over 35 licensed facilities across California, including Adult Residential Facilities, Social Rehabilitation Centers, and Psychiatric Health Facilities (PHFs). These facilities provide a continuum of care, including recovery-oriented treatment, trauma-informed rehabilitation, geropsychiatric care, and services for individuals with neurobehavioral conditions.
This contract supports the County’s obligations under the Mental Health Plan (MHP) as defined in the California Code of Regulations (CCR), Title 9, and is consistent with Medicaid Managed Care requirements under 42 CFR Part 438. As a designated MHP, LCBHS is responsible for ensuring that medically necessary SMHS are provided to eligible beneficiaries in accordance with the 1915(b) Waiver, the State’s Medi-Cal Specialty Mental Health Services Consolidation Waiver, and associated Special Terms and Conditions issued by the Department of Health Care Services (DHCS).
Crestwood shall adhere to all federal and state compliance requirements, including but not limited to:
• CCR, Title 9, Sections 1810.435, 1850.210 - Provider selection, compliance, and grievance processes
• Welfare & Institutions Code §5325 - Client rights
• HIPAA and HITECH Act - Protection of health information
• 42 CFR §§422.128, 438.100, and 438.230 - Advance directives, client rights, and audit access
• Deficit Reduction Act of 2005 and the Federal and State False Claims Acts - Fraud, waste, and abuse compliance
• County’s Cultural Competency Plan & National CLAS Standards - Equity in service delivery
The agreement includes defined service authorizations, clear expectations for documentation, record retention, audit readiness (including rights of DHCS, CMS, and HHS Office of Inspector General), and detailed fiscal and compliance provisions. Services must be preauthorized by LCBHS, and monthly invoices must include client-level documentation. Rates vary by facility type and level of care (Patch 1-5, PHF, Social Rehab), with itemized rates in Exhibit B.
The term of the agreement is July 1, 2025, through June 30, 2026, with the option to continue services on a month-to-month basis if necessary. County reserves the right to terminate the agreement with 30 days' written notice or upon non-appropriation of funds.
Approval of this agreement ensures Lake County maintains access to appropriate step-down and long-term care placement options for individuals requiring high levels of care, especially in light of ongoing challenges with inpatient psychiatric bed capacity and discharge planning statewide.
If not budgeted, fill in the blanks below only:
Estimated Cost: $1,200,000.00__ Amount Budgeted: ________ Additional Requested: ________ Future Annual Cost: ________
Purchasing Considerations (check all that apply): ☐ Not applicable
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☐ Economic Development ☐ Infrastructure ☐ County Workforce
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Recommended Action: Approve Agreement between the County of Lake and Crestwood Behavioral Health, Inc. for the provision of specialized mental health services for Fiscal Year 2025-2026 in the Amount of $1,200,000 and Authorize the Board Chair to Sign.