Memorandum
Date: October 7, 2025
To: The Honorable Lake County Board of Supervisors
From: Elise Jones, Director of Behavioral Health
Subject: Consideration to Approve the Submission of the Attached Letter to the Department of Health Care Services (DHCS).
Executive Summary:
On August 15, 2025, the California Department of Health Care Services (DHCS) issued Lake County Behavioral Health a recoupment notice seeking recovery of funds for (1) Specialty Mental Health Services inpatient claims and (2) services provided to beneficiaries with Unsatisfactory Immigration Status. These recoupments reach back to claims from 2011-2020.
LCBH, in coordination with County Counsel, has formally protested this action, arguing that counties acted in good faith reliance on DHCS eligibility and claims systems, that many claims fall outside the statutory three-year audit window, and that DHCS has not provided claim-level detail or a formal appeal process. The protest requests rescission of the recoupments or, at minimum, an appeal pathway or State backfill of the disallowed claims.
If upheld, these retroactive recoupments would create substantial unbudgeted liabilities for the County and set a precedent that shifts State claiming errors onto counties. Staff recommends the Board receive this update and authorize continued coordination with County Counsel and CSAC to protect the County's fiscal interests.
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