Memorandum
Date: December 9, 2025
To: The Honorable Lake County Board of Supervisors
From: Elise Jones, Director of Lake County Behavioral Health Services
Subject: Lake County Behavioral Health Services Fiscal Recovery Plan - Status Update and Board Endorsement of Ongoing Implementation
Executive Summary:
Lake County Behavioral Health Services (LCBHS) has taken significant steps to stabilize its financial position following the cash flow challenges created by delayed state reimbursements and the front-loaded cost structure of the Medi-Cal Intergovernmental Transfer (IGT) process.
Over the past several months, the Department has implemented a disciplined Fiscal Recovery Plan focused on three priorities:
1. Protect payroll and essential services.
2. Align provider payments to the timing of state receipts.
3. Build long-term fiscal controls to prevent recurrence.
To achieve these goals, LCBHS has:
* Developed a 12-week cash runway to forecast weekly inflows, payroll, and vendor payments.
* Adopted a receipt-linked disbursement policy, releasing payments only after the related state funds are received.
* Established a vendor prioritization framework that ensures life-safety, placement, and essential community providers are paid first.
* Begun weekly reconciliation with the Department of Health Care Services (DHCS) to track pending claims, state draws, and any payment offsets ("intercepts").
* Re-aligned major contracts under firm spending caps and pass-through ceilings to prevent cost overruns.
Despite ongoing state payment delays, these measures have prevented service disruptions, maintained payroll, and given the Department a predictable financial roadmap.
LCBHS is also collaborating with DHCS and other small counties on process improvements, including:
* A weekly payment tracker showing claim status from submission to state payment.
* Same-day notice of any intercepts or reductions.
* Clear processing time targets and transparency on how the state calculates...
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