Memorandum
Date: September 16, 2025
To: The Honorable Lake County Board of Supervisors
From: Elise Jones, Behavioral Health Director
Subject: Consideration of Behavioral Health Fiscal Recovery Plan and Request for Loan Repayment Extension
Executive Summary:
Lake County Behavioral Health Services (LCBHSis bringing forward this item to provide context to the Department's 9-month loan extension request.
This memorandum discusses recent cash flow challenges associated with statewide payment reforms, the County's Electronic Health Record (EHR) transition, and the structural shift in how Medi-Cal services are financed under CalAIM. Additionally, this memorandum covers recent mitigation steps and proposed next steps, which include a proposal to return in 10-weeks with a comprehensive fiscal repayment plan.
As described in more detail in the following memorandum, while LCBHS' core mission remains client care, the Department is laser-focused on achieving durable fiscal stability and independence. To that end, LCBHS is in the process of transitioning internal processes, contracts, and financial forecasting to stabilize cash flow, rebuild reserves, and repay the General Fund loan.
Background: Two Major Transitions in 2023
In 2023, two significant changes occurred simultaneously that depleted cash reserves:
* EHR Transition (March 2023): The Department implemented a new EHR system, requiring staff retraining and system reconfiguration before Medi-Cal claims could be billed correctly, resulting in an 8-month delay in billing reimbursement
* State Payment Reform (July 2023): In addition to new billing codes and requirements, the State shifted counties to a new Intergovernmental Transfer (IGT) reimbursement model, requiring significant cash on hand to receive revenues.
From March-December 2023, revenue totaled only $1.97 million, compared to $7-8 million expected, due to simultaneous billing delays from the EHR transition and the payment reform rollout.
Recent Insight: ...
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