Approve third amendment to Agreement No. 23-318 with Granite Wellness to add funding in the amount of $275,000 for 2025-26, increasing the maximum payment obligation to $1,737,500 for the period of January 1, 2024 through June 30, 2026; to include provisions regarding repayment obligations to the County; and to update rates effective July 1, 2025 for the provision of Substance Use Disorder (SUD) adult continuum of care services. (No general fund impact) (Mórales)

The County entered into an agreement with the California Department of Health Care Services (DHCS) to provide Drug Medi-Cal Organized Delivery System (DMC-ODS) substance use disorder (SUD) treatment services to eligible clients. DMC-ODS is a program for organized SUD services to Medi-Cal eligible individuals with SUD residing in a county that has elected to participate in the DMC-ODS. The program provides beneficiaries with access to care and system interaction needed to achieve sustainable recovery. The County also receives funding from a variety of other federal and state funding streams for the provision of SUD treatment services to various client populations, which may include but is not limited to: Substance Abuse Prevention and Treatment Block Grant (SABG) Funds; Substance Abuse and Mental Health Services Administration (SAMHSA); CalWORKs and Child Welfare Services (CWS) funding; 2011 Realignment; AB109 Revenue, FFP, and Opioid Settlement funds.

SUD Continuum of Cares services include:

These services are provided to any eligible Yolo County resident referred through an access point established by Yolo County or directly requesting services through a provider and include, but not limited to, the following populations/programs:

Contracting History:
On October 13, 2023, the Deputy Director/Manager of Procurement or designee approved a single source procurement for Granite Wellness to provide withdrawal management, low intensity residential, high intensity residential, perinatal residential services, care coordination, and clinician consultation services.  

On September 13, 2024, the Deputy Director/Manager of Procurement or designee approved a second single source procurement allowing the addition of two new scopes for FY 2024-25 that include outpatient services and recovery residence (details below).

On or about January 12, 2024, the County and Granite Wellness entered into Agreement No. 23-318 (“the Agreement”) for withdrawal management, low intensity residential, high intensity residential, perinatal residential services, care coordination, and clinician consultation services.

On or about May 7, 2024, the County exercised its option to extend the Agreement per its terms for FY 2024-25.

On or about September 24, 2024, the County amended the Agreement to add funding to FY 2023-24 to cover remaining fiscal year 2023-24 invoices. The additional funding for FY 2023-24 was needed due to an increase utilization in services that were greater than projected.

On or about November 3, 2024, the County exercised its option to extend the Agreement per its terms for FY 2025-26.

The approval of this amendment will add funding for FY 2025–26 and update rates effective July 1, 2025. This amendment also includes provisions regarding repayment obligations to the County. When DHCS increases rates, HHSA elects to pass these increases through to contracted providers. Per Minute Order 25-35, dated May 20, 2025, the Board approved allowing the HHSA Director to sign amendments for rate increases of up to four percent (4%). This rate increase exceeds four percent (4%) compared to FY 2024–25 rates. Please see Att. A. Third Amendment for the updated rate tables.

The additional funding for FY 2025–26 is necessary to meet the local demand for referrals to withdrawal management, perinatal residential services, and ASAM 3.1 and 3.5 residential services. We have experienced a threefold increase in referrals due to new state initiatives, Proposition 36, and other state mandates.

Performance Measures included in this Agreement are as follows:
The Performance Measures were included in the underlying Agreement and are not being revised at this time (see Att. B. Performance Measures). Granite Wellness has not performed to HHSA’s satisfaction under this Agreement. The primary deficiencies have been related to documentation, which the County has communicated to the Contractor. Granite Wellness has agreed to address and correct these performance deficiencies moving forward. During FY 2023–24, 70% of referrals to Granite Wellness resulted in successful intakes. Additionally, Granite Wellness has strengthened its aftercare follow-up and coordination with outpatient services. The Center also reported an increase in successful treatment completions during the second and third quarters of FY 2023-24 compared to the previous six-month period. In FY 2024–25, a total of 15 unduplicated clients were served. Of these, there were 14 referrals or coordination efforts related to substance use disorder (SUD). Among these clients, 46% successfully completed their treatment plans, while 54% discontinued treatment before completion. Notably, 100% of clients reported a reduction in substance use upon completion of the treatment program.

County Counsel has approved this Agreement as to form.
Department of General Services, Procurement Division

A single source was deemed appropriate for these services because the County has a contractual obligation with the State to provide SUD continuum of Care services that include 3.1 residential, withdrawal management 3.2, residential 3.5 and perinatal services. County staff completed outreach to several agencies in the region and Granite Wellness is the only provider that offers perinatal services and is willing to contract for those services. They are the only perinatal provider in the region that is currently certified for Drug Medi-Cal delivery system services.

By contracting these services with Granite Wellness, the County is able to meet the state requirements of providing SUD services to all levels of care in a timely manner. The provider costs for these services align with County SUD budgets and set rates. Without single source approval, the County would not be able to meet the needs of Yolo County residents. County residents would be put at risk of not having timely access to SUD services, costly interventions, significant delays in treatment and adverse effects when needed.