Agenda Item   



                                                                                                                        ASR Control  23-000973




legal entity taking action:

Board of Supervisors

board of supervisors district(s):


SUBMITTING Agency/Department:

Health Care Agency   (Approved)

Department contact person(s):

Annette Mugrditchian (714) 834-5026 



Veronica Kelley (714) 834-7024



Subject:  Renewal of Contract for Inpatient Behavioral Health Services


     ceo CONCUR

County Counsel Review

Clerk of the Board


Approved Agreement to Form




3 Votes Board Majority




    Budgeted: N/A

Current Year Cost:  N/A

Annual Cost: FY 2024-25 $16,695,000
FY 2025-26 $16,695,000




    Staffing Impact:


# of Positions:           

Sole Source:   N/A

    Current Fiscal Year Revenue: N/A

   Funding Source:    State: 100% (1991 Realignment and 2011 Realignment)

County Audit in last 3 years: No

   Levine Act Review Completed: Yes


    Prior Board Action:         12/20/2022 #17, 12/14/2021 #S39N






Approve Amendment No. 2 to renew the Contract with Aliso Ridge Behavioral Health, LLC for provision of Inpatient Behavioral Health Services for the term July 1, 2024, through June 30, 2026, for an amount not to exceed $33,390,000, for a revised cumulative contract total amount not to exceed $62,005,000.



Authorize the County Procurement Officer or Deputized designee to execute Amendment No. 2 to the Contract with Aliso Ridge Behavioral Health, LLC, as referenced in the Recommended Action above.







Approval of Amendment No. 2 with Aliso Ridge Behavioral Health, LLC, for the provision of Inpatient Behavioral Health Services will provide services to mentally ill youth and adults to assist them in successfully reaching psychiatric stabilization to be discharged or transferred to a lower level of care.







On December 14, 2021, your Honorable Board of Supervisors (Board) approved the contract with Aliso Ridge Behavioral Health, LLC (Aliso Ridge) for the provision of Inpatient Behavioral Health Services. The term of this contract started upon execution of all authorized signatures, February 12, 2022, through June 30, 2024.   


On December 20, 2022, the Board approved Amendment No. 1 to increase the amount not to exceed due to the unanticipated volume of services being provided to adults, ages 22 – 64 years old, experiencing a mental health crisis being admitted to Aliso Ridge. This Amendment will allow services to continue for the term of July 1, 2024 through June 30, 2026. Prior to contract expiration, the Health Care Agency (HCA) plans to issue a solicitation to continue services.  


Part of the Contract with Aliso Ridge is compensated directly from the Department of Health Care Services (DHCS), as indicated in the table below under Pay Source. There are two separate rates for acute psychiatric inpatient hospitalization: 1) a negotiated rate for Acute hospitalization days, and 2) an Administrative Day Rate, which is set by DHCS. Administrative days are inpatient stay days for clients who no longer require acute psychiatric hospital care and are awaiting placement in subacute or post-acute care.   


As noted in the table below, DHCS does not cover acute inpatient hospitalization costs in Institute for Mental Disease (IMD) facilities for individuals ages 22 – 64 years old. Therefore, this client population is compensated by the County of Orange (County) through HCA. 


Bed Rates

Age Served

Negotiated Acute Bed Rate

Administrative Day Rate

Pay Source

12-17 years old


Set by DHCS


18-21 years old


Set by DHCS


22-64 years old


Set by DHCS


65 + years old


Set by DHCS



Scope of Services

Aliso Ridge provides Inpatient Behavioral Health Services to seriously emotionally disturbed and/or acute mentally ill youth aged 12 – 17 years, adults aged 18 – 64 years and/or older adults aged 65 and older, who may experience co-occurring medical/substance use diagnoses and who are experiencing a behavioral health crisis. These individuals may be deemed a danger to themselves and/or others, or gravely disabled and require this highly restrictive level of care to ensure the safety of themselves and/or others. Aliso Ridge provides services to any individual experiencing a behavioral health crisis requiring acute psychiatric hospitalization, either on an involuntary or voluntary status. Aliso Ridge accepts referrals from anywhere in Orange County, including the County Crisis Assessment Teams, County and contracted outpatient clinics, Full-Service Partnerships, Law Enforcement, Emergency Departments, County and contracted Crisis Stabilization Units (CSUs) and self-referred walk-ins. Referrals from County and County-contracted CSUs are prioritized for admission.    


These inpatient services are recovery oriented, and trauma informed. The staff engage clients in a non-coercive way and focus on assisting clients to reach psychiatric stabilization to be discharged or transferred to a lower level of care as appropriate. Services include, but are not limited to, the following: a series of medical, physical, and psychiatric assessments to determine the individual’s treatment needs, psychiatric medication evaluation and ongoing monitoring; individual, group and collateral therapies, supportive services, psychoeducational support, continuing care and discharge planning and referral and linkage to aftercare behavioral health providers for continued treatment.   


Performance Outcomes

The following data is reported to DHCS during yearly audits of the HCA Mental Health and Recovery Services system of care. While DHCS monitors acute psychiatric hospital utilization, performance objectives for this measure are not set. Aliso Ridge hospital utilization will continue to be monitored through monthly reporting of hospital admissions and rates of re-hospitalization within seven and thirty days of discharge. 


Medi-Cal Beneficiary Admissions  


FY 2021-22* 

FY 2022-23 

FY 2023-24 (YTD**) 

Youth (12- 21 years) 




Adult (22 – 64 years) 




Older Adult (65 + years) 

Total Admissions 




*Services began on February 12, 2022

** YTD is July – October 



FY 2021-22* 

FY 2022-23 

Total Admissions    



Total Readmissions within 7 Days    

8 (7.3%)  

133 (10.7%)    

Total Readmissions within 30 Days    

15 (13.6%)  

272 (21.8%) 

*Services began on February 12, 2022


FY 2023-24 YTD (July – October) 






Total Admissions Per Month  





Readmissions within 7 Days  

6 (7.4%)  

12 (8.7%)  

20 (14.9%)  

13 (8.6%)  

Readmission within 30 Days  

9 (11.1%)  

20 (14.5%)  

36 (26.9%)  

32 (21.2%) 


After opening in February 2022, Aliso Ridge continued hiring licensed staff to allow to continue to open beds until max bed capacity was reached in FY 2022-23. Since all beds have been opened, the expectation is for admissions numbers to remain stable.


The Contract does not currently include subcontractors or pass through to other providers. See Attachment B for Contract Summary form. The Orange County Preference Policy is not applicable to this Amendment.


Contractor’s performance has been confirmed as satisfactory. HCA has conducted due diligence on Contractor and has verified there are no concerns to address with respect to Contractor’s ownership/name, litigation status or conflicts with County interests. 


HCA requests that the Board approve Amendment No. 2 with Aliso Ridge Behavioral Health, LLC, for the provision of Inpatient Behavioral Health Services, as referenced in the Recommended Actions.






Appropriations for this Amendment will be included in Budget Control 042 FY 2024-25 Budget and will be included in the budgeting process for future years. 


Should services need to be reduced or terminated due to lack of funding, these Contracts contain language that allows HCA to give 30 days’ notice to either terminate or renegotiate the level of services provided. The notice will allow HCA adequate time to transition or terminate services to clients, if necessary.












Attachment A – Amendment No. 2 to Contract MA-042-22010732 for the Provision of Inpatient Behavioral Health Services
Attachment B - Contract Summary Form
Attachment C - Redline version of Attachment A