Behavioral health director urges cautious repayment of $2M loan as county stabilizes billing

Lake County’s Behavioral Health director briefed the Board on June 17 about the fiscal consequences of statewide payment reform and a transition to a new electronic health record that left the county fronting large shares of cost while claim adjudication lagged.

Director Jones said service expansion under CalAIM and the need to front local share‑of‑cost payments significantly increased cash exposure. "We had to move forward to request $4 million in bridge loans to keep our operations afloat," Jones said, describing how the county repaid $2 million in March 2025 but still carries a $2 million balance to the general fund.

Jones described three drivers of the cash strain: expanded service units after CalAIM, the state’s IGT preload based on COVID‑era utilization (which under‑estimated current monthly needs), and state offsets/recoupments that reduced the county’s realignment receipts (realignment receipts were described as low as about 19% in FY24/25 after offsets). Those dynamics constrained the county’s ability to place sufficient IGT to clear Medicaid claims promptly.

Staff said available operating cash was roughly $3 million (including restricted funds) while contractor payables approached $7 million, mostly hospital invoices. Jones described corrective actions already taken: renegotiating contracts to lower pass‑through rates, shifting to strict fee‑for‑service contract terms, weekly billing and enhanced cash forecasting, and technical assistance from Boston Consulting Group and the California Mental Health Services Authority.

Jones presented two board options for the $2 million outstanding balance: (a) forgiveness as an investment in transformational behavioral‑health infrastructure, or (b) an affordable repayment plan that would not undercut the local share needed to draw down Medicaid‑reimbursable services. Multiple supervisors said forgiving the loan immediately would be imprudent and asked for a repayment plan; the board asked staff for a proposed repayment schedule at the June 23 meeting and asked for monthly BH billing/denial reporting to the board.

Amber Russell, BH program fiscal manager, added that medication‑assisted treatment services had to be staffed before billing mechanisms were available and that opioid settlement funds were later used in part to reimburse development costs for required MAT services; the board requested a detailed opioid settlement fund presentation on July 28.