Agenda 05-19-2026; 8-d - Renewal of Health Services Agreement with Southern Health Partners for Medical Services at the Orange County Detention Center

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Southern Health s `llr Partners March 19, 2026 Sheriff Charles Blackwood Orange County Sheriff's Office 106 East Margaret Lane Hillsborough, NC 27278 Re: Health Services Agreement Dear Sheriff Blackwood: I hope this letter finds you well and pleased with the program of services at the Jail provided by Southern Health Partners (SHP). I am writing to acknowledge annual pricing/terms for continuation of the inmate medical program for the July 2026-2027 contract period. We continue to see unprecedented wage inflation and competition for skilled nursing staff, commonly contending with local hospitals, facilities and agencies offering wage rates far in excess of our site budgets. This is making it necessary for us to account for now-current costs of providing competitive salaries/benefit packages to keep good nurses and maintain contract staffing levels. Labor costs are one very substantial area of our operating budget, among many other ever-increasing costs of doing business in correctional care. Therefore, SHP will need a rate adjustment on the contract this year. Additionally, with many of our existing contracts, there is a need for restructuring along the same lines as how our newer contracts are priced considering the now-current industry standard, with certain service items covered by SHP for inclusion in the cost pool, rather than under the base fees. For Orange County's contract, there is a need to shift the cost of medically generated hazardous waste to the cost pool. Going forward under the new arrangement, the costs for this item will still be paid for by SHP, with the County continuing to receive the benefit of SHP's bulk pricing discounts from our various vendors, but the amounts will be applied toward the cost pool accounting totals to accrue against the annual pool limitation. Only if the annual cost pool limit is used up fully for any given contract period, then at that point SHP would begin to seek reimbursement from the County for any costs in excess of the cost pool limit, as is done under our current normal practice. Costs for medically generated hazardous waste have run approximately a total of $440.00 over the last twelve months. Under this new structure, we can limit our annual increase to four percent (4%) on the base fee and per diem rate for the July 2026-2027 period, making use of the cost pool to help offset an otherwise higher annual adjustment that would be needed to get all operating cost-items and expenses adequately accounted for under the site budget if we were to continue under the existing terms. Be assured we take into consideration site-specific circumstances in reviewing each customer contract individually before formulating renewal pricing. Despite being faced with rising costs, we absorb as much as we reasonably can in an effort to support minimal annual adjustments for customers. 203 0 Ha rn 1 Ito n PI ace Blvd,Ste.140