Sole Source Justification Form

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Bulletin Reference Number 27-444DHS-MIS44-B-52010

Requesting Agency/University Department of Human Services

Sole Source Justification Form - Part I Section I - General Information

Department/Bureau/Section: Division of Mental Health

Need Identified Date: Apr 1, 2026 Supply/Service Need By Date: Jul 1, 2026

Project Title: Community Health Administrative Services Organization (ASO)

Vendor: Carelon Behavioral Health

Provide a description of the supplies or services required:

The Department of Human Services/Division of Behavioral Health and Recovery (DHS/DBHR) is requesting a one-year sole economically feasible source (SEFS) contract with Carelon Behavioral Health) to assist DHS/DBHR with a variety of administrative activities associated with the statewide community mental health system founded by DHS/DBHR. Specifically, DHS/ DBHR requires assistance with: 1) tracking and monitoring mental health service delivery and the utilization and expenditure activities associated with the contracts awarded annually to the community-based providers, 2) quality enhancement and recovery and resiliency activities designed to provide the optimal outcome for consumers of mental health services and their families as well as the efficient and effective administration of the system; and 3) maintenance of an integrated data system including registration and authorization to support the management needs of DHS/DBHR. It is also required that staffing includes a dedicated Illinois IT lead.

Value: Estimated Value of Initial Term, this Change Order or Amendment: 3,225,270

Will this Sole Source amend a Professional or Artistic Services contract? Yes No

*Sole Source may not be used for amendments for Professional or Artistic Services if the amendment would increase the value by more than 5% of the initial award or extend the term by more than 60 days.

Type: New Sole Economically Feasible Source

Section II - Proposed Term

One-Time Purchase Term Contract

Estimated Contract Begin Date: Jul 1, 2026

Estimated Contract End Date: Jun 30, 2027

Number of Potential Renewals:

Length of Each Renewal in Months:

Total Value of All Renewals:

If a Term Contract, does the term, including renewals, exceed 12 months? Yes No

Section III - Funding Source Select the type of funding to be used (Check all that apply): State Appropriate Funds Federal Funds Other (Explain):

Section IV - Sole Source Justification

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Bulletin Reference Number 27-444DHS-MIS44-B-52010

Requesting Agency/University Department of Human Services

This purchase is economically only available from a single source primarily because it is: (If "Other" explain in one sentence)

Compatibility of Equipment, Accessories, Replacement Parts or Service

Are there secondary justification(s) for this sole source? Yes No

Another justification that this purchase is only available from a sole source is because it is:

Potential loss of approximately $29 million in federal grant funds.

Another justification that this purchase is only available from a sole source is because it is:

Section V - Purchase History

Has the Agency or University Purchased these supplies or services in the past? Yes No

Term Term From Term To Value Description Contract Number Type

1 Sep 21, 2017 Jun 30, 2022 15,104,154 Community Mental Health Administrative Services 45CRB01188 RFP

2 Jul 1, 2022 Jun 30, 2023 3,765,736.92 Community Mental Health Administrative Services 4100159255 Sole Source

3 Jul 1, 2023 Jun 30, 2024 3,916,367 Community Mental Health Administrative Services 4100176123 Sole Source

4 Jul 1, 2024 Jun 30, 2025 4,073,022 Community Mental Health Administrative Services 4100197604 Sole Source

5 Jul 1, 2025 Jun 30, 2026 4,235,942.04 Community Mental Health Administrative Services 4100214116 Sole Source

If more than 10, or if other comments, explain:

Section VI - Business Rationale

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Bulletin Reference Number 27-444DHS-MIS44-B-52010

Requesting Agency/University Department of Human Services

1. Provide a detailed explanation of the need for the supplies or services:

DHS/DBHR is the mental health authority for the State of Illinois and meets it responsibility through a network of state operated hospitals and the contracted community based providers. These responsibilities are contained in the Mental Health and Developmental Disabilities Administrative Act (20 ILCS 1705) which states in part: "The Department shall develop an effective, integrated system for delivering State-funded and State-operated services to persons with mental illness." (20 ILCS 1705/18.3) Failure to provide these services will preclude DHS/DBHR from fulfilling its responsibilities relative to the community-based (state-funded) network. DHS/DBHR does not have the resources available to properly comply with federal data reporting requirements and requires the use of an outside vendor with the capacity and resources to provide the requested data reporting requirements.

DHS/DBHR requires a vendor to provide the necessary oversight to ensure that consumers with pressing mental health needs receive the services they need to avoid untoward events for themselves or others and to improve the quality of their lives. When necessary, the vendor provides technical assistance to Community Mental Health Providers to submit registration information of individuals receiving services. Registration are submitted into a system through direct data entry and batch processes. The vendor maintains a web-based data collection system which holds information related to the consumers who receive publicly funded mental health services. This data is necessary for Division of Behavioral Health and Recovery to maintain roughly $29 million in Federal Block Grant funds. These activities allow DHS/DBHR to maintain a network of statewide service providers that protect the interest of mental health consumers and their families.

2. Provide a list and describe in detail the specifications required to satisfy the need:

• Implementing eligibility/enrollment/registration systems that meet DBHR criteria for services.

o Registration information and status o Classification of consumer groupings that indicate target, eligible and non-eligible priorities.

o Receive eligibility information as determined through existing systems. Populate this information into the system for use and reporting.

o Maintaining and analyzing the data collection system, as a component of a unified, integrated data system.

o Producing HIPAA compliant transactions regarding notification of and queries about consumer registrations.

o Assisting DHS/DBHR in conducting analyses regarding consumer registrations with respect to the following:

� Consumer characteristics and demographics.

� Geographic distribution.

� Distribution among providers.

� Projections of registrations.

• Provider Network – data collection of provider information o Assist in data collection of information regarding certification based on DBHR and Administrative Rules.

o Periodic provider meetings/training sessions. New provider orientation for eligibility and registrations.

o Development of materials for the DHS/DBHR Provider Manual and maintenance when required.

o Provide a Provider Directory shall include all the following information: provider name, address for each site, phone number for each site, services available by site, hours of operation for each site, specialty services, such as languages or translation, ages and populations served and any additional data fields subject to DHS/DBHR approval.

• Management Information System o Data collection platform for consumer level and provider level information.

o Interface to other state entities through existing systems in order to reduce administrative burden on the provider community. The information to collect includes but not limited to the following � Claims Information � Recipient Eligibility � Provider Information o Maintenance of a data warehouse environment for a multitude of reporting needs.

o Data Visualization for provider and internal DHS/DBHR staff for the purpose of decision making on benefit and continuity of programs.

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Bulletin Reference Number 27-444DHS-MIS44-B-52010

Requesting Agency/University Department of Human Services

3. Provide detail explaining the justification selected in Section IV to explain why the requested supplies or services are the only ones available that can satisfy the agency or university requirements?

The Federal Data reporting requirements are specific on which data sets and in which order they are received to be in compliance. In addition, State law requires DHS/DBHR to maintain a statewide system of community-based provider services. The Administrative Service Organization vendor provides the mechanism by which DHS/DBHR is able to manage the community-based operation of service delivery. The current vendor operates a state-of-the-art management information system (MIS). The current system is capable of receiving and utilizing Medicaid eligibility (e.g. All Medicaid programs relating to comprehensive program coverage that could include but not limited to Managed Care Organization (MCO) and Fee-for-Service (FFS) claims) data from the Illinois Department of Healthcare and Family Services (IHFS) and other IDHS and IDHS/DBHR systems. The system is capable of producing one-time ad-hoc reports, regularly scheduled reports and Dashboards as directed by IDHS/DBHR . The system maintains and transmit data among all appropriate federal, state, and local entities including the network of IDHS/DBHR funded community mental health providers. The system collects data for consumer registration information as defined by IDHS/DBHR . The registration is integrated and linked to services/claims, eligibility, and an existing provider database. The vendor currently operates and maintains a data warehouse to which IDHS/DBHR staff shall have direct access and the ability to create tables and reports. The data warehouse is currently managed in a physical environment that contains IDHS/DBHR information including, but not limited to, registrations, claims, eligibility, authorization, and the provider database. The data warehouse currently provides linkages to integrate data between all such data tables for the purposes of reporting. The Data Warehouse currently houses specified historical data for analytical and reporting purposes.

4. What are the unique features of the supplies or services that are not available in any other product or by any other vendor? Provide specific quantifiable factors/qualifications:

Other similar data reporting vendors currently lack the ability to provide the specificity of information required by the Federal government that Carelon Behavioral Health Inc. can without significant ramp-up time, testing, ETL (extract, transform and load) procedures, and other factors in a timely manner. The current system is very similar to an electronic health record. There was a previous project through DoIT for this type of system and the first year value was estimated around $25 million. Selecting a different vendor would also require 12-18 months of gap analysis and business requirements gathering to ensure that we get the necessary data collection for federal reporting requirements. The delay or loss of this information could hinder the divisions approximate $29 million in Federal Block grant funds.

5. Has the Agency or University considered alternative supplies or services to satisfy their need? Yes No

5a. If no, why weren't alternatives evaluated?

We are working with DHS DoIT and HFS to analyze data to bring this in-house now that DHS DoIT has resources available to assist. DHS DoIT is working to determine level of effort and costs. In addition, there is discovery work being completed to determine the feasibility of interfacing with the Department of Healthcare and Family Services to collect the necessary Medicaid data. If the feasibility determines that HFS does not have the necessary data elements needed for our Block Grant reporting, a competitive solicitation will be pursued.

6. Are there resellers or distributors?

Yes No N/A

7. What efforts were made to get the best possible price (i.e. did the agency/university negotiate) and how did you determine the price for this purchase is considered fair and reasonable?

The quote from the vendor for this 12 month contract contains a decrease from last year due to the inclusion of only the MIS and Reporting services. There was a removal of the Warm Line portion of the contract that has resulted in the decrease. This decrease was determined to be fair and reasonable and in accordance with current industry standards for medical data services seen at DHS/DBHR.

The total cost for this contract is broken out with the following categories:

1. Maintenance of an integrated data system including registration and authorization to support the management needs of DHS/DBHR.

$2,490,750

2. Reporting requirements/deliverables (per Reporting & Service Matrices) $734,520

Estimated Total for FY'27: $3,225,270

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Bulletin Reference Number 27-444DHS-MIS44-B-52010

Requesting Agency/University Department of Human Services

8. Will this purchase obligate the State to this vendor for future purchases such as maintenance, licensing or continuing need?

Yes No

9. What will be the financial or other impact to the State if this sole source is not approved and a competitive bid is required?

There are both statutory and fiscal consequences if this procurement is not approved. DHS/DBHR is required by state law to maintain a statewide system of state-funded community-based provider services. The Administrative Service Organization vendor provides the mechanism by which DHS/DBHR is able to manage the community-based operation of service delivery. DoIT utilizes data provided by the vendor to amalgamate reports as required for the Federal Government. Failure to continue this contract will stop the data reports from continuing. SAMHA Block Grant reporting would stop, with a potential loss of Federal Funding of approximately $29 million per year if this reporting is not completed.

Without these supplies and services, the State would face serious statutory and fiscal consequences. Specifically DHS/DBHR would be out of compliance with the Mental Health and Developmental Disabilities Act (20 ILCS 1705). DHS/DBHR and Illinois Health and Family Services (HFS) rely on the work of the vendor to successfully claim $80-$90 million annually in federal reimbursement. Failure to provide these supplies and services would place that reimbursement at risk.

10. Is there any additional information you would like to add to justify this sole source?

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Bulletin Reference Number 27-444DHS-MIS44-B-52010

Requesting Agency/University Department of Human Services

Section VII

Requesting Department Representative

Requesting Department Signature Required

I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed.

Date May 11, 2026

Printed Name Ryan Cowan E-mail Address Ryan.Cowan@illinois.gov

Phone Number 217-299-9711

State Agency Bureau/Division Head or University Purchasing Director Approval and Signature Required

I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed. (All prior form fields will lock once this e-signature is completed)

E-mail Address Jean.Sandstrom@illinois.gov

Phone Number 217-557-9298 Date May 12, 2026

Printed Name Jean Sandstrom

Agency Bureau/Division Head or University Purchasing Director and Not a Designee

SPO Approval and Signature Required

I have reviewed and understand the contents of this Sole Source Justification and agree with the State Agency or University determination.

I have reviewed and understand the contents of this Sole Source Justification and do not agree with the State Agency or University determination. As a result, the State Agency or University must explore other sourcing methods to satisfy their need.

State Purchasing Officer Signature Phone Number 217-836-6172 Date May 12, 2026

Printed Name Shea Firebaugh E-mail Address shea.firebaugh@illinois.gov

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Bulletin Reference Number 27-444DHS-MIS44-B-52010

Requesting Agency/University Department of Human Services

Sole Source Justification Form - Part II Section I - General Information

Project Title Community Health Administrative Services Organization (ASO)

Vendor Carelon Behavioral Health (Formally Beacon Health Options, Inc)

Initial Date of Procurement Bulletin Posting May 12, 2026

Was a Sole Source hearing held per 30 ILCS 500/20-25?

Yes - Complete Section II and III below (Section II will only be visible when this option is selected)

No - Section II not required, go to Section III below Section III - CPO Approval and Signature Required

Based on my review, I authorize the Agency/University to proceed in accordance with the published Notice referenced above.

Based upon my review, I authorize the Agency/University to proceed with the following Changes.

Based on my review, the Agency/University is not authorized to proceed with this sole source as presented and my recommendation is that it be cancelled.

Other

CPO Signature CPO Phone 217-622-1857

Printed Name Ellen H. Daley Date May 27, 2026

CPO E-mail Ellen.H.Daley@illinois.gov

Version 7.01 Page of Sole Source Justification Form - Part I Section I - General Information Will this Sole Source amend a Professional or Artistic Services contract?

If yes, what was the original contract value?

*Sole Source may not be used for amendments for Professional or Artistic Services if the amendment would increase the value by more than 5% of the initial award or extend the term by more than 60 days.

Section II - Proposed Term If a Term Contract, does the term, including renewals, exceed 12 months?

If yes, provide a detailed justification including any economic benefit received for agreeing to a multi-year term:

Section III - Funding Source Select the type of funding to be used (Check all that apply):

Section IV - Sole Source Justification Are there secondary justification(s) for this sole source?

Section V - Purchase History Has the Agency or University Purchased these supplies or services in the past?

Term Term From Term To Value Description Contract Number Type Section VI - Business Rationale

1. Provide a detailed explanation of the need for the supplies or services:

2. Provide a list and describe in detail the specifications required to satisfy the need:

3. Provide detail explaining the justification selected in Section IV to explain why the requested supplies or services are the only ones available that can satisfy the agency or university requirements?

4. What are the unique features of the supplies or services that are not available in any other product or by any other vendor? Provide specific quantifiable factors/qualifications:

5. Has the Agency or University considered alternative supplies or services to satisfy their need?

5a. If yes, name the alternative vendors whose supplies or services were evaluated:

5b. If yes, what were the alternatives for each vendor and why were they unacceptable? Be specific with regard to features, characteristics, requirements, capabilities and compatibility:

5c. Explain how the market evaluation was conducted?

*This evaluation is to determine available options within a market. If the evaluation is to determine quality or best suited option, this is not the appropriate source selection. Under no circumstances shall the evaluation consist of testing alternative options. These activities must be conducted in a competitive transparent environment (i.e. IFB or RFP).

5a. If no, why weren't alternatives evaluated?

6. Are there resellers or distributors?

7. What efforts were made to get the best possible price (i.e. did the agency/university negotiate) and how did you determine the price for this purchase is considered fair and reasonable?

8. Will this purchase obligate the State to this vendor for future purchases such as maintenance, licensing or continuing need?

8a. If yes, please provide details regarding future obligations and/or needs:

9. What will be the financial or other impact to the State if this sole source is not approved and a competitive bid is required?

10. Is there any additional information you would like to add to justify this sole source?

Section VII Requesting Department Signature Required I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed.

State Agency Bureau/Division Head or University Purchasing Director Approval and Signature Required I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed. (All prior form fields will lock once this e-signature is completed) SPO Approval and Signature Required Sole Source Justification Form - Part II Section I - General Information Was a Sole Source hearing held per 30 ILCS 500/20-25?

Section II - Sole Source Hearing Details The State posted to the Illinois Procurement Bulletin a description of the State's need, the justification for the sole source decision, and information regarding the opportunity to submit comments and testify at a public hearing. Notice of the hearing was also posted outside of the hearing room 48 hours prior to the hearing.

The public hearing was conducted for the purpose of receiving testimony regarding the sole source determination. The Hearing Officer recommends the following:

The following relevant documents are attached:

Section III - CPO Approval and Signature Required 9.0.0.2.20101008.1.734229 Ellen.H.Daley@illinois.gov

DHS/DBHR requires a vendor to provide the necessary oversight to ensure that consumers with pressing mental health needs receive the services they need to avoid untoward events for themselves or others and to improve the quality of their lives. When necessary, the vendor provides technical assistance to Community Mental Health Providers to submit registration information of individuals receiving services. Registration are submitted into a system through direct data entry and batch processes. The vendor maintains a web-based data collection system which holds information related to the consumers who receive publicly funded mental health services. This data is necessary for Division of Behavioral Health and Recovery to maintain roughly $29 million in Federal Block Grant funds. These activities allow DHS/DBHR to maintain a network of statewide service providers that protect the interest of mental health consumers and their families.

Q2Answer: • Implementing eligibility/enrollment/registration systems that meet DBHR criteria for services.

o Registration information and status o Classification of consumer groupings that indicate target, eligible and non-eligible priorities.

o Receive eligibility information as determined through existing systems. Populate this information into the system for use and reporting.

o Maintaining and analyzing the data collection system, as a component of a unified, integrated data system.

o Producing HIPAA compliant transactions regarding notification of and queries about consumer registrations.

o Assisting DHS/DBHR in conducting analyses regarding consumer registrations with respect to the following:

Consumer characteristics and demographics.

Geographic distribution.

Distribution among providers.

Projections of registrations.

• Provider Network – data collection of provider information o Assist in data collection of information regarding certification based on DBHR and Administrative Rules.

o Periodic provider meetings/training sessions. New provider orientation for eligibility and registrations.

o Development of materials for the DHS/DBHR Provider Manual and maintenance when required.

o Provide a Provider Directory shall include all the following information: provider name, address for each site, phone number for each site, services available by site, hours of operation for each site, specialty services, such as languages or translation, ages and populations served and any additional data fields subject to DHS/DBHR approval.

• Management Information System o Data collection platform for consumer level and provider level information.

o Interface to other state entities through existing systems in order to reduce administrative burden on the provider community. The information to collect includes but not limited to the following Claims Information Recipient Eligibility Provider Information o Maintenance of a data warehouse environment for a multitude of reporting needs.

o Data Visualization for provider and internal DHS/DBHR staff for the purpose of decision making on benefit and continuity of programs.

The total cost for this contract is broken out with the following categories:

1. Maintenance of an integrated data system including registration and authorization to support the management needs of DHS/DBHR. $2,490,750

2. Reporting requirements/deliverables (per Reporting & Service Matrices) $734,520

Estimated Total for FY'27: $3,225,270

Without these supplies and services, the State would face serious statutory and fiscal consequences. Specifically DHS/DBHR would be out of compliance with the Mental Health and Developmental Disabilities Act (20 ILCS 1705). DHS/DBHR and Illinois Health and Family Services (HFS) rely on the work of the vendor to successfully claim $80-$90 million annually in federal reimbursement. Failure to provide these supplies and services would place that reimbursement at risk.