COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Department of Hospital and Clinics

DATE:

July 3, 2002

BOARD MEETING DATE:

July 23, 2002

TO:

Honorable Board of Supervisors

FROM:

Nancy J. Steiger, Chief Executive Officer

SUBJECT:

Resolution Waiving the Request for Proposals Process and Authorizing Execution of an Agreement with Argent Healthcare (formerly Paralign Revenue Management, Inc.)

Recommendation

Adopt a resolution waiving the Request for Proposals process and authorizing the President of the Board to execute an agreement with Argent Healthcare (formerly Paralign Revenue Management, Inc.)

Background

Since 1988, San Mateo County Department of Hospital and Clincis has been using outside service providers to find payment sources for uninsured accounts. Hospital and Clinics has contracted with Argent Healthcare (formerly Paralign Revenue Management, Inc.) to provide these cost recovery services since 1997, based on an RFP process conducted by the Division of Hospital and Clinics in 1996. Argent Healthcare recovers costs from selected uninsured inpatient accounts, which are referred to Argent Healthcare by Hospital and Clinics supervisory staff when a program linkage such as Medi-Cal has been identified, but the patient is hard to locate or fails to follow up with the necessary paperwork. Argent Healthcare assists patients in completing the insurance application process. Additionally, Argent Healthcare functions as a designated representative for patients to complete the necessary forms. Upon approval of insurance eligibility, Argent Healthcare delivers all required eligibility documents to Hospital and Clinics and Hospital and Clinics then bills the third-party payor for reimbursement. In 2000, Hospital and Clinics realized approximately $961,376 in additional revenue based on Argent's services. This type of service is typically used by county hospitals treating large volumes of Medi-Cal patients to maximize reimbursement from the program.

Discussion

The contract between San Mateo County Hospital and Clinics and Paralign/Argent expired on December 31, 2001. We are requesting that your Board approved a one-year agreement for the term January 1, 2002 to December 31, 2002 while an RFP is developed. It was not feasible for Hospital and Clinics' Business Services to conduct a Request for Proposals in September 2001 as declared when the previous agreement was amended in June 2001. During this period of time, Business Services was involved with Global Strategic Services (GSS) in an extensive revenue cycle review. As a result, one of the recommendations of the GSS review was to split Business Services into two management areas, Patient Access and Business Services. Once this was accomplished, it had to be determined where Paralign/Argent functions would reside. Finally, during the same period Paralign was in negotiations to be acquired by Argent. It was not confirmed until January 2002 that Argent would be the contracting agent. Terminating Paralign's services at that point would reduce our revenue further. Renewing the agreement with Argent for one year will give Hospital and Clinics the opportunity to develop an appropriate RFP to integrate both the internal changes and the transition within Paralign.

An RFP is currently being developed and will be released in August 2002.

The process of locating discharged patients, obtaining documents and representing the patients in an appeals process is very specialized, lengthy and time consuming. Without a contractual arrangement for this service, many inpatient accounts would be charged to Medically Indigent Adult (MIA) funds and be otherwise uncollectible.

In the past year, Hospital and Clinics has increased efforts to enroll clients in insurance programs, in part by placing more patients in Medi-Cal pending status. As a result, Argent enrollment services have increased within the past year as well. The Hospital expects to recover $1,705,078 through these program services in the current year. Additionally, Hospital and Clinics is able to claim a percentage of the contract costs through Medi-Cal Administrative Activity (MAA) program because the agreement provides that the Contract comply with State Department of Health Services (DHS) regulations and policies regarding Medi-Cal Administrative Activities as outlined in the agreement between DHS and the County.

2000 Actual

2001 Actual

2002 Projection

Cost Recovery

$961,376

$1,241,298

$1,705,078

Vision Alignment

The contract with Argent Healthcare keeps the commitment of Ensuring basic health and safety for all and goal number 1: Residents have access to healthcare and preventive care. The contract contributes to this commitment and goal since Argent Healthcare assists patients in completing the insurance application process.

Fiscal Impact

The term of this agreement is January 1, 2002 to December 31, 2002. The maximum amount of the agreement is $300,000. Argent Healthcare is paid on a contingency basis. Reimbursement is based on the amount collected. There is no net county cost. The revenue is included in the FY2001-02 Approved Budget and will be included in the FY2002-03 Recommended Budget.