COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Health Services Agency

DATE:

December 23, 2002

BOARD MEETING DATE:

January 7, 2003

TO:

Honorable Board of Supervisors

FROM:

Margaret Taylor, Director, Health Services

Gale Bataille, Director, Mental Health Services

SUBJECT:

Managed Care Agreement with the State Department of Mental Health

Recommendation

Adopt a resolution authorizing the President of the Board to execute an agreement with the State Department of Mental Health for mental health Medi-Cal managed care services.

Background

In April 1995, under a 1915(b) waiver granted to the State Department of Health Services (DHS) by the Centers for Medicare and Medicaid Services (CMS), formerly the Health Care Financing Administration (HCFA), San Mateo was the first California county to implement a managed mental health care system for Medi-Cal beneficiaries. At the end of the initial two-year waiver period, the San Mateo Mental Health Services Division worked with DHS and the Department of Mental Health (DMH) to submit a second federal waiver request. The second waiver was approved effective July 1, 1998, and was extended through October 31, 2001. A third waiver was approved for the period November 1, 2001, to October 31, 2003.

Mental Health Services Division provides a range of mental health services to approximately 5,500 Medi-Cal clients a year. Since 1995, annual DMH Managed Care Agreements have authorized the San Mateo Mental Health Plan to provide mental health services under the conditions of these federal waivers to Medi-Cal eligible clients and provides State General Fund revenue to support managed care and other specified services.

Discussion

This agreement defines the requirements for the mental health plan for Medi-Cal eligible clients, including quality assurance, record keeping, client rights, and availability and accessibility of services. In addition, it delineates the unique requirements of the San Mateo County waiver including case rate reimbursements, responsibility for medications prescribed by psychiatrists, and laboratory services.

The agreement does not yet reflect the FY 2002-03 state allocation. The initial state allocation contained in this agreement is based on FY 2001-02, a total of $7,802,641. This agreement contains contingency provisions to assure the Division is not obligated to provide unfunded services if the state reduces the allocations for these services. The Mental Health Services Division budget for FY 2002-03 reflects the anticipated revenues for this program according to state budget planning thus far. This agreement provides funding for the current Medi-Cal managed care program, children's system of care and other specialized Medi-Cal services.

Goals and Objectives

Performance Measures

2001 - 2002 Objectives

2001 - 2002 Actual

2002 - 2003 Objectives

Medi-Cal clients as % of total

56%

51%

56%

Medi-Cal penetration rate

12.4%

10.9%

10%

Pharmacy cost growth

12%

11%

12%

Cost per client w/o pharmacy

<$5,700

$6,054

<$6,200

Total cost per client

<$6,691

$7,080

<$7,200

Vision Alignment

This contract with DMH keeps the commitment to Ensure Basic Health and Safety for All and goal number 8: Help vulnerable people-the aged, disabled, mentally ill, at risk youth, and others-achieve a better quality of life. The contract contributes to this commitment by providing managed care mental health services to a vulnerable population.

Fiscal Impact

The interim amount of the agreement is $7,802,641 for FY 2002-03, the same as FY 2001-02. This includes $5,224,212 as the state share of Medi-Cal expenses for pharmacy and laboratory services, $1,844,308 for current managed care clinical services, $734,000 for children's services, and $121 for IMD ancillary fees. The actual amounts for FY 2002-03 are still to be negotiated by the State and there will be an amended agreement at that time. In addition to the state allocation, Mental Health bills the State separately for the federal fee portion (FFP) of Medi-Cal. The anticipated federal revenue is approximately $21,049,200. The state and federal revenue is included in the FY 2002-03 Mental Health Services budget.