Inter-Departmental Correspondence

Health Services Agency



March 18, 2004


April 6, 2004



Honorable Board of Supervisors


Margaret Taylor, Director, Health Services

Gale Bataille, Director, Mental Health Services



Amendment to the Agreement with 7th Avenue Center



Adopt a resolution authorizing the President of the Board to execute an Amendment to the Agreement with 7th Avenue Center.



Mental Health Rehabilitation Centers (MHRC) such as 7th Avenue Center provide locked psychiatric care for San Mateo County adults with serious and persistent mental illness.


Counties are required by the State Department of Mental Health to pay a "basic rate" for skilled nursing/basic care for adults 18-64 years of age who are housed in MHRC facilities. The basic rates vary by geographic region and are set annually by the State Department of Health Services. Medi-Cal provides basic rate funding for individuals in locked facilities who are age 65 years and older. In addition to the basic rate, selected San Mateo County clients at MHRC facilities may be authorized for supplemental payments, often referred to as "patches" or "enhanced rates" in order to provide augmented services based on the severity of an individual's illness.



For severely mentally ill clients, 7th Avenue Center is an alternate and less expensive placement than Napa State Hospital. The daily rate at the State Hospital is $346.68 versus $165 at 7th Avenue Center. This facility has a women's wing with all female staff for female clients in need of a gender specific program. In addition, 7th Avenue has been able to successfully work with clients who are placed directly from the State Hospital.


For these reasons, the volume of services provided by this Contractor is greater than what was originally anticipated, i.e. to up five clients have been placed at this facility rather than two. This Agreement is being amended to increase the payment maximum to reflect the actual usage.


The increase in use of this contract is the result of the philosophy of moving severely and persistently mentally ill people to a less restrictive environment (i.e. from locked facilities back into the community). As we have been moving people from out-of-county placements, decreasing the length of stay at Napa State Hospital, and moving people out of Cordilleras Hospital, the result has been an increased use of community placements, like 7th Avenue Center. Although this contract is being increased, there is overall system savings and improved quality life of the high-risk mentally ill adults.


Current Health Insurance Portability and Accountability Act of 1996 (HIPAA) requirements, and provisions relating to Contractor certifying the integrity of their program have also been added to this amended Agreement.


Vision Alignment

This amended Agreement with 7th Avenue Center 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 amended Agreement contributes to this commitment and goal by providing locked psychiatric care for San Mateo County adults with serious and persistent mental illness.


Fiscal Impact

The term of this amended Agreement remains January 1, 2002 through June 30, 2004. The Amendment has been reviewed and approved by Risk Management and County Counsel.


The amended Agreement maximum of $391,630 covers the three-year Agreement term. This includes a $91,000 increase from the original Agreement maximum of $300,630.


The Agreement maximum for FY 2003-04 is $247,759 which has been included in the approved FY 2003-04 Mental Health Services budget. Of that amount, sales tax through realignment will cover 90% or $222,983. The remaining $24,776 represents the net County cost as maintenance of effort for realignment.