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COUNTY OF SAN MATEO
Inter-Departmental Correspondence
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San Mateo Medical Center
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DATE:
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August 16, 2005
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BOARD MEETING DATE:
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September 13, 2005
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SPECIAL NOTICE/HEARING:
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None
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VOTE REQUIRED:
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Majority
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TO:
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Honorable Board of Supervisors
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FROM:
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Nancy J. Steiger, Chief Executive Officer, San Mateo Medical Center
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SUBJECT
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Resolution Increasing the Rates in the San Mateo Medical Center Charge Master (fee schedule for all hospital services)
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RECOMMENDATION:
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Adopt a Resolution authorizing the Board of Supervisors to implement an across-the-board 5% rate increase.
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VISION ALIGNMENT:
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Commitment: Responsive, effective and collaborative government
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Goal 20: Government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain.
Increasing the rates in San Mateo Medical Center’s Charge Master contributes to this commitment by making it possible for San Mateo Medical Center to maintain competitive pricing for its services in order to meet the revenue target for the Medical Center’s FY2005-06 Budget, to avoid losing a significant amount of revenue from the government, and to ensure recovery of appropriate reimbursement from commercial payors.
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Performance Measure:
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Measure
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FY 2004-05
Actual
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FY 2005-06
Projected
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Net Patient Revenue
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$90,672,296
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$104,687,274
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BACKGROUND:
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The Charge Master is a fee schedule that delineates the hospital charges for all medical services. Pursuant to law, all hospitals must maintain a Charge Master. Moreover, the County Ordinance Code empowers and authorizes the Board of Supervisors to set all hospital rates.
The rates for the SMMC were last increased by 10% in July 2004 to help cover increases in the Medical Center’s wages, pharmaceuticals and other operating costs. Despite this increase, based on a room rate survey conducted with comparable hospitals in May 2005, it was verified that the County is still significantly below the average of all private and county hospitals.
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DISCUSSION:
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SMMC conducted an analysis of the San Mateo Medical Center Charge Master file with comparable hospitals and found the following:
§ Eighty percent (80%) of charges are below the seventy-fifth (75th) percentile
§ The top 25 procedures are One Hundred Fifty percent (150%) below average
§ The top 25 Diagnostic Related Groups (DRG’s) are below average
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FISCAL IMPACT:
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This rate increase is expected to net an estimated additional $200,000 in revenue. It will not increase co-pays, deductibles and annual fees that patients currently pay, nor will it impact payors that currently reimburse patient services using fixed per-diems or case rates. However, it will impact payors that use a percent-of-charge reimbursement such as certain Medi-Cal eligible inpatients.
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