COUNTY OF SAN MATEO

Inter-Departmental Correspondence

San Mateo Medical Center

DATE:

April 11, 2005

BOARD MEETING DATE:

April 26, 2005

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Nancy J. Steiger, Chief Executive Officer, San Mateo Medical Center

SUBJECT:

Amendment to the Agreement with Health Advocates, LLP

Recommendation

Adopt a Resolution authorizing an Amendment to the Agreement with Health Advocates, LLP for cost recovery services

1)

extending the term of the agreement by one year, making the new term of the Agreement May 1, 2003 to April 30, 2006, and

2)

increasing the maximum amount by $450,000, bringing the total obligation to

$1,050,000

Vision Alignment

Commitment: Ensure basic health and safety for all.

Goal 1: Residents have access to healthcare and preventive care.

The Agreement contributes to this commitment and goal by providing a process whereby Health Advocates will assist patients to complete the application process for insurance benefits.

Performance Measures:

Measures

FY2004-05

FY2005-06

Cost Recovery

$1,360,000

$2,040,000

Background

On June 10, 2003, your Board approved an agreement with Health Advocates for cost recovery services. The term of the agreement is two years, from May 1, 2003 to April 30, 2005, with an option for a third year. The maximum amount of the agreement is $600,000.
Health Advocates was awarded a contract after San Mateo Medical Center (SMMC) conducted a Request for Proposals (RFP), to recover costs from selected uninsured inpatient accounts, in October 2002. Accounts are referred to Health Advocates by SMMC supervisory staff when program linkages such as Medi-Cal have been identified, but the patients is difficult to locate or fails to follow-up with the necessary paperwork. Health Advocates assists patients and in some circumstances function as a designated representative for patients to complete the necessary documentation. Once approval of insurance eligibility is established, Health Advocates is required to deliver all eligibility documents to SMMC and bill the appropriate insurance program.

Discussion

The contract with Health Advocates, which is effective from May 1, 2003 to April 30, 2005, has a maximum amount of 600,000. During the first 20 months of the contract, the County has paid out $523,482.65 or approximately $26,174.32 per month. If this continues through the end of the contract, there will not be sufficient funds to meet our obligation. During the 20 months, San Mateo County has referred 1798 inpatient accounts. Health advocates has obtained Medi-Cal benefits for 264 of those accounts.

In per diem charges alone, San Mateo Medical Center has been able to recoup approximately $2,261,595. As a general rule, only the most difficult cases are assigned to Health Advocates. If it were not for the efforts of Health Advocates, many of these inpatient accounts would be charged to Medically Indigent Adult (MIA funds and be otherwise uncollectible.

San Mateo Medical Center is choosing to take the third year option by extending the term of the agreement. Due to the number of referred accounts during the two-year term of the current agreement and to allow for costs incurred due to the extension of the term of the agreement, the maximum amount needs to be increased by $450,000.

Fiscal Impact

This amendment extends the term of the agreement by one year, making the new term of the agreement May 1, 2003 to April 30, 2006. The Amendment also increases the maximum amount of the Agreement by $450,000, from $600,000 to $1,050,000.

Health Advocates, LLP is paid on a contingency basis. Reimbursement is based on the amount collected from the identified health program. There is no net county cost. The revenue is included in SMMC’s FY2004-05 Adopted Budget and will be included in the budget request for FY2005-06.