COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Health Department

DATE:

May 6, 2005

BOARD MEETING DATE:

May 24, 2005

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Charlene A. Silva, Director, Health Department

Gale Bataille, Director of Mental Health Services

SUBJECT:

Agreement with Health Plan of San Mateo for Medicare Advantage Plan

RECOMMENDATION:

Adopt a resolution authorizing the President of the Board to execute an agreement with the Health Plan of San Mateo for the Medicare Advantage Program for the term January 1, 2006, through December 31, 2006.

VISION ALIGNMENT:

Commitment: To ensure basic health and safety for all.

Goal 8: Help vulnerable people - the aged, disabled, mentally ill, at risk youth, and others - achieve a better quality of life.

This agreement contributes to the goal by maximizing access to health care coverage for eligible County residents.

BACKGROUND:

The Health Plan of San Mateo (HPSM) is applying to the federal Centers for Medicaid and Medicare Services (CMS) for certification as the Medicare Advantage Plan for San Mateo County. This will maximize access to healthcare coverage for San Mateo County residents by enabling those beneficiaries who have both Medi-Cal and Medicare health care coverage to receive new Medicare prescription drug benefits coverage through HPSM, effective January 1, 2006. To qualify for this certification the HPSM must have a contract in place for outpatient mental health services for these residents.

This agreement for outpatient mental health services is an essential component of the HPSM proposal to CMS to become a Medicare Advantage Plan.

Currently Mental Health Services has an agreement with HPSM for the provision of psychiatric and other mental health services to County residents with insurance coverage through Healthy Families, HealthWorx and Healthy Kids. That agreement was approved by your Board on March 3, 2003. It was amended on December 7, 2004, to extend the end date through September 6, 2006.

DISCUSSION:

Through this agreement Mental Health Services will provide outpatient mental health services to clients with Medicare health insurance. Mental Health Services currently provides services for County beneficiaries who have dual Medi-Cal and Medicare health care coverage, including prescription benefit services, and bills Medicare directly. This agreement with the HPSM will allow us to continue to provide these services after January 1, 2006. Mental Health Services was selected by the HPSM to provide these psychiatric services.

If the HPSM is not selected as the Medicare Advantage provider for San Mateo County another plan will be selected by CMS. Should this occur, clients with dual Medi-Cal/Medicare coverage would be required to receive their prescription benefit services from a plan other than the HPSM, increasing fragmentation of care. It is anticipated that this would cause considerable hardship for clients in managing their healthcare. Dual Medi-Cal/Medicare beneficiaries would select or be assigned to one of multiple Medicare plans. Mental Health Services would either have to successfully negotiate with each of these plans or face substantial uncompensated costs that would require termination of medication prescription services for long-standing mentally ill clients. Approximately fifty percent of medication expenditures are for clients with dual eligibility.

The term of this agreement is January 1, 2006, through December 31, 2006. This agreement will automatically renew for successive twelve month periods unless terminated.

FISCAL IMPACT:

Services will be reimbursed on a per-unit basis at rates that are ninety (90) percent of federal Medicare rates. These rates are equivalent to current reimbursement rates for these services. It is anticipated that this agreement will have a neutral effect on current reimbursements. There is no net County cost associated for services provided through this agreement.