COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Health Department

DATE:

September 6, 2005

BOARD MEETING DATE:

September 27, 2005

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Charlene A. Silva, Director, Health Department

Nancy Steiger, Chief Executive Officer, San Mateo Medical Center

Gale Bataille, Director of Mental Health Services

SUBJECT:

Agreement with MedImpact Healthcare Systems, Inc.

RECOMMENDATION:

Adopt a resolution

A.

Authorizing the President of the Board to execute an agreement with MedImpact Healthcare Systems, Inc. to provide pharmacy benefit management services for clients in Mental Health Services and for the Well Program at the San Mateo Medical Center for the term of July 1, 2005, through June 30, 2007, for a maximum obligation of $30,880,000; and

B.

Authorizing the Director of Health to execute subsequent amendments and minor modifications not to exceed an aggregate of $25,000 and to make minor changes in the type of services and activities provided under the Agreement.

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 this goal and commitment through the provision of pharmacy benefits management services to increase the cost effectiveness and availability of pharmacy services.

Performance Measures:

Measure

FY 2004-05
Actual

FY 2005-06
Projected

Turnaround time for claims processing – monthly goal of 98% within four seconds

Average response time .9 seconds

Average response time 1.0 seconds

System downtime not to exceed 1%

99.8% system availability

99% system availability

BACKGROUND:

MedImpact Healthcare Systems Inc. was selected through a RFP process to provide pharmacy benefit management (PBM) services in 2002. Under the Mental Health Services Division’s plan for contracted services, long-term clinical programs are on a five-year cycle for Requests for Proposals.

This contractor provides the following services: an extensive network of community pharmacies, including all the traditional independently-owned pharmacies that have served mental health clients; a member eligibility service that will insure that all of the clients referred by the agency are served; a physician eligibility list that keeps up-to-date records of all the authorized prescribers in the county; maintenance of a database of all the medications authorized to be dispensed under this program; benefit administration, which allows the County to define what the requirements are by program; and data reporting so that the agency is able to track what medications are being prescribed and dispensed to which patients.

MedImpact serves indigent mental health clients and mental health Medi-Cal clients served by the Mental Health Plan. The PBM also serves indigent clients currently served by the Medical Center satellite clinics. These clients currently belong to the WELL Program, and as part of those services they are able to have prescriptions filled at local community pharmacies as well as at the San Mateo Medical Center pharmacy, substantially improving their access to pharmacy services.

DISCUSSION:

This agreement is being renewed for the two-year term of July 1, 2005, through June 30, 2007. County Counsel and Risk Management have both reviewed and approved the amendment to this agreement.

FISCAL IMPACT:

The maximum obligation for the term of the agreement is $30,880,000. Of that amount $30,621,000 is for drug costs for Mental Health Services and $259,000 is the cost for the Medical Center WELL Program.

For FY 2005-06, $14,450,000 has been included in the Mental Health Services budget. Reimbursement through Federal and State Medi-Cal will be $12,282,500. Of the remaining $2,167,500, sales tax provided through realignment will cover 64% or $1,387,200. The net County cost for Mental Health pharmacy costs is $780,300. The Mental Health Services maximum for FY 2006-07 is $16,171,000. Similar arrangements will be in place for FY 2006-07.

The maximum obligation for WELL Program services for FY 2005-06 is $123,000 and is included in the approved FY 2005-06 budget.