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:

First Amendment to the Agreement with MedImpact Healthcare Systems, Inc.

RECOMMENDATION:

Adopt a resolution authorizing the President of the Board to execute an amendment to the agreement with MedImpact Healthcare Systems, Inc. for the provision of 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, 2002, through June 30, 2005, for a maximum obligation of $61,055,978.

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 Measure(s):

Measure

FY 2003-04 Actual

FY 2004-05 Actual

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

99.8% system availability

BACKGROUND:

MedImpact Healthcare Systems Inc. was selected through a RFP process to provide pharmacy benefit management (PBM) services in 2002. 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 insures that all of the clients referred 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 amended to clarify MedAccess user fees and connectivity charges, as well as other standard MedImpact charges. The result of this amendment will be a reduction of approximately $3,000 in charges to the County for these services. Current language pertaining to the Health Insurance Portability and Accountability Act of 1996 (HIPAA) has also been added to this agreement.

MedImpact has requested that these technical changes be made by amending our agreement. This amendment has been delayed due to extended negotiations regarding HIPAA language, and delay in return of the signed amendment from MedImpact.

The term of the agreement remains July 1, 2002, through June 30, 2005. County Counsel and Risk Management have both reviewed and approved the amendment.

FISCAL IMPACT:

Mental Health Services included $13,100,686 for these services in the approved budget for FY 2004-05. Reimbursement through Federal and State Medi-Cal was $11,135,583. Of the remaining $1,965,103, sales tax provided through realignment covered 64% or $1,265,103. The net County cost for Mental Health pharmacy costs was $700,000.

The contract maximum of $61,055,978 for the three-year term is unchanged.