COUNTY OF SAN MATEO

Inter-Departmental Correspondence

HEALTH DEPARTMENT

DATE:

November 10, 2005

BOARD MEETING DATE:

December 6, 2005

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors
Acting as the In-Home Supportive Services Public Authority

FROM:

Charlene A. Silva, Director, Health Department
Lisa Mancini, Director, Aging and Adult Services

SUBJECT:

First Amendment to the Agreement with Addus HealthCare, Inc., increasing the contract rate

RECOMMENDATION:

Adopt a Resolution authorizing the First Amendment to the Agreement with Addus HealthCare, Inc., to increase the rate paid to Addus HealthCare, Inc., adding $343,374 to the contract for a total amount of $10,333,354.

VISION ALIGNMENT:

Commitment: 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.

Aging and Adult Services strives to provide services to severely impaired individuals to help them remain in the most independent setting possible. The provision of these services helps to meet a division-wide performance measure.

Performance Measure(s):

Measure

FY 2005-06
Actual

FY 2006-07
Projected

Percent of severely impaired client population who are maintained in an independent setting through case management

95%

90%

BACKGROUND:

In December 2003, Aging and Adult Services, acting on behalf of the Public Authority (PA), issued a Request for Proposals (RFP) for In-Home Supportive Services (IHSS) provided through a contract agency. On June 29, 2004, your Board adopted Resolution 66747 approving an Agreement with Addus HealthCare, Inc., (Addus) in the amount of $9,989,980 for the term of July 1, 2004 through June 30, 2007 to provide IHSS assistance to individuals who are unable to remain safely in their own homes without this assistance and who are unable to hire, supervise or fire their own providers due to the type or severity of their disabilities.

DISCUSSION:

On September 1, 2005, the IHSS independent providers received a $1.00 per hour wage increase, bringing their rate of pay to $10.50 per hour. The wage currently paid to Addus providers under the existing agreement is $9.50 per hour. In order for Addus to provide a comparable increase in wages to its contractual providers, the PA proposes to amend the Addus agreement to incorporate a rate increase of $1.10 (wage and tax cost) for 2005-06 and $.97 for 2006-07. The proposed changes in the rate paid to Addus in the agreement are from $18.29 per hour to $19.39 in 2005-06 and from $18.42 per hour to $19.39 per hour in 2006-07.

The State allows San Mateo County to contract for as many as 182,000 hours annually for IHSS; this is the number that is used in the agreement with Addus and is reflected in the Fiscal Impact section below. However, the adopted budgets for 2005-06 and 2006-07 are based on 100,000 hours of contract services annually, and this is the number used for budget control. In recent years the actual hours of contract services provided have been between 80,000 and 90,000. Therefore, we will be able to reduce our control number to 92,000 hours with no reduction in client services; this will allow us to meet the increased costs associated with the rate increase within the existing resources of the Public Authority budgets for 2005-06 and 2006-07.

Upon your Board’s approval of the Addus amendment, the PA will request that the State approve the new contract rate effective September 1, 2005, to coincide with the date of the approved wage increase to IHSS independent providers. Simultaneously, the PA will request an increase in the State-approved Maximum Allowable Contract Rate (MACR) for IHSS contract services in San Mateo County. This is the maximum rate at which the State will share in the cost of IHSS contract services. The current MACR is $19.02 per hour. An increase in the MACR would increase the portion of the contract rate paid by state funds, thereby reducing the cost to the county.

FISCAL IMPACT:

The term of this agreement remains the same, July 1, 2004 through June 30, 2007, and the maximum hours that can be purchased under this agreement each year is 182,000 at a fixed rate. There is no change in the rate for the first year. The amendment increases the rate to $19.39 per hour effective September 1, 2005 through June 30, 2007. The total contract amount is increased by $343,374 to $10,333,354. State and Federal funds pay approximately 80.5% of the cost of this amended agreement. The remaining 19.5% represents the required County obligation. A portion of this amount is offset through the application of Realignment trust funds. The amounts necessary for reimbursement of this agreement as amended for the remaining two years of the agreement are included in the adopted 2005-06 and 2006-07 Public Authority budgets.