COUNTY OF SAN MATEO

Inter-Departmental Correspondence

HEALTH DEPARTMENT

DATE:

January 25, 2006

BOARD MEETING DATE:

February 7, 2006

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:

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

RECOMMENDATION:

Adopt a Resolution authorizing the Second Amendment to the Agreement with Addus HealthCare, Inc., to increase the rate paid to Addus HealthCare, Inc., adding $50,049 to the contract for a total amount of $10,383,403.

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 2004-05
Actual

FY 2005-06
Projected

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

95%

90%

BACKGROUND:

On December 6, 2005, your Board adopted Resolution number 67703 approving a first amendment to the Agreement with Addus HealthCare, Inc., to provide In-Home Supportive Services (IHSS) to individuals who are unable to remain safely in their own homes without the assistance of Addus providers. This first amendment increased the contract amount by $343,374 to enable Addus HealthCare, Inc., to pay their staff a wage of $10.50 per hour, which is comparable to that received by IHSS independent providers. This new wage was to be effective September 1, 2005. The rate paid to Addus HealthCare per hour increased from $18.29 to $19.39, effective September 1, 2005 in order to accomplish this wage increase.

DISCUSSION:

It has come to the attention of Aging and Adult Services (AAS) that the increase included in the first amendment to the Agreement is not sufficient to allow Addus HealthCare, Inc., to pay their staff the $10.50 per hour wage, as originally stated. This was an oversight by Aging and Adult Services that is now being corrected through this second amendment to the Agreement.

This second amendment to the Agreement increases the rate paid to Addus HealthCare Inc., from $19.39 per hour to $19.54 for the period September 1, 2005 through June 30, 2007.

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 FYs 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, AAS will be able to reduce its control number to 92,000 hours with no reduction in client services; this will allow the Public Authority (PA) to meet the increased costs associated with the rate increase within the existing resources of the PA budgets for FYs 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. This amendment increases the rate to $19.54 per hour effective September 1, 2005 through June 30, 2007. The total contract amount is increased by $50,049 to $10,383,403. 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 revenues. The amounts necessary for reimbursement of this agreement as amended for the remaining two years of the agreement are included in the adopted FYs 2005-06 and 2006-07 Public Authority budgets.