COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Health Department

DATE:

March 3, 2008

BOARD MEETING DATE:

March 11, 2008

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Charlene A. Silva, Director, Health Department

Srija Srinivasan, Special Assistant to the County Manager, Health Policy and Planning

SUBJECT:

Third Amendment to the Agreement with San Mateo Community Health Authority for the Healthy Kids Program

RECOMMENDATION:

Adopt a Resolution:

1.

Waiving the Request for Proposals (RFP) process; and

2.

Authorizing the President of the Board to execute the Third Amendment to the Agreement with the San Mateo Community Health Authority to: decrease the coverage rate by $17.66 per-member per-month, for a new coverage rate of $74.47, effective February 12, 2008; change the Agreement term from February 12, 2005 through February 11, 2008, to February 12, 2005 through December 31, 2009; and increase contract amount by $160,765, for retention efforts of families enrolled in the Healthy Kids program and consulting activities related to One-e-App.

VISION ALIGNMENT:

Commitment: Ensure basic health and safety for all.

Goal 5: Residents have access to healthcare and preventive care.

This Amendment contributes to this commitment and goal by ensuring healthcare coverage for eligible children of families living in San Mateo County with an income below 400% of the Federal Poverty Level.

Performance Measures:

Measure

FY 2007-08
Estimated

FY 2008-09
Projected

Medi-Cal membership for children

13,500

14,300

Healthy Families membership

9,400

9,600

Healthy Kids membership

6,500

6,550

BACKGROUND:

In February 2002 your Board established and funded the San Mateo County Children’s Health Initiative (CHI) to address community-wide concern for the 17,000 County children who lacked access to comprehensive health coverage. In January 2003 San Mateo County implemented the Healthy Kids (HK) insurance program to cover children ineligible for Medi-Cal (MC) and Healthy Families (HF) programs and by promoting outreach and enrollment efforts for all three programs.

The San Mateo Community Health Authority (the Authority), as the governing body of the Health Plan of San Mateo (HPSM), is the contracted plan administrator for HK under an Agreement approved by your Board in May 2005, for the term February 12, 2005 through February 11, 2008. The Agreement was amended in October 2006 and June 2007 in order to continue funding, to provide retention efforts, and to include an “at-risk” premium arrangement through which the Authority receives a payment rate of $92.13 per-member per-month (PMPM).

In March 2007 your Board approved the transfer of governance of CHI to the Authority. CHI operational functions, such as overall financial administration and contracts management, are being transferred to the Authority in phases.

DISCUSSION:

After analyzing the costs and trends of the program, the Authority approved a recommendation to lower the HK PMPM rate from $92.13 to $74.47 and change program payment procedures to better reflect the true premium and operational costs of the program. Moreover, under this Amendment the Authority will be paid a maximum amount of $136,765 for retention efforts targeting HK families and $24,000 to fund a consultant who will provide Medi-Cal program support for the One-e-App web-based application processing system.

This Amendment has been delayed for your Board’s approval due to the required internal process of the Authority. Therefore, this Amendment will not be executed on its start date of February 12, 2008.

The Authority is the sole source provider of the HK program administration, and for this reason, the Health Department is requesting a waiver for the RFP process. This Amendment has been reviewed and approved by County Counsel.

FISCAL IMPACT:

The Third Amendment to the Agreement extends the term of February 12, 2005 through February 11, 2008 to February 12, 2005 through December 31, 2009 and increases the contract amount by $160,765. CHI’s total budget of approximately $9.9 million is funded by donor contributions from organizations, including First 5 San Mateo County, Peninsula and Sequoia Healthcare Districts; from the County’s Solid Waste Fund ($1.5 million); and from the County’s General Fund ($1.2 million). Costs for this contract are included in the Health Policy & Planning FY 2007-08 Adopted Budget. Costs for subsequent years will be included in the Health Policy & Planning FY 2008-09 and FY 2009-10 budgets. There is no Net County Cost impact as a result of this Amendment; Agreement cost increases will be met through donor contributions and increased appropriation from the HK Trust Fund.