COUNTY OF SAN MATEO
Inter-Departmental Correspondence

Health System

DATE:

November 19, 2008

BOARD MEETING DATE:

December 9, 2008

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Charlene A. Silva, Interim Chief, Health System

SUBJECT:

Agreement with the Health Plan of San Mateo (HPSM) for Administration of the Consolidated Access and Care for Everyone Program to include the Wellness, Education, Linkage Low Cost (WELL) Program and termination of the existing Agreement with the HPSM for Administration of the Access and Care for Everyone (ACE) Program

RECOMMENDATION:

Adopt a Resolution:

A.

Authorizing the President of the Board to execute an Agreement with the Health Plan of San Mateo (HPSM) for administration of the Consolidated Access and Care for Everyone (ACE) Program, including payment for indigent medical services on behalf of the County, for the term of January 1, 2009 to December 31, 2011 in the amount of $179,370,000; and

B.

Authorizing the President of the Board to terminate the existing Agreement with the HPSM for administration of the Coverage Initiative (SB1448)/Access and Care for Everyone for the period of September 1, 2007 to August 31, 2010, for a total not to exceed $1,360,800.

VISION ALIGNMENT:

Commitment: Ensure basic health and safety for all.

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

The Agreement contributes to this commitment and goal by providing unified administration of the adult coverage programs (WELL and ACE), resulting in streamlined administration and improved service to clients.

Performance Measure(s):

Measure

FY 2008-09

Projected

FY 2009-10

Projected

Percent of WELL/ACE participants rating services from the HPSM as very good.

90%

90%

BACKGROUND:

On November 6, 2007, your Board approved an Agreement with the HPSM for administration of the ACE Program, a pilot project funded by the California Department of Health Care Services that has allowed expanded adult coverage. On March 25, 2008, your Board approved the first-year implementation plan for the Health System Redesign Initiative, which included a focus on streamlined administration of public healthcare coverage programs. On May 20, 2008, your Board accepted the Blue Ribbon Task Force on Adult Health Care Coverage Expansion Final Planning Phase Recommendations. These recommendations called for the HPSM to serve as the single third-party administrator (TPA) to provide unified administration of the adult coverage programs in San Mateo County and stronger alignment with the HPSM’s Medi-Cal and Medicare programs. This alignment will allow for greater access to care, improved utilization management, and more effective partnerships with participants in the provider network.

DISCUSSION:

Under this new arrangement, the HPSM will incorporate the WELL Program into the existing ACE TPA service functions. In addition, the HPSM will serve as the conduit for funding directed to the provision of care to the medically indigent. The HPSM will manage provider services, contracting/network management, claims processing/data management, outpatient pharmacy benefit, utilization/medical management, collection of participant fees, customer service; grievances/appeals, quality assessment/ improvement, participant information materials and reporting.

The separation of coverage administration from healthcare delivery services provided by San Mateo Medical Center (SMMC) will strengthen the base of information that the County has regarding the cost of indigent health care over the long term and will provide a nexus for coordinating partnerships with other delivery system organizations that align with the roles that these organizations play in serving other publicly covered clients. The structure of the Agreement relies on the HPSM’s assets as a managed care organization with expertise in achieving administrative efficiency, promoting preventive healthcare, and improving healthcare quality while managing healthcare costs.

The contractor has assured compliance with the County's Contractor Employee Jury Service Ordinance, as well as all other contract provisions that are required by County ordinance and administrative memoranda, including but not limited to insurance, hold harmless, non-discrimination, and equal benefits. The Agreement has been reviewed and approved by County Counsel.

FISCAL IMPACT:

The HPSM has reduced the per member per month administrative fee from $18.00 to $15.50 with an anticipated enrollment of 15,000 participants per year. The annual administrative fee will not exceed $2,790,000. Costs anticipated for the indigent medical services are estimated at $300 per member per month, for an annual total of $54,000,000. The HPSM has requested that $9,000,000 be set aside as a revolving reserve for payment of the medical services, resulting in a total contract cost of $179,370,000. These expenses have been included in the FY 2008-09 Adopted Budgets for the SMMC and Contributions budgets. Funds to pay for these services for the remainder of the contract will be included in the Health System’s future budget requests with no increase in Net County Cost.