COUNTY OF SAN MATEO

Inter-Departmental Correspondence

San Mateo Medical Center

DATE:

November 9, 2008

BOARD MEETING DATE:

December 9, 2008

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Sang-ick Chang, M.D., Chief Executive Officer, San Mateo Medical Center

SUBJECT:

Second Amendment to the Agreement with HFS Consultants

RECOMMENDATION:

Adopt a resolution authorizing the President of the Board to execute a Second Amendment to the Agreement with HFS Consultants (HFS) to provide consulting and management services for physician and payor contracting at San Mateo Medical Center (SMMC); extending the term of the Agreement by one year to September 30, 2009; and increasing the maximum amount payable thereunder by $360,000 from $400,000 to a total amount payable not to exceed $760,000.

VISION ALIGNMENT:

Commitment: Ensure Basic Health and Safety for All

Goal 5: Provide residents access to healthcare and preventive care.

The Agreement contributes to this commitment and goal by providing a resource for completing negotiations and contracts which, in turn, will allow for the payment of providers providing services to SMMC patients.

Performance Measure(s):

Measure

Current

Target

Percentage of physician and payor contracts renewed prior to expiration

11%

1%

BACKGROUND:

In January, 2007, the position of Director of Payor and Provider Contracting (DPP) was filled after being vacant for a prolonged period of time. However, due to the considerable backlog and complexity of the contracts, the new Director was unable to bring the situation to a current and more workable level. In November, 2007, the DPP left the employ of San Mateo County and the DPP position remains vacant. Since the departure of the DPP, this Board authorized a contract with HFS pursuant to which that organization has assisted SMMC with Physician and Payor Contracting. HFS has successfully negotiated a substantial number of physician and payor contracts. Additionally, HFS has assisted SMMC to identify and correct several errors in the calculations of Relative Value Units (RVUs) and bonuses claimed as payable by some providers, thereby saving SMMC money. A first amendment to this Agreement was approved by the Board of Supervisors on May 20, 2008, which extended the term by five months to September 30, 2008, and increased funding by $200,000, to $400,000. This Second Amendment to the Agreement, if approved, would extend its term by an additional year, to September 30, 2009, and increase the maximum amount payable thereunder by $360,000, to a total amount not to exceed $760,000.

DISCUSSION:

Contracts handled by the DPP are mainly with doctors, health plans and hospitals. Because of the sensitivity and high dollar values, it is imperative that these contracts be aggressively negotiated and processed in a timely manner.

Given the current circumstances at SMMC, it is imperative that the services being provided by HFS continue until select key contracts are negotiated and a new DPP can be hired. This Amendment will allow for HFS to continue providing their expertise in negotiating physician and payor contracts.

This item was reviewed by the Health System Redesign Initiative Team and aligns with the first-year implementation plan approved by the Board of Supervisors on March 25, 2008.

County Counsel has reviewed and approved this Amendment.

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.

FISCAL IMPACT:

The term is extended by one year, for a revised term of August 1, 2007 to September 30, 2009. The maximum amount payable under the Agreement is increased by $ 360,000, from $400,000 to $760,000. Funds to pay for these services are included in San Mateo Medical Center’s FY2008-09 Adopted Budget.