COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Health System

DATE:

January 5, 2009

BOARD MEETING DATE:

January 27, 2009

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

4/5th

TO:

Honorable Board of Supervisors

FROM:

Charlene A. Silva, Interim Chief, Health System

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

SUBJECT:

Amendment 2008-1 to the Hospital Agreement with the San Mateo Health Commission and Intergovernmental Agreement Regarding Transfer of Public Funds

RECOMMENDATION:

A) Adopt a resolution:

1) Ratifying the execution of Amendment 2008-1 to the Hospital Agreement between the County of San Mateo and the San Mateo Health Commission.

2) Ratifying the execution of the Intergovernmental Agreement Regarding Transfer of Public Funds between the County of San Mateo and the California Department of Health Care Services (DHCS).

B) Approve an Appropriation Transfer Request (ATR) recognizing Unanticipated Revenue of $6,000,000 from the State Department of Health Care Services (DHCS) and making a corresponding appropriation in Other Charges in the Medical Center budget unit, of which $3,000,000 will be used to reimburse the General Fund for the Intergovernmental Transfer (IGT) to DHCS pursuant to the amended agreement; appropriating $3,000,000 in Services and Supplies in the Medical Center Contributions budget unit for the purpose of remitting the IGT to DHCS; and recognizing Unanticipated Revenue of $3,000,000 in Non-Departmental Services for the reimbursement of the IGT from the Medical Center.

VISION ALIGNMENT:

Commitment: Ensuring Basic Health and Safety for All.

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

The agreements contribute to this commitment and goal by providing a mechanism to pay for Medi-Cal reimbursable hospital and medical services provided to San Mateo County Medi-Cal recipients at SMMC.

BACKGROUND:

In 1994, this Board approved an agreement with the San Mateo Health Commission for SMMC to serve as a participating hospital in the Health Plan of San Mateo (HPSM), the Medi-Cal capitated program of the Health Commission. All San Mateo County Medi-Cal patients are automatically enrolled in the HPSM, and are assigned to hospital-affiliated primary care providers. This Board has approved numerous amendments to this agreement that have, among other things, revised fee schedules, adjusted allocations, and extended terms.

DISCUSSION:

The San Mateo Health Commission received an increase in total compensation under its Medi-Cal Services Contract with the State of California, effective for the 2008-2009 fiscal year. This increase is in addition to the Commission’s share of the rate increases for Medi-Cal Managed Care Plans, including County Organized Health Systems health plans. SMMC is the only disproportionate share hospital in San Mateo County. This amendment would increase the supplemental quarterly payments by the Commission to the SMMC to $4,500,000 per quarter for the 2008-2009 fiscal year, for a total of $18,000,000 for the year, representing a $6 million increase over budgeted amounts.

In order to fund the non-federal share of the Medi-Cal managed care capitation rate increase discussed above, County staff coordinated to enter into a contract with the DHCS to transfer $9 million to the State of California, which would then be matched by $9 million in federal funds and thereafter transferred to the Commission for subsequent payment to the SMMC.

Federal and state officials informed the County that it needed to have both agreements signed and in their offices by late November 2008 or there would be a several-month delay in processing payments to the County. Therefore, the County Manager signed both agreements on behalf of the County and we are now seeking this Board’s ratification of the County Manager’s action.

FISCAL IMPACT:

The amended agreement will generate additional Medi-Cal revenue of $6 million to the Medical Center, of which $3 million will be reimbursed to the General Fund for the increased Intergovernmental Transfer (IGT) to DCHS. The additional $3 million will be used to balance the Medical Center’s budget for FY 2008-09. The ATR aligns the revenue and expenditure appropriations in the FY 2008-09 budgets for the Medical Center (6600B), Medical Center Contributions (5850B) and Non-Departmental Services (8000B) with that of the amended agreement. There is no Net County Cost.