Inter-Departmental Correspondence

Health System



January 15, 2009


March 31, 2009




Four-fifths Vote



Honorable Board of Supervisors


Jean S. Fraser, Chief, Health System
Sang-ick Chang, MD, Chief Executive Officer,
San Mateo Medical Center



Amendment to the Agreement with Health Advocates, LLC




Adopt a Resolution:


Authorizing the President of the Board to execute an Amendment to the Agreement with Health Advocates, LLC to provide cost recovery and legal services, increasing the total amount payable by $1,000,000, for a total amount payable not to exceed $3,280,000.



Approve an Appropriation Transfer Request for an unanticipated revenue of $1,000,000 and appropriate the same amount to Contract Special Program.



Commitment: To 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 income revenue via cost recovery and collection which helps pay for services provided to our patients.


Performance Measure



FY 2007-08

FY 2008-09

Cost Recovery





San Mateo County is responsible for providing access to professional medical care for its indigent residents. San Mateo Medical Center (SMMC), as a general acute care hospital, must control its budget by determining patient eligibility for various government medical subsidy programs, as well as billing private and third party payors.

On June 6, 2006, by Resolution No. 068043, your Board approved an Agreement with Health Advocates, LLC (HA) to provide cost recovery services. HA provides comprehensive services, including hospital-based and field eligibility services for programs such as Medi-Cal, Social Security, California Children Services, Genetically Handicapped Persons Program, Medicare, Victims of Crime, and Worker’s Compensation. HA also provides Medi-Cal billing and legal services.



HA has determined that a greater number of SMMC patients are eligible for Medi-Cal than were anticipated under the original Agreement. HA assists SMMC in converting the more complex uninsured inpatients to Medi-Cal, which allows SMMC to be paid. HA is only paid when additional, unanticipated revenue is received from Medi-Cal. HA is paid 20% of the reimbursement received from Medi-Cal for patients they convert to Medi-Cal. HA’s success is due, in part, to the on-staff attorneys who represent our patients in the Fair Hearing Process to overturn Medi-Cal denials. Due to the increase in patients identified as Medi-Cal eligible, the maximum fiscal resources of the original Agreement have been expended.

A Request for Proposals (RFP) is being developed for this service after expiration of the current Agreement, and a new Agreement will be awarded based on the results of the RFP. In order to sustain use of HA’s services during the remainder of the existing Agreement, the contract must be increased to reflect the increased success rate of HA’s work. The Amended contract will allow the County to pay for the continued provision of services.

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. County Counsel has reviewed and approved this Amendment.



The term of this Agreement is May 1, 2006 to April 30, 2009, which remains unchanged under this Amendment. The maximum obligation for this Agreement is increased by $1,000,000 from $2,280,000 to a new maximum of $3,280,000. Health Advocates will be paid on a contingency basis only. Reimbursement is based on the amount collected from the identified health program. San Mateo Medical Center expects an additional $5,000,000 in revenue from the increase in contract amount.