Inter-Departmental Correspondence

Health System


March 24, 2009


May 5, 2009







Honorable Board of Supervisors


Jean S. Fraser, Chief, Health System

Susan Ehrlich, MD, MPP, Interim Chief Executive Officer,
San Mateo Medical Center



Resolution Authorizing the Controller to Pay Non-Contract Medical Service Providers



Adopt a Resolution authorizing the Controller to pay non-contract medical service providers at other locations to provide services not offered at San Mateo Medical Center in an amount not to exceed $1,500,000 for the period July 1, 2009 through June 30, 2011.



Commitment: Ensure basic health and safety for all.

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

This Resolution contributes to this commitment and goal by providing access to specialty care services.


Performance Measure:


FY 2008-09 Estimated

FY 2009-10

Percentage of patients referred to non-contract providers for specialty care services





Since 1990 the Board of Supervisors has authorized the Controller to pay non-contract medical providers who provide medical services at other facilities to patients for whom the County has responsibility. If a patient needs services or procedures not offered at San Mateo Medical Center (SMMC) or through a contracted medical care provider, the patient is referred to an off-site facility and the expenses must be paid by the County. In a resolution adopted on July 24, 2007, the Board of Supervisors authorized the Controller to pay up to $1,500,000 to non-contract medical service providers for the period from July 1, 2007 through June 30, 2009.


The July 2007 Resolution allows the Controller to pay non-contract providers for services provided at the Medicare participating fee schedule rate for San Mateo County Part “B” and on the Medicare Labor Adjusted Ambulatory Surgery Classification (ASC). All other services not found on the Part “B” Medicare Fee Schedule or the ASC are paid at the Ambulatory Payment Classification (APC) rate, and all additional procedures are paid at 50% of the Medicare Allowable Reimbursement Rate.


On December 9, 2008, the Board executed an Agreement with the Health Plan of San Mateo (HPSM), effective January 1, 2009, to administer the Consolidated ACE Program. The Agreement calls for the HPSM to serve as the conduit for funding directed to the provision of care to the medically indigent population. A major benefit of this arrangement is to ensure consistency among contracting rates with providers and to take advantage of the HPSM contracting expertise.



This Resolution allows the Chief of the Health System to negotiate rates different and most likely higher than rates recommended by HPSM in cases where, in the judgment of the Chief, such rates are necessary in order to secure required medical care. This provision will also be included in an Amendment to the Agreement with HPSM to ensure consistency in all payment terms related to County funding for medical care for the medically indigent population.


All referrals to non-contract providers must be authorized by SMMC Administration, and utilization review will be concurrently provided by the Case Management Department at SMMC. Effective January 1, 2009, HPSM will work with SMMC to assure appropriate referrals to outside providers.


The Health System Redesign Initiative Team and County Counsel have reviewed and approved this Resolution.



The term of this Resolution is July 1, 2009 through June 30, 2011. Payments under this Resolution will not exceed $1,500,000 for the term. Funds are included in the SMMC FY2009-10 Recommended Budget and will be included in future Recommended Budgets. Expenses at SMMC are covered by fees for services or third-party payors whenever possible. The portion of expenses for services provided to the medically indigent or to those covered by programs that do not meet the full costs of care are covered by the County’s General Fund contribution to SMMC.