COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Health System

DATE:

January 15, 2010

BOARD MEETING DATE:

March 23, 2010

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Jean S. Fraser, Chief, Health System
Susan Ehrlich, MD, MPP, Chief Executive Officer
San Mateo Medical Center

SUBJECT:

Agreement with Seton Medical Center

RECOMMENDATION:

Adopt a Resolution:

1.

Authorizing the President of the Board to execute an Agreement with Seton Medical Center to provide diagnostic and therapeutic services not available at San Mateo Medical Center for the term January 1, 2010 through December 31, 2010, in an amount not to exceed $1,000,000; and

2.

Authorizing the Chief of the Health System or designee to execute contract amendments which modify the County’s maximum fiscal obligation by no more than $25,000 (in aggregate), and/or modify the contract term and/or services so long as the modified term or services is/are within the current or revised fiscal provisions.

BACKGROUND:

San Mateo County is responsible for providing medical care to its medically indigent adult (MIA) population. San Mateo Medical Center (SMMC) is a general acute care hospital and does not provide certain highly specialized services. A contract with Seton Medical Center (Seton) ensures that such specialty services are readily available. Services provided under this Agreement are required medical services to the County’s medically indigent adult patients that are not presently provided at SMMC. A significant percentage of patient referrals to Seton are for outpatient vascular services for North San Mateo County MIA residents. Beginning January 1, 2009, SMMC achieved two milestones with this contract; Seton reduced pricing to Health Plan of San Mateo (HPSM) rates and HPSM provided the Third Party Administration (TPA) services of utilization review and the payment of claims for ACE and ACE County patients.

DISCUSSION:

All patients referred to Seton undergo utilization review to minimize hospital stays and maintain control over costs. Health Plan of San Mateo (HPSM) rates for all services except cardiovascular surgery services and brachytherapy, (which will be charged at Medicare rates) have been negotiated in order to reduce the costs of services for tertiary care contracts, which account for outpatient services and inpatient transitions through each level of care, including intensive (ICU), telemetry (step down), stabilized (med/surg), observation, and eventual discharge. In 2010, Seton has re-priced the cost of cardiology services at HPSM rates. SMMC continues to provide utilization review and TPA services for self-pay (uninsured) and Medi-Cal pending patients. The total amount expended at Seton in 2009 was $681,601.50.

The Health System Redesign Initiative Team and Risk Management have reviewed and approved this Agreement. County Counsel has reviewed and approved the Resolution and Agreement as to form. 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.

Approval of this Agreement contributes to the Shared Vision 2025 outcome of a Healthy Community by providing patients with access to necessary specialty services not offered at SMMC. It is expected that most services to patients are provided in-house and about 3.5% of patients will receive some specialty care from other community providers.

The contract has been delayed because of the failure of the vendor to return the signed Agreement in a timely manner. After detailed analysis, Seton reduced the cost of cardiology services to HPSM rates.

Performance Measure:

Measure

FY 2008-09
Actual

FY 2009-10
Projected

Percentage of patient referrals

3.5%

3.5%

FISCAL IMPACT:

The term of this Agreement is January 1, 2010 through December 31, 2010. The maximum fiscal obligation is $1,000,000. Funds in the amount of $500,000 are included in the FY 2009-10 Adopted Budget, and funds in the amount of $500,000 will be included in the FY 2010-11 Recommended Budget. 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.