COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Health System

DATE:

March 16, 2010

BOARD MEETING DATE:

April 27, 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 Health Advocates, LLC

RECOMMENDATION:

Adopt a Resolution:

1.

Waiving the Request for Proposals process; and

2.

Authorizing the President of the Board to execute an Agreement with Health Advocates, LLC for cost recovery services for the term May 1, 2010 through April 30, 2011, in an amount not to exceed $984,000; and

3.

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 access to professional medical care for its indigent residents. San Mateo Medical Center (SMMC), as a general acute care hospital providing medical care, must control costs by determining patient eligibility for various government medical subsidy programs, as well as billing private and third-party payors. SMMC has used outside service providers to find payment sources for uninsured accounts since 1977.

Health Advocates, LLC (Health Advocates) was initially selected as the outside service provider for SMMC as a result of a Request for Proposals (RFP) conducted in March 2006. Health Advocates 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. Health Advocates provides cost recovery and Medi-Cal billing services.

DISCUSSION:

Providers of this type of service are limited in this area. The Health Plan of San Mateo (HPSM) recently issued an RFP for eligibility services and awarded a contract to Health Advocates, LLC. Health Advocates has proven success with cost recovery. SMMC has reviewed the RFP conducted by HPSM and will rely on the RFP issued by HPSM. It is recommended that your Board waive the formal RFP process otherwise required under Section 2.83.170 of the San Mateo County Ordinance Code.

Health Advocates assisted SMMC in converting the complex-uninsured inpatients to Medi-Cal, which allows SMMC to be paid. This process was successful due to the on-staff attorneys who represent our patients in the Fair Hearing Process to overturn Medi-Cal denials. Health Advocates is only paid when additional, unanticipated revenue is received from Medi-Cal.

Risk Management has reviewed and approved this Agreement. County Counsel has reviewed and approved this Agreement and Resolution as to form. 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.

Approval of this Agreement contributes to the Shared Vision 2025 outcome of a Healthy Community by providing income through cost recovery and collection which helps pay for services provided to patients. Based on past amounts recovered by Health Advocates, it is anticipated that $3,750,000 or more will be recovered as revenue for the County.

Performance Measures:

Measure

FY 2008-09
Actual

FY 2009-10
Projected

Cost Recovery

$3,500,000

$3,750,000

FISCAL IMPACT:

The term of the Agreement is May 1, 2010 through April 30, 2011. The maximum obligation of this Agreement is $984,000. Health Advocates will be paid on a contingency basis only. Reimbursement is based on the amount collected from the identified health program. Funds for these services are included in the SMMC FY 2009-10 Adopted Budget and in the SMMC 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.