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COUNTY OF SAN MATEO
Inter-Departmental Correspondence
Health System
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DATE:
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October 7, 2010
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BOARD MEETING DATE:
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November 9, 2010
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SPECIAL NOTICE/HEARING:
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None
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VOTE REQUIRED:
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Majority
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TO:
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Honorable Board of Supervisors
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FROM:
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Jean S. Fraser, Chief, Health System
Susan Ehrlich, MD, MPP, Chief Executive Officer
San Mateo Medical Center
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SUBJECT:
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Amendment No. 3 to Agreement with San Mateo Health Commission
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RECOMMENDATION:
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Adopt a Resolution authorizing the President of the Board to execute Amendment 2010-01 (Amendment No. 3) to the Agreement with San Mateo Health Commission for the provision of Medi-Cal Services for Health Plan of San Mateo clients, revising the amounts of supplemental payments upwards by $5,833,334 to $28,000,000 for FY 2010-11, and amending conditions for receipt of those supplemental payments.
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BACKGROUND:
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The County of San Mateo through San Mateo Medical Center (SMMC) has contracted with San Mateo Health Commission, doing business as Health Plan of San Mateo (HPSM), since January 1994. The current Agreement is for a three-year term, January 1, 2007 through December 31, 2009. This Agreement automatically renews for successive twelve month periods with the same terms and conditions, subject to any subsequent amendments.
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The Agreement provides for the care of inpatient, outpatient, emergency services, and long term care to patients who are eligible to receive Medi-Cal benefits. HPSM reimburses SMMC for providing such care.
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DISCUSSION:
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HPSM received an increase in total compensation under its Medi-Cal Services Contract with the State of California, in addition to its share of rate increases for Medi-Cal Managed Care Plans. SMMC is the only disproportionate share hospital in San Mateo County and is the largest provider of adult (non-obstetric) inpatient hospital service to HPSM members.
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HPSM makes supplemental quarterly payments to SMMC. The amount of those payments is being increased to a new total of $28,000,000 for FY 2010-11 from a total of $22,166,666 for FY 2009-10. HPSM will make a supplemental quarterly payment to SMMC in the amount of $7,000,000 for September 30, 2010, and will make payments on December 31, 2010, March 31, 2011, and June 30, 2011.
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The American Recovery and Reinvestment Act (ARRA) of 2009, provided a temporary increase in the Federal Medical Assistance Percentages (FMAP) from October 1, 2008 through June 30, 2011. From October 2008 through December 2010 the FMAP increased from 50% to 61.59%. The FMAP rates are graduated to reduce from 61.59% to 50% during the period of January – July 2011, resulting in a weighted average annual FMAP rate for FY 2010-11 of 59.15%.
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The FMAP percentage drives the amount SMMC contributes towards the overall Intergovernmental Transfer Agreement (IGT) payment received. In the past SMMC contributed 50% and received a 50% match due to the FMAP. Once the ARRA temporary increase went into affect the amount SMMC was matched increased which resulted in SMMC having to contribute less. As the FMAP percentage decreases the amount SMMC must contribute will increase to the rate of the pre-ARRA match.
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The conditions upon which the supplemental payments are made continue to include: working with HPSM medical staff to reduce hospital readmissions from the skilled nursing facility; agreeing not to terminate the Agreement; agreeing not to close the Emergency Department at SMMC; and exploring medical management collaborative initiatives.
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County Counsel has reviewed and approved this Amendment and Resolution as to form.
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This Amendment contributes to the Shared Vision 2025 outcome of a Healthy Community by providing care to inpatient, outpatient, emergency services, and long term care to patients who are clients of HPSM. It is anticipated that 27,886 Medi-Cal recipients will be treated at SMMC during FY 2010-11.
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Performance Measure:
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Measure
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FY 2009-10
Actual
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FY 2010-11
Projected
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Number of Medi-Cal recipients treated at SMMC
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26,165
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27,886
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FISCAL IMPACT:
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The initial term of the Agreement was January 1, 2007 through December 31, 2009. Pursuant to its terms, the Agreement automatically renews for successive twelve month periods with the same terms and conditions, subject to any subsequent amendments. This Amendment has a positive fiscal impact on SMMC. The total increase of this Amendment is $5,833,334. Of this amount SMMC must contribute $2,496,997 to receive $3,336,337. The revenue from this Amendment is included in SMMC’s FY 2010-11 Adopted Budget.
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