Inter-Departmental Correspondence

Health System



November 29, 2010


January 11, 2011







Honorable Board of Supervisors


Jean S. Fraser, Chief of the Health System

Srija Srinivasan, Director, Strategic Operations


Amendment to the Agreement with the San Mateo Community Health Authority for the Healthy Kids Program



Adopt a Resolution authorizing the President of the Board to execute an Amendment to the Agreement with the San Mateo Community Health Authority to: (1) increase the payment rate from the $74.47 per-member-per-month to $101.02 per-member-per-month effective January 1, 2011 through December 31, 2012; (2) implement an automatic waiver of the family contribution for Healthy Kids members with income under 133% of the Federal Poverty Level (FPL); and (3) establish other administrative changes to the Agreement.



In February 2002 your Board established and funded the San Mateo County Children’s Health Initiative (CHI) to address community-wide concern for the 17,000 County children who lacked access to comprehensive health coverage. In January 2003 San Mateo County created the Healthy Kids (HK) insurance program to cover children ineligible for Medi-Cal (MC) and Healthy Families (HF) programs and initiated an outreach and enrollment strategy to enroll children in all three public programs.


The San Mateo Community Health Authority (the Authority), as the governing body of the Health Plan of San Mateo (HPSM), is the contracted plan administrator for HK under an Agreement approved by your Board in May 2005. In March 2007 your Board approved the transfer of governance of CHI to the Authority. In March 2008 your Board approved a recommendation to lower the HK per-member-per-month (PMPM) rate from $92.13 to $74.47 after an analysis of program costs in its first four years. In January 2010 your Board approved a new three-year Agreement with the Authority effective January 1, 2010 through December 31, 2012 with the same HK PMPM rate of $74.47.



Under this Amendment, the Authority seeks an increase in the HK PMPM rate from $74.47 to a new rate of $101.02 effective January 1, 2011. The increase in the PMPM rate would cover the increased medical costs experienced within the HK program, which have risen from $22.57 PMPM in 2004 to $84.60 in 2010.

The Authority also seeks an automatic family contribution waiver for HK members with income under 133% FPL, which is the criteria for the County’s Access and Care for Everyone (ACE) program. The other administrative changes under this Agreement include the transition of the eligibility determination function for HK from the Human Services Agency to the Health System, the transfer of some retention and utilization responsibilities from the Health System to the Authority and the assumption of CHI fund holder responsibilities by the Health System. These measures streamline administration of the program.


This Amendment and Resolution have been reviewed and approved by County Counsel. The Contractor’s insurance has been reviewed and approved by Risk Management.


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 Amendment contributes to the Shared Vision 2025 outcome of a Healthy Community by providing health coverage for low-income children in San Mateo County, which promotes access to preventive and regular healthcare. It is anticipated that the number of children enrolled is an indicator of the reach of the HK program.


Performance Measure(s):


FY 2009-10


FY 2010-11


Medi-Cal (*)



Healthy Families



Healthy Kids



(*) Children enrolled in Full Scope No Share-of-Cost Medi-Cal



The CHI total budget of approximately $7.3 million is funded by donor contributions from organizations, including First 5 San Mateo County; Peninsula and Sequoia Healthcare Districts; federal and state programs covering a subset of the Healthy Kids members; and from the County’s General Fund. Approximately $5.6 million of the CHI budget is allocated to the Healthy Kids premiums. Costs for this contract are included in the CHI FY 2010-11 Adopted Budget. Costs for the subsequent years will be included in the CHI FY 2011-12 and the FY 2012-13 Recommended Budgets. The General Fund allocated to this contract is $924,000 with the balance of approximately $7 million covered by funding from donor contributions and federal and state funding.