Inter-Departmental Correspondence

Health System



December 13, 2010


January 25, 2011







Honorable Board of Supervisors


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



Intergovernmental Agreement Regarding Transfer of Public Funds



Adopt a Resolution authorizing the:


County Manager to execute an Intergovernmental Agreement Regarding Transfer of up to a total maximum of $11,314,800 of Public Funds with the California Department of Health Care Services for the period of July 1, 2010 through June 30, 2011; and



County Manager to execute future Intergovernmental Agreements between the County of San Mateo and the California Department of Health Care Services.



In 1994 your Board approved an agreement with the San Mateo Health Commission for the San Mateo Medical Center (SMMC) to serve as a participating hospital in the Health Plan of San Mateo (HPSM), the Medi-Cal capitated program of the Health Commission. The majority of San Mateo County Medi-Cal recipients is automatically enrolled in the HPSM, and is assigned to hospital-affiliated primary care providers. Your Board has approved numerous amendments to this agreement that have, among other things revised fee schedules, adjusted allocations, and extended terms.



The San Mateo Health Commission received an Intergovernmental Transfer (IGT) increase in its total compensation under its Med-Cal Services Contract with the State of California effective for the 2010-2011 fiscal year. This increase of $5,833,334, for a total of $28,000,000, is in addition to the Commission’s share of the rate increases for Medi-Cal Managed Care Plans, including County Organized Health System health plans. On November 9, 2010, your Board approved an amendment to the Agreement with the San Mateo Health Commission for this increase.


In order to fund the non-federal share of the Medi-Cal managed care capitation rate increase, County staff coordinated to enter into a contract with the California Department of Health Care Services (DHCS) to transfer $11,314,800 to the State of California, which would then be matched by subsequent payments to the SMMC. Last year, your Board approved an amendment to the Agreement between SMMC and the Commission increasing the supplemental quarterly payments to replace the supplemental funding SMMC received for its long term care services to Medi-Cal recipients. HPSM assumed responsibility for this benefit and as such, SMMC could no longer claim the supplemental funds.


The FY 2010-11 IGT Agreement is an increase of $2,800,583 from the prior year due primarily to the full year supplemental funding impact of the transfer of responsibility for long term care services benefit, and to changes in Federal Financial Participation in State Assistance Expenditures - also known as Federal Medical Assistance Percentages (FMAP) program. (The American Recovery and Reinvestment Act provides a temporary increase in FMAP through June 2011.) The IGT increase has a corresponding increase of approximately $5.8 million in funding to the SMMC for Medi-Cal recipient client services, approved by your Board on November 9, 2010.


The IGT Agreement is renewed on an annual basis and the funds transferred pursuant to the IGT Agreement are included in the County’s adopted budget. As such, delegating authority to the County Manager to execute future IGT agreements between the County and DHCS is recommended to facilitate the timely processing of future agreements.


County Counsel has reviewed and approved the Resolution and Agreement as to form.


Approval of this Agreement contributes to the Shared Vision 2025 outcome of a Healthy Community by providing care to inpatient, outpatient and emergency services patients who are clients of HPSM. It is anticipated that 27,886 Medi-Cal recipients will be treated at SMMC during FY 2010-11.




FY 2009-10

FY 2010-11

Number of Medi-Cal recipients treated at SMMC





The term of the agreement is July 1, 2010 through June 30, 2011. The Intergovernmental Agreement Transfer is $11,314,800 and is appropriated in the General Fund contribution of the SMMC FY 2010-11 Adopted Budget.