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COUNTY OF SAN MATEO
Inter-Departmental Correspondence
Health System
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DATE:
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March 15, 2011
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BOARD MEETING DATE:
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April 26, 2011
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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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Agreement with Health Advocates, LLC
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RECOMMENDATION:
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Adopt a Resolution authorizing:
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A)
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The President of the Board to execute an Agreement with Health Advocates, LLC for cost recovery services at San Mateo Medical Center for the term May 1, 2011 through April 30, 2014, in an amount not to exceed $2,952,000, which shall be paid solely on a contingency basis from amounts recovered under the Agreement; and
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B)
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Health Advocates, LLC—on behalf of San Mateo County and San Mateo Medical Center patients—to undertake certain legal actions in support of the cost recovery services outlined in the Agreement; and
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C)
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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.
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BACKGROUND:
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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.
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In November 2010 SMMC conducted a Request for Proposals (RFP) for cost recovery services. SMMC received and evaluated four proposals. Health Advocates, LLC (Health Advocates) was selected by the RFP evaluation based on firm qualification and experience along with their proposed approach methodology.
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DISCUSSION:
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Health Advocates has shown past success with cost recovery for SMMC. Health Advocates will only be paid on a contingency basis when additional, unanticipated revenue is received from Medi-Cal or third parties. In order to perform these services, Health Advocates needs the ability to undertake certain legal actions outlined in the Agreement, including: filing liens when authorized by law; reviewing provider contracts to ensure contract compliance; processing, negotiating, and intervening in legal actions relating to recovery; participating and representing San Mateo County and/or patients in relation to administrative hearings addressing eligibility and other matters; litigating Treatment Authorization Request and insurance denial appeals; and processing and responding to civil attorney correspondence and discovery (subpoenas) in relation to such insurance and third-party recovery actions.
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County Counsel has reviewed and approved this Agreement and Resolution as to form. The Contractor’s insurance has been reviewed and approved by Risk Management.
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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.
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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 $2,500,000 or more will be recovered as revenue for the County.
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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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Cost Recovery
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$2,394,762
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$2,500,000
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FISCAL IMPACT:
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The term of the Agreement is May 1, 2011 through April 30, 2014. The maximum fiscal obligation is $2,952,000. Funds in the amount of $164,000 are included in the SMMC FY 2010-11 Adopted Budget. Funds in the amount of $984,000 are included in the SMMC FY 2011-12 Recommended Budget. Similar arrangements will be made for future years.
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Expenses at SMMC are covered by fees for services or third-party payers 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 cost of care are covered by the County’s General Fund contribution to SMMC.
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