Agenda Item   

AGENDA STAFF REPORT

 

                                                                                                                        ASR Control  18-000535

 

MEETING DATE:

07/17/18

legal entity taking action:

Board of Supervisors

board of supervisors district(s):

All Districts

SUBMITTING Agency/Department:

Health Care Agency   (Approved)

Department contact person(s):

Marc Meulman (714) 834-2980 

 

 

David Souleles (714) 834-3882

 

 

Subject:  Intergovernmental Transfer Opportunity

 

      ceo CONCUR

County Counsel Review

Clerk of the Board

          Concur

Approved Agreement to Form

Discussion

 

 

3 Votes Board Majority

 

 

 

    Budgeted: Yes

Current Year Cost:   $2,203,341

Annual Cost: N/A

 

 

 

    Staffing Impact:

No

# of Positions:

Sole Source:   N/A

    Current Fiscal Year Revenue: $2,737,503

  Funding Source:      GF: 100%

County Audit in last 3 years: No

 

 

    Prior Board Action:          5/9/2017 #SS4A, 4/26/2016 #S32F

 

RECOMMENDED ACTION(S):

 

 

1.

Approve the Intergovernmental Agreement Regarding Transfer of Public Funds with the  California Department of Health Care Services for the transfer of approximately $2,203,341 from the Health Care Agency to the California Department of Health Care Services.

 

2.

Authorize the Health Care Agency Director, or designee, to execute the final Agreement referenced in Recommended Action No. 1.

 

3.

Approve the Intergovernmental Transfer Agreement with the Orange County Health Authority dba CalOptima for participation in an Intergovernmental Transfer to obtain federal reimbursement for uncompensated care provided to their patients during FY 2017-18.

 

4.

Authorize the Health Care Agency Director, or designee, to execute the Agreement referenced in Recommended Action No. 3.

 

5.

Direct the Auditor-Controller, upon notification from the Health Care Agency Director, or designee, to issue payments as required for the Intergovernmental Transfer.

 

 

 

 

 

SUMMARY:

 

The Health Care Agency requests approval to participate in an Intergovernmental Transfer to receive reimbursement for uncompensated health care provided to Medi-Cal patients and approval of Agreements with California Department of Health Care Services and the Orange County Health Authority dba CalOptima for such participation.

 

 

 

BACKGROUND INFORMATION:

 

 The Health Care Agency (HCA) has been invited by Orange County Health Authority dba CalOptima (CalOptima) to participate in an Intergovernmental Transfer (IGT) to obtain federal reimbursement for uncompensated care provided to their patients during FY 2017-18. HCA has identified an estimated $5,430,472 in uncompensated Public Health clinical and nursing services for CalOptima patients that are eligible for an IGT. The estimated net revenue increase to the County, after fees and revenue sharing, is an estimated $2,737,503, which can be used to support Public Health services.

 

Rate range IGTs began statewide in 2006 and have been used by every county in the state to offset the cost of uncompensated care provided by county health departments, public hospitals and other local care providers. The federal Centers for Medicare and Medicaid Services (CMS) provides a rate range for Medi-Cal managed care services, but the actual reimbursement rates that plans receive are set by the California Department of Health Care Services (DHCS). The difference between the federal allowable rate and state actual rate represents the potential amount of federal reimbursement that counties can claim through a rate range IGT. The reimbursement by CMS is a dollar for dollar match of non-federal funds, which combined covers the cost of eligible healthcare expenditures incurred. The net proceeds are shared between the managed care plan and the provider that incurred the original expense.

 

CalOptima has participated in IGTs beginning with its 2010-11 rate year. The University of California, Irvine Medical Center (UCI MC) provided the non-federal funds for the first four transactions. Beginning with the 2014-15 IGT year, UCI MC was not able to use the total capacity for Orange County. To optimize Orange County's federal drawdown, CalOptima extended the IGT opportunity to other potential eligible providers including HCA and the Children and Families Commission of Orange County. Your Honorable Board approved HCA's participation in the 2014-15 IGT on April 26, 2016, and the FY 2015-16 and FY 2016-1 7 IGTs on May 9, 2017.

 

HCA's proposed IGT amounts, based upon our current estimates and information, are as follows:

  • Transfer from the County to the DHCS: Upon your Board's approval, HCA will transfer an estimated $2,203,341 to DHCS. The Health Care Agency anticipate this transfer will be made in late 2018.

 

  • Receipt of federal match: Upon receipt of the above funds from the County, the state will draw down an additional estimated $5,914,924 in federal matching funds from CMS.

 

  • State transfer to CalOptima: CalOptima will receive an estimated $8,114,514 from the state, which includes the full match by CMS. After returning the HCA's original investment, CalOptima will net an estimated $5,475,006 to be split between the HCA and CalOptima.

 

  • Payment to HCA: CalOptima will make a payment to HCA of an estimated $4,940,844 comprised of HCA's original IGT of $2,203,341 and approximately $2,737,503 in additional federal match funds. CalOptima will retain the remaining estimated $2,737,503.

 

Funding amounts are estimates based on HCA's current analysis. Numbers will be finalized and no funds will be transferred until all parties have agreed to all terms; and the return of all funds is assured.

 

Because funding originated from Public Health expenditures, all funds received by both CalOptima and HCA will be used to support Public Health initiatives in Orange County.

 

CalOptima's portion will be used to support priorities of the Orange County Health Improvement Plan that are consistent with their strategic priorities: for example improving access to medical and behavioral health care, and improving children’s health particularly around reducing obesity. Funds received by HCA will be utilized to support Public Health Services that promote health and prevent the spread of communicable diseases.

 

Although the term of the IGT Agreements with DHCS and with CalOptima both reference a start date of July 1, 2017, the Agreements are not retroactive because the term refers only to the time period available for the IGT and no services have been provided pursuant to the Agreements at this time.

 

The Agreement with CalOptima contains a mutual indemnification provision, which varies from the County's standard of sole indemnification, thereby obligating both parties to indemnify, defend, and hold harmless each other from all third party claims and liabilities arising from the parties' performance of the IGT Agreement. CEO/Office of Risk Management has reviewed and approved this provision and determined the risk to be acceptable for the County's obligations under the Agreement.

 

HCA requests approval of the IGT Agreements with DHCS and CalOptima and associated actions referenced in the Recommended Actions.

 

 

 

FINANCIAL IMPACT:

 

Appropriations and revenue related to this IGT are included in the HCA's FY 2018-19 Budget. All amounts are estimates until approved by the DHCS and CMS.

 

 

 

STAFFING IMPACT:

 

N/A

 

ATTACHMENT(S):

 

Attachment A - Intergovernmental Transfer Agreement Regarding Transfer of Public Funds with the California Department of Health Care Services
Attachment B - Intergovernmental Transfer Agreement with the Orange County Health Authority dba CalOptima
Attachment C - Risk Assessment Form
Attachment D - California Welfare and Institutions Code 14301.4
Attachment E - Health Improvement Plan 2017-19