AGENDA STAFF REPORT

Agenda Item AGENDA STAFF REPORT ASR Control 17-000018
MEETING DATE:	03/28/17
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):	Jeffrey Nagel (714) 834-7024
	Mary Hale (714) 834-6032

Subject: Agreement for Administrative Services Organization for Specialty Mental Health

ceo CONCUR

County Counsel Review

Clerk of the Board

Concur

Approved Agreement to Form

Discussion

3 Votes Board Majority

Budgeted: N/A

Current Year Cost: N/A

Annual Cost: FY 2017-18 $5,357,959
FY 2018-19 $5,357,959
FY 2019-20 $5,357,959

Staffing Impact:

# of Positions:

Sole Source: No

Current Fiscal Year Revenue: N/A

Funding Source: See Financial Impact Section	County Audit in last 3 years: No

Prior Board Action: 6/23/2015 #56

RECOMMENDED ACTION(S):

Approve the Agreement with Beacon Health Strategies, LLC to act as the Administrative Services Organization for Specialty Mental Health Outpatient Services for the period July 1, 2017, through June 30, 2020, for a total maximum obligation of $16,073,877.

Authorize the Health Care Agency Director or designee, to exercise a contingency contract cost increase of 10% of the Period One funding for the Agreement as referenced in the Recommended Action above, for the entire term and within the scope of work set forth in the Agreement, pursuant to Contract Policy Manual Section 3.3-113.

Authorize the Health Care Agency Director, or designee, to execute the Agreement as referenced in the Recommended Actions above.

SUMMARY:

The Health Care Agency requests approval of the Agreement with Beacon Health Strategies, LLC to act as the Administrative Services Organization for Specialty Mental Health Outpatient Services to provide maintenance of a provider network, adjudication of provider claims, and the operation of a 24/7 telephone access line.

BACKGROUND INFORMATION:

On June 23, 2015, the Board approved the Agreement with Beacon Health Strategies, LLC (Beacon) to act as the Administrative Services Organization for Specialty Mental Health Outpatient Services (ASO), for the period July 1, 2015, through June 30, 2017, for a total maximum obligation of $10,221,360. The current Agreement will end June 30, 2017, and the proposed Agreement will allow services to continue through June 30, 2020.

The proposed Agreement has an annual maximum obligation of $5,357,959, for a total maximum obligation of $16,073,877. The increase in the annual costs is due to projected increases in the number of members receiving services and the costs of the Mental Health Claims. Mental Health Claims have increased as follows: FY 2014-15 - $2,707,302, FY 2015-16 - $3,018,925, and are projected at $3,629,000 for FY 2016-17. Program has reviewed the increase with Beacon and has determined that there has been an increase in the use of the therapy benefits by eligible members.

The ASO services consist of administrative and specialty mental health service components that include maintenance of a provider network including credentialing and contracting, adjudication of provider claims, and the operation of a 24/7 telephone access line.

The chart below reflects the performance outcomes utilized to measure the volume and timeliness of accessing services provided by the ASO. The 24/7 telephone access line is expected to: 1) provide access to outpatient services, as measured by the number of member calls, to no less than 15,000 members annually; 2) provide treatment authorization within 14 days; and 3) answer 95% of the member calls within 30 seconds.

Member Calls

Treatment Authorizations within 14 Days

Calls Answered within 30 Seconds

Fiscal Year

2015-16

July - June

33,302

99%

84%

The proposed Agreement will have subcontracts with network providers who will provide authorized specialty mental health services in an estimated amount of $3,408,078. See Attachment C - Contract Summary Form and Attachment D - ASO Network Providers.

HCA requests that the Board authorize the HCA Director or designee, to exercise a contingency contract cost increase in an amount not to exceed 10% of the Period One funding for the Agreement over the entire term and within the scope of work set forth in the Agreement, pursuant to Contract Policy Manual Section 3.3-113. The contingency provision would be exercised in the event there is an increase in the projected amount of specialty mental health services provided to Orange County Medi-Cal beneficiaries.

HCA requests that the Board approve the Agreement with Beacon Health Strategies, LLC to act as the Administrative Services Organization for Specialty Mental Health Outpatient Services, as referenced in the Recommended Actions.

FINANCIAL IMPACT:

Appropriations for this Agreement will be included in the budgeting process for future years.

Funding Sources:

GF: 5%

State: 50% (Mental Health Realignment and Vehicle License Fees)

Fees/Other: 45% (Federal Financial Participation Medi-Cal)

Should services need to be reduced or terminated due to lack of funding, the Agreement contains language that allows Health Care Agency to give 30-day notice to either terminate or renegotiate the level of services to be provided. Additionally, the RFP states in part that HCA reserves the right to modify RFP; cancel the solicitation at any time, in whole or in part; reject any or all Applications; contract for all or some of the stated services; and/or based upon the County's needs or availability of funding at the time of selection or during contract negotiations, modify the scope of services described herein.

STAFFING IMPACT:

N/A

ATTACHMENT(S):

Attachment A - Agreement between Orange County with Beacon Health Strategies, LLC for Provision of Administrative Services Organization for Specialty Mental Health Outpatient Services.
Attachment B - Redline Version to Attachment A
Attachment C - Contract Summary Form for Attachment A
Attachment D - ASO Network Providers