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Agenda Item
ASR
Control 19-001049 |
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MEETING DATE: |
06/02/20 |
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legal entity taking action: |
Board of Supervisors |
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board of supervisors
district(s): |
All Districts |
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SUBMITTING
Agency/Department: |
Health Care Agency
(Approved) |
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Department contact
person(s): |
Cheryl Meronk (714) 834-4099 |
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Steve Thronson (714) 834-4418 |
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Subject: Master Agreement for
Indigent and Trauma Care Services
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ceo CONCUR |
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Clerk of the Board |
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Concur |
Approved Agreement to Form |
Consent Calendar |
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3 Votes Board Majority |
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Budgeted: N/A |
Current Year Cost:
N/A |
Annual Cost:
FY 2020-21 $4,610,933 |
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Staffing Impact: |
No |
# of Positions:
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Sole Source:
No |
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Current Fiscal Year Revenue: N/A
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Prior Board Action: 03/14/2017
#S42A, 06/28/2016 #S104C, 05/10/2016 #35, 05/20/2014 #40 |
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RECOMMENDED ACTION(S):
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1. |
Approve the Master Agreement with various providers for the Provision of Indigent and Trauma Care Services for the term of July 1, 2020, through June 30, 2025. |
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2. |
Authorize the County Procurement Office or authorized Deputy to execute the individual contracts under the Master Agreement as referenced in Recommended Action #1 above. |
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3. |
Authorize the Auditor-Controller to send to the California Department of Health Care Services, via an electronic funds transfer, amounts not to exceed the available Tobacco Settlement Revenues each fiscal year, as negotiated by the Health Care Agency, pursuant to Welfare & Institutions Code 14166.12, for FY 2019-20 and through the duration of the agreement term. |
SUMMARY:
Approval of the Master Agreement for the provision of Indigent and Trauma Care Services with participating hospitals will allow the County to meet mandates under Health and Safety Code 1797.98a and County Codified Ordinance, Article 14, Division 4.
BACKGROUND INFORMATION:
The Health Care Agency (HCA) receives state funds and fee revenue for the purpose of reimbursing hospitals for uncompensated and emergency health care. These funds include penalty assessments on fines relating to certain penal code violations and funding from Measure H, the Tobacco Settlement Revenue (TSR) Initiative. The Indigent and Trauma Care Services Master Agreement (ITC Agreement) is the mechanism used to pass the funding amounts in the manner that is mandated in state statutes, Orange County ordinances and/or policies set for by your Honorable Board of Supervisors (Board).
A summary of actions approved by the Board for the ITC Agreement is as follows:
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Contract |
Board Date |
Action |
Term |
Max Obligation |
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Provision of Indigent and Trauma Care Services |
May 20, 2014 |
Board Approved Contract |
July 1, 2014, through June 30,2016 |
$ 8,462,060 |
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Provision of Indigent and Trauma Care Services |
May 10, 2016 |
Board Approved Contract |
July 1, 2016, through June 30, 2020 |
$16,731,594 |
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First Amendment for pass through of Whole Person Care Pilot Grant Funds |
June 28, 2016 |
Board Approved Contract |
July 1, 2016, through June 30, 2020 |
$2,065,600 |
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Second Amendment for pass through of Whole Person Care Pilot Grant Funds |
March 14, 2017 |
Board Approved Contract |
July 1, 2016, through June 30, 2020 |
$0 |
The proposed Master Agreement for the provision of Indigent and Trauma Care Services distributes these funds as follows over the next five fiscal years.
Penalty Assessments - Emergency Medical Services Fund
Health and Safety Code 1797.98a authorizes the collection of penalty assessments by the Courts on certain penal code violations to fund County emergency medical services. These funds are placed in the County’s Emergency Medical Services Fund (EMSF) and must be allocated as follows: 58 percent for physician services, 25 percent for hospital services and the remaining 17 percent to the County for emergency medical services activities. In 2006, the legislation allowed for an additional penalty to be assessed and deposited into the EMSF upon approval of the Board. The Board approved this additional assessment on December 18, 2007. In accordance with the legislation, an initial 15 percent of the new penalty funding is allocated to fund pediatric trauma care before the remaining 85 percent is allocated according to the percentages listed above.
The portion of the EMSF specified for hospitals is distributed to the County's trauma centers: Children's Hospital of Orange County, Mission Hospital, Orange County Global Medical Center and UCI Medical Center. Each Orange County trauma center receives a base payment of $125,000 and the balance of the fund is distributed proportionately based on the number of trauma runs reported for the fiscal year, including those provided by Long Beach Memorial Hospital due to its proximity to the Orange County border. The funds specified for pediatric trauma care are distributed proportionately based on the number of pediatric trauma runs reported for the fiscal year. HCA estimates the portion of the EMSF allocated for distribution to hospitals to be $2,309,718 each fiscal year.
Tobacco Settlement Revenue
County Ordinance Article 14, Division 4, resulting from Measure H, allocates a portion of TSR funding to hospitals, which is to be distributed based on the hospital’s proportion of charity care and bad debt reported to the Office of Statewide Health Planning and Development. HCA and the hospitals have agreed that this calculation is based on data reported for the four quarters ending September 30 of each year. The proposed ITC Agreement makes it clear that the distribution of funds will occur based on the actual funding received, which is typically in April of each year, so the amounts specified in the Master Agreement are estimates based on the amount included in HCA's Strategic Financial Plan. The following hospitals, by corporate ownership, receive a TSR funding allocation:
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AHMC: - AHMC Anaheim Regional Medical Center |
Prospect Medical Holdings: - Foothill Regional Medical Center |
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Children’s Hospital: - Children’s Hospital at Mission - Children’s Hospital of Orange County |
St. Joseph Healthcare System: - Hoag Memorial Hospital Presbyterian - Mission Hospital - St. Joseph Hospital – Orange - St. Jude Medical Center |
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KPC Healthcare, Inc.: - Anaheim Global Medical Center - Chapman Global Medical Center - Orange County Global Medical Center - South Coast Global Medical Center |
Tenet Healthcare: - Fountain Valley Regional Hospital & Medical Center - Los Alamitos Medical Center - Placentia-Linda Hospital |
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MemorialCare Health System: - Orange Coast Memorial Medical Center - Saddleback Memorial Medical Center |
University of California: - Regents of the University of California - Irvine |
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Prime Healthcare: - Garden Grove Hospital & Medical Center - Huntington Beach Hospital & Medical Center - La Palma Intercommunity Hospital - West Anaheim Medical Center |
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Whole Person Care
The allocation of TSR funds to hospitals provides an opportunity to use these dollars as match for federal revenues for certain state programs such as the Whole Person Care (WPC) Program. The California Department of Health Care Services (DHCS) has approved the use of TSR as a local revenue source for counties to use as match for these programs. The ITC Agreement allows for receipt and pass through of these TSR dollars, along with the match via the WPC Program to be used to support the efforts of the WPC. The following hospitals allocate a portion of their TSR dollars to draw down federal WPC dollars to fund homeless outreach and navigation staff stationed in the hospital emergency departments.
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AHMC: - AHMC Anaheim Regional Medical Center |
St. Joseph Health System: - Hoag Memorial Hospital Presbyterian - Mission Hospital - St. Joseph Hospital – Orange - St. Jude Medical Center |
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MemorialCare Health Systems: - Orange Coast Memorial Medical Center - Saddleback Memorial Medical Center |
University of California: - Regents of the University of California - Irvine |
While the WPC has been anticipated to end on December 31, 2020, statewide efforts relating to addressing the COVID-19 pandemic have prompted a delay in the implementation of programs meant to continue some of the services currently provided by the WPC. At this time, DHCS is looking at a number of options to address the service gap during the delay, which may include extension of the WPC Program. The ITC Agreement allows for such continuation and HCA will return to your Board for other approvals as may be required should the WPC be extended.
The total of all funding sources for these agreements (which may change based on actual penalty assessments and TSR funding collected) is estimated as follows for each fiscal year:
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FY 2020-21 |
FY 2021-22 |
FY 2022-23 |
FY 2023-24 |
FY 2024-25 |
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Penalty Assessments - EMSF |
$2,309,718 |
$2,309,718 |
$2,309,718 |
$2,309,718 |
$2,309,718 |
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TSR |
$1,594,815 |
$1,631,496 |
$1,669,020 |
$1,707,407 |
$1,746,677 |
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WPC - Federal Portion |
$706,400 |
$0 |
$0 |
$0 |
$0 |
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Total |
$4,610,933 |
$3,941,214 |
$3,978,738 |
$4,017,125 |
$4,056,395 |
Intergovernmental Transfer Agreement
The allocation of TSR funds to hospitals also provides an opportunity to transfer funds through DHCS' Intergovernmental Transfer (IGT) Program, which allows DHCS to draw down an equal amount of new federal revenues and direct an amount equal to the transfer plus the federal revenues to eligible local hospitals in accordance with Welfare & Institutions Code 14166.12. DHCS has approved the use of TSR as a local revenue source for County IGT funding and language regarding the IGT Program has been added to the ITC Agreement to address this process. Unlike the WPC Program, the TSR funds and the federal match are paid to the hospitals directly by DHCS.
DHCS requires any hospital participating in the IGT Program to be a private Disproportionate Share Hospital, operate a basic emergency room and participate in the DHCS Private Hospital Supplemental Fund Program. In Orange County, six hospitals meet this criteria and are eligible to participate in the IGT Program: Anaheim Global Medical Center, Children's Hospital of Orange County, Fountain Valley Regional Hospital, Garden Grove Hospital and Medical Center, Orange County Global Medical Center and South Coast Global Medical Center.
In November, 2018, DHCS indicated that it was seeking federal approval for the IGT Program for a three-year cycle commencing with FY 2019-20 and would be including these amounts in the State Financial Plan. HCA, after collaboration with the eligible hospitals, submitted estimated amounts for each hospital for FY 2019-20, FY 2020-21 and FY 2021-22 and those amounts are included in the ITC Agreement. Amounts for future cycles, if any, will be determined after direction from DHCS and in collaboration with eligible hospitals.
Because there are a number of variables that can impact the actual amount of TSR allocated to each hospital each fiscal year, and these variables may cause the actual allocation to be more or less than the amount required to send to DHCS, the proposed Master Agreement includes a reconciliation process following the end of each IGT cycle to balance any adjustments required to meet the IGT commitment. The adjustments and reconciliation only impact those hospitals participating in the IGT Program. These hospitals have agreed that this reconciliation process will determine the funding amounts that will be specified to DHCS for the next IGT cycle starting FY 2022-23.
This Master Agreement does not currently include subcontractors. See Attachment B for Contract Summary Form.
The Master Agreement is being submitted for Board approval less than 30 days prior to the start of the contract because the hospitals requested a restructuring of the various funding components and programs presented in the Master Agreement to allow any future amendments for certain components to only be addressed by those hospitals participating in those components, thereby eliminating confusion for those not impacted by the changes. The hospitals have reviewed the modified Master Agreement and are satisfied with the proposed changes.
HCA requests that the Board approve the Indigent and Trauma Care Master Agreement, execution of the individual Agreements with various providers and the electronic funds transfers to the Department of Health Care Services, as referenced in the Recommended Actions.
FINANCIAL IMPACT:
Appropriations for this Master Agreement will be included in Budget Control 042 for HCA’s FY 2020-21 Budget and will be included in the budgeting process for future years.
Federal: 3% (WPC)
State: 41% (TSR)
Fees/Other: 56% (EMSF)
STAFFING IMPACT:
N/A
ATTACHMENT(S):
Attachment A - Master Agreement for the Provision of
Indigent and Trauma Care Services
Attachment B - Contract Summary Form
Attachment C - Redline Version to Attachment A
Attachment D - Regulatory Reference CFR Title 42, Section 433.51
Attachment E - Regulatory Reference - WIC Section 14166.12 (b), 14166.12(e) and
14166.12(f)
Attachment F - Regulatory Reference - HSC Div. 2.5, Section 1797.98a et seq.,
1797.198 et seq., and 1798.165
Attachment G - Regulatory Reference - HSC Div. 2.5, Section 1250 et seq.
Attachment H - Regulatory Reference - County Codified Ordinance, Article 14,
Div 4, Section 1-4-250 et seq.