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HomeMy WebLinkAboutStaff Report 3.A 05/16/2016Agenda Item #3.A DATE: May 16, 2016 TO: Honorable Mayor and Members of WCityuncil through the City Manager FROM: Leonard C. Thompson, Fire Chief SUBJECT: Resolution Authorizing the City Manager to Execute an Agreement for Intergovernmental Transfer with Partnership HealthPlan of California RECOMMENDATION It is recommended that the City Council adopt the attached Resolution Authorizing the City Manager to Execute an Agreement for Intergovernmental Transfer with Partnership HealthPlan of California. BACKGROUND Since 2006, the California Department of Health Care Services (DHCS) has offered local governments that provide health care the opportunity to secure additional Medi -Cal revenues by participating in a voluntary Intergovernmental Transfer (IGT) program with their local Medi -Cal managed care plan. Partnership HealthPlan of California (PHC) is a non-profit community- based health care organization that contracts with the State to administer Medi -Cal benefits through local care providers to ensure Medi -Cal recipients have access to high-quality, comprehensive, cost-effective health care. Petaluma Fire is already in contract with PHC since it bills and receives payments for PHC-covered Medi -Cal patients who are treated and transported by Petaluma Fire ambulances. IGTs offer a way for entities like Petaluma Fire to receive additional Medi -Cal funds for ambulance services provided to PHC beneficiaries. PHC collects data on each provider's costs, charges and revenues for Plan services and recommends to DHCS which entities should be allowed to participate and at what dollar amount. Local governments volunteer to participate in these IGTS; no entity is required to participate. Last year signified Petaluma Fire's first year participating in the program and, by carefully following DHCS' guidelines, funds were indeed received, per City Council approval on June 1, 2015 (Resolution #15-074 N.C.S.), from transports made during FY 2013-14. This year will mark the second year participating and Petaluma Fire anticipates positive results once again, as described in the Financial section below. The IGT process will result in PHC paying public ambulance providers additional Medi -Cal revenues to offset previously unreimbursed costs for serving Medi -Cal plan members. The payment amounts will be determined by: (1) the provider's unreimbursed costs (and/or charges); (2) the number of other local governments participating in the IGTs in that county or region; (3) PHC's recommendations; and (4) DHCS's formulas. DISCUSSION In a rate range IGT, the local government entity transfers funds to the State (the "intergovernmental transfer") which are used to increase the actuarially sound rates the State pays the health plan and to reimburse the State for its administrative costs. The Plan then pays the local provider the IGT -funded proceeds that the local government transfer made possible. Because the local transfer is matched with Federal funds, the participating government provider receives the amount of the transfer plus new funds as well. For every dollar transferred, the provider receives a one-time Plan payment of approximately $1.60. These rate range IGTs have been approved by the Federal government and are referenced in California state law. They are similar to other types of IGTs and cost-sharing arrangements that California uses to finance Medi -Cal payments to local governments providing services to Medi - Cal patients. Any Plan rate increases are approved by the Federal government. Participation in IGTs represents an opportunity for local government providers of Medi -Cal services to re -coup a share of their costs for serving PHC patients. Using the IGT mechanism, PHC will be able to pay the providers a lump sum Medi -Cal payment to cover costs that were previously subsidized by the local government entity. The IGT program is for Medi -Cal patients who have Medi -Cal coverage that is managed specifically through Partnership HealthPlan HMO — equal to approximately 80% of HMO -managed Medi -Cal patients. This is a matching program requiring money up front to demonstrate what has been "spent" on Medi -Cal patients. Those matching funds, amounts that are different every year based on provider transport statistics, are returned back to the provider along with the new net funds from DHCS. Essentially, the local entity has its initial funding returned, along with the Federal match. The total amount of PHC's payment to the provider is considered Medi -Cal revenue. Pursuant to the terms of the Plan Provider Agreement, any revenue in excess of the provider's uncompensated cost of care for Plan members must be used for health care services. The definition of health care services, however, is broad and the services can be provided to the general population; they do not need to be Medi -Cal services provided exclusively to Medi -Cal patients. The new funds also do not have to be expended in the year received. Revenues may be used to operate existing EMS services, such as what occurred with funding received in the first participating year, or to support new or improved health care programs and services. Petaluma Fire anticipates using revenue from this second round of the program to purchase new, state-of- the-art heart monitors for the medic units which are highly technical and very expensive pieces of essential equipment. The Department is committed to seeking and using new funding sources, even if short-lived, to grow and maintain the high level of emergency medical service to which the growing City of Petaluma has become accustomed. FINANCIAL IMPACTS As stated earlier, this is the second year that Petaluma has participated in this program. Last year, the net new funds were anticipated to be $82,576; in fact, $105,555 was received. Similar positive results are expected this year. PHC has determined that the City of Petaluma needs to transfer funds equal to $254,144 from the General Fund as the Provider Contribution and $50,829 as the Administrative Fee to DHCS, pursuant to sections 14164 and 14301.4 of the Welfare and Institutions Code. In return, the City will receive net new funds totaling $188,071 in the form of a lump sum payment back to the City in the amount of $493,044 in supplemental Medi -Cal revenues. These figures were derived from research completed by PHC based on documentation provided by Petaluma Fire for FY 2014-15. The original funds provided by the City can be general tax revenues, patient fees or agency reserves made up of a combination of sources, and in this case will come from fund balance on hand in the City treasury. Net funds in excess of the originating payment will be budgeted for Fire Department use to be put towards the purchase of four new heart monitors. Medi -Cal is a major source of payment for locally provided ambulance services; receiving reimbursement for the true cost of that care can only benefit local government providers of ambulance services. ATTACHMENTS 1. Resolution a. Exhibit A to the Resolution: Intergovermnental Agreement Regarding Transfer of Public Funds b. Exhibit B to the Resolution: Intergovernmental Transfer Assessment Fee ATTACHMENT 1 RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT FOR INTERGOVERNMENTAL TRANSFER WITH PARTNERSHIP HEALTHPLAN OF CALIFORNIA WHEREAS, since 2006, the California Department of Health Care Services (DHCS) has offered local governments that provide health care the opportunity to secure additional Medi -Cal revenues by participating in a voluntary Intergovernmental Transfer (IGT) program with their local Medi -Cal managed care plan; and WHEREAS, Partnership HealthPlan of California (PHC), is a non-profit community- based healthcare organization that contracts with the State to administer additional Medi -Cal revenues to public ambulance providers (i.e., Petaluma Fire Department) to offset previously unreimbursed costs for serving Medi -Cal plan members; and WHEREAS, Partnership HealthPlan of California covers members who currently make up approximately 80% of HMO -managed Medi -Cal patients and, although the City incurs significant costs for these types of ambulance transports, it can only contractually bill and expect payment for a certain amount (i.e., a fixed rate of approximately $150 is received per Medi -Cal patient whiles costs incurred equal approximately $1,200 per patient); and WHEREAS, participation in an Intergovernmental Transfer Program represents an opportunity for local government providers of Medi -Cal services to re -coup a share of their costs for serving PHC patients, most notably because California tends to pay Plans at the lower end of the actuarially sound rate range and the Federal government, tapping potentially unclaimed Federal matches, works to make up the difference by requiring all managed care Plans to be paid at an actuarially sound rate; and WHEREAS, an IGT program of this type is a matching program, not a reimbursement program and, therefore, the Federal government will match the transferred funds, pay half of the Plan's rate increases and, in the end, the local entity receives its own funding plus the Federal match in return; and WHEREAS, PHC's role is to collect and submit data to DHCS on each entity interested in participating in the IGT and to assist each participating entity with the terms governing the Program and use of newly received revenue; and WHEREAS, PHC, as the agent for DHCS, has determined that the City of Petaluma shall transfer funds equal to $254,144 to DHCS as the Provider Contribution and $50,829 as the DHCH Administrative Fee pursuant to section 14164 and 14301.4 of the Welfare and Institutions Code in order to receive net new funds totaling $188,071 in the form of a lump sum amount of supplemental Medi -Cal revenues (or $493,044 back in return); and WHEREAS, the up -front funds required from the City of Petaluma can be garnered from general tax revenues, patient fees or agency reserves made up of a combination of sources and while the total amount of PHC's payment back to the provider is considered Medi -Cal revenue and must be used for health care services, the funds do not need to be Medi -Cal services provided exclusively to Medi -Cal patients and funds do not have to be expended in the year received. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Petaluma, as follows: 1. The proposed agreement with the California Department of Health Care Services (DHCS) for Intergovernmental Transfer (IGT) in order to increase Medi -Cal reimbursement for EMS ambulance transport services previously provided to Partnership Health Plan's members in FY 2014-15 and which will result in transfer of local matchable funds to the State in the summer of 2016, attached to this resolution as Exhibit A, is hereby approved and the City Manager is authorized to sign the agreement on behalf of the City. 2. The proposed agreement with the California Department of Health Care Services (DHCS) for Intergovernmental Transfer Assessment Fee will result in payment of a 20% fee to DHCS which is a condition of participating in the IGT, attached to this resolution as Exhibit B, is hereby approved and the City Manager is authorized to sign the agreement on behalf of the City. EXHIBIT A CONTRACT # INTERGOVERNMENTAL AGREEMENT REGARDING TRANSFER OF PUBLIC FUNDS This Agreement is entered into between the CALIFORNIA DEPARTMENT OF HEALTH CARE SERVICES ("DHCS") and the City of Petaluma with respect to the matters set forth below. RECITALS A. This Agreement is made pursuant to the authority of Welfare & Institutions Code, section 14164 and 143 01.4. B. The Partnership HealthPlan of California is a County Organized Health System formed pursuant Welfare and Institutions Code section 14087.54 and County Code Chapter 7.58, County Code Chapter 2.45, County Code Chapter 2, Title 2, and County Code Chapter 34. Partnership HealthPlan of California is a party to a Medi -Cal managed care contract with DHCS, entered into pursuant to Welfare and Institutions Code section 14087.3, under which Partnership HealthPlan of California arranges and pays for the provision of covered Medi -Cal health care services to eligible Medi -Cal members residing in the County. THEREFORE, the parties agree as follows: AGREEMENT 1. Transfer of Public Funds 1.1 The City of Petaluma shall transfer funds to DHCS pursuant to section 14164 and 14301.4 of the Welfare and Institutions Code, up to a maximum total amount of Two hundred fifty-four thousand one hundred forty-four dollars ($254,144), to be used solely as a portion of the nonfederal share of actuarially sound Medi -Cal managed care capitation rate increases for Partnership HealthPlan of California for the period July 1, 2014 through June 30, 2015 as described in section 2.2 below. The funds shall be transferred in accordance with a mutually agreed upon schedule between the City of Petaluma and DHCS, in the amounts specified therein. Template Version -5/13/2016 City of Petaluma/Partnership Draft 5/15/15 EXHIBIT A CONTRACT # 1.2 The City of Petaluma shall certify that the funds transferred qualify for federal financial participation pursuant to 42 C.F.R. part 433 subpart B, and are not derived from impermissible sources such as recycled Medicaid payments, federal money excluded from use as State snatch, impermissible taxes, and non -bona fide provider -related donations. For transferring units of government that are also direct service providers, impermissible sources do not include patient care or other revenue received from programs such as Medicare or Medicaid to the extent that the program revenue is not obligated to the State as the source of funding. 2. Acceptance and Use of Transferred Funds by DHCS 2.1 DHCS shall exercise its authority under section 14164 of the Welfare and Institutions Code to accept funds transferred by the City of Petaluma pursuant to this Agreement as intergovernmental transfers ("IGTs"), to use for the purpose set forth in section 2.2 below. 2.2 The funds transferred by the City of Petaluma pursuant to this Agreement shall be used to fund a portion of the nonfederal share of increases in Medi -Cal managed care actuarially sound capitation rates described in paragraph (4) of subdivision (b) of section 14301.4 of the Welfare and Institutions Code and shall be paid, together with the related federal financial participation, by DHCS to Partnership HealthPlan of California as part of Partnership HealthPlan of California's capitation rates for the period July 1, 2014 through June 30, 2015. The rate increases paid under section 2.2 shall be used for payments related to Medi -Cal services rendered to Medi -Cal beneficiaries. The rate increases paid under this section 2.2 shall be in addition to, and shall not replace or supplant, all other amounts paid or payable by DHCS or other State agencies to Partnership HealthPlan of California. 2.3 DHCS shall seek federal financial participation for the rate increases specified in section 2.2 to the full extent permitted by federal law. 2 Template Version -5/13/2016 City of Petaluma/Partnership Draft 5/15/15 EXHIBIT A CONTRACT # 2.4 The parties acknowledge the State DHCS will obtain any necessary approvals from the Centers for Medicare and Medicaid Services prior to the payment of any rate increase pursuant to section 2.2. 2.5 The parties agree that none of these funds, either the City of Petaluma or federal matching funds will be recycled back to the City of Petaluma's general fund, the State, or any other intermediary organization. Payments made by the health plan to providers under the terns of this Agreement and their provider agreement constitute patient care revenues. 2.6 Within One Hundred Twenty (120) calendar days of the execution of this Agreement, DHCS shall advise the City of Petaluma and Partnership HealthPlan of California of the amount of the Medi -Cal managed care capitation rate increases that DHCS paid to Partnership HealthPlan of California during the applicable rate year involving any funding under the terms of this Agreement. 2.7 If any portion of the funds transferred by the City of Petaluma pursuant to this Agreement is not expended for the specified rate increases under Section 2.2, DHCS shall return the unexpended funds to the City of Petaluma. 3. Amendments 3.1 No amendment or modification to this Agreement shall be binding on either party unless made in writing and executed by both parties. 3.2 The parties shall negotiate in good faith to amend this Agreement as necessary and appropriate to implement the requirements set forth in section 2 of this Agreement. 4. Notices. Any and all notices required, permitted or desired to be given hereunder by one party to the other shall be in writing and shall be delivered to the other party personally or by United States first class, certified or registered mail with postage prepaid, addressed to the other party at the address set forth below: 3 Template Version -5/13/2016 City of Petaluma/Partnership Draft 5/15/15 EXHIBIT A CONTRACT # To the City of Petaluma: John C. Brown, City Manager City of Petaluma 11 English Street Petaluma, CA 94952 With copies to: To DHCS: Dave Kahn, Battalion Chief -Fire Administration Petaluma Fire Department 198 D Street Petaluma, CA 94952 Carolyn Stewart Senior Director of Financial Analysis Partnership HealthPlan of California 4665 Business Center Drive Fairfield, CA 94534 Sandra Dixon California Department of Health Care Services Capitated Rates Development Division 1501 Capitol Ave., Suite 71-4002 MS 4413 Sacramento, CA 95814 5. Other Provisions 5.1 This Agreement contains the entire Agreement between the parties with respect to the Medi -Cal rate increases for Partnership HealthPlan of California described in section 2.2 that are funded by the City of Petaluma and supersedes any previous or contemporaneous oral or written proposals, statements, discussions, negotiations or other agreements between the City of Petaluma and DHCS. This Agreement is not, however, intended to be the sole agreement between the parties on matters relating to the funding and administration of the Medi -Cal program. One or more other agreements 4 Template Version -5/13/2016 City of Petaluma/Partnership Draft 5/15/15 EXHIBIT A CONTRACT # already exist between the parties regarding such other matters, and other agreements may be entered into in the future. This Agreement shall not modify the terms of any other agreement between the parties. 5.2 The nonenforcement or other waiver of any provision of this Agreement shall not be construed as a continuing waiver or as a waiver of any other provision of this Agreement. Agreement. 5.3 Section 2 of this Agreement shall survive the expiration or termination of this 5.4 Nothing in this Agreement is intended to confer any rights or remedies on any third party, including, without limitation, any provider(s) or groups of providers, or any right to medical services for any individual(s) or groups of individuals; accordingly, there shall be no third party beneficiary of this Agreement. 5.5 Time is of the essence in this Agreement. 5.6 Each party hereby represents that the person(s) executing this Agreement on its behalf is duly authorized to do so. 6. State Authority. Except as expressly provided herein, nothing in this Agreement shall be construed to limit, restrict, or modify the DHCS' powers, authorities, and duties under federal and state law and regulations. 7. Approval. This Agreement is of no force and effect until signed by the parties. 8. Term. This Agreement shall be effective as of July 1, 2014 and shall expire as of June 30, 2017 unless terminated earlier by mutual agreement of the parties. Template Version -5/13/2016 City of Petaluma/Partnership Draft 5/15/15 10 EXHIBIT A CONTRACT# SIGNATURES IN WITNESS WHEREOF, the parties hereto have executed this Agreement, on the date of the last signature below. THE CITY OF PETALUMA Date: John C. Brown, City Manager, City of Petaluma THE STATE OF CALIFORNIA, DEPARTMENT OF HEALTH CARE SERVICES: Date: Jennifer Lopez, Acting Division Chief, Capitated Rates Development Division Template Version -5/13/2016 City of Petaluma/Partnership Draft 5/15/15 11 EXHIBIT B CONTRACT INTERGOVERNMENTAL TRANSFER ASSESSMENT FEE This Agreement is entered into between the CALIFORNIA DEPARTMENT OF HEALTH CARE SERVICES ("State DHCS") and THE CITY OF PETALUMA with respect to the matters set forth below. RECITALS A. This Agreement is made pursuant to the authority of Welfare & Institutions Code, section 14301.4. THEREFORE, the parties agree as follows: AGREEMENT 1. Transfer of Public Funds 1.1 THE CITY OF PETALUMA shall make Intergovernmental Transfer(s) ("IGTs") to State DHCS pursuant to section 14164 of the Welfare and Institutions Code and paragraph 1.1 of the Intergovernmental Agreement(s) Regarding the Transfer of Public Funds contract numbers)-, to be used as a portion of the non-federal share of actuarially sound Medi -Cal managed care rate range capitation increases ("non-federal share IGT") to Partnership Healthplan of California ("PHC") for the period of July 1, 2014 to June 30, 2015. 1.2 The parties acknowledge that State DHCS will obtain any necessary approvals fiom the Centers for Medicare and Medicaid Services ("CMS") pertaining to the acceptance of non- federal share IGTs and the payment of non-federal share IGT related rate range capitation increases to Partnership Healthplan of California. 2. Intergovernmental Transfer Assessment Fee 2.1 The State DHCS shall, upon acceptance of non-federal share IGTs pursuant to the Intergovernmental Agreement(s) Regarding the Transfer of Public Funds, and as described in paragraph 1 Template Version 4/2/12 IGT Assessment Fee The City of Petaluma/Partnership Draft 4/25/16 EXHIBIT B CONTRACT of this Agreement, exercise its authority under section 14301.4 of the Welfare and Institutions Code to assess a 20 -percent assessment fee on the entire amount of the non-federal share IGTs to reimburse State DHCS for the administrative costs of operating the IGT program pursuant to this section and for the support of the Medi -Cal program. 2.2 The funds subject to the 20 -percent assessment fee shall be limited to non-federal share IGTs made by the transferring entity, THE CITY OF PETALUMA, pursuant to the Intergovernmental Agreement(s) Regarding the Transfer of Public Funds, and as described in paragraph 1 of this Agreement. 2.3 The 20 -percent fee will be assessed on the entire amount of the non-federal share IGTs pursuant to the Intergovernmental Agreement(s) Regarding the Transfer of Public Funds, and as described in paragraph 1 of this Agreement, and will be made in addition to, and transferred separately from, the transfer of funds pursuant to the Intergovernmental Agreement(s) Regarding the Transfer of Public Funds. 2.4 The 20 -percent assessment fee pursuant to this Agreement is non-refundable and shall be wired to State DHCS separately from, and simultaneous to, the non-federal share IGTs pursuant to the Intergovernmental Agreement(s) Regarding the Transfer of Public Funds, and as described in paragraph 1 of this Agreement. However, if any portion of the non-federal share IGTs is not expended for the specified rate increases stated in paragraph 2.2 of the Intergovernmental Agreement(s) Regarding the Transfer of Public Funds, DHCS shall return a proportionate amount of the 20 -percent assessment fee to the CITY OF PETALUMA. 2 Template Version 4/2/12 IGT Assessment Fee The City of Petaluma/Partnership Draft 4/25/16 EXHIBIT B CONTRACT 3. Other Provisions 3.1 This Agreement contains the entire Agreement between the parties with respect to the 20 -percent assessment fee on non-federal share IGTs pursuant to the Intergovernmental Agreement(s) Regarding the Transfer of Public Funds, and as described in paragraph 1, and supersedes any previous or contemporaneous oral or written proposals, statements, discussions, negotiations or other agreements between the transferring entity and State DHCS. This Agreement is not, however, intended to be the sole agreement between the parties on matters relating to the funding and administration of the Medi -Cal program. One or more other agreements may exist between the parties regarding such other matters, and other agreements may be entered into in the future. This Agreement shall not modify the terms of any other agreement between the parties. 3.2 Time is of the essence in this Agreement. 3.3 Each party hereby represents that the person(s) executing this Agreement on its behalf is duly authorized to do so. 4. State Authority. Except as expressly provided herein, nothing in this Agreement shall be construed to limit, restrict, or modify State DHCS' powers, authorities, and duties under federal and state law and regulations. 5. Approval. This Agreement is of no force and effect until signed by the parties. 3 Template Version 4/2/12 IGT Assessment Fee The City of Petaluma/Partnership Draft 4/25/16 4 CONTRACT SIGNATURES EXHIBIT B IN WITNESS WHEREOF, the parties hereto have executed this Agreement, on the date of the last signature below. THE CITY OF PETALUMA: Date: John C. Brown, City Manager, City of Petaluma THE STATE OF CALIFORNIA, DEPARTMENT OF HEALTH CARE SERVICES: IN Date: Jennifer Lopez, Acting Division Chief, Capitated Rates Development Division Template Version 4/2/12 IGT Assessment Fee The City of Petaluma/Partnership Draft 4/25/16 j l 4