HomeMy WebLinkAboutStaff Report 3.B 07/16/2018DATE: July 16, 2018
TO: Honorable Mayor and Members of the City Council 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 City of Petaluma ambulances. IGTS offer a way for entities like Petaluma 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.
Petaluma has participated in the program for the past three years, and has seen positive results
from its participation.
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.
1
DISCUSSION
As a participant in the IGT, the City transfers funds to the State (the "intergovernmental
transfer") which are used to increase the 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 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 $1.84.
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.
FINANCIAL IMPACTS
This is the fourth year that Petaluma will participate in this program. Last year, the program
covered two rate periods: FY 2015/16 and FY 2016/17. The final amounts already received by
PHC are listed below, along with the estimated figures for this round covering FY 2017/18.
PHC has determined that the City of Petaluma will need to transfer funds equal to $393,094 fiom
the General Fund as the Provider Contribution and $78,618.80 as the Administrative Fee to
DHCS. In return, the City will receive estimated net new funds totaling $330,000 in the form of
a lump sum payment back to the City in the amount of $801,712.80 in supplemental Medi -Cal
revenues. These figures were derived from research completed by PHC based on documentation
provided by Petaluma Fire for the stated rate period.
*anticipated estimated amounts as deduced by DHCS
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 may be budgeted for
Fire Department use to be put towards establishment of new programs or further implementation
and support of existing programs. 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: Intergovernmental Agreement Regarding Transfer of Public
Funds
0
Transfer to
Fund the IGT
DHCS 20%
Admin Fee
Total Funds
Received
New Net
Funds
FY 2015/16
$188,293
$37,658.60
$400,201.85
$174,250.25
FY 2016/17
$227,761
$45,552
$464,414.26
$191,101.26
FY 2017/18
$393,094*
$78,618.80*
$801,712.80*
$330,000.00*
*anticipated estimated amounts as deduced by DHCS
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 may be budgeted for
Fire Department use to be put towards establishment of new programs or further implementation
and support of existing programs. 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: Intergovernmental Agreement Regarding Transfer of Public
Funds
0
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 and 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 $393,094 to DHCS as the Provider Contribution and $78,618.80 as
the DHCH Administrative Fee pursuant to section 14164 and 14301.4 of the Welfare and
Institutions Code in order to receive estimated net new funds totaling $330,000 in the form of a
lump sum amount of supplemental Medi -Cal revenues for the rate period of FY 2017/18; and
0
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 for
Intergovernmental Transfer in order to increase Medi -Cal reimbursement for EMS
ambulance transport services previously provided to Partnership Health Plan's members
in FY 2017/18 and which will result in transfer of local matchable funds to the State in
late 2018, 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.
EXHIBIT A
CONTRACT # 17-94793
CONTRACT H 17-94793
ENTERGOVERN,MENTAL 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 FIRE DEPARTMENT
(GOVERNMENTAL FUNDING ENTITY) with respect to the matters set forth below.
The parties agree as follo,,vs-
AGREEMENT
I , Transfer of Public Funds
1.1 The GOVERNMENTAL FUNDING ENTITY agrees to make a transfer
of ftu16 to DHCS pursuant to sections 14164 and 14301,4 of the Welfare and lotitutiom Code.
The amount transferred shall be based on the sura of the following rate categor)r per rnember per
month (PNVINI) contribution increments multiplied by member months.
Funding Enfity.,
City of Petaluma Fire Deparlm ard
Heal(b Plan,
Partnerft
Rating Region.
Sonoma
Estimated
Cocuibution
Estimated
Contribution (Non -
Rate Category
PMPM
"MamborMonths
Ved448hare)
Mild -non MtH 1P
0.14344i637
48,24!9
Child - 14CHIP
DA3
221,BBO
5
6,667
Adult - nan M CHIP
$
0.55
106,,+55
S
92,706
Adult - MCHIP
013
5,811
SPO
1,7275,596
S
130,0-24
SFTFull Duat
0,26,
138,4111
S
35,587
BccTP
2,02
1,153
$
2,32q
LTC
7-21
319
S
2,2396
LTC Fall Duals
4.10
11'M2
S
48,50�
Optimal Ea�pana am
712017 - 12'201 7
$
0.06
197,207
5
11,832
Optional Expansion
I t201 8 - eV201 8
0107
186,439
S
13,751
.Estimated Wal
11361,13451
393,094
Template Version- 3)'2018
1
EXHIBIT A
CONTRACT # 17-94793
CONTRACT H 17-94793
The GOVERNMENTAL FUNDING ENTITY agrees to initially transfer amounts that are
calculated using the Estimate d Member Months in the chart above, which will be reconciled to
actual enrollment for the. senrice period of July 1, 2017 through June 30, 2018 in accordance with
Sub -Section 1.3 of this AgreenienL The funds trLa
nsfenred shall be used as described in Sub -
Section 2.2 of this Agreement. The funds shall be transferred in accordance with the terms and
conditions; including schedule and amount, established by DHCS,
1.2 The GOVERNMENT! AL FUNDING ENTITY shall certi(y shat the funds
transferred qualify for Federal Financial Participation pursuant to 42. C,F.R- part 433, subpart B,
and are. not derived from inipen-nissible sources such as recycled Medicaid paments, Federal
money excluded from use as State match, inipen-nissible taxes, and non -bona fide provider -
related donations. Impe-n-nissible sources do not include patient care or other revenue received
frons programs such as Medicare or Medicaid to the extent that the program revenue is not
obligated to the Slate as the source of funding.
13 CHCS shall reconcile the -Estimated Member Months," in Sub -Section
1.1 of this Agreement, to actual enrollment in HEALTH PLAN(S) for the service period of
July 1, 2017 through June 30, 2018 using actual enrollment figures taken from DHCS records.
Enrollm-ent reconciliation will occur on an ongoing basis as. updated enrollment figures become
available. Actual enrollment figures will be considered final two years after June. 30, 2018, If
this reconciliation results in an increase to the total amount necessary to fund the notifederal
share of the payments described in Sub -Section 2-2, the GOVERNMENTAL FUNDING
ENTITY agrees to traiisfer miy additional funds necessary to cover the difference. If This
reconciliation results In Lq decrease to the total amount necessary to fund the nonfederal share of
the payments described in Sub -Section 2,2, DHCS. agrees to return the unexpended funds to the
2
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EXHIBIT A
CONTRACT # 17-94793
CONTRACT #1 94793
GOVERNMENTAL FUNDING ENTITY. If DHCS and the GOVERNMENTAL FUNDING
ENTITY mutually ag-ree, amounts due to or owed by the GOVERNMENTAL FUNDING
ENTITY may be offset against future transfers.
2, Acceptance and Use of Transferred Funds
2.1 DHCS shall exercise its authority under section 14164 of the Welfare and
Institutions Code to accept funds transferred by the GOVERNMENTAL FUNDING ENTITY
pursuant to this Apgreenient as lGTs., to use for the purpose set forth in Sub -Section 2.2.
12 The funds transferred by the GOVERNMENTAL FUNDING ENTITY
pursuant to Section 11 of this Agreement shall be used to fund the non-federal share of Medi -Cal
Managed Care actuarially sound capitation rates described in section 14301,4(b)(1-) of the
Welfare and Institutions Code as reflected in the, eDntribution PIS PM and rate categories
reflected in the chart set forth in Sub -Section 1.1. The funds transferred shall be paid, together
with The related Federal Financial Participation, by DHCS to HEALTH PLAN(S) as part of
HEALTH PLAN(S)' capitation rates for the service period ,of July 1, 2017 through June 30,
2018. in accordance with section 1430, 1. A of the Welfare. and Institutions Code,
2-3 DHCS shall seek Federal Financial Participation for the capitation rates
specified in Sub -Section 2.2 to the full extent permitted by federal law.
2A The parties acknowledge that DHCS will obtainany necessary approvals
from the Centers for Medicare and Medicaid Services_
'?.5 DHCS shall not direct HEALTH PLAN(S)'expenditure of the payi-nents
received pursuant to Sub -Section 2.2.
3, Assessment Fee
3
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0
EXHIBIT A
CONTRACT # 17-94793
CONTRACT 17-94`93
3.1 DHCS shall exercise its authorlt)l under section 14301.4 of the. Welfare
and Institutions Code to assess a 20 percent fee. related to the amounts transferred pursuant to
Section I of this Agreement, except as proNrided in Sub -Section 3.. G'O'B
FUNDING ENTITY agrees to pay the full amount of that assessment in addition to the funds
transferred pursuant to Section I of this Agreement,
assessment fee shall not be applied to any portion of funds
J-2 The 20 -percent asse I
transferred pursuant to Section I that are exempt in accordance with sections 14301 A(d) or
14301,5(b'1(4) of the Welfare and Institutions Code- DHCS shall have sole discretion to
determine the amount of the funds transferred pursuant to Section I that wi I I not be subject to a
20 percent fee. DHCS has determined that $0.00 of the transfer amounts, will not bee assessed a
20 percent fee, subject to Sub -Section, 3.3.
3.3 The 20 -percent assessment fey pursuant to this Agreement is non-
refundable and shalt be wired to DHCS separately from, and simultaneous to, the transfer.
amounts made under Section I of this Agreement. If, at the time of the reconciliation performed
pursuant to Sub -Section 1.3 of this Agreement, there is a chance in the aniourit transferred that is
sukjeck to the 20 -percent assessment in accoTdance with Sub -Section 3. 1, then a proportional
adjustment to the assessnirent fee will be made.
4. Amendments
4.1 No amendment or modification to this Agreement sliaLl be binding on
either party unless made in writing and executed by both parties.
4-2 The parties shall negotiate in good faith to amend this Agivement as
necessary and appropriate to implement the. Tequirements set forth in Section 2 of this
ApTeernent,
Ll
Template Vmion- 1"2018
I
EXHIBIT A
CONTRACT # 17-94793
CONTRACT H 17-94793
5, Notice -i. Any and all notices required, perinitted or desired to be given hereunder
by one part), to the other shall be in ivriting and shall be delivered to the other party personally or
by United States First Class, CertffleA or Registered nail with postage prepaid, addressed to The
other party at the address set forth below. -
To the. GOVERNMENTAL FUNDING ENTITY.,
John C. Brown, City Manager
City of Petaluma
11 English Street
Petaluma, CA 94952
qWumaxa.us
With copies to:
David Kahn, Battalion Chief -EMS
Petaluma Fire Deparli-nent
198 D Street
Petalurna, CA 94952
=11
Corey Garberollio, Finance Director
City of Petaluma
11 English Street
Petaluma, CA 94952
and
Carolyn Stewart
Senior Director of Financial Analysis
Partnership 1-lealthi'lan of California
4665 Business Center Dive
Fairfield, CA 94534
cs texa AL�t; partnersh ip,or g
Template Version- 1122018
To DHCS.
Sandra Dixon
California Department of Health Care Services
Capitated. Rates Development Division
1501 Capitol Ave,, Suite 7 1 AjD02
MS 4413
Sacramento, CA 95814
Sandra.Dixon@Acs.ca,gov
EXHIBIT A
CONTRACT # 17-94793
CONTRACT R 17-94793
6. Other Provisions
6.1 This Agree-raent, contains the entire Agreement between the parties with
respect to the Medi -Cal payments described in Sub -Section 2.2 of this Agreement that are funded
by the GOVERNMENTAL FUNDING ENTITY, and supersedes any previous or
conternpora,neous oral or written proposals, statements, discussions, negotiations or other
agreements between the GOVERNMENTAL FUNDING ENTITY and DHCS relating to the
subject matter of this Agreement. This Agreement is not, however, intended to be the sole
agreement behyeen the parties on matters relating 'to the funding and administration of the. Medi -
Cal program, This Agreement shall not modify the terms of any other agreement, extisting or
entered into in the future, behveen the parties,
6.2 The non -enforcement 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
ALp-eernent,
6.3 Sections 2 and 3 of this Agreement shall survive the expiration or
tennination ofthis. Agreement_
6ANothing 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
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EXHIBIT A
CONTRACT # 17-94793
CONTRACTfl 17-947! 3
to medical services for any individual(s) or groups of individuals. Accordingly, there shall be no
third party beneficiary of this Agreement,
E5 Time is of the essence in this Agreement.
&6 Each party hereby represents that the person(s) executing this Agreement
on its behalf is duly autt oria-d. to do so.
7, State Authority, Except as expressly provided herein, nothing in. this Agreement
shall be construed to limit, restrict, or modify the DHC S' powers, authorities, and duties under
Federal and State law and regulations.
& A roval. This Agreement is of no force and. effect until signed by the parties.
9, Term, This ALTeement shall be efTective as of July 1, 2.017 and. shall expire, as of
December 31, 2020 unless terminated earlier by mutual agreement of the parties,
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, on
the date of the last signature below -
'THE CITY OF PETALUMA,
By;
John C. Brown, C111,
.,� Manager
Date..,
THE STATE OF CALIFORNIIA,, DEPARTME-IN'T' OF HEALTH. CARE SERVICES:
By: Dater
Jennifer Lopez, Actin I
g Division Chief, Capitated Rates Development Division
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