HomeMy WebLinkAboutStaff Report 3.B 07/01/2019p,. L AgendaI •
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DATE: July 1, 2019
TO: Honorable Mayor and Members of the City Council through the City Manager`U
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 four years and has seen positive results
from its participation.
The TGT 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
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.
PUBLIC OUTREACH
This agenda item appeared on the City's tentative agenda document on June 17, 2019, which was
a publicly -noticed meeting.
FINANCIAL IMPACTS
This is the fifth year that Petaluma will participate in this program. Last year, the program
covered the rate period of FY 2017/18. The final amounts already received by PHC are listed
below, along with the estimated figures for this round covering FY 2018/19. PHC has
determined that the City of Petaluma will need to transfer funds equal to $371,959 from the
General Fund as the Provider Contribution and $74,392 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 estimated amount of $776,351 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.
ON
*estimated amounts as deduced by DHCS
DHCS 20%
Transfer to
Admin Fee
Fund the IGT
FY 2015/16
$188,293
FY 2016/17
$227,761
FY 2017/18
$385,453
FY 2018/19
$371,959*
*estimated amounts as deduced by DHCS
DHCS 20%
Total Funds
Admin Fee
Received
$37,659
$400,201.85
$45,552
$464,414.26
$77,091
$1,187,221.14
$74,392*
$776,351*
New Net
Funds
$174,249.85
$191,101.26
$724,677.14
$330,000* i
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
ATTACHMENT I
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
focal 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 iG,r 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 $371,959 to DHCS as the Provider Contribution and $74,392 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 slim
amount of supplemental Medi -Cal revenues for the rate period of FY 2018/19; 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 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 2018/19, which will result in the transfer of local matchable funds to the State in
late 2019, and is attached to this resolution as Exhibit A, is hereby approved and the City
Manager is authorized to sign the agreement and any necessary related documents on
behalf of the City.
5
CONTRACT # 18-95609
CONTRACT #18•-95609
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 FIRE DEPARTMENT
(GOVERNMENTAL FUNDING ENTITY) with respect to the matters set forth below.
The parties agree as follows;
AGREEMENT
1. Transfer of Public Funds_
1.1 The GOVERNMENTAL FUNDING ENTITY agrees to make a transfer
of funds to DHCS pursuant to sections 14164 and 14301.4 of the Welfare and Institutions Code.
The amount transferred shall be based on the stmt of the applicable rate category per member per
month (PMPM) contribution increments multiplied by member months, as reflected in Exhibit 1.
The GOVERNMENTAL FUNDING ENTITY agrees to initially transfer amounts that are
calculated using the Estimated Member Months in Exhibit 1, which will be reconciled to actual
enrollment for the service period of July 1, 2018 through June 30, 2019 in accordance with Sub -
Section 1.3 of this Agreement. The fluids transferred shall be used as described in Sub -Section
2.2 of this Agreement. The fronds shall be transferred in accordance with the terms and
conditions, including schedule and amount, established by DIICS.
1.2 The GOVERNMENTAL FUNDING ENTITY shall certify that the fiords
transferred qualify for Federal Financial Participation pursuant to 42 C.F.R, part 433, subpart B,
and are not derived from imperipissible sources such as recycled Medicaid payments, Federal
money excluded from use as State match, impermissible taxes, and non -bona fide provider -
Template Version- 7/2018
EXHIBIT A
CONTRACT # 18-95609
CONTRACT #18-95609
related donations, 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 Rinding;
13 DHCS shall reconcile the `Estimated Member Months," in Exhibit 1, to
actual enrollment in HEALTH PLAN(S) for the service period of July 1, 2018 through June 30,
2019 using actual enrollment .figures taken from DHCS records, Enrollment reconciliation will
occur on an ongoing basis as updated enrollment figures become available, Actual enrollment
figures will be considered final two years after .lune 30, 2019. If this reconciliation results in an
increase to the total amount necessary to fund the nonfederal share of the payments described in
Sub -Section 2,2, the GOVERNMENTAL FUNDING ENTITY agrees to transfer any additional
funds necessary to cover the difference. If this reconciliation results in a 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 GOVERNMENTAL FUNDING ENTITY.
If DHCS and the GOVERNMENTAL FUNDING ENTITY mutually agree, amounts due to or
owed by the GOVFRNMENTAL FUNDING ENTITY may be offset against future transfers.
2. Accet)tance and Use of Transferred Funds,
2.1 DHCS shall exercise its authority tinder section 14164 of the Welfare and
Institutions Code to accept fiords transferred by the GOVERNMENTAL FUNDING ENTITY
pursuant to this Agreement as IGTs, to use for the purpose set forth in Sub -Section 2.2.
2.2 The fiends transferred by the GOVERNMENTAL FUNDING ENTITY
pursuant to Section I and Exhibit I 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)(4)
of the Welfare and Institutions Code as reflected in the contribution PMPM and rate categories
2
Template Version- 7/2018
EXHIBIT A
CONTRACT # 18-95669
CONTRACT' #18-95609
reflected in Exhibit 1, The funds transferred shall be paid, together with the related Federal
Financial Participation, by DHCS to TIEALTH"PLAN(S) as part of III EALTIJ PLAN(S)'
capitation rates for the service period of July 1, 2018 through Rine 30, 2019, in accordance with
section, 14301.4 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,
2.4 The parties acknowledge that DIICS will obtain any necessary approvals
from the Centers for Medicare and Medicaid Services,
2.5 DHCS shall not direct HEAIATI PLAN(S)' expenditure of the payments
received pursuant to Sub -Section 22,
3. Assessment Fee
3.1 DHCS shall exercise its authority 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 provided in Sub -Section 3.2. GOVERNMENTAT,
FUNDING ENTITY agrees to pay the Rill amount of that assessment in addition to the funds
transferred pursuant to Section I of this Agreement,
3.2 The 20 -percent assessment fee shall not be applied to any portion of funds
transferred pursuant to Section 1 that are exempt in accordance with sections 14301.4(4) or
14301,5(b)(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 will not be subject to a
20 percent fee. DHCS has determined that $0.00 of the transfer amounts will not be assessed a
20 percent fee, subject to Sub -Section 3.3.
3
Template Version- 7/2018
EXHIBIT A
CONTRACT # 18-95609
CONTRACT #18-95609
33 The 20 -percent assessment fee pursuant to this Agreement is non-
refiuidable and shall be wired to DHCS separately from, and simultaneous to, the transfer
amounts made under Section 1 of this Agreement. If, at the time of the reconciliation performed
pursuant to Sub -Section 1.3 of this Agreement, there is a change in the amount transfer ed that is
subject to the 20 -percent assessment in accordance with Sub -Section 3.1, then a proportional
adjustment to the assessment fee will be made,
4. Amendments
4.1 No amendment or modification to this Agreement shall 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 Agreement as
necessary and appropriate to implement the requirements set forth in Section 2 of this
Agreement.
5. 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:
To the GOVERNMENTAL FUNDING ENTITY;
Peggy Flynn, City Manager
City of Yetaluma
I 1 English Street
Petaluma, CA 94952
Oflvnn0McitvofDCtaluma,ora
With copies to:
4
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EXHIBIT A
CONTRACT # I8-95609
CONTRACT #18-95609 .
To DISCS:
Jeff Schach, Assistant Dire Chief
Petalu►na Fire Department
198 D Street
Petaluma, CA 94952
iscliach eitvofDctalunaa.ore
and
Corey Garberolio, finance Director
City of Petaluma
I I English Street
Petaluma, CA 94952
cL,arberoncitvo fueta lama. ora
and
Jeff Ingram, Director, fP&A
Partnership IlealthPlan of California
4665 Business Center Drive
Fairfield, CA 94534
iinarauinpartnershi ulrn.org
Sandra Dixon
California Department of Health Care Services
Capitated Rates Development Division
1501 Capitol Ave., Suite 71-4002
MS 4413
Sacramento, CA 95814
Sandra.Dixon )dhcs.ca.gov
6. Other Provisions
6.1 This Agreement 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
contemporaneous oral or written proposals, statements, discussions, negotiations or other
agreements between the GOVERNMENTAL, FUNDING ENTITY and DHCS relating to the
Template Version- 7/2018
EXHIBIT A
CONTRACT # 18-95609
CONTRACT #18-95609
subject matter of this Agreement. This Agreement is not, however, intended to be the sole
agreement between the parties on matters relating to the finding and administration of the Medi -
Cal program. This Agreement shall not modify the terms of any other agreement, existing or
entered into in the future, between the parties.
6.2 The non -enforcement or other waiver of any provision of this Agreement
shall not be construed as a continuing waiver oras a waiver of any other provision of this
Agreement.
6.3 Sections 2 and 3 of this Agreement shall survive the expiration or
termination of this Agreement.
6A 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.
6.5 Time is of the essence in this Agreement.
6.6 Each party hereby represents that the person(s) executing this Agreement
on its behalf is duly authorized to do so.
7. State Authority. Except as expressly provided herein, nothing in this Agreement
shall be construed to limit, restrict, or modify the DIICS' powers, authorities, and duties under
Federal and State law and regulations.
8. Approval, This Agreement is of no force and effect until signed by the parties.
9. Term., This Agreement shall be effective as of July 1, 2018 and shall expire as of
December 31, 2021 unless terminated earlier by mutual agreement of the parties.
6
Template Version- 7/2018
EXHIBIT A
CONTRACT # 18-95609
CONTRACT #18-95609
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, on
the date of the Iast signature below.
THE CITY OF PETALUMA FIRE DEPARTMENT:
By:
Peggy Flynn, City Manager, City of Petaluma
Date:
THE STATE OF CALIFORNIA, DEPARTMENT OF HEALTH CARE SERVICES:
By: Date:
Jennifer Lopez, Division Chief, Capitated Rates Development Division.
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Template Version- 7/2018
Exhibit l
Funding Entity:
Health Plan:
Rating Region:
Rate Category
Child - non MCHIP
Child - MCHIP
Adult - non MCI -HP
1 Adult - 1\4CI31P
SPD
J SPD/Full-Dual
IBCCTP
1 L1'C
1 LTC/Full-Dual
1 -Whole Child Model
Optional Expansion-
Estimated
xpansionEstimated Total
Template Version- 7/2018
;City ofPetahmra Fire Deparlment
}Partnership Health Plan
Northern Re.gion
Contribution PMPM
$ 0,04
$ 0.01
$ 0.14
$ 0.02
$ 0.43
$ 0.07
$ 0.59
$ 1,60
$ 1,31
$ 1,001
$ 0.02 1
Estimated Member
Months
1,053,493
439,588
563,208
11,019
296,959
468,766
2,387
655
24,163
28,034
1,185,175
4,073,447
EXHIBIT A
CONTRACT # 18-95609
CONTRACT #18-95609
Estitruted
C:onftibutlon (Non -
Federal Share)
$ 42,1401
$ 4,3961
$ 78,8491
$ 2201
$ 127,692
$ 32,814 1
$ 1,408
$ 1,048
$ 31,654
$ 28,034
$ 23,704
$ 371,9591
8