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Home My WebLink About16 - Assembly Bill 1705 for Ground Emergency Medical Transport Intergovernmental Transfer Voluntary ParticipationQ �EwPpRT CITY OF s NEWPORT BEACH `q44:09 City Council Staff Report June 13, 2023 Agenda Item No. 16 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Jeff Boyles, Fire Chief - 949-644-3101, jboyles@nbfd.net PREPARED BY: Kristin Thompson, EMS Division Chief, khompson@nbfd.net Raymund Reyes, Administrative Manager, rreyes@nbfd.net PHONE: 949-644-3352 TITLE: Assembly Bill 1705 for Ground Emergency Medical Transport Intergovernmental Transfer Voluntary Participation ABSTRACT: The City of Newport Beach (City) has received reimbursement for eligible Medi-Cal ambulance transports in four ways: as a direct base -rate payment from the State of California's (State) Medi-Cal program; as an add -on payment for each transport under SB 523 through a Quality Assurance Fee (QAF) program; as a separate annual payment under the Ground Emergency Medical Transport (GEMT) program; and, as an annual intergovernmental (IGT) transfer through agreements with the California Department of Health Care Services (DHCS) and CalOptima. In 2019, Governor Gavin Newsom signed Assembly Bill No. 1705 (AB 1705) into law, authorizing the replacement of QAF and GEMT programs with a single reimbursement program under a new Public Provider GEMT Intergovernmental Transfer (PP-GEMT-IGT) process. QAF and GEMT programs ended on December 31, 2022, and implementation of PP-GEMT-IGT began on January 1, 2023. The PP-GEMT-IGT program is voluntary. However, it is dependent on the participation of all transport agencies for the program to be successful. The first payment is due to the State for participation in the new PP-GEMT-IGT program. RECOMMENDATIONS: a) Determine this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly; b) Approve the City's voluntary participation in the new PP-GEMT-IGT program per AB 1705 for State Calendar Year 2023 (CY 2023) and authorize the City Manager to execute the Public Provider Intergovernmental Transfer Program for Ground Emergency Medical Transportation Services Certification Form for State Calendar Year 2023 and pay all necessary invoices; c) Approve Budget Amendment No. 23-075 appropriating $134,477.47 in increased expenditures in Account No. 01040404-821010 (PP-GEMT-IGT) from the general fund unappropriated fund balance for Fiscal Year 2022-23 in order to pay the first payment; and 16-1 Assembly Bill 1705 for Ground Emergency Medical Transport Intergovernmental Transfer Voluntary Participation June 13, 2023 Page 2 d) Approve Budget Amendment No. 24-002 appropriating $309,298.18 in increased expenditures in Account No. 01040404-821010 (PP-GEMT-IGT) from the general fund unappropriated fund balance for Fiscal Year 2023-24 to make remaining estimated payments to the State under the PP-GEMT-IGT program for State Calendar Year 2023. DISCUSSION: The Medi-Cal program is the State's Medicaid program. Administered by the Department of Health Care Services (DHCS), Medi-Cal provides qualified Californians with healthcare services. Medi-Cal coverage can extend to Emergency Medical Services (EMS) including those provided by the City's Fire Department. Unlike patients with private insurance (or in most cases Medicare), Medi-Cal patients do not have a co -pay and medical providers must accept Medi-Cal payments as payment in full. Medi-Cal is partially governed and funded by Federal Medicaid provisions. Medi-Cal plan holders account for approximately 10% of all City medical transports. The City is reimbursed for EMS services directly from the State's Medi-Cal program as well as through several other funding programs; these programs have either resulted in minor net losses, or substantial net gains. Medi-Cal has only paid a capitated base rate of $118.20 per transport since 1999, which is significantly lower than the actual costs for the City to provide these services. GEMT The Ground Emergency Medical Transport (GEMT) program was a Certified Public Expenditure (CPE) program authorized by the State in 2011. Public agencies would complete annual cost reports to show the actual costs to the municipality for providing EMS services to eligible Medi-Cal patients. Matching funds were then provided by the federal government to make up for below -cost Medi-Cal reimbursements. Due to shrinking Medi-Cal eligibility for inclusion in GEMT cost recovery, this revenue was expected to decrease if the program were to continue in later years. Year GEMT Revenue FY 18/19 $166,374.98 FY 19/20 $196, 948.55 FY 20/21 $226,945.34 FY 21/22 $216,364.02 (estimate from DHCS as of 5/30/2023), pending receipt) FY 22/23 71112022 — 1213112022 Only (To be determined, Cost report due 71512023 16-2 Assembly Bill 1705 for Ground Emergency Medical Transport Intergovernmental Transfer Voluntary Participation June 13, 2023 Page 3 QAF (SB 523) On October 13, 2017, Governor Jerry Brown approved Senate Bill No. 523. This bill imposed a mandatory Quality Assurance Fee (QAF) for all patient transports, and was intended to claim increased federal financial participation to increase the add -on Medi-Cal payment rates to service providers. In addition to the capitated base rate of $118.20, the QAF program provided an additional $220 per eligible Medi-Cal transport in the form of an add -on payment. Those service providers with a higher number or percentage of Medi-Cal patient transports generally received a positive financial result from the QAF program. However, given the City's low percentage of Medi-Cal patient transports and the increasing fees that were paid on every patient transported, the QAF program generally resulted in minor gains or losses. Year QAF Pa ment QAF Add -On Revenue Net Total CY 2018 $145,577 $85,891 $59,686 CY 2019 $158,167 $192,758 $34,591 CY 2020 $177,489 ($187,459) $9,970) CY 2021 $166,031 ($205,564) $39,533 CY 2022 $215,245 ($207,460) $7,785 IGT The DHCS' Intergovernmental Transfer (IGT) program secures additional Medi-Cal patient transport service revenues. CalOptima is Orange County's organized health system created by the Board of Supervisors in 1993 and serves as the Medi-Cal managed care plan for Orange County. In 2016, CalOptima allowed fire departments that provided ambulance transport services to participate in the IGT Program. Participation in this program allows the City to receive additional funds to recover associated costs incurred from transporting Medi-Cal patients. This program is authorized under the Welfare and Institutions Code, Sections 14164 and 14301.4 and implements a voluntary Rate Range Program related to Medi-Cal managed care capitation rate ranges. Capitation rates are the fixed amounts paid from an insurer to a provider. The funding amounts under the program equate to the non-federal share of the difference between the Medi-Cal managed care plans' contracted rates and the top of the plans' actuarially sound rate range (as determined by DHCS). The program is administered through CalOptima. In 2022, CalOptima reduced its share of the funds that would be received from 50% to 2%, enabling the City to retain 98% of net proceeds. 16-3 Assembly Bill 1705 for Ground Emergency Medical Transport Intergovernmental Transfer Voluntary Participation June 13, 2023 Page 4 Intergovernmental Transfer IGT for City of Newport Beach — CY 2021 Amount: 1. City of Newport Beach IGT Transfer to DHCS $258,481 2. City of Newport Beach Additional 20% State Fee to DHCS $51,696 3. Federal Match of City of Newport Beach IGT $538,806 4. Increased Capitation Payment from DHCS to CalOptima $848,984 5. City of Newport Beach's Initial Contribution Item 1 + 2 $310,177 6. Net IGT Transaction Revenue for Orange County $538,806 98% Share for City of Newport Beach 2% Share for CalOptima $528,030 $10,776 7. Total Payment to City of Newport Beach (received 4/4/2023) $838,207 PP-GEMT-IGT (AB 1705 AB 1705 implements a new Medi-Cal Public Provider Intergovernmental Transfer Program (PP-GEMT-IGT) for public ground emergency medical transportation providers. Passed in 2019 but not implemented until 2023, this program replaces the QAF and GEMT programs and will provide additional payments to public providers who transport eligible Medi-Cal patients. With the new add -on payments included in each transport bill resulting from AB 1705, the total payment for the transport of Medi-Cal patients is now approximately $1,065.00 and represents a significant increase from the $220.80 add -on fee received under the QAF program. PP-GEMT-IGT is funded by a combination of ambulance transport agency funds and a federal (CMS) match, called a Federal Financial Participation (FFP). The State of California will not allow State general funds to be utilized for this reimbursement program, so the program requires that public ambulance providers voluntarily provide the State with the amount needed (approximately $110 million) through an Inter -Governmental Transfer (IGT). DHCS will then use the non-federal funds to draw down available matching federal funds and use the combined sum to pay the add -on amount per eligible Medi-Cal transport. DHCS will manage the new reimbursement program and charges an administrative fee of 10% of the non-federal share amount. 16-4 Assembly Bill 1705 for Ground Emergency Medical Transport Intergovernmental Transfer Voluntary Participation June 13, 2023 Page 5 While participation is considered voluntary because of the requirements for Federal Intergovernmental Transfer (IGT) programs, if a large number of agencies decline to participate, the program will fail and agencies must revert back to the QAF and GEMT programs. When fully implemented, the program is expected to bring in significantly more revenue from Medi-Cal transports than the City currently receives through GEMT and QAF. AB 1705 does not prohibit the City's continued participation in the current IGT program, enabling the City to receive revenues from both programs. Based on historical revenues from GEMT and QAF programs, it is estimated that the City would bring in higher net revenue amounts from participation in the new PP-GEMT-IGT program. With the reduction in CalOptima's share for IGT, the City will also see additional revenue gains should the City continue with the next IGT program. FISCAL IMPACT: To participate as a funding entity for the new PP-GEMT-IGT program, the City must transfer local funds up to an estimated total CY 2023 contribution amount of $443,776. This includes a 10% administrative fee to DHCS. It is important to note that depending on total agency participation, the actual payment amounts due in September and December may be higher or lower. Based on the current DHCS estimates, the City may expect to receive a total of $1,181,208, resulting in an approximate net revenue of $737,433. • Estimated total revenue: $1,181,208 • Estimated IGT owed:-$403,433 • DHCS Admin Fees:-$40,344 Estimated total Net PP-GEMT-IGT Revenue: $737,433 DHCS will normally invoice the City's portion of the annual non-federal share plus DHCS's 10% administration fees four times per year (quarterly). However, due to delays on the implementation by the State, in 2023, the annual IGT amount will be divided into thirds. DHCS' 20% admin fees will be added to the second and third invoices, which are likely to be due in September and December of 2023. The first PP-GEMT-IGT invoice is due no later than June 15, 2023 at 10 a.m. The Budget Amendment appropriates $134,477.47 in increased expenditure appropriations from the General Fund unappropriated fund balance for payment into the PP-GEMT-IGT program. A second Budget Amendment in FY 2023/24 for an estimated $309,298.18 will be processed in order to pay the two remaining Calendar Year 2023 payments. With the implementation PP-GEMT-IGT, Medi-Cal providers have already begun providing add -on rates to all public agency Medi-Cal transports. These revenues are posted to the EMS Division revenue account, 01040404-521245 (Paramedic Service Fee) as they are received. 16-5 Assembly Bill 1705 for Ground Emergency Medical Transport Intergovernmental Transfer Voluntary Participation June 13, 2023 Page 6 ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING - The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENTS: Attachment A — Participation Letter Attachment B — Department of Health Care Services Invoice Attachment C — Budget Amendment No. 23-075 Attachment D — Budget Amendment No. 24-002 16-6 ATTACHMENT A DEPARTMENT OF HEALTH CARE SERVICES PUBLIC PROVIDER INTERGOVERNMENTAL TRANSFER PROGRAM FOR GROUND EMERGENCY MEDICAL TRANSPORTATION SERVICES CERTIFICATION FORM FOR STATE CALENDAR YEAR 2023 I, the undersigned, hereby declare and certify on behalf of City of Newport Beach (the "Public Entity") as follows: 1. As a public administrator, a public officer, or other public individual, I am duly au- thorized to make this certification. 2. The Public Entity elects to make this intergovernmental transfer (IGT) to the De- partment of Health Care Service (DHCS) as a voluntary contribution to the non- federal share of Medi-Cal expenditures for purposes of Assembly Bill 1705 (2019) pursuant to Sections 14105.94, 14105.945, 14129, 14129.3, and 14164 of the Wel- fare and Institutions (W&I) Code. All funds transferred pursuant to this certification qualify for federal financial participation (FFP) pursuant to Section 1903(w) of the Social Security Act and Title 42 of the Code of Federal Regulations, Section 433 Subpart B, and are not derived from impermissible sources such as recycled Med- icaid payments, federal money excluded from use as the non-federal share, im- permissible health care -related taxes, or non -bona fide provider -related donations. 3. Voluntary contributions attributable to the period of January 1, 2023, through De- cember 31, 2023, will be made via recurring transfers as indicated on the invoices provided to the Public Entity by DHCS. The Public Entity acknowledges that any transfers made pursuant to this certification during this time period are considered an elective IGT made pursuant to W&I Code sections 14105.945 and 14164, to be used by DHCS, subject to paragraph four herein, exclusively as the source for the non-federal share of ground emergency medical transport public provider supple- mental payments in both Medi-Cal fee -for -service payments and the portion of the risk -based capitation rate to Medi-Cal managed care health plans associated with reimbursement made in accordance with Section 14105.945, subdivision (h)(1) (hereafter, the AB 1705 Public Provider (PP) Ground Emergency Medical Trans- portation (GEMT) Intergovernmental Transfer (IGT) Program, or the PP-GEMT IGT Program), and DHCS costs associated with administering the PP-GEMT IGT Program. 4. DHCS may accept this voluntary contribution to the extent it is able to obtain FFP for the PP-GEMT IGT Program as permitted by federal law. In the event DHCS is unable to obtain FFP for the PP-GEMT IGT Program, or the full payments cannot otherwise be made to and retained by eligible public providers, and, therefore, all or a portion of the transferred amount cannot be used as the non-federal share of payments, DHCS will notify the Public Entity via e-mail and return the applicable portion of the unused IGT amount, no later than 90 days after such notification. 5. The Public Entity acknowledges that, in accordance with W&I Code section 14105.945, subdivision (h)(2), upon CMS approval, DHCS shall assess a ten per- cent (10%) fee on each transfer of public funds to the state to pay for health care 16-7 DEPARTMENT OF HEALTH CARE SERVICES PUBLIC PROVIDER INTERGOVERNMENTAL TRANSFER PROGRAM FOR GROUND EMERGENCY MEDICAL TRANSPORTATION SERVICES CERTIFICATION FORM FOR STATE CALENDAR YEAR 2023 coverage and to reimburse DHCS its costs associated with administering the PP- GEMT IGT Program. 6. The Public Entity acknowledges that the IGT is to be used by DHCS for the filing of a claim with the federal government for federal funds and understands that any misrepresentation regarding the IGT may violate federal and state law. 7. The Public Entity acknowledges that all records of funds transferred are subject to review and audit upon DHCS' request. The Public Entity will maintain docu- mentation supporting the allowable funding source of the iGTs. 8. Upon notice from the federal government of a disallowance or deferral related to this IGT, the Public Entity responsible for this IGT shall be the entity responsible for the federal portion of that expenditure. I hereby declare under penalty of perjury under the law of the United States that the fore- going is true and correct to the best of my knowledge. I further understand that the known filing of a false or fraudulent claim, or making false statements in support of a claim, may violate the Federal False Claims Act or other applicable statute and federal law and may be punishable thereunder. Executed on this 13th day of June, 2023 at Newport Beach, California. Signature of Authorized Person: Name of Authorized Person: Grace K. Leung Title of Authorized Person: City Manager Name of Public Entity: City of Newport Beach NPI of Public Entity: 1679579296 Amount of IGT: $134,477.47 APPROVED AS TO FORM: CITY ATTOLP/_ IE�C' OFFICE Date: S Z3 3y; ar C. p, ity Attorney N0.oS. L3 Cg__ 16-8 ATTACHMENT B PUBLIC PROVIDER (PP) GROUND EMERGENCY MEDICAL TRANSPORTATION (GEMT) PROGRAM MANAGED CARE AND FEE FOR SERVICE INVOICE Funding Entity Name: City of Newport Beach Fundinq Entity NPI: 1679579296 IGT Transfer Amounts: 1/3 of CY 2023 annual collection amount Due Date: 6/15/2023 Managed Care Fee For Service Administration Fee *Any differences are due to rounding. $121,477.55 $12,999.92 $0.00 Total* IGT Transfer Amount Due: $134,477.47 16-9 City of Newport Beach BUDGET AMENDMENT 2022-23 Department: Fire Requestor: Raymund Reyes ❑ CITY MANAGER'S APPROVAL ONLY 0 COUNCIL APPROVAL REQUIRED ONETIME: ❑ Yes ❑ No BA#: 23-075 ATTACHMENT C Approvals Finance Director: goop Wg14,Vsn Date f t? PL City Clerk: Date EXPLANATION FOR REQUEST: For first payment to State of California for participation in PP-GEMT-IGT program. ❑ from existing budget appropriations ❑ from additional estimated revenues from unappropriated fund balance REVENUES Fund # Org Object Project Description Increase or (Decrease) $ Subtotal $ EXPENDITURES Fund # Org Object Project Description Increase or (Decrease) $ 010 01040404 821010 EMERGENCY MEDICAL SERVICES - PP-GEMT-IGT 134,477.47 Subtotal $ 134,477.47 FUND BALANCE Fund # Object Description Increase or (Decrease) $ 010 300000 GENERAL FUND - FUND BALANCE CONTROL (134,477.47) Subtotall $ (134,477.47) Fund Balance Change Required 16-10 } City of Newport Beach "y r BUDGET AMENDMENT 2023-24 Department: Fire ONETIME: ❑ yes ❑ N. Requestor: Raymund Reyes ❑ CITY MANAGER'S APPROVAL ONLY Finance Director: Qp F1 COUNCIL APPROVAL REQUIRED City Clerk: EXPLANATION FOR REQUEST: For payments to State of California for participation in PP-GEMT-IGT program REVENUES Fund # EXPENDITURES Fund # Org Object 010 01040404 821010 Project Description Project Description Approvals EMERGENCY MEDICAL SERVICES - PP-GEMT-IGT FUND BALANCE Fund # Object Description 010 300000 GENERAL FUND -FUND BALANCE CONTROL ATTACHMENT D BA#: 24-002 Date b!� Date ❑ From existing budget appropriations ❑ from additional estimated revenues ❑� from unappropriated fund balance Increase or(Decrease)5 Subtotals $ Increase or (Decrease) $ 309,298.18 Subtotal Increase or (Decrease) $ (309,298.18) Subtotal $ (309,298.18) Fund Balance Change Required