HomeMy WebLinkAboutSS3 - Medi-Cal Managed Care Rate Transfer ProgramTO:
FROM:
CITY OF
NEWPORT BEACH
City Council Staff Report
June 14, 2016
Agenda Item No. SS3
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
Scott L. Poster, Fire Chief - 949-644-3101, sposter@nbfd.net
PREPARED BY: Angela S. Crespi, Administrative Manager, acrespi nbfd.net
PHONE: 949-644-3352
TITLE: Medi -Cal Managed Care Rate Range Intergovernmental Transfer
(IGT) Program
ABSTRACT:
The California Department of Health Care Services (DHCS) offers local units of
government that provide health care services 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. CalOptima is a County Organized Health
System (COHS) created by the Orange County Board of Supervisors in 1993 and
serves as the Medi -Cal managed care plan for Orange County. In 2016, CalOptima will
allow Fire Departments that provide ambulance transport services to participate in the
Medi -Cal Managed Care Rate Range IGT for FY2014-2015. Participation in the
FY2014-2015 IGT will allow the City to draw down additional Federal funds to offset
previously unreimbursed costs for providing transport services to Medi -Cal plan
members during that fiscal year. Participation in the IGT program is on a year -by -year
basis.
RECOMMENDATION:
Discuss and provide comments regarding participation in the Medi -Cal Managed Care
Rate Range Intergovernmental Transfer (IGT) Program. A separate staff report with
recommended actions will be presented for City Council consideration on the Regular
Meeting agenda.
FUNDING REQUIREMENTS:
To participate as a funding entity, the City must transfer local funds up to a maximum
amount of $257,087 to DHCS through an Intergovernmental Transfer along with a
twenty percent assessment fee of $51,417.40 for administering such Intergovernmental
Transfer. DHCS will then use the local funds provided to draw down additional Federal
funds to access the highest allowable Medi -Cal reimbursement rate from the Federal
Government. The City expects to receive from CalOptima 100 percent of the originally
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Medi -Cal Managed Care Rate Range Intergovernmental Transfer
June 14, 2016
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wired funds, including the twenty percent assessment fee, as well as $102,835 of new
revenue from the IGT -funded rate increase.
DISCUSSION:
The City's costs associated with delivering Emergency Medical Services (EMS) are
recovered through adopted user fees. However, the nature of how EMS costs are
recovered is unique to the healthcare industry. The City has little control over the actual
amount of revenue collected due to adjustments made by various payer sources. In FY
2014-2015, the Newport Beach Fire Department provided Medi -Cal Services to 390
CalOptima plan members. The total cost of providing these services was $564,330 and
the actual payments received were $50,157, resulting in unreimbursed costs of
$514,173. Participation in the Medi -Cal Rate Range IGT provides the City an
opportunity to recover some of these previously unreimbursed costs (up to
$102,835.00).
To participate in the IGT program for FY2014-2015, the City must execute several
agreements and return them to DHCS by June 24, 2016. The agreements will be
presented at the regular City Council meeting. While there is no contractual guarantee
of the City receiving all of its initial investment via payments from CalOptima, it is the
City's understanding that all other local governments in the State of California that have
participated in the IGT program in prior years have received all of their initial investment
plus the IGT -funded rate increase. Once the required agreements are in place, the City
will receive a funds transfer request from DHCS in early September 2016. The timeline
for the City to receive the original contribution, initial assessment fee, and the leveraged
additional federal funds, is approximately 60 days from the transfer.
Prior to distribution of the IGT -funded capitation rate increase to the City, CalOptima will
pay any Medi -Cal Managed Care Seller's (MMCS) tax due pursuant to the Revenue and
Taxation Code Section 6175 and retain up to $102,835 (50% of the net revenue) for
community health investments in Orange County. CalOptima is the only Medi -Cal
managed care plan in the state approved to retain IGT funds. Such funds have been
reinvested in the community to support programs such as recuperative care for the
homeless, service expansions at community health centers, and care coordinators for
CalOptima's vulnerable senior members.
Locally, CalOptima has completed four IGT transactions to date with UCI, which has
brought over $64 million in additional revenue to Orange County. In addition to the City
of Newport Beach, the City of Orange is also planning to participate in the FY 2014-
2015 IGT. Other public agencies including County of Marin; City of Fresno; City of
Sacramento; City of San Rafael; City of Rialto; and Novato Fire Protection District have
all successfully participated in the Medi -Cal Rate Range IGT program.
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
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Medi -Cal Managed Care Rate Range Intergovernmental Transfer
June 14, 2016
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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:
None
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