HomeMy WebLinkAboutHuntington Beach Hospital - 2017-09-05Dept. ID AD-17-024 Page 1 of 2
Meeting Date: 9/5/2017
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CITY OF HUNTINGTON BEACH
REQUEST FOR. CITY COUNCIL ACTION
MEETING DATE: 9/5/2017
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Fred A. Wilson, City Manager
PREPARED BY: Antonia Graham, Assistant to the City Manager
SUBJECT: Approve a Memorandum of Understanding (MOU) between the City and
Huntington Beach Hospital to enable the Huntington Beach Hospital to
participate in the 340B Program
Statement of Issue:
Huntington Beach Hospital is a non-profit that provides a disproportionate share of
healthcare services to the Medicare and Medicaid populations, in addition to supporting
many programs that benefit the indigent, uninsured or underinsured populations in
Huntington Beach. The new CEO of the Hospital reached out to the City to ask if the City
would opt into the 340B program which would enable the Hospital to participate in a low-
cost drug program that benefits the aforementioned populations. This Council Action seeks
to enter into a no -cost Memorandum of Understanding that allows the Hospital to take part
in a drug discount program.
Financial Impact:
There is no fiscal impact as this is a no -cost Memorandum of Understanding.
Recommended Action:
Authorize the Mayor and City Clerk to execute the Memorandum of Understanding (MOU) between
the City and Huntington Beach Hospital for the 340B Program.
Alternative Action(s):
Do not approve the Memorandum of Understanding (MOU) between the City of Huntington
Beach and the Huntington Beach Hospital and direct staff accordingly.
Analysis:
Created in 1992, the 340B Program works with manufacturers to provide outpatient drugs
to covered hospitals (e.g. Huntington Beach Hospital) at significantly reduced prices. The
intent of the program is to maintain services and lower medication costs for patients.
In order for the Hospital to participate in this Program, the Hospital must enter into an
agreement with a unit of the state or local government pursuant to which the Hospital
commits to provide health care services to low-income individuals who are not entitled to
Medicare or Medicaid benefits - at no reimbursement or considerably less than full
reimbursement from these patients. By entering into this MOU, the Hospital agrees to
continue its commitment to the provision of health care to indigent, uninsured, and
Item 14. - 1 HB -322-
Dept. ID AD-17-024 Page 2 of 2
Meeting Date: 9/5/2017
underinsured residents of Huntington Beach and Orange County. The Hospital wishes to
enter into this Program in order to maintain current levels of service to uninsured,
underinsured, and indigent patients. The savings from this program are roughly eleven
(11) percent greater than those obtained through the Medicaid Rebate Program.
Environmental Status:
Not applicable.
Strategic Plan Goal:
Improve quality of life
Attachment(s):
1. Memorandum of Understanding between the City of Huntington Beach and
Huntington Beach Hospital
2. Office of Pharmacy Affairs (OPA) Certification of Contract Between Private, Non -
Profit Hospital and State/Local Government to Provide Health Care Services to Low
Income Individuals
HB _;2;_ Item 14. - 2
MEMORANDUM OF UNDERSTANDING
BETWEEN
City of Huntington Beach
001
Huntington Beach Hospital, a not -for -profit Disproportionate Share Hospital
THIS NO -COST MEMORANDUM OF UNDERSTANDING is made this
151 day of August 2017 by and between the undersigned representatives of the
City of Huntington Beach, located at 2000 Main Street, Huntington Beach, CA 92648,
Huntington Beach Hospital a non-profit corporation organized and existing under the
laws of the State of California, located at 17772 Beach Blvd., Huntington Beach, CA
92647
RECITALS:
WHEREAS, Huntington Beach Hospital is a not -for -profit hospital that provides
a disproportionate share of healthcare services to the Medicare and Medicaid populations
in addition to supporting many programs that benefit the indigent, uninsured or
underinsured populations in Huntington Beach CA;
WHEREAS, Huntington Beach Hospital desires to participate in the drug
discount program established under Section 340B of Public Health Services Act
(the "340B program");
WHEREAS, in order to participate in the 340E Program Huntington Beach
Hospital must enter into an agreement with a unit of the state or local government
pursuant to which Huntington Beach Hospital commits to provide health care services to
low income individuals who are not entitled to Medicare or Medicaid benefits at no
reimbursement or considerably less than full reimbursement from these patients;
WHEREAS, Huntington Beach Hospital desires to make such a formal
commitment to the City of Huntington Beach.
WHEREAS, the City of Huntington Beach agrees to accept such commitments
on behalf of Orange County/Huntington Beach residents;
NOW, THEREFORE, in consideration of the mutual agreements and covenants
contained therein and for other good valuable consideration, the receipt and sufficiency
of which hereby are acknowledged, it is mutually agreed and covenanted, under seal, by
and between the parties to this Agreement, as follows:
1. Commitment of Huntington Beach Hospital to Provide Uncompensated
Care.
During the term of this MOU, Huntington Beach Hospital agrees to continue
its commitment to the provision of health care to indigent, uninsured and
underinsured residents of Huntington Beach and Orange County, CA through
the operation of its Uncompensated Care Program and maintain its current
eligibility standards.
In fiscal year 2016, this commitment totaled $5,274,949 in uncompensated
care as reported on the latest Medicare Cost Report. Care provided under this
program is inclusive of the scope of services provided by Huntington Beach
Hospital, including but not limited to emergency care, general outpatient care,
including ambulatory surgery and all levels of inpatient care. Pursuant to this
commitment, it is the intention of Huntington Beach Hospital to continue
providing this level of service regardless of patients' ability to pay.
Huntington Beach Hospital is entering the 340B Drug Discount Program in
order to maintain current levels of service to uninsured, underinsured and
indigent patients.
A study by Moody's Investors Service published in June 2015 found that
Medicaid Expansion under the Affordable Care Act is having a minimal
affect on hospital financial viability given other financial pressures,
especially on non-profit hospitals. Payor restrictions and accelerated drug
costs increases are major factors. Generic drug prices are also rising at an
alarming rate.
Huntington Beach Hospital will include 340B drugs for its Medicaid Payors
and thereby pass on 340B savings to California's Medicaid Program. 340B
savings are roughly 11% greater than those obtained through the Medicaid
Rebate Program. This pass -through of 340B savings is not applicable to
contract pharmacy arrangements because of 340B requirements.
2. Commitment of Huntington Beach Hospital to Submit Reports of Benefit
to Residents of Orange County.
During the term of this MOU, Huntington Beach Hospital agrees to submit to
the City of Huntington Beach relevant sections of the latest annual Medicare
Cost Report after audit and acceptance by the CMS Fiscal Intermediary. This
report will be submitted within 30 days after notification of acceptance of the
annual Medicare Cost Report by Fiscal Intermediary.
Costs of care for Orange County/Huntington Beach and California residents
will be specified within the report.
3. Acceptance and Acknowledgements of the City of Huntington Beach.
(a) City of Huntington Beach accepts the commitments of Huntington
Beach Hospital set forth above;
(b) City of Huntington Beach hereby acknowledges that the healthcare
services provided by Huntington Beach Hospital hereunder are in the
public interest and are being provided to individuals who are not
entitled to benefits under Title VII or eligible for assistance under any
State plan pursuant to Title XIX of the Social Security Act: and
(c) City of Huntington Beach acknowledges that Huntington Beach
Hospital is providing these services at no reimbursement or
considerably less than full reimbursement from the patients.
4. Representations of Hospital: Huntington Beach Hospital represents that
as of the date hereof:
(a) Huntington Beach Hospital constitutes a corporation duly organized
and validly existing in good standing under the laws of the State of
California with the corporate power and authority to enter into and
perform its obligations under this MOU; and
(b) Huntington Beach Hospital is a tax-exempt corporation under Section
501(c)(3) of the Internal Revenue Code of the United States, as
amended, and under applicable laws of the State of California.
5. Term and Termination. The term of this MOU shall commence on the date
first above written shall continue until terminated by either party upon not less
than sixty (60) days prior written notice to the other. MOU shall be reviewed
and in the absence of identified threshold issues, automatically reviewed on an
annual basis.
6. Notices. All notices required or permitted to be given under the MOU shall
be deemed given when delivered by hand or sent by registered or certified
mail, return receipt requested, addressed as follows:
7. Governing Law. This MOU shall be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the Huntington Beach Hospital and the City of Huntington
Beach have executed this Agreement as of the day and year first written above by their
duly authorized representatives.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by and through their authorized officers onOS 2017.
CONSULTANT,
HUNTINGTON BEACH HOSPITAL,
a not -for -profit corporation
By:
A ice.
r
print name
ITS: (circle one),Ghairman-Xresident/Vice President
AND
C
print name
ITS: (circle one) Secretary/Chief Financial
Officer/Asst. Secretary - Treasurer
CITY OF HUNTINGTON BEACH,
a municipal corporation of the State of California
INITIATED AND APPROVED:
Assistant to the City Manager
APPROVED AS'T-0-FORM:
D(' 0 %7 C) tvv
REVI ND APPROVED:
Ci n er
Department of Health and Human Services, Health Resources and Services Administration, Healthcare Systems Bureau
OMB No. 0915-0327; Expiraton Date; 10/3112015
OFFICE OF PHARMACY AFFAIRS (OPA)
CERTIFICATION OF CONTRACT BETWEEN PRIVATE, NON-PROFIT HOSPITAL AND
STATEILOCAL GOVERNMENT TO PROVIDE HEALTH CARE SERVICES TO LOW INCOME
INDIVIDUALS
To demonstrate that the hospital meets the statutory definition of covered entity under section
3408(a)(4)(L)(i) as a private non-profit hospital which has a contract with a State or local
government to provide health care services to low income individuals, this certification must be
Pursuant to the requirement of Section 340B of the Public Health Service Act
(42 U.S.C. 256b), I certify that a valid contract (please provide contract number or
identifier if applicable # ) is currently in place between the private, non-
profit hospital named above, and the State or Local Government Entity named
below, to provide health care services to low income individuals who are not
entitled to"benefits under Title XVIII of the Social Security Act or eligible for
assistance under the State plan of Title X1X of the Social Security Act. In addition,
the authorizing official certifies that when this contract is no longer valid,
appropriate notice will be provided to the Office of Pharmacy Affairs. The
undersigned represents and confirms that he/she is fully authorized to legally
bind the covered entity and certifies that the contents of any statement made or
reflected in this document are truthful and accurate.
Signature of Hospital -Authorizing Official Datq,,'
N5mEL and Title of Authorizing Official {e. ., CEO, CFO, COO) (please print or type)
t'L S15-44 I n Baf}k.4tii1ai m- A to e -ODD 1
h O} ber ' E-Mail Address
Signature of State.or Local GovernrAnt Of€ici 1 Da cf
Ngrfle of State. or Lt3taIlGoyprnr46htgficial (please print or type)
Title
Address4
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Phone Number Ext. E-Mail Address .•.J1
This registration ri+rm tnw> t he completed and submittal according to the est3h1ishcd deatftine. that art pnhh hed on the OVA wchsite (+a uw hma,6ov.'<tPJ).
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City of Huntington Beach
2000 Main Street s Huntington Beach, CA 92648
(714) 536-5227 ♦ www.huntingtonbeachca.gov
Office of the City Clerk
Robin Estanislau, City Clerk
September 12, 2017
Huntington Beach Hospital h
Attn: Richard M. Rowe, CEO `
17772 Beach Blvd.
Huntington Beach, CA 92647
Dear Mr. Rowe:
Enclosed is a copy of the fully executed "Memorandum of Understanding Between the City
of Huntington Beach and Huntington Beach Hospital, a not -for -profit Disproportionate Share
Hospital."
Sincerely,
Robin Estanislau, CIVIC
City Clerk
RE:pe
Enclosure
Sister Cities. Anjo, Japan ♦ Waitakere, New Zealand