HomeMy WebLinkAboutCalOptima Health - 2023-01-01 2000 Main Street,
Huntington Beach, CA
92648
C3;• .- _' City of Huntington Beach APPROVED 7—()
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File #: 24-599 MEETING DATE: 9/3/2024
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Eric G. Parra, Interim City Manager
VIA: Scott M. Haberle, Fire Chief
PREPARED BY: Jeff Lopez, Fire Division Chief
Bonnie To, Principal Management Analyst
Subject:
Approve and authorize execution of an agreement between the California Department of
Health Care Services (DHCS) and City of Huntington Beach; Approve and authorize execution
of a Health Plan-Provider Agreement - Intergovernmental Transfer Rate Range Program
Agreement between CalOptima Health and the City of Huntington Beach; Authorize
designated City staff to execute the agreements; and, Approve an appropriation of$468,843
for the agreements during FY 2024/25
Statement of Issue:
City Council is requested to approve and authorize execution of an agreement between the California
Department of Health Care Services (DHCS) and City of Huntington Beach to participate in the
Voluntary Rate Range Intergovernmental Transfer Program (VRRP IGT) to help recover
unreimbursed City costs for service to CalOptima patients. City Council is also requested to approve
an authorize execution of a Health Plan-Provider Agreement - Intergovernmental Transfer Rate
Range Program Agreement between CalOptima Health and the City of Huntington Beach.
Last year, when the HBFD first participated in this VRRP IGT, the City of Huntington Beach's net
revenue from this program was approximately $3,243,360. For this year, the City of Huntington
Beach's net revenue from this VRRP IGT is estimated to be $3,868,980, which is an increase of
approximately $625,620.
City Council is requested to designate and authorize the City Manager, Chief Financial Officer, and/or
Fire Chief to sign the agreements to obtain funding as stated in the two agreements and approve an
appropriation of$468,843.
Financial Impact:
Funding in the amount of $2,282,450 has been included in the FY 2024/25 Budget for participation in
the program, based on the FY 2023/24 payment amount. An appropriation of$468,843 is requested
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File #: 24-599 MEETING DATE: 9/3/2024
to business unit 10065403 to provide sufficient funding for the FY 2024/25 upfront payment amount.
With this agreement and Huntington Beach's payment of$2,751,293, it is anticipated that an
estimated $6,620,273 in funds will be distributed to Huntington Beach, resulting in a net revenue of
approximately $3,868,980 for additional reimbursement of Medi-Cal Managed Care services that
were incurred and unreimbursed for the service period of January 1 , 2023 through December 31,
2023.
Recommended Action:
A) Approve and authorize execution of an agreement between the California Department of Health
Care Services (DHCS) and City of Huntington Beach;
B) Approve and authorize Mayor and City Clerk to execute the Health Plan-Provider Agreement-
Intergovernmental Transfer Rate Range Program Agreement between CalOptima Health and City of
Huntington Beach;
C) Authorize the designation of the City Manager, Chief Financial Officer, and/or Fire Chief to
execute the agreements; and
D) Approve an appropriation of$468,843 to business unit 10065403 for the agreements during FY
24/25.
Alternative Action(s):
Do not approve the recommended action(s), and direct staff accordingly.
Analysis:
In March of 2023, the Fire Department and Finance Department reached out to CalOptima to inquire
about our potential participation in their Voluntary Rate Range Intergovernmental Transfer Program
(VRRP IGT) to help recover unreimbursed City costs for service to CalOptima patients. During FY
22/23, the City was notified of eligibility to participate in the VRRP IGT and notified again this fiscal
year.
Per the CalOptima Health Board of Directors Regular Meeting Minutes, dated September 7, 2023:
The Voluntary Rate Range IGT program allows DHCS and CalOptima Health to secure additional
Medi-Cal dollars for eligible Orange County entities. For each IGT transaction, DHCS identifies the
estimated member months for rate categories (e.g., adult, adult optional expansion, child, long term
care, seniors and persons with disabilities, and whole child model) and provides the total amount
available for Orange County to contribute through funding entities. To receive funds, entities provide
a dollar amount to DHCS, which is then used to obtain a federal match. DHCS distributes the funds
and the match to the eligible entities through CalOptima Health.
The City's ongoing participation in the program is dependent on available federal funding for the
program and the City's ability to provide the upfront contribution required. The contribution and net
revenue received annually by the City is also dependent on other factors, such as the number of
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File #: 24-599 MEETING DATE: 9/3/2024
program participants in the County and number of Medi-Cal calls for service.
The City of Newport Beach and the City of Orange have participated in the VRRP IGT for over five
years and have received net revenue. Other entities eligible for this year's VRRP IGT through
CalOptima include: First 5 Orange County, Orange County Health Care Agency, and UCI Health.
If City Council approves the recommended actions, the agreement with DHCS would require an
upfront payment of$2,751,293. Once paid, an estimated $6,620,273 will be disbursed to Huntington
Beach within approximately 60 days through CalOptima, for a net revenue of approximately .
$3,868,980. The 60-day time estimate is based on the actual transfer dates of previous years' VRRP
IGT. The required upfront payment and subsequent disbursement from CalOptima are calculated
below and are based on Medi-Cal managed care services provided by the City during the January 1,
2023-December 31, 2023 period:
$2,292,744 Estimated Contribution (Non-Federal Share) that Huntington Beach Pays
+ $ 458,549 20% DHCS Fee that Huntington Beach Pays
$2,751,293 Total Amount that Huntington Beach Pays (New Appropriations Request)
$6,620,273 Estimated Disbursement to Huntington Beach after CalOptima's 2% Share
= $2,751,293 Total Amount that Huntington Beach Pays
$3,868,980 Estimated Net Revenue that Huntington Beach Receives (98% Share)
The agreement is required to be executed on or before September 16, 2024 per DHCS. The upfront
payment of up to $2,751,293 from Huntington Beach to DHCS is due by November 22, 2204.
The amount the City initially transfers shall be calculated using the Estimated Member Months (refer
to Exhibit 1 in IGT Agreement Regarding Transfer of Public Funds with DHCS), which will be
reconciled to actual enrollment for the service period of January 1, 2023 through December 31, 2023
using actual enrollment figures taken from DHCS records. Enrollment reconciliation will occur on an
ongoing basis as updated figures are made available. If, after the enrollment reconciliation, there is
an increase to the amount needed to fund the nonfederal share, the.City will be required to transfer
additional funds to cover the difference. If, after the reenrollment reconciliation there is a decrease to
the amount needed to fund the nonfederal share, the City can choose to receive the additional funds
from DHCS. If mutually agreed upon by DHCS and the City, amounts due to or owed by City may be
offset against future transfers. Actual enrollment figures for this IGT capitation rate period will be
considered final two years after December 31, 2023.
In addition, the City of Huntington Beach would need to sign a separate agreement (attached) with
CalOptima regarding the payment of the estimated $6,620,273 from CalOptima to Huntington Beach.
Environmental Status:
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
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File #: 24-599 MEETING DATE: 9/3/2024
resulting in physical change to the environment, directly or indirectly.
Strategic Plan Goal:
Goal 2 - Fiscal Stability, Strategy A - Consider new revenue sources and opportunities to support the
City's priority initiatives and projects.
For details, visit www.huntingtonbeachca.qov/strategicplan
<http://www.huntingtonbeachca.qov/strategicplan>.
Attachment(s):
1. Agreement between the California Department of Health Care Services (DHCS) and City of
Huntington Beach
2. Agreement between CalOptima Health and the City of Huntington Beach
3. PowerPoint
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HEALTH PLAN-PROVIDER AGREEMENT
INTERGOVERNMENTAL TRANSFER RATE RANGE PROGRAM AGREEMENT
This Agreement is made this 1st day of September, 2024,by and CALOPTIMA
HEALTH, a California public agency hereinafter referred to as "PLAN", and the City of
Huntington Beach, a California municipal corporation operating through its Fire Department,
hereinafter referred to as "PROVIDER".
RECITALS:
WHEREAS, PLAN is a public agency formed pursuant to California Welfare and
Institutions Code Section 14087.54 and Orange County Ordinance No. 3896 as amended by
Ordinance Nos. 00-8, 05-008, 06-012, 09-001, 11-013, 14-002 and 16-001, and is party to a
Medi-Cal managed care contract with DHCS, entered into pursuant to Welfare and Institutions
Code Section 14087.3, under which PLAN arranges and pays for the provision of covered Medi-
Cal health care services to eligible Medi-Cal members residing in Orange County;
WHEREAS,the City of Huntington Beach is an emergency transport provider
who provides transportation on a non-contract basis, including to CalOptima Health Medi-Cal
Members;
WHEREAS, PLAN and PROVIDER desire to enter into this Agreement to
provide for Medi-Cal managed care capitation rate increases to PLAN as a result of
intergovernmental transfers ("IGTs") from City of Huntington Beach(GOVERNMENTAL
FUNDING ENTITY)to the California Department of Health Care Services ("State DHCS")to
maintain the availability of Medi-Cal health care services to Medi-Cal beneficiaries.
NOW, THEREFORE,PLAN and PROVIDER hereby agree as follows:
IGT MEDI-CAL MANAGED CARE CAPITATION RATE RANGE INCREASES
1. IGT Capitation Rate Range Increases to PLAN
A. Payment
Should PLAN receive any Medi-Cal managed care capitation rate increases from
State DHCS where the nonfederal share is funded by the GOVERNMENTAL FUNDING
ENTITY specifically pursuant to the provisions of the Intergovernmental Agreement Regarding
Transfer of Public Funds, CONTRACT#IGT-23-0008, ("Intergovernmental Agreement")
effective for the period of and January 1, 2023 through December 31, 2023 for
Intergovernmental Transfer Medi-Cal Managed Care Rate Range Increases ("IGT MMCRRIs"),
PLAN shall pay to PROVIDER the amount of the IGT MMCRRIs received from State DHCS, in
accordance with paragraph 1.E below regarding the form and timing of Local Medi-Cal
Managed Care Rate Range ("LMMCRR") IGT Payments. LMMCRR IGT Payments paid to
PROVIDER shall not replace or supplant any other amounts paid or payable to PROVIDER by
PLAN.
B. Health Plan Retention
(1) a. PLAN shall retain two percent(2.0%) of the net proceeds (after
reimbursing PROVIDER's initial contribution for the transaction), from the Medi-Cal managed
care rate increases paid to PLAN by DHCS as described in this agreement prior to disbursing
LMMCRR IGT Payments to PROVIDER. The retained funds will be expended by PLAN for
Covered Services under PLAN's contract with DHCS for Medi-Cal, in either the State fiscal year
received, or in subsequent State fiscal years, as appropriated by the CalOptima Health Board of
Directors.
Each provider's share of the retained funds shall be calculated based on the provider's
proportionate share of the LMMCRR IGT payment made by PLAN in Orange County.
b. The amounts referenced in this agreement are estimates. The parties
understand and agree that the total amount of the Medi-Cal managed care capitation rate
increases paid by DHCS to PLAN may fluctuate as a result of enrollment. The parties further
understand and agree that any such fluctuations will likewise affect the amount to be retained by
the PLAN and the amount payable to PROVIDER by the same percentage as the variance in the
capitation rate increases, if any.
(2) PLAN will not retain any other portion of the IGT MMCRRIs received
from the State DHCS other than those mentioned above.
C. Conditions for Receiving Local Medi-Cal Managed Care Rate Range IGT
Payments
As a condition for receiving LMMCRR IGT Payments, PROVIDER shall, as of
the date the particular LMMCRR IGT Payment is due:
(1) continue to provide emergency transport services to PLAN
Members promptly and in a manner which ensures access to care consistent with PROVIDER's
regular business practices for providing such services; and
(2) not discriminate against PLAN Members or in any way impose
limitations on the acceptance of PLAN Members for care or treatment that are not imposed on
other patients of PROVIDER.
D. Schedule and Notice of Transfer of Non-Federal Funds
1. PROVIDER shall provide PLAN with a copy of the schedule regarding the
transfer of funds to State DHCS referred to in the Intergovernmental Transfer Agreement within
fifteen(15) calendar days of establishing such schedule with State DHCS. Additionally,
PROVIDER shall notify PLAN, in writing, no less than seven(7) calendar days prior to any
changes to an existing schedule, including but not limited to, changes to the amounts specified
therein.
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2. PROVIDER shall provide PLAN with written notice of the amount and date of
the transfer within seven(7) calendar days after funds have been transferred to State DHCS for
use as the nonfederal share of any IGT MMCRRIs.
E. Form and Timing of Payments
PLAN agrees to pay LMMCRR IGT Payments to PROVIDER in the following
form and according to the following schedule:
(1) PLAN agrees to pay the LMMCRR IGT Payments to PROVIDER using
the same mechanism through which compensation and payments are normally paid to
PROVIDER(e.g., electronic transfer).
(2) PLAN will pay the LMMCRR IGT Payments to PROVIDER no later than
thirty (30) calendar days after receipt of the IGT MMCRRIs from State DHCS.
F. Consideration
(1) As consideration for the LMMCRR IGT Payments, PROVIDER shall use
the LMMCRR IGT Payments for the following purposes and shall treat the LMMCRR IGT
Payments in the following manner:
(a) The LMMCRR IGT Payments shall represent compensation for
emergency ambulance services rendered to Medi-Cal PLAN members by PROVIDER between
January 1, 2023, and December 31, 2023, and shall be used by PROVIDER solely to fund the
costs that exceed the fee-for-service rates paid by Medi-Cal PLAN for covered services provided
to Medi-Cal PLAN Members during that period.
(b) To the extent that total payments received by PROVIDER for any
State fiscal year under this Agreement exceed the cost of Covered Services provided to Medi-Cal
PLAN members by PROVIDER during that fiscal year, any remaining LMMCRR IGT Payment
amounts shall constitute an overpayment, and shall by returned to Medi-Cal PLAN pursuant to
the provisions of Section 1.K.,below
(2) Both parties agree that none of these funds, either from the
GOVERNMENTAL FUNDING ENTITY or federal matching funds will be recycled back to the
GOVERNMENTAL FUNDING ENTITY'S general fund, the State, or any other intermediary
organization. Payments made by the health plan to providers under the terms of this Agreement
constitute patient care revenues.
G. PLAN's Oversight Responsibilities
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PLAN's oversight responsibilities regarding PROVIDER's use of the LMMCRR
IGT Payments shall be limited as described in this paragraph. PLAN shall request, within thirty
(30) calendar days after the end of each State fiscal year in which LMMCRR IGT Payments
were transferred to PROVIDER, a written confirmation that states whether and how PROVIDER
complied with the provisions set forth in Paragraph 1.F above. In each instance, PROVIDER
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shall provide PLAN with written confirmation of compliance within thirty (30) calendar days of
PLAN's request.
H. Cooperation Among Parties
Should disputes or disagreements arise regarding the ultimate computation or
appropriateness of any aspect of the LMMCRR IGT Payments, PROVIDER and PLAN agree to
work together in all respects to support and preserve the LMMCRR IGT Payments to the full
extent possible on behalf of the safety net in Orange County.
I. Reconciliation
Within one hundred twenty(120) calendar days after the end of each of PLAN's
fiscal years in which LMMCRR IGT Payments were made to PROVIDER, PLAN shall perform
a reconciliation of the LMMCRR IGT Payments transmitted to the PROVIDER during the
preceding fiscal year to ensure that the supporting amount of IGT MMCRRIs were received by
PLAN from State DHCS. PROVIDER agrees to return to PLAN any overpayment of LMMCRR
IGT Payments made in error to PROVIDER within thirty (30) calendar days after receipt from
PLAN of a written notice of the overpayment error,unless PROVIDER submits a written
objection to PLAN. Any such objection shall be resolved in accordance with the dispute
resolution process set forth in Section 1.H. The reconciliation processes established under this
paragraph are distinct from the indemnification provisions set forth in Paragraph 1.J below.
PLAN agrees to transmit to the PROVIDER any underpayment of LMMCRR IGT Payments
within thirty(30) calendar days of PLAN's identification of such underpayment.
J. Indemnification
PROVIDER agrees to and acknowledges the following: (1)PLAN has no
obligation to make any payments hereunder until PLAN has received IGT MMCRRIs from State
DHCS; (2) that PLAN is not responsible for State DHCS payments to PLAN, including any
mathematical calculations made by DHCS, and (3) PLAN is not responsible for the timing of the
payments from DHCS to PLAN (including the conditions precedent to the timing of such
payments which includes the timing of DHCS submission to CMS and/or CMS review and
approval). In addition,PLAN and PROVIDER agree and acknowledge that nothing herein is
intended to create an obligation on the part of PLAN to agree to delays in capitation payment(s)
from DHCS in order to accommodate this IGT.
K. Overpayments and CalOptima Health Right to Recover
PROVIDER has an obligation to report any overpayment identified by
PROVIDER, and to repay such overpayment to CalOptima Health within sixty (60) days of such
identification by PROVIDER, or of receipt of notice of an overpayment identified by CalOptima
Health. PROVIDER acknowledges and agrees that, in the event that CalOptima Health
determines that an amount has been overpaid or paid in duplicate, or that funds were paid which
were not due under this Contract to PROVIDER, CalOptima Health shall have the right to
recover such amounts from PROVIDER by recoupment or offset from current or future amounts
due from CalOptima Health to PROVIDER, after giving notice and an opportunity to return/pay
such amounts. This right to recoupment or offset shall extend to any amounts due from
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PROVIDER to CalOptima Health, including,but not limited to, amounts due because of
overpayments as described in the provisions of this agreement.
2. Term
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The term of this agreement shall commence on January 1, 2023 and shall
terminate on June 30, 2026.
SIGNATURES
HEALTH PLAN: CalOptima Health
Date:
By: Yunkyung Kim, Chief Operating Officer
PROVIDER: City of Huntington Beach
.9a. vsz1.1.1_ v 1ey)v . Date: ct—k k — L4
By: Gracey Van Der Mark,Mayor
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ATTEST:
Date: g- /[ 2/
' .Robin Estanislau, City Clerk
APPROVED AS TO r
Date:
chae . Gates, City Attorney
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�� Voluntary Rate Range IGT
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Huntington Beach Fire Department
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317
Recommendation
A) Approve and authorize execution of an agreement between the California
Department of Health Care Services (DHCS) and City of Huntington
Beach;
B) Approve and authorize execution of a Health Plan-Provider Agreement -
Intergovernmental Transfer Rate Range Program Agreement between
CalOptima Health and the City of Huntington Beach
C) Authorize designated city staff to execute the agreements; andotIP
y
D) Approve an appropriation of $468,843 for the agreement ., r ° =ti
during FY 24/25. 0.0,01
318
Background
• During FY 24/25, the City was notified of eligibility to participate in the
Voluntary Rate Range IGT program (VRRP IGT). This is the second year that
the City of Huntington Beach would participate in VRRP IGT.
• The City of Newport Beach and the City of Orange have participated in the
VRRP IGT for over five years and have received net revenue. Other entities
eligible for this year's VRRP IGT through CalOptima include First 5 Orange
County, Orange County Health Care Agency, UCI Health, and Fountain Valley.
319
Background
The CalOptima Health Board Action Agenda Referral dated 08/31/2023 states:
The Voluntary Rate Range IGT program allows DHCS and CalOptima Health
to secure additional Medi-Cal dollars for eligible Orange County entities. For
each IGT transaction, DHCS identifies the estimated member months for rate
categories (e.g., adult, adult optional expansion, child, long term care,
seniors and persons with disabilities, and whole child model) and provides
the total amount available for Orange County to contribute through funding
entities. To receive funds, entities provide a dollar amount to DHCS, which is
then used to obtain a federal match. DHCS distributes the funds and the
match to the eligible entities through CalOptima Health.
320
Financial Impact
• Last year when the HBFD first participated in this VRRP IGT, the City of
Huntington Beach's net revenue from this program was approximately
$3,243,360.
• For this year, the City of Huntington Beach's net revenue from this VRRP IGT
is estimated to be $3,868,980, which is an increase of. approximately
$625,620.
321
Steps
Step 1 Step 2
A)Approve and authorize execution of an Step 3
un Htington Beach transfers funds/pays
agreement between the California DHCS inFY 24/25. DHCS pays the IGT funds. Then
Department of Health Care ServicesCalOptima, the managed care plan,
(DHCS) and City of Huntington Beach; pays Huntington Beach +
in FY 24/25.
B)Approve and authorize execution of a
Health Plan-Provider Agreement Therefore, Huntington Beach's
Intergovernmental Transfer Rate Range estimated net revenue is
Program Agreement between CalOptima
Health and the City of Huntington Beach
C)Authorize designated City staff to
execute the agreements; and
D)Approve an appropriation of
for the agreements during FY 24/25. (Note:
has been included in the FY
2024/25 Budget. The total is )
322
Future
The City's ongoing participation in the program is dependent on available federal
funding for the program and the City's ability to provide the upfront contribution
required. The contribution and net revenue received annually by the City is also
dependent on other factors, such as the number of program participants in the
County and number of Medi-Cal calls for service.
323
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