HomeMy WebLinkAboutCalifornia Department of Health Care Services (DHCS) - 2024-09-03 2000 Main Street,
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City of Huntington Beach
APPROVED 7-0
COUNT tr.
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 tha 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.gov/strategicplan
<http://www.huntingtonbeachca.gov/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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CONTRACT#IGT-23-0008 -
INTERGOVERNMENTAL AGREEMENT REGARDING
TRANSFER OF PUBLIC FUNDS
This Agreement is entered into between the CALIFORNIA DEPARTMENT OF
HEALTH CARE SERVICES ("DHCS") and CITY OF HUNTINGTON BEACH
("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 sum 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 January 1,2023 through December 31, 2023 in accordance
with Sub-Section 1.3 of this Agreement. The funds transferred shall be used as described in Sub-
Section 2.2 of this Agreement. The funds shall be transferred in accordance with the terms and
conditions,including schedule and amount, established by DHCS.
1.2 The GOVERNMENTAL FUNDING ENTITY shall certify that the funds
transferred qualify for Federal Financial Participation pursuant to 42 C.F.R. part 433, subpart B,
and are not derived from impermissible sources such as recycled Medicaid payments, Federal
money excluded from use as State match, impermissible taxes,and non-bona fide provider-
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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 funding.
1.3 DHCS shall reconcile the"Estimated Member Months," in Exhibit 1,to
actual enrollment in HEALTH PLAN(S) 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 enrollment figures become available.
Actual enrollment figures will be considered final two years after December 31, 2023. If
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 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 GOVERNMENTAL FUNDING ENTITY may be offset
against future transfers.
2. Acceptance and Use of Transferred Funds
2.1 DHCS shall exercise its authority under section 14164 of the Welfare and
Institutions Code to accept funds transferred by the GOVERNMENTAL FUNDING ENTITY
pursuant to this Agreement as Intergovernmental Transfer(IGTs),to use for the purpose set forth
in Sub-Section 2.2.
2.2 The funds transferred by the GOVERNMENTAL FUNDING ENTITY
pursuant to Section 1 and Exhibit 1 of this Agreement shall be used to fund the non-federal share
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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
reflected in Exhibit 1.The funds transferred shall be paid,together with the related Federal
Financial Participation,by DHCS to HEALTH PLAN(S) as part of HEALTH PLAN(S)'
capitation rates for the service period of January 1,2023 through December 31,2023, 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 DHCS will obtain any necessary approvals
from the Centers for Medicare and Medicaid Services.
2.5 DHCS shall not direct HEALTH PLAN(S)' expenditure of the payments
received pursuant to Sub-Section 2.2.
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 1 of this Agreement, except as provided in Sub-Section 3.2. GOVERNMENTAL
FUNDING ENTITY agrees to pay the full amount of that assessment in addition to the funds
transferred pursuant to Section 1 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(d) 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 1 that will not be subject to a
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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.
3.3 The 20-percent assessment fee pursuant to this Agreement is non-
refundable and shall be wired to DHCS simultaneously with 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 transferred 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 either be sent via secure email or submitted in writing 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 as set forth below:
To the GOVERNMENTAL FUNDING ENTITY:
Scott M. Haberle, Fire Chief
2000 Main Street
Huntington Beach, CA 92648
(714) 536-5401
scott.haberle@,surfcity-hb.org
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With copies to:
Jeff Lopez Division Chief
2000 Main Street
Huntington Beach CA 92648
(714) 374-5376
jlopez@a,surfcity-hb.org
To DHCS:
Vivian Beeck
California Department of Health Care Services
Capitated Rates Development Division
1501 Capitol Ave.,MS 4413
Sacramento, CA 95814
Vivian.Beeck@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
subject matter of this Agreement. This Agreement is not,however,intended to be the sole
agreement between the parties on matters relating to the funding 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.
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6.2 The non-enforcement or other waiver of any provision of this Agreement
shall not be construed as a continuing waiver or as 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.
6.4 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. Any required signature(s) on any documents must be in
compliance with California Government Code section 16.5 and any other applicable state or
federal regulations.
7, State Authority. Except as expressly provided herein,nothing in this Agreement
shall be construed to limit,restrict, or modify the DHCS' 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 January 1,2023 and shall expire as
of June 30,2026 unless terminated earlier by mutual agreement of the parties.
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SIGNATURES
IN WITNESS WHEREOF,the parties hereto have executed this Agreement, on
the date of the last signature below.
City of Huntington Beach:
By: Date:
(Funding Entity Signer)
THE STATE OF CALIFORNIA, DEPARTMENT OF HEALTH CARE SERVICES:
By: Date:
David Bishop,Division Chief, Capitated Rates Development Division
APPROVED AS TO FORM
B
MICHAEL E.GATES
CITY ATTORNEY
CITY OF HUNTINGTON BEACH
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Exhibit 1
Health Plan Funding Entity County Service Period Participation%
CalOptima City of Huntington Beach Orange 1/2023-12/2023 4.36%
Contribution Estimated Member Estimated .
Category of Aid SISIUIS PMPM Months* Contribution(Non-
Federal Share)
Child SIS $ 0.13 3,472,048 $ 451,366
Child UIS $ 0.05 148,873 $ 7,444
Adult S1S $ 0.26 1,423,569 $ 370,128
Adult UIS $ 0.20 267,683 $ 53,537
ACA Optional Expansion SIS $ 0.06 3,773,376 $ 226,403
ACA Optional Expansion UIS $ 0.06 419,435 $ 25,166
SPD SIS $ 0.94 442,469 $ 415,921
SPD UIS $ 0.84 86,182 $ 72,393
SPD/full-Dual SIS $ 0.33 1,299,679 $ 428,894
SPD/Full-Dual UIS $ 0.17 6,355 $ 1,080
LTC SIS $ 0.94 2,597 $ 2,441
LTC UIS $ 0.85 1,559 $ 1,325
LTC/Full-Dual SIS $ 0.33 31,893 $ 10,525
LTC/Full-Dual UIS $ 0.14 124 $ 17
Whole Child Model SIS $ 1.67 133,436 $ 222,838
Whole Child Model UIS $ 0.57 4,171 $ 2,377
Est.FE Total 11,513,449 $ 2,291,855
*Note that Estimated Member Months are subject to variation, and the actual total Contribution
(Non-Federal Share)may differ from the amount listed here.
* FMAP is a weighted blend of multiple FMAPs.
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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; and �,® , �t��+cr
D) Approve an appropriation of $468,843 for the agreement •
during FY 24/25. `o ' +:�1F 180 P4 %.` �6�.
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 Imp act
• 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
Huntington Beach transfers funds/pays
agreement between the California DHCS pays the IGT funds. Then
Department of Health Care Services DHCS in FY 24/25. CalOptima, 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 -
Intergovernmental Transfer Rate Range Therefore, Huntington Beach's
Program Agreement between CalOptima estimated net revenue is
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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