HomeMy WebLinkAbout03 - Medi -Cal Managed Care Rate Range Intergovernmental Transfer (IGT) Program�EWPR CITY OF
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- z NEWPORT BEACH
<,FoR�P City Council Staff Report
May 23, 2017
Agenda Item No. 3
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Chip Duncan, Fire Chief - 949-644-3101, cduncan@nbfd.net
PREPARED BY: Angela Crespi Velazquez, 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 began
allowing Fire Departments that provide ambulance transport services to participate in the
Medi -Cal Managed Care Rate Range IGT. Because of our participation in 2016, the City
of Newport Beach was able to secure $90,363 in increased revenue. Continued
participation in the 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 each fiscal year. Participation in the IGT program is on a year -by -year basis and
is currently available for the FY 2015-2016 and FY 2016-2017 years.
RECOMMENDATION:
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) Adopt Resolution No. 2017-36, A Resolution of the City Council of the City of Newport
Beach, California, Authorizing the City Manager, or Designee, to Execute Agreements
with the Department of Health Care Services (DHCS) and CalOptima to Participate in
the FY 2015-2016 and FY 2016-2017 Medi -Cal Rate Range Intergovernmental
Transfer (IGT) Program; and
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Medi -Cal Managed Care Rate Range Intergovernmental Transfer (IGT) Program
May 23, 2017
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c) Authorize Finance Department staff to execute an administrative amendment to the
FY 2018 budget to increase expenditure appropriations by $459,621 in the Medi -Cal
IGT account 01040404-821008 and to increase revenue estimates by $612,828 in the
Medi -Cal IGT account 01040404-431246 of the Fire Department.
FUNDING REQUIREMENTS:
To participate as a funding entity, the City must transfer local funds up to a maximum total
amount of $383,017 to DHCS through an Intergovernmental Transfer along with a twenty
percent assessment fee of $76,604 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 wired funds,
including the twenty percent assessment fee, as well as $153,208 of new revenue from
the IGT -funded rate increase.
Following adoption of the FY 2018 budget, Finance staff will execute an Administrative
Budget Amendment to record and appropriate $612,828 in additional revenue from the
California Department of Healthcare Services distributed by CalOptima and $459,621 in
increased expenditure appropriations. The revenue will be posted to the Medi -Cal IGT
account in the Fire Department, 01040404-431246, and the funds transfer will be
expensed to the Medi -Cal IGT account in the Fire Department, 01040404-821008.
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
2015-2016, the Newport Beach Fire Department provided Medi -Cal Services to 524
CalOptima plan members. The total cost of providing these services was $796,873 and
the actual payments received were $62,968, resulting in unreimbursed costs of $733,905.
Participation in the Medi -Cal Rate Range IGT provides the City an opportunity to recover
some of these previously unreimbursed costs (up to $64,205 for FY 2015-2016). Due to
impending changes to Medicaid at the Federal level, DHCS has decided to combine two
reporting years into one transaction. As a result, the City may also recover additional
unreimbursed costs (up to $89,002 for FY 2016-2017).
The Medi -Cal Rate Range IGT is implemented through the execution of three (3) separate
agreements:
(1) An agreement with DHCS regarding the City's transfer of the FY 2015-2016 IGT
amount of $160,513 and FY 2016-2017 IGT amount of $222,504 (Attachment B);
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(2) An agreement with DHCS regarding the City's payment of a twenty percent IGT
assessment fee for administering the City's participation in the IGT program in the
amount of $32,103 for FY 2014-2015 and $44,501 for FY 2015-2016 (Attachment C);
and
(3) An agreement with CalOptima regarding the terms upon which the City is paid its
previously unreimbursed costs for providing transport services to Medi -Cal plan
members plus the additional federal funds made available as a result of participation
in the IGT program (Attachment D).
To participate in the IGT programs for FY 2015-2016 and FY 2016-2017, the three
agreements attached hereto must be executed and returned to DHCS by May 31, 2017.
While there is no contractual guarantee of the City receiving all of its initial investment via
payments from CalOptima, our own recent history with the program was successful. In
addition, 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 September 2017. 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 $153,207 (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 five IGT transactions to date with UCI, which has
brought over $90 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 2015-2016
and FY 2016-2017 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.
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.
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Medi -Cal Managed Care Rate Range Intergovernmental Transfer (IGT) Program
May 23, 2017
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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 — Resolution No. 2017-36
Attachment B — Intergovernmental Agreement Regarding Transfer of Public Funds with
DHCS
Attachment C — Intergovernmental Transfer Assessment Fee Agreement with DHCS
Attachment D — Health Plan -Provider Intergovernmental Transfer Rate Range Program
Agreement with CalOptima
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Attachment A
Resolution No. 2017-36
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RESOLUTION NO. 2017-.36
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
NEWPORT BEACH, CALIFORNIA AUTHORIZING THE
CITY MANAGER, OR DESIGNEE, TO EXECUTE
AGREEMENTS WITH THE DEPARTMENT OF
HEALTHCARE SERVICES (DHCS) AND CALOPTIMA TO
PARTICIPATE IN THE FY2015-2016 AND FY2016-2017
MEDT -CAL RATE RANGE INTERGOVERNMENTAL
TRANSFER (IGT) PROGRAM
WHEREAS, since 2006, the California Department of Health Care Services
(DHCS) has offered local governments that provide health care 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;
WHEREAS, CalOptima is a County Organized Health System (COHS) created by
the Orange County Board of Supervisors to serve as the local Medi -Cal managed care
plan for Orange County;
WHEREAS, CalOptima contracts with the State of California to administer
additional Medi -Cal revenues to qualified public entities to offset previously unreimbursed
costs for serving Medi -Cal plan members;
WHEREAS, the City of Newport Beach is a public entity that receives payment
from CalOptima for the provision of emergency medical transport services to CalOptima
members on a fee for service basis and has unreimbursed costs associated with providing
these services;
WHEREAS, participation in the IGT Program with CalOptima represents an
opportunity to recover previously unreimbursed costs in an effort to reach full cost
recovery for Emergency Medical Services in accordance with City of Newport Beach
Municipal Code Chapter 3.36; and
WHEREAS, the City of Newport Beach participated last year for FY 2014-2015
with a transfer of $266,191 to draw down an additional $90,363 in previously
unreimbursed costs.
NOW, THEREFORE, the City Council of the City of Newport Beach resolves as
follows:
Section 1: The City Council does hereby authorize the City Manager, or designee,
to execute (1) an "Intergovernmental Agreement Regarding Transfer of Public Funds"
with DHCS regarding the City's transfer of the FY2015-2016 IGT amount ($160,513.00)
and of the FY2016-2017 IGT amount ($222,504.00); (2) an "Intergovernmental Transfer
Assessment Fee Agreement" with DHCS regarding the City's payment of a twenty
percent IGT assessment fee for FY2015-2016 ($32,103.00) and of the FY2016-2017
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Resolution No. 2017 -
Page 2 of 2
($44,501.00) for administering the City's participation in the IGT program, and (3) a
"Health Plan -Provider Agreement Intergovernmental Transfer Rate Range Program"
agreement with CalOptima regarding the terms upon which the City is paid its previously
unreimbursed for providing transport services to Medi -Cal plan members plus the
additional federal funds made available as a result of participation in the IGT program.
Section 2: The recitals provided in this resolution are true and correct and are
incorporated into the operative part of this resolution.
Section 3: If any section, subsection, sentence, clause or phrase of this resolution
is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the
validity or constitutionality of the remaining portions of this resolution. The City Council
hereby declares that it would have passed this resolution, and each section, subsection,
sentence, clause or phrase hereof, irrespective of the fact that any one or more sections,
subsections, sentences, clauses or phrases be declared invalid or unconstitutional.
Section 4: The City Council finds the adoption of this resolution is not subject to
the California Environmental Quality Act 4"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.
Section 5: This resolution shall take effect immediately upon its adoption by the
City Council, and the City Clerk shall certify the vote adopting the resolution.
ADOPTED this day of , 20
Kevin Muldoon
Mayor
ATTEST:
Leilani 1. Brown
City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Aaron C. Harp
City Attorney
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Un
Intergovernmental Agreement Regarding Transfer of Public Funds with DHCS
M
CONTRACT # 16-93671
INTERGOVERNMENTAL AGREEMENT REGARDING
TRANSFER OF PUBLIC FUNDS
This Agreement is entered into between the CALIFORNIA DEPARTMENT OF HEALTH CARE
SERVICES ("DHCS") and the City of Newport Beach, a California municipal corporation and charter
city operating through its Fire Department (GOVERNMENTAL FUNDING ENTITY) with respect to the
matters set forth below.
RECITALS
A. This Agreement is made pursuant to the authority of Welfare & Institutions Code, sections
14164 and 14301.4.
B. The Orange County Health Authority, a California public agency dba Orange Prevention
and Treatment Integrated Medical Assistance, dba CalOptima (HEALTH 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 and 14-002.
HEALTH PLAN is a party to a Medi -Cal managed care contract with DHCS, entered into pursuant to
Welfare and Institutions Code section 14087.3, under which HEALTH PLAN arranges and pays for the
provision of covered Medi -Cal health care services to eligible Medi -Cal members residing in the County.
THEREFORE, the parties agree as follows:
AGREEMENT
Transfer of Public Funds
1.1 The GOVERNMENT FUNDING ENTITY shall transfer funds to DHCS pursuant
to sections 14164 and 14301.4 of the Welfare and Institutions Code, up to a maximum total amount of
One Hundred Sixty Thousand Five Hundred Thirteen dollars ($160,513) for the period of July 1, 2015
through June 30, 2016, and a maximum total amount of Two Hundred Twenty Two Thousand Five
Hundred Four dollars ($222,504) for the period of July 1, 2016 through June 30, 2017, to be used solely
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CONTRACT # 16-93671
as a portion of the nonfederal share of actuarially sound Medi -Cal managed care capitation rate increases
for HEALTH PLAN for the periods of July 1, 2015 through June 30, 2016, and July 1, 2016 through June
30, 2017 as described in section 2.2 below. The funds shall be transferred in accordance with a mutually
agreed upon schedule between the GOVERNMENTAL FUNDING ENTITY and DHCS, in the amounts
specified therein.
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 -related donations. For transferring
units of government that are also direct service providers, 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.
2. Acceptance and Use of Transferred Funds by DHCS
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 transfers ("IGTs"), to use for the purpose set forth in section 2.2
below.
2.2 The funds transferred by the GOVERNMENTAL FUNDING ENTITY pursuant to
this Agreement shall be used to fund a portion of the nonfederal share of increases in Medi -Cal managed
care actuarially sound capitation rates described in paragraph (4) of subdivision (b) of section 14301.4 of
the Welfare and Institutions Code and shall be paid, together with the related federal financial
participation, by DHCS to HEALTH PLAN as part of HEALTH PLAN'S capitation rates for the periods
of July 1, 2015 through June 30, 2016 and July 1, 2016 through June 30, 2017. The rate increases paid
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under section 2.2 shall be used for payments related to Medi -Cal services rendered to Medi -Cal
beneficiaries. The rate increases paid under this section 2.2 shall be in addition to, and shall not replace or
supplant, all other amounts paid or payable by DHCS or other State agencies to HEALTH PLAN.
2.3 DHCS shall seek federal financial participation for the rate increases specified in
section 2.2 to the full extent permitted by federal law.
2.4 The parties acknowledge the State DHCS will obtain any necessary approvals
from the Centers for Medicare and Medicaid Services prior to the payment of any rate increase pursuant
to section 2.2.
2.5 The parties agree that none of these funds, either GOVERNMENTAL FUNDING
ENTITY or federal matching funds will be recycled back to the GOVERMENTAL 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 and their provider agreement constitute
patient care revenues.
2.6 Within One Hundred Twenty (120) calendar days of the execution of this
Agreement, DHCS shall advise the GOVERNMENTAL FUNDING ENTITY and HEALTH PLAN of the
amount of the Medi -Cal managed care capitation rate increases that DHCS paid to HEALTH PLAN
during the applicable rate year involving any funding under the terms of this Agreement.
2.7 If any portion of the funds transferred by the GOVERNMENTAL FUNDING
ENTITY pursuant to this Agreement is not expended for the specified rate increases under Section 2.2,
DHCS shall return the unexpended funds to the GOVERNMENTAL FUNDING ENTITY.
3. Amendments
3.1 No amendment or modification to this Agreement shall be binding on either party
unless made in writing and executed by both parties.
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3.2 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.
4. Notices. Any and all notices required, permitted or desired to be given hereunder by one
party to the other shall be in writing and shall be delivered 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 set forth below:
To the GOVERNMENTAL FUNDING ENTITY:
City of Newport Beach Fire Department
Attn: Angela Velazquez, Administrative Manager
100 Civic Center Drive
Newport Beach, California 92660
acrespi@nbfd.net
With copies to:
To DHCS:
City of Newport Beach
Attn: Andrew Maiorano, City Attorney
100 Civic Center Drive
Newport Beach, California 92660
amaiorano@newportbeachca.gov
Sandra Dixon
California Department of Health Care Services
Capitated Rates Development Division
1501 Capitol Ave., Suite 71-4002
MS 4413
Sacramento, CA 95814
Sandra.Dixon@dhcs.ca.gov
5. Other Provisions
5.1 This Agreement contains the entire Agreement between the parties with respect to
the Medi -Cal rate increases for HEALTH PLAN described in section 2.2 that are funded by the
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CONTRACT # 16-93671
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. 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. One or more other agreements already exist between the parties regarding such other
matters, and other agreements may be entered into in the future. This Agreement shall not modify the
terms of any other agreement between the parties.
5.2 The nonenforcement 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.
Agreement.
5.3 Section 2 of this Agreement shall survive the expiration or termination of this
5.4 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.
5.5 Time is of the essence in this Agreement.
5.6 Each party hereby represents that the person(s) executing this Agreement on its
behalf is duly authorized to do so.
6. 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.
7. Approval. This Agreement is of no force and effect until signed by the parties.
Term. This Agreement shall be effective as of July 1, 2015 and shall expire as of
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CONTRACT # 16-93671
June 30, 2019 unless terminated earlier by mutual agreement of the parties.
SIGNATURES
CN WITNESS WHEREOF, the parties hereto have executed this Agreement, on the date of
the last signature below.
THE CITY OF NEWPORT BEACH, a California municipal corporation and charter city operating
through its Fire Department
At
Kevin Muldoon, Mayor
Date:
THE STATE OF CALIFORNIA, DEPARTMENT OF HEALTH CARE SERVICES:
Date:
Jennifer Lopez, Acting Division Chief, Capitated Rates Development Division
APPROVED AS TO FORM:
CITY ATTO EY'S OFFICE
Date: 5
Fay: r
Aaron C. Harp, City Attorney
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Intergovernmental Transfer Assessment Fee Agreement with DHCS
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CONTRACT # 16-93702
INTERGOVERNMENTAL TRANSFER ASSESSMENT FEE
This Agreement is entered into between the CALIFORNIA DEPARTMENT OF HEALTH CARE
SERVICES ("State DHCS") and the City of Newport Beach, a California municipal corporation and
charter city operating through its Fire Department (GOVERNMENTAL FUNDING ENTITY) with
respect to the matters set forth below.
RECITALS
A. This Agreement is made pursuant to the authority of Welfare & Institutions Code, section
14301.4.
THEREFORE, the parties agree as follows:
AGREEMENT
1. Transfer of Public Funds
1.1 GOVERNMENTAL FUNDING ENTITY shall make Intergovernmental
Transfer(s) ("IGTs") to State DHCS pursuant to section 14164 of the Welfare and Institutions Code and
paragraph 1.1 of the Intergovernmental Agreement(s) Regarding the Transfer of Public Funds contract
number 16-93671, to be used as a portion of the non-federal share of actuarially sound Medi -Cal managed
care rate range capitation increases ("non-federal share IGT") to HEALTH PLAN (Orange County Health
Authority, a California public agency dba Orange Prevention and Treatment Integrated Medical
Assistance, dba CalOptima) for the periods of July 1, 2015 to June 30, 2016 and July 1, 2016 to June 30,
2017
1.2 The parties acknowledge that State DHCS will obtain any necessary approvals
from the Centers for Medicare and Medicaid Services ("CMS") pertaining to the acceptance of non -
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CONTRACT 4 16-93702
federal share IGTs and the payment of non-federal share IGT related rate range capitation increases to
HEALTH PLAN.
2. Intergovernmental Transfer Assessment Fee
2.1 The State DHCS shall, upon acceptance of non-federal share IGTs pursuant to the
Intergovernmental Agreement(s) Regarding the Transfer of Public Funds, and as described in paragraph 1
of this Agreement, exercise its authority under section 14301.4 of the Welfare and Institutions Code to
assess a 20 -percent assessment fee on the entire amount of the non-federal share IGTs to reimburse State
DHCS for the administrative costs of operating the IGT program pursuant to this section and for the
support of the Medi -Cal program.
2.2 The funds subject to the 20 -percent assessment fee shall be limited to non-federal
share IGTs made by the transferring entity, GOVERNMENTAL FUNDING ENTITY, pursuant to the
Intergovernmental Agreement(s) Regarding the Transfer of Public Funds, and as described in paragraph 1
of this Agreement.
2.3 The 20 -percent fee will be assessed on the entire amount of the non-federal share
IGTs pursuant to the Intergovernmental Agreement(s) Regarding the Transfer of Public Funds, and as
described in paragraph 1 of this Agreement, and will be made in addition to, and transferred separately
from, the transfer of funds pursuant to the Intergovernmental Agreement(s) Regarding the Transfer of
Public Funds.
2.4 The 20 -percent assessment fee pursuant to this Agreement is non-refundable and
shall be wired to State DHCS separately from, and simultaneous to, the non-federal share IGTs pursuant
to the Intergovernmental Agreement(s) Regarding the Transfer of Public Funds, and as described in
paragraph 1 of this Agreement. However, if any portion of the non-federal share IGTs is not expended for
the specified rate increases stated in paragraph 2.2 of the Intergovernmental Agreement(s) Regarding the
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Transfer of Public Funds, DHCS shall return a proportionate amount of the 20 -percent assessment fee to
the GOVERNMENTAL FUNDING ENTITY.
3. Other Provisions
3.1 This Agreement contains the entire Agreement between the parties with respect to
the 20 -percent assessment fee on non-federal share IGTs pursuant to the Intergovernmental Agreement(s)
Regarding the Transfer of Public Funds, and as described in paragraph 1, and supersedes any previous or
contemporaneous oral or written proposals, statements, discussions, negotiations or other agreements
between the GOVERNMENTAL FUNDING ENTITY and State DHCS. 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. One or more other agreements may exist between the parties
regarding such other matters, and other agreements may be entered into in the future. This Agreement
shall not modify the terms of any other agreement between the parties.
3.2 Time is of the essence in this Agreement.
3.3 Each party hereby represents that the person(s) executing this Agreement on its
behalf is duly authorized to do so.
4. State Authority. Except as expressly provided herein, nothing in this Agreement shall be
construed to limit, restrict, or modify State DHCS' powers, authorities, and duties under federal and state
law and regulations.
5. Approval. This Agreement is of no force and effect until signed by the parties.
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CONTRACT 9 16-93742
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, on the date of the last
signature below.
CITY OF NEWPORT BEACH, a California municipal corporation and charter city operating through its
Fire Department:
Date:
Kevin Muldoon, Mayor
THE STATE OF CALIFORNIA, DEPARTMENT OF HEALTH CARE SERVICES:
Date:
Jennifer Lopez, Acting Division Chief, Capitated Rates Development Division
APPROVED AS TO FORM:
CITY ATTQRN'S OFFICE
Date: r'
By:
Aaron C. Harp, City Attorney
4
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Health Plan -Provider Intergovernmental Transfer Rate Range Program
Agreement with CalOptima
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HEALTH PLAN -PROVIDER AGREEMENT
INTERGOVERNMENTAL TRANSFER RATE RANGE PROGRAM AGREEMENT
This Agreement is made this day of , 2017, by and between
CALOPTIMA, a California public agency hereinafter referred to as "PLAN", and the City of
Newport Beach, a California municipal corporation and charter city 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, PROVIDER is a public healthcare provider of emergency
ambulance transport services, which is a covered Medi -Cal health care service, to persons
enrolled with Medi -Cal Managed Care Health Plan Providers, including PLAN;
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 Newport 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, 416-93671 ("Intergovernmental Agreement") effective for the periods
of July 1, 2015 through June 30, 2016 and July 1, 2016 through June 30, 2017 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 LE 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
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PLAN. For purposes of this Agreement, the phrase "GOVERNMENTAL FUNDING ENTITY"
shall have the same meaning as in the Intergovernmental Agreement.
B. Health Plan Retention
(1) Medi -Cal Managed Care Seller's Tax
(a) The PLAN shall be responsible for any Medi -Cal Managed Care
Seller's ("MMCS") tax due pursuant to the Revenue and Taxation Code Section 6175 relating to
any IGT MMCRRIs through June 30, 2016. If the PLAN receives any capitation rate increases
for MMCS taxes based on the IGT MMCRRIs, PLAN may retain an amount equal to the amount
of such MMCS tax that PLAN is required to pay to the State Board of Equalization, and shall
pay, as part of the LMMCRR IGT Payments, the remaining amount of the capitation rate
increase to PROVIDER.
(b) This paragraph does not apply to any service months on or after
July 1, 2016.
(2) a. PLAN shall retain 19.68%, 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. Such retained funds will be expended by PLAN in support of
Medi -Cal beneficiaries and the Medi -Cal program, in either the State fiscal year received or in
subsequent State fiscal years, to make improvements in one or more of the following areas upon
approval by the CalOptima Board of Directors as follows:
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Community health investments as identified by a member health needs assessment
conducted in CY 2017. Investment areas may include programs addressing opioid
overuse, homeless health care access, children's mental health, adult mental health,
childhood obesity, strengthening the safety net, children's health, older adult health and
other areas as identified;
• Up to three percent (3%) of the amount retained by CalOptima will be expended
on administration of the IGT program and any programs developed within the community
health investment areas above.
Each provider's share of retained amounts 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.
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(3) 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.
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.
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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
Medi -Cal services rendered to Medi -Cal PLAN members by PROVIDER during the State fiscal
year to which the LMMCRR IGT Payments apply.
(b) To the extent that total payments received by PROVIDER for any
State fiscal year under this Agreement exceed the cost of Medi -Cal services provided to Medi -
Cal beneficiaries by PROVIDER during that fiscal year, any remaining LMMCRR IGT Payment
amounts shall be retained by PROVIDER to be expended for health care services. Retained
LMMCRR IGT Payment amounts may be used by the PROVIDER in either the State fiscal year
for which the payments are received or subsequent State fiscal years.
(2) For purposes of subsection (1) (b) above, if the retained LMMCRR IGT
Payments, if any, are not used by PROVIDER in the State fiscal year received, retention of funds
by PROVIDER will be established by demonstrating that the retained earnings account of
PROVIDER at the end of any State fiscal year in which it received payments based on
LMMCRR IGT Payments funded pursuant to the Intergovernmental Agreement, has increased
over the unspent portion of the prior State fiscal year's balance by the amount of LMMCRR IGT
Payments received, but not used. These retained PROVIDER funds may be commingled with
other GOVERNMENTAL FUNDING ENTITY funds for cash management purposes provided
that such funds are appropriately tracked and only the depositing facility is authorized to expend
them.
(3) 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
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
shall provide PLAN with written confirmation of compliance within thirty (30) calendar days of
PLAN's request.
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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 I.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;
(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 State DHCS in order to
accommodate this IGT; and
(4) In the event of any dispute or legal action arising under this Agreement, the
prevailing party shall not be entitled to attorneys' fees.
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2, Term
The term of this Agreement shall commence on July 1, 2015 and shall terminate
on September 30, 2019.
SIGNATURES
HEALTH PLAN: CalOptima
By: Michael Schrader, Chief Executive Officer
APPROVED AS TO FIRM:
CITY ATTORNEY'S [OFFICE
Date: 5AA -/
Aaron C. Harp
City Attorney
ATTEST:
Date:
Leilani I. Brown
City Clerk
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Date:
CITY OF NEWPORT BEACH,
a California municipal corporation and
charter city operating through its Fire
Department.
Date:
Kevin Muldoon
Mayor
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