Our Mission
To serve member health with excellence and dignity, respecting the value and needs of each person. Our VisionBy 2027, remove barriers to health care access for our members, implement same-day treatment authorizations and real-time claims payments for our providers, and annually assess members’ social determinants of health. 1 CalOptima Health, A Public Agency
February 4, 2025Voluntary Rate Range Intergovernmental Transfer Program (VRRP/IGT) Attachment 3
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○ Overview of VRRP/IGT ○ VRRP/IGT Funding Process○ VRRP/IGT Allocation○ CalOptima Health’s Participation○ Participating Entity’s Required Documentation○ IGT 14 Calendar Year 2024 Next StepsAgenda 11 3
○ The Voluntary Rate Range Intergovernmental Transfer (VRRP/IGT) Program is a Medi-Cal program funded by state funds and matching federal funds. This program allows the Department of Health Care Services (DHCS) to secure additional dollarsfor eligible governmental entities that serve Medi-Cal members. ○ VRRP/IGT fund transfers from government entities are used to secure matching federal funds for Medi-Cal.
○ Payments to government entities are intended to fund uncompensated costs from providing Medi-Cal covered services from the previous calendar year. ○ DHCS notifies managed care plans annually of upcoming funding rounds. ○ Participation is voluntary, and DHCS approves/disapproves participation.
Overview
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○ Only governmental entities that incur uncompensated costs for covered Medi-Cal services may be eligible for funding, and are specific to public entities that include:
Counties Cities Special purpose districts, state university teaching hospitals Other political subdivisions of the state ○ Funding entities may not use recycled Medicaid funds or federal funds that are not eligible to fund the state share of the IGT.
○ Funding entities must be:
A contracted CalOptima Health provider with uncompensated Medi-Cal expenditures, or costs which exceed payment from the plan for services rendered to Medi-Cal members. Interested in providing local funds to act as a local IGT match. ○ Funding entities must:
Certify that the funds provided are eligible for federal matching dollars. Document uncompensated services (costs above reimbursement) provided to (directly by your organization as a CalOptima Health contractor or via a contractor which is a contracted CalOptima Health provider) CalOptima Health members for dates of service between July 1, 2022 through June30, 2023.
Eligibility for Participation
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VRRP/IGT Funding Process
California
DHCS
Eligible
Entities
VRRP Contribution + Assessment Fee
(20% of total IGT transaction)
VRRP
Contribution +
Federal Match
VRRP Contribution
+ Federal Match
Federal
CMS VRRP Contribution (Retains Assessment Fee)
California
DHCS
CalOptima
Health
IGT Eligible
Entities
VRRP Contribution
○ VRRP participating entities fund an initial payment to DHCS (Retains 2% Assessment Fee)○ DHCS obtains federal matching funds○ Eligible entities may receive back up to their initial contribution amount, administration fee and most of the net federal matchingfunds Based on funding availability by DHCS and participating entities ○ CalOptima Health retains 2% of net federal match funds for assessment fees
VRRP Payment
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○ Based on the number of participating entities and DHCS available funds in each period
○ Based on estimated contribution* amount from each participating funding entity○ Total contribution should not exceed 100% of the estimated funds provided by DHCS
○ As a result, the proportion allocated to each funding entity will vary in each program year
VRRP 14 (Calendar Year 2024) Allocation*The difference between the designated provider’s charges or costs for services provided to CalOptimaHealth members and payments received or anticipated from CalOptima Health for the Voluntary RateRange IGT Program year. 15 7
○ Receive DHCS notification for upcoming funding round○ Notify current and new potential eligible governmental entities Share DHCS template for submission
○ Obtain estimated contributions from participating funding entities○ Calculate allocation percentage for each funding entity Obtain confirmation from funding entities
○ Request CalOptima Health’s Board of Directors approval and/or ratification of intent to participate
○ Submit CalOptima Health’s Letter of Interest (LOI) for DHCS submission Includes eligible entities’ LOI and required supplemental documents ○ Prepare plan-provider agreement for execution○ Calculate and distribute payment once funds have been receivedCalOptima Health’s Participation in VRRP 16 8
○ Governmental entities must complete and submit required DHCS documents Letter of Interest (LOI)
• Federal Tax ID number• Approximate contribution amount for Calendar Year (CY) 2024• Point of contact• Authorized signature Voluntary Rate Range Program Supplemental Attachment
• Uncompensated services (costs above reimbursement) provided to (directly by your organization as a CalOptima Health contractor or via a contractor which is a contracted CalOptima Health provider) CalOptima Health members for dates of service between July 1, 2022 through June 30, 2023 • Description of services provided• Identify source and ability to transfer funds ○ Enter into a plan-provider agreement with CalOptima Health DHCS approves and provides contract to complete
Participating Entity’s VRRP Required Documentation
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○ Interested Eligible Governmental Entities:
Complete LOIs and supporting documentation and submit to CalOptima Health by Wednesday 3/5/25; email to [email protected] • CY 2024 Attachment A – VRRP LOI-Final• CY 2024 Att –VRRP and Attestation• Blank Funding Entity Contacts (identify point of contact for DHCS and CalOptima Health) Seek appropriate approval as needed for participation (City Council, Board, etc.) ○ CalOptima Health:
Request authorization from CalOptima Health Board of Directors (BOD) for CEO to submit the required IGT materials to DHCS on 3/6/2025.
Submit all participating entities’ LOIs and supporting documents to DHCS by 3/28/2025 Request authorization from CalOptima Health BOD for ratification of the final allocated amounts on 4/2/2025.
VRRP 14 (Calendar Year 2024) Next Steps
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Thank You!
For questions not available in FAQ, please email [email protected] 19 11
www.caloptima.org
Stay Connected With Us
@CalOptima
20 CalOptima Health, A Public Agency
Voluntary Rate Range ICT Program FAQs_<E>
MMA 3659 12-02-24 SD
Voluntary Rate Range Intergovernmental Transfer Program Frequently Asked Questions (FAQs)
Background
The Voluntary Rate Range Intergovernmental Transfer (VRR/IGT) Program is a Medi-Cal program funded by state funds (i.e., non-federal share) and matching federal funds. IGT programs let local government entities help the state fund Medi-Cal by making an intergovernmental transfer to the Department of Health Care Services (DHCS). These local government entities making an intergovernmental transfer are called governmental funding entities.
The program is authorized by federal and state law and is carried out periodically based on DHCS’ decision. Participation is optional for managed care plans and governmental funding entities. DHCS uses the intergovernmental transfers from the governmental funding entities to secure matching federal funds for Medi-Cal.
FAQs
1. What types of government entities are eligible to participate as governmental funding entities? Intergovernmental transfers are transfers of funds from one government unit to another. Only governmental entities are eligible to participate in the VRR/IGT Program. Governmental entities are counties, cities, special purpose districts, state university teaching hospitals and other political subdivisions of the state.1 DHCS has the authority to approve or disapprove participation by a governmental funding entity in the VRR/IGT Program.
2. What types of providers can receive funds?
As part of the proposal submitted to DHCS, the governmental funding entity must submit a VRR/IGT Program Supplemental Attachment. This attachment lists the related provider, calculates the amount of uncompensated Medi-Cal costs for that provider, and shows how much of those costs the governmental funding entity can and is willing to contribute. 2
3. What is the total amount of funding available for the VRR/IGT Program? The total amount of funding available is determined by DHCS and can change each program round. 1 See, Social Security Act, Section 1903(w)(7)(G); Welfare & Institutions Code § 14164. 2 See Welfare & Institutions Code § 14301.4. 21 Voluntary Rate Range ICT Program FAQs_<E>
MMA 3659 12-02-24 SD
4. What are the requirements related to funds provided through intergovernmental transfers? All intergovernmental transfers made to DHCS for obtaining matching funds must qualify and comply with requirements applicable to Medicaid funding under 42 CFR Part 433 Subpart B. The funding sources cannot come 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. Impermissible sources do not include patient revenues, including patient revenues from Medicare or Medicaid if those patient revenues are not specifically set aside for intergovernmental transfer for the VRR/IGT Program.
5. Can non-governmental entities provide funding to a governmental entity for the intergovernmental transfer?
No, only governmental entities can transfer funds to DHCS for the VRR/IGT Program. These entities should consult their legal counsel to determine whether the funds they plan to use for the intergovernmental transfer are eligible for federal matching funds. Any transferred funds must comply with requirements applicable to Medicaid funding under 42 CFR Part 433 Subpart B. Refer to Question 4 above for more information on impermissible sources of funds.
6. How much can each governmental funding entity contribute to the VRR/IGT Program? The amount each governmental funding entity can contribute depends on:
• The total amount of uncompensated Medi-Cal costs or charges (i.e., the difference between the provider’s charges or costs for services provided to CalOptima Health members and payments received or expected from CalOptima Health for the applicable VRR/IGT Program year)
• The level of funding each participating governmental funding entity is able to contribute • The total number of governmental funding entities participating in the VRR/IGT Program in Orange County.
The total amount contributed by all participating governmental funding entities must not exceed DHCS’ estimated non-federal share of the available amount. DHCS has the authority to approve or disapprove the level of participation by a governmental funding entity.
7. How does CalOptima Health fund providers?
Any payments that CalOptima Health makes to providers must follow the requirements of CalOptima Health’s contract with DHCS and must be connected to Medi-Cal services provided to CalOptima Health members. These payments are meant to reimburse unpaid or uncompensated Medi-Cal costs.
8. What is CalOptima Health’s role in the VRR/IGT Program? When notified by DHCS of an upcoming VRR/IGT funding round, CalOptima Health notifies eligible governmental funding entities of the upcoming program funding round and the deadline for submission of documentation to DHCS.
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MMA 3659 12-02-24 SD
CalOptima Health shares the needed documents with governmental funding entities, including template letters of interest and VRR/IGT Program Supplemental Attachments, which the governmental funding entities must complete. If needed, CalOptima Health will collect documents for the proposal from governmental funding entities or direct the governmental funding entity to submit the required documents to DHCS.
CalOptima Health will make sure that the contributions from all participating governmental funding entities for a program period do not exceed 100% of the estimated non-federal share of the available funding amount provided by DHCS. CalOptima Health submits the proposal to participate in a VRR/IGT Program each program period based on the timeline set by DHCS.
9. What is the DHCS review process?
Each proposal submitted for a VRR/IGT Program period is reviewed by DHCS. DHCS has the right to approve, amend or deny the proposal as it sees fit.
For any other questions about the VRR/IGT Program in Orange County, please contact [email protected].
Resources
• Social Security Act § 1903(w) (codified at 42 USC § 1396b(w)). • 42 CFR §§ 433.50 – 433.74.
• Welfare & Institutions Code §§ 14164, 14301.4, 14301.5. • DHCS Care Coordination Advisory Committee, Medi-Cal Sources of Non-Federal Share, available at https://www.dhcs.ca.gov/services/Documents/CareCoordination/CCAG_Sources_of_NonFederal_Share_Final.pdf • Medicaid Program; Cost Limit to Providers Operated by Units of Government and Provisions to Ensure the Integrity of Federal-State Financial Partnership, 72 Fed. Reg. 29748 (final rule, May 29, 2007) available at https://www.federalregister.gov/documents/2007/05/29/07-2657/medicaid-program-cost-limit-forproviders-operated-by-units-of-government-and-provisions-to-ensure. (NOTE: Regulations in this document were repealed because they were enacted in violation of a moratorium on provider financing regulations. See Medicaid Program; Cost Limit for Providers Operated by Units of Government and Provisions To Ensure the Integrity of Federal-State Financial Partnership, 75 Fed. Reg. 73972 (final rule, Nov. 30, 2010), available at https://www.federalregister.gov/documents/2010/11/30/2010- 30066/medicaid-program-cost-limit-for-providers-operated-by-units-of-government-and-provisions-toensure). • Medicaid Program; Cost Limit for Providers Operated by Units of Government and Provisions To Ensure the Integrity of Federal-State Financial Partnership, 72 Fed. Reg. 2236 (proposed Jan. 18, 2007), available at https://www.federalregister.gov/documents/2007/01/18/07-195/medicaid-program-cost-limit-forproviders-operated-by-units-of-government-and-provisions-to-ensure. • Medicaid Program; Health Care-Related Taxes, 73 Fed. Reg. 9685 (final rule, Feb. 22, 2008), available at https://www.federalregister.gov/documents/2008/02/22/E8-3207/medicaid-program-health-care-relatedtaxes. • Health Care Financing Administration, 57 Fed. Reg. 55118 (interim final rule, Nov. 24, 1992), available at https://archives.federalregister.gov/issue_slice/1992/11/24/55091-55148.pdf#page=28. 23