STAFF REPORT
Meeting Date:
September 23, 2025
CONSENT
16 SUBJECT: PARTICIPATE IN THE MEDI-CAL VARIABLE RATE INTERGOVERNMENTAL
TRANSFER (VRRP/IGT) PROGRAM
RECOMMENDATION: It is recommended that the City Council:
1. Adopt a Resolution approving the City’s participation in the Medi-Cal Variable Rate Range Intergovernmental Transfer (VRRP/IGT) Program for Calendar Year 2024 titled, “A
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAGUNA BEACH, CALIFORNIA,
AUTHORIZING/RATIFYING EXECUTION OF THE INTERGOVERNMENTAL
AGREEMENT(S) REGARDING THE TRANSFER OF PUBLIC FUNDS TO THE
DEPARTMENT OF HEALTH CARE SERVICES (DHCS), AND THE HEALTH PLAN
PROVIDER AGREEMENT WITH CALOPTIMA, TO PARTICIPATE IN THE MEDI-CAL RATE RANGE INTERGOVERNMENTAL TRANSFER (IGT) PROGRAM”;
2. Approve a budget amendment to increase General Fund appropriations by $143,400 in the Fire Department’s FY 2025-26 and increase revenue estimates by $339,900 to reflect participation in the VRRP/IGT Program and direct the City Manager to execute payment to the California Department of Health Care Services (DHCS) and CalOptima Health; and
3. Find that the recommended action is not subject to the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Sections 15060(c)(2) and 15060(c)(3), as it will not result in a direct or reasonably foreseeable physical change to the environment.
Appropriation: $143,400 Fund: General Fund
Submitted By: Niko King Approved:
Niko King, Fire Chief Dave Kiff, City Manager
SUMMARY OF THE MATTER
This report recommends that the City Council authorize through a resolution (Attachment 1) participation in the Medi-Cal Variable Rate Range Intergovernmental Transfer (VRRP/IGT) Program for Calendar year 2024, which allows the City to recover unreimbursed Medi-Cal ambulance transport costs. Participation will involve a transfer of $143,400 in local funds to the California Department of Health Care Services, which is expected to yield a net return of approximately $196,556. The action requires a budget amendment and is exempt from the California Environmental Quality Act (CEQA) pursuant to Guidelines Sections 15060(c)(2) and 15060(c)(3).
DISCUSSION
Background and Overview
The California Department of Health Care Services (DHCS), in coordination with CalOptima Health, administers the Medi-Cal Variable Rate Range Intergovernmental Transfer Program (VRRP/IGT). The
PARTICIPATE IN THE MEDI-CAL VARIABLE RATE INTERGOVERNMENTAL TRANSFER (VRRP/IGT) PROGRAM
September 23, 2025
program permits local governmental entities that provide emergency medical transport services to transfer local funds to DHCS, which then draws down federal Medicaid funds, allowing the City to recover a portion of previously unreimbursed costs.
Laguna Beach Fire Department Eligibility
The Laguna Beach Fire Department provides emergency ambulance services to Medi-Cal recipients. Due to low reimbursement rates, these services routinely result in unreimbursed operational costs. Participation in the VRRP/IGT Program provides a mechanism for recovering a portion of these costs and helps support ongoing emergency medical service delivery.
Participate Process
By participating in the VRRP/IGT Program, the City will:
• Transfer $143,330 in local funds (the non-federal share) to DHCS; • Comply with all DHCS documentation requirements, including submission of a Letter of Interest, a Supplemental Attachment showing uncompensated costs, and execution of required agreements; • Allow DHCS to obtain matching federal funds; and
• Receive back the original contribution minus administrative fees (approximately 20%), along with a proportionate share of the federal match via CalOptima Health.
Based on current estimates, the City expects to receive a total of $339,886, resulting in a net gain of approximately $196,556.
Administrative Requirements
The City is required to execute two agreements with DHCS, the Intergovernmental Agreement (IGT-24- 0015) and the IGT Assessment Fee Agreement. Participation was coordinated with CalOptima and confirmed through the City’s submission of required documentation in accordance with program deadlines – including the City submitting an executed version of the Letter of Intent (Attachment 2) by a required deadline with City Council ratification required prior to any fund transfers.
Additional background documents have been included in Attachment 3.
FINANCIAL ANALYSIS
Participation in the VRRP/IGT Program requires the transfer of up to $143,400 in local funds, which includes a 20 percent administrative assessment fee charged by the California Department of Health Care Services (DHCS). This expenditure has not been appropriated in the Fire Department’s adopted FY 2025- 26 budget and will require a budget amendment. In return, the City anticipates receiving $339,900 in total revenue from DHCS and CalOptima Health, consisting of the original local contribution and additional federal matching funds.
PARTICIPATE IN THE MEDI-CAL VARIABLE RATE INTERGOVERNMENTAL TRANSFER (VRRP/IGT) PROGRAM
September 23, 2025
This participation is expected to result in a net financial benefit of approximately $196,500. To enable participation, a budget amendment is proposed to appropriate $143,400 in expenditures and increase revenue estimates by $339,900 to reflect the anticipated reimbursements. The net revenue will help offset previously unreimbursed Medi-Cal ambulance transport costs incurred by the Fire Department.
ENVIRONMENTAL ANALYSIS
The recommended action is not subject to the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Sections 15060(c)(2) and 15060(c)(3). Specifically, this action does not involve a project as defined under CEQA because it will not result in a direct or reasonably foreseeable indirect physical change to the environment. The action consists of authorizing a financial transaction and budget amendment related to the City’s participation in the Medi-Cal Variable Rate Range Intergovernmental Transfer (VRRP/IGT) Program, which does not involve any construction or physical improvements.
ATTACHMENTS
1. Resolution Authorizing Participation in the VRRP/IGT Program (Pgs. 4-7)
2. Letter of Intent (Pgs. 8-9)
3. Background Documents (CalOptima 2025 VRR IGT Webinar PPT and VRR IGT Program FAQ’s) (Pgs. 10-23)
Report Prepared By: Coordinated With:
Niko King, Fire Chief