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NEWPORT BEACH
City Council Staff Report
COUNCIL STAFF REPORT
CITY OF
January 14, 2025
Agenda Item No. 18
ABSTRACT:
In 2019, Governor Gavin Newsom signed Assembly Bill No. 1705 (AB 1705) into law, authorizing the replacement of two existing Medi -Cal reimbursement programs with a single program under a new Public Provider GEMT Intergovernmental Transfer (PP-GEMT-IGT) process. This program is voluntary and its success is dependent on the participation of all transporting agencies . The City of Newport Beach participated in the inaugural Calendar Year (CY) 2023 program as well as the CY 2024 program. Total reimbursement (including pending amounts ) indicate reimbursement amount s beyond original estimates. The Fire Department is requesting continued participation for CY 2025.
RECOMMENDATIONS:
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; and
b) Approve the City of Newport Beach’s voluntary participation in the Public Provider GEMT Intergovernmental Transfer program per AB 1705 for Calendar Year 2025, and authorize the City Manager to execute the Public Provider Intergovernmental Transfer Program for Ground Emergency Medical Transportation Services Certification Forms and pay all necessary invoices.
DISCUSSION:
The Medi-Cal program is the State of California’s Medicaid program and is administered by the California Department of Health Care Services (DHCS.) Medi -Cal provides qualified California residents with healthcare coverage. This coverage can extend to Emergency Medical Services (EMS), including those provided by the City’s Fire Department. Unlike patients with private insurance (or in most cases, Medicare), Medi-Cal patients do not have a co -pay and medical providers like the City must accept Medi-Cal payments as payment in full.
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Jeff Boyles, Fire Chief - 949-644-3101, [email protected] PREPARED BY: Raymund Reyes, Administrative Manager - 949-644-3352, [email protected]
TITLE: Ground Emergency Medical Transport Intergovernmental Transfer Voluntary Participation for Calendar Year 2025
Ground Emergency Medical Transport Intergovernmental Transfer Voluntary Participation for Calendar Year 2025
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Medi-Cal is partially governed and funded by federal Medicaid provisions. Medi-Cal plan holders account for approximately 10%-15% of all City medical transports and the City is reimbursed for EMS services directly from the State’s Medi -Cal program. Medi-Cal has historically paid a capitated base rate of $118.20 per transport since 1999; this is significantly lower than the actual co sts for the City to provide transport service. The California Department of Healthcare Services’ (DHCS) Quality Assurance Fee (QAF), Ground Emergency Medical Transport (GEMT), and Intergovernmental Transfer (IGT) programs provide additional revenue to help offset the cost of service.
Passed in 2019 but not implemented until 2023, AB 1705 implemented a new Medi-Cal Public Provider Intergovernmental Transfer Program (PP-GEMT-IGT) for public ground emergency medical transportation providers. The program replaced the outgoing QAF and GEMT programs and provides additional payments to public providers who transport Medi-Cal patients. IGT remains viable and the City continues to participate in this program.
PP-GEMT-IGT is funded by a combination of ambulance transport agency funds and a federal Centers for Medicare and Medicaid Services (CMS) match, called a Federal Financial Participation (FFP.) The State’s general funds cannot be utilized for this reimbursement program, so public ambulance providers voluntarily provide the State with the amount needed (roughly $110 million) through an Inter -Governmental Tran sfer.
DHCS then uses the non -federal funds to draw down available matching federal funds and uses the combined sum to pay the add -on amount per eligible Medi-Cal transports.
DHCS manages the reimbursement processes and charges an administrative fee of 10% of the non-federal share amount.
This add-on amount is currently $946.92, bringing the total add-on amount (including the base rate) to $1,065 .12. The City Council previously approved participation for both CY 2023 and CY 2024. Based on amounts received to date and pending amounts forthcoming, the program appears to be successful. Staff requests City Council approval to participate in the CY 2025 program.
FISCAL IMPACT:
Because DHCS elected to submit payments via an add -on amount, t he month or even year in which add-on fees are collected are not necessarily reflective of the time when the transport occurred. Whereas DHCS’ IGT program consists of a single payment to the State followed by a single reimbursement back to the City for completed transports in a prior calendar year, PP-GEMT-IGT add-on payments are included with the $118.20 base rate amounts and remitted to the City as part of the normal billing collection process. This can result in a delay between the month that the transport occurred and the receipt of any payments. As a result, pending amounts yet to be collected cumulatively roll forward, and revenues could be reflective of add-on amounts for either year.
Ground Emergency Medical Transport Intergovernmental Transfer Voluntary Participation for Calendar Year 2025
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PP-GEMT-IGT ADD ON FEES FOR CY 2023, CY 2024
Calendar
Year
Program
Payments to
DHCS (Not
including 10%
admin fee)
Original
Estimated
Revenue
Add-On Fees
Collected
through Oct
2024
Add-on Fees
Pending
Receipt
(through Oct
2024)
PP-GEMT-IGT
Prospective
Total Revenue
for CY2023,
CY2024
2023 $399,377 $1,181,208 $565,514 $1,728,075 $3,032,787 2024 $390,461 $1,155,655 $739,198 TOTALS: $789,837 $2,336,863 $1,304,712 $1,728,075
*This amount includes approximately $3,521 in leftover QAF reimbursements received from DHCS during the PP -GEMT-IGT implementation process.
Even so, the program seems to have surpassed original estimates. Add-on fees already collected have exceeded the City’s original contribution amounts, with a pending add-on amount owed of $1,728,074.62 . Based on the pending amounts yet to be received, revenue estimates may be upwards of $695,923.96 higher than originally anticipated for CY 2023 and CY 2024 combined.
DHCS Payments to Date PP-GEMT-IGT Prospective
Total Revenue to Date
Projected Net Revenue
(including pending amounts)
$789,837 ** $3,032,787 $2,242,950
**While DHCS has invoiced the City for CY 2023 and CY2024 amounts; agencies have not yet been invoiced any 10% administrative fee amounts.
To participate as a funding entity for CY 2025, the City must transfer local funds up to an estimated total contribution amount of $364,855, which includes the 10% administrative fee estimate. Based on current DHCS figures, the number of possible transports and the current program reimbursements , the City may expect to receive a total of $1,310,133 from the CY 2025 program , resulting in an approximate net revenue of $ 945,278. It is important to note that depending on total agency participation, the actual p ayment amounts due during the year may be higher or lower.
DHCS recently published a public notice for the CY 2025 State Plan Amendment (SPA), SPA 25-0002. This SPA includes a proposed add-on reimbursement amount of $1,478.68 for CY 2025 (an increase from $946.92 to $1,360.48.) The SPA is expected to be submitted to CMS in the first quarter of CY 2025. However, approval from CMS is not anticipated until late CY 2025. If approved by CMS, retroactive adjustments reflecting the CY 2025 add -on amount will be applied for the period of January 1, 2025, through December 31, 2025.
Retroactive reimbursements would follow the standard process of Medi-Cal Managed Care Plans reconciling payments based on the updated add-on amount. Adjustments will be applied to each eligible GEMT claim processed during the retroactive service period , once the rates are finalized and approved by CMS. Assuming the amendment passes, Ground Emergency Medical Transport Intergovernmental Transfer Voluntary Participation for Calendar Year 2025
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the City could be required to process additional payments to the State, but could also see increased add-on revenues in a later fiscal year.
The adopted budget includes sufficient funding for the first two quarterly payments due in January and April 2025. Payments will be expensed from the PP -GEMT-IGT account in the Fire Department’s EMS Division, 01040404-821010. The two remaining payments in July and October 2025 will be incorporated into the Fiscal Year 2025-26 adopted budget.
Anticipated revenues from the CY 2025 program have been incorporated into the current year budget (for amounts estimated to be received prior to June 30, 2025) and the Fiscal Year 2025-26 budget process.
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.
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 – Certification for CY 2025 PP-GEMT-IGT Program Attachment B – Public Notice Re. State Plan Amendment 25-0002