City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2024-01547 9/10/2024 Consent Item 8.
Agreements: Participation in the Rate Range Intergovernmental Transfer (IGT) program with the California Department of Health Care Services (DHCS) and Medi-Cal Managed Care Plan Providers (MMCPP) (Two-Thirds Vote Required)
File ID: 2024-01547
Location: Citywide
Recommendation: Pass a Motion 1) by two-thirds vote waiving the requirement for 10-day posting of agreements over $1 million pursuant to City Code section 4.04.020(c) and Council Rules of Procedure Chapter 7, Section E.2.d.; 2) authorizing the City Manager or the City Manager’s designee to execute a) the Intergovernmental Transfer Agreement Regarding Transfer of Public Funds and Assessment Fee with the California State Department of Health Care Services (DHCS); and b) the Health Plan-Provider Agreements with participating Medi-Cal Managed Care Plan Providers; 3) authorizing transfer of funds up to approximately $4.5 million from the Fire Department’s operating budget to DHCS; 4) accepting reimbursement for Medi-Cal services of approximately $9.5 million, of which, approximately $4.5 million will reimburse the Fire Department’s operating budget; and 5) authorizing designation of the additional federal reimbursement of approximately $5.1 million to offset costs of providing Emergency Medical Services (EMS).
Contact: Anne Iturraran, Fire Administrative Manager, (916) 808-0452, [email protected], Fire Department
Presenter: None.
Attachments:
1-Description/Analysis
2-IGT Agreement Regarding Transfer of Public Funds with DHCS 3-Health Plan Provider Agreement with Kaiser Foundation Health Plan 4-Health Plan Provider Agreement with Health Net of California 5-Health Plan Provider Agreement with Molina
6-Health Plan Provider Agreement with Anthem Blue Cross Description/Analysis
Issue Detail: The Rate Range Intergovernmental Transfer (IGT) program provides an opportunity to receive federal matching funds to support health services for Medi-Cal-Managed Care beneficiaries
File ID: 2024-01547 9/10/2024 Consent Item 8.
served by the Fire Department. The Fire Department does not receive full reimbursement for medical services to Medi-Cal Managed Care patients. Currently, the Fire Department receives approximately 25% in reimbursement of our Medi-Cal Managed Care costs from payments received from Medi-Cal Managed Care Plan Provider(s) (MMCPP).
The IGT requires the transfer of eligible local dollars from the City to the Department of Health Care Services (DHCS). DHCS uses the funds to receive additional Federal funding from the Centers for Medicare and Medicaid Services (CMS). Since the funds must be used to support the Medi-Cal Managed Care program, DHCS transfers both the original contribution from the City and matched funds to the MMCPP, making those funds available to the City. The State and Federal governments will review and approve the documents the City submits to participate in the IGT program before any funds are sent to DHCS.
The amount the City initially transfers will be calculated using the Estimated Member Months (refer to Exhibit 1 of the IGT Agreement Regarding Transfer of Public Funds and Assessment Fee with DHCS), which will be reconciled to actual enrollment for the service periods of January 1, 2023, through December 31, 2023. Enrollment reconciliation will occur continuously as updated figures are made available. If, after the enrollment reconciliation, there is an increase in the amount needed to fund the non-federal share, the City will be required to transfer additional funds to cover the difference. If, after the enrollment reconciliation, there is a decrease in the amount needed to fund the non-federal share, the City can choose to receive the unexpended funds from DHCS. If DHCS and the City mutually agreed upon, amounts due to or owed by the City may be offset against future transfers. Actual enrollment figures of the respective period will be considered the final two years after December 31, 2023.
The City of Sacramento provides ambulance transports and meets the following IGT participation criteria:
1. Provides law enforcement services.
2. Has eminent domain authority.
3. Has taxing authority.
As such, the City of Sacramento participates in an IGT program to request funds to recover unreimbursed Medi-Cal costs.
Policy Considerations: Participation in this program is consistent with Council’s adopted Budget Guidelines to pursue new and enhance existing revenue sources and the Council’s adopted Advanced Life Support (ALS) Revenue Recovery policy.
Pursuant to City Charter Section 20 and City Code Section 3.56.090, the City Council holds the delegable authority to approve the execution of contracts of $250,000 or more for supplies or
File ID: 2024-01547 9/10/2024 Consent Item 8.
nonprofessional services.
The Sacramento Code Section 4.04.020 and Council Rules of Procedure (Chapter 7, Section E.2.d) mandate that, unless waived by a 2/3 vote of the City Council, all labor agreements and all agreements greater than $1,000,000 shall be made available to the public at least ten (10) days prior to City Council action.
Economic Impacts: None.
Environmental Considerations: This report concerns administrative activities that do not constitute a “project” as defined by Section 15378 of the California Environmental Quality Act (CEQA) Guidelines and are otherwise exempt under Section 15061(b)(3).
Sustainability: Not Applicable.
Commission/Committee Action: None.
Rationale for Recommendation: The following agreements and amendments must be in place for the City to participate in the IGT program:
a. The Intergovernmental Transfer Agreement: This contract specifies the amount to be transferred by the City to DHCS. It requires DHCS to use the transferred funds to increase capitation payments to a specified healthcare plan and to secure federal match funds, or if that is not possible, to return the transferred funds. The parties to this contract are the City and DHCS.
This portion of the agreement commits the City to paying DHCS 20% of the amount transferred as an administrative fee. This fee is refundable if the IGT does not proceed. b. The Health Plan-Provider Agreements: These agreements are amendments between the MMCPPs and the City. These contract amendments commit the MMCPPs to pay the City a specified amount of the IGT-funded capitation rate increases they receive from DHCS within 30 days of receiving those funds from the State. The MMCPPs will deduct an administrative fee of 2%, 2.5%, or 5% from the amount that will be remitted to the City. The amendments specify how the City will treat these funds from an accounting standpoint. The MMCPPs participating in the program are Aetna Better Health of California, Anthem Blue Cross, Health Net of California, Kaiser Foundation Health Plan, and Molina Healthcare.
Financial Considerations: Upon approval of these agreements, the City will apply and request an amount to be reimbursed through the IGT program. This amount will help the City recover additional reimbursement of our previously unreimbursed Medi-Cal costs incurred from January 1, 2023,
File ID: 2024-01547 9/10/2024 Consent Item 8.
through December 31, 2023, consistent with the ALS Revenue Recovery policy. To receive the reimbursement from MMCPPs, the City will be required to transfer up to approximately $4.5 million to DHCS to cover the City’s Non-federal share of the managed-care costs. This share includes the 20% fee assessed by the State to cover their costs to administer the IGT program.
The City will recover our non-federal share amount from the reimbursements received through the IGT program. This amount is net of the 2%, 2.5%, or 5% administrative fee assessed by the MMCPPs.
The City’s contribution will be funded from the Fire Department’s EMS operating budget. The payment received from the MMCPPs will reimburse EMS for the contribution. The additional reimbursement will offset the EMS costs, consistent with the ALS Revenue Recovery policy.
Local Business Enterprise (LBE): Not Applicable.