City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2025-01479 9/9/2025
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: 2025-01479
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 Interim City Manager 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 $5.2 million from the Fire Department’s operating budget to DHCS; 4) accepting reimbursement for Medi-Cal services of approximately $10.1 million, of which, approximately $5.2 million will reimburse the Fire Department’s operating budget; and 5) authorizing designation of the additional federal reimbursement of approximately $4.8 million to offset costs of providing Emergency Medical Services (EMS).
Contact: Crystal Harland, Fire Administrative Manager, (916) 767-367, [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
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 served by the Fire Department. The Fire Department does not receive full reimbursement for medical
File ID: 2025-01479 9/9/2025
services to Medi-Cal Managed Care patients. Currently, the Fire Department receives approximately 25% in reimbursement of 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, 2024, through December 31, 2024. 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 agree 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, 2024.
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.
The Fire Department provides prehospital emergency medical services (PHEMS) on a year-long and 24-hour basis to the public, including Medi-Cal Managed Care patients. MMCPP make the Fire Department’s continued provision of PHEMS to the public financially feasible. The deadline for participating providers to execute their IGT Agreements Regarding Transfer of Public Funds and Assessment Fee with DHCS was August 1, 2025. Therefore, pursuant to Sacramento City Code section 3.56.260, the Interim City Manager signed the City of Sacramento’s attached IGT Agreement Regarding Transfer of Public Funds and Assessment Fee with DHCS on July 29, 2025 as an
File ID: 2025-01479 9/9/2025
emergency purchase with approval as to form by the Office of the City Attorney in order to permit the continued conduct of city operations and services in the form of PHEMS provided to the public, including Medi-Cal Managed Care patients. To continue the City of Sacramento’s participation in the reimbursement program, staff seeks ratification of the Interim City Manager’s execution of IGT Agreement in addition to approval of the transfer of city funds and acceptance of funds from DHCS and additional approval to execute attendant Plan Provider Agreements with Kaiser Foundation Health Plan, Health Net of California, and Molina as final and necessary steps for the City of Sacramento to receive reimbursements under the Rate Range IGT program.
Policy Considerations: Participation in this program is consistent with the City Council’s adopted Budget Guidelines to pursue new and enhance existing revenue sources. 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 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 before 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.
File ID: 2025-01479 9/9/2025
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, 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 previously unreimbursed Medi-Cal costs incurred from January 1, 2024, 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 its costs to administer the IGT program.
The City will recover its 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.
1 Template Version – 2018 Plan Provider Agreement for City of Sacramento and Health Net for 2024 IGTs HEALTH PLAN-PROVIDER AGREEMENT AMENDMENT 11 TO AGREEMENT BETWEEN HEALTH NET OF CALIFORNIA, INC. AND THE CITY OF SACRAMENTO VIA ITS FIRE DEPARTMENT This Amendment is made, ____ day of _________ 2025, by and between Health Net of California, Inc., a California corporation licensed pursuant to Health and Safety Code section 1349 et seq. to act as a health plan hereinafter referred to as "PLAN", and City of Sacramento via its Fire Department, hereinafter referred to as "PROVIDER." RECITALS: WHEREAS, PLAN and PROVIDER have previously entered into an Agreement effective January 1, 2013; WHEREAS, Health Net Community Solutions, Inc. (HNCS), a corporate entity licensed under Health and Safety Code Section 1349 et seq. has a contract with the California Department of Health Care Services (State DHCS) pursuant to Welfare and Institutions Code Section 14087.3 to act as a Medi-Cal managed care plan. HNCS has contracted with Health Net of California, Inc. to fulfill its responsibilities for the provision of Medi-Cal covered services for eligible Medi-Cal members. Health Net of California, Inc. has subsequently entered into the Agreement referenced above, and amendments to it, to allow PROVIDER to render such services to HNCS Medi-Cal members in Sacramento County. For purposes of this Amendment, Health Net of California, Inc. and Health Net Community Solutions, Inc. shall collectively be referred to as “PLAN;” WHEREAS, PROVIDER provides 9-1-1 emergency medical response and transport for the City of Sacramento and in that capacity serves all patients in need, including Medi-Cal beneficiaries. PROVIDER provides advanced life support paramedic services, including 12-lead ECG monitoring, advanced airway interventions and Advanced Cardiac Life Support medication consistent with the latest American Heart Association guidelines. PROVIDER currently deploys 24-hour ALS ambulances, flex ALS ambulances when additional staffing and equipment are available, ; WHEREAS, PLAN and PROVIDER desire to amend the Agreement to provide for Medi-Cal managed care capitation rate increases to PLAN as a result of intergovernmental transfers (“IGTs”) from PROVIDER (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: Amendment 11 of the Agreement is added to read as follows:
2 Template Version – 2018 Plan Provider Agreement for City of Sacramento and Health Net for 2024 IGTs 2024 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, IGT-24-0021 (“Intergovernmental Agreement”) effective for the period January 1, 2024 through December 31, 2024 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 1.E 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 PLAN. B. Health Plan Retention (1) The PLAN shall not impose a fee or retention amount, or reduce other payments to a county public hospital health system, that would result in a direct or indirect reduction to the payments authorized under Welfare and Institutions Code Section 14301.5. (2) The PLAN shall retain a two percent (2%) administrative fee based on the total amount of the IGT MMCRRIs received from DHCS for PLAN’s cost to administer this program. Each provider’s share of the two percent (2%) fee shall be calculated based on that provider’s proportionate share of the LMMCRR IGT payments made by Plan in Sacramento County. (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) remain a participating provider in the PLAN and not issue a notice of termination of the Agreement; (2) maintain its current emergency response services for PLAN Medi-Cal beneficiaries. 3 Template Version – 2018 Plan Provider Agreement for City of Sacramento and Health Net for 2024 IGTs D. Schedule and Notice of Transfer of Non-Federal Funds The GOVERNMENTAL FUNDING ENTITY shall notify the PLAN within five (5) business days after PROVIDER’s funds referred to in the Intergovernmental Transfer Agreement have been transferred to the State. 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., check, 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. 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 Amendment 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’S funds for cash management purposes 4 Template Version – 2018 Plan Provider Agreement for City of Sacramento and Health Net for 2024 IGTs 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 Amendment 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. 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 Sacramento 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 any dispute resolution processes set forth in the Agreement or otherwise in good faith by the parties. The reconciliation processes established under this paragraph are distinct from the indemnification provisions set forth in Section 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. 5 Template Version – 2018 Plan Provider Agreement for City of Sacramento and Health Net for 2024 IGTs J. Indemnification (1) Anything to the contrary contained in the Agreement notwithstanding, PROVIDER shall indemnify and hold PLAN harmless against any losses, claims, demands, liabilities, court costs, judgments and expenses, imposed by a court or otherwise incurred by PLAN after the execution date of this Amendment as a result of PLAN’s receipt of IGT rate increases or payment of LMMCRR IGT payments, including but not limited to the following circumstances: (2) In the event that DHCS, the Department of Human Health and Services or any other federal or state agency recoups, offsets, or otherwise withholds any monies from or fails to provide any monies to PLAN, or PLAN is denied any monies to which it otherwise would have been entitled, for any reason relating to the Medi-Cal managed care capitation rate increases arising from the Intergovernmental Agreement as such increases flow through the Medi-Cal Agreement between PLAN and the State and this Agreement, including but not limited to (a) State DHCS’ use of IGT Rate Increases or LMMCRR IGT payments to supplant or replace other amount in violation of the restrictions in Section 2.2 of the Intergovernmental Agreement; (b) the failure of the IGT Rate Increases to qualify in whole or part for federal participation pursuant to 42 C.F.R. part 433, subpart B; or (c) overpayment of the IGT Rate Increases to PLAN by State DHCS, PLAN shall have a right to immediately recoup, offset or withhold any and all such amounts from payments otherwise due to PROVIDER. Recovery by PLAN pursuant to this section shall include, but not be limited to, reduction in future LMMCRR IGT payments paid to PROVIDER in an amount equal to the amount of IGT Rate Increases payments recovered from PLAN, or by reduction of any other amounts owed by PLAN to PROVIDER. K. Severability If a court of competent jurisdiction declares any provision of this Agreement or application thereof to any person or circumstances to be invalid or if any provision of this Agreement contravenes any federal, state or county statute, ordinance, or regulation, the remaining provisions of this Agreement or the application thereof shall remain valid and the remaining provisions of this Agreement shall remain in full force and effect, and to the extent the provisions of this Agreement are severable. L. Status of Contractor Each party is, and shall at all times be deemed to be, an independent contractor and shall be wholly responsible for the manner in which it performs the services required of it by the terms of this agreement. Each party is entirely responsible for compensating staff, subcontractors, and consultants employed by that party. This Agreement shall not be construed as creating the relationship of employer and employee, or principal and agent, between PLAN and PROVIDER or any of either party’s employees, agents, consultants, or subcontracts. Each party assumes exclusively the responsibility for the acts of its employees, agents, consultants, or 6 Template Version – 2018 Plan Provider Agreement for City of Sacramento and Health Net for 2024 IGTs subcontractors as they relate to the services to be provided during the course and scope of their employment. Each party, its agents, employees, consultants, or subcontractors shall not be entitled to any rights or privileges of the other party’s employees and shall not be considered in any manner to be employees of the other party. M. Remittance Information The IGT-funded payments made by the PLAN pursuant only to this Amendment, shall be mailed to the PROVIDER at the address set forth below: Masoumeh Ramazani, Administrative Officer City of Sacramento Fire Department 5770 Freeport Blvd., Suite 200 Sacramento, CA 95822-3516 Phone: (916) 808-8065 Email: [email protected] 2. Term The term of this Amendment shall commence on January 1, 2024 and shall terminate on December 31, 2027. All other terms and provisions of said Agreement shall remain in full force and effect so that all rights, duties and obligations, and liabilities of the parties hereto otherwise remain unchanged; provided, however, if there is any conflict between the terms of this Amendment and the Agreement, then the terms of this Amendment shall govern. 7 Template Version – 2018 Plan Provider Agreement for City of Sacramento and Health Net for 2024 IGTs SIGNATURES HEALTH PLAN: HEALTH NET OF CALIFORNIA INC. By: __________________________________ Date: ____________ Jessica Sellner, Plan Chief Financial Officer, Health Net of California, Inc. PROVIDER: CITY OF SACRAMENTO VIA ITS FIRE DEPARTMENT By: ______________________________________ Date: _____________ , City Manager, City of Sacramento Approved as to Form: Date: Gary P. Lindsey, Jr., Senior Deputy City Attorney, City of Sacramento Attest By: Date: Wendy Klock-Johnson, Assistant City Clerk, City of Sacramento