SR - AGR-6351 - INTERGOVERNMENTAL TRANSFERoP o
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AGENDA ITEM
June 14, 2016
TO: Honorable Mayor and
Members of the City Council
THRU: Rick Otto
City Manager
FROM: Jack Thomas, Fire Chief
Will Kolbow, Finance Director
ReviewedNerified
City Manage
Finance Dir ctor
To Be Presen By: Jack Thomas,
Fire Chief, Will Kolbow, Finance
Director
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1. SUBJECT
Participate in a one -time intergovernmental transfer (IGT) between the City of Orange and
CalOptima.
2. SUMMARY
A request for City Council approval to participate in a one -time IGT in fiscal year 2015 -2016
(FYI 6) to access additional federal Medicaid dollars to support unreimbursed care.
3. RECOMMENDED ACTION
1) Approve agreements and authorize the Mayor and City Clerk to execute on behalf of the
City.
2) Authorize the transfer of $479,330 of reimbursable funds to the California State
Department of Health Services.
4. FISCAL IMPACT
Reimbursable funds of $479,330 will be advanced to obtain previously unreimbursed Medicaid
revenue of $159,777. The total amount of $639,107 will be received by December 2016.
Funds are available in the Emergency Transport Program (125).
5. STRATEGIC PLAN GOAL(S)
2. Be a fiscally healthy community.
[b]. Analyze future fiscal needs and potential revenue opportunities.
ITEM 3 -�� 1 06/14/16
6. GENERAL PLAN IMPLEMENTATION
Public Safety Goal 3.0: Protect lives and property of Orange residents and businesses from urban
and wildland fire hazards.
Policy 3.8 Ensure that the Fire Department has sufficient capacity, stations, personnel, and
equipment to meet growth needs in the City for fire protection and related emergency services.
7. DISCUSSION and BACKGROUND
The City of Orange (City) was approached by CalOptima to participate in a one -time funding
entity partnership for an Intergovernmental Transfer (IGT). An IGT allows California's Medi -Cal
managed care plans to partner with local units of government to access additional federal Medicaid
dollars and use them to support unreimbursed care and provide health care services. Since the City
provides ambulance transport services and we have unreimbursed Medicaid expenses, we are
eligible to participate in the program.
CalOptima is Orange County's managed care plan and is approved to retain IGT funds. It has
previously engaged with the University of California, Irvine to complete four IGT transactions to
date, and is now offering this same program to other eligible agencies. The City of Newport Beach
is also considering participating in this IGT program at their June 14, 2016 City Council meeting.
Provisions of the IGT require the City to transfer an amount representing 50% of unreimbursed
FY 15 CalOptima patient charges (IGT amount) to the California State Department of Health
Services (DHCS). The City will also remit an administrative fee equal to 20% of the IGT amount.
DHCS will use the original IGT amount to access the Federal government's highest allowable
Medi -Cal reimbursement rate, allowing them to draw down additional Federal funds on behalf of
the City. Upon reimbursement from the Federal government, CalOptima will reimburse the City
the original IGT amount, the 20% administrative fee, and 50% of the additional revenue (the
maximum allowed recovery amount under the program). The amount to be received is based on
the rate range and the number of CalOptima providers.
The details of the City's participation is as follows:
FY 15 Medi -Cal Charges $905,416
CalOptima reimbursement (106,532)
Unreimbursed Charges 798,884
IGT Amount 399,442
(50% of above)
20% Admin Fee 79,888
Total IGT to DHCS $479,330
ITEM 2 06/14/16
Estimated IGT Revenue $319,554
50% Share to City 159,777
Total Received back from $639,107
DHCS
On March 21, 2016, the City submitted a letter to the DHCS confirming our interest in participating
in the program. Currently, there is no binding commitment to continue; however, if the City intends
to move forward, the DHCS requires three (3) agreements to be signed:
1) Provider Agreement between Orange and CalOptima,
2) Intergovernmental Agreement regarding transfer of public funds between Orange and
DHCS, and
3) Agreement for an Intergovernmental Transfer Assessment Fee between Orange and
DHCS.
Approximate Timeframe for IGT participation:
In April 2016, CalOptima advised DHCS the City will be participating in the IGT program and
the funding level will be $479,330. Cal Optima also verified the FY15 uncompensated Managed
Medi -Cal was $798,884.
In June 2016, all agreements will be signed and submitted to DHCS for their review and approval.
In the third quarter of calendar year 2016 (CY16), the City will wire $479,330 to DHCS.
In the fourth quarter of CY16, DHCS will send the additional revenue to CalOptima for
disbursement. CalOptima will distribute $639,107 back to the City within the 30 days specified
in the Provider Agreement.
Specifics of this IGT participation require additional monies received will be used for transport
services. Allowable expenditures include salaries for transport personnel, related materials and
supplies, and capital expenses. The additional revenue received should be used within a year after
receipt; however, there are no specific guidelines or obligations. There are no guarantees that
future monies for reimbursement will be available; as such, this revenue should be viewed as one-
time funding only. There is also no guarantee that the City will receive any funds. If CalOptima
does not receive funds from the federal government, the City does not receive any reimbursement.
However, the risk is minimal as all agencies that have participated in this program to -date have
received reimbursement.
8. ATTACHMENTS
- Provider Agreement between Orange and CalOptima
- Intergovernmental Agreement regarding transfer of public funds between Orange and DHCS
- Agreement for an Intergovernmental Transfer Assessment Fee between Orange and DHCS
ITEM 3 06/14/16