SR - AGR-6469 - INTERGOVERNMENTAL TRANSFER AGREEMENT1. 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 2017 -2018
(FYI 8) 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 $714,124 of reimbursable funds to the California State
Department of Health Services.
4. FISCAL IMPACT
Reimbursable funds of $714,124 will be advanced to obtain previously unreimbursed Medicaid
revenue of $238,041. The total amount of $952,165 will be received by early 2018. Funds are
available in the Emergency Transport Program (125).
5. STRATEGIC PLAN GO
2. Be a fiscally healthy community.
[b]. Analyze future fiscal needs and potential revenue opportunities.
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
In fiscal year 2015 -2016 (FY16) the City of Orange (City) was approached by CalOptima to
participate in a one -time funding entity partnership for an Intergovernmental Transfer (IGT) for
fiscal year 2014 -15 (FY15). As Orange County's designated managed care plan, CalOptima is
approved to retain IGT funds. 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 we provide ambulance transport
services and have unreimbursed Medicaid expenses, the City is eligible to participate in the IGT
program. (Prior to FYI 5, cities were not yet eligible and only the University of California, Irvine
participated in the program.) In fiscal year 2016 -2017 (FYI 7), the City participated for the first
time and received net revenue of $140,398 for FYI unreimbursed transport services.
Provisions of the IGT require the City to transfer an amount representing 50% of unreimbursed
CalOptima patient charges (the IGT amount) to the California State Department of Health Services
(DHCS). The City also remits an administrative fee equal to 20% of the IGT amount. DHCS uses
the original IGT amount to access the Federal government's highest allowable Medi -Cal
reimbursement rate, enabling them to draw down additional Federal funds on behalf of the City.
Upon reimbursement from the Federal government, CalOptima reimburses the City the original
IGT amount, the 20% administrative fee, and 50% of the additional reimbursement 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.
While there are fewer funds available, and ultimate funding is not guaranteed, CalOptima did reach
out to the City to participate in the program for FY16 and FY17. The details of the City's
participation are as follows:
IGT Transfer -FY16
IGT Transfer-FY 17
$249,393
345,710
IGT Transfer to DHCS
595,103
IGT Amount
20% Admin Fee
595,103
119,021
Total IGT to DHCS
$714,124
ITEM 2 5/9/17
Estimated IGT Revenue $476,082
50% Additional Revenue $238,041
Total Received back from $952,165
DHCS
On February 14, 2017, the City submitted a non - binding letter to the DHCS confirming our interest
in participating in the program. If the City intends to move forward, the DHCS requires three (3)
agreements to be signed:
1) Provider Agreement between the City and CalOptima,
2) Intergovernmental Agreement regarding transfer of public funds between the City and
DHCS, and
3) Intergovernmental Transfer Assessment Fee Agreement between the City and DHCS.
Approximate Timeframe for IGT participation:
• In March 2017, CalOptima advised DHCS the City will be participating in the IGT program at
a funding level of $714,124.
• In June 2017, all agreements will be signed and submitted to DHCS for their review and
approval.
• Starting in the third quarter of calendar year 2017 (CY17), the City will wire DHCS $299,272
for FYI and $414,852 for FYI 7.
• In the first quarter of calendar year 2018 (CY18), DHCS will send the additional revenue to
CalOptima for disbursement. CalOptima will distribute $952,165 back to the City within the
30 days specified in the Provider Agreement. Therefore, the net revenue to the City is
anticipated to be $238,041
Specifics of this IGT participation require additional monies received to be used for transport
services. Allowable expenditures include salaries for transport personnel, related materials and
supplies, and capital expenses. While there are no specific guidelines or obligations, the additional
revenue received should be used within a year after receipt. There are no guarantees that future
monies for reimbursement will be available; as such, this revenue should be viewed as one -time
funding only. Although funding is not guaranteed, successful participation in the FYI program
did net the City $140,398 of additional revenue in FY17 and staff recommends the City seek this
additional reimbursement.
ITEM 3 5/9/17
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