REPORT TO SHASTA COUNTY BOARD OF SUPERVISORS

BOARD MEETING DATE:  December  5, 2017
CATEGORY:  Consent - Health and Human Services-17.

SUBJECT:

Intergovernmental Transfer Letter of Interest

Supervisorial District No. :  All

DEPARTMENT CONTACT:  Donnell Ewert, Director, Health and Human Services Agency, (530) 225-5899

STAFF REPORT APPROVED BY:  Donnell Ewert, Director, Health and Human Services Agency

RECOMMENDATION

Take the following actions: (1) Approve and authorize the Chairman to sign a Letter of Interest for the Fiscal Year (FY) 2017-18 Intergovernmental Transfer where Shasta County is willing to contribute up to $4,586,294 in order to receive funding to assist in financing health improvements for Medi-Cal beneficiaries in Shasta County; and (2) authorize the Health and Human Services Agency Director or his designee to complete and submit the State FY 2017-18 Voluntary Rate Range Program Supplemental Attachment to the California Department of Health Care Services.

SUMMARY

Approval of the Letter of Interest (LOI) will confirm the interest of Shasta County Health and Human Services Agency (HHSA) in working with Partnership HealthPlan of California (PHC) and the California Department of Health Care Services (DHCS) to provide a Medi-Cal managed care rate range Intergovernmental Transfer (IGT).  This is a non-binding letter, stating our interest to participate in financing health improvements for Medi-Cal beneficiaries in Shasta County.  In order for Shasta County to participate in the FY 2017-18 IGT, the LOI must be submitted to DHCS.

DISCUSSION

On June 9, 2015, the Board of Supervisors approved participation in the FY 2013-14 IGT.  The IGT process is a funding strategy under Section 1903(w)(a) of the Social Security Act whereby states and/or local governments can utilize state or local funds to increase federal matching dollars for Medicaid programs. California currently receives a 50 percent match for services provided through Medi-Cal, the California Medicaid program. Currently, the State claims federal funds for use in the Medi-Cal system at a level that is less than the maximum allowable federal funding level. The difference between the maximum allowable federal funding level and the actual amount drawn down by the State is referred to as “headroom.” This “headroom” of unused federal reimbursement is available to be drawn down through an IGT by counties and other public entities covered by a Medi-Cal managed care plan.

PHC, a County Organized Health System, is the provider of managed health care services for low-income individuals and families eligible for Medi-Cal in Shasta County.  The additional Medicaid funds must be used for the provision of health care services to Shasta County residents and cannot be transferred into the County’s General Fund. Per PHC policy, HHSA must use the additional federal Medicaid funds to improve behavioral health services, care coordination, oral health services, and/or access to specialty care for Medi-Cal beneficiaries.

For many years, California Counties covered by Medi-Cal managed care plans have had the opportunity to secure federal matching funds for their local health care expenditures on behalf of the Medi-Cal population. The mechanism for securing these funds involved an IGT, whereby the county transfers funds to DHCS, and DHCS then uses the funds to draw down additional federal funding from the federal Center for Medicare and Medicaid Services (CMS), which is then transferred to the Medi-Cal Managed Care health plan for that county. The Medi-Cal Managed Care health plan then makes payments to its contracted Medi-Cal providers which results in the county getting back the transferred funds, along with the matching federal funds that are contained in the Medi-Cal expenditures, less a 20 percent DHCS administration fee, managed care organization (MCO) taxes, and a three percent managed care plan administrative fee.

ALTERNATIVES

The Board could choose not to approve the Letter of Interest.

OTHER AGENCY INVOLVEMENT

 This recommendation has been reviewed by the County Administrative Office.

FINANCING

There is no additional General Fund impact with the proposed recommendation.  HHSA is estimated to receive a net amount of $4,586,294 in IGT funding for the FY 2017-18 IGT rate period.