HomeMy WebLinkAboutMINUTES - 04052005 - SD.3 TO: BOARD OF SUPERVISORS Contra
FROM. WILLIAM B. WALKER M.D.
, ,
Health Services Director '
CDATE: March 16 2005 - u
0
SUBJECT: Quality Improvement Fee (QIF)
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATION:
Authorize the Health Services Director (William Walker, MD) or his designee (Rich Harrison) to
apply to the California Department of Managed Health Care for a Knox-Keene license to
create a separate HMO for Contra Costa Health Plan's commercial lines of business
(approved by the Joint Conference Committee on March 11, 2005).
BACKGROUND:
The State Department of Health Services will impose a quality improvement fee (QIF) of 6%
on the non-Medicare operating revenues of Medi-Cal managed care plans in California starting
on July 1, 2005. The state intends that the revenue from the fee will be used to draw down
federal Medicaid matching funds, a portion of which (about 75%) will be returned to the Medi-
Cal managed care plans in the form of a premium rate increase for Medi-Cal enrollees.
California's proposal to use this process to increase federal funding of California's Medicaid
program has been approved by the Federal Centers for Medicare and Medicaid Services.
Because Contra Costa Health Plan (CCHP) has a significant amount of commercial revenue
(non-Medicare operating revenue), the cost of the fee under CCHP's current structure would
exceed any capitation rate increase that would accrue to the pian. It is therefore necessary to
transfer the commercial revenue into a separate plan that is not a Medi-Cal managed care
plan. Doing so will protect the commercial revenue from the QIF resulting in a net revenue
increase to CCHP.
FISCAL IMPACT:
If CCHP is not allowed to establish a separate sister health plan to accommodate the QIF, the
result is estimated to be an annual revenue loss of approximately $3.2 million. Establishing
the separate sister health plan will result in a net revenue increase to the health plan of
approximately $1.4 million.
CONTINUED ON ATTACHMENT: No SIGNATURE: �4jv
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RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
__!APPROVE OTHER
SIGNATURE(S):
ACTION OF BO ON P —APPROVE AS RECOMMENDED OTHER
VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE
r AND CORRECT COPY OF AN ACTION TAKEN
UNANIMOUS(ABSENT ) AND ENTERED ON THE MINUTES OF THE
BOARD OF SUPERVISORS ON THE DATE
AYES: NOES: SHOWN.
ABSENT: ABSTAIN:
ATTESTED
CONTACT: Frank LeeH SWEETEN,CLERK OF THE
BO D OF SUPERVISORS AND
COUNTY ADMINISTRATOR
CC: Richard Harrison,CCHP
Dom Biunno,CCHP
BY ° PUTY