Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Louise F. Rogers, Chief, San Mateo County Health
Chester J. Kunnappilly, MD, Chief Executive Officer, San Mateo Medical Center
Subject: Amendment to the Agreement with Med-Metrix, LLC to Provide Accounts Receivable Services
RECOMMENDATION:
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Adopt a resolution authorizing an amendment to the agreement with Med-Metrix, LLC to provide accounts receivable services, extending the term by three months through August 31, 2023, and increasing the amount by $200,000, to an amount not to exceed $1,450,000.
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BACKGROUND:
San Mateo Medical Center’s (SMMC) Patient Financial Services (PFS) department has been using an external vendor to collect revenue for services provided to commercially insured patients at SMMC since 2020.
In June 2020, this Board approved a waiver of the Request for Proposals process and an agreement with Med-Metrix, LLC for the term of June 1, 2020, through May 31, 2022, in an amount not to exceed $650,000.
In June 2022, this Board approved an amendment extending the term through May 31, 2023 and increasing the amount by $600,000 to an amount not to exceed $1,250,000.
Med-Metrix is paid on a contingency fee basis only when additional cash collections have been successfully collected on commercial insurance accounts (e.g., Aetna, Anthem Blue Cross, Blue Shield). Med-Metrix only pursues collections from commercial insurance payers and does not pursue collections from patients. Med-Metrix successfully exceeded SMMC’s initial expectation by increasing cash collections by 85% above the average monthly target of $300,000 and is now achieving a monthly collection rate of approximately $550,000. Because the collections (and fees earned by Med-Metrix) vary with patient volume and payor mix, the growth in the not-to-exceed amount has not been linear.
DISCUSSION:
SMMC does not have specialized internal expertise necessary to engage successfully with commercial insurance payers for collection follow-up, the appeals process, and payment negotiation. SMMC continues to need commercial insurance accounts receivable services and is issuing a Request-For-Proposals (RFP). The current recommendation for a short-term extension will allow time to complete the RFP process. Additionally, the not to exceed contract amount needs to be increased as a result of the increase in collection activity.
County Attorney has reviewed and approved the resolution and amendment as to form.
The resolution contains the County’s standard provisions allowing amendment of the County fiscal obligations by a maximum of $25,000 (in aggregate).
The County’s Contract Compliance Committee approved a waiver request for the first two-year term and an initial extension for this agreement.
It is anticipated that SMMC will collect an average monthly cash amount of $555,000 from commercial payors.
PERFORMANCE MEASURE:
|
Measure |
FY 2022-23 Estimated |
FY 2023-24 Projected |
|
Average amount of monthly cash collected from commercial payors |
$555,000 |
$555,000 |
FISCAL IMPACT:
The term of the amended agreement is June 1, 2020, through August 31, 2023. The amendment increases the amount payable under the agreement by $200,000 to an amount not to exceed $1,450,000 for the three-year term. Funds in the amount of $100,000 are included in the SMMC FY 2022-23 Adopted Budget. Funds in the amount of $100,000 will be included in the SMMC FY 2023-24 Recommended Budget.
Expenses at SMMC are covered by fees for services or third-party payors whenever possible. The portion of expenses for services provided to the medically indigent or those covered by programs that do not meet the full costs of care is covered by the County’s General Fund contribution to SMMC and is within the existing annual appropriation.