Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Colleen Chawla, Chief, San Mateo County Health
Chester J. Kunnappilly, MD, Chief Executive Officer, San Mateo Medical Center
Subject: Amendment to the Agreement with Peninsula Pathologists Medical Group, Inc. to Provide Pathology Services
RECOMMENDATION:
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Adopt a resolution authorizing an amendment to the agreement with Peninsula Pathologists Medical Group, Inc. to provide pathology services, extending the term by three months through August 31, 2025, and increasing the amount by $225,000 to an amount not to exceed $2,825,000.
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BACKGROUND:
San Mateo County provides necessary medical care to financially vulnerable patients. Peninsula Pathologists Medical Group, Inc. (PPMG) provides pathology services to San Mateo Medical Center (SMMC) and has done so since 2005. PPMG collects anatomic slide preparations and provides histology/cytology services of patient tissue samples and professional medical analysis of the slides and samples taken. PPMG’s services consist of a mix of professional medical services and non-professional technical services to prepare slides and tissue samples for the pathologist’s examination and interpretation. The parties are negotiating a renewal of PPMG’s agreement and have engaged VMG Health to render an opinion of fair market value regarding the non-professional component of the contract’s scope of services.
DISCUSSION:
The recommended amendment to extend the agreement is needed to give VMG time to prepare its fair market value analysis regarding the non-professional component of the contract pricing, which is approximately 38% of the current $866,104 annual contract value. The contract pays for the non-professional services in block annual rates, which do not readily translate to existing public wage data, necessitating the need for VMG’s opinion of value based on past trends of sample preparation and analysis and an analysis of the reasonable overhead factors that may be applied. The extension also accounts for this Board’s regular summer recess and summer budget agenda, where consent items are not considered. There is no other recommended change in the terms of the current agreement.
County Attorney has reviewed and approved the resolution and agreement 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).
It is anticipated that 100% of laboratory and pathology services provided will comply with standards as defined by the Joint Commission and Title XXII of the State of California Code of Regulations.
PERFORMANCE MEASURE:
|
Measure |
FY 2024-25 Actual |
FY 2025-26 Estimated |
|
Percentage of laboratory and pathology services provided that comply with standards as defined by the Joint Commission and Title XXII of the State of California Code of Regulations |
100% |
100% |
COMMUNITY IMPACT:
PPMG’s continued pathology coverage will positively impact equitable health outcomes because delivery of pathology services at SMMC, a public safety net hospital, addresses community need. Demographically, within the past 18 months, the largest cohorts of specialty care patients at SMMC were female (52%), Hispanic or Latino (63%), and primarily Spanish-speaking (55%). SMMC strives to eliminate bias in the medical profession by providing culturally competent training to its physicians and by following up with patients to ensure that they continue to have access to specialized care.
FISCAL IMPACT:
The proposed term of the amended agreement is June 1, 2022 through August 31, 2025. The amount of the agreement is not to exceed $2,825,000 for the 39-month term. Additional funds in the amount of $225,000 to cover the extension period from June 1, 2025 through August 31, 2025 are included in the SMMC FY 2024-25 Adopted Budget and 2025-2026 Recommended Budget. Other than the extension of the current agreement, there are no other proposed changes to the compensation method or formula of the PPMG contract.
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 to 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.