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 Quest Diagnostics to Provide Laboratory Reference Testing Services
RECOMMENDATION:
title
Adopt a resolution authorizing an amendment to the agreement with Quest Diagnostics to increase the amount of the agreement by $2,750,000 to an amount not to exceed $7,750,000 with no changes to the term of the agreement.
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BACKGROUND:
This Board originally approved an agreement with Quest Diagnostics to provide laboratory reference testing services on May 18, 2021, for the term of November 1, 2020 through October 31, 2025, in an amount not to exceed $5,000,000.
DISCUSSION:
San Mateo Medical Center (SMMC) continues to rely upon reference laboratory testing, a service that Quest Diagnostics has provided. In addition, SMMC’s laboratory experienced an increase in volume at a rate of about 3-5% annually due to increased provider ordering. Shortly after the contract was awarded, SMMC also had to add microbiology services to the scope of the Quest Diagnostics agreement, which resulted in an additional $55,000 in costs per month. The additional microbiology services were necessary due to unplanned retirements, the inability to recruit qualified microbiology staff, and the need to improve patient care. Finally, the Quest Diagnostics agreement is utilized as a failsafe for SMMC Laboratory and with all the supply chain disruptions during the COVID pandemic, SMMC had to rely on Quest Diagnostics to backfill tests that became temporarily unavailable. As a result, this amendment will add $2,750,000 to the amount payable of the agreement to cover the increased volume and the additional microbiology services through the end of the term. The expense for these added services has been and will be partially recouped through patient billing.
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).
It is anticipated that that laboratory reference testing results will be returned to the laboratory for analysis within 48 hours from time of pick up 100% of the time.
PERFORMANCE MEASURE:
|
Measure |
FY 2023-24 Actual |
FY 2024-25 Estimated |
|
Percentage of time laboratory reference testing results will be returned to the laboratory for analysis within 48 hours from time of pick-up |
100% |
100% |
EQUITY IMPACT:
The utilization of Quest Diagnostics ensures continued equitable health outcomes for SMMC and SMC Health patients by providing laboratory testing (including microbiology culture) results that SMMC Laboratory nor San Mateo County Public Health Laboratory can provide due to technological, skill, or expense limitations. These results are utilized by the patient care teams to provide the necessary care for all of SMMC’s patient population. This continued service will positively impact equitable health outcomes because delivery of laboratory services at SMMC, a public safety net hospital, addresses community need. Specifically, in the past 12 months, 68.3% of SMMC’s patients were enrolled in Medi-Cal with an additional 6.1% of SMMC’s patients enrolled in the Access to Care for Everyone (ACE) program. SMMC’s patients span a wide spectrum of races, ethnicities, gender, and gender-identities.
FISCAL IMPACT:
The term of the amended agreement is November 1, 2020 through October 31, 2025. The amendment increases the amount payable under the agreement by $2,750,000 to an amount not to exceed $7,750,000 for the five-year term. Funds in the amount of $1,350,000 are included in the SMMC FY 2024-25 Adopted Budget. Funds in the amount of $1,400,000 are included in the SMMC FY 2025-26 Recommended Budget. Similar arrangements will be made for future years.
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.