To: Board of Supervisors
From: Anna Roth, Health Services Director
Report Title: Department of Health Care Services Guaranty Required for Contra Costa Health Plan to serve as the Single Local Plan for Medi-Cal Managed Care Enrollees
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
APPROVE and AUTHORIZE the Health Services Director or designee to execute a written Guaranty required by the state Department of Health Care Services to allow Contra Costa Health Plan to serve as the single local plan for Medi-Cal managed care enrollees in the County.
FISCAL IMPACT:
Conversion from a two-plan model to a County Organized Health System will increase the Contra Costa Health Plan’s Medi-Cal membership from 200,000 enrollees to approximately 238,000. The net income impact is expected to be positive and in the 2% to 4% of gross revenue.
BACKGROUND:
The State Department of Health Care Services (DHCS) provided counties with the option to change its local plan model. The Contra Costa Health Plan (CCHP) has operated a two-plan model. Converting CCHP to a single plan model, known as a County Organized Health System (COHS), will provide numerous benefits for the County’s Medi-Cal population. As the CCHP governing body, the County Board of Supervisors authorized CCHP’s CEO to sign a non-binding letter of intent to the State of California and in September, 2021, the Board adopted Ordinance No. 2021-31 authorizing the Contra Costa Health Plan to serve as the single local plan for Medi-Cal managed care enrollees in the County commencing on January 1, 2024.
Conversion from a two plan to a single plan model requires State Department of Health Care Services (DHCS) approval. Contract No. 22-20199 between the DHCS and CCHP regards operational readiness, implementation and operation of the County Organized Health System. As one of the final steps in the approval process, DHCS requires CCHP to provide a written Guaranty, wherein the County pledges responsibility for CCHPs debts and obligations. Per DHCS’s instruction, the Guaranty shall recite certain terms, as follows:
Guarantor (Contra Costa County) stipulates that if the contract is ultimately awarded to Contractor, DHCS will so award in reliance on the Guaranty.
Guarantor accepts unconditional responsibility for all performance and financial requirements and obligations of the contract between DHCS and CCHP.
Guarantor warrants that the official executing the Guaranty is authorized to legally bind the Guarantor.
Guarantor agrees that DHCS need not take any action against CCHP or the Guarantor, or resort to any securities held by same before proceeding against Guarantor.
Guarantor waives notices and demands which may otherwise be required by statute or rule of law and agrees that its liability will not be affected, diminished or released by extension of time, forbearance, or waiver, which may be granted to CCHP.
The Guaranty will extend to and include all future amendments, modifications, and extensions of the Contract and any future supplemental or other agreements with respect to matters covered by the Contract that DHCS and Contractor may enter into regarding the requested conversion.
Guarantor agrees that the guaranty will continue in full force and effect despite any change in CCHP’s legal status.
CONSEQUENCE OF NEGATIVE ACTION:
If the Board of Supervisors does not authorize the Health Services Director’s execution of the Guaranty, the Department of Health Care Services may not provide approval for CCHP conversion from a two-plan model to a County Organized Health System, a single plan model.