Title
Recommendation to Authorize the City Manager to Make Overpayments to the State Department of Health Care Services Concerning the Ground Emergency Medical Transportation Program. (City Manager/Fire)
Body
To: Honorable Mayor and Members of the Alameda City Council
EXECUTIVE SUMMARY
The State Department of Health Care Services (DHSC) reimburses the City of Alameda (City) for medical transports of individuals who receive Medi-Cal benefits based on Cost Reports that the City submits annually to the DHSC. Due to an error in the methodology that the City used in fiscal years 2011/12 through 2014/15, the DHSC overpaid the City $508,737.03 and has now requested the overpayment to be returned. City staff agrees the City was overpaid and, because of the amount of the overpayment ($508,737.03), the City Manager is requesting City Council authority to make this payment. Additionally, prior to the methodology being corrected, other Cost Reports were submitted using the same methodology, therefore, the City Manager is requesting Council authority to make other overpayments if City staff agrees such overpayments are in order
BACKROUND
From time to time, the Alameda Fire Department is called upon to transport persons who are Medi-Cal patients for medical purposes. Under the State’s Ground Emergency Medical Transportation (GEMT) Program, the City is eligible to be reimbursed for its costs to provide these services. To be reimbursed, the City prepares a “Cost Report” on a fiscal year basis that it submits to the State. DHCS then reimburses the City. The Cost Report, however, is subject to a State audit which typically is completed two years after the City has received its reimbursement. Based on that audit, the DHSC will make an additional payment to the City when there has been an underpayment or the City is obligated to return to the State any overpayment for services or other costs that the State has determined were not subject to reimbursement.
For Fiscal Years (FY) 2011-12 through 2017-18, the City received reimbursement from DHSC in the amount of $967,356. Recently, however, following the conclusions of the State audits for FYs 2011-12 through 2014-15, the DHSC requested a Demand for Overpayment that the City would need to return to DHSC in the amount of $508,737.03.
City staff investigated the reasons for the DHSC’s request and determined that the methodology that staff at that time had used to prepare the Cost Report had not been updated and significantly overstated the amount of various services and costs. Staff requested that Management Partners (a consultant group under contract with the City) review the Cost Reports that had been submitted to the DHSC and the methodology that had been employed. Management Partners confirmed that the methodology was in error and that the State’s audit findings were correct.
DISCUSSION
In that the Cost Reports for FYs 2011-12 through 2014-15 were prepared using incorrect methodology, it is in order for the City to return to DHSC the overpayment requested in the amount of $508,737.03.
Fortunately, because the City has not spent any of those funds, there is funding in the account into which these funds were deposited to make that overpayment.
In addition, staff expects that when it receives the final audit for FY 2015-16, it is likely that the DHSC will make a further demand for overpayment in an estimated amount of $255,475. Assuming staff concurs that an overpayment was received, the City Manager is requesting authority at this time to make a similar overpayment to the DHSC.
The Cost Reports for FY 2016-17 and going forward have, however, been prepared using correct methodology. Accordingly, staff does not expect that there will be any demand for significant overpayments for those fiscal years.
FINANCIAL IMPACT
The funds will be refunded out of revenue receipts from Fiscal Year 2019-2020.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
There are no Alameda Municipal Code or Policy documents affected by this action.
CLIMATE IMPACTS
There are no climate impacts anticipated from this action.
ENVIRONMENTAL REVIEW
City Council authorization to the City Manager to make these payments is not a project under the California Environmental Quality Act (CEQA) and therefore no environmental review is required. CEQA Guidelines, Section 15378 (b)(2), (4), and (5).
RECOMMENDATION
Authorize the City Manager to make overpayments to the State Department of Health Care Services concerning the City Ground Emergency Medical Transportation Program.
CITY MANAGER RECOMMENDATION
The City Manager requests authorization for the City Manager to make overpayments to the State Department of Health Care Services regarding City Ground Emergency Medical Transportation Program.
Respectfully Submitted:
Gerry Beaudin, Assistant City Manager
Ricci Zombeck, Acting Fire Chief
Financial Impact section reviewed,
Nancy Bronstein, Human Resources Director and Interim Finance Director
cc: Eric Levitt, City Manager