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HomeMy WebLinkAboutAgenda - 06-20-2023; 8-f - Renewal of Health Services Agreement with Southern Health Partners for Medical Services at the Orange County Detention Center 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: June 20, 2023 Action Agenda Item No. 8-f SUBJECT: Renewal of Health Services Agreement with Southern Health Partners for Medical Services at the Orange County Detention Center DEPARTMENT: Sheriff's Office ATTACHMENT(S): INFORMATION CONTACT: Renewal Letter Dated April 13, 2023 for Sheriff Charles S. Blackwood, Contract Period July 1, 2023—June 919.245.2900 30, 2024 Jennifer Galassi, Legal Advisor to the Sheriff, 919.245.2952 PURPOSE: To approve a renewal of the Health Services Agreement with Southern Health Partners for medical services at the Orange County Detention Center for Contract Period July 1, 2023 through June 30, 2024. BACKGROUND: Since 2009, the County has contracted with Southern Health Partners (SHP) to provide a structured and comprehensive medical program for inmates housed in the Orange County Detention Center (OCDC). SHP is experiencing rising costs associated with providing competitive pay rates to staff and inflationary costs related to supply lines and core business insurance. FINANCIAL IMPACT: Upon approval of the renewal, the monthly contract price will increase $19,500.94 per year ($1,625.07 per month). The new contract price, effective July 1, 2023, will be $409,518.48 annually ($34,126.54 per month). If the average daily population (ADP) exceeds 140 inmates, the compensation payable to SHP shall be increased by a per diem rate of $1.60 for each inmate over 140. Other financial obligations under the Agreement remain unchanged. SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goals are applicable to this item: • GOAL: FOSTER A COMMUNITY CULTURE THAT REJECTS OPPRESSION AND INEQUITY The fair treatment and meaningful involvement of all people regardless of race or color; religious or philosophical beliefs; sex, gender or sexual orientation; national origin or ethnic background; age; military service; disability; and familial residential or economic status. • GOAL: ENSURE ECONOMIC SELF-SUFFICIENCY 2 The creation and preservation of infrastructure, policies, programs and funding necessary for residents to provide shelter, food, clothing and medical care for themselves and their dependents. • GOAL: CREATE A SAFE COMMUNITY The reduction of risks from vehicle/traffic accidents, childhood and senior injuries, gang activity, substance abuse and domestic violence. ENVIRONMENTAL IMPACT: There is no Orange County Environmental Responsibility Goal impact associated with this item. RECOMMENDATION(S): The Manager recommends that the Board approve the renewal of the Health Services Agreement with Southern Health Partners for medical services at the Orange County Detention Center; and authorize the Chair to sign on behalf of the Board. Southern Health 3 Partners April 13, 2023 Sheriff Charles Blackwood Orange County Sheriff's Office 106 East Margaret Lane Hillsborough, NC 27278 Re: Health Services Agreement Dear Sheriff Blackwood: Southern Health Partners has been proudly partnering with Orange County since 2009. With our contract anniversary approaching, I want to welcome you to reach out with any questions or needs. I would be happy to speak with you if there were any areas of the contract you would like to discuss. Being on the front lines caring for patients and serving our customers' correctional health care needs, SHP has repeatedly confronted a range of financial and operational challenges since the outset of the pandemic, including substantial growth in expenses across labor, drugs, and supplies, let alone higher economy-wide inflation. Labor costs have presented a dramatic and extended wave of challenges. Quality staffing is central to the care process and represents a significant portion of our operating budget. With nursing shortages being what they are nationally, we have continued to experience considerable issues with recruitment and retention of nurses, especially in perspective to correctional work. As we strive to ensure coverage at our facilities, we have become increasingly reliant on utilizing current staff, Operational managers, travel nurses and agency staffing as resources for providing coverage until we can bring on permanent team members to fill open positions. We have increased recruitment efforts as well as added higher pay rate scales, sign-on on bonuses, and other benefits to help attract applicants. These coverage and recruitment practices, of course, come at a much greater cost to SHP than originally budgeted for in our contracts, as the parties could not have foreseen such an unprecedented hike in healthcare labor costs. Professional lines of insurance and employee benefits costs have continued an upward trend, as well as expenses for prescription drugs. Medical supply costs are another area which has hit hard over the past few years, considering supply chain disruptions and infection control practices/procedures put in place to comply with governmental regulations and to assure the health and safety of patients, and facility/medical staff. A major driver in increased medication costs has been the continued spike in drug prices, coupled with increased utilization, treating sicker patients in the correctional environment during and since the pandemic. Despite persistent cost pressures, SHP has tried to price annual contract adjustments modestly over the history of the contract. Unfortunately, our direct and indirect costs have escalated to the point of being unsustainable without an adequate annual increase for the new contract year. We have incorporated a 5% adjustment on the base fee and per diem rate based on continuation of the program at the current level of staffing/services for the 2023-2024 period. The new rates are provided for you below. Place2030 Hamilton Blvd,Ste.140 Chattanooga, 423.553.5635(phone)423.553. .- Southern Health 4 Partners Sheriff Charles Blackwood Orange County Sheriff's Office Page 2 April 13, 2023 Contract Period: July 1, 2023 through June 30, 2024 Base annualized fee: $409,518.48 $34,126.54 per month Per diem greater than 140: $1.60 Annual outside cost pool limits: $60,000.00 first tier ; $140,000.00 second tier Again, please feel free to reach out to me directly with any questions at 423-553-5635, ext. 922. 1 will ask that you keep this letter on file with your contract and return a signed copy to me at your earliest convenience, or by May 26, 2023, for the historical contract record and to confirm the renewal of our original Health Services Agreement dated August 18, 2009 with Orange County. A scan to email will be fine at Jeanette.rod rig uez(absouthern health partners.corn or if you prefer by direct confidential fax at 423-305-6964. If this letter is not signed in a timely manner, then billing will be prorated back to the contract inception date. Except as stated herein, or as may be amended or modified in writing by mutual agreement of the parties, all provisions of the contract will remain in full force and effect. We appreciate the support and resources provided by our customers, and we will continue to look toward mutually beneficial solutions in partnership together so that SHP can stay strong in providing high-quality care to the patients we serve. Sincerely, SOUTHERN HEALTH PARTNERS, INC. ORANGE COUNTY, NC BY: Jeanette Rodriguez Contracts Administrator cc: Chief Deputy Jamison Sykes Jennifer Galassi, Legal Advisor