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HomeMy WebLinkAboutAgenda - 02-29-2000-8is .~: ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: February 29, 2000 Action Agenda Item No. „$. 1. SUBJECT: Contract With DMG-Maximus, Inc. to Conduct a Cost Study for Personal Health Services DEPARTMENT: Health PUBLIC HEARING: (Y!N) No ATTACHMENT(S): INFORMATION CONTACT: Contract Rosemary Summers, ext 2411 TELEPHONE NUMBERS: Hillsb6rough 732-8181 Chapel Hill 9fi8~501 Durham 688-7331 Mebane 336-227-2031 PURPOSE: Contract between DMG-Maximus, Inc. and Health Department to conduct a cost study for the purpose of setting fees for personal health services. BACKGROUND: Traditionally the Orange County Health Department has charged very minimal fees for only a few of the personal health care services it provides. The Department has billed the Medicaid program for services provided to Medicaid-eligible clients, which has comprised approximately 13% of the department's total budget and 19% of the personal health services budget. These bills have been submitted in a "bundled" format. For example, a patient might be seen for a well child check-up that would include a physical exam, an immunization, and perhaps some laboratory tests, and all of those services would have been "bundled" and submitted to Medicaid as a single bill. Beginning July 1, 2000 the North Carolina Medicaid program is requiring all health departments to submit "unbundled" bills for all services eligible for Medicaid reimbursement. The cost for each individual service rendered must be submitted to Medicaid. The department must be able to show actual costs for each service to justify the amount billed. This then requires the health department to establish cost figures for each individual personat health service provided. A cost study will also allow the department to establish fees and thereby bill third party payors such as Blue Cross and Blue Shield for Health Choice clients and others who have private insurance. There are approximately 40-50 procedure codes for which the department needs to establish cost figures. Due to current workloads, staff in the health department do not have time to conduct the study internally. The department conducted some preliminary work in this regard last spring through the use of students from the School of Public Health, however, students cannot meet the July 1 time frame that the_department must meet. In addition, the establishment of fees is expected to impact budget projections for the fiscal year 2000-2001. In consultation with the Finance Director, the department contacted DMG-Maximus, Inc. They have conducted several of these studies for other counties. The attached contract with DMG- Maximus, Inc. will provide a cost study that will meet the department's needs in this regard. After DMG-Maximus,. Inc. finishes its report, the Board of Health will consider the fees to be established and recommend their establishment as part of the regular budget process for 2000- 2001. FINANCIAL IMPACT: The results of the cost study should enable the department to increase its revenue earned through fees. It is difficult to project how much additional revenue can be earned since the department has not kept financial eligibility information for patients in most programs offered. In 1998-99 revenues eamed through Medicaid reimbursements totaled $462,147.03 for personal health services. This cost study will enable the department to make the required transition and remain stable in these earnings. In addition, it is projected that the department will be able to eam at least $25,000 in new revenue through additional third party reimbursements from private insurance companies currently not available due to a lack of an established fee structure. This is a low number since it is assumed that a high number of the health department's patients that are not Medicaid eligible will not have private insurance and have incomes that will only allow them to pay a minimum fee. These new revenues will help offset increased costs of medical and pharmaceutical supplies. The contract amount of $11,000 was included in the department's approved budget for the current fiscal year. RECOMMENDATION(S): The Manager recommends that the Board approve the contract with DMG-Maximus, Inc. and authorize the chair to sign. 3 Agreement to Provide Professional Consulting Services to Orange County, North Carolina THIS AGREEMENT, entered into this day of , 2000 and effective immediately by and between DMG-MA~MUS, INC., (hereinafter called the "Consultant") and Orange County, State of Narth Cazolina (hereinafter called the "County"), _~ . WTTNESSETH THAT: WHEREAS, the Consultant is staffed with personnel lrnowledgeable and experienced in the determination of costs and fees for various services of County departments, and WHEREAS, the County desires to engage the Consultant to conduct a comprehensive service cost evaluation study for the Personal Health Division of the Public Health Department, NOW THEREFORE, the parties hereto mutually agree as follows: 1. Employment of Consultant. The County agrees to engage the Consultant and the Consultant hereby agrees to perform the following service,. 2. Scone of Services. The Consultant shall do, perform and carry out in a good and professional manner consulting services in accordance with the Consultant's proposal dated February 1, 2000, which shall be incorporated herein by reference. The study will provide a thorough evaluation and analysis of costs and recommend fees for the above refereared areas of service provided by Orange County. Five (5) copies of the draft report, containing the methodology, facts, conclusions, and recommendations, shall be submitted to the Health Director for review and distribution. Twenty-five (25) copies of the final report, containing a written analysis for each area of service, shall be submitted to the Health Director for distribution to the Board of Health and others whom she deems appropriate. One exit conference to discuss conclusions and reconunendations shall be held with the Health Director and staff and, if requested, one exit conference shall be held with the Board of Health. 3. Time of Performance. A draft report will be presented to the County within 20 days from project initiation. The final report will be provided within fifteen days of the County's acceptance of the draft report. 4 4. Compensation. The County agrees to pay the Consultant a sum of eleven thousand dollars ($11,000) "for all services required herein, which shall include reimbursement for expenses incurred. Consultant agrees to complete the project and all services provided herein for said sum. 5. Information and Reuorts. The Consultant shall provide the County five (5) copies of the draft report and twenty-five (25) copies of the final report. Additional information regazding the project shall be provided upon request by the County. 6. _Method of Payment The Consultant shall be entitled to payment in accordance with the provisions of this paragraph. Consultant's fees are to be paid as follows: 90% ($9,990) of the fee will be billed upon presentation of the draft report; the remaining 10% ($1,100) of the contract upon the presentation of the final report. 7. Chang. The County may, from time to time, require changes in the scope of the services of the Consultant to be performed hereunder. Such changes, which are mutually agreed upon by and between the County and the Consultant, shall be incorporated in written amendment to this agreement. S. Services and Materials to be Furnished by the County. The County shall" locally furnish the Consultant with all available necessary information, data, and ,material pertinent to the execution of this agreement. The County shall cooperate with the Consultant in carrying out the work herein and shall provide adequate staff for liaison with the Consultant and the affected agencies of County govennmeirt. 9. Termination of A Bement for Cause. It; through any cause, the Consultant shall fail to fulfill in timely and proper manner his obligations under this agreement, the County shall thereupon have the right to terminate this agreement by giving written notice to the Consultant of such termination and specifying the effective date thereof; at least five (5) days before the effective date of such termination. 10. Coeyright. The County acknowledges that the report format to be provided by Consultant is copyrighted. Consultant shall ensure that all copies of its report bear the copyright legend. The County agrees that all ownership rights and copyrights thereto lie with Consultant. The Courrty may use the report solely for and on behalf of the County's operations. The County agrees that it will take appropriate action by instruction, agreement or otherwise with its employees to satisfy its obligations with respect to use, copying, protection and security of the report format. This does not preclude the County from making copies for internal use. 2 5 11. Notices. Any notices, bills, invoices, or reports required by this agreement shall be sufficient if sent by the parties in the United States mail, postage paid, to the address noted below: Orange County Health Department 300 W. Tryon Street Hillsborough, North Cazolina 27278 DMG-MAXiMUS, INC. 1100 Logger Court, Suite D-100 Raleigh, North Carolina 27609 IN WITNESS WHEREOF, the County and the Consultant have executed this agreement as of the date first written above. County of Orange, North Carolina By: (county official) DMG-MAXIMUS, INC. By: Timothy H. McKinnie vice President 3