REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Travis Hopkins, City Manager
VIA: Eric McCoy, Fire Chief
PREPARED BY: Kevin Justen, Senior Management Analyst
Subject:
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Authorize designated City staff to execute the agreement between the California Department of Health Care Services (DHCS) and the Health Plan-Provider Agreement - Intergovernmental Transfer Rate Range Program Agreement between CalOptima Health and the City of Huntington Beach; and approve a payment of $1,017,485 to DHCS for FY 2026/27
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Statement of Issue:
City Council is requested to designate and authorize the City Manager, Chief Financial Officer, and/or Fire Chief to execute the agreement between the California Department of Health Care Services (DHCS) and the Health Plan-Provider Agreement - Intergovernmental Transfer Rate Range Program Agreement between CalOptima Health and the City of Huntington Beach and approve a payment of $1,017,485 to DHCS.
Financial Impact:
Funding in the amount of $1,017,485 has been included in the FY 2026/27 Budget for participation in the program. With these agreements and Huntington Beach’s payment of $1,017,485, it is anticipated that an estimated $2,314,890 in funds will be distributed to Huntington Beach, resulting in a net revenue of approximately $1,297,405 for additional reimbursement of Medi-Cal Managed Care services that were incurred and unreimbursed for the service period of January 1, 2025 through December 3, 2025.
Recommended Action:
recommendation
A) Authorize the designation of the City Manager, Chief Financial Officer, and/or Fire Chief to execute the agreement between the California Department of Health Care Services (DHCS) and the Health Plan-Provider Agreement - Intergovernmental Transfer Rate Range Program Agreement between CalOptima Health and the City of Huntington Beach; and
B) Approve a payment of $1,017,485 to the California Department of Health Care Services for the agreement during FY 2025/26.
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Alternative Action(s):
Do not approve the recommended actions(s), and direct staff accordingly.
Analysis:
Since the 2022/23 fiscal year, the City of Huntington Beach has participated in the Voluntary Rate Range Intergovernmental Transfer Program (VRRP IGT) through the California Department of Health Care Services. This program allows the City to recover unreimbursed City costs for service to CalOptima patients. DHCS distributes the funds to eligible entities through CalOptima Health.
The City’s ongoing participation in the program is dependent on available funding for the program and the City’s ability to provide the upfront contribution required. The net revenue received annually by the City is also dependent on a number of factors, including the number of program participants in the County and the number of Medi-Cal calls for service.
If the City Council approves the recommended actions, the agreement with DHCS would require an upfront payment of $1,017,485. Once paid, an estimated $2,314,890 will be disbursed to Huntington Beach within approximately 60 days through CalOptima, for a net revenue of $1,297,405. The 60-day time estimate is based on the actual transfer dates of previous years’ VRRP IGT. The required upfront payment and subsequent disbursement from CalOptima are based on Medi-Cal managed care services provided by the City during the January 1, 2025-December 31, 2025 period.
The agreements with DHCS and CalOptima are attached for reference, along with a PowerPoint presentation.
Environmental Status:
Pursuant to CEQA Guidelines Section 15378(b)(5), administrative activities of governments that will not result in direct or indirect physical changes in the environment do not constitute a project.
Strategic Plan Goal:
Goal 2 - Fiscal Stability, Strategy A - Consider new revenue sources and opportunities to support the City's priority initiatives and projects.
Attachment(s):
1. Agreement between the Department of Health and Human Services (DHCS) and the City of Huntington Beach.
2. Agreement between CalOptima Health and the City of Huntington Beach
3. PowerPoint Presentation