2015-01-21Special Meeting January 2015 Term Held January 21, 2015
THE STATE OF TEXAS §
COUNTY OF CALHOUN §
BE IT REMEMBERED, that on this 21st day of January, A.D.; 2015 there was begun and holden in the
Commissioners' Courtroom in the County Courthouse in the City of Port Lavaca, said County and State, at
10:00 A.M., a Special Meeting of the Commissioners' Court within said County and State, and there were
present on this date the following members of the Court, to -wit:
Michael Pfeifer
CountyJudge
Roger Galvan
Commissioner, Precinct #1
Vern Lyssy
Commissioner, Precinct #2
Neil Fritsch
Commissioner, Precinct #3
Kenneth Finster
Commissioner, Precinct #4
Josie Sampson
Deputy Clerk
Thereupon the following proceedings were had:
WORKSHOP TO DISCUSS AN OVERVIEW OF THE NURSING HOME UPL PROGRAM WITH
MEMORIAL MEDICAL CENTER PERSONNEL:
Jason Anglin, CEO Memorial Medical Center: Mr. Anglin stated they have been working with a company
called Cantex and the company has five facilities in Region 3 (RHP 3 - in the Houston area) and
approximately 30 facilities across the state. Mr. Anglin reviewed the Summary UPL Impact Report with
the Court and stated that one funding cycle, from the time we start funding to receipt of the last
payment, is approximate eighteen months. The projected date to get into the program is February 1,
2015. Participation would be under the old NH UPL Program for one month. He anticipates an Inter -
Governmental Transfer of $350,000 on March 15, 2015, with a return of $850,000 on April 15, with a net
return of $500,000 (return of $850,000 less our IGT of $350,000 = $500,000). Fifty percent of the net
return would benefit the hospital and fifty percent would benefit the nursing home. Judge Pfeifer asked
if the
Mr. Anglin stated the new program requires more funding up front. The first payment would start in
September, 2015 and would require a full quarter IGT plus an 10% fee required by the state. The
additional 10% would be returned by the State at a later date. The initial IGT would need to be $1.1
million. A second IGT of $1.1 million would be due in December 2015 with receipt of monthly payments
beginning in February 2016. The third IGT of $1.143 million would be payable in March 2016 and at that
point the County would have invested $2.8 million. In June 2016 the fourth IGT would be payable. By
September 2016 all the money invested has been returned and there would be a positive cash position.
Mr. Anglin that as the program is today, the program is scheduled to do four quarters of funding and after
that, the program is scheduled to be discontinued. He also stated his personal opinion is that the
program is not costing the State any money and is generating funds for health care in Texas for the
nursing home industry so he envisions the program will be renewed on that basis. If the program is not
renewed, there would still be a benefit of $2.9 million for this funding cycle.
The challenge for MMC with this program is when it comes to cash flow, as the hospital is not in a
position to put $2.8 into funding the program. In January 2016, MMC will receive a little over $1,000,000
for participation in the waiver program and that can be used for funding into the program. Additional
requests for assistance from the County would be in the range of a minimum of $1.5 million and a
maximum of $2 million to get through the early funding cycles of the program. Once monthly payments
are received, MMC will be in a position to repay those funds and ultimately have the $2.9 million benefit.
Mr. Anglin stated legal details are still being worked out.
Commissioner Fritsch questioned what liability, other than the cash outlay, the County would have in the
event of failure, bankruptcy or lawsuits at any of the facilities. Mr. Anglin stated that in the legal
agreements the nursing homes place the hospital as additional insured.
Anne Marie Odefey, stated there are several contracts relating to this issue. The typical setup as to
nursing homes is there is a company that owns the real estate and there is an operating company. The
real estate company leases to the operating company and they operate a nursing home. They are
anticipating the operating LLC is going to sub -lease the property to us under a sub -lease agreement then
we will enter into a management agreement with the operator to operate the facility. So there will be an
operating agreement, a transfer of ownership agreement and a sub -lease agreement. These are the
three main documents that are being tweaked. Ms. Odefey is working with an attorney with the firm of
Kevin Reed, a well-known attorney in health care from Austin that does this program on behalf of
hospitals. He has made recommendations and the agreements are being worked up. The agreements
state there are indemnifications, they keep us additional insured and send notice to us if insurance comes
back. The history of the nursing homes and how they operate the business is looked at, the nursing
homes are toured, and there will be some financial and hands-on inspections of the nursing homes.
There will be someone at the hospital that will be maintaining and watching over the program, so there is
due diligence involved on our side.
Ms. Odefey stated they have asked the health care attorney, worst case scenario, if the nursing home
goes belly up, what happens? This is addressed in the agreement, but what happens to our money? She
stated there is always risk, but that most nursing homes that file bankruptcy file Chapter 11, which is just
a reorganization. There is always risk, but the State would have our money that we have already
transferred and they would just give it back to us, we would not get the reward. She also stated she
does not think it is a risk that we would lose the money pursuant to what we've dealt with in the UPL.
She stated there are some legislative things that are happening that will hopefully bring the things we are
doing to the forefront to the legislature so we all are more comfortable with and to acknowledge these
programs are going on. She stated this has been going on for about twenty years, but the hospital has
only been in for about four years.
Commissioner Fritsch asked what would happen if the program ends, will we be stuck with operating
after that? Ms. Odefey stated we just get our payments. The agreement states it terminates, the
agreement states a finite date, and for us to receive those payments and settle up. We would have to
renegotiate.
Mr. Fritsch asked if we would be protected against embezzlement. Mr. Anglin gave a brief description as
to procedures for receiving funds, etc. Ms. Odefey stated the accounts are under the umbrella of the
Auditor and Treasurer and she went on to further explain the procedure for receipt and disbursement of
the funds. She stated there are some checks and balances in place and stated the financial agreement is
being worked up as is the practical side.
Country Treasurer Rhonda Kokena stated she noticed in the agreement that the nursing home managers
want access to the bank accounts. She stated all they need to be able to do is view. Ms. Kokena
questioned the 5% salary subsidy and Ms. Odefey stated the agreement is not yet final. Ms. Odefey said
the issue has also been discussed with their auditors and the practical side of the finances is still being
worked out.
Ms. Kokena asked if insurance deposits will be direct deposited or is Cantek the third -party administrator.
Who is the insurance company going to send payments to? Mr. Anglin stated Medicare and Medicaid
payments will be direct deposited and was not sure as to the other insurance payments as these details
are still being worked out.
Judge Pfeifer asked, if over a period of time, with roughly $2 million from the County plus whatever the
hospital is going to chip in, will the hospital will have enough money to operate, do what they need to do
with the clinic, recruit doctors and all that? Mr. Anglin stated yes, if they are able to access up to $2
million to help fund this program, yes.
Peggy Hall of the Auditor's office stated there are days that all she seems to do is hospital work, that if
she is assigned this additional work, she feels as if she almost works for the hospital. She stated that she
is already swamped as Judge Pfeifer Is aware. She stated she is worried about the County's liability,
about the ease with which the hospital has with asking the County for money "all of the time" and that
she feels the County and County employees are always "put on the back burner" and the hospital and
their employees are "put on the top burner". She addressed the County health insurance, stating there is
a problem getting mature, qualified employees mainly in the Sheriff's Office and Jail due to the expense.
Ms. Odefey responded that on the fraud side, this company has been vetted, and that you typically do
not see the big operators hit with fraud, this company has good numbers on their health grades, we have
an auditing firm involved, two attorneys involved, Mr. Anglin will handle the paperwork, the money is only
accessible by the hospitals. She stated it is a lot of work, but the benefit would still be substantial.
Judge Pfeifer said he visited with some representatives of the local nursing home and he was told the
program was excellent for the nursing home and the hospital. Ms. Odefey stated part of the program is
that there has to be quality improvement initiatives on the part of the nursing home. The 50% benefit
that the nursing home receives is split 40/10. The 10% is set aside and has to be earned by the nursing
home by meeting their quality initiatives. She stated the initiatives are good because the nursing homes
will only improve because they will have the additional funds available.
Judge Pfeifer asked if the concern at the Auditor's office concerning the workload is that they need
another employee. Mr. Anglin stated that hospital staff would process most of the paperwork required.
Ms. Hall stated she wanted to clarify that her main concern was not the workload, but the liability to the
County.
Commissioner Fritsch asked if Kevin Reed is the same person who conducts CEU classes for the THA. Ms.
Odefey responded that he is. She stated he is probably rated the number one healthcare attorney in
Texas. She stated they are working with his partner Trent Krenke (sp?) as well as several other
attorneys. She stated they have also worked with another attorney who brokers these deals, actually
sets these deals up and who wrote the original management agreement.
Judge Pfeifer asked how long this program has been in existence. Mr. Anglin stated that to his
understanding the Texas program is being modeled after a program in Indiana. The program in Texas
actually started a couple of years ago and is in the process of evolving.
Judge Pfeifer asked how long has Citizens been in the program. A representative from Regency nursing
home stated Citizens has been in since March 2014. He commented the program has worked well for
Regency and if Trent Krenke is representing the hospital, they are well represented. He said the program
will definitely bring more revenue to local hospitals and nursing homes.
Commissioner Fritsch made a motion that the County work with the hospital in entering this program.
Commissioner Lyssy seconded the motion.
Rhonda Kokena asked if this was a loan. Cindy Mueller asked if the money would be set aside like the
$1.5 million for the business improvement plan in a separate fund. Judge Pfeifer responded "yes".
Motion passed. Commissioner Finster abstained from voting.
COURT ADJOURNED AT 10:50 A.M.
Summary UPL Impact
RHP 3
Annual
Net UPL
Total
Total Annual
.
Net Annual
112
Facility
Mcaid Days
PPD
Gross UPL
IGT
UPL
UPL
Ashford Gardens
35,504
$
97.10
$
5,874,980
$
2,427,542
$
3,447,438
$
1,723,719
Solera at West Houston
9,682
$
98.89
$
1,631,651
$
674,198
$
957,453
$
478,727
The Crescent
2,590
$
113.76
$
502,110
$
207,472
$
294,638
$
147,319
Broadmoor at Creekside Park
2,200
$
88.70
$
332,549
$
137,409
$
195,140
$
97,570
Fort Bend
10,846
$
93.13
$
1,721,350
$
711,262
$
1,010,088
$
505,044
Total
60,822
$
10,062,640
$
4,157,883
$
5,904,757
$
2,952,379
Hospital makes first IGTequa Ito a full qua rteriGTPLU510%
$ -
$
-
9/1/2015
$
(1,143,418)
$ (1,143,418)
Manager has 60 days to complete Sept Billing
$ -
$
-
10/1/2015
$
-
$ (1,143,418) -.
o
11/1/2015
$
-
$ (1,143,418)
Hospital makes second IGT equal to a full quarter IGT PLUS 10%
$ -
$
-
12/1/2015
$
(1,143,418)
$ (2,286,836)
$ -
$
-
1/1/2016
$
-
$ (2,286,836)
State receives data from MCO for Sept services
$ -
$
-
2/1/2016
$
-
$ (2,286,836)
State completes calculation of UPL dollars for Sept
$ -
$
-
2/15/2016
$
-
$ (2,286,836)
MCO makes payment of September (one month) UPL to Hospital
$ 246,032
$
246,032
2/29/2016
$
592,522
$ (1,694,314)
Hospital makes a full quarter IGT PLUS 10%
$ -
$
246,032
3/1/2016
$
(1,143,418)
$ (2,837,732)
MCO makes payment of October (one month) UPL to Hospital
$ 246,032
$
492,063
3/31/2016
$
592,522
$ (2,245,210)
v
$ -
$
492,063
4/1/2016
$
-
$ (2,245,210)
s .
MCO makes payment of November (on month) UPL to Hospital
$ 246,032
$
738,095
4/30/2016
$
592,522
$ (1,652,688)
n
MCO makes payment of December (one month) UPI -to Hospital
$ 246,032
$
994,126
5/31/2016
$
592,522
$ (1,060,166)
3
Hospital makes a full quarter IGT PLUS 10%
$ -
$
984,126
6/1/2016
$
(1,143,418)
$ (2,203,584)
MCO makes payment of January (one month) UPL to Hospital
$246,032
$
1,230,158
6/30/2016
$
592,522
$(1,611,062)
"
MCO makes payment of February (one month) UPL to Hospital
$ 246,032
$
1,476,189
7/31/2016
$
592,522
$ (1,018,541)
MCO makes payment of March (one month) UPL to Hospital
$ 246,032
$
1,722,221
8/31/2016
$
592,522
$ (426,019)
n
State returns excess 10% IGT to Hospital (less 2%they keep)
$ -
$
1,722,221
9/30/2016
$
332,632
$ (93,336)
MCO makes payment of April (one month) UPL to Hospital
$ 246,032
$
1,968,253
9/30/2016
$
592,522
$ 499,135
^
MCO makes payment of May (one month) UPL to Hospital
$ 246,032
$
2,214,284
10/31/2016
$
592,522
$ 1,091,657
o
a
MCO makes payment of June (one month) UPL to Hospital
$ 246,032
$
2,460,316
11/30/2016
$
592,522
$ 1,684,179
$ -
$
2,460,316
12/1/2016
$
-
$ 1,694,179
MCO makes payment of July (one month) UPL to Hospital
$ 246,032
$
2,706,347
12/31/2016
$
592,522
$ 2,276,701
MCO makes payment of August (one month) UPL to Hospital
$ 246,032
$
2,952,379
1/31/2017
$
592,522
$ 2,869,223
State returns 2% of IGTto Hospital
$ -
$
2,952,379
9/30/2018
$
83,156
$ 2,952,379
'. ASSUME PROGRAM ENDS
8/31/16
17'- `Tota4 -.
__-_
$.
2,952,379-:
.J
$'4,951;379.r
With February 1st Start Date:
Will Be under OLD NH UPL Program for 1 Month
With that can do IGT in March for Old Program
IGT will be based on actual medicaid utilization. IGT approximately
Funds returned
Less IGT
Net Funds from UPL program
50/50 Split & Net Benefit to MMC and NH
350,000 March 15tf
850,000 April15th
350,000
500,000
250,000