III. The Health Plan of San Mateo
Community Roots. The Health Plan of San Mateo has its roots in
the San Mateo community. The cooperation of providers, consumers and public health
policymakers has ensured broad awareness and input as HPSM pursues its mission and goals.
In its developmental phases, collaboration between the county Departments of Health
Services and Social Services, the Board of Supervisors, the Medical Society, the Hospital
Consortium, consumers, and other providers created a broad base of support for HPSM. In
keeping with the intent of the original Medicaid program, HPSM was designed to integrate
members into mainstream medical care. Utilizing the expertise of existing, committed
providers in San Mateo's medical community, HPSM's planners addressed community-wide
concerns about poor access, low reimbursement, and high costs associated with Medi-Cal.
Increasing the participation of private practitioners as well as preserving the role of
safety net providers were both critical elements in ensuring that beneficiaries were
guaranteed the full range of health care services Medi-Cal provided. The Health Plan was
assisted initially by both state and local financial support, receiving a $450,000 loan
from the County (repaid by HPSM in FY 1998/89), a $12,000 grant from the Peninsula
Community Foundation, and a $50,000 grant from the California Health Financing Authority.
HPSM's Regulatory Framework. The Health Plan of San Mateo is
a County Organized Health System (COHS) and Health Insuring Organization (HIO), one of
five operating in California and one of about half-a-dozen in the nation. The first
California plan, in operation since 1983, is the Santa Barbara Regional Health Authority.
Others in California are The Solano Partnership Health Plan, Cal OPTIMA in Orange County
and Santa Cruz Health Options.
Under federal law, Health Insuring Organizations are defined as capitated entities that
arrange and/or pay for covered health care but do not directly provide care to members. In
each of the five California H10s, the plans are mandatory for AFDC and SSI/SSP
beneficiaries and the plan is the exclusive Medi-Cal managed care contractor within the
county. Development of HIOs requires federal authorization, and new H10s were de facto
prohibited by requirements of the Consolidated Omnibus Budget Reconciliation Act of
1985 (COBRA) that Medicaid and/or Medicare enrollment in health plans not exceed 75%
of total plan membership. Other federal law prohibits the enrollment of more than 10% of a
state's Medicaid beneficiaries in County Organized Health Systems. In addition to
long-standing questions related to mandatory enrollment and freedom of choice issues,
Congress voiced concerns in 1985 regarding the "quasi-public" nature of H10s,
their limited capital asset base, and their exemption from the reserve requirements placed
on commercial insurers. San Mateo County's federal waiver was approved before the COBRA
requirements became effective.
Governance of HPSM. The Health Plan is governed by the San Mateo
Health Commission, doing business as the Health Plan of San Mateo. The commission is a
quasi-governmental, fully independent entity authorized in 1986 by passage of special
state legislation. The commission was established in June 1986 by the San Mateo County
Board of Supervisors under the authority of the California Welfare and Institutions Code.
Federal regulations governing Health Insuring Organizations require that a separate entity
be established in cases where the county directly provides health services through a
hospital or other county-sponsored facilities. Enabling state legislation therefore
provides for the establishment of a local public agency whose decision-making is
independent of the county. Under this arrangement, the San Mateo Health Commission has
responsibility for policy setting; oversight of its health care systems; contract,
purchase, and lease approval; employment of the Executive Director; financial oversight;
and establishment of advisory groups and committees of the Commission.
The San Mateo Health Commission operates the Health Plan under a prepaid, risk contract
negotiated with the State of California through the California Medical Assistance
Commission (CMAC) and administered by the State Department of Health Services. The San
Mateo Health Commission receives two-year waivers of certain federal Medicaid program
provisions granted by the Health Care Financing Administration in accordance with Section
1915(b) of the Social Security Act. Among the program waivers granted are those that allow
HPSM to be the sole source of non-emergency medical care for Medi-Cal beneficiaries
residing in San Mateo County, and permit HPSM to restrict the choice of providers to those
contracting with the commission. As a waivered program, HPSM must be cost-effective,
demonstrating savings to the state compared to the Medi-Cal fee-for-service system.
The Health Commission meets on a monthly basis and consists of 11 voting members
appointed by majority vote of the county Board of Supervisors to four year terms. With the
exception of the one permanent seat held by the Director of the San Mateo County Health
Services Agency, commission members may serve a total of two full terms, or ten years if
the term begins or ends with filling out another member's term. The other voting members
of the commission are two members of the Board of Supervisors, three public members
representing HPSM beneficiaries and the senior and/or minority communities in San Mateo
County, one hospital administrator, one representative of the San Mateo County General
Hospital physicians, one pharmacist, and one representative of the hospitals located in
San Mateo County.
The commission is advised by a number of standing committees, advisory groups,
subcommittees, and ad-hoc groups. Committee and advisory group memberships consist of
commission members, providers, representatives of community groups, and consumers. See
Attachment B for a listing of committees and advisory groups.
Covered Medi-Cal/HPSM Benefits. The Health Plan's contract with
the state Department of Health Services requires that HPSM deliver a specified scope of
services, at a minimum identical to the traditional Medi-Cal benefit package. The Health
Plan has added a number of benefits, including special prenatal services, the HealthRide
transportation program, adult health screenings and an expanded drug formulary.
Not included in HPSM's contract and therefore remaining in the Medi-Cal fee-for-service
system are dental care, long-term care room and board charges, long-term in-home waivered
services, multi-senior services, adult day health services, and services covered by the
Child Health and Disability Prevention Program (CHDP). CHDP is the California equivalent
of the federal Early and Periodic Screening, Diagnosis and Testing (EPSDT) program. Care
delivered to children through California Children's Services (CCS) is authorized by the
county Health Services Agency and paid for by HPSM. Some Medi-Cal mental health care
services were covered by HPSM until April 1995, at which time all mental health services
were consolidated into a county run managed mental health plan.
A Profile of HPSM's Membership. The Health Plan of San Mateo
provides nearly universal coverage to Medi-Cal beneficiaries in San Mateo County.
Beneficiaries automatically become HPSM members if they qualify for public assistance
through the Aid to Families with Dependent Children (AFDC) program, Supplemental Security
Income/Supplemental Security Program (SSI/SSP) program, or through undocumented immigrant
status. Approximately 25% of HPSM members are dually eligible for Medicare and Medicaid.
Undocumented immigrants became HPSM members in September 1993 and by federal law are
limited to services for emergencies and deliveries. California has added prenatal care to
the scope of services available to undocumented immigrants.
Medi-Cal beneficiaries who are not HPSM members and have remained in the state
fee-for-service system are those qualifying for Medi-Cal on the basis of percent of
poverty guidelines and certain Medicare beneficiaries eligible only for Medi-Cal payment
of the Part A (Hospital) deductible and coinsurance and/or Part B (Medical Services)
Information about HPSM's membership is presented in Table 2.
Membership Growth. As indicated in Figure 4, HPSM's membership grew nearly 85%
between FY 1987/88 and FY 1994/95, from 28,041 average member months in 1987/88 to 51,852
estimated for 1994/95.
Gender and Age. At the end of FY 1994/95, HPSM membership was 61% male and 39%
female. Over HPSM's history, the proportion of males has increased slightly while the
proportion of females has decreased. In FY 1994/95, 16%, and 3% were 85 or over. Like the
county population, there have been numerical increases in all age groups since FY 1998/89.
As percentages of HPSM's membership, there have been increases in the 0-4, 5-19 and 20-44
age groups, no change in the 54-64 age group, and decreases in the 65-84 and 85+ age
Figure 5 compares HPSM membership by age in FYs 1989/90 and 1994/95
Ethnicity. In 1993/94, HPSM membership was estimated to be 14%
African-American, 9% Asian/Pacific Islander, 26% Caucasian, and 36% Hispanic, with a 15%
share unreported. Between FYs 1988/89 and 1993/94, the numbers of members within all
ethnic groups increased. As percentages of HPSM's membership, there were increases among
Hispanics and Asian/Pacific Islanders, and decreases among Caucasians, African-American,
and "Not Reporteds." The Health Plan's membership has a lower percentage of
Caucasians and Asians and higher percentages of Hispanics, African-Americans, and
"Other" groups than the county population.
Figure 6 compares HPSM membership by ethnic group in FYs 1988/89 and
Medi-Cal Eligibility Category. Changes in HPSM's member
eligibility profile have resulted from changes in San Mateo County demographics as well as
from changes in Medicaid eligibility criteria. By Medi-Cal eligibility category in FY
1998/95, 50% of members were low-income families eligible through AFDC, 17% were aged and
eligible through SSI, 17% were disabled and eligible through SSI, 9% were undocumented
immigrants, 6% were medically indigent children, and .3% were primarily medically indigent
adults and refugees. Since FY 1987/88, the number of low-income family members has
increased by 90%, ages members by 36%, disabled members by 34%, Medically indigent
children by 188%, and medically indigent adults by 96%. As percentages of HPSM's
membership, there were increases in the family and child categories, and decreases in the
aged and disabled categories. In HPSM's two full years of experience with undocumented
immigrants, these members comprised about 10% of HPSM's membership in FY 1993/94 and 9% in
FY 1994/95. Children born to undocumented immigrants are included in the low-income family
Figure 7 compares HPSM membership eligibility category in FYs 1987/88 and
A Profile of HPSM's Provider Network. The
Health Plan of San Mateo is a mixed model managed care plan. Most HPSM providers also
participate in several commercial managed care networks in Sam Mateo County. Members
select or are assigned a Primary Care Provider (PCP) and directly access the full range of
primary care services PCPs provide. Primary Care Providers have case management
responsibility for their caseloads and authorize most elective referral, specialty, and
The Health Plan contracts with San Mateo based providers certified by
Medi-Cal. in good standing with the state Medi-Cal program, and who meet HPSM's
credentialing criteria. This "any willing provider" policy has ensured the
HPSM's provider network is a mix of public and private providers located throughout the
county, Many of HPSM's providers speak languages other than English. The most common
languages spoken in San Mateo County aside from English are Spanish, Tagalog, Russian, and
Figure 8 presents a profile of HPSM's provider network.
Health Plan of San Mateo Provider Network Profile
|Primary Care Physicians
||156 contracts representing 234 PCPs
||351 contracts representing specialty physicians in solo, group, clinic and
||12 contracted facilities in San Mateo, Santa Clara and San Francisco
||115 contracts representing independent pharmacies and chains with multiple
||243 contracts covering non-physician providers
Organization and Staffing. The Health Plan's pattern of
organization and staffing reflects not only the structure that needs to be in place to
support an effective and efficient managed care program, but the components needed to
support a publicly financed program serving a population that is non-commercial,
non-employer based, public assistance-affiliated, and diverse in terms of ethnicity, age,
health status, and eligibility category. In addition to membership, what differentiates
HPSM from commercial insurers is its funding, the focus on member and provider support
services, and the unique administrative requirements of managing a public program.
With some notable exceptions, HPSM's organizational structure is similar to commercial
plans. Like commercial plans, HPSM maintains sophisticated financial, MIS, claims
processing, provider relations, member services, referral authorization, utilization
review, and quality improvement functions. In addition, however, HPSM places tremendous
emphasis on informing members about the Health Plan and helping them learn how to use it.
When members become eligible for public assistance benefits, for example, they also meet
individually or in group "intake" sessions with HPSM Member Services
Representatives at sites throughout San Mateo County. Members directly contact HPSM's
Member Services staff with questions and problems; there is no "benefits
manager" to serve as a liaison between the membership and Health Plan.
Organizationally, HPSM must adapt managed care concepts to the unique characteristics
of a public program. From state information, HPSM "re-enrolls" its entire
membership each month. Its systems must be able to accommodate retroactive as well as
prospective eligibility data, estimates of member counts upon which initial capitation
payments to HPSM are based, six and 12 month reconciliations of member counts and
capitation payments, and information about members whose Medi-Cal eligibility may change
from month to month. Incurred-But-Not-Reported (IBNR) estimates for outstanding claims
must anticipate expenses associated with retroactive memberships for which HPSM is
responsible but may not know about until the member's eligibility is confirmed, often long
after service has been provided.
The role of the Health Plan's Member Services staff is perhaps one of the most
dramatically affected by HPSM's public nature. The public assistance system of which
Medi-Cal is a part is complicated and fragmented. Even though HPSM provides beneficiaries
with a more accessible and comprehensive provider network than fee-for-service Medi-Cal
did, there are still complexities associated with eligibility determinations, PCP
selection and change, covered services, referrals and authorizations for services, etc. In
addition to orienting members to HPSM in person and responding to a broad range of
questions and problems by phone, HPSM's Member Services Representatives fill a
quasi-social worker role by helping members understand other social services available to
them and referring them as appropriate. For example, to be more available to HPSM members
as well as to solidify the collaborative working relationship between HPSM and county and
community agencies also serving HPSM members, four of the Health Plan's eight Member
Services Representatives are out-stationed at county Human Service Agency offices where
members apply for public assistance. Member Services Representatives are highly visible in
the community to increase awareness about HPSM and Medi-Cal.
A variety of language capabilities is critical among HPSM staff and providers, and
language and speciality medical care needs of the membership need routine monitoring.
Education and health promotion activities, as well as enhancement programs such as
HealthRide and the Prenatal Care Program, have required dedicated staff.
The Health Plan's Provider Relations Department must also work closely with providers.
These staff act as resources for providers in understanding the differences between HPSM
and the Medi-Cal fee-for-service system as well as between HPSM and commercial insurance.
They also support the hundreds of providers who participate in Medi-Cal at reimbursement
rates below what is available in the private sector.
Because HPSM has the option of "bending the rules" related to approved
services when it is medically justified, in the best interests of the member, and
cost-effective, the Health Services staff has the challenge of living in a
"gray" area when these decisions are made. To uphold its fiduciary
responsibility, HPSM must administer the Medi-Cal program in San Mateo cost-effectively,
appropriately expending public funds. Yet unlike the Medi-Cal fee-for-service system, it
may take into consideration alternatives that may not be mandated Medi-Cal benefits or may
extend them. It is a great challenge to fairly evaluate "exceptions to the
rule," make ethical case by case decisions, be aware of setting precedent, define
medical necessity when there may also be a great social need, and overall, provide the
right amount of latitude and flexibility while also being fiscally responsible.
Balancing sound business practice with medical needs, public health
needs, and a sense of social responsibility is a challenge faced by the Health Plan daily
on an individual member basis as well as at a policy and operational level. The following
sections detail how HPSM integrates its financial and service operations.