Title
[Contract] Participation in the Rate Range Intergovernmental Transfer (IGT) program with the California Department of Health Care Services (DHCS) and Medi-Cal Managed Care Plan Providers (MMCPP) [Two-Thirds Vote Required]
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FileID
File ID: 2026-01491
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Location
Location: Citywide
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Recommendation
Recommendation: Pass a Motion by two-thirds vote: 1) waiving the requirement for 10-day posting of agreements over $1 million, pursuant to City Code section 4.04.020(c) and Council Rules of Procedure Chapter 7, Section E.2.d.; 2) authorizing the City Manager or designee to execute: a) the Intergovernmental Transfer Agreement Regarding Transfer of Public Funds and Assessment Fee with the California State Department of Health Care Services (DHCS); and b) the Health Plan-Provider Agreements with participating Medi-Cal Managed Care Plan Providers; 3) authorizing transfer of funds up to approximately $5.2 million from the Fire Department’s operating budget to DHCS; 4) accepting reimbursement for Medi-Cal services of approximately $10.1 million, of which, approximately $5.2 million will reimburse the Fire Department’s operating budget; and 5) authorizing designation of the additional federal reimbursement of approximately $4.8 million to offset costs of providing Emergency Medical Services (EMS) to patients who are covered by Medi-Cal.
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Contact
Contact: Chris Costamagna, Fire Chief, (916) 808-2200, ccostamagna@sfd.cityofsacramento.org, Fire Department
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Presenter
Presenter: None
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Attachments
Attachments:
1-Description/Analysis
2-IGT Agreement Regarding Transfer of Public Funds with DHCS
3-Health Plan Provider Agreement with Anthem Blue Cross
4-Health Plan Provider Agreement with Health Net of California
5-Health Plan Provider Agreement with Molina
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Description/Analysis
IssueDetail
Issue Detail: The Rate Range Intergovernmental Transfer (IGT) program provides an opportunity to receive federal matching funds to support health services for Medi-Cal-Managed Care beneficiaries served by the Fire Department. The Fire Department does not receive full reimbursement for medical services to Medi-Cal Managed Care patients. Currently, the Fire Department receives approximately 25% reimbursement of Medi-Cal Managed Care costs from payments received from Medi-Cal Managed Care Plan Provider(s) (MMCPP).
The IGT requires the transfer of eligible local dollars from the City to the Department of Health Care Services (DHCS). DHCS uses the funds to receive additional Federal funding from the Centers for Medicare and Medicaid Services (CMS). Since the funds must be used to support the Medi-Cal Managed Care program, DHCS transfers both the original contribution from the City and matched funds to the MMCPP, making those funds available to the City. The State and Federal governments will review and approve the documents the City submits to participate in the IGT program before any funds are sent to DHCS.
The amount the City initially transfers will be calculated using Estimated Member Months (refer to Exhibit 1 of the IGT Agreement Regarding Transfer of Public Funds and Assessment Fee with DHCS) and will be reconciled to actual enrollment for the service periods from January 1, 2025, through December 31, 2025. Enrollment reconciliation will occur continuously as updated figures become available. If, after the enrollment reconciliation, the amount needed to fund the non-federal share increases, the City will be required to transfer additional funds to cover the difference. If, after the enrollment reconciliation, the amount needed to fund the non-federal share decreases, the City may choose to receive the unexpended funds from DHCS. If DHCS and the City mutually agree, amounts due to or owed by the City may be offset against future transfers. Actual enrollment figures for the respective period will be considered in the final two years after December 31, 2025.
The City of Sacramento provides ambulance transport and meets the following IGT participation criteria:
1. Provides law enforcement services.
2. Has eminent domain authority.
3. Has taxing authority.
As such, the City of Sacramento participates in an IGT program to request funds to recover unreimbursed Medi-Cal costs.
The Fire Department provides prehospital emergency medical services (PHEMS) on a year-long and 24-hour basis to the public, including Medi-Cal Managed Care patients. MMCPPs make the Fire Department’s continued provision of PHEMS to the public financially feasible. The deadline for participating providers to execute their IGT Agreements Regarding Transfer of Public Funds and Assessment Fee with DHCS was August 31, 2026. Therefore, pursuant to Sacramento City Code section 3.56.260, the City Manager signed the City of Sacramento’s attached IGT Agreement Regarding Transfer of Public Funds and Assessment Fee with DHCS on August 17, 2026, as an emergency purchase with approval as to form by the Office of the City Attorney in order to permit the continued conduct of city operations and services in the form of PHEMS provided to the public, including Medi-Cal Managed Care patients. To continue the City of Sacramento’s participation in the reimbursement program, staff seeks ratification of the City Manager’s execution of the IGT Agreement in addition to approval of the transfer of city funds and acceptance of funds from DHCS and additional approval to execute attendant Plan Provider Agreements with Anthem Blue Cross, Health Net of California and Molina as final and necessary steps for the City of Sacramento to receive reimbursements under the Rate Range IGT program.
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PolicyConsiderations
Policy Considerations: Participation in this program is consistent with the City Council’s adopted Budget Guidelines to pursue new and enhance existing revenue sources, and Council’s adopted Advanced Life Support (ALS) Revenue Recovery policy.
Pursuant to City Charter Section 20 and City Code Section 3.56.090, the City Council holds the delegable authority to approve the execution of contracts of $250,000 or more for supplies or nonprofessional services.
The Sacramento Code Section 4.04.020 and Council Rules of Procedure (Chapter 7, Section E.2.d) mandate that, unless waived by a two-thirds vote of the City Council, all labor agreements and agreements greater than $1,000,000 shall be made available to the public at least ten (10) days before City Council action.
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EconomicImpacts
Economic Impacts: None.
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EnvironmentalConsiderations
Environmental Considerations: This report concerns administrative activities that do not constitute a “project” as defined by Section 15378 of the California Environmental Quality Act (CEQA) Guidelines and are otherwise exempt under Section 15061(b)(3).
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Sustainability
Sustainability: Not applicable.
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Commission/Committee Action
Commission/Committee Action: None.
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RationaleforRecommendation
Rationale for Recommendation: The following agreements and amendments must be in place for the City to participate in the IGT program:
a. The Intergovernmental Transfer Agreement: This contract specifies the amount to be transferred by the City to DHCS. It requires DHCS to use the transferred funds to increase capitation payments to a specified healthcare plan and to secure federal match funds, or if that is not possible, to return the transferred funds. The parties to this contract are the City and DHCS.
This portion of the agreement commits the City to paying DHCS 20% of the amount transferred as an administrative fee. This fee is refundable if the IGT does not proceed.
b. The Health Plan-Provider Agreements: These agreements are amendments between the MMCPPs and the City. These contract amendments commit the MMCPPs to pay the City a specified amount of the IGT-funded capitation rate increases they receive from DHCS within 30 days of receiving those funds from the State. The MMCPPs will deduct an administrative fee of 2%, 2.5%, or 5% of the amount remitted to the City. The amendments specify how the City will treat these funds from an accounting standpoint. The MMCPPs participating in the program are Aetna Better Health of California, Health Net of California, , and Molina Healthcare.
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FinancialConsiderations
Financial Considerations: Upon approval of these agreements, the City will apply and request an amount to be reimbursed through the IGT program. This amount will help the City recover additional reimbursement of previously unreimbursed Medi-Cal costs incurred from January 1, 2025, through December 31, 2025, consistent with the ALS Revenue Recovery policy. To receive reimbursement from MMCPPs, the City will be required to transfer up to approximately $4.5 million to DHCS to cover the City’s non-federal share of the managed-care costs. This share includes the 20% fee assessed by the State to cover its costs to administer the IGT program.
The City will recover its non-federal share amount from the reimbursements received through the IGT program. This amount is net of the 2%, 2.5%, or 5% administrative fee assessed by the MMCPPs.
The City will fund its contribution from the Fire Department’s EMS operating budget. The payment received from the MMCPPs will reimburse EMS for the contribution. The additional
reimbursement will offset the EMS costs, consistent with the ALS Revenue Recovery policy.
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LocalBusinessEnterprise
Local Business Enterprise (LBE): Not applicable.
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