Agenda - 12-14-2010 - 7b - Laserfiche WebLink

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4 FINANCIAL IMPACT: Development costs for this project are estimated at $1.47 million allocated in the followin cate ories: HEALTH ESTIMATED COSTS DENTAL ESTIMATED COSTS Construction $1,016,000 $203,000 Professional Services $ 83,000 $ 15,000 Furnishin s $ 45,000 $ 5,000 E ui ment $ 33,000 $ 70,000 Total $1,177,000 $293,000 This estimate was developed by staff, the project architect -Corley Redfoot Zack (CRZ), and CostPlus Estimators, a third party estimating firm. Medicaid Maximization Cost Settlement Funds are the proposed funding source for this project. In the mid-90s, the federal Medicaid program recognized that health departments were often expending more funds in providing care for Medicaid recipients than the reimbursement that was provided. In order to bring health departments to a more equitable "cost reimbursement" in line with that received by federally qualified health centers and by public hospitals, the federal Medicaid program authorized a supplemental payment for health departments to adjust for the cost of providing Medicaid direct services on an annual basis. The amount reimbursed is only calculated on the federal portion of Medicaid, not on the state share. Federal regulations require the funds to be allocated and spent for the programs that actually earned the funds. The settlement amount is calculated on actual expenses and therefore generally paid one year after the fiscal year in which the services were provided. The first payment made to health departments in North Carolina was in late 1997 and represented a partial payment for the federal fiscal year October 1994 through September 1995. That payment was $37,721.48. In the fall of 1998, a second payment was received that was the balance of 1994-95 and 1995-96. Since then the Health Department has received an annual payment in late spring that represents payment for services in a previous year. As an example, the County received notice of payment for fiscal year 2006-2007 on June 23, 2008 ($270,203.70). Each year, the Board of Commissioners has authorized budget amendments accepting these funds into this project account. The Board. of Commissioners established a Medicaid Maximization Project Ordinance in 1998 to allow for the receipt and use of these funds. The intent was to save and utilize the funds for renovation, capital building, equipment, and furnishings as needed by health and dental programs, thereby assisting the County in meeting service obligations to residents. Federal and State regulations require these funds to be budgeted and expended to further the objectives of the program that generates the funds. Allowed uses of these funds include public information and outreach, automation of administrative operations, capital improvements including equipment and furnishings, and program support services. In 2001-2002, approximately $225,000 was used to renovate the clinical space in conjunction with the HVAC replacement at Whiffed. Over the years, the Board of Commissioners has approved utilization of the funds to replace equipment on an emergency basis that has broken but was not able to be funded through the General Fund. These funds were also used to bring Health Department facilities and equipment into compliance with accreditation requirements in 2007. The Health Department has been parsimonious in the use of these funds, anticipating the need to build or renovate adequately appointed space for the future. One such anticipated use was the upfit of Hillsborough Commons, discussed in 2007 and 2008.