Memorandum
Date: December 10, 2024
To: The Honorable Lake County Board of Supervisors
From: Benjamin Rickelman, Deputy County Administrative Officer
Subject: Consideration and Discussion of the Resolution of Formation Declaring the Formation of the Lake County Hospital Improvement District
Executive Summary:
The Lake County Hospital Improvement District (LCHID) would be a business-based assessment of general acute care hospitals in Lake County, which currently is Sutter Lakeside Hospital and Adventist Health Clear Lake (Hospitals). These Hospitals petitioned the County to form the LCHID by utilizing the Property and Business Improvement Law of 1994. The purpose of LCHID is to utilize the assessment to increase the non-federal share of Medi-Cal reimbursement, which will then increase the federal share of Medi-Cal reimbursement at an anticipated 2:1 ratio. It is projected the LCHID will raise $16.9 million on average per year for its initial term. The Hospitals plan to utilize the increase in federal Medi-Cal payment for an increase in services, which will also provide financial stability to the Hospitals. Medi-Cal reimbursement is generally lower than Medicare and private insurance. Approximately 53% of Lake County residents utilize Medi-Cal in some capacity.
If approved, the initial term of the LCHID would be five years, renewals could be up to ten years, and the assessment would be 6% of the Hospital’s net patient revenue. The County would retain a fee of 1% of the collected assessment to cover the administration costs of the LCHID. The initial term of the LCHID would be from January 1, 2025, to December 31, 2029. Attached is the Management District Plan which provides an overview of the LCHID. The LCHID will also submit an annual plan to the Board of Supervisors outlining how the increase in Medi-Cal reimbursement was utilized, a comparison of Medi-Cal charges from the Hospitals versus Sutter and Adventist hospitals systemswide, and volume of Medi-Cal services for inpatient and outpatient services.
The Board of Supervisors adopted a Resolution of Intention on September 10, 2024, a public meeting was held on October 22, 2024, and a public hearing was held November 5, 2024, for the LCHID. Attached is an annual report template for the LCHID and the Management District Plan. Also attached are exhibits with a map of the LCHID and a Resolution of Consent by the City of Clearlake, which is required by State law since Adventist Health Clear Lake is in Clearlake.
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☒ Well-being of Residents ☐ Public Safety ☐ Disaster Prevention, Preparedness, Recovery
☒ Economic Development ☐ Infrastructure ☐ County Workforce
☐ Community Collaboration ☐ Business Process Efficiency ☐ Clear Lake
Recommended Action: Approve the Resolution of Formation Declaring the Formation of the Lake County Hospital Improvement District