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Home My WebLink About2016-01-26 - AGENDA REPORTS - HENRY MAYO 340B DRUG PRICING (2)Agenda Item: 8 CITY OF SANTA CLARITA Q) AGENDA REPORT CONSENT CALENDAR i, CITY MANAGER APPROVAL: fAI DATE: January 26, 2016 SUBJECT: HENRY MAYO NEWHALL HOSPITAL PARTICIPATION IN THE 340B DRUG PRICING PROGRAM DEPARTMENT: Administrative Services PRESENTER: Darren Hernandez RECOMMENDED ACTION City Council authorize the City Manager or designee to execute a Memorandum of Understanding between the City of Santa Clarita and Henry Mayo Newhall Hospital related to the participation of Henry Mayo Newhall Hospital in the 340B Drug Pricing Program. BACKGROUND The 340B Drug Pricing Program permits certain hospitals to receive discounted pricing on outpatient drugs from manufacturers. The program is named after the section number the program has been assigned in the Public Health Services Act. To participate in this program, a private non-profit hospital must have a contract with a state or local government to provide health care service to low-income individuals who are not otherwise entitled to benefits through federal or state programs. Pursuant to the proposed Memorandum of Understanding, Henry Mayo Newhall Hospital would agree to continue its historic commitment to provide health care to indigent, uninsured, and underinsured (Charity Care) residents of Santa Clarita. For the fiscal year ended September 30, 2015, Henry Mayo Newhall Hospital reports this commitment totaled approximately $12.4 million in costs or services provided. Approval of this request does not obligate the City of Santa Clarita (City) financially in any way, nor does it create a liability for the City. ALTERNATIVE ACTION Other action as determined by the City Council. FISCAL IMPACT There is no fiscal impact to the City. 7�l Page 1 PacketPg. 55 ATTACHMENTS HMNH 340B MOU Page 2 Packet Pg. 56 Henry Mayo J1 Newhall Hospital January 5, 2016 Ken Striplin City Manager City of Santa Clarita 23920 Valencia Blvd., Suite 300 Santa Clarita, CA 91355 Dear Ken: Thank you for assisting us in getting City Council approval to participate in the 340B Drug Program. Attached is some basic information for you to reference that outlines the program. This is the first year that Henry Mayo Newhall Hospital has qualified for this program and if we are approved, this could provide significant cost savings on drug purchases made by the Hospital. The attached MOU is required between the City and the Hospital to allow us to file an application with the federal government for participation in the 340B Program. Again, thank you for your assistance with the MOU. I can be available to meet either in person or by phone with you and/or any others to discuss this matter in more detail. My phone number is 661-200-1025, and my assistant, Elda Coleman, can help you with any arrangements you prefer. Sincerely, C.R. I u son Senior Vice President/Chief Financial Officer CRH/ec Attachment • MOU Phone: (661) 253-8000 Website: www.henrymavo.com 23845 McBean Parkway Valencia, CA 91355-2083 8.a Packet Pg. 57 MEMORANDUM OF UNDERSTANDING BETWEEN The City of Santa Clarita AND Henry Mayo Newhall Hospital THIS AGREEMENT is made this day of January, 2016, by and between The City of Santa Clarita ("CITY'), located at 23920 Valencia Boulevard, Santa Clarita, CA 91355 and Henry Mayo Newhall Hospital (HMNH) a non-profit corporation organized and existing under the laws of the State of California, located at 23845 McBean Parkway, Valencia, CA 91355. RECITALS: WHEREAS, HMNH is a California not-for-profit hospital that provides a disproportionate share of healthcare services to the Medicaid population in addition to supporting programs that benefit the indigent, uninsured or underinsured population in the State of California; WHEREAS, HMNH desires to participate in the drug discount program established under Section 340B of the Public Health Services Act ( the "34013 Program"); WHEREAS, in order to participate in the 340B Program HMNH m u s t enter into an agreement with a unit of the local government pursuant to which HMNH commits to provide health care services to low-income individuals who are neither entitled to benefits under Title XVIII of the Social Security Act nor eligible for assistance under the State plan of Title XIX under this Act; WHEREAS, HMNH desires to make such a formal commitment to The CITY; and WHEREAS, The CITY agrees to accept such commitment on behalf of the citizens of Santa Clarita. NOW, THEREFORE, in consideration of the mutual agreements and covenants contained herein and for other good a valuable consideration, the receipt and sufficiency of which hereby are acknowledged, it is mutually agreed 8.a Packet Pg. 58 and covenanted, under seal, by and between the parties to this Agreement, as follows: 1. Commitment of Henry Mayo Newhall Hospital to Provide Indigent Care. During the term of this Agreement, HMNH agrees to continue its historic commitment to the provision of health care to indigent, uninsured and underinsured (Charity Care) residents of Santa Clarita. In the Fiscal year ended September 30, 2015, this commitment totaled approximately $12.4 million in cost or services provided. Pursuant to this commitment, it is the intention of HMNH that Charity Care provided during the term of this Agreement will range generally between $10 and $15 million on an annual basis. In any event, HMNH will assure that all patients will receive necessary care, as required by law, regardless of ability to pay. HMNH understands and agrees that CITY shall not be responsible in any manner for any costs, whether incurred by HMNH or otherwise, in connection with the provision of such care, compliance with the requirements of the 340B program, or administration of this Agreement. 2. Acceptance and Acknowledgements of The CITY (a) The CITY accepts the commitment of HMNH set forth above; (b) The CITY has executed a certification form, attached hereto, which acknowledges that the healthcare services provided by HMNH are being provided to low- income individuals who are neither entitled to benefits under Title XVIII of the Social Security Act nor eligible for assistance under the State plan of Title XIX under this Act; and (c) The CITY authorizes HMNH to submit the attached certification in support of HMNH's application to enroll in the 340B program. 3. Representations of Henry Mayo Newhall Hospital. HMNH represents that as of the date hereof: (a) HMNH constitutes a corporation duly organized and validly existing in good standing under the laws of the State of 8.a Packet Pg. 59 California with the corporate power and authority to enter into and perform its obligations under this Agreement; and (b) HMNH is a tax-exempt corporation of under Section 501 (c)(3) of the Internal Revenue Code of the United States, as amended and under applicable laws of the State of California. 4. Term and Termination. The term of this Agreement shall commence on the date first above written and shall continue until terminated by either party upon not less than sixty (60) days prior written notice to the other party. 5. Notice. All notices required or permitted to be given under this Agreement shall be deemed given when delivered by hand or sent by registered or certified mail, return receipt requested, addressed as follows: Sent to: The City of Santa Clarita Attention: City Manager 23920 Valencia Boulevard Santa Clarita, CA 91355 Sent to: Henry Mayo Newhall Hospital Attention: President/CEO 23845 McBean Parkway Valencia, CA 91355 6. Indemnification. HMNH agrees to indemnify and hold CITY harmless from and against any claim, action, damages, costs (including, without limitation, attorney's fees), injuries, or liability, arising out of the performance of this agreement by HMNH or any failure of HMNH to comply with any laws associated with the subject matter of this Agreement. Should CITY be named in any suit, or should any claim be brought against it by suit or otherwise, arising out of the performance of HMNH of services rendered pursuant to this Agreement, HMNH will defend CITY (at CITY's request and with counsel satisfactory to CITY) and will indemnify CITY for any judgment rendered against it or any sums paid out in settlement, fines, penalties or costs incurred in defense otherwise. 7. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California (excepting any conflict of law provisions which would serve to defeat application of California substantive law). 8.a Packet Pg. 60 IN WITNESS WHEREOF, Henry Mayo Newhall Hospital and the CITY have executed this Agreement as of the day and year first written above by their duly authorized representatives. WITNESS: Name: Roger E. Seaver Title: President/CEO Henry Mayo Newhall Hospital 23845 Mc Bean Parkway Valencia, CA 91355 Kenneth W. Striplin Title: City Manager City of Santa Clarita 23920 Valencia Boulevard Santa Clarita, CA 91355 8.a Packet Pg. 61