SFHSS accepts Sutter Health settlement checks; trustees to use funds in upcoming rate-setting
November 10, 2022 | San Francisco City, San Francisco County, California
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The San Francisco Health Service Board voted unanimously to accept and deposit proceeds from a Sutter Health legal settlement and to consider the funds in future rate-setting.
Executive Director Abby Yant and Chief Financial Officer Iftikhar Hussain told the board the fund received a first settlement distribution of roughly $14.7 million, and staff expect a subsequent payment of about $2 million. "The distribution that we have received is 14.7, almost 14,800,000.0," the presentation stated. The staff recommendation was to deposit the funds to the trust and use them in the underwriting rate-setting process beginning with plan year 2024.
Commissioners pressed staff on allocation details and whether any specific plan populations would be affected. Emma Hu of the Pacific Business Group on Health, invited as a technical resource, clarified the litigation scope: "It is, specifically based on the hospital claims that were submitted by the carriers between a period starting in 2003 to 2016 ... it would not cover Medicare Advantage; it's just commercial, self funded or flex funded plans." That clarification was taken into account by commissioners before voting.
Board members and staff said additional technical steps — actuarial analysis and consultation with city attorneys — will precede any formal distribution rules or rate adjustments. Iftikhar Hussain said the settlement will be recorded in the trust and then incorporated into the underwriting/rate-setting process, not into the standing rate stabilization policy language the board uses.
The motion to approve the distribution and the recommended approach to governance of the funds was moved, seconded and approved on a roll-call vote with all members present voting "Aye." The board also recorded that staff will return with more detailed proposals on distribution methodology and how the funds will affect future rates.
What happens next: staff will work with the actuary and legal counsel to develop a distribution method and present options to the board ahead of 2024 rate-setting. The board noted that the items are subject to further analysis and that the second settlement payment remains an estimate.
Executive Director Abby Yant and Chief Financial Officer Iftikhar Hussain told the board the fund received a first settlement distribution of roughly $14.7 million, and staff expect a subsequent payment of about $2 million. "The distribution that we have received is 14.7, almost 14,800,000.0," the presentation stated. The staff recommendation was to deposit the funds to the trust and use them in the underwriting rate-setting process beginning with plan year 2024.
Commissioners pressed staff on allocation details and whether any specific plan populations would be affected. Emma Hu of the Pacific Business Group on Health, invited as a technical resource, clarified the litigation scope: "It is, specifically based on the hospital claims that were submitted by the carriers between a period starting in 2003 to 2016 ... it would not cover Medicare Advantage; it's just commercial, self funded or flex funded plans." That clarification was taken into account by commissioners before voting.
Board members and staff said additional technical steps — actuarial analysis and consultation with city attorneys — will precede any formal distribution rules or rate adjustments. Iftikhar Hussain said the settlement will be recorded in the trust and then incorporated into the underwriting/rate-setting process, not into the standing rate stabilization policy language the board uses.
The motion to approve the distribution and the recommended approach to governance of the funds was moved, seconded and approved on a roll-call vote with all members present voting "Aye." The board also recorded that staff will return with more detailed proposals on distribution methodology and how the funds will affect future rates.
What happens next: staff will work with the actuary and legal counsel to develop a distribution method and present options to the board ahead of 2024 rate-setting. The board noted that the items are subject to further analysis and that the second settlement payment remains an estimate.
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