San Francisco Government SmartTranscripts:

[Supervisor Connie Chan (Chair)]: Good morning. The meeting will come to order. Welcome to the 04/08/2026 meeting of the Budget and Finance Committee. I'm Supervisor Connie Chan, Chair of the Committee. I'm joined by Vice Chairs, Supervisor Matt Dorsey, and member Supervisor Danny Sauter. Our Clerk is Brent Halipa. I would like to thank Kalina Mendoza from SFGUF TV for broadcasting this meeting. Mr. Clark, do you have any announcement?

[Brent Jalipa (Committee Clerk)]: Thank you madam chair. Just a friendly reminder to those in attendance to please make sure to silence all cell phones and electronic devices to prevent interruptions to our proceedings. Should you have any documents to be included as part of the file, should be submitted to myself, the clerk. Public comment will be taken on each item on this agenda. When your item of interest comes up and public comment is called, please line up to speak on the west side of the chamber to your right, my left along those curtains. And while not required to provide public comment, we do invite you to fill out a comment card and leave them on the tray by the television to your left by the doors if you wish for your name to be accurately recorded for the minutes. Alternatively, you may submit public comment in writing in either of the following ways. Email them to myself, the Budget and Finance Committee clerk at brent.jalipa@sfgov.org. If you submit public comment via email, it will be forwarded to the supervisors and also included as part of the official file. You may also send your written comments via US Postal Service to our office in City Hall at 1 Doctor Carlton Bee Goodlet Place Room 244 San Francisco California 94102. And finally madam chair items acted upon today are expected to appear on the board of supervisors agenda of April 14 unless otherwise stated. Madam chair.

[Supervisor Connie Chan (Chair)]: Thank you mister clerk and before we call item number one I would again remind the public that we have budget and legislative analyst reports for items one through four today and for those items we will have the department presentation first by and then followed by the budget legislative analyst then we will take questions and public comments mr clerk with that please call item number one

[Brent Jalipa (Committee Clerk)]: yes item number one is a resolution approving modification number one to a professional services agreement for general airport security services between covenant aviation security llc and the city and county acting by and through its airport commission to increase the contract amount by 10,500,000.0 for a total not to exceed amount of 20,300,000.0 and to extend the contract term for two years from 06/30/2026 for a new contract term of 07/01/2024 through 06/30/2028, with one remaining option to extend for two additional years pursuant to the charter. Madam chair.

[Supervisor Connie Chan (Chair)]: Thank you. And we have SFO here.

[Deanna Volak (San Francisco International Airport)]: Good morning. Deanna Volak from SFO. The item before you seeks approval for modification number one to an existing contract between the airport and Covenant Aviation Security LLC for general airport security services to increase the not to exceed amount by 10,500,000.0 and exercise the first option to extend the term through 06/30/2028. This is a general aviation security service contract with Covenant Aviation for screening of merchandise and consumables entering airport sterile areas via vendor screening checkpoints. This contract also provides security for airport exit lanes when checkpoints are not are closed and not staffed by TSA and at all times at exit lanes not adjacent to TSA passenger screening checkpoints. This contract is also essential to provide trained personnel to conduct aviation worker screening at designated airport director act direct access points as required by TSA's Airport Security Program or ASP. All commercial airports are required to provide trained personnel and inspection services throughout airport terminals and exits to comply with requirements of the TSA approved ASP and TSA security directives. This contract does not perform passenger or checked baggage screening and includes compliance with all city laws that do not conflict with federal requirements. Covenant has performed satisfactorily in all its contractual obligations at SFO. The BLA has recommended approval, and I'm happy to answer any questions along with my colleagues from operations and security.

[Supervisor Connie Chan (Chair)]: Thank you.

[Nick Menard (Budget and Legislative Analyst)]: Morning. Nick Menard from the Budget Legislative Analyst Office. Item one is a resolution that approves an amendment to the airport's contract with Covenant Aviation Security. The amendment increases the value of the contract to $20,300,000 and extends the agreement through June 2028. Covenant provides non passenger airport security to entrances to the secure area at the airport. This amendment also increases the staffing from 51 staff to 57 staff starting next fiscal year. The contractor's performance is primarily based on complying with the number of TSA required randomized screenings that they do. And they are complying with those requirements according to the airport. And then on page five of our report, can see the kind of annual spending on the contract. It's about $5,700,000 next year. And those costs are funded by airport operating revenues. We recommend approval of item one.

[Supervisor Connie Chan (Chair)]: Thank you. Could you elaborate a little bit about how this contract is also in compliance of both with city law and the federal law?

[Deanna Volak (San Francisco International Airport)]: So in all of our contracts, we include language that the contractor has to be kept fully informed of all codes, ordinances, charter laws of the city, and must at all times comply. But there are as you all know, with federal supremacy, if there are federal regulations or requirements that conflict with that, they would have to follow those federal laws. In this case, the contract specifically screens airport employees and badge employees. So that is their specific duty in terms of what they are required to comply with.

[Supervisor Matt Dorsey (Vice Chair)]: And

[Supervisor Connie Chan (Chair)]: understood. Okay. Thank you. I don't have any additional questions for the moment. And with that let' go to public comment on this item.

[Brent Jalipa (Committee Clerk)]: Yes we' now opening public comment for this item number one if we have any members of the audience that wish to address this committee. Madam Chair we have no speakers.

[Supervisor Connie Chan (Chair)]: Seeing no public comments public comment is now closed. Colleagues I would like to move this item to full board with recommendation and roll call please.

[Brent Jalipa (Committee Clerk)]: And on that motion to refer this resolution to the full board as recommended vice chair Dorsey.

[Supervisor Matt Dorsey (Vice Chair)]: Aye.

[Brent Jalipa (Committee Clerk)]: And Dorsey. Aye. Member Soder. Aye. Chair Chan.

[Supervisor Connie Chan (Chair)]: Aye.

[Brent Jalipa (Committee Clerk)]: Chan. Aye. We have three ayes.

[Supervisor Connie Chan (Chair)]: The motion passes. Thank you very much. Thank you. Sir clerk, could you call item number two?

[Brent Jalipa (Committee Clerk)]: Item number two is a resolution approving and authorizing the general manager of the san francisco public utilities commission on behalf of clean power s f to participate in california community powers procurement of the Willow Rock long duration storage project by entering into the buyer liability pass through agreement and entering into the Willow Rock long duration storage project participation share agreement for a total not to exceed amount of 75,900,000.0 with a contract duration of twenty years estimated to begin 07/01/2030 through 06/30/2050 pursuant to the charter. Madam Chair.

[Supervisor Connie Chan (Chair)]: Thank you and today we have public utilities commission here.

[Michael Himes (SFPUC, CleanPowerSF)]: Good morning chair Chan and supervisors Dorsey and Souter. My name is Michael Himes. I'm the deputy assistant general manager at the San Francisco Public Utilities Commission where I'm responsible for Clean Power SF and our power supply resources. We have a presentation for you today. I wanted to just make a quick intro noting that last year, the Board of Supervisors approved legislation delegating to the SFPUC general manager approval of contracts for the sale and purchase of power supply. This delegation allows the SFPUC to meet the time requirements of the competitive markets we operate in, so that we can secure cost effective renewable energy and energy storage supplies for our ratepayers. We report contracts executed using this authority to the Board of Supervisors every quarter. Today, we have a contract where we do not need to rely on that delegated authority for timely execution. If I could have the next slide, thanks. So today we're requesting that this committee refer to the full board for approval a new contract for Clean Power Sf to procure long duration energy storage. The agreement will help facilitate Clean Power Sf's compliance with a June 2021 California Public Utilities Commission order that Clean Power SF and other power providers under its jurisdiction procure long duration energy storage resources. Long duration energy storage is defined as those, resources that are capable of storing and discharging energy to the grid at their maximum power capacity for eight hours or more. Clean Power SF was ordered to procure 15.5 megawatts of this resource type by the CPUC. In 2022, the board of supervisors approved Clean Power SF's participation in the tumbleweed and goal line long duration energy storage projects with CC Power. These two projects would have satisfied Clean Power SF's regulatory obligation for long duration storage. While the Tumbleweed project is on schedule to reach commercial operation this June, the Goal Line project was terminated by the developer last year. In anticipation of additional member procurement needs, CC Power issued a request for offers in 2024 for renewable energy and energy storage supplies. As part of that solicitation, the agency received offers from 30 long duration storage projects. CC Power selected the Willow Rock Energy Storage Center for a contract due to its high project viability and technology diversification benefits. If approved, this will be Clean Powercept's first non lithium ion energy storage project. The CC Power board approved the energy storage agreement with Willow Rock on January 28, and the agreement was executed on February 4. CC Power members now have a hundred and twenty days after that execution date to execute their own participation agreements, and that date's May 4. Next slide. California Community Power or CC Power for short is a joint powers agency formed in 2021 by community choice aggregation programs in Northern And Central California. The board of supervisors approved membership and Clean Power Sift formally became a member in April 2021. Today there are nine members of CC Power representing about 2,700,000 customers across a 112 municipalities from Humboldt County to Santa Barbara County. By joining forces, Clean Power SF and other CCAs can leverage a larger buying power to develop projects and purchase energy from larger projects at a lower cost than if we went alone, providing financial benefits to our ratepayers. CC Power is subject to the Brown Act, so all of its board meetings are open to the public with both virtual and in person attendance options. Next slide. Here's a summary of the key elements of the Willow Rock project and the agreement with CC Power. Willow Rock is a proposed 500 megawatt and 4,000 megawatt hour advanced compressed air energy storage project to be built in Rosamond, California, a region that has an abundance of utility scale solar energy resources. A rendering of the project is provided on this slide. On behalf of its members, CC Power has contracted for a 50 megawatt portion of the facility. Clean Power SF's share of that would be 11.5 megawatts or about 23% of CC Power's commitment. Under the participation agreement with CC Power, Clean Power SF would commit to purchasing resource adequacy capacity and energy storage services from Willow Rock for twenty years from the project's commercial operation date which is expected in July 2030. Under the participation agreement Clean Power Systems costs are not to exceed $75,900,000 or about $4,000,000 per year. This amount includes a buffer to account for a step up in Clean Power SYS project share should another participating member withdraw from the project. The developer HydroStor has committed to using a project labor agreement to construct the facility. They've also committed 2,100,000 per year over five years for a total of $10,500,000 in community benefits to various organizations in Rosamund, Tehachapi, and the Antelope Valley region where the project will be located. Next slide. Okay. So how does this work? This illustration shows the major components of the project. First, an air compressor, which is labeled one on this image, uses electricity drawn from the grid to deliver pressurized air into an underground water filled cavern specifically designed for this use, and that's labeled three on the slide. The process of compressing air generates heat, which is extracted using a heat exchanger and captured in a thermal management system, and that's labeled two. As compressed air is pumped underground, it places displaces the water in the cavern which is then forced up through a different shaft into a reservoir that's on the surface and that's labeled four. When energy is needed on the grid, the water is allowed to flow back down into the cavern pushing that compressed air back to the surface. The compressed air is then reheated using stored thermal energy, in number three, which heats and expands the air as it passes through a turbine generator. The generator produces the electricity from the heat heated expanded air and then that electricity is delivered back to the grid. To charge, the system will draw power from the grid when electricity market prices are low and solar energy supply is high. The stored energy will then be discharged, as I just described, when electricity market prices and the grid demand are high, capturing the difference in those energy market values. The project will use proven technology like air compressors and heat exchangers and will not rely on any combustion of fossil fuels to store and discharge the energy. Next slide. In order to participate in the Willow Rock project, Clean Power SF will need to execute two agreements. The first noted here with a number one is called the Project Participation and Share Agreement. This agreement governs the relationship between CC Power and the participating members. It specifies the energy projects products to be delivered to Clean Power SF and the other members and outlines the processes and procedures in the event any individual participant withdraws from the agreement. The second agreement, number two on the slide, is called a buyer liability pass through agreement. This agreement is executed between Clean Power SF, CC Power, the Willow Rock project, and it acts as a guarantee by Clean Power SF of its share of CC Power's payment obligations to the project. This agreement's intended to address the fact that CC Power or the JPA is an entity with no customers or revenues of its own. So this agreement mimics what Clean Power SF would commit to if it had entered into the agreement on its own. Clean Power SF's guarantee is limited only to its share of the project. The third agreement not numbered on this slide but is labeled RA plus TB4 agreement. This is also called the energy storage agreement. And this is the purchase agreement entered into by C. C. Power, excuse me, and the Willow Rock project. Clean Power SF is not a direct party to that agreement. The contract structure that I just outlined is the same structure used by the other CC Power long duration energy storage projects that we have participated in, including the Tumbleweed project. So to recap, CC Power enters into a direct contractual relationship with the project, and then the members enter into a separate agreement with CC Power to participate in The members also provide a financial guarantee of their share to the project. That concludes my presentation. I'm happy to take any questions you may have.

[Nick Menard (Budget and Legislative Analyst)]: Item two is a resolution that would approve the PUC to participate in California Community Power's procurement of the Willow Rock long duration energy storage project. The resolution also approves related contracts. This will allow the PUC to purchase a share of long duration energy storage from that project over twenty years to meet a CPUC requirement for obtaining a certain amount of capacity, which we describe in the report. You can see the cost of the agreement on page 11. This is a $75,900,000 agreement over twenty years, or about $3,800,000 per year for Clean Power division. That includes the potential to purchase additional energy if one of the other CC Power members is no longer participating in the project, as well as a contingency for increased power costs, though it may be offset by revenues that the project will generate over that time. So it really is a maximum cost. These costs are funded by clean power customer revenues. And we recommend approval of item two.

[Supervisor Matt Dorsey (Vice Chair)]: Thank you, Chair Chan. I'm happy to support this. And grateful to see progress being made having worked in the city attorney's office when community choice aggregation was coming online. This is mostly just for my edification. Suppose we come out of the CPUC valuation proceeding, and it's a number we're comfortable with, and we're proceeding with municipalization. What happens with community choice aggregation? Is this folded into the enterprise, or does this exist separately? How does it look?

[Michael Himes (SFPUC, CleanPowerSF)]: Yeah. Thank you, supervisor. Great question. If that were to happen, we would essentially merge the two existing services that we operate, Hetch Hetchy Power, our existing public utility, and Clean Power SF. So you could think of all of the commitments that the city makes through Clean Power SF as sort of a base of energy supply for that future integrated municipal utility. So all the work that we're doing today would support that effort.

[Nick Menard (Budget and Legislative Analyst)]: Okay. Great.

[Supervisor Connie Chan (Chair)]: Supervisor Sauter.

[Supervisor Danny Sauter (Member)]: Thank you. Thank you for the presentation. What is the impact of this particular project to an everyday user, right? I mean, is this something that you think is going to lower costs? Is this going to increase reliability? What does this mean to an average San Francisco resident?

[Michael Himes (SFPUC, CleanPowerSF)]: Yeah, yeah, great question. So this is an emerging technology, which is part of the reason why the California Public Utilities Commission has ordered Clean Power SF and other entities under its jurisdiction to make these commitments. The vision is that as we move to a more renewable and clean source of energy to power our grid, We're gonna have more resources that are variable. They produce power when the sun's shining, the wind's blowing. And we're gonna need to store that energy for discharge when demand on the grid emerges. What we're starting to see now, because we've made great progress not just here for the city but also throughout the state in transitioning to clean energy, we're seeing an abundance of solar in the middle of the day. In fact, at times more than the grid can absorb, more than demand. And we need to put that somewhere. Increasingly, the grid operator has to curtail the solar energy producers, shut down the amount of solar power because there's nowhere to put it. So resources like this are gonna allow us to absorb that solar energy and move it into the evening when demand picks up that solar declines It allow us to reduce our reliance on natural gas, which the state grid is still using to balance things, especially in the evening. So for ratepayers, what we'll see with this kind of technology is a flattening of the wholesale cost of energy supply between the middle of the day and the evening. Right now, there's a pretty big disparity between those two times at certain times of the year. So it's going to help smooth out our costs and really leverage the great solar resource that we have.

[Supervisor Danny Sauter (Member)]: That's very helpful. Thank you.

[Supervisor Connie Chan (Chair)]: Thank you. I'm eager to learn more about just how effective this storage technology is going to be. I'm interested to learn more about whether it's really going to fulfill its capacity of that 11.5 megawatt. Thank you so much for bringing this before us. And so with that, let's go to public comment on this item.

[Brent Jalipa (Committee Clerk)]: Yes, if we have any members of the audience who have joined us today who wish to address this committee regarding this item number two, that was your opportunity. Madam Chair, we have no speakers.

[Supervisor Connie Chan (Chair)]: Seeing no public comments, public comment is now closed. Colleagues I would like to move this item to full board with recommendation and a roll call please.

[Brent Jalipa (Committee Clerk)]: And I motion to refer this resolution to the full board with recommendation vice chair Dorsey. Aye. Dorsey aye member sotter. Aye. Chair Chan. Aye. Chan aye. We have three ayes.

[Supervisor Connie Chan (Chair)]: The motion passes.

[Supervisor Matt Dorsey (Vice Chair)]: You.

[Supervisor Connie Chan (Chair)]: Mr. Clerk call item number three.

[Brent Jalipa (Committee Clerk)]: Yes item number three is a resolution authorizing the department of technology to enter into the third amendment to the agreement between the city and county and mythics llc for the purchase of oracle products and cloud computing solutions to increase the agreement by approximately 34,600,000.0 for a total amount not to exceed approximately 94,600,000.0 and to extend the term for thirty one months from 04/30/2026 for a total agreement term of 05/01/2021 through 11/30/2028. Madam Chair.

[Supervisor Connie Chan (Chair)]: Thank you. And today, we have Department of Technology here.

[Hao Hsieh (Department of Technology)]: Hi, good morning, supervisors and colleagues. My name is Hao Hsieh, strategic sourcing manager at the Department of Technology. Today, I'm seeking approval of the third amendment to the city's contract at MiXi LLC for the procurement of all the co products. All the co provides computer software, hardware and cloud solution that support many of the city's critical operations such as finance, HR and public safety. The agreement is currently used by 12 departments and will expire at the end of this month. Over the past five years, the city spent about 10,500,000.0 annually. This amendment will simply extend the agreement by two years and seven months and increase the amount from £60,000,000 to £94,600,000 Financially, this amendment will protect the city against rising costs. We are seeing market increase of 8% to 10% annually, but through negotiation, kept increases at 4% for on premise software and hardware and 5% for cloud products. So, this is equivalent to a cost avoidance of 2,900,000.0 over the next two and a half years. In addition, if the city buys more products to enhance or replace the existing system, we will continue to benefit from the strong discount that was successfully negotiated five years ago. Why approve this resolution? First, it will ensure continuity of the city's critical system. Second, it avoid the fragmented and high cost purchasing by departments. Third, it maintains centralised management of the contract and vendor performance. And fourth, it safeguards cybersecurity and data protection across the city. Before concluding, would like to thank my colleague, and for coordinating this citywide effort, and for his analytical support. And we're all here and happy to answer questions. Thank you.

[Supervisor Connie Chan (Chair)]: Thank you.

[Nick Menard (Budget and Legislative Analyst)]: Item three is a resolution that approves an amendment to DT's contract with mythics, which is an oracle reseller. The amendment increases the value of the contract from 60,000,000 to $95,000,000 and extends the agreement through November 2028. Oracle provides some of the key software systems that the city uses, including PeopleSoft, which is an HR system Primavera, which is a capital project control system and also for the PUC to bill customers. They also provide cloud storage for city data. We show the contract budget on page 16 of our report. This contract value is based on annual spending of about $13,300,000 this year and projected forward. Historically, 71% of the contract has been funded by the general fund. And you can see the spending by department on page 15 of our report. And we recommend approval item three.

[Supervisor Connie Chan (Chair)]: Thank you. Did I understand this correctly that you do actually have five year option on this?

[Hao Hsieh (Department of Technology)]: Yes. We the original contract has a five year option, but because we're piggyback on the Mendocopa County's contract, their contract expire in two year and seven months. So, we have to align with that deadline. We cannot go beyond.

[Supervisor Connie Chan (Chair)]: I appreciate the thinking around I just want to let you know that I appreciate while you have the option of five years, you exercise not the full full five years instead, and you're being strategic and thoughtful about how you approach alignment of your contracting we need more of that we want to see more of that not just from you but actually throughout the city so we appreciate that approach and so with that said let'92s go to public comment on this item thank you.

[Brent Jalipa (Committee Clerk)]: Yes we are opening public comment for this item number three if we have any members of the audience who wish to address the committee. Madam Chair we have no speakers.

[Supervisor Connie Chan (Chair)]: Seeing no public comments public comment is now closed. Colleagues I would like to make the motion to move this item to full board with recommendation and a roll call please.

[Brent Jalipa (Committee Clerk)]: And on that motion to refer to the full board to the recommendation vice chair Dorsey Dorsey aye member Sauter aye chair Chan aye we have three ayes

[Supervisor Connie Chan (Chair)]: the motion passes

[Hao Hsieh (Department of Technology)]: thank you

[Supervisor Connie Chan (Chair)]: thank you Mr. Clerk please call item number four.

[Brent Jalipa (Committee Clerk)]: Item number four is a resolution retroactively authorizing the department of public health to accept and expend a grant in the amount of approximately 7,900,000.0 from the California board of state and community corrections for participation in a program entitled proposition 47 cohort five for the period of 10/01/2025 through 06/30/2029 in approving the notice of award agreement pursuant to the charter. Madam Chair.

[Supervisor Connie Chan (Chair)]: Thank you and today we have department of public health here.

[Kelly (Director of Substance Use Services, SF Department of Public Health)]: Good morning supervisors my name is Kelly I am the director of substance use services for the department of public health. Today we are here to request retroactive authority to accept the Proposition 47 Cohort five grant. As a reminder, Prop 47 changed certain low level drug crimes from felonies to misdemeanors. The resulting savings were set aside and awarded as part of a competitive grant aimed to reduce recidivism. DPH applied for and was awarded the Cohort five grant that will allow us to continue critical community care by providing withdrawal management, residential, and residential step down services for justice involved individuals with co occurring substance use and mental health needs. The grant is administered by the California Board of State and Community Corrections. The amount is a little less than $8,000,000 The duration is from 10/01/2025 to 06/30/2029. Next slide, please. The grant required that a certain percentage of the funds were allocated to CBOs, or community based organizations, and offered bonus points for higher percentages. DPH was able to submit a very competitive proposal by naming CBOs with longstanding histories of working with justice involved individuals. In cohort five, we are continuing the efforts of cohort three that provided withdrawal management and residential services for justice involved individuals. And additionally, we are investing more in the whole continuum of care by adding residential step down services to ensure sustained support as individuals continue in their recovery journey. To this end, dollars 4,000,000 will be allocated to Salvation Army Harbor Lights for 10 withdrawal management beds and 18 residential beds. And we will be adding $2,000,000 to purchase 15 residential step down beds from HealthRite three sixty. Next slide. And just so that you can see, these are pictures of Salvation Army Harbor Light Center, where the withdrawal management and residential services will take place. This is followed by pictures of HR three sixty's residential step down program on Treasure Island, which will be providing the 15 residential step down beds. This is a notation regarding the retroactive nature of this request. DPH received final grant agreement after the projected start date of the project. We got initial notification of the award on 09/11/2025, with a project start date of 10/01/2025. We received final grant agreement on 01/21/2026. And we're bringing this request to you after going through the fiscal approval process. Thank you for your time. I'm available for questions.

[Nick Menard (Budget and Legislative Analyst)]: Item four is a resolution that would approve DPH to accept and expend about $8,000,000 from the Board of State and Community Corrections. It also approves the underlying grant agreement associated with that money. The grant would fund the Supporting Treatment and Reducing Recidivism program from October 2025 through June 2029. You can see on page 22 of our report how that program has evolved over time with prior rounds of funding from the BSCC. This grant would continue to fund 10 detox beds and 18 residential beds at the Salvation Army. And then it adds 15 step down beds at Health Right three sixty. And then on page 24 of our report, you can see that there is a matching fund requirement from this grant. The city is required to commit $2,000,000 to receive the $8,000,000 over the next three years. That will be met by existing DPH staff, so there's no change to the salary ordinance before you as part of this grant approval. It must be recommended approval of item four.

[Supervisor Connie Chan (Chair)]: Thank you. And Supervisor Sauter.

[Supervisor Danny Sauter (Member)]: Thank you, Chair Chan. Question here. These beds that would be funded, I know there's been past funding coming through Prop 47. But these particular beds, are these new, or are these extensions of current space?

[Kelly (Director of Substance Use Services, SF Department of Public Health)]: Thank you for your question. So the beds at Salvation Army, the 10 withdrawal management and the 18 residential beds, those are continued from cohort three, where we had used Proposition 47 funds for those particular beds. The residential step down beds at HealthRite360 would be new beds that were not previously funded by this grant.

[Supervisor Danny Sauter (Member)]: And then the I see that the last cohort of funding, cohort four, has been seeing delays. But that looks like it was funded to HSH. Are you able to speak to that at all?

[Kelly (Director of Substance Use Services, SF Department of Public Health)]: So the cohort for the lead agencies, HSH. And unless there are representatives from HSH, am not able to speak to that.

[Supervisor Danny Sauter (Member)]: Thank you.

[Supervisor Connie Chan (Chair)]: Vice Chair Dorsey.

[Supervisor Matt Dorsey (Vice Chair)]: Thank you, Chair Chan. I'm happy to support this. These are both facilities in my district. And I'm particularly enthusiastic about residential step down, because I think that's a need in the continuum of care that we really haven't been funding enough. So I'm grateful to be seeing that. I know that there are some changes in how the state is going to be allocating resources, I think both as a result of changes to Prop 47 and Proposition one. There were some issues about the procurement that came up in the budget legislative analyst report. It's my understanding working with the mayor's office on these issues that they are trying to be mindful of identifying bidders. But I just wanted to ask if there's anything you have to want to add to that about making sure that we have more competitive bidding on these kinds of services as we expand them.

[Kelly (Director of Substance Use Services, SF Department of Public Health)]: Yeah, the nature of the grant application did not afford us an opportunity to request for proposals in advance of the grant application. So it was determined best to go forward with tried and true CBOs that we work in relationships with and who have longstanding community relationships and histories of serving this community.

[Supervisor Matt Dorsey (Vice Chair)]: Thank

[Supervisor Connie Chan (Chair)]: you. So with that, I don't have any questions at the moment. And so let's go to public comment on this item.

[Brent Jalipa (Committee Clerk)]: Yes we' now opening public comment for this item number four if we have any members of the public who wish to address this committee. Madam Chair we have no speakers.

[Supervisor Connie Chan (Chair)]: Seeing no public comment public comment is now closed. Colleagues I would like to move this item to full board with recommendation and a roll call please.

[Brent Jalipa (Committee Clerk)]: And on that motion that we refer this resolution to the full board with the recommendation vice chair Dorsey. Dorsey aye member sotter Aye. Chan? Aye. Chan, aye. We have three ayes.

[Supervisor Connie Chan (Chair)]: The motion passes. And, mister clerk, please call item number five.

[Brent Jalipa (Committee Clerk)]: That's item number five is a resolution retroactively authorizing the San Francisco Public Defender's Office to accept an expanded grant in the amount of 850,000 from the office of the state public defender to maintain the capacity of the office' post conviction unit or the freedom project to meet the increased demand for decarceration reentry, and resentencing reform services for the period of 02/01/2026 through 06/30/2028. Madam chair.

[Supervisor Connie Chan (Chair)]: Thank you and we have our public defender's office here.

[Lison Castro (Chief of Staff, Public Defender’s Office)]: Good morning, supervisors. Listen, cost chief of staff at the public defender's office along here with Danielle Harris, our managing our manager for the Freedom Project post conviction unit. I want to first thank supervisor Walton's office and team, specifically Natalie G. And Tracy Gallero for helping us in sponsoring this resolution. Specifically, we're asking for approval of this resolution to retroactive authorizing the public defender's office to accept and expand a grant in the amount of $850,000 from the office of the state public defender to maintain the capacity of the office's post conviction unit, specifically two positions which are our senior social workers. Miss Harris is here to speak more about the freedom project and its impact and the need for the positions.

[Danielle Harris (Managing Attorney, Freedom Project, SFPD)]: Thank you. Good morning everybody. I'm really happy to be here to give you a brief introduction to the Freedom Project which as you heard is the San Francisco Public Defenders Post Conviction Unit. And what we do is look at the cases that we San Francisco has sent to state prison people who are serving prison sentences sometimes from two, three, four decades ago. We look often, I should say, that old. We look at these cases and see which of them deserves a second look and proceed when if we find such a case with resentencing and or parole board representation. We just from 2020 when we were staffed up with a different state grant that is expiring in just a couple months we staffed up to three lawyers, two paralegals, and two social workers. It's those two social workers that we're hoping to continue on for the two years through the expanded public defense grant. And in this time period we have brought home actually this is just slightly outdated it's now 105 individuals. We have reunited thus 105 families, 105 communities with all the benefits that that entails both fiscal in terms of fiscal and human costs. We focus on a few different types of cases. Number one we focus on elders and seniors who are in prison because we know from many robust studies that recidivism goes down and then virtually disappears once a person reaches a certain age and our the population of folks serving prison time from San Francisco is an older population with 69% over 50, forty 4% over 60, and twelve percent over 70. We also know that this the state and thus the taxpayers pay a much higher cost to house folks over 55 than other age groups. And that's because nearly all of them have chronic health conditions from being in prison for a long time and aging under those circumstances and our social workers make sure if they do come home they're connected to all the services they needed need and particularly health care. The second group of cases that we look at specifically are those who went to prison as young offenders including minors. We still have folks in prison serving life sentences that they were given as teenagers from the 1980s and the 1990s. And those folks are are quite different individuals now and have done many of them done a lot of work and deserve a second look to see if it's time for them to come home. And then the third category we look at, of course, in our criminal legal system is racial injustice cases. We can talk about any number of statistics. The one I'm highlighting here is that across California approximately ninety percent of cases involving youth that are transferred from juvenile court to adult court that we've decided it makes sense to treat kids as adults legally are are kids of color and the same is true for for those who are serving prison time out of San Francisco. I've highlighted one case here which cuts across all three of these categories. A client of ours who came home about four years ago now, he was 59, but he had gone to prison at age 17 in the 1980s on a life sentence and at that time he was one of many, many, many black youth who were transferred to adult court as teenagers. He's now working as a case manager at transitional home that he came home to helping others walk the path that he's walked. Of course, we don't want to just bring people home, we want to make sure they have what they need to stay home and be productive community members. That means we build support systems, we work with them for months in advance to plan what what their release is going to look like from pick up at the prison gate to housing to health care to employment. We celebrate homecomings, freedom celebrations every year, and a monthly freedom peer group to make sure that they have pro social networks to rely on. And our commitment is as long as the Freedom Project is here we are there to make connections. So we've had folks coming back to us three years into reentry saying I'm losing my housing can you help? I'm getting laid off can you help? And our answer is as long as we're here, yes. And we have so many success stories to share. And we are also working at the state level to expand paths to to resentencing and second looks. Thank you for listening I'm here to answer any questions you may have and very grateful for your time.

[Supervisor Connie Chan (Chair)]: Thank you and just want to thank you for your work and thank you so much for working on this not only the project but with our public defender and being able to have this grant through the city and so I don' see any name on the roster I don' have additional questions again thank you we' going to public comment on this item.

[Brent Jalipa (Committee Clerk)]: Members of the public wish to address this committee regarding this item number five, and that was your opportunity. Madam Chair, we have no speakers.

[Supervisor Connie Chan (Chair)]: Seeing no public comments, public comment is now close. Colleagues, would like to move this item to full board with recommendation and a roll call, please.

[Brent Jalipa (Committee Clerk)]: Now, I motion to refer this resolution to the full board with the recommendation of vice chair Dorsey. Dorsey, aye. Member Soder? Soder, aye. Chair Chan? Aye. Chan? Aye. We have three ayes.

[Supervisor Connie Chan (Chair)]: The motion passes. Mister Clark, please call item number six.

[Brent Jalipa (Committee Clerk)]: Item number six is a resolution approving and authorizing the mayor's office of housing and community development to jointly apply with sixty nine post LLC and swords de plowshares veterans rights organization to the California department of housing and community development for the home keep cost grant for the property located at 629 Post Street in a total amount not to exceed approximately 15,800,000.0 or the maximum award amount allowable under the notice of funding availability whichever is greater on behalf of the city and county. Madam chair.

[Supervisor Connie Chan (Chair)]: Thank you and today we have mayor's office of housing and community development here.

[Lakessa Scott (Project Manager, MOHCD)]: Good morning chair Chan, committee members Dorsey and Sauter. My name is Lakessa Scott. I'm a project manager with the mayor's office of community development. I'm here today to present on item six to request approval of a resolution supporting the rehabilitation of 629 Polk Street into 63 units of permanent supportive housing along with one Ground Floor commercial space to serve unhoused and formerly unhoused veterans exiting homelessness. Staff representing the the project sponsors towards Deploud Share are here as well as our colleagues from the mayor's office of community development to answer any questions you may have at the end. Next slide. This resolution authorizes MOCD to jointly apply with six twenty nine post LLC to the California department of housing and community development for the home key plus grant of the rehabilitation of 629 Post Street in a total amount not to exceed $15,869,669. Next slide. The home key program began as a statewide initiative launched during the COVID nineteen pandemic to rapidly expand housing options for individuals experiencing homelessness or at risk of homelessness. The home key program focus focused on the acquisition and conversion of hotels, motels, multifamily buildings into permanent supportive housing allowing jurisdictions to quickly bring new units online. In San Francisco, Homekey resulted in a creation of ten seventy four new permanent supportive housing units across several properties. These efforts not only provided immediate housing solutions during a public health crisis but also established long term assets that continue to support the city's homeless response system. Homekey plus is the state's new permanent supportive housing initiative funded through proposition one. The program allocates $1.91972000000.000 statewide to Homekey Plus and is administered by the California Department of Housing and Community Development. Home key plus builds upon the original home key model by shifting the programs entirely to permanent supportive housing with the strong emphasis on rapid project delivery typically within twelve months of award. The program prioritizes serving veterans experiencing homelessness who also have significant behavioral health challenges. Homekey plus requires a local match and is structured to align with county behavioral health commitments to ensure long term service and operating support. The notice of funding available availability was released in November 2024 consistent with the state's implementation excuse me timeline for proposition one. Prop one, approved by California voters in March 2024, provides a statewide framework to expand behavioral health services and supportive housing, which authorized 6,400,000,000.0 for new treatment beds, supportive housing, community facilities, and dedicated housing for veterans with behavioral health needs. The project 629 Polk Street, also known as the Sheldon Hotel, is a six story, 63 unit 63 mixed unit building located between Taylor And Shannon Street in Lower Knob Hill. In March 2023, the board of supervisors approved the city small site program loan to support the acquisition and rehabilitation of the building. Swards currently owns the building and has been working on the rehab scope. The 15,800,000.0 Homekey Plus investment will fund key rehabilitation needs at six twenty nine post including structural seismic upgrades, modernization modernizing the electrical, HVAC, and plumbing system, and remodeling of the basement. The project will convert 20 SRO units into studios to meet HUD VASH requirements and create six fully ADA accessible units by re re by rehabbing the entire stack and installing a new wheelchair lift. In addition, one Ground Floor commercial space will be converted to create a ADA compliant building entrance on Pulte Street. The project is supported by the city and state funding source. Of the 26,500,000.0 in the city loan funds committed to the project, 14,020,000.00 was used for the initial acquisition. In addition the project includes 15,900,000.0 in home key plus funds from HCD which are before the board of which are which are before the board for consideration today. The Homekey plus money will reduce the overall MOCD support for this project by 3,400,000.0. With the board's support, Schwartz de Plowshare anticipates beginning construction in November 2026, contingent on the Homekey Plus award, with project completion expected November 2027. Thank you for your consideration and support. Here with me today are representatives from Swords to Plowshare and well as well as our colleagues from the mayor's office of housing and community development. We are able to answer any questions the committee members may have.

[Supervisor Connie Chan (Chair)]: Thank you. Thank you for your presentation today. I appreciate the presentation. I would like to see if we I'm in support of this item today. I would like to actually with my colleagues support to hope to vote this out to full board which is then will be a full board next Tuesday April 14 between this time though if I would like to request is additional existing condition photos of the existing condition of the basement because that is where the grant is going to go for rehab as well as existing the SRO units and the units that will be converted into ADA yes just having a photos of that added to that it's great because you already show the entrance and as well as the staircase that help us understand this is how you're to convert it into ADA. But I would just like just additional, like, with a better understanding of what the current condition looks like and what are we anticipating. So by the time they complete, we have some a little bit of before and after comparison for that completion. And of course, we always really appreciate Swords and Plowshares partnership and for their work. So thank you. And do you think that's possible?

[Lakessa Scott (Project Manager, MOHCD)]: Yes. Thank you.

[Supervisor Connie Chan (Chair)]: Great. We look forward to those additional basements, existing SRO units, and the units, the current conditional units that will be then converted into the six units of the a d eight units. Thank you and with that let' go to public comment on this item.

[Brent Jalipa (Committee Clerk)]: Yes we' now opening public comment for this item number six if we have any members of the public who wish to address this committee. Madam chair we have no speakers.

[Supervisor Connie Chan (Chair)]: Seeing no public comments public comment is now closed. Colleagues I would like to move this item to full board with recommendation and a roll call please.

[Brent Jalipa (Committee Clerk)]: And on that motion to refer this resolution to the full board with the recommendation vice chair Dorsey. And Dorsey aye. Member Soder. Aye. Soder. Aye. Chair Chan. Aye. Chan. Aye. We have three ayes.

[Supervisor Connie Chan (Chair)]: The motion passes. Mister clerk, please call item number seven.

[Brent Jalipa (Committee Clerk)]: Yes. Item number seven is a resolution retroactively authorizing the office of the city attorney to accept and expend a grant in the amount of 600,000 from the California Department of Industrial Relations labor commissioner's office for the workers rights enforcement grant program to fund the enforcement of state labor laws for the period of 08/01/2025 through 07/31/2026. Madam chair.

[Supervisor Connie Chan (Chair)]: Thank you. And today we have the city attorney's office here with us.

[Matt Goldberg (Chief Attorney, Worker Protection Team, City Attorney’s Office)]: Good morning, supervisors. I'm Matt Goldberg. I'm the chief attorney of the worker protection team within the San Francisco city attorney's office. I'm here to request retroactive authorization of a $600,000 grant from the state of California to our office to engage in worker protection work and combating wage theft. I'll be happy to answer any questions. I'll give you just a very short summary of this. This is a unique grant program. Typically, the state of California is not in the business of funding localities to do worker protection work. So we were pleased that they commenced this project. It's a two year grant cycle. It was a competitive process. We were the recipient of a first year grant for just over $400,000 We reported a lot of successful work following year one. And we were pleased to once again be accepted for a second year grant. They increased our grant by roughly 50%. I think that was a reflection on the excellent work we had done in the first year. I'll say that the grant period we're now sort of toward the end or in the middle of grant period. We've already had a number of important successes. I think roughly we have secured over $5,000,000 in restitution for workers via judgments and settlements during this first part of the grant year, an additional $500,000 in penalties coming back to the city and the city attorney's office. I guess similarly, we're on track. Basically, this is funding exclusively for salaries and benefits. And so we're tracking the qualifying time we spend on doing work that qualifies for the grant funding. And we're on track to use and expend down all of the funding. I think that's essentially it. So I'm happy to answer any questions you may have.

[Supervisor Connie Chan (Chair)]: Vice Chair Dorsey.

[Supervisor Matt Dorsey (Vice Chair)]: Thank you, Chair Chan. I have no questions but just wanted to say that I am enthusiastically in support of this. I will say that during my time in the city attorney's office I think these are the kinds of cases that were some of the most important and consequential. It's not just for the workers and their families who are cheated of their wages and benefits, but it's also really about protecting the law abiding businesses and making sure that they're that the lawbreakers are not corrupting the marketplace. So I'm a huge believer in this work. And I worked for years there with Vince Chabria on it. And I'm grateful to see a lawyer of your caliber, Matt. So keep up the great work. I'm happy to support this. Thank you.

[Supervisor Connie Chan (Chair)]: Thank you. And so then with that let's go to public comment on this item.

[Brent Jalipa (Committee Clerk)]: Yes we're opening public comment for this item number seven if we have any members of the public who wish to address this committee. Madam Chair we have no speakers.

[Supervisor Connie Chan (Chair)]: Seeing no public comments public comment is now closed and then so with that colleagues I would like to move this item to full board with recommendation and a roll call please.

[Brent Jalipa (Committee Clerk)]: And I motion to refer to the full board with the recommendation vice chair Dorsey.

[Fred Sanchez (President, Protect Our Benefits; retired SFFD Deputy Chief)]: Aye.

[Brent Jalipa (Committee Clerk)]: Dorsey. Aye. Member Soder. Aye. Chair Chan. Aye. Chan. Aye. We have three ayes.

[Supervisor Connie Chan (Chair)]: The motion passes.

[Supervisor Matt Dorsey (Vice Chair)]: Thank you.

[Supervisor Connie Chan (Chair)]: And so with that, Court, please call item number eight.

[Brent Jalipa (Committee Clerk)]: Item number eight is our hearing on the denial of health care, including cancer care for San Francisco workers, retirees, and their families by blue shield and requesting the san francisco health services board blue cross blue shield of california and protect our benefits to report. Madam chair.

[Supervisor Connie Chan (Chair)]: Thank you. Colleagues, if I may just start it with some remarks. I don't know if Vice Chair Dorsey also have some initial remarks about this hearing. We, or I, have learned, and in addition to Vice Chair Dorsey, have learned that there were the denial of care for particularly really our firefighters and retired firefighters. And both of us have sat on the Health Services Board with the understanding of the type of transitions that we've been through with our health care system and service provider. And particularly, in this case, for our retirees is the transitions from UnitedHealthcare to now Blue Cross Blue Shields of California as an insurance provider, service provider to our retirees. So as you can imagine, when we learn about the denial of care, it's alarming and disheartening. And we wanted to get to the bottom of this. And so that we can understand why and how and most importantly I think that our core mission has always been prioritizing care for our city workers and those who especially those including those who are now have contributed their career and service to our city. And so I think today's hearing is not only that we want to learn from our health services system, who has been providing us the advice and the contract for us to evaluate and approve, but also from those who actually have firsthand experience receiving care and inclusive of their process eventually resulted in the denial of care. And then we do want to give Blue Shield an opportunity to also explain to us publicly what has how that process has been and the reason for denial care. I am coming from a space that it's not just that I see as a potentially a problem for us as a city in terms of providing effective and comprehensive care for our workers it is also I want to understand better the entire health care system there's no doubt that there's the health care system as it currently exists not just for our city workers but really for the country, broken. So I also look to our health service system and health services board staff to kind of walk us through from your perspective what as a city we can do to fix it, and what is it that in the city that need to demand our, partners, our contractors, and in this case, Blue Shield, to make sure that they do deliver that care. But also, what else do we have we missed in this transition? And what can we do as a city, too, moving forward, in addition to what we want to hear from Blue Shield today? So with that, Vice Chair Dorsey.

[Supervisor Matt Dorsey (Vice Chair)]: Thank you, Chair Chan. And I want to thank you for calling this hearing. And I want to just elaborate a little bit on some of the background when our health service system initiated an RFP process for some of our retiree health care services. Right now, we are in a situation, as Chair Chan mentioned, where health care prices are far outpacing the rising costs of everything else. And maybe the only tool that we have is a competitive bidding process. And HSS did that. What came back was that Blue Cross Blue Shield was the lower bidder by tens of millions of dollars. And I was, as a member of that health service board, felt strongly that HSS and our consultants did a thorough, careful, meticulous RFP process. I put faith in that. But it wasn't without controversy that we were replacing an incumbent with Blue Shield and we heard from a lot of our retirees on that. I made a commitment as a member of the board of supervisors that we had no intention of balancing our city budget on the backs of our retirees and we expected that people were going to keep their word about the services that they were going to be providing. I did say after this happened that you know the first third of my career I was a consultant and I often engaged in competitive bidding processes. And sometimes there's really competitive bids and the good news is when you win it, you want it. And the bad news is you won it. And now everybody's eyes are gonna be on you. And there's gonna be a really high standard and high expectations to deliver. So that was, I think, what animated the concerns that I had, and I think that we share as a board of supervisors, to make sure that our contractors are delivering what they signed up for. And it was obviously concerning when we are getting reports from some of our retirees that they're being denied care, and we're seeing at least anecdotal information that that was not the case with some of the previous providers. So I really appreciate the work that Chair Chan's office is doing on this. I appreciate the work that HSS has done on this. And I know that we sent a letter of inquiry to you. I do want to acknowledge that there's not much that HSS I knew when we sent that letter of inquiry that it was unlikely that you would have any information. But to do our due diligence, we had to do that. We also reached out to many of the unions and bargaining units of employees to just ask their members if they're experiencing issues similar to what we saw with some of the firefighters. So I really appreciate that we are doing everything we can to do right by our retirees and our workers. And thank you again, Chair Chan, holding this hearing.

[Supervisor Connie Chan (Chair)]: Thank you. So let's start with our health services system.

[Supervisor Matt Dorsey (Vice Chair)]: Good morning, committee members. I'm Ray Kean, executive director for the Health Service System, and I'm here today representing both the department and the Health Services Board. Health service board president Mary Howe was unavailable to attend today's hearing due to a preexisting work obligation. However, commissioner Jack Kremin is in the audience today, and as you know, supervisor Dorsey is a current board of supervisor appointee on the health service board. Next slide. In my presentation this morning, I hope to clarify the roles of both the Health Services System and the Health Service Board, and also explain each entity's limitations. I will then highlight the roles of our selected health plan vendors, and the regulatory agencies responsible for overseeing them. Finally, I will go through the resources available to our members should they feel that they are not receiving the care that they need. Next slide. And one more, please. The health service system staff administer the programs, rules, and policies approved by the Health Service Board. In regard to the medical plans that are offered to our active and retired members, as well as their families, SFHSS serves as the plan sponsor and our main responsibilities include managing member eligibility and enrollment, collecting and paying premiums, ensuring compliance with regulations such as HIPAA, COBRA, and the Affordable Care Act, and completing certain legal requirements such as offering required plan documentation like the summary plan descriptions to our members. And finally, we assist the Health Service Board in meeting its fiduciary duties. The Health Service Board sets a policy direction for the health service system and is responsible for selecting the various health plan vendors. It holds a fiduciary responsibility to prudently select and monitor these insurance carriers, but the carriers handled the day to day administration of the health plans the carriers hold their primary responsibility for managing and denying claims the health service boards fiduciary responsibility related to claims denials is to ensure that its selected health plan carriers provide members with a clear appeals process and that they are following that process. Neither the health service system nor the health service board is responsible for the specific denial decisions made by its health plan carriers provided again that we have acted prudently in selecting the carriers under hippa plan sponsors like sfhss generally cannot receive the specific identifiable medical details of an employee's claim that would be necessary to evaluate a claim denial whether a claim denial was appropriate or not in most cases plan sponsors only received the de identified aggregated data about claims showing trends rather than who was denied what service Plan sponsors are limited to monitor key performance indicators from their insurance carriers such as denial rates for specific types of care, for instance, behavioral health versus medical, to perform their general oversight. And, I'll just stop here and mention, as Supervisor Dorsey mentioned earlier, you know, the city is concerned with the high cost of all the plans that it offers. The plans that we offered are managed health care plans. And again, part of the duties of our health insurance carriers is to determine whether or not submitted claims are within the applicable guidelines for such services. HSS's selected health plans are responsible for managing all claims processing, utilization reviews, and payment of benefits in accordance with the evidence of coverage documents that outline the benefit design approved by the health service board for each plan. The insurance carriers must perform these tasks in accordance with the laws and regulations that apply to their particular plan type. The two main regulators applicable to our plans are the Department of Managed Health Care and the Centers for Medicare and Medicaid Services. The Affordable Care Act ensures that health plan members have a right to appeal health insurance plan decisions. First, health plans must offer an internal appeals process. Then, if the plan still denies payment after considering a member's appeal, the law permits the member to have an independent review organization decide whether or not to uphold or overturn the plan's decision. This check is often referred to as an external review. Health plans are regulated by various federal and state entities depending on the type of plan it is, HMO, PPO, Medicare Advantage, etcetera. These agencies are the ones responsible for enforcing compliance through investigations, public reporting, and penalties. If a member contacts our member services team with an issue about medical care received or not received, our staff provide guidance to the member on how to navigate the appeals process. This final slide provides a summary of the various roles and responsibilities that I went over today. This concludes my presentation. Thank you.

[Supervisor Connie Chan (Chair)]: Thank you. We will have questions. I think what we're going to do is we're going to go through the presentation, and we're going to follow-up with the questions. And so now I am going to call on Mr. Fred Sanchez, protect our benefits.

[Fred Sanchez (President, Protect Our Benefits; retired SFFD Deputy Chief)]: I'm Fred Sanchez. I'm a retired deputy chief of the San Francisco Fire Department. Did thirty two years there. It was great, except the last year. I'm president of Protect Our Benefits. Protect Our Benefits is a watchdog organization that monitors the retirement system as well as the health service system for the 41,000 approximately retired city workers. They're not all police and fire. Some of these people are miscellaneous workers who have pensions in the neighborhood of maybe $20,000 to $25,000 a year. So when they get denied services, it's critical. Any out of pocket expense is really extremely difficult. Today, you'll have several speakers. There are some of them that can't be here, like Al Casciato, who's down in Phoenix waiting for a double lung transplant. He was approved by Blue Shield to have this double lung transplant. When he got down there, he had to go to a health and wellness training. That was part of the process. He got there on a Monday. He goes to get the training. He's told, this has to be approved by Blue Shield. He says, what are you talking about? Blue Shield approved the process. Well, not this particular part. He's denied. I get a call. Ray is great. He picks up my call. I call Blue Shield, Charles Lee, and all this stuff. Hey, what can we do about this? I mean, he needs this training to proceed. It took till Friday. It took four days for them eventually to approve what they already should have been part of the process. It made no sense. The aggravation, can you imagine on a guy who's almost 80 years old when it's like, hey, when am I gonna get this lung transplant? He's told if he doesn't have it within six months, he's no longer gonna be with us. I mean, it's cases like that. We have Herb Weiner, who's here. He was at the Jewish Center rehabbing from a thoracic valve replacement and his heart replacement. He gets a call telling them that they want to move him out back into his residential care at the Frank residence. He calls me. I'm his advocate. I call the caseworker, his nurse. Is her ready to go back home? And they said, he needs additional care. His blood pressure is dropping below 100. He has some incontinence issues. We need more time, you know. So, the caseworker tells me to call this commence health, which is an independent review, like part of the peer review process. I call them. I speak to them. I tell them that we need some extended care. It's not ready to go back. I was confident that, hey, talk to his doctor. Talk to the nurse. You'll find out he needs more time. I get a letter of denial a few days later. Next thing I know, Herb is being moved out that very day into his residence. Hey, thank God he's not back in the hospital. But I get the letter, and the letter says that he was admitted to a skilled nursing facility after hospitalization for cardiogenic shock. That's all it says. If he woulda they woulda talked to his doctors and his nurse, they woulda found out he had blood pressure issues, he had incontinent issues, he's still, hey, he wasn't ready to go back. But they forced him to, and that's what they do. So, I'm just tired of Blue Shield acting like they're the medical professionals. What I expect out of this meeting is a commitment from Blue Shield to look at the processes of denial and stop playing doctor, listen to the doctors, change some of these processes so that they can be streamlined because like the Ken Jones case is unbelievable. I mean, he had to get care. I talked to Doctor. Gubins. He says they were wrong in their assessment. He helped set up the guidelines himself. He was on the board and he knew that what he recommended was appropriate. And for Blue Shield to deny it against one of the most prominent doctors, oncologists in the world, that's ludicrous. So I need a commitment from this board that these meetings will take place because I know nothing takes places in the chambers at HSS or here, but I need a commitment that we will have meetings with Blue Shield to streamline this process so that these denials cannot take place. I have a representative here who's gonna talk about Irene Braun, one of the first women police officers. I mean, she have to get treatment every six months. She's been doing this for a number of years. It was streamlined with United Healthcare, even though United Healthcare is not so innocent as people might want to think. But after appeal and appeal, she finally got paid some stuff, but I'll let, you know, Juanita Stockwell speak to that specific issue. I've been assured from people that are close to Blue Shield that they are going to process Irene Braun's case. But there's too many. I mean, I get a thing from Al Casciato saying that he just got contacted from HSS that emails that go to hss.retireeconcerns.com that they're not getting any emails to that email. And this was from people at HSS. I'm going, what are you talking about? I've referred no less than 50 people to that website. That's impossible. Something is broken here really bad, and I need a commitment from this board and Blue Shield that, yes, we will have these meetings, and they won't be in two months. They'll be within this next month and we'll work for hours to make sure that the process is fixed. Not just a little bit fixed, but greatly fixed and switched. I need commitments. For me to come here is ridiculous. It's like a waste of my time. I spend two to three hours a day. I'm a volunteer. I'm supposed to be enjoying my son's grandkids' little league games. And, I'm on the phone, you know, I'm about ready for my partners ready to kick me out of the house because, you know, get a life. So thank you for your time, but please, I need action. I need real progress. Thank you.

[Supervisor Connie Chan (Chair)]: Thank you. And before I do call on Blue Shields for their presentation for this hearing, this is how the rest of the hearing will go. We will have Blue Shields come before us to make their presentation. And then we will go to public comments and allowing those who can also talk about, be it their personal stories or their friends and families, that they learn about claim denials information. And then we will then have questions and answers, which I have some. But I also want to make sure that we do allow Blue Shield to be able to respond to any public comments that we hear today. As well as our health service system should be able to respond some of these, public comments. So with that, I'm going to call on Blue Shield, to make their presentation, and then we will go to public comment.

[Tim Lieb (SVP, Commercial Markets, Blue Shield of California)]: Madam Chair and the committee, thank you for the opportunity to be here today. We want to cover three main things today. We want to talk about our phones and the handling of those. We want to talk about the prior authorization process, and then very specifically on oncology and what we have done on a proactive way for peer to peer outreach. So my name is Tim Lieb. I'm the Senior Vice President of Commercial Markets for Blue Shield of California. And I'm joined by Doctor. Kay Judge, Chief Medical Officer and a physician at Blue Shield of California. Blue Shield of California, our mission is to create a health care system where they are family and friends and sustainably affordable. We have enjoyed over twenty year relationship with the city and county of San Francisco, and we hope that over that entire time, we have demonstrated our responsibility to administer your programs and to really to show what it means to actually serve those who serve our community. We're not always perfect. But throughout those time and throughout the period of we worked with you, we have shown that we will step up. When there are issues, how do we actually work together to address those and make sure that we're delivering a program that we can all be proud of for your members? But we take it seriously when we fall short, whether that's from a phone support, an escalation process, or simply what services that people need. We always aim to identify what was the actual breakdown and to make sure we can act on that quickly. We're not going to be able to speak to anyone's specific issues. You know, that's just not something we can do. But we can assure you that we are taking all of this serious. We recognize what we need to do. One of the key items that we did right away was took a comprehensive look at all of our processes. And specifically, we looked at the customer and provider support. We looked at our peer to peer review process and the specialized support for those individuals that are receiving care like cancer. One, we recognized there were gaps in the handling of the phones. We put trainings and systems in place to make sure that we were actually addressing and we could move those individuals to the care that they needed. Simply put, we wanted to make sure that there was no wrong door coming in. There would be no one spent on the phones. They would get to the people that they needed to. Specific to prior auth, as it was stated, that's part of managed care. Prior authorization is a checks and balance. It's to how to address patient safety, utilizing the latest evidence based guidelines. And now, to speak more about that is Doctor. Kay Judge.

[Dr. Kay Judge (Chief Medical Officer, Blue Shield of California)]: Thank you, Tim. Thank you, Chair. Good morning to the members of the committee and to everyone sitting here listening. As my name's Kay Judge. As Chief Medical Officer, I'm guided by one principle through my career, and that is the Hippocratic Oath, do no harm. My North Star is to make sure our members get the care they need quickly and without unnecessary barriers. At Blue Shield of California, our approach to care is built around clinical quality, safety, and consistency. Care decisions have to be clinically appropriate. They have to be clear, and we feel they have to be reliable. And those are just words, and they don't count. It only works when if that translates into a real world experience that works for our members. And Fred, we're listening. I am listening. We're listening. And we are listening and evolving. I want to highlight two things that we've done since January. As medicine is an iterative process, medicine is complex, care of elderly persons is complex. And as Supervisor Chan said, this is both a national charge and also for us in the city and state of California, the city of San Francisco. We did two things. We relooked at our oncology process. We wanted to be appropriately, proactively reactive. And we looked at our oncology process. And we said, Let us align our oncologists in the community with same specialty oncologists for the purposes of prior authorization. So, we've shifted same specialty review for oncology so that oncologists are reviewing oncology cases. These are board certified specialists. They have deep familiarity in medical oncology, radiation oncology, cancer treatment, and they're the ones who are making the determinations, and they are guided by nationally recognized guidelines, including NCCN. Blue Shield does continue to oversee and manage the appeal and this work, and we want to make sure that these decisions are consistent and that our members' rights are fully protected. I also want to acknowledge as a physician that guidelines are not always black and white. And these are the cases where research is ahead of policy. Research is ahead of guidelines. New and innovative medications are out there. And we haven't had a standardized national protocol yet. And in those cases, we decided, let's do something proactive. This is industry standard. I don't know of any health plan that's doing that right now. But what we're doing is when we see that we might not be aligned based on the guidelines we're looking at and what the physician's looking at, we are instituting prior to a denial a proactive outreach. We're picking up the phone, and an oncologist is calling the oncologist and saying, Hey, this is what I'm seeing. What are you seeing? Where's the difference? And how can we both align on something that is right for the member? And this is something that we started in the January, I believe. We're always listening. We identified that there were parts of our prior process that weren't working well enough for our members. And we're looking at it honestly, and we're attempting to build something better. And this is our commitment. And we also realize this is not a one time commitment. Medicine is iterative. Change is iterative. And so is improvement. Want to be continuous. We want to be collaborative and we want to be worthy of the members and the communities that we serve. Thank you all for your opportunity to speak today and your continued partnership on behalf of San Francisco members. Tim?

[Tim Lieb (SVP, Commercial Markets, Blue Shield of California)]: I just want to reinforce our commitment to the city and county. We fully recognize health care is incredibly personal, and getting the right care and the timing of that is incredibly important. We hear, you know, what has occurred. We take members' concerns incredibly serious. When we fall short, it's always moments to learn. But we recognize our role, and our role is to make sure we're following policy. We're putting in place the things that protect patient safety. And so we want to thank you for your time today. We do welcome questions, and we recognize that will come after public comment. Thank you.

[Supervisor Connie Chan (Chair)]: Thank you. And so with that, Mr. Clark, let's go to public comment.

[Brent Jalipa (Committee Clerk)]: Yes, we're now opening public comment for this item number eight. If we have any members of the public who wish to address this committee, feel free to line up along those curtains. And as soon as I have my first speaker on a microphone, I could start your time at two minutes. Each speaker will have two minutes to address this committee. First speaker please.

[Helen Horvath (retired SFFD firefighter/paramedic)]: My name is Helen Horvath. I'm a retired San Francisco firefighter paramedic. I receive my health insurance through the San Francisco Health Service System with Blue Shield. My husband, Ken Jones, here is also a retired firefighter. He left Blue Shield and switched to straight Medicare in February because of the barriers Blue Shield placed on his cancer care. Ken's living with work related stage four metastatic lung cancer. It's aggressive and fast growing. What started as a pea sized tumor in his neck grew to the size of an egg in just six weeks. And there are many more tumors inside his body that we can't see. Despite this urgency, Blue Shield denied the treatment recommended by his oncologist at UCSF, a world renowned lung cancer expert. This is a treatment intended to slow the progression of his disease. Blue Shield overrode that expert judgment, claiming it wasn't the standard regimen. These denials delayed care, drained his medical team, and caused us enormous distress. Every delay matters when that cancer is growing fast. Because Blue Shield would not cover the treatment his oncologist prescribed, we paid $50,000 out of pocket for just one round to move forward with his care. I appreciate Blue Shield's changes, but we and really the many people around the country that donated to our GoFundMe campaign are still out $50,000 that should be Blue Shield's. Since switching to straight Medicare, Ken has received every treatment his doctors ordered without delay. Even getting pain medication became easier. Under Blue Shield those prescriptions were repeatedly held up while his pain worsened. Blue Shield claims they're following Medicare guidelines. This is simply not true. They're making choices that protect their profits at the expense of patients. I'm asking you to hold Blue Shield accountable. No one fighting for their life should have to fight for fight their insurance company at the same time. Thank you.

[Brent Jalipa (Committee Clerk)]: And thank you much for addressing this committee. Next speaker, please.

[Teresa Palmer, MD (retired city geriatrician)]: Hi, my name is Theresa Palmer. I'm a retired city employee. I worked at Laguna Honda. I'm an MD geriatrician. And my case of denial is relatively minor. I had a knee replacement in mid March, and Blue Shield refused to pay for the pain medications that I needed. And so, I was faced with paying between $1,000 and $2,000 out of pocket. In a situation like a knee replacement, if your pain is not well controlled, you cannot rehab and you end up with a knee that doesn't bend and you end up going down steps, one step at a time, for the rest of your life. And so, I am privileged. I had $1,000 but I'm not sure that a retired school teacher or retired janitor would. The problem is these are medications that Medicare approves. It's not even that much money for Blue Shield. It's a knee jerk denial. There is no need to deny a lot of the stuff that Blue Shield denies. And it occurs at a time when you need the care right away. And not only does it delay the care you need right away, but it places a burden on a very sick patient and a family that is under distress caring for them. This is really unacceptable. It's unnecessary. And Blue Shield needs to stop practicing medicine without a license and let the clinical judgment go to the personal physician, whether it's a case of survival from cancer or being able to walk normally for the rest of your life. Thank you.

[Brent Jalipa (Committee Clerk)]: And thank you much Teresa Palmer. Next speaker please.

[Miriam Pangle (retired SFPD lieutenant)]: Porter Soups, thanks for listening. My name is Miriam Pangle. I'm a retired lieutenant from the San Francisco Police Department. And in a nutshell, twenty seven months ago I had my knee replaced, total knee replacement. It didn't work. From day one it didn't work. I was referred to a doctor at UCSF. That doctor was an expert in what I had going on. Essentially I got denied. I appealed it. I grieved it. They denied it again. I got another referral. Denied. I appealed it. I grieved it. Denied. I then went to they sent me 12 doctors to go and see. In those 12 doctors, I saw they sent me elbow doctors. They sent me shoulder doctors. They sent me minimally invasive knee doctors. It's not minimally invasive. I saw the one doctor that they sent me that said they could do this revision. I need a total new knee. That being said, he said, You should go see Doctor. Ward. He's the best in the system. You have to see him. I was denied. I know my Blue Shield number. It's a nine digit number and I know it by heart. Why? Because I was on the phone. I was talking to Susie and Sally and Mary who had no idea anything about answering phones and we do our best and our due diligence. It was ridiculous. At the end of the day, by a miracle I got in to see Doctor. Ward. I had two weeks of special testing of the stuff that came out of my knee. Went to New Jersey for two weeks. I was to follow-up with him the next day. Blue Shield called UCSF and canceled my appointment and said, too bad. It's not covered. It was a mistake. Well, that's a mistake. Can you imagine the stress whether knowing you have an infection or rejection of your knee? Refraction infection Speaker's

[Brent Jalipa (Committee Clerk)]: time has expired.

[Miriam Pangle (retired SFPD lieutenant)]: You know what? I understand that, but you know what? I worked forever to

[Brent Jalipa (Committee Clerk)]: have Thank you this much for the Greetings Committee.

[Miriam Pangle (retired SFPD lieutenant)]: Thank you.

[Brent Jalipa (Committee Clerk)]: I do apologize for cutting anybody off, but we are timing each speaker at two minutes, and I have to enforce that across the board. Next speaker please.

[Tim O’Brien (Secretary-Treasurer, Retired Firefighters and Spouses Association)]: Tim o'brien secretary treasurer for the retired firefighters and spouses association. These are severe cases, but there are also other cases that are not severe. They get put on. Yesterday, I received a call from a firefighter. His spouse has had treatments for many years. She receives shots twice a year for brittle bones caused by cancer. And so now she switched, of course, to Blue Shield to have this shot, and now she thinks maybe next week it might be approved. So something in that system is just slow. Fortunately, it's not a life or death situation but it's just perhaps a symptom of what's going on. Why does it take so long for a person who has been under treatment for many years and then find that, well, maybe she''ll get a shot she doesn''t know yet because she hasn''t had a response but she believes that maybe next week so hopefully blue shield will respond and take care of it thank you.

[Brent Jalipa (Committee Clerk)]: And thank you to o'brien for addressing this committee next speaker.

[John “Ski” Tostonoski (President, RECCSF)]: My name is john ski tostonoski I'm the president of the retired employees of the city county of san francisco I've talked to hundreds of our members who get denied. We're senior citizens. What happens when we're denied? A senior citizen says, oh, I'm denied. I have to find another option. So that's what they do. A lot of times, they don't even fight it. They don't have fight left in them, a lot of them. Technology. We're given a a system a a email to call health service system about our complaints on our denials. What is it? It's an email. Thank you very much. I have members that don't have cell phones, no computers. They have a landline at home. 92 years old, Betty is calling me asking me, what do I do? And I say, you've gotta do what they want you to do. That's not good enough. The denials that are happening are not okay. Health service has phone calls that they get. What do we get? An answering machine. An email for people who don't have it? Come on. This is ridiculous. I put out a letter from health service in our newsletter and I put a rebuttal on it saying they're leaving our most vulnerable members behind and it happens all the time.

[Brent Jalipa (Committee Clerk)]: Thank you much john ski tostoneski for addressing this committee next speaker.

[Mindy Talmadge (retired SFFD firefighter)]: Hi, good morning. I'm Mindy Talmadge. I'm a retired firefighter that proudly served our city for twenty four years. I'm embarking on the transition into Medicare right now. I'm very blessed that I have a best friend who's very ethical, and she is an insurance agent that writes only Medicare plans. She's fully educated me on this. And I'm here to enlighten you and to inform you of the problem that is it's much more insidious than Blue Shield denials alone. This problem goes across the board with insurance companies and their plan offerings to government retirees. The problem is their Medicare Advantage plans, which have corporate professionals making decisions about our health care. The Advantage plans are yet again another tactic of the insurance company to line the pockets of corporate leaders with money, specifically by denying care. They are cheap, all inclusive packages dressed up with a little bow. The hidden caveats are that plan participants are limited to a network of doctors, And the doctors must get prior authorization from the insurance plan. The plan can delay the care. The plan can deny the care. Even if the care is approved, the process can take an unknown amount of time. Yes, their decisions can be appealed, but that's long and tedious. Many older patients would find that difficult and often give up, again delaying care. This can mean life or death. May I continue?

[Brent Jalipa (Committee Clerk)]: You have thirty seconds.

[Mindy Talmadge (retired SFFD firefighter)]: On the other hand, Medicare supplement participants can see any doctor or go to any treatment center that accepts Medicare. Ninety eight percent of doctors and treatment centers in The US accept Medicare without prior authorization requirements. So if my doctor orders a test or a treatment, I get it. I'm going to skip to the end here, but I have a lot to say, but it begs the question, why aren't we offered original Medicare through the city and county of San Francisco?

[Brent Jalipa (Committee Clerk)]: Well, thank you much for the questions committee. Next speaker, please.

[Adam Wood (Vice President, SF Firefighters Cancer Prevention Foundation)]: Morning supervisors. My name's Adam Wood. I'm the vice president of the San Francisco Firefighters Cancer Prevention Foundation. Cancer is currently the number one cause of work related death for firefighters. And for our retirees, that elevated risk is compounded by the elevated risk they face with age. So I want to deeply thank the supervisors, especially Supervisor Chan and Dorsey, for holding this hearing and for their advocacy on this issue. I also want to thank the health service system for soliciting and facilitating testimony from beneficiaries about experiences with denials and delays of treatment. I'm hoping Al's email experience was a one off glitch, cause I know the attempt was made. But what we're hearing is an alarming rate of denials and an even higher rate of delays in treatment approval. And for retirees with late stage cancer, a delay in treatment can lead to a drastic reduction in quality of life and length of life because it gives the cancer free rein to wreak havoc in the body without any countermeasures. So Ken Jones who bravely stepped forward and alerted us to this problem and who is here with us today, retired firefighter Ken Jones, I think his experience sheds a light on the root of this problem, and Helen spoke about it. When Ken was able to switch to straight Medicare, his entire treatment plan that was recommended by his treating physician, doctor Gubins, was approved. So it does not appear that the block is in the Medicare system writ large. It was within barriers in the Medicare advantage system that he was provided with from blue shield. That's where the scrutiny has to go in this investigation. I think all of our goals here today is to make sure that these city workers, firefighters, others who dedicated their lives in service of their fellow citizens get the treatment they need when they need it. Thank you.

[Brent Jalipa (Committee Clerk)]: And thank you, Adam Lloyd. Next speaker, please.

[Juanita Stockwell (retired SFPD officer)]: Hi. My name is Juanita Stockwell. I'm a retired SFPD officer. And I was supposed to talk about Irene Brunn's case where Blue Shield approves medication for her knee shots. She goes to the doctor. It's been denied. She has to pay herself twice last year. Dollars 2,900. Do you think that's going to break Blue Shield? She can't walk if she doesn't have this medication in her knees. But more importantly, they're just gonna keep screwing with her because that's what they do. I have a question for you. I sent you and you, Chan and Dorsey, an e mail last three months ago asking you to use the HSS system and send out e mails and find out how many people are being denied. You don't have to violate HIPAA. You just ask them a simple question: How many people are being denied by Blue Shield? And if you do it, I think you're gonna be shocked. I got no response from either one of you. I sent it to the mayor also. He, at least, had his office respond to me, but he hasn't done anything either. This is bordering on elder abuse, in case you didn't know it. And I would encourage these people to file police reports and list Blue Shield as the suspect because they're doing it on purpose. They're asking for everyone's medical records. They're not entitled to it. They don't tell you why you're being denied. They don't tell you anything. You're just denied. Too bad. I love that sound. So maybe you guys could look at your emails and find out if in fact you got that and use a system that you have that is available to you and you can get those answers and find out how many times these people are doing this. Thank you.

[Brent Jalipa (Committee Clerk)]: And thank you wanting to stock well. Next speaker.

[Ken Jones (retired SFFD firefighter)]: No, it's fine. Thank you. Hi. My name is Ken Jones. I am that Ken Jones. I wasn't going to say anything, but all these brave people spoke to the situation that I find myself in now. So I felt I should speak for myself. There was a big delay in the treatment that I received. And as such, it's going to be a delay sorry, I don't always think the right way. I've got METs. It's going to not allow me to extend my life anymore. And so it just seems to me that there are institutions that are more and I mean, can't blame them for this, more interested in making money than they are in taking care of patients. And so I wish that could be addressed. Now, I think it's too late for me. It's not too late for other firefighters and other people that live and work in the city and county of San Francisco so maybe something can be done for them if not for me. You. And

[Brent Jalipa (Committee Clerk)]: thank you much for addressing this committee. And if we have no further speakers.

[Supervisor Matt Dorsey (Vice Chair)]: If

[Herbert Weiner (retired 2912 Senior Social Worker)]: I can testify with this. Thank you very much. My name is Herbert Weiner. I'm a retired '29, 12 senior social worker, And I worked for the city from 1964 through 2003. Now, I was hospitalized once for a procedure where I had a stent replacement. After that replacement, I was discharged to rehab. Rehab noticed very low blood pressure, and I had to be rehospitalized again. I had a valve replacement and also rehab. Now, what happened was that I there was a notice that I was to be discharged on Friday, March 19. Fred Chan Sanchez, who was very concerned about a possible relapse that could actually be fatal if it wasn't addressed in time, wanted to file an appeal. Well, that appeal was never fully processed. And I was wondering about the status of the appeal and everything. As it turned out, I was discharged back to the Frank residence where I presently stay, and I'm getting services. Now, I'm wondering if this is in a breach of contract because the nurse and case manager were never contacted

[Brent Jalipa (Committee Clerk)]: Speaker's time has

[Herbert Weiner (retired 2912 Senior Social Worker)]: Commence Health

[Supervisor Connie Chan (Chair)]: Yes.

[Herbert Weiner (retired 2912 Senior Social Worker)]: Which provided an assessment.

[Brent Jalipa (Committee Clerk)]: Again, speaker's time has

[Herbert Weiner (retired 2912 Senior Social Worker)]: And this is a clear violation of the Blue Shield contract.

[Brent Jalipa (Committee Clerk)]: Thank you, mister Weiner, for, addressing this committee.

[Juanita Stockwell (retired SFPD officer)]: Thank

[Supervisor Connie Chan (Chair)]: you. Thank you. Thank you, mister Reiner. We understand. Yeah. We wanna go to Blue Shield for answer. Yes, we do. And and with that too, go ahead.

[Brent Jalipa (Committee Clerk)]: And yes, if we have no further speakers, Madam Chair, that completes our queue.

[Supervisor Connie Chan (Chair)]: See you. No more public comments. Public comment is now closed. I wanna thank everybody for your public comments today. If you feel like you have not complete your public comments, please feel free to have it in written form and submit. We are more than happy to have them on the record. But I think that we actually do understand from the testimony from public comments today is where I would like to bring Blue Shield back to be able to answer some of these. As you have heard from the public comments that it's not just one case from Kent Jones, there are knee surgery denial. There are medication denial. There are confusion of different cases, as you have heard today. Could you actually provide us a response? And including this what I'm hearing, and I would love for you to address today, is also the Medicare Advantage decisions. Please elaborate.

[Tim Lieb (SVP, Commercial Markets, Blue Shield of California)]: Let me first go a little bit. I want to first say, you know, there's been a variety of items that we highly support both within California and at a federal level around how to expeditiously move prior auth, not from an elimination. It's elimination of where prior auth is not necessary, but then how is it when we have the data to automatically approve. So, there have been a number of efforts, but it does require then the necessary information to really validate that it's all aligned to policy. Another item just to note is we also have customer service that should be moving everything through and getting everyone to the right level. It's part of what we did on the phone handling. But again, if there are issues, we'll continue to go back and look at those and ensure they are addressed. In no way, shape, or form should that be a service that we're delivering. So what I'd love is Doctor. Kay Judge to talk a little bit about the process and comparing original Medicare to Medicare Advantage.

[Dr. Kay Judge (Chief Medical Officer, Blue Shield of California)]: Yes. I think it's very difficult. I'm going to start out with two personal anecdotes, my why. I had a partner who died of metastatic cancer. So Ken Jones' story really spoke to me when I heard about it. The second thing is my father's in palliative care. So when I moved to California from Michigan working with another plan, I wanted something that was mission aligned. And I chose Blue Shield because Blue Shield is a nonprofit. We cap our profits at 2%. The rest is invested back. The third thing I want to bring up is I've worked in Medicare from the health system side, from the health plan side for now over two decades. And our population is aging and the costs are increasing. And you're right, one of our members was talking about Medicare versus Medicare Advantage. And Medicare straight Medicare is a PPO product. My father in palliative care, I've enrolled in Medicare Advantage specifically. So that's what I would choose for my family. And the reasons are Medicare Advantage is managed, but the patient is managed. So, what we find are, for Medicare Advantage, quality measures are usually better, outcomes are better. And there are studies that show with diabetes that amputations are markedly reduced in Medicare Advantage because you have a PCP. Who's doing the yearly annual visit? Who's checking them? Right? So we may get a lot of care in Medicare straight, but for Medicare Advantage what we're finding is the quality of care is better. And this is, I think, a very personal decision. But that's just my perspective.

[Supervisor Connie Chan (Chair)]: My apologies, too, for your interruption. That does not answer my question at And nor, I think, any of the public comments that was provided today. Let me be very bit more specific if I may then.

[Dr. Kay Judge (Chief Medical Officer, Blue Shield of California)]: Thank you.

[Supervisor Connie Chan (Chair)]: Based on what I'm hearing and if you can just answer that. If if there's an answer to it, is that what is it that what I'm hearing today specifically, the the process of seems to me that our retirees are receiving a notice by their doctors and say, you need this treatment for your symptoms or whatever it is that you're tackling in terms of your health condition. So that the doctors have said, this is what you need, be it knee surgery, be it cancer treatment. And somehow, with the understanding that is provided by Blue Shield. But at the moment when they're about to receive the treatment, that then they are now told by the center or the facilities that is supposed to provide that treatment that the coverage and the claim is denied when they're actually about to receive the care. Tell me what happened between that time when that the doctor have now prescribed the treatment to when the patient arrived at the facility to receive the treatment? What happened in that time period when suddenly they are now being told that Blue Shield has denied that care?

[Dr. Kay Judge (Chief Medical Officer, Blue Shield of California)]: I can't speak to the specific cases In general? That we heard about.

[Supervisor Connie Chan (Chair)]: What does a patient do when they are at the facility? Tell me how would you advise any patient when they arrive at the facility and then now they're being told that the treatment is denied. What would you advise them to do from Blue Shield's point of view? Is there a number they call? What is the next step at that moment?

[Dr. Kay Judge (Chief Medical Officer, Blue Shield of California)]: So there are many procedures and treatments that don't require prior authorization. And for those, they're scheduled and they see their members. There are some that are required. They're on our website. It's part of our provider contract, and the providers know to obtain the prior authorization. There are some that they may think there needs to be a prior authorization, and there didn't.

[Supervisor Connie Chan (Chair)]: So if I may interrupt then, then this is the city's ask at this moment for for this. We want a 1800 number specifically for a situation like that. We want a hotline when any of our retirees, and we want Blue Shield to consider this. You know, clearly, I can't mandate any of that. But I am requesting that we, our retirees and our workers, when they actually have a prescribed treatment and preapproved and when they arrive at the facility to receive that treatment and care and that now they're being told that it's denied, we want a one-eight hundred number specifically for that scenario. And that is not then they are going round and around and say, well, we we need to know who's your doctor and who assigned this and whether it's the specialist. I can't find your claim. I can't find approval or claim. I I think that and I can tell you this is that I think that's the sad part about this is I'm so sorry say, but the sad part about this, we all in this room has a story, be it as a personal or someone that we know. So I'm just trying to problem solve at this moment is that, like, can we actually have a commitment to have a hotline that for for our contract that we will then receive that specific phone number for folks that can be able to call that would be able to address

[Dr. Kay Judge (Chief Medical Officer, Blue Shield of California)]: that. So

[Tim Lieb (SVP, Commercial Markets, Blue Shield of California)]: Madam Chair, we have a phone number. And what we can do is put in processes to help expedite that because there is a number. It's a concierge level service that is for the Medicare retirees. We also will then look at what are these unique cases and what happened in the breakdown because that is part of a network provider knowing what information they are to provide. And so we also have to address that. And we've got to do that on behalf of the retirees. So those are two areas we can absolutely commit to. And we'll look, and we can come back, and we can come back through SFHSS and say, how can we put this in place? I just want to set expectations. I'm not always sure, like, when they're sitting in the office. So we can also take phone calls when someone is expecting care, right? And to make sure everything has been done in advance.

[Dr. Kay Judge (Chief Medical Officer, Blue Shield of California)]: Yeah. I also wanted to add that our most complex members get care management, and some of our members have not availed of that. And they're losing that connectivity. Because when you have care management, you have your nurse's number. And you can connect with her. Hey, I'm having a problem here, or can you help me with this? And I think that that's another escalation path and I would ask that about 50 to 60% of our members when we outreach for care management they probably aren't aware of the benefits that can get them to an internal advocate who can root for them and kind of help guide them through that process. And I think it's especially for our senior members, it's probably the single most important part you can take. Because then you need just one number, and you don't need to navigate the entire system.

[Supervisor Connie Chan (Chair)]: And tell me understand, though, when a claim is being denied and when we're informed that our claim is being denied, how long would it take for us to resolve that claim denial?

[Teresa Palmer, MD (retired city geriatrician)]: Months. Maybe never.

[Dr. Kay Judge (Chief Medical Officer, Blue Shield of California)]: We The

[Lakessa Scott (Project Manager, MOHCD)]: problem is the denial.

[Supervisor Connie Chan (Chair)]: Okay. I know, but I we've to let Blue Shield to answer. I'm sorry. Let's not have outbursts. So

[Tim Lieb (SVP, Commercial Markets, Blue Shield of California)]: basically, it's a formal appeal process that's governed by, like, Medicare. So that's what we follow. But what we've also put in place is there's the ability to have a peer to peer. At any point, that provider can get a peer to peer. We absolutely know we had a breakdown, and that's why it was three hours on the phone of trying to navigate. We are resolving that, but it is a peer to peer review process, and that's what it's intended, is for the providers to discuss and make sure is the right information there and how do I expedite.

[Supervisor Connie Chan (Chair)]: What is the timeline goal to resolve the claim response?

[Tim Lieb (SVP, Commercial Markets, Blue Shield of California)]: An overall like if it's a prior authorization denial then they're looking to appeal, don't have our formal timeline.

[Dr. Kay Judge (Chief Medical Officer, Blue Shield of California)]: Seventy two hours to five days, depending Seventy on

[Supervisor Connie Chan (Chair)]: two hours to five And

[Dr. Kay Judge (Chief Medical Officer, Blue Shield of California)]: that's Medicare adherent guidelines of which we're audited.

[Supervisor Connie Chan (Chair)]: Okay. So the commitment is if we receive a claim denial, our expectation is that it could be anywhere within seventy two hours or up to five days.

[Dr. Kay Judge (Chief Medical Officer, Blue Shield of California)]: Depending on the This is six. Yeah, depending yes, depending on the claim, Medicare. There's very Medicare specific guidelines that a managed care plan has to answer within x period of time for x denials, yes.

[Supervisor Connie Chan (Chair)]: And what happens if that does not happen? How do we escalate that?

[Dr. Kay Judge (Chief Medical Officer, Blue Shield of California)]: And I think that that's where that if it's a complex if it's a polychronic complex member, hopefully they have their care manager. And they pick up the phone and say, what do I do here? Help me out here. Where can I go? And we will then they advocate for the member inside the health system, inside the managed care plan, and what are the options that we can have that might assist our member through this process.

[Supervisor Connie Chan (Chair)]: But then what happened in the case of Firefighter Ken Jones that you basically just completely denied the care and the treatment and until until they actually have to come to health service system and and escalate it to this point. So, like, explain to me what happened there.

[Dr. Kay Judge (Chief Medical Officer, Blue Shield of California)]: I'm not sure we can comment on a particular case. So

[Tim Lieb (SVP, Commercial Markets, Blue Shield of California)]: I understand what the audience is saying. We just do not comment on specific cases. But that's where, again, Doctor. Judge talked about the oncology process, where we have now completely revamped it. And it's a proactive outreach. If there's anything within that condition that would not be approved, it's a proactive outreach for a peer to peer. So that was one of the things, as Doctor. Judge said, we have put in place very specific to oncology, recognizing what that need is specifically for the city and county.

[Supervisor Connie Chan (Chair)]: I know that, like, the reality is that the city is limited with its regulation, of what we can mandate and how we can mandate you in terms of your response time and your, process for denying claim. I know that we have our limitation. And but I don't think I'm going to accept that limitation for today. That instead of saying this to Blue Shield, I think it's not just Blue Shield, but to recognize that there's really a problem all throughout our health care system and that this is something that I would like for our health service, system to address. And I have specific, items for them to work on as well. But I think today, and I don't know if any of my colleagues had any other questions, but before I, let Blue Shields, go, here's my request to Blue Shields today, is that, as, mister Fred Sanchez from Protect Our Benefits has indicated that they would like for a meeting directly with Blue Shields specifically addressing, these concerns. And so and not two months from now, but what I'm expecting is that before the month before the April that you will have a meeting that really with, again, mister Sanchez is here, that I am expecting you have that meeting to be able to hammer out specifically a process, that within for the retirees of our system that we can have a concierge as you have indicated a concierge service and process for both that they can call in about their claims denial and processing response, and all of that, that we are we're gonna look forward to seeing, in written form, if I may, to really spell out that agreement and process. So we will be following up through a letter to you formally requesting your agreement with Protect Our Benefits.

[Dr. Kay Judge (Chief Medical Officer, Blue Shield of California)]: We welcome the opportunity.

[Supervisor Connie Chan (Chair)]: Thank you. And so I'm going to leave for you. I don't think any of my colleagues have any other questions. I will leave for you to make maybe your remark.

[Tim Lieb (SVP, Commercial Markets, Blue Shield of California)]: I mean, we want to thank you and the entire committee for taking the time. We understand. I mean, again, if we fall short, we want to make sure. We have an obligation to administer your plan, and that is what we want to do. And as a key component of that, it's to ensure there's the right level of service that is there. We appreciate the time.

[Dr. Kay Judge (Chief Medical Officer, Blue Shield of California)]: Absolutely. And I'd say we are committed to standing in the space with you and coming to a collaborative discussion and solutions that in openness, transparency. So we look forward to the next steps. Thank you for your time.

[Supervisor Connie Chan (Chair)]: Thank you. And because of that, thank you. And I'm going to call on our house service system to answer some of the questions. And I just want to be clear today, this hearing is going to colleagues, I want to let you know that I it is my intention to continue this hearing to the call chair, so that we can call this back, in May, to go through the agreement, that is gonna be hopefully finalized by the April between Blue Shields and our protect our benefits group. So thank you for coming before us today. I want to express, while my gratitude for your work, just for the entire system, I wanted to also express my disappointment in your presentation today and hear me out why. I think what, I am disappointed in the presentation because of this there's this entire slide on slide five is what you cannot do. And it is disappointing to go through that because what I would like today is to turn that slide five to what we can do with what is happening with us at the moment. And and I get it. What you're saying is the jurisdiction jurisdiction and the authority within of what you can't mandate a health plan because of federal regulations. And really, do understand those challenges, that we can't mandate them to provide treatments and process claims. They can delay. They can deny. And then they can go back. But we can't mandate response time. But what I do think we can do and what I'm expecting you to do when you come back for us to us, in this budget process is the following. And that when you do come back, it's not just for Blue Shield. I think to not to just single out Blue Shield, but actually for all our, service provider because I am through your response to our letter of inquiry, it's astounding that I'm learning that there is a in network denial rate is 21%. I don't know if that is it seems to me what you're saying is is a standard that 21% of the claim is actually be in denial. It does not tell me what they are. It seems like we cannot we don't track them. You are not telling me what they are and how we actually end up resolving those, claim denials. And how do we actually, most importantly, ultimately, is that our our workers are actually receiving the care. Like, I can understand that perhaps that there are claim denials happen for whatever reason. But then how do we as a system then resolve those claim denials that then will eventually still result in care and treatments is what I'm not understanding. So I I will love this information from the health service system today is first, I would love to track, claim response time. Like, claim like, basically, response time for claim denial from all our service provider. I wanna understand the percentage of claim denials. I wanna understand how like, the the duration of time for them to response to those claims and resolve those claims. You can track that. You may not be able to mandate that, but you can track that all through across all the service provider and need to come by the time you come before us for budget in June. I would also understand the percentage of claim that actually are denied all across the board from all our service providers, not just Blue Shield. Because it is again, I can see what you're tracking is an average of 21%, But I want to understand then within our own system, what does that percentage look like? Are we actually above that percentage, or are we below that percentage? I absolutely want to track the results of those claim denial. And I don't know exactly what that would look like, meaning without violating HIPAA on your end, because I do understand a lot of it is probably complaint driven, meaning people actually have to tell you that my claim has been denied and I'm not receiving care. They may like, according to all the public comments, that they end up going to different places than they to seek care some other way. And I think this is probably by far the hardest one and the most heartbreaking one is that, like, people has prayed into our system. And then when the care is denied and the claim is denied, they end up finding other resource because they didn't think that they can continue to track back to the system. So I am asking the system itself that to come up with a solution when when our workers are actually denying claims and they cannot be resolved, especially and particularly similar to the case like firefighter Ken Jones? How do we track this population?

[Supervisor Matt Dorsey (Vice Chair)]: CHRISTOPHER Chair Chan, thank you for your direction. What I would say is that some of this would be more of a policy matter that I would need to take back to the Health Service Board. Some of what you requested, certainly some of that data is available. And, you know, before I start, what I want to mention is, as mentioned earlier, this country's health care system is extremely complicated. As we look at managed care plans, such as Blue Shield, as well as our other carriers, Kaiser, Health Net, unfortunately prior authorization is part of the process. We, as the health service system, do review prior authorization denial rates across the health plans that we manage, as well as their comparator plans in the industry. And what I would say is that we did provide you a number but that number is within industry norm and as we look at the prior authorization denial rates of blue shield as well as our previous carrier for our retirees united healthcare they are in line with one another and in fact lower than many of their competitors our competitors lot of what you asked for related to data, again, is publicly available on a plan wide level. We certainly can request from our carriers to provide those denial rates for our plan specific population. But because the information that we receive is aggregated across all items and services, it's really hard to break down, you know, what those denial rates actually mean. A lot of denials that happen are part of an administrative process. For instance, when Blue Shield or any of our carriers contract for health care services with their providers, a lot of those services are bundled in order to get the best reimbursement rate. And sometimes a provider, knowing or not remembering that services are bundled, will submit them separately. One denial that will be received is that claim will be sent back inside, no, this is a bundled program. You have to resubmit this claim for further processing, and that will mark, you know, a denial for that prior authorization. And so, without, you know, resources to evaluate or without the information on plan or or claim specific information, it's really hard to make any sense of what those denial rates are actually showing.

[Supervisor Connie Chan (Chair)]: My apologies. I disagree. That's actually exactly what the problem is right now. And as we can hear, the problem about the burdensome of administration, the cost of health care, it seems to me what you just described, particularly around the the challenge around claim denials sounds like an administrative issue to me than an actual care issue. And that is exactly what I think we're all getting at. Correct? Because it sounds to me then this is a Blue Shield or service provider that they're not doing good enough of job of processing claims and actually adding administrative cost and challenges and bureaucracy into that process. And so therefore, they cannot provide in care in a timely fashion and an effective fashion. I think that's actually what you're saying.

[Supervisor Matt Dorsey (Vice Chair)]: Well, what I'm saying is, again, the information that we would receive would need to be de identified and aggregated to not violate privacy rules. And so, again, we would not get that claims level information that we would need to use to evaluate whether or not a denial was valid or not. And so, again, we cannot, due to HIPAA privacy rules, get that member specific claims information. Again, the HIPAA rule was designed to prevent employers from receiving claim specific information because unfortunately there are nefarious employers out there that would like just a healthy workforce, right? And so the laws are prevented from employers, such as the city and county of San Francisco, receiving member specific information that would be necessary to review to see whether or not a claim denial was valid or

[Juanita Stockwell (retired SFPD officer)]: not.

[Supervisor Connie Chan (Chair)]: Let me ask let me rephrase for the request then. I should say then you should ask the service providers in the percentage of claim denials in what category is specifically for the for example, if Blue Shields is the average norm of 21% and out of that 21% of the claim denials, at what percentage is due to administrative issues that they experience and at what percentage is really denial of care because for in the case of firefighter Ken Jones, that the it seems like they interpret the FDA regulations for care. It's differently than his own oncologist.

[Supervisor Matt Dorsey (Vice Chair)]: Thank you for that clarification. That provides me some additional information. We will take that back and respond to you. What I do need to be one of my concerns is one of resources unfortunately we are one of the smallest city departments within the city organization we have a limited number of staff Again, our role primarily is eligibility enrollment. Again, we care very highly for each one of our members, but we do not maintain any medical experts on our staff. Again, we are really one of an administrative department here administer the policy direction of the Health Service Board. And so, some of the what you're requesting in terms of data analysis and review, we simply don't have any resources to provide such data analysis and review. So, it would be a policy direction that we would need to go back to our board to request clarification on how to find those resources.

[Supervisor Connie Chan (Chair)]: Absolutely. They can I think what you can do is that you can ask for that information directly to the service provider and ask them to provide it in those category and along with a signed affidavit that these claims have been that I I get it? You're what you're saying is you don't have a staffing to independently verify the accuracy of these claim percentage and the information that they provide. I'm not expecting you to, but what I do expect you to is to ask for those information and have them provide them in a timely fashion before you come before us as for your contract approval, for their contract approval, and along with an affidavit for those information.

[Supervisor Matt Dorsey (Vice Chair)]: I understand your request. Thank you.

[Supervisor Connie Chan (Chair)]: Thank you. And I don't see any other name again on the roster to ask for the question. But I think what I'm asking is pretty clear. And again, I will be continuing this hearing with the expectation that you will be starting gathering this information, but you'll be ready by the time June 1 come, for those, along with the contract, that you have determined and been approved by your health service board. I do expect that you will relate this. I'm also happy, and I will be, separately writing a letter, back to House Service Board, requesting those information directly from me to them, and and through you to be able to provide that, should they approve, another year of the contract back to the board supervisor, that I do expect that information that will be attached to your contract.

[Supervisor Matt Dorsey (Vice Chair)]: Sure, sure. And I thank you for the explanation. I understand.

[Supervisor Connie Chan (Chair)]: Thank you. I want to make sure that I don't leave room for you to prepare to actually have any closing remark.

[Supervisor Matt Dorsey (Vice Chair)]: No. I think we've covered it all, so thank you.

[Supervisor Connie Chan (Chair)]: Thank you. And so, colleagues, I think that today, I thank you so much for your support and time, allowing us to have this question and answer with this hearing. But I think clearly we have a lot of work to do still. And I would like to, if I can make this motion, to continue this herring to the call of chair and that we can perhaps come back either in May and then potentially again in June, if necessary. I do not hope so, but and so with that, a motion to continue to the call, Chair. A roll call, please.

[Brent Jalipa (Committee Clerk)]: And on that motion that we continue this hearing to the call of the Chair, Vice chair Dorsey?

[Tim O’Brien (Secretary-Treasurer, Retired Firefighters and Spouses Association)]: Aye.

[Brent Jalipa (Committee Clerk)]: Dorsey? Aye. Member Soder? Aye. Sauter? Aye. Chair Chan? Aye. Chan? Aye. We have three ayes.

[Supervisor Connie Chan (Chair)]: The motion passes. And with that, mister clerk, do we have any other business before us today?

[Brent Jalipa (Committee Clerk)]: Madam chair, that concludes your business.

[Supervisor Connie Chan (Chair)]: The meeting is adjourned.