06-07-07 Chapter 172 Employee Retiree Insurance and Benefits Board Meeting

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Neal Welch: Let's talk about the Self-Funded Medical Marketing. Claims Administration: They pay our claims and therefore, is a big piece of the program. Surprisingly, today it is less and less involved than it was years ago because so many claims are processed electronically. There is a set of electronic rules that go into an abstract and the computer makes a decision and it may apply a deductible, co-insurance, determine eligibility and ineligible expenses, eligible and ineligible plan participants. On an average today you don't include Pharmacy. By the way, 100% of Pharmacy claims are processed electronically. When you pay your co-pay the claim goes into their computer to what we call a PBM (Pharmacy Benefit Management) company thru Humana. The claim gets paid quickly because the health plan pays, the employee or retiree pays and it is a done deal. Because so many claims today are electronically processed almost everyone of them is from a hospital and many are from physicians. The actual cost of operating your plan is no greater than it was twenty (20) years ago. There are a lot of efficiencies if a human being doesn't touch all but 15 or 20% of those claims, the cost goes down. There are a lot of evaluations in the RFP like Customer Service, how much time does it take to answer the telephone, error rate, abandonment rate and how is there Website Customer Service? Internet Technology: Today an awful lot of people answer questions about their health plans using their own computers, what Doctors are in the system, what does my plan look like, which Pharmaceutical is in tier one, tier two, or tier three? Almost ever piece of information about that health plan is out there on the web custom designed for you. Comment Karen Beerman: As far as this evaluating you are talking about, who captures this information? Response Neal Welch: There are standard templates in the documents that we ask those submitting an RFP to populate with just about everything that is in the document. That include Pharmacy information, provider information, what hospitals, what Doctors, how do you do something and what is the price of this? etc. With 25 or 30 Public Sector plans undeI management by us, we have a little bit of an opinion about who is doing well and who isn't. There are financials to look at; most of these companies are publicly traded so WE can find out all sorts of information including, ratings from independent rating agencies, In the Public Sector for instance, we can't place insurance coverage with anything les~ than an A Rated Company. It can be a A-, A, A+ or A++.