06-20-07 Chapter 172 Employee Retiree Insurance and Benefits Board Meeting Minutes

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Question Matt Daeumer: Do you know what we have averaged for the last three years on Disease Management? Answer Kathy Clark: We haven't received that information. We did ask for it. Once we have it we will re- populate the spreadsheet. Question George Van Dyke: Can you explain Stop Loss Benefits? Answer Donnie Wright: When you are in a self-insured plan it is very wise to buy Stop Loss Insurance. Which means you will cover the claims up to a certain point. But if you have a very large claim Stop Loss coverage pays the rest. Stop Loss is generally purchased by an independent company. Claim Fiduciary: Service purchased to deal with the employees and their claims and if there is a dispute regarding a claim. The Claim Fiduciary has the final word in terms of claim determinations. Aetna provides the service on a mature basis, which means at the end of the contract if you have claims run-off they will cover them. These are claims that are incurred prior to the end of the contract. Question Robert Swanagan: We have had claims that fell in this category when we left TML and I was told that after a certain period of time the old TML was not liable to pay these claims after six months. Do we have something to protect us from this and is this something we should insist that a future carrier specifically spell out? Answer Donnie Wright: Yes it is something you need to consider and it is normally longer than six months. It is normally twelve months. Network Discounts: We ask all of the carriers to tell us what their average Network Discounts were in the Houston area including La Porte. We wanted to know what it was for the physicians, for in-patient and outpatient claims. For example with Humana 52% is their discount. Therefore, if a Doctor's claim was for $100 the discount knocks it down to $48.00 to be paid to the Doctor. In the middle section "eligible bill claims" which is not what the City of La Porte paid. It is what the hospitals and Doctors billed the insurance company. This is the allowed cost which is the actual cost the City of La Porte paid in 2006. It generated a claim cost saving in excess of $50,000. When you look at a total claim cost of $2,500,000; $600,000 is a big number.