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HomeMy WebLinkAbout07-05-07 Chapter 172 Employee Retiree Insurance and Benefits Board Meeting Minutes Chapter 172 Employee Retiree Insurance and Benefits Board Meeting Minutes Thursday, July 5, 2007 The Chapter 172 Employee Retiree Insurance and Benefits Board Meeting was called to order at 5:33 pm by Robert Swanagan. Attendees: Clark Askins Karen Beerman Matt Daeumer Juliane Graham Sammy Jacobs George Van Dyke Robert Swanagan Absent: Michael Dolby Steve Valerius 172 Board Member 172 Board Member 172 Board Member 172 Board Member 172 Board Member 172 Board Member Staff Representative 172 Board Member 172 Board Member Guest: Kathy Clark, HRH Consultant Neal Welch, HRH Consultant Robert Swanagan called the meeting to order at 5:33 pm. Robert thanked the Retirees and active employees for attending the meeting to get information about the Medical Insurance and the process being used to evaluate the Request For Proposals (RFPs) that had been submitted. He also stated that all Chapter 172 Board members would be available after the meeting to receive input from meeting attendees about the Medical Insurance and the process used to select another carrier. The Minutes of the June 20, 2007 Chapter 172 Meeting were reviewed for approval by the board. Motion was made by Matt Daeumer to accept the minutes as written and seconded by Sammy Jacobs. The motion carried. The meeting was turned over to guest, Neal Welch & Kathy Clark of HRH. Consultants Kathy Clark and Neal Welch presented information to Chapter 172 members about the Health Insurance RFP. Comments Neal Welch: I am sorry I was not here for the last meeting. However, I am happy Kathy and Donnie made the presentation because they researched all of the information you received. The way Kathy laid out the book Chapter one is exactly as you saw it before. It looks at comparison of discounts and fees, networks, Pharmacy and so forth. As a result of that review we are down to three (3) companies for Best and Final Offer illustrations. Humana is our incumbent; Aetna is one of the alternatives and Texas Municipal League (TML) using United Healthcare, as their back office shop is also one of the three finalists. The first distinction to look at is if there is a dramatic advantage to getting away from Humana as it relates to the Networks. Not only are they third in this category but also they are fifth in the overall review of the five finalists. It seems that the horse race is between Aetna and TML. When Donnie conducts his review he not only looks at the relative value of each of the proposals he looks at the proposal that generates the greatest net saving to the plan including the Administrative fees and the impact of discounts and etc. on the claims cost. According to the aggregate discount Aetna came out number one. On the last page there are more details of the claim cost, which is what determines the true value. Keep in mind, we are talking about a plan that will spend in excess of three million dollars plus a year. While the Administrative fees range from $150,000 to $200,000 are certainly not insignificant. However, it is far more important to see how those companies exert influence on the $2,800,000 worth of claims. On the bottom you see renewal rates. They are certainly a concern because we do try to negotiate a long-term rate guarantee and a long-term contract. This does not mean we are locked in and cannot change our mind and leave the vendor at anytime. However, we do try to protect ourselves with rate caps on the Administration fees. In the next illustration this is a comparison of Physician pricing. It is important that you see how we drill down to this level of detail by using the top 25 or so, CPG codes for zip codes where your folks utilize health care and compare cost. It is also important that you know how network pricing is negotiated and the impact it has not only on your folks in the plan, but also on the providers of service. A number of years ago the government came up with a rating system called RBRBS which was new way of calculating a reimbursement to a provider of service based upon the geographic area which was regionally based. Basically they paid more to primary care physicians and paid less to the higher specialty care providers. Question George Van Dyke: Neal are these the prices of administration fees in the network? Answer Neal Welch: No, this is the actual price ofthe service. Question Matt Daeumer: Does the co-pay come offthe top? Answer Neal Welch: Basically, if you have a bill that cost $50.00 and the doctor is paid $45.00. However, if there is a $45.00 co-pay the employee will pay $45.00 and the doctor receives only $5.00. All of this is probably more than you wanted to know but we just wanted to show you how much detail we get and how it is used by us to evaluate the provider and system. Question George Van Dyke: Are the applications for the caps for the second and third year for all of this cost? Answer Neal Welch: No, they only apply to the Administration Fees. Question George Van Dyke: How are these negotiated with the Networks? Answer Neal Welch: Usually the Doctors will initially sign a three-year contract. Comment Matt Daeumer: I assume this is just a sample of what you look at because I know some of the prices with Aetna are much higher than some of the others. Kathy Clark answered some questions from the previous meeting: Mail Orders Prescriptions They can be made for a 3-month supply of medicine for the same cost of a 2-month order. Humana's plan design only allows you to get a 3-month supply for the cost of 3 months. HRH was able to negotiate that with no additional administrative cost from other companies. It will cost the City more money because they are paying for that extra month of supplies. Overall, they can administer that. Flex Cards We wanted to bring this back to you because employees had issues using their Flex Cards at places like the Pharmacies and Wal Mart. Employees would have to pay for their prescription out of their pockets then get reimbursed for that claim. With Aetna and TML they both provide a card that Pharmacies and Wal Mart will take without the employee having to complete a paper claim. Currently with Humana the Flex card cannot be used to purchase Over The Counter drugs without a paper claim form for reimbursements. Question George Van Dyke: Did you say at the last meeting that even though it is required now, starting January 2008 per the IRS that will no longer be required. Answer Kathy Clark: Yes, that is correct. In 2008 a coding system will be in place at Pharmacies and Wal Mart that flags items as "flex qualified." Question Juliane Graham: Why didn't you show any information on this for Blue Cross/ Blue Shield? Answer Neal Welch: They were not one of the final three being considered for BAFO. Question Matt Daeumer: What is the "Discrimination Test" which is listed here for Humana? Answer Neal Welch: The three finalists don't do it. This means we will do it. We have to file a form that provided a certain legal statement. Kathy Clark provided some additional comments regarding items they had researched: 1. There is a twenty- four (24) hour nursing line that offers care information by phone. 2. ID Cards will be available prior to January 1, 2008. 3. The carrier will be able to come out during August and conduct informational meetings 4. Flu shots are not covered. This could be offered for an additional fee. 5. Online enrollment is available with all companies. Neal Welch summarized some additional components being looked at as we go about selecting the three carriers being recommended for Best and Final Offer: Comments Sammy Jacobs: For me, prescription costs are a major concern I have. As we look at selecting a Health Insurance carrier we should try to get as much in this area as we can when it come to prescriptions. Comment Matt Daeumer: We do really need to look at co-pays when we get to plan design. Question Neal Welch: Do we like the fact that we now have four (4) plans now versus one (1)? Comment Matt Daeumer: Well yes and no! When we had only one, everybody paid the same price and you had 80/20 with no co-pays to me it was a better deal. Now it cost more money with the co- pays. It is good to have the options. Question Karen Beerman: Are these the highest utilized drugs by tier that most of our employees are being prescribed? Answer Kathy Clark: Yes, this list is specific to the City of La Porte employees. Comments Matt Daeumer: I would like to see what the total Billed cost is for the top lOO and then what tier they fall into. Question Matt Daeumer: So, looking at the analysis on the CPG Code process it appears that from what we spent in 2006 that Aetna is $45,000 higher than Humana and $60,000 higher than TML. Are we going to look at some more of these codes? Answer Neal Welch: Yes, we will look at some more. I don't feel comfortable making a recommendation where we would loose Doctors in this area. That is too much of an anomaly to take only two passes on it. Question Robert Swanagan: When do you think you guys will be ready to bring more information back to us? Answer Kathy Clark: We will have to see how much additional information we need to develop and get back to you very quickly. Question Matt Daeumer: Do you do a lost ratio breakdown graph each year? Answer Neal Welch: Sure, we can do it by month, prior years and so forth. Comments Robert Swanagan: Well it looks like we are on track. Kathy and Neal will get back to us with a date for another meeting. Also we will inform active employees and retirees of the date of our next meeting as we have done in the past. Motion was made to adjourn the meeting at 6:29 pm by George Van Dyke. Motion seconded by Karen Beerman. Motion carried. Meeting adjourned. Respectfully submitted, l2..'-.~~~ Robert Swanagan, HR Staf'fJ Approved this 24th day of July, 2007