State health benefit plan procurement

LEGISLATIVE BRIEF
State Health Benefit Plan Procurement
Overview
The State Health Benefit Plan's (SHBP) mission is to execute a long-term health care strategy with consumer-driven health care and consumerism as a key part. The main objectives to meeting the mission include:
Promoting consumerism Streamlining administration by consolidating options and vendors Maintaining provider access and member choice Meeting financial targets Finding opportunities for long-term success
Snapshot
There were 15 SHBP Plan Options at the end of 2008: Preferred Provider Organization (PPO) United HealthCare (UHC) Health Maintenance organizations (HMOs) o BlueChoice o Kaiser o UHC Indemnity (frozen to new enrollees) High Deductible Health Plan (HDHP) UHC Definity Health Reimbursement Arrangement (HRA) Blue Cross Blue Shield (BCBS) Lumenos HRA Each plan had a Consumer Choice Option (CCO)
What Vendors Would Provide as Health Insurance Benefits from FY 2009 to FY 2013
Two statewide health plan vendors would offer four choices for active employees: HRA (Consumer-Driven Health Plan {CDHP}) HDHP (CDHP) PPO HMO Medicare Advantage Plan (for Medicare-eligible retirees only)
SHBP's Procurement for 2009 Contracts
SHBP conducted a procurement to identify two vendors who could provide the required products statewide
Coverage choices needed to be expanded to the more than 50 percent of covered people outside metropolitan Atlanta
State Legislature voted in the 2008 session to allow SHBP the flexibility to discontinue the CCO in 2009
In August 2008, the Board of Community Health approved removal of CCO and Indemnity options from 2009 suite of products
The Georgia Department Community of Health - www.dch.georgia.gov

State Health Benefit Plan Procurement
How SHBP Evaluated Procurement Criteria
In the procurement evaluation, statewide access to a comprehensive provider network was the category awarded the most points over one-third of the total points available
SHBP conducted site visits to ensure the accuracy of reported information After the two candidates with the highest scores were identified, SHBP conducted financial and contract
negotiations to ensure it could meet its targets In May 2008, SHBP awarded CIGNA and UHC contracts effective January 1, 2009 Rigorous performance guarantees with financial penalties were agreed to in all areas of:
o Network access o Claims o Customer service o Clinical quality o Medical management improvement; and o Demonstrated quarterly improvement in Electronic Health Records (EHR) and Personal Health
Records (PHR) adoption.
The Impact to Employees
Number of employees/ retirees affected: o BCBS Georgia 79,656 o Kaiser 21, 241 o Indemnity 4,386 o CCO 6,419
Based on claims analysis, over 97 percent of physicians used by the BCBS members participate in the CIGNA and/or UHC networks
Because of Kaiser's unique staff-model HMO, SHBP decided to allow Kaiser members an extra year to research and select new doctors through 2009
Less than seven percent of the entire SHBP membership was affected (three percent of BCBS members since 97 percent of providers participate in CIGNA or UHC networks) and 100 percent of Kaiser members will be disrupted in 2010
Benefit Changes to the 2009 Plan
Benefits enhanced to provide mental health parity on all options HRA plan enhancements:
$125 additional "cash" added to HRA accounts ($250 for employee + spouse) for members who get an annual preventive care screening and complete a health assessment
No cost for certain drugs for members with diabetes, asthma, and cardiac conditions who remain enrolled in and actively compliant with the Disease Management program guidelines
Out-of-pocket maximums, some co-pays and some deductibles were changed to provide more comparability between plans and act as further incentive to members to select consumer-driven plans
The Georgia Department Community of Health - www.dch.georgia.gov

State Health Benefit Plan Procurement

Medicare Advantage Plan Benefits
Two private fee-for-service (PFFS) plans cover the entire state
Optional in 2009 for Medicare-eligible retirees
Automatically cover all parts of Medicare (A,B and D)
Benefits are enhanced over standard Medicare to cover: o $1,000 annual out-of-pocket maximum and lower co-pays o Unlimited inpatient hospital days o No hospital stays required before Skilled Nursing Facility o Worldwide emergency room coverage o Routine chiropractic care o Routine podiatry visits o Routine vision exams and hardware ($125 over two years) o Hearing exams and hearing aid benefit ($1,000 over four years)

Projected Total Budget (in billion dollars)
Calendar 2009 2010 2011 2012 2013 Year Baseline $2.94 $3.25 $3.59 $3.97 $4.39 CDH $2.75 $2.89 $3.14 $3.44 $3.77 Strategy
Source: Aon Consulting, 2009

Annual Trends Baseline 10.5 percent CDH Strategy 8.2 percent
Total Five Year Savings over baseline CDH Strategy - $2.16 billion

The Georgia Department Community of Health - www.dch.georgia.gov