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