|
Agenda Item
ASR
Control 24-000480 |
||
|
MEETING
DATE: |
06/25/24 |
|
|
legal entity taking action: |
Board
of Supervisors |
|
|
board of supervisors district(s): |
All
Districts |
|
|
SUBMITTING Agency/Department: |
County
Executive Office (Approved) |
|
|
Department contact person(s): |
Kim
Derrick (714) 834-2564 |
|
|
|
Janine
Boiarsky (714) 834-4895 |
|
Subject: Approve
Contract for Claims Administration for Self-Insured Health Plans
|
ceo CONCUR |
County Counsel Review |
Clerk of the
Board |
||||||||
|
Concur |
Approved Agreement to Form |
Discussion |
||||||||
|
|
|
3 Votes Board Majority |
||||||||
|
|
|
|
||||||||
|
Budgeted: N/A |
Current
Year Cost: N/A |
Annual
Cost: FY 2024-25 $1,312,521 |
||||||||
|
|
|
|
||||||||
|
Staffing
Impact:
|
No |
#
of Positions: |
Sole
Source: No |
|||||||
|
Current Fiscal Year Revenue: N/A
|
||||||||||
|
Prior Board Action: 9/26/2023 #31, 8/9/2022 #31, 6/4/2019
#41 |
||||||||||
RECOMMENDED
ACTION(S):
|
1. |
Authorize the County Procurement Officer
or Deputized designee to execute contract with California Physicians’
Service, dba Blue Shield of California for claims administration, network and
utilization management services and a Preferred Provider Organization network
for the self-insured Preferred Provider Organization health plans estimated
at $7,875,124 for a period of three years effective January 1, 2025, through
December 31, 2027, with the option to renew for two additional one-year
periods. |
|
2. |
Authorize the County Procurement Officer
or Deputized designee to enter into additional Amendments to the Contract if
such Amendments are necessary for the County to comply with California or
federal law or guidance issued by a governmental regulatory agency. |
SUMMARY:
Approval of the
contract with California Physicians’ Service, dba Blue Shield of California
will provide claims administration, network and utilization management and a
Preferred Provider Organization network for the County’s self-insured Preferred
Provider Organization health plans.
BACKGROUND
INFORMATION:
The County offers
self-funded Preferred Provider Organization (PPO) health plans for County
employees and retirees. The current two self-insured active employee PPO health
plans are Wellwise Choice and Sharewell Choice with a total of 3,335 enrolled
employees, and the two self-funded retiree PPO health plans are Wellwise
Retiree and Sharewell Retiree, with a total of 2,051enrolled retirees. The
County’s current PPO claims administrator is California Physicians' Service,
dba Blue Shield of California (Blue Shield).
Blue Shield’s contract expires on December 31, 2024, and, in
anticipation of the contract expiration, Human Resource Services (HRS) issued
Request for Proposal (RFP) number 017-202403-MC on February 15, 2024. The RFP
closed on March 15, 2024, and the County received three responsive proposals
from the following vendors:
- Aetna Life Insurance Company
- Blue Cross of California dba Anthem Blue
Cross
- California Physicians' Service, dba Blue
Shield of California
RFP EVALUATION
PROCESS:
An RFP evaluation
committee was established and consisted of one staff member from County
Executive Office (CEO) / Finance, two staff members from CEO / Human Resource
Services (HRS) / Employee Benefits, one staff member from Auditor-Controller
and one County retiree. A County Deputy Purchasing Agent (DPA) presided over
and attended all committee meetings to monitor the selection process.
The evaluation
committee was charged with selecting a proposal that best meets the needs of
the County based on the following criteria:
- Administrative Capabilities
- Cost Estimates
- High-Performance Network (HPN)
- Provider Network
- Performance Guarantees
- Plan Design
- Qualifications and Experience
- Responsiveness to RFP
The evaluation
process consisted of two phases:
PHASE I:
Each
committee member individually evaluated the proposals in accordance with the
pre-determined criteria outlined above and independently scored each proposal.
The members of the evaluation committee met to discuss their individual observations,
comments and scores for each criterion in the proposals. The DPA documented the
committee members’ scores and established a rank order for the proposals.
PHASE II:
The
two highest scoring vendors were selected as finalists and requested to make an
oral presentation to the evaluation committee. Following the oral
presentations, the members of the evaluation committee completed the scoring
process. See Attachment A for the final
scores of each proposal.
In addition,
members of the County’s CEO / OC Information Technology (OCIT) / Enterprise
Privacy & Cybersecurity office reviewed the cybersecurity compliance
questionnaires to ensure that all vendors met minimum acceptable standards for
cybersecurity.
RFP SCORING:
The table below
represents the collaborative scoring effort made by the committee and is the
basis for the HRS recommendation included in this Agenda Staff Report. Based on
the evaluation results, Blue Shield received the highest overall evaluation
score as shown below.
|
Proposer |
Final Score |
|
Aetna
Life Insurance Company |
60.4 |
|
Blue
Cross of California dba Anthem Blue Cross |
73.8 |
|
California
Physicians’ Service, dba Blue Shield of California |
85.5 |
Blue Shield
Blue Shield is a
California-based nonprofit organization with nearly 4.7 million members. Blue Shield’s size and influence in the
health insurance industry provide the buying power and resources necessary to
give employers the level of negotiated discounts and broad network of providers
necessary to help control rising healthcare costs. Blue Shield has been the claims administrator
for the County’s self-insured plans since 2008 and understands the needs and
expectations of the County and its plan participants. Blue Shield offers comprehensive Customer
Service and Claims Administration programs at a competitive fee. Blue Shield’s other public sector clients
include the California School Employee Benefits Association, San Francisco
Health Service System, County of Los Angeles, County of San Bernardino, County
of San Luis Obispo, County of Santa Barbara, County of Ventura, and California
Public Employees' Retirement System (CalPERS).
PPO Network
Blue Shield’s PPO
network consists of more than 75,000 doctors and 378 hospitals in
California. The hospital network
includes all the major hospitals within Orange County including Providence/St.
Joseph Hospital, Hoag Memorial Hospital Presbyterian, University of California Irvine
Medical Center, Saddleback Memorial Medical Center, Fountain Valley Regional
Hospital and Medical Center, Orange County Global Medical Center, Providence
Mission Hospital Regional Medical Center and Children’s Hospital of Orange
County. Both California and out of state
members will have access to Blue Shield’s national BlueCard program. All County of Orange active and retiree
members will have a 99.6 percent hospital access rate, which means on average
members will have access to one hospital within 3.3 miles of their home
address. Maintaining the current PPO
network will result in no disruption to our members.
Claims
Administration
Blue Shield can
administer all the County’s current plan benefit designs and has been flexible
in working with the County to implement revisions to the plan documents over
the last 17 years. Their comprehensive
claim system includes auto adjudication, edits to monitor duplicate claims and
billing inconsistencies, along with fraud and abuse software and auditing
processes. Blue Shield indicated that 89
percent of total claims were auto adjudicated in 2023. The claims processing system is integrated
with their customer service system to allow representative access to view
claims and better support our members.
Customer Service
Blue Shield’s
customer service team is based in California and trained specifically for the
County of Orange account. There are 39
trained customer service representatives whose average length of service is six
years with a first call resolution rating of 97 percent. In addition, they provide a dedicated
Ombudsman/Claim Service Representative to deliver one-on-one assistance on
complex and/or urgent issues and resolve any service needs of employees and
retirees enrolled in the County’s PPO plans.
Members will have toll-free access to a live customer service
representative from 7 a.m. to 7 p.m., Monday through Friday. Caller satisfaction surveys are offered to
all callers before and after each call to rate and improve service.
Members can
utilize the customized website and mobile application, which feature robust
tools that allows customers to access plan information, find a provider, order
ID cards, check claim status, compare costs of services, as well as obtain
general health and wellness information.
Performance
Guarantees
Blue Shield
commits to meeting the County’s claims processing, customer service and account
management standards by placing up to 26 percent of their Administration fees
at risk should they fail to meet the contract standards. This is an increase from 22 percent of fees
at risk in their current contract. In
addition, Blue Shield offered a competitive network discount guarantee compared
to the other proposals with the greatest amount at risk. Blue Shield is risking up to 50 percent of
its administrative fees, if it does not meet a 59.1 percent total in-network
discount percentage. The Contractor’s
performance has been confirmed as satisfactory.
Complete lists of network performance standards are included in the
contract (Attachment B).
Contract Scope and
Language
The Contract
includes the optional addition of High-Performance Network (HPN) PPO plans,
which could be additional Sharewell and Wellwise PPO options that use a
narrower network focused on higher quality care at lower cost. These HPN PPO options would not be available
in 2025 but will be evaluated by the County for potential activation at a later
date. The HPN network includes many of Blue Shield’s current partnerships and
provides statewide coverage with approximately 67 percent of physicians and 91
percent of hospitals from their full PPO network.
Also added to the
Contract is language about an optional Health Savings Account (HSA), which
could be offered as a tax-advantaged savings account in conjunction with the
Sharewell high-deductible health plan (HDHP). The participant sets money aside
in their tax-free HSA, and uses it to pay for the HDHP deductible, plus other
qualified medical expenses, like copayments, coinsurance, and more. The HSA balance rolls over year to year to
build up reserves to pay for health care items and services the participant may
need later. The County will be
evaluating whether to implement the HSA option at some time after 2025. The
administrative cost will be $2.95 per account per month. Pending further analysis, this cost is
planned to be charged to the employee as part of their plan premium at a
Sharewell with HSA rate. The estimated
annual amount if all employees, enrolled in Sharewell, elected to establish an
account would be $35,000.
The Orange County
Preference Policy (OCPP) was applicable and incorporated into this
solicitation. No OCPP qualified vendors submitted a response.
The contract
includes minor changes to the insurance language which were reviewed and
approved by Risk Management. See Attachment D for information regarding changes
and approved Risk Assessment Form.
This contract
includes subcontractors. See Attachment E for information regarding
subcontractors and Contract Summary Form. This contract, due to the nature of
the services, could require the addition of subcontractors. To add
subcontractor(s) to the contract, the contractor must seek express consent from
the department. Should the addition of a subcontractor affect the scope of work
and/or contract amount, the department will bring the item back to the Board of
Supervisors (Board) for approval. In the past subcontractor(s) have been used
for this contract.
|
CONTRACT AND PRIOR BOARD ACTIONS: |
|
Blue Shield is the incumbent provider
and therefore, there are Prior Board Actions associated with the contract. |
|
|
|
On June 4, 2019,
the Board approved the execution of the contract with Blue Shield for Claims
Administration for the Self-Insured PPO Health Plans effective January 1,
2020. |
|
On August 9,
2022, the Board approved the execution of Amendment Number One to extend the
contract with Blue Shield for Claims Administration for the Self-Insured PPO
Health Plans for a period of one-year, effective January 1, 2023, through
December 1, 2023. |
|
On July 26,
2023, the Board approved the execution of Amendment Number Two to extend the
contract with Blue Shield for Claims Administration for the Self-Insured PPO
Health Plans for a period of one-year, effective January 1, 2024, through
December 1, 2024. |
FINANCIAL IMPACT:
The estimated cost
for the three-year contract is $7,875,124.
In addition, Blue
Shield has committed to maintaining the annual credit paid to the County for
wellness activities of $250,000. They
will provide an additional $75,000 credit in the first year to cover the costs
of the Wellwise Non-Smoker Incentive.
Appropriations for this contract will be
included in the FY 2024-25 Budget and will be included in the budgeting process
for future fiscal years. The Contract is
contingent upon funding by the County during the term of this Contract. If such funding is not approved, this
Contract will be immediately terminated without penalty to the County.
STAFFING IMPACT:
N/A
ATTACHMENT(S):
Attachment A – Final Scoring
Summary
Attachment B – Individual Scoring Sheets
Attachment C – Contract MA-017-24010766
Attachment D – Risk Assessment Form
Attachment E – Contract Summary Form