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Agenda Item
ASR
Control 23-000359 |
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MEETING
DATE: |
05/09/23 |
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legal entity taking action: |
Board
of Supervisors |
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board of supervisors district(s): |
All
Districts |
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SUBMITTING Agency/Department: |
County
Executive Office (Approved) |
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Department contact person(s): |
Kim
Derrick (714) 834-2564 |
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Robin
Gurien (714) 834-7114 |
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Subject: Approve 2024 Medicare Retiree
Insured Health Plan Agreements
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ceo CONCUR |
County Counsel Review |
Clerk of the Board |
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Concur |
Approved
Agreement to Form |
Discussion |
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3
Votes Board Majority |
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Budgeted: N/A |
Current Year
Cost: N/A |
Annual Cost: N/A |
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Staffing Impact: |
No |
# of Positions: |
Sole Source: No |
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Current Fiscal Year Revenue: N/A
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Prior Board Action: 3/8/2022 #9, 1/12/2021 #18, 10/22/2019
#28, 7/16/2019 #9 |
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RECOMMENDED
ACTION(S):
Authorize
the Chief Human Resources Officer or designee to execute the Administrative
Service Agreements with Humana Insurance Company, Kaiser Foundation Health
Plan, Inc., and SCAN Health Plan for Medicare-eligible retiree health plans for
employees effective January 1, 2024, through December 31, 2026, renewable for
two additional one-year periods per Board policy.
SUMMARY:
Approval of the agreements with
Humana Insurance Company, Kaiser Foundation Health Plan, Inc., and SCAN Health
Plan will allow the County to continue to provide health plans to County of
Orange Medicare-eligible retirees.
BACKGROUND
INFORMATION:
The County has existing agreements with
Anthem, Kaiser Foundation Health Plan, Inc. (Kaiser), and SCAN Health Plan
(SCAN) to provide health plans for Medicare-eligible retirees. In anticipation
of the expiration of the current agreements, Human Resource Services (HRS)
issued a Request for Proposal (RFP) on January 10, 2023, to solicit health plan
proposals from qualified vendors for County of Orange Medicare-eligible
retirees. This process allowed HRS to
assess the cost of the current agreements as well as new proposals for health
plan services. The Orange County Preference Policy (OCPP) was applicable and
incorporated into this solicitation. No qualified OCPP vendors were submitted.
The RFP closed on February 7, 2023, and the County received four proposals from
the following vendors:
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Anthem Blue Cross (Elevance Health)
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Humana Insurance Company
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Kaiser Foundation Health Plan, Inc.
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SCAN Health Plan
RFP
EVALUATION PROCESS:
An evaluation committee was established
consisting of three members, which included two staff from HRS/Employee
Benefits and one County retiree. The County’s Benefits Consultant, Mercer
Health and Benefits, provided analytical support and summary exhibits to the
committee in the complex areas of provider geographical access match, plan
design differences, performance guarantees, administrative capabilities,
program enhancements, and preliminary health plan rates. A County Deputy
Purchasing Agent (DPA) attended all committee meetings to monitor the selection
process.
The evaluation committee was charged with
selecting vendors that best meets the needs of the County based on the
following criteria:
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Qualification & Experience
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Provider Network (Access)
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Customer Service Capabilities
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Proposed Contract Terms/Limitations/Caveats
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Ability to Match Existing Benefits/Plan Design Provisions
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Performance Standards and Guarantees
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Administrative and System Capabilities
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Overall Responsiveness
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Cost and Credits
The evaluation process consisted of two
phases:
PHASE
I:
The committee evaluated each proposal 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 criteria in the
four proposals. The DPA documented the
committee member’s scores and established a rank order for the proposals.
PHASE
II:
All four vendors were invited to make an
oral presentation to the evaluation committee. Following oral presentations,
the members of the evaluation committee completed the scoring process for the
finalist proposals. See Attachment A for
the final scoring sheet for all proposals.
RFP
FINALIST SCORING:
The table below represents the aggregate
scoring of the committee with respect to the finalist’s proposals. The results
from the evaluation committee are presented in rank order below:
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PROPOSER |
FINAL
SCORE |
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Humana Insurance Company |
80.5 |
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SCAN Health Plan |
76.7 |
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Anthem Blue Cross (Elevance Health) |
75.7 |
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Kaiser Foundation Health Plan, Inc. |
73.7 |
Based upon the results of the evaluation
process, the evaluation committee recommends that your honorable Board continue
the Kaiser and SCAN HMO plans and offer a new Humana PPO plan for
Medicare-eligible retirees. It is duly noted that the third-place proposer is
not being recommended. Purusant to County's Procurement Manual Section 4.3.116,
award of the contract will be made to the responsible bidder whose proposal
best meets the County’s requirements. The third-place bidder proposed the
highest premium for County Medicare Retirees. This represented the greatest
percent increase over 2023 Medicare Retiree rates. Furthermore the first-place
bidder’s PPO network is similar to the third-place bidder’s PPO network. Thus,
the first-place bidder's premiums represents a 53 to 69 percent decrease from
the third-place bidder’s 2023 rates with little to no impact to whom retirees
receive their health care services from. Since County Retirees pay 100 percent
of the monthly premium, the panel found it important to pass the cost savings
on to retirees. Additional justification for this selection can be found in the
following carrier summaries.
Humana
Insurance Company
Humana Insurance Company (Humana) was
founded in 1961 and has been offering group Medicare plans since 1990 and
Medicare Advantage plans since 2003. Humana is the second-largest provider of
Medicare Advantage plans in the United States. Their plans are among the
highest rated by the Centers for Medicare & Medicaid Services (CMS) and
have been recognized as the best overall Medicare Advantage plans since 2020.
Humana provides customer service from 5am
to 6pm Monday through Friday. After-hours assistance is offered via their
24-hour interactive voice response (IVR) system that can assist members with
commonly asked questions and requests such as verification of benefits and
eligibility, claim status, and proof of coverage. Humana’s Medicare Advantage
Plan includes a suite of health management programs including health coaching,
fitness membership, in-home health services, and telehealth access.
HRS/Employee Benefits is recommending
replacing Anthem’s Medicare HMO and PPOs with one Humana Passive PPO. Humana’s
Passive PPO offering will allow retirees and their dependents to select any
practitioner, whether In-Network or Out-of-Network, for the same deductible and
co-payments, and with no coinsurance. Humana’s monthly premiums are
significantly lower than all proposed County Medicare-Advantage plans.
As part of their proposal, Humana is
offering a performance guarantee that pays the County up to $100,000 of annual
premiums in 2024 if specific performance guarantees are not met, including year
one implementation guarantees. Humana offered up to $45,000 premium at risk for
plan years 2025 and 2026. They have also offered a $25,000 implementation
credit that can be used to announce the new plan to retirees and educate them
about plan options in advance of Open Enrollment. Humana also offered to
reimburse the County their pro-rata share of the cost for OE communication
development and distribution.
The Humana agreement does not currently
include subcontractors or pass through to other providers. See Attachment L for
Contract Summary Form.
Kaiser
Foundation Health Plan, Inc.
Founded in 1945, Kaiser Foundation Health
Plan, Inc. (Kaiser) is one of the nation’s largest non-profit group health
plans and one of America’s leading integrated healthcare organizations. Their
care delivery organization offers integrated care in which hospital, primary
care, and specialist providers in all areas work collaboratively to share information,
simplify coordination of care, and focus on total health. Their unique model is
looked upon as an extremely effective way to enhance efficiency and manage
complex diseases while containing costs. Kaiser is accredited by the National
Committee of Quality Assurance (NCQA) and has continually received excellent
ratings.
As a vendor for the County for more than
30 years, Kaiser continues to provide a high level of quality care to County
Medicare-eligible retirees through its Senior Advantage Plan. Customer Service
Representatives are available 24 hours a day, 7 days a week to assist County
retirees. In addition, Kaiser offers access to medical advice from a nurse 24
hours a day, 7 days a week to assist with urgent care needs and direct them to
appropriate medical care.
Continuing to offer Kaiser is in the best
interest of the County and County retirees. With over 1,800 pre-65 and post-65
subscribers plus their covered dependents, Kaiser has the highest enrollment.
Kaiser is a fully integrated company with a closed network of doctors, medical
groups, and hospitals. If the County were to no longer offer Kaiser as an
available option, 100 percent of the retirees and their covered dependents
enrolled in Kaiser would encounter a disruption in services and would have to
find new providers for their medical needs.
As part of their proposal, Kaiser has
agreed to provide $15,000 for retiree-specific wellness programs for plan year
2024. The wellness fund will be re-evaluated annually and must be used for
programs approved by Kaiser.
Kaiser has agreed to performance guarantee
savings for up to 2 percent of premium per year if specific performance targets
are not met in areas of member services, claims accuracy, member satisfaction,
account management, and quality of care.
The Contractor’s performance has been confirmed as satisfactory.
HRS/Employee Benefits has verified there are no concerns that must be addressed
with respect to Contractor’s ownership/name, litigation status or conflicts
with County interests.
The Kaiser agreement includes
subcontractors. See Attachment M for information regarding subcontractors and
Contract Summary Form.
SCAN
Health Plan
SCAN Health Plan (SCAN) has over 30 years
operating as a Medicare Advantage plan and is the second largest non-profit
Medicare Advantage plan in California.
SCAN currently provides health plans for a number of public sector and
private sector clients including the Los Angeles County Employees Retirement
Association, the County of Riverside, and The Boeing Company. SCAN focuses exclusively on Medicare-eligible
retirees and develops its plan designs, services, and rates as such. Currently,
433 Medicare-eligible retirees are enrolled in County’s SCAN Health Plan.
The committee recommends the County retain
SCAN health plan in order to provide its unique and robust in-home service
option for Medicare-eligible retirees. SCAN’s innovative Independent Living
Power (ILP) service helps to keep group premiums low by providing members with
the extra help that may be necessary for independent living. Continuing to
offer SCAN is in the best interest of the County. SCAN’s unique in-home
services known as ILP, keeps people on Medicare healthy and independent. These
services can help participants during recovery from a hospital stay or provide
support during an acute episode of long-term illness. Many seniors find these
services provide the extra assistance necessary to stay out of a nursing home.
While most Medicare Advantage Plans include non-skilled in-home care such as
medication management and mobility assistance, SCAN includes those services as
well as light housekeeping, grocery shopping, cooking, and caregiver relief.
Participants that qualify for Independent Living Power are eligible for up to
$850 per month for these additional services.
SCAN also agreed to offer $15,000 in
retiree-specific wellness programs, thereby allowing the County to continue
offering a retiree wellness fair as well as other events to enhance County
retirees’ activity and engagement. SCAN is providing a performance guarantee
that pays the County up to 2 percent of annual premiums if specific performance
guarantees are not met for areas specific to customer service, and eligibility
processing and account management. The Contractor’s performance has been
confirmed as satisfactory. HRS/Employee Benefits has verified there are no
concerns that must be addressed with respect to Contractor’s ownership/name,
litigation status or conflicts with County interests.
The SCAN agreement does not currently
include subcontractors or pass through to other providers. See Attachment N for
Contract Summary Form.
2024
Health Plan Rates for Medicare Retirees
Due to the timing of the RFP, the
recombining of the active employees and the pre-65 retirees, separating the
agreements and eligibility for the Medicare retirees, and the uncertainty of
which vendors would be selected, the RFP was done far in advance of normal rate
setting process. The CMS final advance rate notice for Medicare Advantage Plans
has not yet been released to the vendors.
Therefore, the rates bid by the vendors are preliminary.
The selected vendors provided the
preliminary rates:
- Humana Passive PPO: minimum decrease of
53 percent to 69 percent from Anthem’s
Standard and Custom current 2023 plan rates respectively.
- Kaiser HMO – Not to exceed 12.4 percent
increase.
- SCAN HMO – Not to exceed 0 percent increase.
We will be returning to the Board in July
with the actual rates for your approval.
Model
Contract Modifications
The Administrative Services Agreements
(ASAs) before your Board contain language modifications to the County’s model
contract, which have been deemed as acceptable by HRS, County Counsel and Risk
Management. Specifically, Humana provides captive insurance and have provided
County Risk Management information on self-insurance retention and group
structure. The ASAs for Humana and Kaiser include non-standard indemnification
and insurance terms. Risk Management has reviewed and approved as per the
Risk Assessment Forms on Attachments O and P. SCAN adopted the indemnity
language and insurance provisions from the Model Contract and does not require
a Risk Assessment Form. Humana, Kaiser,
and SCAN services are Covered Entities under the HIPAA Privacy Rule and are
obligated to maintain the confidentiality of any protected health information
relating to health care benefits, based on extensive California regulations,
under a health services agreement. The only information the County transmits to
these health plans is to determine eligibility of County employees and
retirees.
Group
Service Agreements (GSA)
The GSAs outline the health benefits
coverage offered to County of Orange Medicare-eligible retirees enrolled in the
Humana, Kaiser, and SCAN plans. These documents are subject to final approval
by the State of California’s Department of Managed Care and are therefore not
subject to County Purchasing policies. State approval is anticipated in
December 2023 for a January 1, 2024, effective date. Attachments I, J, and K
are the summaries of the GSAs.
Prior
Board Actions
On March 8, 2022, the Board approved
Amendment Number Five to Administrative Services Agreement with Anthem Blue
Cross, SCAN, and Kaiser Permanente Medicare-eligible retiree health plans,
January 1, 2023, through December 31, 2023; and authorized the Chief Human
Resources Officer or designee to execute amendment and 2023 Group
Service/Benefit Policies and amend underlying agreements.
On January 12, 2021, the Board approved
Amendment Number Four to Administrative Services Agreement with Anthem Blue
Cross, SCAN, and Kaiser Permanente Medicare-eligible retiree health plans,
January 1, 2022, through December 31, 2022; and authorized the Chief Human
Resources Officer or designee to execute amendment and 2022 Group
Service/Benefit Policies and amend underlying agreements.
On October 22, 2019, the Board approved
Amendment Number Three to Administrative Services agreement with Anthem Blue
Cross, SCAN, and Kaiser Permanente Medicare-eligible retiree health plans,
January 1, 2021, through December 31, 2021; and authorized the Chief Human
Resources Officer or designee to execute amendments and amend underlying
agreements.
On July 16, 2019, the Board approved
Amendment Number Two to Administrative Services agreements with Anthem Blue
Cross, SCAN, and Kaiser Permanente Medicare-eligible retiree health plans,
January 1, 2020, through December 31, 2020; and authorized the Chief Human
Resources Officer or designee to execute amendments and amend underlying
agreements.
FINANCIAL
IMPACT:
These
agreements contain preliminary rates:
- Humana – minimum decrease of 53 percent to
69 percent from Anthem’s current 2023 rates.
Guaranteed not to increase when finalized.
- Kaiser – not to exceed 12.4 percent increase
- SCAN
– not to exceed 0 percent increase
The
retiree rates are paid by the retiree with offset by the Retiree Medical Grant,
if applicable. There is no County cost.
HRS
will be returning to the Board in July with the final 2024 health plan rates
for your approval.
The agreements proposed in this
agenda item contains language which permits reduction or termination with
thirty (30) days’ notice. Because of the essential nature of these services,
the department believes it is prudent to proceed with this item as recommended.
STAFFING
IMPACT:
N/A
ATTACHMENT(S):
Attachment
A – Final Scoring Summary
Attachment B – Final Panel Scoring Sheets
Attachment C – Humana Administrative Services Agreement
Attachment D – Kaiser Administrative Services Agreement
Attachment E – SCAN Administrative Services Agreement
Attachment F – Benefits Summary - Humana
Attachment G – Benefits Summary - Kaiser
Attachment H – Benefits Summary - SCAN
Attachment I – Redline ASA: Revisions from Model Contract-Humana
Attachment J – Redline ASA: Revisions from Current Agreement - Kaiser
Attachment K – Redline ASA: Revisions from Current Agreement - SCAN
Attachment L – Contract Summary Form - Humana
Attachment M – Contract Summary Form - Kaiser
Attachment N – Contract Summary Form - SCAN
Attachment O – Risk Assessment Form - Humana
Attachment P – Risk Assessment Form - Kaiser