Public Employees Benefits Board
April 23, 2002
2003 PEBB Procurement Bid Alternatives
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Legislative Budget Assumptions
• Office visit copayment increase to $15
• 10% reduction in drug benefit
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2003 PEBB Bid Alternatives
Pharmacy Benefit Alternatives assumes a 30-day supply at retail & 90-day supply with mail
order
Option 1:
Tiers Retail Cost Share Mail Order Cost Share
Formulary generic, all insulin &disposable diabetic supplies $10 $20
Formulary brand $25 $50
Non-formulary brand $40 $80
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2003 PEBB Bid Alternatives
Pharmacy Benefit Alternatives assumes a 30-day supply at retail & 90-day supply with mail
order
Option 2: Includes $50/individual deductible
Tiers Retail Cost Share Mail Order Cost Share
Formulary generic, all insulin &disposable diabetic supplies $10 $20
Formulary brand $25 $50
Non-formulary brand $40 $80
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2003 PEBB Bid Alternatives
Pharmacy Benefit Alternatives assumes a 30-day supply at retail & 90-day supply with mail
order
Option 4:
Bidders are invited to submit a proposal of their own design that aligns with the PEBB philosophy of providing pharmacy benefits as well as producing the necessary 10% cost savings.
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Additional 2003 PEBB Bid Alternatives
Option 1: Out-of-Pocket Maximum• Current design = $750/person, $1500 family• Bid Alternative B = $1500/person, $3000/family
Option 2: Hospital Inpatient Co-Pay• Current design = $200/day, max $600/year• Bid Alternative = $250/day, max $750/year
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Additional 2003 PEBB Bid Alternatives
Option 3: Ambulatory Surgical Center Copay• Current design = $100 copay• Bid Alternative = $150 copay
Option 4: Ambulance Service• Current design = Air Ambulance $100• Bid Alternative = Air Ambulance $200
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Additional 2003 PEBB Bid AlternativesPharmacy Benefit Alternatives assumes a 30-day supply at retail & 90-day supply with mail
order
Option 3: Includes $100/individual deductible
Tiers Retail Cost Share Mail Order Cost Share
Formulary generic, all insulin &disposable diabetic supplies $10 $20
Formulary brand $25 $50
Non-formulary brand $40 $80
Uniform Medical Plan
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2003 UMP Benefit Changes
• Medical– Developing three alternative approaches, all with the
same overall employee impact
• Pharmacy– Legislative budget targets 10% reduction in
prescription costs
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2003 UMP Benefit Changes
• Approach #1 based on legislative budget notes– 85% coinsurance for most services from preferred
providers (currently 90%)– Enrollee out-of-pocket limit is also increased
proportionally (currently $1,125 per year)
• Concerns– Higher coinsurance may discourage needed care
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UMP Benefit Changes
• Approach #2 - Leave coinsurance at 90% but make other changes to achieve same premium impact– Evaluate possible out-of-state networks– Increase annual out-of-pocket limit, hospital
copayments, deductible, or other enrollee cost-sharing– Consider expanding services covered in full (i.e.
maintain or increase access to preventive care)
• Concerns– Impact on particular categoreis of enrollees, such as
those with high medical costs
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2003 UMP Benefit Changes
• Approach #3 - Offer enrollees choice of two UMP benefit designs– Higher premium choice would maintain current UMP
benefits– Lower premium choice would have higher deductible,
coinsurance, and other enrollee cost-sharing– Current PEBB risk adjustment process would be used
to mitigate “adverse selection”
• Concerns– Communication challenges– Enrollee understanding of plan choices
Quality, Access, and Affordability
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Plan Report Card• Access
– Network Value– Statewide Coverage– Unique Coverage– Capacity/Stability– Consumer Assessments
• Quality– Prevention standards (HEDIS)– Consumer Satisfaction (CAHPS)– TEAMonitor Audits
• Affordability– Medicare and non-Medicare employee contribution
• Overall Performance
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Non-Financial Incentives
• Publicize outcomes by plans, providers and facilities
• Use consumer data and performance measures• Produce support tools and educational materials• Use quality data and consumer surveys• Use information to make choices• Use information to demand quality care
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Leapfrog
Seattle-Tacoma-Everett 100% of invited hospitals responded to the survey (25 hospitals
out of 25)
13 (57%) have at least one Leapfrog patient safety practice
• Specifics:– Computer Order Entry: None have fully implemented CPOE
12 say they plan to implement CPOE by 2004
– ICU Staffing: 3 have fully implemented the IPS practice
12 say they plan to staff intensivists by 2004
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Leapfrog
Seattle-Tacoma-Everett Evidence-based Hospital Referral:
- 4 meet the coronary artery bypass recommended annual volume
- 9 meet the coronary angioplasty volume recommendation
- 8 meet the abdominal aortic aneurysm repair volume
recommendation
- 5 meet the carotid endarterectomy volume recommendation
- 3 meet the esophageal cancer surgery volume recommendation
- 5 meet Leapfrog specifications for the Neonatal ICU
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Incentive Systems
• Dimensions – Financial vs. non-financial– Informational vs. market-driven
• Incentive Models• Success
– Incentives based on risks– Limited number of reliable, acceptable, & meaningful
metrics
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RFP, Contracting & Auditing
• Post Award– Contract compliance
• Negotiations– Link measures to
value
• Pre-Bid and RFP– Entrance Standards
• Auditing standards• Performance Standards
• Comparative rankings• Trending reports
• Benchmarks• Link to purchasing
standards
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2003 PEBB ProcurementNext Steps:RFP:
– Scheduled for release May 3rd– Bids due to HCA by June 12th– Bid evaluation through end of July– Board meeting July 30, 2002
Materials Review:– On-line enrollment– Actives - all materials on PEBB website– Decision Support Tool (Select-A-Plan)