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Home My WebLink AboutCORRESPONDENCE - RFP - P682 BENEFITS P583 BENEFITS CONSULTANTTHE SEGAL COMPANY 6300 S. Syracuse Way Suite 200 Englewood, Colorado 1I1-6722 303-714-9900 FAX:303-714-9990 Ms. Laurie Harvey City of Fort Collins 200 West Mountain Ave, Suite A Fort Collins, CO 80522-0580 Re: Analysis of Proposals Dear Laurie: August 28, 1998 Attached is The Segal Company's analysis of proposals received in response to the Request for Proposal (RFP) dated June, 1998. This analysis provides pertinent information necessary to compare and evaluate the proposals. Our analysis contains an executive summary, as well as detailed financial analyses. We look forward to discussing this analysis with you in further detail. Should you have any questions in the meantime, please contact our office. incerel Don R. Heilman Senior Vice President Attachments cc: Gwen Feit Jacob W. Lawrence Lorri A. Kohle Atlanta Boston Chicago Cleveland Denver Edmonton Hartford Houston Los Angeles Minneapolis +CG Multinational Group of Actuaries and Consultants: Amsterdam Antwerp New Orleans New York Phoenix St. Louis San Francisco Seattle Toronto Washington, D.C. West Palm Beach Barcelona Hamburg Lausanne London Melbourne Mexico City Oslo Paris SUMMARY OF FIXED COSTS OPTIO. Coverage - 7PPO'' EPO` Prescription Drugs (2) In TPA In TPA Stop -Loss Insurance ($135,000) $6.60 Utilization Review Services 3.50 In TPA Third Party Administration Services (TPA) 18.62 Network Access Fees (3) 1.95 Estimated Monthly Per Capita Fixed Costs _- _ $30.67 Estimated Annual Fixed Costs (1) Selected vendors and proposed fees as follows: Total In TPA -- $6.60 $6.60 -- In TPA -- 34.17 35.17 -- 3.00 3.00 -- Coverage PPO EPO < POS _ - ---- — Prescription Drugs Mutual of Omaha Mutual of Omaha Mutual of Omaha Stop -Loss Insurance American Stop -Loss American Stop -Loss American Stop -Loss Utilization Review Services Mutual of Omaha Mutual of Omaha Mutual of Omaha Third Party Administration Services 1 Mutual of Omaha Mutual of Omaha Mutual of Omaha Medical Managed Care _ _ Mutual of Omaha Mutual of Omaha _ Mutual of Omaha (2) Assumes 1.72 scripts per participant per month. Assumes 10% mail order utilization. (3) For Mutual of Omaha, physician incentive charges which are not included in TPA fees. Assumptions: - - — _ PPO EPO Total Number of Participants 1 600 585 POS Total 1,265 6 NETWORK ACC ----- --- - PPO, POS, and EP0 Lake (2) Service - - --- Mutual of Omaha (1) PaciriCare _ ctera (3) _Sbans Current Proposed PPO Network OnI (Comprehensive and Basic) Access Fee $1.95 $2.04 $2.35 $2.65 $3.50 In ASO fee (Additional Charges: ID Cards/Enrollment i Start -Up Fees Other (detail) Proposal excludes charges for booklet developing and printing. Actual printing In ASO fee In ASO fee None — .- None None None Did not respond Did not respond $1.25 repricing charges will be billed directly (PPO sorted only) to the plan sponsor Estimated Monthly Fees (4) $1J80 $1,234 1,422 1 603 $2,118 (Estimated Annual Fees (4) - - 14 157 _ (_ - - 14 810 _ 17 061 $19,239 $25,410 i 12 12 12 24 Guarantee (months) 11 RANKING _== -- -= —_— - -1 --__ _ — ---- 2 — — -- 3 4 — --- (1) The provider incentive payment charge will be withdrawn by the underwriting company each month from the claim deposit account (ASO). $1.95 for access plus $3.50 for utilization review. (2) The UR fee is $2.50 per participant month; however, the UR piece cannot be unbundled. (3) This access fee is subject to client providing claims volume and identifying the states that would be accessed for underwriting purposes. Minimum revenue requirements of $1, 000 per month commencing on the first month of the Agreement. Any cost associated with creating new or chaning existing computer programs, file layouts, data storage and back up, or any other requested changed to their information systems which is not currently supported or available, is subject to an hourly rate of $100. Fee information is privileged and confidential and cannot be transmitted to other parties without their permission and is exempt from disclosure under applicable law. See attachments for other terms and conditions. (4) Excludes "other" charges. Assumption: PPO Plan 605 10 NETWORK ACCESS CONTINUED Service Mutual of Omaha (1) PacifiCare _ POS EPO Sloans Lake (2) POS EPO S ectera (3) _ -- POS EPO P05 � EPO f-- POS/EPO Network Only Access Fee N/A N/A $2.61 $2.61 Did not $5.85 Did not Did not In ASO fee In ASO fee quote quote quote Capitation Fee N/A N/A In ASO fee In ASO fee 0 Incentive $3.00 $3.00 i 5.56 5.56 0 Total $3.00� $3.00 $8.17 $8.17 $5.85 FBtimated Monthly Fees (4) $240 _- $1,755 $654 V,779 -_ - ___$3,422 -- — _—.— Estimated Annual Fees (4) $2 880 I— $21 060 _$2 06—I - $7 843 L - S 57 353 1 r— $a1,o671 i Additional Charges: ID Cards/Enrollment Proposal excludes charges In ASO fee None for booklet developing Start -Up Fees and printing. Actual printing N/A None charges will be billed directly Other (detail) to the plan sponsor N/A None How the above charges differ No change Did not respond Did not respond sssuming selection as the network provider for allplans'! 3uarantee 12 12 12 RANKING 1 2 — — (1) The provider incentive payment charge will be withdrawn by the underwriting company each month from the claim deposit account (ASO), (2) The UR fee is $2.50 per participant month; however, the UR piece cannot be unbundled. (3) This access fee is subject to client providing claims volume and identifying the states that would be accessed for underwriting purposes. Minimum revenue requirements of $1, 000 per month commencing on the first month of the Agreement. Any cost associated with creating new or chasing existing computer programs, file layouts, data storage and back up, or any other requested changed to their information systems which is not currently supported or available, is subject to an hourly rate of $100. Fee information is privileged and confidential and cannot be transmitted to other parties without their permission and is exempt from disclosure under applicable law. See attachments for other terms and conditions. (4) Excludes "other" charges. Assumption: POS 80 EPO _ _585 _ Total 665 UTQJZAT , 3VIEW SERVICES 'Service ---- - RMHMC-Current _.. _...._.. ---Mutual of Omaha PacifiCare Sbans fake Speclera PM Plans 014 Pre-Admission/Concurrent Included below Included below Included below Included below $2.10 Utilization Review Psychiatric/Substance Abuse Included below Included below Included below Included below 0.75 Review (if separate from - #1 above) Full Package $1.60 $3.50 $8.18 $2.00 $2.70 Included in ASO fee Case Management (Hourly) i S70/11our Included above Included in ASO fee $100/Hour Included above Estimated Monthly Premium (1) _ 5960 _. _ _.____S2 10(1,._ _____. , 54.908 _ 00 _______ __ �1 2 _620 _,___11 Estimated Annual Premium (1) ___ _ _�11r520_ 25 200_ _ _ $58.896 ----- --- - _— 514,400 $19,440 Other Charges: Start-Up/Implementation Fee .NIA In ASO fee N/A None None Basic Communication Package N/A In ASO fee No charge for None None, unless custom (brochure, stickers, and letters) - standard materials made Estimated Monthly Premium (2) $960 2 100 54, 008 1 200 _- IL"S Estimated Annual Premium (2) __. __�25 200 __ - - 58 896 51 4,400 --$1.620 _ �19,"0_ -- --_ -- I - 12 ____ 12 Guaramee (months) _ - 12 — 24 RANKING (1) Does not take into consideration "Other" charges. (2) Includes "Other" charges. Assumytion PPO Plan 600 12 UTD.IZATION REWt ,V SERVICES CONTINUED Service POS/EPO Plans Only Mutual of Omaha PacifiCar_e Sloan Lake POS EPO POS _ EPO POS EPO POS I EPO _-_ _ _ _ _ Pre-Admission/Concurrent In ASO fee Ili In ASO fee Included below Included below Did not Included below $2.10 $2.10 Utilization Review i quote Psychiatric/Substance Abuse In ASO fee In ASO fee Included below Included below Included below 0.75 0.75 Review (if separate from kl above) Full Package -- -- $10.56 $10.45 $5.85 $2.70 $2.70 In ASO fee In ASO fee Case Management (Hourly) They do not charge -- In ASO fee In ASO fee $I00/hour Included above Included above hourly or "per case" fees Estimated Monthly Premium (1) L __ _ 845 $6113 _ _ -- 3 422 _ 216 _-1 580 _ __ __- _._ — __- I _--1 Estimated Annual Premium (1) - .110 138 _ 373,359 -- 541 067 Other Charges: Start-Up/Implementation Fee In ASO fee N/A None None Basic Communication Package In ASO fee No charge for standard None None, unless custom (brochure, stickers, and letters) materials made Estimated Monthly Premium (2) $8451 6 113 _ -- 3 422 216 1 580 Estimated Annual Premium (2) _ — -- _ --� 10 138 --_,____ 73 359 _______--1 $41.0671 $2,592118 954 Guarantee (months) -- -- 24 24 -- 24 24 24 RANKING (TOTAL) -- -- 2 -- — I How do charges differ assuming you are No difference No difference No difference No difference; for all plans. to provide UR for all plans Rates may change if not chosen for all Warts._ (1) Does not take into consideration "Other" charges. (2) Includes "Other" charges. POS 80 EPO 585 Total 665 13 THIRD PARTY ADMINI ATION (TPA) SERVICES Service Mutual of Omaha (1) - National Health Systems (2) PadriCare' 3 Current Proposed _ PPO Plans Only: Without Run -In (Medical Claims Administration $18.62 $7.77 $9.10 $34.31 Estimated Monthly Fees ___$11,265_—___--- 701' _ 5 506 $20,758 Estimated Annual Fees $135 181 $56410>1 $66,066$249,091 Additional Charges: COBRA Administration/election or notice $50 per reporting unit — 10/election/notice Not available plus $5 each month for and $15/COBRA each COBRA billing participant/month address Retiree Administration Included above $11.65/ee/month '' $13.65/ee/month Not available HIPAA Administration $.30 plus one-time $10/certificate Not available set-up fee of $500 ID Cards Included above — Do not provide Included above Start -Up Fees $0 — $0 N/A Other detail None None N/A Guarantee (months) 12 60 12 RANKING 2 1 3 (1) Includes claims administration, operations -information management systems, customer service, premium and enrollment administration, underwriting actuarial services, and corporate overhead. (2) Includes documented expenses of $1.60 per eligible per month (averaged over the past 18 months). These expenses include postage, long distance telephone, printing of claim forms, and EOBs. (3) Represents total fee composite for bundled services of UR, network access and ASO services. All services provided unless specifically stated otherwise. Incentive risk charges are not included in the numbers shown above. Charges for ID cards depend upon customization required. ID cards already have company name, group number, and benefits. Assumption: PPO Plan 605 14 POS/EPO Plans Only: Without Run -In Medical Claims Administration Rx Administration Estimated Monthly Fees (1) Estimated Annual Fees (1) Additional Charges: COBRA Administration/election or notice Retiree Administration HIPAA Administration ID Cards Start -Up Fees Other (detail) How do the above charges differ assuming THIRD PARTY ADMINISTRATIvN (TPA) SERVICES (CONTINUED) Mutual of Omaha (1) _ National He21th Systems (2) 1 $35.17 1 $34.17 I Did not quote Included above 1 Included above $.50 per reporting unit plus $5 each month for each COBRA billing address Included above $.30 Included above $0 None Did not respond un are WJ posed _._. vun Did not quote $28.96 $.34.15 $31.52 $31.27 Included above Included above 2 317 $17,638' --_ $2,522 18 293 S219-515 Not available Not available Not available Not available — In ASO fee N/A N/A — Did not respond RANKING (months) 2 1 — I Guarantee 12 — 12 (1) Includes claims administration, operations -information management systems, customer service, premium and enrolbnent administration, underwriting actuarial services, and corporate overhead. (2) Includes documented expenses of $1.60 per eligible per month (averaged over the past 18 months). These expenses include postage, long distance telephone, printing of claim forms, and EOBs. (3) Represents total fee composite for bundled services of OR, network access and ASO services. All services provided unless specifically stated otherwise. Incentive risk charges are not included in the numbers shown above. Charges for ID cards depend upon customization required. ID cards already have company name, group number, and benefits. ssunlption: POS Plan 80 EPO Plan 585 _ Total _ 665 15 STOP-. SUMANCE WdivWuil SIw.Lae Baed m AR CWm lavrred Me Q1aMr 1 IffB nrd Prb Mar Jao 1 1999 - - - ING M W/N•ellmareen M of O."m P"Won Sm ure of CLAMS. 41 III, -T _-. - - Cr _ ': :' Expended Expelled Expelled I Expaved E,�aIM EVmed Prgeaed Per Eligible hacurred CW Per Elipble ; Iaurred CWrm Per Elidble Incurad CW. Pa Eligible h.,d CWm Pe EEdbk lmned Chia Per E31glMe iaawrted Chb. Per E11pbk I....d Ck r C.fti-wi y PPD PIam Dnly (15/121 P. M� Pa Madb �- - Pa March Pa Mash --- _ Pa Mmd, -- _ Ps MmM ----_ _ Per MaloW Pa Mm b Pt MrYb PerMwlh Pc Md.& Pa MmN --�- Pw Mmh hY.Maolh sin FmplD $7.11 Did $5.3) Did m $1.73 Did m $5.85 $5.74 $203.58 54.% Did m Employ. + Spouse 7.19 m 10.85 regaad 9.88 rnpaRJ 12.86 12.63 Cd1.T/ 13.26 r 9-1 Employee + Child(rca) 7.19 ".,r d 9.61 9.76 16.32 14.06 090.64 13.26 Empk y + F ly 15.27 13.89 19.95 $2%) % - - 19.51 692.00 13.26 Foimn.n M-hiv Remh... - -. 319 L - 335 -- _ 45.763 - OW 174 589 - -' 7 8681275,589,3]I -- F-11"m dmuLPtmium _ Ln68 [_._$76.014 �w _ 96063 095056 - -1 W, RANKING I 3 1 2 6 1 5 ! 1135, Employee $6.60 Did S4.43 Did m $3.% Didm $5.30 i3.tl S4.45 $203.58 SCU Did Em Ployee+5po Employee+Child(rcn) Employ. + F fly 660 660 6 W m rcgmod 1 9.25, 919, 13 01 rcryood 8.32 7.36 11.70 reryord 11.63 1297 17% 8293 M N f# 13.17 - - - 9.79 10.90 15.13 Ml.T? 490.64 692.00 11.% 11.% 11.98 napood .i a.m.rM M_-_Nrni. pronii Fnj,AAmml 13950 3 -_ BSSL L`83 _}I75380 IO,D i__ .101 75589 _ S755 _ ...._ _.-._ _ 87 - _ RANKING 3 1 2 6 5 ! use, 7 Employee $e.9a Did $3,76 Did.0 $3.39 Did m $4.74 83.75 $203.58 $3.92 Did Employee + SP 4,94 m 7.81 r,q..d 7.08 rcWo d 10.91 •. 8.26 NI m 10 39 ns"w Empla + C1ald(m�) e.94 rmp. d 6.91 6.27 11.61 - - 9.19 A%.64 10 59 Employee + F.Ily 4.94 10,99 9.% 16.10 $293 91 -. ••' 12]6 682.00 10 39 R,.�.'M M.... hi, Premi�..� _ 82961 _. - I jA.55Bf -- ji, 133 9_493 _j 1763C6 _ - - j5105 -. _9215.589 EVimYcddpoal$alnm _ j35368 _ __. _-� _. _ _ _i58,ttOf _ --� }19583]__ ] =¢508]� IOIOL :_.___-_ 910 �u116152� - - 17N _-_ f13O7066I 6 3 ! .RANKING f 3 I 2 Did m Ram Guaraaee __ 12 I 12 _�.. 12 1 12 (1) Rmsed,fugw27, 1998; $135, 070sp ifiic reflecu$2.000,000 bftime mraimumf all plan. (I) 1212. (2) Arhder r6dms ahrve and brow rperifir naploss. Padhuir. (3) lhne-mmtA rtm in suitR rpreial xuiver. hu'nal mnc inrluk /OR cummirriun: we have aQlurtei rM rani donnnmd 6)' /OX. Coverage fw mMiml brxfiu only. J% lmdfae Specific ro wWe Rc. Aturhd we addinmvl rmdldau' afduir proparal. Al'• E.. /90 En Player + Spaae 130 Employee + C6ild(nn) 60 Empbryee + Family 2W 600 STOP -SASS M, .NCE COWPOAD Ameiun sl L. - Idc,- ._.. -u7cw Mtlkm <MW"QCOrralha PdIICre ._- $gin uk 9f C=Wa -{ - ---- I : -_ Cvr... it Pc Eligible Par Mmb EyeaW baomeed CJmm ,Per mwth P. Elldble P. Mmeh Eat.. baareed Cl r ': Per Marsh CpvenRe -_._ POSIEM Plan= Only ils(121 Per Eligible _ Per MadW Expected Imurred Cl b Per Mwlb: - Ps EOdbk Pa Mru6 Eypeeted tm.rmd CWmr Per March +-_ Per ERgi6k gin Mdmh E W I. C1alm PW Mmth.: I7II _ P. Ugible Pa A41"m Evmw hrcwred ClY Per MmW Pa UWbk Pa Mardb EVOcUd brnrrtd Cltl� Pm Mmth .. sin." ws Emplw. Fmpkyz ♦ Slawe Emdoy«+C6ild(1.) Emplyee + I%ndly $7.19 7.19 7.19 7 19 Did m respmd $4.72 9.89 8.74 13 89Tj Did m .4" $4.31 8.% 7.95 12.6t Did m -W W $6. 12 13.50 13.07 20.8 $257 d8 - - - $4.79 10.53 11.73 16.28 $151.19 332.63 M.99 514.05 fd.W 13.26 JIM 13.26 Did m rerymW F.nu .Mm6ly P j1 $6______ 106] f9 __. �32 2di ___ll _�cn.. j0 ]IB 9 R f0� e.i pmny: j6,90 _. f8661 __- -_ / 3 2 6 - :-: S RANKING EW Empl,Nec E.O,,. + Six. Fmpl y + CNId(ren) Enydoyee+Family $7.19 7. 19 7.19 1. 19 Did m raepw 54.26 8.89 1.88 12.5211 Did m rnp,md $3.87 8.10 7.17 11.39 Did m reaped 15.95 12.97 14.32 19.98 f21873 - - - - - $4.55 10.03 11.17 Ism $122.47 269.41 306.19 416.41 f/.W 13.26 13.26 13.26 Did -q-1 Estimud o n _� - _ __- M2 _ __$1.805 f12195] - - OB 4210 r m.�=i Prem6- ,i, f50 ]III._. -� $59908 7. _._L f59.$0� - 1 _ 1535185 - - 3001 M_W7 1968637 4570 J iRANKING ,.-_ __.._. --_-� -_ 2 --__ I S STOP -LOSS Db_ ._NCE CONTINUED _�;r.lr,�s<wi=�o1 -- INc "-- - - ---- - avcw/wdlrm�a Mwq.l,tar.b. Pxtncrr s4nwrac.n.a. _ T- Curried Proppeed Erpaled 1 Egenrd ErWateel Ever" ` :,Ewetul Expected Erderud Per Eligible Incurred CWme Per Eligible , Incurred CWrm Per Eligible I Inc. CWrm Per Eligible Ir ..vd CM. PerFJigihk loorrej CWm Per Eligible Incurred Clolm Per Eligible Incurred Claims �Slrcao0 Per Mouth Per Mash Per Mash __ Per Menial, . Per Math _ Per Mouth Per March Per Math Pr Mueth Pr Meulh Per Madb Pr Me.& :. Per Mash Per No.* POS Emdoytt $6.601 Did not $4.03 Did car $3.63 Did act $5.51 Off - $3.61) 1151.19 H.M Did giro Employer + sprout, 6,W respond 8.r1 respcoil 7.57 respond 12.22 7.41 7.0 332.63 11.98 repond Employee + Cbild(¢m) 6.W 7.r3 6.70 13.65 9.27 - 3.92 377.99 11.98 Employer + Family 6.W 11.83I 10.65 18,91 f259.09 11.46 12.23 514M 11.98 Funm.rM Monfliyr.i.. _._1613L___ -._-____ 966 f20.727 - I26,383 _._ 32 -- __„__I531 16.61T --_}13✓66pOT.__. EmmigedAmawlPranum _f528 . f6336( _. ____ _ _._ 1___._ .. _ ,35T -1 3 2 6 I 5 ""KING ! Employs Employee +S'. Employee+C61M1rem1 $6.60 6.60 6.W $3.63 7.59, 6711 I3.2]' 6.821 6.031 Did m rrm and $5.30 11.65 12.97 63.i3 - 7.11� - 7.01 $3.43 7.55 8A0 $122.47 M9.M Mi. 19 H.M 11.98 11.98 Did ne rnpmd p Employee +Family iFr:m•enM a!v Rey 660 __. f3 Ml 10.67' _H255 _ 9.60 _828_ _ 19.00 ]OM f22010 _ 128759 10.97 - 11.66 £r 578 416.41 _ SI6d 053 1198 5,61] - E, numd Ama..t�rn _ $ 332 [ _ 1 _ $51 061 1 _ _ � 03 934 L - SM B12 I[ M5 102 RANIYlNG _ 1 3. _ 2 6 ! 5 (1) Rensd Aueurll7, 1998..$135,070sperifec reJl"S2.000,0001tfe ountrumnmforoUplau. EXECUTIVE SUMMARY The Segal Company was retained by the City of Fort Collins to seek competitive bids for its health programs. Proposals were requested for PPO, POS and EPO network services, utilization review (UR), third party administrative (TPA) services, stop -loss insurance, and prescription benefit management (PBM) services. A primary goal of this competitive bidding process was to seek medical plan cost savings, while retaining the current benefit coverages. Thirty-nine (39) requests for proposal (RFPs) were distributed to qualified insurance companies and vendors. Below is a summary of the responses received. ♦ PPO. POS and EPO Networks: Four proposals were received for the requested managed care networks: four PPO (Mutual of Omaha, PacifiCare, Sloans Lake, and Spectera (through Beech Street Corporation)), three POS (Mutual of Omaha, PacifiCare, and Sloans Lake) and two EPO (Mutual of Omaha and PacifiCare). ♦ TPA: Three quotations were received for medical administrative services (Mutual of Omaha, National Health Systems, and PacifiCare). ♦ UR: Four quotations were received for UR services (Mutual of Omaha, PacifiCare, Sloans Lake, and Spectera). ♦ PBM: Eleven quotations were received for prescription benefits (Eckerd, Express Scripts/ValueRx, King Soopers, Mutual of Omaha, National Medical Health Card, PacifiCare, PCS HealthSystems, Restat, Rx America, SMC Rx, and WHP Health Initiatives). ♦ Stop -loss: Five proposals were received for stop -loss insurance (American Stop Loss, ING, Mutual of Omaha, PacifiCare, and Sun Life of Canada). ♦ Two companies declined, while nineteen companies did not respond. Network Issues PPO Access ♦ There appear to be only two logical candidates for PPO access - Sloans (the incumbent) and PacifiCare. ♦ Sloans, as the incumbent, obviously represents the least amount of disruption for employees. PacifiCare's network includes 83 % of all doctors listed in Sloans' network, and six doctors which are not in Sloans' network. Of the top 20 Sloans network physicians utilized by City members, all of them are in PacifiCare's network. Mutual of Omaha and Spectera's networks represent a greater disruption of the physician network than PacifiCare. ♦ The PPO access fee is better under PacifiCare than Sloans; however, PacifiCare's claims administration services proposal, which are required to be utilized for the PPO network, is one of the least competitive. 1 STOP -LOSS M- .ICE CONTMED A.7 Saw IAoM ING - WM1YM�1amact MWutAdOrsWa 1's1RCMe SitrtlNe dCawada` �PIG ,ExpeMN Lveded Ewprdw Ewyened I Evemed Ew omad E*peMed Par ERpble I Inmrted Calms Pr FJ ok Incnrted Chum Pa EhRlbk Irmurred Calm Pr Eligible I KV td Calms Pea noble irhmed CJaitm Per MOW Iernrgd ChbM Per Midble bxmred W. Pe Maoah I ..Per Maoah -. p. ManshPar Momh__ Per Moeth PtrMoeth Pr Month PerMmb Pat Moth P6r Moab Per MMMIS Pr M.011 Per Mwnlh Pr Marais _ Vso, P ffiS i Employe $4.94 -- f3.10 -- f3.09 -- H.% - - f3.13 $151.19 f3.92 -- Employee + S1wm 4.94 - 1.11 -- 6.1t - 10.0 -. - 6.88 332.63 10.59 -- Emplo,e + men) -- 6.29 -- 5.71 - 12.II ;. _ - 7.65 3T7.99 10.59 - Family Fmployce t FamilY 4.94 1.91 10.00 -- 9.0) - Ifi.9/ f2fi0'N - - 10.63 Si1.% 10.59 - FaimeM Mmaaly Prm ,mi 3% -- __ - 517 - _---- - 70 �6 _ - 518 - - 5!3 383 7 - ESymye4Annul$®ilm H]Q - H109 f5631 - _ 10 1. ]8210 - 51 16600 7765 - j RANKING 1 3 2 6 - 4 5 � -ye H.W -- $3.06I - $278 - H.74 - - $2.98 $122.47 f3.W - Employwe t Sl u. 1.9/ -- 6.10; -- 5.80 - IO.M - 6.55 269.M 10.59 - Empioyee I Child(ren) 1.91 -- 1,671 -- 5.111 - 11.61 - - 7.29 306. 19 10.59 - Fmployee+Funily /.94 - 901 -- 8.1] - 16.12 fIIIM - - 10.12 416.41 10.59 - F. m.0 d M urnly Premium _ _ 890 - -. f3 5921 - L -_ 3, 3 973 1 053 H.%[ - EsumMcdAms-IPmuhm __._. _3M.6I9Z _ _[_ - _ _231 _fM.0491 _ RANKING 1 3 2 6 I 5 Rue Guam. (All Plays) 12 12 12 12 12 Did m respmd How do abw chwrgcs differ Qrved rues asswve Did i m respond Did od rmMaI Cw rap is imdcpcdcm spnn NIA No c]%. a Did m rmpsy d a saminp pau are ml.wd to provide c ,Afn for all three nch miss and muR k Pcc6ssad sm,,lms cwcra8c fm a1l Plays? plays. If all duo M paclu8e II plain arc not imlukd in ,, rams or co J A,,.,, M EPlt ZmaL Enyrloyee 30 I85 215 £mPloyr+-S ntue 10 /00 110 Ewloyr + Cld6l(rm) IS 95 110 Emp6ryee + F miry 25 205 4 230 Trawl _ _ _. M51 _.,_ <, w _ sIW Lmos Jq we -. u9c wnvdk� Sulu d S4,-lucc Rat. ._.. Per Eligible Per Eligible Per Eligible Per i C_ov_>ege.. _ Per Mmtb Per_ .Per M9Nh mwb ii Feel MAmIm1I]5uW10a1,.L00Y00P00u4_9_iu- m I9.95 f12,06 $10.9601 f135000 8.349 0,29.2341 6,2491 9.669 7,85 9fi50." Pvfi,, SI0A00 I] '8 f1131.518 10f135.00 81 (l) Reri+eil Augurt 27, /9R3,S135, 000 rpenlir rsJ/nv 52,an,W04jennR madmumjor al/p4uu. i41bk mlb Per Eligible Per M.* r Per Eligible rwmwh $14,783 Pt Eligible Pa Mmtb_. $13.396 I16.899 - 13,266 f41,265 11.304 12.101 13,686 9.662 10.695 202.543 - Sil1,400 f160,7M 183.433 SMIM 135,650 m PRESCI S DRUG PLAN National - WHIP Health ' Express Sc ' (1) King Mutual of Medleal Health PCs Initiatives, Retail Only _.._ - Eckerd PERxSelect J PERxCare _ Soho ers _ Omaha Card Systems, Int. Cum t rooased _ PadfsCare RESTAT RnAmeri a SMC Rz (2 _ _ Inc. Average Prescription Cost (3) Administration Brand Name $42.90 $42.45 $41.55 Did Not $41.65 $41.45 $41A5 $41.65 of pharmacy $42.18 $41.63 $44.90 $41.651 MAC - Based Generic 8.07 7.80 10.59 Quote 6.01 7.70 ': 5.65 5.20 services is not 10.23 10.31 11.05 10.20 available on a - _ carve -out basis. Discount off of A W P - The cons Brand Name 13.0% 12.0% 14.0% 13.0% 14.0% 13.0% 13.0% associated with 13.0% 13.0% 8.0% 13.0% MAC - Based Generic (4) 52.0% 45.0% 14.0% 61.0% 45.0% 65.0% 70.0% the administration 20.0% 13.0% 15.0% 20.0% of the drug plan, as pan of a medial -. _- Administration/Postage Fee per Rat plan quoted, are Brand Name $1.50 $0.601 $0.60 In ASO fee $0.35 N/A $0.00 included in the $0.53 $0.48 $0.65 $0.50 Generic 1.50 0.60 0.60 In ASO fee 0.35 N/A 0.00 ASO fee 0.53 0.49 0.65 0.50 $.44/electronic Dispersing Fee per Rx -: Brand Name $2.25 $2.25 $2.25 $2.50 $2.40 U-% $2.50 $2.50 $2.00 $2.75 $2.00 Generic i 2.25 2.251 2.25 2.50 2.40 2.50 2.50 2.50 2 2.75 2.50I Other Fees: ID Cards 2 provided per Standard bi-fold card Now $.50/ee/mth - 1st - Norc Now 5.65/card Paper - Now In set-up fee family at no charge included card only Laminated - $.50/card Ili $.50/card DUR Program Now Now Now Now - Now None $.08/claim (2) Included MAC Pricing Now Now Now Did not respond - Now Now Now Included Included Other Fees: Now See attached In ASO fee See attached - See Now Out -of -area Four monthly reports See schedule attached DMR: $2.50/clm will be provided at no Client remote charge. After that, $50/ access program: report $SW/siw Ad lac reports: S511haur pm grammiug; Paper eligibility; s.50/liw 44.7% 44.7% 447%. 44.7% - 44.7% 44.7% Generic Fill Rate Average 44.7% 44.7% 44.7% -- 44.7% 44.7% Average Weighted Prescription Cost 5 $27.33 $26.96 $27.71 25.72 $26.36 .56 $25.36 $27.90 S27.63 $29.71 $27.59 RANKING (6) 5 4 8 - 2 3- ( - 9 7 10 6 Guanmee rtonth5i _. _ _ _ -_,___ 24 _. 361 __36 - _ 12.__-.. _.36 _.._.._._ 36 - 36 12 Did not respond _36 _ _, __---204 __?4I (1) They have applied $.25 ojFW market share incentives to reduce the dispensing fee to $2.25. !f rebates are discontinued or materially changed by pharmaceutical mom facturers or if Me City elects "to enroll in the Express Preference the dispensing fee reverts to $2.50, (2) Optimal dilly an line, direct (remote) access:.$325/month. The City in responrible for phone Bne charges. (3) Based on AWP of $45,00 Brand and $9.00 Generic; inchdes discount, dispensing fee and administrallon/postage fee. (4) Beffects actual reported percent dls'coma off cfAWP, and does not take into account impact of respective MAC pnong. (5) Formula equals (Average Brand Name Cast x (I - Average Generic Fill Rate)) + (Avrrage Generic Cost x Average Generic Fill Rate). (6) Bared on Average Weighted Prescription Cost. - NaOotsal - WifP Health , King Mutual of Medical Kenn PCs SMC Rx lnitlatives,: ail Order _ _Ecke_rd_ Express Scripts(1) _-_Sappers _ _ Omaha. Card Systems, fnc. Current ' ':Proposed Paeirrc re RESTAT RxAmerka ::_ __ lot. _. enrage Prescription Cost (1) Administration Brand Name $76.04 $79.15 $77.75 $76.35 $75.95 $7$.96 $78.50 of pharmacy $77.60 $76.20 $80.05 $76.451 MAC - Based Generic 11.99 12.15 13.15 10.35 13.10 13.46 15.00 services is not 14.00 14.50 16.65 11.75 available on a GNebni haze. scount off of AWP The costs Brand Name 16.0% 14.0% 16.0% 18.0% 16.0% 15.0% 15.0% associated with 16.0% 17.0% 14.0% 17.0% MAC - Based Generic (2) 52.0% 48.0% 45.0% 61.0% 45.0% 3"s 35.0% the administration 40.0% 35.0% 30.0% 50.0% of the drug plan, as _ pan of a medical Iministration/Postage Fee per Rx - plan quoted, are Brand Name E0.44 $0.00 $0.65 In ASO fee $0.35 $0.46 $0.00 included in the $0.00 $0.00 $0.65 $0.50� Generic 0.44 0.00 0.65 In ASO fee 0.35 010 0.00 ASO fee. 0.00 0.00 0.65 0.50 spensing Fee per Rx Brand Name $0.00 $1.75 $1.50 $2.55 $0.00 _$2.00 $2.00 $2.00 $1.50 $2.00 $1.25 Generic 1.95 1.75 1.50 2.55 1.75 2.00 2.00 2.00 1.50 2.00 .25 her Fees: ID Cards Now Standard bi-fold card Now Nam NIA - Now None Now Same as above In set-up fee it included OUR Program Nam Now None None Now - Now Now Nam Same as above Included MAC Pricing None Now None Nam Did not respond - ;.' Norc Now Now Same as above N/A Other Fees: Now None Ad hoc reporting In ASO fee Portage and See Now Customized Same as above See schedule up to $150/hour handling of attached brochures: $.85/ communications brochure t 3'7.T% 37.7% 37.7% 37.7% 377% 37.7% writ Fill Rate Average 37.7% 37.7% 37.7% IT 11.7% 37.7%1 erage Weighted Prescription Cost (5) E51.$9 $53.89 $53.39 $51.47 $52.26 $M (12 E54.56 - $53.62 E52.9 $$56.15 $52.06 NK1NG(6) 2 8 6 / 4 9 - 7 5 10 3�,i (I) 7hry have applied $.25 of the market share incentives to reduce the dispensing fee to $2.25. q rebates are discontinued or materially changed by pharmaceutical mamJacmrers or if the City elects not to enroll in the ErpreisPreferewt the dispensingfee reverts to.$2.50. (2) Bored on AWP of $90.00 Brand and $20.00 Generic: includes discount, dispensing fee and admn'dstrat)on/posaage fee. (2) Reflects actual reported percent discount of of AWP, and does rat take into account impact of respective MAC pricing. (3) New case set-up fee = $20 per unit. (4) $.25/brochure for customized brxhures. (5) Formula equa6 (Average Brand Name Cott x (I -Average Generic Fill Rate)) + Average Generic Rates x Average Generic Fill Rate). (6) Based on Average Weighted Prescription Cost. PMCRIPIIM DRUG PLAN POSlEP4 Plaas-only _.._Express Scripts Ill:. Befall Only Echerd POS EPO Avenge Prescription Cost (3) Brand Name $42.90 $42.45I $41. MAC - Baud Generic 8.07 7.B0 7. Discount off of A W P Brand Name 13.0% 12.0%I 14A MAC - Based Generic (4) 52.0% 45.0% 45A Administration/Postage Fee per Rx Brand Name $1.50 $0.60' S0. Generic 1.50 0.60 0. 5.44/electronic Dispensing Fee per Rx Brand Name $2.25 $2.251 $2. Generic 2.25 2.251 2. Other Fees: ID Cards 2 provided per Standard bi-fold DUR Program MAC Pricing Other Fees: Generic Fill Rate Average family at an charge included $.50/card Now Now None Now Now See attached __.. _. 44.7%I 44. Ring Soopers (21 _ $42.5 11.0 12.5' 12.51 $0.7 0.7 $2.9 2.51 Did not respond 5.50/card Now Ad hoc reporting up to $150/huur 44.79 RANKING f41 -_.f __-_.-_.. I._____ _4L-_--- ._31- 1 __._._9 Nial'-- ioa WEIP Neal Mutual of Msdicd Ifra1f6 1tsRiYivn, lac. Omaha Cud Systems, loss. RTiSTAT RxAnuertca SMC Ra <: FaAmeraca $41.65 541.45 WAS 541.63 544.80 541.65 6.01 7.70 10.23 10.31 11.05 10.20 13.0% 14.0% 13.0% 0.13 8.0% 13.0% 61.0% 45.0% 20.0% 0.13 15.0% 20.0% In ASO fee 0.35 $0.53 $0.48 $0.65 $0.50 In ASO fee 0.35 0.53 0.48 0.65 0.50 $2.50 $2.40 $2.50 $2.00 $2.75 $2.00 2.50 2.40 2.50 2.00 2.75 2.50 Now 5.50/ee/mth - 1st None 5.65/ee Same as previous In set-up fee card None Nore Now $.08/a Satre as previous Included Now Did not respond Now Note Same as previous N/A ASO fee See attached No None Outof-area Same as previous See schedule DMR: $2.50%Im m Client reote access program: $5WIsite Ad hoc repass: ar S50/bo Paper eligibility: 5.50/line 44.7% 44.7% 44.7% 44.7% 44.7% 44.7% $25.72 $26.36 527.90 $27.63 $29.71 $27.59 2 8 _ 7 _10 61 (1) They have applied $.25 of the market share incentives to reduce the dispensing fee to $2.25. If rebates are discontinued or materialty changed by pharmaceutical manufacturers or if the City elects to enroll in the ExpressPreftrentt program, the dispensing fee reverts to $2.50. (2) AWP (brand): POS = 11% and EPO = 13%. Administration Fee: POS = $.751a and EPO = $.65/rx. (3) Based on AWP of $45.00 Brad aid .$9.O0 Generic; includes discount, dispensing fee and admAstraion/postage fee. (4) Reflects; actual reported percent discount off of AWP, aMdoes nor late into account impact of respective MAC pricing. (5) Formalist equals (Average Brad Name Cost x (1- Average Generic Fill Rae)) + (Average Generic Cost x Average Generic Fill Rae). (6) Baed on Average Weighed Prescription Cast. 23 PBE$GRIPTION DRUG PLAN ;M-M i WFrM14= ��EwmisScrims Ring Mutual of .Medical heel : -Ioiatkitim, : Mail Order _.-,_,.Edterd POS EPO _ _ Soo�ers Omaha'. Card Systems,.Ina. RESTAT . . RIAmeriea SMC Rx Inc. :. Average Prescription Cost (1) Brand Name $76.04 579.15 $79.15 577.75 $76.35 $75.95 $77.60 $76.20 $80.05 $76.45 MAC -Bazed Generic 11.99 12.15 12.15 13.15 10.35 13.10 14.00 I4.50 16.65 11.75 Discount of(of AW P Brand Name 16.0% 14.0% 14.0% 16.0% 18.0% 16.0% 16.0% 17.0% 14.0% 17.0% MAC -Bazed Generic (2) 52.0% 48.0% 48.0% 45.0% 61.0% 45.0% 40.0% 35.0% 30.0% 50.0% Administration/Postage Fee per Rx Brand Name $0.44 $0.00 $0.00 50.65 In ASO fee $0.35 $0.00 50.00 $0.65 $0.50 Generic 0.44 O.OD 0.00 0.65 In ASO The 0.35 0.00 0.00 0.65 0.30 Dispensing Fee per Rx Brand Name Generic $0.00 1.95 $1.751 $1,75 1.751.75 51.50 1.50 52.55 2.55 50.00 1.75 $2.00 2.00 $1.50 1.50 $2.00 2.00 51.25 1.25� Other Fees: ID Cards Now Now Now NOW N/A Now Now Same as previous In set-up fee DUR Program Now Now Now Now Now Nore Now Same as previous Included MAC Pricing Now Nore Now Now Did wit respond Now Norc Sam as previous N/A Other Fees: Now Now Ad hoc reporting In ASO fee Postage and Now Customized Same as previous See schedule up to $150/hour hardling of brochures: 5.85/ communications brochure 37.7% 37.7% 37.7% Generic Fill Rate Average 37.7% 37.7% 37.7% 37.7% 37.7% 37.7% 37.7% Average Weighted Prescription Cost (3) $51.89 553.89 $53.89 $53.40 $51.47 $52.26 553.62 552.94 $56.15 $52.06 RANKING (4) 2 8 i 8 6 / 4 7 5 9 3 If chosen to provide Its for all plans? Did not respond Did not respond All charges would N/A Did not respond Did not respond No difference No difference Did not respond default to the lowest rates proposed. Fee for initial cards �- would be waived (I) Bated on AWP of $90.00 Brand and $20.00Gewric, includes discoans, dlspemingfee and administratioMposrage fee. (2) Reflects actual reported percem ducoma off of AWP, and does not take fma accoana impairs of respective MAC pricing. (3) Fo nala equals (Average Brand Nome Cast x (I - Average Generic Fill Rae)) + (Average Generic Rare x Average Genenc Fill Rae). (4) Based an Average Weighted Prescription Cost. ♦ Both organizations essentially use a relative fee schedule as the basis for physician reimbursement. PacifiCare more extensively uses per diems and DRGs than does Sloans for hospital reimbursement. ♦ Neither Spectera nor PacifiCare provided the requested level of detail in order to make a thorough assessment of the competitiveness and strength of their network contracts. Sloans Lake and Mutual of Omaha did provide this information. It appears that neither has a competitive advantage for hospital services, while Sloans holds a slight advantage for physician services. POS/EPO Access ♦ Neither Sloans (POS only) nor Mutual of Omaha (POS and EPO) adequately compare to the network currently in place through PacifiCare. ♦ PacifiCare recently expanded their capitation arrangements to specialists. They also have some global reimbursement caps at Poudre Valley Hospital. Again, PacifiCare did not provide the requested level of detail in order to make a more thorough assessment of the competitiveness and strength of their network contracts. ♦ PacifiCare's access fees are competitive if the incentive payments are not factored into the administrative fee. Utilization Management (UM) ♦ Of the UM bids, two proposals (Mutual of Omaha and PacifiCare) require that they pay claims. ♦ Upon applying our proprietary UM rating tool, Sloans Lake ranks highest, followed by Mutual of Omaha, Spectera and PacifiCare. ♦ Sloans Lake quoted the most competitive fees for PPO UM services, followed by Spectera, Mutual of Omaha, and finally PacifiCare. ♦ While Spectera's fees are the most competitive for POS/EPO UM services, neither of the POS/EPO network vendors will allow UR to be performed by a competing vendor. Third Party Administration ♦ Of the three (3) respondents, NHS - the incumbent - offers the most competitive fee quotation for PPO claims administration, while PacifiCare offers the most competitive POS/EPO claims administration fee. 2 ♦ PacifiCare is not able to offer all of the desired services (e.g., COBRA and HIPAA administration). ♦ NHS was recently evaluated favorably through a formal claims audit conducted by the City. ♦ NHS's fees are quoted on a mature basis, while other proposers did not factor claims run-in into their quoted fees. Stop -Loss ♦ Of the five (5) proposers, American Stop Loss was consistently the most competitive, followed by ING, for the various scenarios requested. ♦ Mutual and PacifiCare have indicated that they will work with another stop -loss carrier, if they are selected for the administration and utilization management of the EPO/POS programs. ♦ Based on the respective quotes by American, it would appear that the optimum stop -loss attachment point, in terms of cost versus risk, is $120,000. ♦ All of the most competitively priced carriers indicate a willingness to increase the lifetime maximum under the PPO program to $2,000,000. The additional cost, as applicable, has been included in the financial analysis (for the $135,000 deductible level only). Pharmacy Benefit Management (PBM) ♦ PCS' bid was deemed non -responsive. ♦ King Soopers did not submit a quotation for PPO retail prescription services. ♦ PacifiCare and Mutual of Omaha are not offering stand-alone prescription quotations; however, Mutual of Omaha is willing to allow the City to select a prescription benefit manager of their choice. PacifiCare requires their PBM services for each medical network product. While we would recommend against carving out PBM services from the EPO/POS programs, we believe it is appropriate to carve out PBM services for the PPO. ♦ National Medical Health Card appears to the most competitive, based on our weighted scoring methodology. The next most competitive stand-alone PBMs are Express Scripts and Eckerd. ♦ Eckerd has the greatest number of contracted pharmacies in Fort Collins (25), followed by Express Scripts (23) and National Medical Health Card (11). 3 ♦ National Medical Health Card provides the greatest percentage and dollar of rebates back to the City, followed by Eckerd and Express Scripts. ♦ National Medical Health Card, Express Scripts and Eckerd have confirmed their ability to process the current PPO plan design. Summary In terms of cost, service, and disruption, it would appear that the vendors best positioned to meet the City's needs and specifications are: PPO Network: Sloans Lake POS/EPO Network: PacifiCare UM - PPO: Sloan Lake UM - POS/EPO: PacifiCare TPA - PPO: NHS TPA - POS/EPO: PacifiCare Stop -Loss (all coverages): American Stop Loss PBM - PPO: National Medical Health Card PBM - POS/EPO: PacifiCare Alternative arrangements would include PacifiCare, or Mutual of Omaha as the provider for all services except stop -loss. We look forward to reviewing this analysis with the City, and would encourage the City to conduct reference checks as appropriate. TSC DEN:31466.1 4 VENDOR, XONSES Medical Vendor _' Aetna/US HealthCare—� PPO POS Network _ Network _ EPO�- Network _ TPA �_ UR Stop Loss Carve Out Prescription Drugs_ Declined to Bid Did Not ' Respond X American Stop Loss X Blue Cross Blue Shield X of Colorado CIGNA Companies X Crawford & Company X Eckerd X Express Scripts/Value Rx X First Health X Frontier Adjusters X Great West Life X ING X Intracorp X King Soopers X (1) McKee Medical Center X j Mutual of Omaha X X X X X X X (2) NYL Care X National Health Systems, Inc. X National Medical Health Card X National Prescription Administrators NorthCare X Northern Colorado Medical Center X Occupational Health Management Services X PacifiCare X X X X X X X (2) PCS Inc X Pacific Life X Poudre Valley Hospital X Professional Pharmacy Services Inc. X The Prudential X QualMed Inc. X Restat X Rocky Mountain HMO X Rx America X SMC Rx X Safeco X Sloans Lake X X X Spectera X (3) X Sun Life of Canada X United HealthCare X -_- -- WHP Health InitiativesInc._.--- ------- -�--- X (1) Did not quote PPO retail. (2) Not offering a stand-alone benefit. (3) Quoted PPO network only through Beech Street Corporation 5 SUMMARY . A!' FIXED COSTS CURRENT O) PPO EPO POS Total Coverage Prescription Drugs (2) $4.30 In TPA In TPA -- Stop -Loss Insurance ($135,000) 8.85 $7.36 $7.31 -- Utilization Review Services 1.60 In TPA In TPA -- Third Party Administration Services (TPA) 7.77 30.15 28.96 -- Network Access Fee (3) 2.35 - 5.63 5.36 -- Estimated Monthly Per Capita Fixed Costs -_ ---_- $24.87 $179,0641 $43.14 $41.63 _ -- $521,872 Estimated Annual Fixed Costs $302,843 -- _ 1_ $39 965 (1) Selected vendors are "current" providers and current costs for all services: - PPO EPO POS Prescription Drugs PCs PacifiCare PacifiCare Stop -Loss Insurance PacifiCare PacifiCare PacifiCare Utilization Review Services RMHMC PacifiCare PacifiCare Third Party Administration Services National Health PacifiCare PacifiCare Medical Managed Care l_ _ Sloans Lake PaciflCare _ _ PacifiCare (2) Assumes 1.72 scripts per participant per month. Assumes 10% mail order utilization. (3) For PacifiCare, physician incentive charges which are not included in TPA fees. Assumptions:_ __ Total Number of Participants PPO EPO POS Total 600 t 585 80 1,265 0 SUMMARY OF FIXED COSTS _ _ -- - -- - OPTION 1 (1) Coverage 1 PPO EPO' ( POS Total Prescription Drugs (2) $4.63 In TPA Stop -Loss Insurance ($135,000) 6.60 $6.60 Utilization Review Services 2.00 In TPA Third Party Administration Services (TPA) 9.10 31.27 Network Access Fees (3) 2.65 5.56 i Estimated Monthly Per Capita Fixed Costs $24.98 ._ $43.43 Estimated Annual Fixed Costs �_ ___ $179,856 $304,879 (1) Selected vendors and proposed fees as follows: Coverage - - Prescription Stop -Loss In Utilization R Third Party Medical Ma In TPA $6.60 1 -- In TPA -- 31.52 -- 5.56 -- _-- Drugs PPO - EPO T POS National Medical PacifiCare PacifiCare surance I American Stop -Loss American Stop -Loss American Stop -Loss eview Services i Sloans Lake PacifiCare PacifiCare Administration Services National Health PacifiCare PacifiCare naffed Care 1 Sloans Lake —1 - Pa ci Care PacifiCare (2) Assumes 1.72 scripts per participant per month. Assumes 10% mail order utilization. (3) For PacifiCare, physician incentive charges which are not included in TPA fees. Assumptions Total Number of Participants PPO EPO POS _ Total 600 585 80 1,2615 7 SUMMARY OF FIXED COSTS OPTION 2 (1) Coverage PPO EpO Prescription Drugs (2) In TPA In TPA Stop -Loss Insurance ($135,000) $6.60 $6.60 Utilization Review Services In TPA In TPA Third Party Administration Services (TPA) 34.31 31.27 Network Access Fees (3) In TPA 5.56 'OS Total In TPA $6.60 -- In TPA -- 31.52 -- 5.56 -- Estimated Monthly Per Capita Fixed Costs $40.91 -_ $294,552 L $43_.43 - $304,879 j $43.68 i Estimated Annual Fixed Costs - _ �-- _ $41,933 _ -- (1) Selected vendors and proposed fees as follows: _ _ - Coverage PPO EPO POS - Prescription Drugs PacifiCare PacifiCare PacifiCare Stop -Loss Insurance American Stop -Loss American Stop -Loss American Stop -Loss Utilization Review Services PacifiCare PacifiCare PacifiCare Third Party Administration Services PacifiCare PacifiCare PacifiCare Medical Managed Care PacifiCare ____--- ._Pact Gare --_ PacifiCare (2) Assumes 1.72 scripts per participant per month. Assumes 10% mail order utilization. (3) For PacifiCare, physician incentive charges which are not included in TPA fees. Assumptions_ - PPO EPO POS Total Number of Participants 600 585 80 Total 1,265 0