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Home My WebLink AboutCORRESPONDENCE - RFP - P682 BENEFITSTHE SEGAL COMPANY 6300 S Synw,e Wav su1[C 200 Enjkwood Colorado III 67' 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 inter 1. Don R Heilman Senior Vice President Attachments cc Gwen Fen Jacob W Lawrence Lorri A Kohle Atla t B [ Ch g CI el d D Edm n[o Hanf d H u [on Lo A gale Min Pot NI N w 0 1 Mult[natl oal Group of Aeluenea nd Con ultank Am t rd noA mw p N w Y A Ph ern Lo San F anti Seaul 4b to W It ngt D C We t P Im B h q 6 Bar I a H mhu g U L a n M Inn to M oC 1y 0 1 Pan SUMMARY OF FIXED COSTS Coverage PPO EPO lPrescnption 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) 1862 Network Access Fees (3) 1 95 Il Estimated Monthly Per Capita Fixed Costs $30 67 _ iEstimated Annual Fixed Costs - _ 220 82, 4 1 (1) Selected vendors and proposed fees as follows Coved - Prescription Drugs M Stop -Loss Insurance Am Utilization Review Services M POS — - I Total In TPA $6 60 $6 60 In TPA 34 17 35 17 300 300 usu Third Party Administration Services 1 M Medical Managed Care M POS — - I Total In TPA $6 60 $6 60 In TPA 34 17 35 17 300 300 EPO POS -_ - Mu of Omaha Mutual of Omaha Mutual of Omaha encan Stop -Loss Amencan Stop -Loss Amencan Stop -Loss al of Omaha Mutual of Omaha Mutual of Omaha Mu of Omaha Mutual of Omaha Mutual of Omaha utual of Omaha I = Mutual of Omaha Mutual of Omaha,. (2) Assumes 1 72 scripts per participant per month Assumes 10% mad order utilization (3) For Mutual of Omaha physician incentive charges which are not included in TPA fees Assumptions - - - PPO EPO Total Number of Participants 600 r 585 QW 1 265 Q, (2) Assumes 1 72 scripts per participant per month Assumes 10% mad order utilization (3) For Mutual of Omaha physician incentive charges which are not included in TPA fees Assumptions - - - PPO EPO Total Number of Participants 600 r 585 QW 1 265 Q, NETWORK ACC _ Service PPO Network Onlv ill (Comprehensive and Basic) Access Fee Additional Charges III ID Cards/Enrollment Start Up Fees Other (detail) Estimated Monthly Fees (4) Estimated Annual Fees (4) Guarantee (months) iIRANKING n Pro fo and p :harg PPO POA and lutual of Omaha (1) PacifrCare Sloan Lake (2) Spectera (3) Current i Proposed $1 95 $2 04 $2 35 $2 65 $3 50 In ASO fee I iosal excludes charges r booklet developing voting Actual printing In ASO fee In ASO fee None - - - None None None Did not respond Did not respond $1 25 repricing es will be billed directly o the plan sponsor (PPO sorted only) $1 180_ _ 14 157 - - -t _ _234 �1 _ 1,422 1 603 2118 _ 14 810 _ 17 061 19,239 _ $25A10 � 12 I 12 12 - 24 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 Mintmum revenue requirements of $1 000 per month commencing on the first month of the Agreement Any cost associated with creating new or chiming existing computer programs file layouts data storage and backup 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) POS EPO PacifiCare POSE _ EPO Sloans Lake POS 2) S ectera (3) — — — — —_ j EPO POS POS/EPO Network Only Access Fee N/A I 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 5 56 5 56 I 0 Total $3 00 $3 00 $8 17 $8 17 $5 85 — �Iimated Monthly Fees (4) $240 $1 755 654 $_ I $4 779 � 422 .snmated Annual Fees (4) $2 8801 $21 060 _ $7 843 In 353 _ 1 $41 067 _ lddntonal 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 low the above charges differ No change Did not respond Did not respond ssummg selection as the network rovider for all plans) ivarantee 12 12 12 ANKINC (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 Mmimum 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 POS 80 EPO _ 585 Total 665 II Service RMHMC Current CPO rldmOrly Pre Admission/Concurrent Included below Utilization Review Psychiatric/Substance Abuse Included below Review (if separate from MI above) Full Package $1 69 i Caw Management (Hourly) $70/Hour EsOmal Monthly Prennum (I1 Est led Annual P ti) 520 _ _ 111,520 Il Other Charges Start Up/Implementation Fee N/A Basic Communication Package NIA (brochure stickers and letters) Estimated Monthly Premium (2) ---1960 Estimated Annual Premium (2) Guarantee (months) �LR4NK1NG (I) Does not take into considemtmn Other charges (2) Includes Other charges AssumnttQd PPO Plan 600 Uf1I,I7ATI VIEW SERVICES Mutual of Omaha PaafiCare _ Shama lake _ Spectera III Included below Included below Included below $2 10 III Included below included below Included below 075 $3 50 $8 18 $2 00 $2 70 Included in ASO fee Included above Included in ASO fee $100/11our Included above $2 100 _ S4 908 _ $1 200 _ _ 11,620 _ 25 200 _ $58 896 _ _ S14 400 ��19 440 — In ASO fee N/A None None In ASO fee No charge for None None unless custom standard materials made $2 100 — _ 908 SI 200 Ll 620 szs 200 _ $58 896_ — �— $tet 400 IF 440" 12 4 1 j 2 3 J 12 UTILIZATION REVa v SERVICES CONTINUED Service ,Pre Admission/Concurrent I Utilization Review Psychtamc/Substance Abuse Review (R separate from NI above) 11 Full Package Case Management (Hourly) Estimated Monthly Premium (1) Estimated Annual Premium (1) Omer Charges Start Up/lmplemenmton Fee, Basic Communication Package (brochure stickers and Inters) snmated Monthly Premium (2) stunated Annual Premium (2) 3uarantee (months) I How do charges differ assuming you are Ito provide UR for all plans (1) Does not take into consideration Other charges (2) Includes Other charges POS 80 EPO _ 585 Total 665 Mutual of Omaha T— POS _ EPO In ASO fee In ASO In ASO fee In ASO They do not charge hourly or per use fees In ASO fee In ASO fee No difference — PacrfiCare _ _ Slonns Lake S en -- _ _ POS EPO POS EPO PO_EPO_ _ Fee Included below Included below Did not Included below 12 10 E2 10 quote 'cc Included below Included below I Included below 075 0 75 f I O 56 f 10 45 In ASO fee In ASO fee In ASO fee In ASO fee 15 85 E100/hour 52 70 Included above $2 70 Included above -t845 j _ $6 113 f1138 f73359 _ $3 422 216 _ $41.667�_ 12592 E18945 N/A None None No charge for standard None None unless custom materials made _ 845 _ 6 113 110 138 _ 73 359 _ _ _ 3 422 $ol 067 $2161 f 1 580 1 52 592 I8 954 24� 24 �—r �No difference No difference for all plans e rf not chosen forlans 13 Service _ III PPO Plans Only -Without Run In Medical Claims Administration Estimated Monthly Fees Estimated Annual Fees i Additional Charges COBRA Administration/election or notice �i Retiree Administration it HIPAA Administration ID Cards Start Up Fees THIRD PARTY ADMINI Mutual of Omaha (1) T $18 62 $11265 $135 181 ATION (TPA) SERVICES $7 77 $9 101 $34 31 $50 per reporting unit — 10/election/noun plus $5 each month for and $15/COBRA each COBRA billing parncipi nt/month address Included above $11 65/ee/month $13 65/ee/month $ 30 plus one time — $10/certificate set up fee of $500 Included above — Do not provide $0 — $0 Not available Not available Not available Included above N/A Guarantee (months) I — 12 I � 60 I 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 far ID cards depend upon customization required ID cards already have company name group number and benefits Assumption, PPO Plan 605 14 THIRD PARTY ADMINISTRATION (TPA) SERVICES (CONTINUED) _ Mutual of Omaha (1) -- - National Health Systems (2) -- -- - - - — PacafiCare (3) �Service POS EPO _ _ POS _EPO Current POS EoPO _ Proposed - - POS EPO -J POS/EPO Plans Only Without Run In Medical Claims Administration $35 17 $34 17 Did not quote Did not quote $28 96L$30 $31 52 $31 27 IIRx Administration Included above Included aboveIncluded above Included above Estimated Monthly Fees !I1 $2 814 1 _ $19 989 _ _ _ _ 2 317 �2 522 $_18 293 Esnmated Annual O) $3_3 763 - $W _873_ - � _ - j $27.802 211 653 _ $30 250 2l9_ 5_ 1_5 it jAdditional Charges COBRA Administration/election or notice $ 50 per reporting unit plus $5 - Not available Not available each month for each COBRA billing address Retiree Administration Included above - Not available HIPAA Administration $ 30 Not available ill ID Cards Included above - In ASO fee Start Up Fees $0 N/A Other (detail) None N/A How do the above charges differ assuming Did _you are selected to administer allclans' not respond - Did not respond l RANKING (months) 2 Guarantee 12 12 (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 charm 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. POS Plan 80 EPO Plan _ _ _ _ _58_5 Total 665 15 STOP SIAWICE �EI@a1M - ENO WIWtlImmS �•••••� �•MeluY m ------------- C.mrE ltl0Eae1 3 _ Sm IN aFCrtl9 oo - - I[ro PL�D.Ir lMrlo - d Pn Ela6k Pv MaM Iavmd CWrm PS MaW gwm+etl Ia EI aLR Iam.eJ CWm Pn Mmh Pa Mmh Pe El abk Pe Mmh Eva 1x-10.1m Pa Mmb Pa £Jtlpk Pa Mmtb E>pmed Irc.vrtElb® Pc Mmlb PS Pddbk Pr h 9e6 INm..ddo6 Pc MasIE Pa Orabk Ps Mael\ EWaWt IrrmmY C1W® f Pa MmG Pw Pbabk Ps Mmb Y Lrnv.NCkuu PgMWM1 51".91>p EmPlo3v �p Ya SPwtt E plY CWIly EmPI^Ya FuwIY 5719I 7I91 7191 ] 19 DW m Pm5 $5N1 Md. IOM Rural 961 W3 998 6]A 13" Md. apm SS IS 13M IA32 19 M $m % - $5NI Iz 63 NM 19 51 $ N9l 1326 13 ]b I3 M Dbm �W RANK/NC - f5 - _ M] m _ I)I SM _ - _ - fP1 A-�- 5 Irk_ t $)6011 �_ lW 1103I O]5 _ b 6 �WW Em1/%'m S,— �F.oilJoy¢ CNIq N Ev�ps Fw 1Y f6M Md 6M m 6 (O gFm1 6W� NO3 Md- 925 eW-d B 19 1301I $3% 93z ] M u M Md. sluoJ 15M 116I 1141 17% 539230 E.S },Sa UI] - - _ 9A low IS IJ M ,n 6%61 6M 03 HN% 11% Dd. ELmbiM,vniv P.em,.m nrmael A-1 R.v,.... RANKING 14-7 520f3 %O _ _ _ _ L�n_6l 835 j L 3_36±L f) M3 fM 0�3 5 ® i11M s(OL 3 - - jfi101 sn z10�13_-�� V75.599 !OF - 5 ]55 J ifiYBH9 E.O1 R-W,K Sv- E-Ol (Mdd( I Emplu F IY 3191 DW 6 4 m d4l qI 4% S3]6 DJm ] 91 691 IArrM IO y) $339 bP 9% UEm teW.W HIa 1161 1161 1610 $m 91 - - _ - _ f3 ]5 816 919 1276 $mm NI]1 090M M2W S39E 1059 1039 1059 Dbm N.N r.n MrnFly Prem m c.. �..,.n A....1Rmm... RANKING $355691 I / SN"IWI I 3 }691 W— 3 � _ I __ S6<93 _ jl]6W _ _ - 115 _ S _ /5 SM i 5%]S _ _ 910 b _ - 6 R. G.. 12 12 I 12 _ L (I)Rm NAAw2)/9, $05P00 Ylfi eJlxu l3fKK{4'V 41 ^r. mn mrrmjw llph ll IV12 R) L W buw oluvearedrbw I fr wp Pmndu (3) xNnm - wm pea-. I.W. rclurk lOR — m rre Meoyw Mtlr rwu Ewmwrb lry lOk dre u8� ma6 n(Wfia mfy t%4alfu Spa>F wu.[IWe.h AwrW.0 -1 m o-4j pgv..W /m P^aklre SP I30 En7kry CkN(m) W £^PI%ee f S, 220 - m STOP LOSS M iCE CONTL o Aewb_oStw l.ou ---T- - —EVG WIVVd"-xa MdualdO®lu Plltlmm��M:as[gp� -9w IXedCRnWa 111 IyI YY U CereaLe PV FBtlhk i InrnnNCYv bMwl6 PvE phk Iv ndCYm PV PlrpE4 m( e6CWm Pv P ImevaN CLi® Ca aE Pv P6dhle Imm3NCleem h 1nrnnMChia �eptlm- _ _ 7/5G.9W Pa MaM PV Marlh Pv MmM Pa Mash PCMmW —h Pe Mash bMmlb Pd Ma16 Pa MmG Plmm bMPv Mmb _ P. M1.b Srmrmtd Clmu Pv Mmlh bMmh 1 mS � Fmq nv 36 W S711 $30 Emfbya S,- 69/ 6N _ 1093I - { 5313 $15119 j39L Emgoya :mo N Fmplgv FuoOY 691 629 5II _ Y 1 688 J326I 1039 0P1 100J 901 1691 $mm 1063 Sa 06 low rm E.r vxly Peon .. FJ� 51] f5.y16�- 10 1 � L �` j_69J � _ _ - ]12 ]8210 - _ 318 53163W f)]M RANKING J 3 l fPQ 6 _ A f bra sryuu Ma� 4% vosl 6p $278 sM U74Fmrlrya _ - f655 f1T2 A] $J 92 Empty CWIJ( 1 <9i 56]I 516 10" 655 2(AM 1059I EmPI°Ya Fan IY dM 901 _ 81] 11M .59 161E fJ21 i6 v 1012 61�G61 1059 EwoY A-.,y Perm m Fs11mOtllBlvulP+®11® _ _ -{N 619r - — L 59f _ � 102 - _251I -18 _9f3 QSJ f_C.961 1 �7 119M 63]I - -� _ - 75%1IM - - RANK/Nr / 3 2 6 - 5 Ru Gm ..(All PI m1 12 R 12 11 12 m rtggtl HH- 1- hAm mf M 1 vc suume DWv tl Yurtl W[vl- WA I.W mMrmh u¢Ims wxrMGn IIN- grvaa8e 6x Al Ma iah hvetl la Fr N Nog[ Md r.n1 plam hall tlua ^++amevum�- POS EP.Q Zue( E^VI%a JO /Hf 213 E^W%a S 10 /W I I/O EmpIN CN& IS 95 /l0 ErgMery £wa(y A 25 205� 230 65f si ...L%W na Rns A--S PI—AQ ING MG WIWtlkmnar I Mu Pr EHVbl Pv PLpbl P PLChk PCamhk C.W Po Mweh 1_u11Wb P_n Madk _ _P_cplm_Ih 1ID3w0 $9095 $12W 6109G1� $169 135000 839i 10266 9231 152 Sim 0M dmu.IP 6249 9668 ]959� 136 um 91A]0.V fIw ICG fIM SW� f131518 jN25 $us aw 1w IM in Iloeu Ia8 Jim wl _ _ ]4999 _ 'In _ IN 011 _ __WY)6 1".2 (1) Rn NA gm 22 Ift e115 M p qg Il pl G .1 Pa £IIdW Pa P2ldhk� Pa G�phk Pa Ns1Y _ Pa MaW Pa Mm1h $15 ]93 $u 3% SM,SNfi 11309 12101 9W 10w SIn800 SIMIN $LAM 1356SO 105212 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-nme (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 PEEM Pro Plana Only ,gat —"oar A rag Pr pie a Cns (3) Brats Name MAC Based Genera D wIoil fAWP B and Now MAC Based Gemrm (4) ;Adrnnsmuoa Posug F e per Rx Brand Name G m D spent gFee pe R Brats N m Gemrc ow F es ID Cart DUR Prog am MAC Pr all, Oda, Fees Niemand Exp. Sc (1) &ug Mutual W Me&W tieallb PCs Erkend PER Sekp PERaCsre swixtrs Omabv CarUS�mv tau _rmpeandi Pa.W. _ R AT Cussem Admmuuatwn $42 % 542 45 $41 55 D d N 5410 E41 45 WAS ul 65 "pharmacy $42 807 7W 1059 Q. 601 770 56 520 servlcn. not 10 — _ _ va]able on .-out base The core 130% 120% 140% 130% 140% 150% 130% assacuuW Wllh 13( 120% 450% 140% 610% 450% 65AS 700% the Wounis atua 20( _ fdudrugplan as put of a tnedv Plan quoted are WIB HI kh In ana. im SMC Rc (2Z Inc $41 63 $44 80 E41 i 1031 1105 10: 130% 90% 130 130% 150% 200 EI So $0W so In Aso fine E035 NIA $000 Ireluhdm die $053 $048 5065 E I50 060 060 1 ASO fee 035 NIA 0W ASO fee 053 048 065 E 44/ learon¢ E2 M E2 M5 $2 25 $2 % E2 40 IIMj 1250 E2 50 E2 W $2 75 E 225 225 225 2M 240 25D 250 250 2 275 2 provded pe Smndard b fold ca d Now E SOkdinlh 1st - Now None $ 65/card Pape Now 1 I p h fain ly at no charg reluded cud only UmInW E w. d E 50/card Nore Now N m Now - Nore Now $ OV la in (2) Ireluded Now None Now DW not respond - None New Now Ircluded Included None See alonc and I ASO fee See anchN - See Nore Out -of area Four moldy r ports See s hedul areched DMR E2 Wclm w II be provWW a no Client remote charge Afier Wt E50/ access p ogram report 5500/sne Ad we rep. $50/Lwr pro- gminin N Paper ehgibd ty -{I _ 550/hre Gem lc Fill Rat g 447% 447% 447% 447% 447% N7% 447%- --- 447% 447% 417%---dd Averag W gned 11 Prescrl t Cont(S) 1 $27 33 $26 95 $27 71 - $25 77 $26 361 $25-%l E25 36 - 1 E2 %% RANKING (6) 5 4 8 - 2 3 - / - 9 Gumema Imontsj _ _ - _ _ _ 24 _ 36 M 12 _ _ 36 - 36 _ - _ 36 _ 12 DW mr res nd (Il Ihry hme Wpl ed715 ofrhe market shm m m n to educe dse Gt pem ng fee to 52 25 if bm ar die ommued a mmendly hangedby pharmar sm d manofo ,,en or sl rAe C sy des ma jo ennoll m the EepressP of or the dupenua fee revers to $2 50 (2) OpnaM daily an 4ae bum (maime) scars S325/mmmh 72u C11y u re pourb/rfo phone bm cha g (3) Bnedm AWP of$4S00Soedardd900Gewa tnolade, daotw dupaaaagf andadnomurmaaNymagef (4) RellecumxadnpmsedpercemduroomoYYAWP asddxsrosmketmoac impnetofreipreave MACpmmng (5) Formals edooG (Ave age B and Name Cmts G A sage Gawnc FR Rme)) + My rag Gem rc Cost x Averag G ne c Fdl Rme) (6) Rased ea A r ge Wmgkod Presenphon C sr 21 PPO Plana e301v Mad Order Fckerd E 0�6 A _x�recv Sendlll Soopera A nge N se pr Coal (1) Brand Name E]6 04 $79 15 En 75 MAC Ba d Gcrc II 99 12 15 1315 Die ntoffo(AWP Brand Name 160% 140% 160% MAC BasedGre (2) 520% 480% 450% i au n/Posmg Fee pe R B and! Name $044 f0011 $065 In �Adm Gercrc 044 000 065 In Do,. gl epe R Bred Namc E000 TI75 $150 Gene 1 95 175 150 Oh F ID Ca d Now Sunda d b.fold card Noce rclulu dd OUR Prog am N no Noe N ne MAC Pe ng Nore Norc N re Orhe Fees Nore Now Ad has report ng I up m E15MIOa Gere Fill Ri A ae 377% 377% ]77% Avcrage Weighted Pr se In o Cosi (5) f51 89 TSI 89 ESJ 39 RANKING (6) 2 8 6 Nmrond __— WHP 1% utad of Medial lEeWh PCs SMC it` lydtldw Aarcha C"SpeemiLa. 'Curved Propmed PaeiflCare RSTAT IlxAmerha isle. Ad. ssras E E75 951310 T'15 515 dpharmacy I1400 f76 E169 1 1035 1015 13 10 /S 06 IN IS W servicm ta ms 1100 1450 Id 50 16 65 avadable on a _ _ — — csry baz s Th costa 180% 160% L5.0% 150% assneuad w s6 160% 170% 140% 610% 450% 35.0% 350% dieadmmmmuon 400% 350% 300% of the drug Plan as pan of a method — _ plan quaN are ASO fee $0 35 To d6 SOW included in die $0 00 SOW Soo ASO ke 035 0A6 000 ASO fa 000 Goo OM 5255 $000 $200 $200 f200 $150 $200 255 175 2 00 2 W 2 W 150 200 New N/A — None None Norc Same as Gov Ins t p I Now None — Now N re N re Sane as above Include, Nore D d not respod — Norc None Now Same as Gave N/A ASO fee Posmgc aid — See Norc CusmmnW Sameas bare See hd hatdluig of attached brochures f M/ on. .1. brochure _ 377% 377% 3771 377% 377% 377% 377% 377% 2 $51 47 $52 26 T55 02 $54 56 — $53 62 $52 94 $56 15 f (1) A, hav apphd $ 25 ofthe mark I she, a owem ves t cedir the Anpema gfe 1 $2 25 if bat ar du in w mB rudly changd by p4arn ac at al maruTmurers or ifthe City e/eess ner to emo8 in the FP easP efe ence thedispeiumgfee everoto T250 (2)BadonAWPofMWBasdandg2000Gne mind dsscouia dsspem Mf and adssam nar onlauagf R)Reflect acted podedpercemdas oaaoffofAWP add« rmrtak tat ac oizpoctof pect MACP 9 (3)New cas et upf e=T20pe.1 (4) $ Z lbrahur for cmorom zedb ochur (5) Fo mule, equals (Ave age Braid Name Cast x (/ A e age G e c Rll Rae)) + A e age Gene c Rates e A e ge Gene is Fl(( Rae) ddi%tuedon Avenge Werghtd Pr c,pt,.Cost SO 0 50 251 25 I 7%I1 2 06 3 1 22 P45/EPO Plans 4nlx _ Nmoed Refill Oaly FiSserd Eaprcss Ser" 1 POS _EP0 wog Soopets(2) Mafi d of Omaha Medd 11eaR! Card SLelemc ix. R&STAT RaAmersra SMC Ra laR{aBeea, as RxAmersn Ave g Pr pt Cms (3) Brats Name S42 % $42 45 $41 55 S42 58 S41 65 S41 45 $42 18 $41 63 $44 80 $41 l MAC Bar dl3ere — — — 80] — 780 ]80 1108 601 — ]A 1023 — 1031 — 1105 10 — D scau t 0 fAWP — B nN me MAC Based Gercw(4) 130% 520% 120%II 140% 45 O% 450% 125% 125% 130% 610% 140% 450% 130% NO% 013 013 80% 150% I1f 20[ Adm Oat NPuang Fee pe R B nN me $150 $060I $060 EO]O In ASO fee 035 $053 $048 $065 SO Gem c I50 OW Off OM i AM fee 035 053 048 00 0. E44/I we I D sp mi g Fee pe R B M N me Generc $1 25 225 $2 25� $2 25 225 225 $ M 2S0 $2 50 2M $2 40 240 $2 50 250 S2 00 2W $2 ]5 275 $2 2'. Onh F s ID Cards 2 p ded w Standard In fold D d ms respoM N re $ SOI Im0i 1 N. $ 65/a Same as pre mus In set W fee family at mcharg reluded card $ 50/card OUR Program N rc N re $ SO/ d N re N re Now S O8/ee Same as Pre loos Include MAC Prcing N ne Now Now Now Dd not spots Norc Norc Same as prc uaa N/A Oahe Fee N. Se On hn Ad hoc porting In ASO fee See asucled N. Oulof. area Samc"p is a See sched le up M$150/hour DMR $250/c1m Cle t taste saws program fia Ad hoccie reports SSOlhow Paper ehgibdiry S 50/hrc Gene c Fill Rate A erage 447% 447% 4d7% 447% 44]% d47% 44716447% 447% N] Average Weight Prescn twn Costs $2733 $26 %,I $26 46 $28 09 $25 ]2 526 36 $27 W $2/ 63 $29 01 ( RANKING (6J _OL_ 3 9 _ I 2 8 2 IO (1) They eve apphn$ 25 cfth mark l hw mwrves to duce the dupenmgfee to$225 If ebaresa edurommmdo mmenly changed by phua� incal wmmoracwr o iftheCry lmst enrol( the Erp essP efe eme ncg we the duRarrngfre evens to $250 (2) AWP (bran) POS = 12% an £PO = 13% Adnunnt went Fee POS = $ 25ft and EPO = $ Oft (3) Ratem AWPOf HS 00 Brwdan $9 0o Getter¢ ne/udes di count Erapewwgfee and antersr w emfinstagefee (4) Reflecu mud epmtedXmew ducnnw off cfAWP an doer m take men wrouw mpact of erpecn a MAC pnc ng (5) Fonwda equa0 (Average Brad Name Cast x (l A rnag G ncn F B Aide)) + (4 e age Gem tc Cast a A e age Gewnc FlR Rine) (6) Barton A e age Weighted Frampton Cost 23 PREKKIL JONDRU PAN P9SLhCG PI➢nc 9nIY I i Motl Orrkr _ _ _ Eckert Avaag Prmcnptw Cmt(1) NrwHe �akinipft__ m.g-P— Maintain( MetEed Health :T—E �_ EPO_ � tLanditia Casd Systems, le MC Rx 1. B. dN me MAC BasedG writ, s BotwlNm Duco tuff fAWP— — p MAC Bwed Gercnc(2) II Ad. .1 WPanmg Fa pe,R $76W 1199 160% 520% E791511 $7915 1215 1215 _I 140%1 140% 480% 480% Sr 75 1315 — 160% 450% — $7635 1035 — 180% 610% — $7595 13K — — 160% 450% EJ]W 1400 160% 400% E7620 1450 170% 350% $8005 1665 — 140% 300% $76 11 170 %13 BnrdNm �1B UP EOW $00p $065 In ASO fa $035 E000 R100 $065 E0, Od4 0W 0a 065 In ASO fa 035 0a 000 065 0: qD pem t%Fce , R Gercrorc IIPI� B.WNme E0W EI75 EI75 $150 E255 E000 Elm EIM $200 $1: 1 95 175 1 75 1 50 251 175 200 1 5() 2 W 11 Ocb F ID Ca ds N rc Nom Now Now N/A N rc Norc Same as p e om In tit up fee DUR" to N rc Now N re Nore N a Norc Now Samcaspre ous IrcIWM MAC N g Norc Now Now N to D d . rc pond Norc Now Same as poe maul N/A Oshe Fees Now N rc Ad hoc porting In A50 fa Pantile and Norc Catom zed Same az prcvtau See schM 1 up t E1500our handl g of Hatboro E IS/ communaatwm _ — — _ Hach rc Gere It, FIIR mA tag 377% 3]]%I 377% 377% 377% 377% 377% 377% 3779 37 J% A crag W ghted p Pr ip0an Cost (3) $51 89 E53 89 $53 89 E53 40 E51 47 S52 26 $53 62 552 NS56 15 E52 0 RANKING f4) 2 81 8 6 1 4 7 5 If chm n to pro d Rx for all plam? Dal rot re port D d not respond All haul. would N/A Dal rot respad Dd rot rapad N d ffem. No dtfferctoe L data It to k lowest ntIn proFa µo antt.1 al card. uld H waived (1)8aMo.AWP0f;9000Brada.dd2000Germ¢rrcWdes dumaa dspe.n.gf macaw., oowXst g fee 12) R#W(1 wMaf epmrM pert m data.. oBafAWP addoas mr roke two aaaax rmpacr aJ tlPMIII MACp rung (3) Formula equals G4 age B/ad Natw Carx (1 Awo, Geoenc F U Rae)) + Na age Ge.en Rarx A ge Gean Flit Rae) (4) Ba don Av g WegNM P ere rpm. Corr 24 ♦ Both organizations essentially use a relative fee schedule as the basis for physician reimbursement PacifiCare more extensively uses per deems 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 PactfiCare) 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-m into their quoted fees Ston-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 Sloans 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 VENDOR PONSES Vendor PPO POS _Network Network Aetna/US HealthCare American Stop Loss Blue Cross Blue Shield of Colorado CIGNA Companies Crawford & Company Eckerd Express Scripts/Value Rx First Health Frontier Adjusters Great West Life ING Intracorp King Soopers McKee Medical Center Mutual of Omaha NYL Care National Health Systems Inc National Medical Health Card National Prescription Administrators NorthCare Northern Colorado Medical Center Occupational Health Management Services PacifiCare PCS Inc Pacific Life Poudre Valley Hospital Professional Pharmacy Services Inc The Prudential QualMed Inc Restat Rocky Mountain HMO Rx America SMC Rx Safeco Sloan Lake Spectera Sun Life of Canada United HealdiCare WHP Health Initiatives Inc_= — X X X X X X X (3) i (1) Did not quote PPO retail (2) Not offering a stand alone benefit (3) Quoted PPO network only through Beech Street Corporation EP( Netwc X X Medical Carve -Out Declined Did Not - 1 Stop- rk TPA UR i Loss Prescription Drums to Bid Respond X X J X X X X X X X X X X X (1) X X X X X (2) X X X X X X X X X (2) X X X X X X X X X X X X X X -- --1 — — -- X- - - X E SUMMARY FIXED COSTS 'Coverage - PPO EPO L POS Prescription Drugs (2) $4 30 In TPA In TPA Stop Loss Insurance ($135 000) 8 85 $7 36 $7 31 jUtihzation Review Services 1 60 In TPA In TPA Third Party Administration Services (TPA) 777 30 15 2896 (Network Access Fee (3) 235 563 536 'Estimated Monthly Per Capita Fixed Costs $24 87 _ $43_14_ $41 63 Estimated Annual Fixed Costs — $179,064 _ $302 843—�_ $39 9 55 (1) Selected vendors are current providers and current costs for all services Coverage _ _ -- -- — — _- PPO _ EPO POS Prescription Drugs PCs PactfiCare PactfiCare Stop -Loss Insurance PactfiCare PactfiCare PactfiCare Utilization Review Services RMHMC PactfiCare PactfiCare Third Party Administration Services National Health PactfiCare PactfiCare Medical Managed Care Sloan Lake PacifiCare — L PactfiCare (2) Assumes 1 72 scripts per participant per month Assumes 10% mail order utilization (3) For PactfiCare physician incentive charges which are not included in TPA fees Assumption P_P_O EPO Total Number of Participants 600 585 Total POS Total 80 1 265 i Coverage Prescription Drugs (2) ,Stop Loss Insurance ($135 000) Utilization Review Services Third Party Administration Services (TPA) ;Network Access Fees (3) Estimated Monthly Per Capita Fixed Costs (1) Selected vendors and proposed fees as follows SUMMARY OF FIXED COSTS PPO EPO $4 63 I In TPA 660 $6 60 200 In TPA 9 10 31 27 265 556 $24 98 $43 43 Coverage } PPO I EPO Prescription Drugs National Medical PactfzCare Stop Loss Insurance American Stop -Loss Amencan Stop -Loss Utilization Review Services Sloan Lake PactfiCare Third Party Administration Services i National Health PacifiCare Medical Managed Care — Sloans Lake Paci Care (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 In TPA $6 60 In TPA 31 52 556 Pacipt-are American Stop -Loss PacifiCare PacifiCare $526 Assumptions _ PPO _r EPO _ POS _ Total Total Number of Participants 600 5851 80 1 1 265 7 SUMMARY OF FIXED COSTS Coverage _ _ _—_ - - PPO EPO Prescription Drugs (2) In TPA In TPA Stop Loss Insurance ($135 000) 1 $6 60 $6 60 Utilization Review Services In TPA In TPA Third Party Administration Services (TPA) 3431 31 27 Network Access Fees (31 In TPA 5 56 Estimated Monthly Per Capita Fixed Costs $40 91 _ _ $43 Estimated Annual Fixed Costs $294 552 $304,8 (1) Selected vendors and proposed fees as follows liCoverage PPO - EPO Prescription Drugs PactfiCare PactfiCare Stop Loss Insurance American Stop -Loss American Stop -Loss Utilization Review Services PactfiCare j PactfiCare Third Party Administration Services PactfiCare PactfiCare ' Medical Managed Care 1 _ Pac(fiCare _ PactfiCare (2) Assumes 1 72 scripts per participant per month Assumes 10% mail order utilization (3) For PactfiCare physician incentive charges which are not included in TPA fees Assumptions Total Number of Participants POS In TPA $6 60 In TPA 31 52 556 PactfiCare American Stop -Loss PactfiCare PactfiCare Total PPO EPO POS Total - -- 1 - 600 I - — 585 80 1 -1 265