TRANSMITTAL LETTER FOR BOARD MEETING OF SEPTEMBER 1, 2016
COMMITTEE ON PROCUREMENT
Mr. David St. Pierre, Executive Director
Title
Authorization to enter into an agreement for Contract 16-RFP-18 Health Plan Administrator, with UnitedHealthcare Insurance Company, for a three-year period, effective January 1, 2017 to December 31, 2019, Account 101-25000-601250
Body
Dear Sir:
Authorization is requested to enter into an agreement with UnitedHealthcare Insurance Company (UnitedHealthcare), to provide a fully-insured group Medicare Advantage Prescription Drug (MAPD) Plan for Medicare-eligible retirees for a three-year period. This contract will cover only the Medicare-eligible retiree population.
The District advertised Request for Proposal 16-RFP-18 Health Plan Administrator on May 4, 2016. The Request for Proposal contained two program options: a combined PPO/HMO program with prescription drug coverage for active employees and retirees; and a group MAPD Plan for Medicare-eligible retirees. Vendors were invited to submit a proposal for either of these plan options or both options. Sixty-six (66) firms were notified and sixteen (16) firms requested proposal documents. The District received four (4) responsive proposals on June 3, 2016 for the group MAPD Plan option. These proposals were submitted by Aetna Life Insurance Company, Blue Cross Blue Shield of Illinois, Humana Benefit Plan of Illinois and UnitedHealthcare. This recommendation is related to the MAPD Plan option only.
The MAPD Plan proposals were evaluated by consultants from Deloitte Consulting and staff of the Human Resources and Procurement and Materials Management Departments. The criteria for these evaluations were outlined in Request for Proposal 16-RFP-18 and included: organizational stability; experience with group MAPD plans; ability to match the current District plan design; network access, size and quality; claims administration performance; member service performance; administrative performance; Center for Medicare and Medicaid Services (CMS) star rating; and financial considerations. Particular weight was given to the level to provider disruption retirees might experience under each vendor and the ability of the vendor to match the District’s current level of coverage in the design of the MAPD Plan. Vendors provided responses to a detailed questionnaire specific to their MAPD product in addition to the standard request for proposal documents to assist in the technical evaluation of the proposal. To address provider disruption, each vendor received a list of providers that District Medicare-eligible retirees had utilized in the prior 24-month period. Vendors were asked to identify any providers on this list that were either not contracted with the vendor or had never submitted a claim through the vendor’s MAPD Plan.
Following the technical evaluation of the proposals, excluding cost, all four vendors were invited to participate in finalist interviews conducted July 28 - 29, 2016. During the finalist interviews, the District was able to gather additional information regarding each vendor’s MAPD product and ask clarifying questions around plan design and provider disruption.
A solicitation was sent to each vendor on August 3, 2016 for an unqualified “best and final” offer. The “best and final” offers were returned to the Director of Procurement and Materials Management on August 10, 2016.
Throughout this process the District held meetings with both the retirees and the Board of Commissioners to provide information on group MAPD plans and the potential transition to this type of plan. Information sessions were held with retirees in five locations between February 18, 2016 and February 25, 2016 to answer questions about group MAPD plans. Approximately 300 retirees participated in these meetings. Study sessions were held with the Board of Commissioners on September 3, 2015, January 21, 2016, March 31, 2016 and August 4, 2016. Retirees were also invited to attend these meetings.
Based on the evaluation of the proposals using the criteria described above and the pricing provided in the “best and final” offer, it is recommended that a contract be awarded to UnitedHealthcare to provide a fully-insured group MAPD Plan for Medicare-eligible retirees. UnitedHealthcare has more than 30 years of experience in the group MAPD market serving over 3,000 clients (460 in the public sector) including the Chicago’s Teachers Pension Fund, Illinois Department of Central Management Services, Rush University Medical Center, United, Boeing and Local IBEW 701. It has 3.3 million members enrolled in Medicare Advantage plans nationally. It has a 99.0% client retention rate for its Medicare Advantage Plans over the past 7 years.
The group MAPD plan offered by UnitedHealthcare has received a Center for Medicare and Medicaid Services (CMS) star rating of 4.5 out of 5.0 stars. It mirrors the current PPO coverage provided to District retirees. The attached comparison chart (Appendix A) gives a detailed comparison of the coverage offered under the current active employee PPO plan, the current retiree PPO plan and the group MAPD plan offered by UnitedHealthcare. The cost for retirees can also be found in Appendix A. The plan also offers the broadest prescription drug formulary available through UnitedHealthcare resulting in an estimated formulary disruption of only 2%. The national pharmacy network consists of over 65,000 pharmacies including all of the major pharmacy chains. Mail order services will be provided through its pharmacy benefits manager OptumRx, one of the largest in the industry. In addition to the standard pharmacy benefit offered under the District plan, UnitedHealthcare offers a built-in pharmacy saver program providing reduced prescription costs for select generic drugs, including the 10 most utilized generics, at 20,000 popular pharmacy locations nationwide. This program offers co-payments as low as $1.50 for these drugs. Members are automatically eligible for this program, no additional enrollment is required.
In addition to the coverage offered under the District’s plan design, UnitedHealthcare offers retirees several additional benefits as part of the group MAPD plan. The SilverSneakers program is offered as a standard benefit under this plan. It provides retirees with group exercise classes, health education seminars and social events at thousands of locations nationwide. For those seniors that cannot get to a location, the program also includes an option to receive an at-home kit in one of four areas: general fitness, strength, walking or yoga. The plan also includes the HouseCalls clinical program designed to identify and assist chronically ill members that have difficulty leaving the home or have limited access to care. It is a voluntary program that consists of an in-home assessment by a licensed health care practitioner to assess medical history, conduct a physical examination, review medications, discuss health concerns, and provide education on health-related issues. The practitioner can then assist with coordination of care based on the result of the assessment. In addition to these programs, other retiree benefits include: a $500 hearing aid allowance; a member rewards (gift card) program for annual wellness visits; six podiatry visits per year covered in full under preventive care; a comprehensive caregiver support program; and a 24-hour nurse line.
The group MAPD plan offered by UnitedHealthcare includes a large national network of providers. It consists of the largest provider and hospital network in the Chicagoland market with almost 18,000 providers and 68 hospitals covered, including the five major teaching hospitals, and nearly 500,000 providers and hospitals nationally. UnitedHealthcare provided a plan to mitigate any provider disruption identified with the District’s retiree population. Its initial provider disruption analysis had the least disruption of the proposals received at 2.7% based on the retiree data provided. During the finalist interviews, UnitedHealthcare was confident that the actual disruption would be even less based on its experience working with providers through these transitions. It has committed to outreach to 100% of the disrupted providers before December 31, 2016. To highlight its confidence in reducing the level of provider disruption, UnitedHealthcare has provided a financial guarantee in the amount of $30,000.00 if it cannot reduce the level of provider disruption based on the provider analysis to 0.5% as part of its best and final offer. The District will also be developing a process of its own to manage any remaining provider disruption identified in the disruption analysis to reduce the level of disruption to zero.
UnitedHealthcare has offered a thorough communication and education plan to help retirees during the transition. It will hold open enrollment meetings throughout the area staffed by experts in MAPD plans. It will also offer teleconferencing events for those retirees that live out of the area or that simply cannot make it to a meeting. The meetings can also be recorded and placed on the District’s website for retirees to access throughout the transition. A Call Center will be establish by UnitedHealthcare with specialists trained on the District’s plan early in the transition to allow retirees to begin asking questions about the transition process and the new plan. UnitedHealthcare has significant experience managing these implementations having transitioned more than 600,000 members to group MAPD plans in the last 3 years.
The Diversity Section has reviewed the MBE/WBE/SBE Commitment form and concluded that UnitedHealthcare committed to 3% Minority Business Enterprise participation, 18% Women Business Enterprise participation and utilized both firms to satisfy the Small Business Enterprise component of the District’s Affirmative Action Policy. UnitedHealthcare is continuing to work with the District’s Diversity Section in furthering its commitment toward these goals.
It is requested that the Director of Procurement and Materials Management be authorized to enter into an agreement with UnitedHealthcare to administer a fully-insured group Medicare Advantage Prescription Drug Plan for the Medicare-eligible retiree population for a three-year period from January 1, 2017 through December 31, 2019.
Funds for 2017, 2018 and 2019 are contingent on the Board of Commissioners’ approval of the District’s budget for those years.
Recommended, Beverly K. Sanders, Acting Director of Human Resources
Recommended, Darlene A. LoCascio, Director of Procurement and Materials Management
Respectfully Submitted, Barbara J. McGowan, Chairman Committee on Procurement
Disposition of this agenda item will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for September 1, 2016
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