The NY44 Health Trust. Town Hall Discussion. March 18, 2019

Transcription

1 The NY44 Health Trust Town Hall Discussion March 18, 2019

2 Dr. Darleen Michalak Proudest Accomplishment: Providing enrollees with quality health care benefits by facilitating a team that successfully transitioned the Erie 1 BOCES Health Benefits Plan Trust into a self-funded entity. 2

3 NY44 Health Trust Board of Trustees John Pope, Chair, Labor Debbie Piatek, Vice Chair, Labor Scott Decker, Labor Liz Freas, Management Jim Fregelette, Management Kate Huber, Labor Michelle Okal-Frink, Management Candy Reimer, Management Donna Walters, Labor NY44 Health Trust Staff Jeni Kapalczynski and Tom Pomidoro, Interim Co-Administrators Alice Riley, Manager of Finance and Enrollment Doreen Kausner, Manager of Data Informatics and Finance Anne Menard, Customer Service Coordinator

4 Panel Members: John Pope, Chair, Board of Trustees Jim Fregelette, Board of Trustees Monica Cecilia, Vice President, Consulting, BPAS Healthcare Consulting Services Aleem Merani, PharmD/ Clinical Pharmacist, Pharmacy Benefit Dimensions Korrin Erickson, Account Manager, Pharmacy Benefit Dimensions Darcie Falsioni, Trust Attorney, Nixon Peabody LLP Alice Riley, Manager of Finance and Enrollment, NY44 Health Trust Tom Pomidoro and Jeni Kapalczynski, NY44 Health Trust Interim Co-Plan Administrators

5 Town Hall Objectives Introduction Index cards on each table to submit questions and comments NY44 Health Trust Board of Trustees and Staff Contribution Rates Calculation of Rates Rate Structure and Financial Health of the NY44 Health Trust Financial State of the Trust Financial Report Financial Plan Plan Changes for July 1, 2019 Pharmacy Brand Drug Changes Emergency Room Copayments Healthy Living Program Future Leadership July 1, 2019 Leadership Structure Board of Trustees Decision Making 5

6 Actuarial Report Monica Cecilia, Vice President, Consulting BPAS Healthcare Consulting Services 6

7 NY44 Health Benefits Plan Trust Town Hall Meeting March 2019

8 Specific Services we provide Healthcare Actuarial Services Premium Equivalent Rate Setting IBNR Reserve Calculations Medicare Part D Attestations PRMB Valuations - GASB 75 for some districts Health and Welfare Benefits Consulting Budget Support Compliance Support Benefit plan design Monthly Meetings but often more frequent Actuarial & Pension Services Healthcare Consulting Services

9 Premium Equivalent Rate Setting Goal is to Project expected cost of health plans for upcoming year Analysis completed annually based on 2.5 years of data through 12/31. Statistical analysis based on: Medical & Pharmacy claims experience Population characteristics (age, geography) Prevalence & severity of health risks Number of employees & family members Current plan design Also Consider: Plan changes & new plan offerings Administrative costs Statistical analysis of trend Compliance with federal & state mandates 9 Actuarial & Pension Services Healthcare Consulting Services

10 Claim Review Claims reviewed by Geographical region MVP claims 25-30% higher per capita than WNY Provider discounts Underlying risk of enrolled population Geographic cost differences within healthcare Access to facilities (urgent care, free standing labs, etc) Claims reviewed by type of member Spouse 30-40% more expensive than employee Children 60-70% less expensive than employee 10 Actuarial & Pension Services Healthcare Consulting Services

11 Claim Review (cont.) Claims projected on Incurred basis As services are rendered not when the cash is paid Longer lag time means claim projection will be higher to cover the unpaid claims Claims reviewed for multiple years Smooth for variability Increase credibility of projection Claims reviewed for population expected to be covered Districts joining or leaving * Simple Claim example 11 Actuarial & Pension Services Healthcare Consulting Services

12 Healthcare Trend Rates Healthcare costs increase each year Recent national survey data suggests: 7.7% medical trend in 2018 (PPOs for pre-65 population) 3.6% medical trend in 2018 (Post-65 plan integrated with Mx) 10.3% Rx trend in 2018 Actuarial & Pension Services Healthcare Consulting Services

13 IBNR Claim Reserve Determine estimated reserve required to pay claims Incurred But Not Reported (IBNR) in the prior year Helps to ensure there are enough funds to pay claims Statistical analysis based on: Medical & Pharmacy claims experience Claim payment patterns (by Vendor) Number of employees & family members Plan design & changes over time Expected trend in claims costs 13 Actuarial & Pension Services Healthcare Consulting Services

14 Trust Finances 14

15 Revenue Sources School Contributions (Largest Source) Pharmacy Rebates Medical Reimbursements Retiree Drug Subsidy (RDS)

16 Initiatives Claims in Cost Reduction and that reduce claim expenses : Mail Order of Maintenance Drugs Contain Costs Specialty Copay Assistant Program(SCAP)

17 Expenses Medical & Pharmacy Claims (Biggest driver behind increases in Contribution Rates) Non Claims Expenses: NYS Health Care Reform Act-HCRA Third Party Administrative Fees (TPA) MVP, Nova, and PBD Professional and Consultant Fees Governmental fees Patient-Centered Outcomes Research Institute (PCORI) is paid per covered life Wellness Fitness/Physical Reimbursements

18 Financial Activity

19 The Enrollment comparison from September 2018 to March 1, 2019

20 Financial Activity of Accounts

21 Bank and Investment Accounts Wellness/Physical Rewards thru February 28, 2019

22 Per Member Per Month Cost thru 2/28/19 Including Incurred But Not Reported Estimation

23 ACTION PLAN The Financial Plan is evolving Meet with financial/audit committee quarterly Modified Contribution Rates Based on Region Work with Third Party Administrators to find cost saving initiatives

24 ACTION PLAN Continue to work closely with the Actuaries to replenish the Reserve Account (Savings) Addressing schools concerns in setting rates for the year, which will now contain Stop Loss coverage and a right rate consideration of the required 12- month departure of any school. Going forward the rates should stabilize with only nominal increases when needed.

25 Benefit Administrator Workshop MVP March 26, :00 am to 11:30 am WebEx Online Workshop Nova/IH March 28, :00 am to 11:30 am This Photo by Unknown Author is licensed under CC BY-SA

26 Historical Rate Increases and Overall Increase Average East Central New York Traditional Average Plan Year Increase % ** % ** % % % 7/1-12/31/ % 1/1-6/30/18 6.5% % % Overall Average Increase 7.8% ** Based on two tier structure Core Average Plan Year Increase % ** % ** % 7/1-12/31/ % 1/1-6/30/18 5.6% % % Overall Average Increase 8.7% 26

27 Annual Percentage Increase Traditional Plan ECNY 20.0% 19.0% 15.0% 14.5% 12.9% 10.0% 7.9% 5.0% 3.9% 5.9% 6.5% Annual Increase Average Overall Increase 0.0% 0.0% -0.3% /1-12/31/17 1/1-6/30/ % 27

28 Revenue v Claims East Central New York July December 2018 $30,000, $25,000, $20,000, $23,786, $25,368, $24,510, $24,928, $25,885, $24,189, $26,457, $26,270, $15,000, $13,490, $10,000, $5,000, $9,356, $8,606, $8,542, $- Jul - Sep 2017 Oct - Dec 2017 Jan - Mar 2018 Apr - Jun 2018 Jul - Sep 2018 Oct - Dec 2018 Contribution Income Claims Expense (Medical + Rx) 2017/18 variance $2,939, /19 variance as of December 31, 2018 ($4,198,059.80) (4,198,059.80) 28

29 Historical Rate Increases and Overall Increase Average MidCentral/ Albany Traditional Average Plan Year Increase % ** % ** % % % % % % Overall Average Increase 8.6% Core Average Plan Year Increase % ** % ** % % % % Overall Average Increase 10.4% ** Based on two tier structure 29

30 Annual Percentage Increase Traditional Plan MCA 25.0% 23.7% 20.0% 15.0% 10.0% 7.9% 7.4% 10.3% 10.1% Average Overall Increase 5.9% 5.0% 3.9% Annual Increase 0.0% -0.3% % 30

31 Revenue v Claims MidCentral/ Albany July December 2018 $6,000, $5,335, $5,000, $4,804, $4,516, $4,000, $4,015, $3,856, $3,716, $3,693, $3,685, $3,690, $3,771, $3,948, $3,000, $3,042, $2,000, $1,000, $- Jul - Sep 2017 Oct - Dec 2017 Jan - Mar 2018 Apr - Jun 2018 Jul - Sep 2018 Oct - Dec 2018 Contribution Income Claims Expense (Medical + Rx) 2017/18 variance ($2,411,638.96) 2018/19 variance as of December 31, 2018 ($653,032.98) 31

32 District Questions Q: Due to the high increases, what is the last date to cancel coverage starting 7/1/19? A: Per the Memorandum of Agreement, school districts must give 12 months written notice, signed by district management and all labor units. Without 12 months notice, a district will be considered in default Q: How many districts including DCMO BOCES have dropped NY44 in the last 3 years? A: Four districts and four labor units in WNY and eleven districts outside of WNY Q: What reasons are there for the huge increases this year? A: I believe this question should have been answered in the actuarial presentation. However, please feel free to ask for further clarification if needed 32

33 District Questions (continued) Q: Can you provide a document showing deductibles and benefits, as well as medication copays, for all three major plans (Traditional, Core and Progressive)? A: Summary Plan Descriptions and Summary of Benefits and Coverage are available on the Health Trust website at Q: Are the rates for the eastern part of the state the same as the rates for the western part of the state? If so, what is the reason behind this? A: No, rates are not the same. Network, discounts, rebates, utilization and access differ between the regions. 33

34 July 1, 2019 Plan Changes 34

35 Pharmacy Brand Drug Change Member Pays the Difference Aleem Merani, PharmD/ Clinical Pharmacist Korrin Erickson, Account Manager Pharmacy Benefit Dimensions 35

36 NY44 Town Hall March 18,

37 The Rising Cost of Drugs 37

38 Why is my drug so expensive? Research & Development 1 in 1000 Salaries, equipment, failures Marketing and sales Monopolizing Manufacturer consolidations Fewer players in market Monopolistic pricing Global Competition e.g. Sun, Teva Hidden costs (tariffs and taxes) Offshore reallocation Advances in Medicine Gene therapies, Car-T therapies Advanced manufacturing New cancer drugs Specialty 15% growth per year Increased disease complexity More pipeline demands Designer Pricing New drug pricing is expensive Medical vs pharmacy Following suit 38

39 Humira AWP Pricing Does not reflect discounts, competitive specialty pricing, SCAP savings, rebates, etc. 39

40 40 Data provided by AMCP 2018

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42 What can we do? 42

43 Generic Drugs FAQs What is a generic drug? o A generic drug has exactly the same active ingredient as the brand name drug and yields the same therapeutic effect. o Same dosing, safety, strength, quality, administration etc. Are generic drugs as safe and effective as brand name drugs? o Yes. The FDA must approve all generic drugs before they are made available. o The FDA requires generic drugs to meet the same rigid standards for approval as the brand name counterpart. If generic drugs are as safe and effective as brand name drugs, why are they less expensive? o Brand drug manufacturers invest many years and a lot of money in research, development, clinical trials, etc. to create a brand drug. After a brand drug loses patent, that information is available to other manufacturers to recreate (generic form). The cost to recreate a medication is considerably less. Source: 43

44 Cost Savings Opportunities 44

45 Option #1 4-Tier Generic Formulary Any generic medication with a cost of $4 or more would apply a $4 member copay; anything less would maintain the $0 member copay. o Number of Members affected: 4,400 o Total Savings: $578,000 Option #2 Increase generic copay Increase the generic copay on the Traditional Plan from $0 to $4. o Number of Members affected: 3,900 o Total Savings: $490,000 Option #3 Member Pays the Difference (MPTD) Members taking a Tier 3 brand medication with a Tier 1 generic equivalent are responsible to pay the cost differential between the Tier 3 and Tier 1 drugs, plus the Tier 3 copay. o Number of Members affected: 152 o Total Savings: $561,000 45

46 Member Pays the Difference (MPTD) If a member elects to receive the brand name when an equivalent generic is available, the member is responsible for: o The Tier Copay PLUS the cost difference between the brand and the generic. EXAMPLE: Drug Actual Drug Cost Tier Copay MPTD Cost Difference TOTAL Member Pay Generic $75.00 $0.00 N/A $0.00 Brand $ $30.00 $ $ The prescribing physician can submit a prior authorization documenting medical necessity. If approved, the cost differential is waived, and member only pays the applicable tier copay. 46

47 MPTD - Member Communication PBD will look back six (6) months to see which members are utilizing a brand medication with a generic equivalent. Members, and prescribing physicians, will receive a letter stating that effective 7/1/19, if they choose to remain on the brand medication, they are required to pay the cost differential between the brand and generic equivalent. o The letter also will contain: A list of generic equivalents Directions for submitting a prior authorization for medical necessity Letters will be sent at least 30 days prior to the effective date of the change. 47

48 Thank you! 48

49 Emergency Room Copayment Tom Pomidoro Interim Co-Administrator NY44 Health Benefits Plan Trust 49

50 Emergency Room Copayment In 2017/2018, there were 4,044 emergency room visits in the ECNY, MCA and MH populations. Of those, nearly 70% were coded at a non-emergent intensity level Strains and sprains, lacerations, allergies Total of nearly $3M in non-emergent care In an effort to curtail emergency room misuse, the NY44 Health Trust has Implemented a $0 copayment for urgent care facilities Partnered with 247 Online Care for telehealth services, at no cost to the enrollee (not yet available to NRCSD enrollees) Nurse s Hotline accessible 24 hours per day, seven days per week To encourage a change surrounding emergency room misuse, the copayment for an Emergency Room visit as of July 1, 2019 will be $300 for the Traditional Plan $400 for the Core Plan the Progressive Plan will remain the same If the patient is admitted from the emergency room, the copayment is waived. Potential savings of nearly $350,000 will be realized in the first year; however additional savings will be recognized in subsequent years as emergency room visits for non-emergent reasons decline 50

51 Healthy Living Program Jeni Kapalczynski Interim Co-Administrator NY44 Health Benefits Plan Trust 51

52 Healthy Living Program: Activity Reimbursements and Annual Physical Rewards While 85% of large corporations offer employee wellness programs, only a small percentage of the employee population participates. According to a GALLUP Poll Study, only 24% of employees participate in their company s wellness program An article on Corporate Wellness Programs from thedoctorwillseeyounow.com reports that wellness programs that reward enrollees (versus a penalty or surcharge) still only see 20-40% participation The NY44 Health Trust data supports this In 2017/18 only 8% of the Health Trust s enrollment in the ECNY, MCA and Mid Hudson areas received Wellness Activity Reimbursements In 2017/18 only 18% of the Health Trust s enrollment in the ECNY, MCA and Mid Hudson areas received Annual Physical Reward payments Over $300,000 was paid out for a benefit used by less than 20% of the Trust s East Central, Mid-Central and MidHudson enrollment. Eliminating the Wellness Program will allow those dollars to be used by 100% of the population (contribution rates). 52

53 District Questions Q: Is the High Deductible Health Plan (HDHP) still available for districts to utilize? A: Not at this time. If there is district interest, the HDHP can be once again explored. Q: We do not feel like we have been kept in the loop on things and would like to see better communication going forward. What communication plan do you have in place to keep us better informed? A: John and Jim will discuss the future of the Trust in the next segment, which will address communication. 53

54 Future Leadership John Pope, Chair, Board of Trustees Jim Fregelette, Board of Trustees 54

55 The Board of Trustees will be issuing an RFP for a health insurance consultant to work with the Board and NY44 staff on Trust operations The health insurance consultant will work with the Board, staff and participating districts to move the Health Trust forward with innovative approaches to healthcare and cost containment strategies The Board of Trustees will continue in its role as an active, working Board, with emphasis on communication and input Existing Health Trust staff will remain Congratulations to Tom Pomidoro and Doreen Kausner, both of whom will retire at the end of June

56 Health Trust Staff as of July 1, 2019 Plan Administrator, TBD Alice Riley, Manager of Finance & Enrollment Anne Menard, Customer Service Coordinator Jeni Kapalczynski, Administrative Assistant Health Trust Partners as of July 1, 2019 Nova/ Independent Health and MVP, Medical Third Party Administrators Pharmacy Benefit Dimensions, Pharmacy Third Party Administrators Pro Benefits Dental Third Party Administrator Legal Consultant, Darcie Falsioni, Nixon Peabody BPAS Healthcare Consulting Services, Actuarial Firm Bahgat & Laurito-Bahgat, Auditors Bswift, Enrollment System Telehealth, 247 Online Care Investments Consultant, Peter Mye of Morgan Stanley Claims Auditor, J. Graham & Associates 56

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