STATE OF NEVADA. MEETING NOTICE AND AGENDA. 901 South Stewart Street, Suite 1002

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1 BRIAN SANDOVAL Governor DAMON HAYCOCK Executive Officer STATE OF NEVADA PUBLIC EMPLOYEES BENEFITS PROGRAM 901 S. Stewart Street, Suite 1001 Carson City, Nevada Telephone (775) (800) Fax (775) PATRICK CATES Board Chairman MEETING NOTICE AND AGENDA Name of Organization: Public Employees Benefits Program Board Date and Time of Meeting: May 25, :00 a.m. Place of Meeting: Video Conferencing: Video Steaming Website: The Richard H. Bryan Building 901 South Stewart Street, Suite 1002 Carson City, Nevada Nevada State Business Center 3300 West Sahara Avenue Tahoe Room, Suite 430 Las Vegas, Nevada AGENDA 1. Open Meeting; Roll Call 2. Public Comment Public comment will be taken during this agenda item. No action may be taken on any matter raised under this item unless the matter is included on a future agenda as an item on which action may be taken. Persons making public comments to the Board will be taken under advisement but will not be answered during the meeting. Comments may be limited to three minutes per person at the discretion of the chairperson. Additional three minute comment periods may be allowed on individual agenda items at the discretion of the chairperson. These additional comment periods shall be limited to comments relevant to the agenda item under consideration by the Board. Persons unable to attend the meeting and persons whose comments may extend past the three minute time limit may submit their public comment in writing to PEBP Attn: Kari Pedroza 901 S. Stewart St, Suite 1001 Carson City NV 89701, Fax: (775) or kpedroza@peb.state.nv.us at least two business days prior to the meeting. Persons making public comment need to state and spell their name for the record at the beginning of their testimony. 3. Approval of the Action Minutes from the April 20, 2017 PEBP Board Legislative Update teleconference. (Patrick Cates, Board Chair) (For Possible Action) 4. Discussion and possible action regarding potential Board position, recommendations, and direction to staff about 2017 Legislative Bills that may impact PEBP. (Damon Haycock, Executive Officer) (For Possible Action) 5. PEBP Biennium Budget Closing Update. (Celestena Glover, Chief Financial Officer) (Information/Discussion)

2 Public Employees Benefits Program Board May 25, 2017 Agenda Page 2 6. Approval of the proposed changes to the Medical, Vision, and Prescription Drug and the Enrollment and Eligibility Master Plan Documents for Plan Year 2018 (July 1, 2017 June 30, 2018) regarding air ambulance services and Medicare coordination of benefits. (Nancy Spinelli, Quality Control Officer) (For Possible Action) 7. Operations Officer Report on Plan Year rd Quarter Activities and Plan Year 2018 Initial Open Enrollment Statistics. (Laura Rich, Operations Officer) (Information/Discussion) 8. Discussion and possible action on approving the development of 2-year contract extensions regarding the Consumer-Driven Health Plan, with: HealthSCOPE Benefits, for Third Party Administration services Hometown Health and Sierra Healthcare Options, for Statewide preferred provider network services (Damon Haycock, Executive Officer) (For Possible Action) 9. Executive Officer Report. (Damon Haycock, Executive Officer) (Information/Discussion) 10. Discussion and possible action regarding Towers Watson s OneExchange s Service Improvement Plan. (Chris Garcia, Towers Watson s OneExchange) (For Possible Action) 11. Public Comment Public comment will be taken during this agenda item. Comments may be limited to three minutes per person at the discretion of the chairperson. Persons making public comment need to state and spell their name for the record at the beginning of their testimony. 12. Adjournment The supporting material to this agenda, also known as the Board Packet, is available, at no charge, on the PEBP website at (under the Board Meeting date referenced above) or by contacting Kari Pedroza at the PEBP Office, 901 South Stewart Street, Suite 1001, Carson City, Nevada, 89701, (775) or (800) An item raised during a report or public comment may be discussed but may not be deliberated or acted upon unless it is on the agenda as an action item. All times are approximate. The Board reserves the right to take items in a different order or to combine two or more agenda items for consideration to accomplish business in the most efficient manner. The Board may remove an item from the agenda or delay discussion relating to an item on the agenda at any time. The Board reserves the right to limit Internet broadcasting during portions of the meeting that need to be confidential or closed. We are pleased to take reasonable efforts to make reasonable accommodations for members of the public who are disabled and wish to attend the meeting. If special arrangements for the meeting are necessary, please notify the PEBP in writing, at 901 South Stewart Street, Suite 1001, Carson City, NV 89701, or call Kari Pedroza at (775) or (800) , as soon as possible so that reasonable efforts can be made to accommodate the request. Copies of both the PEBP Meeting Action Minutes and Meeting Transcripts are available for inspection, at no charge, at the PEBP Office, 901 South Stewart Street, Suite 1001, Carson City, Nevada, or on the PEBP website at For additional information, contact Kari Pedroza at (775) or (800) Notice of this meeting was posted on or before 9:00 a.m. on the third working day before the meeting at the following locations: NEVADA STATE LIBRARY & ARCHIVE, 100 N. Stewart St, Carson City; BLASDEL BUILDING, 209 East Musser Street, Carson City; PUBLIC EMPLOYEES BENEFITS PROGRAM, 901 South Stewart Street, Suite 1001, Carson City; THE GRANT SAWYER STATE OFFICE BUILDING, 555 East Washington Avenue, Las Vegas; THE LEGISLATIVE BUILDING, 401 South Carson Street, Carson City, and on the PEBP website at also posted to the public notice website for meetings at and In addition, the agenda was mailed to groups and individuals as requested.

3 1. 1. Open Meeting; Roll Call

4 2. 2. Public Comment Public comment will be taken during this agenda item. No action may be taken on any matter raised under this item unless the matter is included on a future agenda as an item on which action may be taken. Persons making public comments to the Board will be taken under advisement but will not be answered during the meeting. Comments may be limited to three minutes per person. Additional three minute comment periods may be allowed on individual agenda items at the discretion of the chairperson. These additional comment periods shall be limited to comments relevant to the agenda item under consideration by the Board. Persons unable to attend the meeting and persons whose comments may extend past the three minute time limit may submit their public comment in writing to PEBP Attn: Kari Pedroza 901 S. Stewart St, Suite 1001 Carson City NV 89701, Fax: (775) or kpedroza@peb.state.nv.us at least two days prior to the meeting. Persons making comment need to state and spell their name for the record at the beginning of their testimony.

5 3. 3. Approval of the Action Minutes from the April 20, 2017 Legislative Update teleconference meeting.

6 STATE OF NEVADA PUBLIC EMPLOYEES BENEFITS PROGRAM BOARD LEGISLATIVE UPDATE TELECONFERENCE The Richard H. Bryan Building 901 South Stewart Street Suite 1002 Carson City, Nevada ACTION MINUTES (Subject to Board Approval) April 20, 2017 MEMBERS PRESENT IN CARSON CITY: Mr. Patrick Cates, Board Chair Mr. Don Bailey, Vice-Chair Ms. Ana Andrews, Member MEMBERS PRESENT VIA TELEPHONE: Mr. Chris Cochran, Member Ms. Leah Lamborn, Member Mr. Tom Verducci, Member Mr. James Wells, Member Ms. Christine Zack, Member MEMBERS EXCUSED: Ms. Rosalie Garcia, Member FOR THE BOARD: Mr. Dennis Belcourt, Deputy Attorney General FOR STAFF: Mr. Damon Haycock, Executive Officer Ms. Celestena Glover, Chief Financial Officer Ms. Kari Pedroza, Executive Assistant 1. Open Meeting; Roll Call Chair Cates opened the meeting at 3:00 p.m. 2. Public Comment There was no public comment at this time. 3. Action Item- Approval of the March 23, 2017 Board meeting action minutes and the April 6, 2017 Legislative Update teleconference meeting action minutes.

7 Public Employees Benefits Program Board Legislative Update Teleconference April 20, 2017 Action Minutes Page 2 Board Action on March 23, 2017 Action Minutes- MOTION: Motion to approve the March 23 minutes. BY: Member Andrews SECOND: Vice Chair Bailey VOTE: Unanimous; the motion carried. Board Action on April 6, 2017 Action Minutes- MOTION: Motion to approve the minutes from the April 6 meeting with the time noted for action taken on Senate Bill 502. BY: Member Verducci SECOND: Member Andrews VOTE: The motion carried with five members in favor and two members abstained. 4. Action Item- Discussion and possible action regarding 2017 Legislative Bills that may impact the Public Employees Benefits Program, including the following: * Assembly Bills * Senate Bills * Bill Draft Requests Executive Officer Haycock presented the status updates to the 2017 Legislative Bills tracking list including the five bills that did not meet the deadline pursuant to Joint Standing Rule No and he shared his opinion that a position change on SB502 would be appropriate at this time as the amendment includes significant changes which address the Board s concerns with the Bill as introduced. Board Action on Senate Bill 502 MOTION: Move that the Board support SB502 as amended. BY: Member Verducci SECOND: Vice Chair Bailey VOTE: The motion carried with six members in favor and one member abstained. Public Comment on Item 4- Priscilla Maloney Representative of AFSCME retirees Terri Laird Executive Director of RPEN 5. Public Comment There was no public comment at this time. 6. Adjournment Chair Cates adjourned the meeting at 4:05 p.m.

8 4. 4. Discussion and possible action regarding potential Board position, recommendations, and direction to staff about 2017 Legislative Bills that may impact PEBP. (Damon Haycock, Executive Officer) (For Possible Action)

9 Public Employees Benefits Program Legislative Session Bill Tracking Updated: 5/17/2017 Bill Number & Description Impact to PEBP & Board Position Bill Status As amended, this bill now provides for a negotiation on emergency services costs between PEBP and the provider, eliminating balance billing to members receiving emergency out-of-network care. Failure to reach negotiation places the decision with the Consumer Health Advocate from the Governor s Office and their decision is binding with the costs of the mediation jointly shared. AB382 (BDR ) Establishes provisions governing payment for the provision of emergency services and care to patients. This bill proposes the following changes: An out-of-network hospital with 100 or more beds that is not operated by a federal, state or local governmental agency or an out-of-network independent center for emergency medical care that is operated by a person who also operates such a hospital shall accept as payment in full for the provision of emergency services and care to a patient, other than services and care provided to stabilize the patient, a rate in accordance with subsection 2 if the patient: a) Was transported to the out-of-network hospital or out-of-network independent center for emergency medical care for the provision of emergency services and care by an ambulance, air ambulance or vehicle of a fire-fighting agency which has received a permit to operate pursuant to chapter 450B of NRS; and b) Has a policy of insurance or other contractual agreement with a third party that provides coverage to the patient for emergency services and care provided by more than one hospital and independent center for emergency medical care in this State other than the hospital or independent center for emergency medical care to which the patient was transported. The out-of-network hospital (above) shall accept as payment in full for such emergency services and care a rate which does not exceed the greater of: a) The average amount negotiated by the third party with in-network hospitals in this State for the same or similar emergency services and care, excluding any deductible, copayment or coinsurance paid by the patient. b) One hundred twenty-five percent of the average amount paid by Medicare These rules apply to out-of-network physicians on medical staff of out-ofnetwork hospitals or centers for emergency care as well at the same level of payments described above. Where disagreements occur, there are rules to mediate. Effective Date: Upon passage and approval for the purpose of adopting any regulations and performing any preparatory administrative tasks necessary to carry out the provisions of this act; and, On January 1, 2018, for all other purposes. As amended, this bill now requires PEBP to potentially pay more for out-of-network services outsourcing the decision and binding result of failed negotiations to GovCHA. Board Position Neutral (4/6/17) Fiscal Note FY 18 = $277,296 FY 19 = $304,897 Future Biennia = $641,624 The Fiscal Note includes costs to meet the requirements of the bill and the addition of a Management Analyst II position. 4/10/17 Notice of Eligibility for exemption. 4/14/17 Assembly Health and Human Services Work Session. Amend and do pass as amended. Amendment by Assemblywoman Carlton. 5/17/17 No future meetings scheduled at this time.

10 Bill Number & Description Impact to PEBP & Board Position Bill Status PEBP maintains multiple networks of providers with guaranteed discounts to control costs for the state. If this bill is passed, out-of-network physicians will be reimbursed at higher rates than in-network physicians, incentivizing a migration of physicians away from the networks altogether. SB289 (BDR ) Requires certain policies of health insurance to cover services provided by an out-ofnetwork physician. This bill proposes the following changes: If an insurer offers for sale in this State a policy of health insurance that provides coverage through a network plan, the insurer shall provide for the reimbursement of services provided by an out-of-network physician to a person covered by the policy of health insurance upon submission of a claim by the physician. The insurer shall provide reimbursement to the physician within 30 days after receipt of a claim in an amount equal to the lesser of: o The amount billed by the physician in the claim submitted by the physician; or o The 80th percentile for the particular service in the geographic area where the service was provided as reported in the database selected by the Commissioner. o The Commissioner shall, by regulation, adopt a database containing benchmarks for charges for services provided by a physician. An insurer who offers or issues a policy of group health insurance which provides coverage through a network plan shall include in the policy of group health insurance: o A notice that the provisions of this act apply to health care services received from an out-of-network physician while covered by the policy of group health insurance; and o A procedure for the recovery of a copayment, deductible or coinsurance from a person covered by the policy of group health insurance for any reimbursement paid. Effective Date: Upon passage and approval for the purpose of adopting any regulations and performing any preparatory administrative tasks necessary to carry out the provisions of this act; and January 1, 2018, for all other purposes. The 80 th percentile in effect could potentially become a 20% off traditional billed charges. PEBP currently averages 62.8% in-network discount with 96.4% utilization. PEBP is developing a fiscal note to show impact of out-of-network incentivized payments. These requirements also apply to HMOs. HMOs do not traditionally provide care outside of their networks unless it is urgent or emergent. Therefore, these requirements also force HMOs to act like PPOs. Their costs could increase dramatically. As amended this bill continues to overpay out-ofnetwork physicians and disrupts the marketplace as a whole. Board Position Opposed (4/6/17) Fiscal Note FY 18 = $12,900,000 FY 19 = $13,416,000 Future Biennia = $28,463,386 Higher Costs will be paid through increased employer and employee contributions or a reduction in plan benefits. 4/4/17 Notice of Eligibility for exemption. 4/12/17 Senate Commerce, Labor and Energy Work Session; Re-refer to Senate Finance. Amendment by Senator Hardy. 5/17/17 No future meetings scheduled at this time. Page 2 of 3

11 Bill Number & Description Impact to PEBP & Board Position Bill Status As amended, the PEBP Board remains governing; a second NSHE member replaces the local government Board member; employee representing Board members must be classified; Director of Administration replaces Director of Office of Finance; the Quality Control Officer is appointed/dismissed by the Director of Administration; and any number of Board members can participate on a RFP committee without it being a quorum. SB502 (BDR ) Makes various changes relating to the Public Employees Benefits Program and the Public Employees Deferred Compensation Program. This bill proposes the following changes: Transitions the Public Employees Benefits Program and the Public Employees Deferred Compensation Program to the Department of Administration. Requiring the Director of the Department of Administration to appoint, with the concurrence of the Governor, the Executive Officer of the Public Employees Benefits Program. Converting the Board of the Public Employees' Benefits Program into an advisory board and transfer the powers, duties and function of the Board relating to the administration of the Program to the Executive Director of the Program. Reduces the size of the Board from ten members to seven, changes the composition of the Board and removes the requirement that the Governor provide certain notice upon removing an appointed member of the Board. Eliminates the requirements that the Executive Officer and the Board of the Public Employees Benefits Program complete certain continuing education requirements relating to the administration of group benefits for public employees. Effective Date: July 1, 2017 Board Position In Support (4/20/17) Fiscal Note No Fiscal Impact. 4/4/10 Notice of Eligibility of exemption. 4/14/17 Senate Government Affairs Work Session. Amend and do pass as amended. Amendment by DoA, RPEN, AFSCME, and NV Faculty Alliance. 5/3/17 Senate Finance. Heard, no action 5/11/17 Senate Finance Work Session. Do pass as amended. 5/17/17 No future meetings scheduled at this time. Page 3 of 3

12 5. 5. PEBP Biennium Budget Closing Update. (Celestena Glover, Chief Financial Officer) (Information/Discussion)

13 BRIAN SANDOVAL Governor DAMON HAYCOCK Executive Officer STATE OF NEVADA PUBLIC EMPLOYEES BENEFITS PROGRAM 901 S. Stewart Street, Suite 1001 Carson City, Nevada Telephone (775) (800) Fax (775) AGENDA ITEM PATRICK CATES Board Chairman Action Item X Information Only Date: May 25, 2017 Item Number: 5 Title: Fiscal Year 2018 and 2019 Budget Closing Report Summary This report addresses the budget closing as recommended and approved by the Assembly Committee on Ways and Means and Senate Committee on Finance, Subcommittees on General Government and the Joint Committee of the Assembly Ways and Means and Senate Committee on Finance for Fiscal Years 2018 and Report The Subcommittees on General Government met on May 10, 2017 to discuss the closing of the Public Employees Benefits Program budget. The subcommittee approved the Governor s recommended budget with several modifications. The Assembly Committee on Ways and Means and Senate Committee on Finance concurred with the recommendations of the subcommittee at the Joint Meeting of the Full Committee held on May 15, Those modifications are discussed below: PEBP Premiums for Non-State, Non-Medicare Retiree Participants The subcommittee discussed the affordability of participant premiums for non-state, non- Medicare retiree participants and approved a PEBP Non-State Retiree Rate Mitigation budget account funded with a General Fund appropriation in the amount of $2.4 million in Fiscal Year 2018 and $1.8 million in Fiscal Year This appropriation provides a fouryear phase-in approach whereby the state provides funding in the first year and gradually reduces funding in Fiscal Years 2019 through 2022 at which time the local governments will be required to provide any additional contributions necessary to align the monthly premium paid by a non-state, non-medicare retiree with a similarly situated state, non- Medicare retiree.

14 Fiscal Year 2018 and 2019 Budget Closing Report May 25, 2017 Page 2 Non-State Non-Medicare Retiree Plan Trend and Inflation Adjustments for Fiscal Year 2019 The subcommittee approved adjustments to plan trend and inflation in the second year of the biennium by increasing the inflation rates for medical, prescription drug, and dental from 6%, 8% and 3% to 11.41%, 16.90% and 5.92% respectively aligning with PEBP s actuary revised trend performed by Aon in April Non-State Non-Medicare Retiree Enrollment Changes for Fiscal Years 2018 and 2019 PEBP staff provided enrollment projections for non-state retirees on September 1, 2016 when the Agency Request budget was submitted, and revised those projections in November 2016 for inclusion in the Governor s Recommended Budget. The subcommittee recommended and approved further revisions to the non-state non-medicare retiree enrollment projections from 1,192 to 1,470 in Fiscal Year 2018 and from 756 to 1,255 in Fiscal Year 2019 based on PEBP s revised projections provided in April Continuing Education for PEBP Board Members Senate Bill 502 proposes to repeal NRS.0428 which requires continuing education for the PEBP Executive Officer and Board members. The subcommittee voted to not approve the Governor s recommendation to eliminate continuing education for PEBP Board members as provided in Senate Bill 502 and restore the funding for this purpose in the amount of $16,445 in each fiscal year. PEBP Budget Account Structure The subcommittee voted to approve back language in the Authorization Act instructing the Governor s Finance Office to develop revenue general ledgers and expenditure categories to enhance tracking and transparency in the PEBP budget. The subcommittee further approved that PEBP submit a work program and a plan for tracking administrative expenditures by participating group to the Interim Finance Committee for consideration at its August 2017 meeting. Employer Contributions The subcommittee approved the Active Employee Group Insurance and Retired Employee Group Insurance (referred to as employer contributions) assessments as provided in the Governor s Recommended budget. The employer contributions are as follows: a) AEGIS contributions were approved at $743 in Fiscal Year 2018 and $ in Fiscal Year 2019; b) REGI contributions were approved at $ in Fiscal Year 2018 and $ in Fiscal Year 2019; and Medicare HRA contributions approved at $2 per month per year of service.

15 Fiscal Year 2018 and 2019 Budget Closing Report May 25, 2017 Page 3 Further modifications to PEBP s budget will be made through technical adjustments as the money committees make final decisions regarding statewide cost allocations, pay raises, and draft and pass the appropriate enabling legislation to carry out the provisions of the budget.

16 6. 6. Approval of the proposed changes to the Medical, Vision, and Prescription Drug and the Enrollment and Eligibility Master Plan Documents for Plan Year 2018 (July 1, 2017 June 30, 2018) regarding air ambulance services and Medicare coordination of benefits. (Nancy Spinelli, Quality Control Officer) (For Possible Action)

17 BRIAN SANDOVAL Governor DAMON HAYCOCK Executive Officer STATE OF NEVADA PUBLIC EMPLOYEES BENEFITS PROGRAM 901 S. Stewart Street, Suite 1001 Carson City, Nevada Telephone (775) (800) Fax (775) PATRICK CATES Board Chairman AGENDA ITEM X Action Item Information Only Date: May 25, 2017 Item Number: 6 Title: Plan Year 2018 Master Plan Document Revisions Summary Changes to the Plan Year 2018 Master Plan documents were originally presented to the PEBP Board on March 23, Staff is providing additional changes to the Medical, Vision, and Prescription Drug plan documents. Report This report provides recommended changes to the Plan Year 2018 Medical and Prescription Drug plan document to clarify language relating to emergency air ambulance services, including in-network and out-of-network benefit limitations. Medical and Prescription Drug Plan Document - Ambulance (Air/Flight) Emergency The plan document provides coverage for emergency air ambulance transportation for Participants and/or their covered Dependent(s) whose medical condition at the time of pick-up requires immediate and rapid transport due to the nature and/or severity of the illness/ injury. Air ambulance transportation should meet the following criteria: The patient s destination is an acute care hospital, and The patient s condition is such that the ground ambulance (basic or advanced life support) would endanger the patient s life or health, or Inaccessibility to ground ambulance transport or extended length of time required to transport the patient via ground ambulance transportation could endanger the patient.

18 Plan Year 2018 Master Plan Document Revisions May 25, 2017 Page 2 As part of Pre-certification review, the Plan Administrator retains discretionary authority to limit benefit availability if and when a Provider fails to comply with the terms of the Plan, or the charges exceed the Maximum Allowable Charge in accordance with the terms of the Plan. For this section only, the Maximum Allowable Charge shall mean 250 percent of the applicable Medicare rate. Recommendation Staff requests approval for the revisions to the Plan Year 2018 Medical, Vision and Prescription Drug Master Plan Document as stated in this report.

19 7. 7. Operations Officer Report on Plan Year rd Quarter Activities and Plan Year 2018 Initial Open Enrollment Statistics. (Laura Rich, Operations Officer) (Information/Discussion)

20 BRIAN SANDOVAL Governor DAMON HAYCOCK Executive Officer STATE OF NEVADA PUBLIC EMPLOYEES BENEFITS PROGRAM 901 S. Stewart Street, Suite 1001 Carson City, Nevada Telephone (775) (800) Fax (775) AGENDA ITEM Action Item PATRICK CATES Board Chairman X Information Only Date: May 25, 2017 Item Number: 7 Title: Operations Officer Report SUMMARY This report will provide the Board, participants, public, and other stakeholders information on Plan Year 2018 initial open enrollment statistics. REPORT MORNEAU SHEPELL CALL CENTER ROLLOVER Historically, PEBP has utilized open enrollment rollover call support to facilitate the high volume call period beginning in mid-april and going through July 31. In early April, PEBP staff visited the Morneau Shepell Pittsburgh office to provide face-to-face training to the call center staff assigned to PEBP rollover support. The on-site training proved to be very successful, as Morneau Shepell staff has proven to be well-prepared and able to handle participant calls more effectively than in previous years. CALL CENTER STATISTICS At the November 17, 2016 and January 19, 2017 Board meetings, the Board voted on various Plan Year 2018 plan design benefit options. In an effort to ensure participants were well versed on these plan changes, PEBP devoted a tremendous amount of effort into communication. Through newsletters, s, website updates, and coordination with our vendors and stakeholders, PEBP participants have received many updates about Plan Year 2018 benefits design and enhancements throughout the year leading up to open enrollment. As a result, PEBP has experienced a lower than normal call volume than is typical for this time of year. To date, calls rolled over to Morneau Shepell are at approximately 28% of the volume compared to the same period last year and PEBP staff has been able to field the majority of participant calls.

21 Operations Officer Report May 25, 2017 Page 2 Call Statistics: PLAN YEAR 15 PLAN YEAR 16 PLAN YEAR 17 Jul-Sep Oct-Dec Jan-Mar Apr-Jun Jul-Sep Oct-Dec Jan-Mar Apr-Jun, Jul-Sep Oct-Dec Jan-Mar Apr-Jun * PEBP Abandoned Calls PEBP Voice Mail Calls PEBP Answered Calls 9,967 8, ,062 9,790 9, ,338 9, Morneau Total Answered Rollover 1,322 N/A N/A 4,983 1,421 N/A N/A N/A N/A 307 Calls PEBP Total Incoming Calls 11,422 8,655 12,607 16,218 11,411 9,744 10,488 14,447 12,437 9,263 10,981 5,961 PEBP Average # of Calls Answered Per Day PEBP Abandonment Rate 0.62% 1.00% 3.25% 0.67% 1.83% 4.56% 3.96% 0.73% 1.23% 0.97% 0.94% 0.50% PEBP Average Call Duration (minutes) 0:04:38 0:05:12 0:04:33 0:04:56 0:04:24 0:04:10 0:04:20 0:04:27 0:04:29 0:04:18 0:04:14 0:04:22 PEBP Average Speed to Answer (seconds) 0:00:13 0:00:16 0:00:30 0:00:12 0:00:20 0:00:43 0:00:39 0:00:13 0:00:13 0:00:13 0:00:15 0:00:12 PEBP Total Walk-ins PEBPAverage # of Walk-ins Per Day PEBP Total s N/A N/A *Through May 15, 2017 OPEN ENROLLMENT MEETINGS Yearly, PEBP staff hosts a series of Open Enrollment meetings throughout the state during the first two weeks in May. Typically, PEBP and its vendors coordinate to present on the medical, prescription and voluntary benefits offered by PEBP. This also gives participants an opportunity to ask questions and meet with the various representatives. This year, we had approximately 533 participants attend one of the twelve meetings offered in Elko, Carson City, Reno, and Las Vegas. PEBP received very positive feedback from participants and agency representatives on the quality and content of these meetings. Without the excellent staff and exceptional vendor support, PEBP would not be able to conduct such an offering for our participants. PRE-MEDICARE/RETIREE INFORMATIONAL SESSIONS Due to high demand, in March, PEBP introduced informational sessions to participants transitioning to the Medicare Exchange. The sessions are offered weekly on Tuesdays and have proven to be a valuable benefit to those enrolling into Towers Watson One Exchange. The process can be quite overwhelming and participants appreciate the extra assistance PEBP staff can offer during these sessions. PEBP has partnered with the Retired Public Employees of Nevada (RPEN), and as a result, has seen a steady stream of attendees. PEBP currently only offers these sessions in the Carson City office, however there are plans to implement a distance learning solution so that participants throughout the state are able to attend and participate.

22 Operations Officer Report May 25, 2017 Page 3 Additionally, the presentation has been made available on the PEBP website. This provides an excellent resource to both participants and authorized representatives who encounter PEBP participants on a daily basis. CONCLUSION The combination of PEBP s focus on communication and training and the relatively minor number of plan changes for the 2018 plan year have resulted in a smooth initial open enrollment period to date.

23 8. 8. Discussion and possible action on approving the development of 2-year contract extensions regarding the Consumer-Driven Health Plan, with: HealthSCOPE Benefits, for Third Party Administration services Hometown Health and Sierra Healthcare Options, for Statewide preferred provider network services (Damon Haycock, Executive Officer) (For Possible Action)

24 BRIAN SANDOVAL Governor DAMON HAYCOCK Executive Officer STATE OF NEVADA PUBLIC EMPLOYEES BENEFITS PROGRAM 901 S. Stewart Street, Suite 1001 Carson City, Nevada Telephone (775) (800) Fax (775) AGENDA ITEM X Action Item PATRICK CATES Board Chairman Information Only Date: May 25, 2017 Item Number: 8 Title: Contract Extension Opportunities SUMMARY The purpose of this report is to request the Board s approval for extensions to the following contracts: HealthSCOPE Benefits (Third Party Administrator Services) 2-year extension Hometown Health Providers & Sierra Healthcare Options (Statewide PPO Network) 2- year extension REPORT HEALTHSCOPE BENEFITS HealthSCOPE Benefits has been PEBP s Third Party Administrator (TPA) for its self-funded medical and dental plans since In 2015, the PEBP Board approved a contract extension to HealthSCOPE Benefits for TPA services that is due to expire on June 30, When the first extension was approved, HealthSCOPE agreed to hold administrative fees flat, with no increase each year through As of May 1, 2017, HealthSCOPE Benefits has further assisted PEBP by absorbing the Diabetes Care Management Program. HealthSCOPE Benefits agreed to provide a Value Based Insurance Design (VBID) program to continue cost savings to members diagnosed with diabetes and enrolled in the program at no additional cost to PEBP. The previous program that was approved by the Board included an annual budget of $990,000, which was comprised of administrative fees and physician incentives. Additionally, HealthSCOPE Benefits has agreed to revise existing performance guarantees cleaning up excessive punitive language while forgoing bonuses built into the contract for exceeding guarantees. The removal of the bonuses saves PEBP approximately $225,000 per year.

25 Contract Extension Operations May 25, 2017 Page 2 PEBP has proposed, and HealthSCOPE has agreed, to provide another two years ( ) of TPA services to PEBP at again no increase in administrative fees. If approved by the Board, the TPA services will be provided to PEBP at flat rates for a combined 7 years since HOMETOWN HEALTH PROVIDERS & SIERRA HEALTHCARE OPTIONS The current contract for Statewide Preferred Provider Organization (PPO) Network services is due to expire on June 30, In an effort to continue to manage future year costs, PEBP reached out to both contracted networks (Hometown Health Providers and Sierra Healthcare Options - SHO) and requested to negotiate extensions with reduced rates. The current contract allows for 5% increases annually to administrative fees. PEBP proposed and both networks agreed to the following: 1. Extend the current contract to June 30, 2021 (2-year extension) 2. Forgo the 5% increase in administrative fees for Plan Year 2019 (the last year of the current contract) 3. Forgo any increase in administrative fees for Plan Years 2020 and 2021 The savings anticipated by this proposition is 5% in 2019, an additional 5% (10% less than usual) in 2020, and an additional 5% (15% less than usual) in 2021 totaling approximately $455,000 of projected administrative fee savings over the next 3 plan years. Additionally in 2016, PEBP reached out to all networks in southern Nevada to assess discounts and administrative fee differences as compared to the current contracted SHO network. Based on network submissions, PEBP s actuaries (Aon) were able to analyze and report the SHO network outperformed other networks in southern Nevada for PEBP by $5 - $7 million annually. Adding these savings to the administrative fee savings above, PEBP projects $10.5 million in savings from retaining the network contracts for another two years through CONCLUSION The two contract extensions represent the spirit of partnership, going well beyond the traditional transactional relationship between vendors and clients, to a shared risk and shared costs outcome for multiple years to position PEBP to continue to provide access to high quality healthcare at affordable prices to our membership. RECOMMENDATION PEBP recommends the Board approve 2-year extensions for HealthSCOPE Benefits for TPA services and Hometown Health Providers & Sierra Healthcare Options for a statewide PPO network as described in the report above.

26 9. 9. Executive Officer Report. (Damon Haycock, Executive Officer) (Information/Discussion)

27 BRIAN SANDOVAL Governor DAMON HAYCOCK Executive Officer STATE OF NEVADA PUBLIC EMPLOYEES BENEFITS PROGRAM 901 S. Stewart Street, Suite 1001 Carson City, Nevada Telephone (775) (800) Fax (775) AGENDA ITEM Action Item PATRICK CATES Board Chairman X Information Only Date: May 25, 2017 Item Number: 9 Title: Executive Officer Report SUMMARY This report will provide the Board, participants, public, and other stakeholders information on the overall activities of PEBP. REPORT REQUEST FOR QUALIFICATIONS (RFQ) NEAR SITE CLINIC At the January 19, 2017 Board meeting, the Board discussed the near site clinic benefit opportunity and ultimately decided to have PEBP work with the Purchasing Division and bring back the results for further consideration. During the discussion, Board members shared an interest in shifting startup costs to an awarded vendor and the utilization of a Request for Qualifications (RFQ) procurement strategy for vendor selection and implementation. PEBP met with Purchasing and developed RFQ 3442 which was released on April 21, The proposed timeline is as follows: Task Date/Time Deadline for submitting questions 12:00 PM Answers posted to website On or about 5/05/2017 Deadline for submittal of Reference Questionnaires No later than 4:30 PM on 5/18/2017 Deadline for submission and opening of SOQs No later than 2:00 PM on 5/19/2017 Evaluation period (approximate time frame) 5/21/2017 6/02/2017 Selection of qualified vendors On or about 6/05/2017 Scope of Work sent to vendors On or about 6/19/2017

28 Executive Officer Report May 25, 2017 Page 2 Task Deadline for submission and opening of Scope of Work proposals Scope of Work proposals evaluation period (approximate time frame) Date/Time 7/21/2017 7/21/2017 8/11/2017 Vendor presentations to committee On or about 8/15/2017 Selection of awarded vendor On or about 8/18/2017 Contract Negotiations 8/18/2017 9/15/2017 PEBP Board Presentation by awarded vendor and PEBP Board ratification of contract On or about 9/21/2017 Anticipated BOE approval 11/14/2017 Contract start date (contingent upon BOE approval) 11/14/2017 In developing the RFQ, PEBP met with multiple vendors to ask questions about opportunities and different models of implementation. Based on those discussions, PEBP was able to develop a standard RFQ which will be supplemented by a robust and comprehensive Scope of Work and all qualified vendors will have an opportunity to bid. We appreciate the hard work and partnership with Purchasing and our consultants (Aon) and we look forward to providing the Board the opportunity to view and potentially approve a near site clinic implementation for Plan Year 2019 at the September 28, 2017 Board meeting. NON-STATE RETIREE HIGH PREMIUM COST SOLUTION For many years, Non-State non-medicare retirees have experienced significant costs and therefore significant rate increases as this separate risk pool has lost all but nine employees to offset the current 1,655 (as of May 1, 2017) retirees enrolled in the CDHP / HMO plans. Retiree advocacy groups (RPEN and AFSCME) embarked on significant coordination and collaboration with the Nevada Legislature to develop a solution whereby the Legislature has designated a separate appropriation of the General Fund to further subsidize the monthly premiums non-state retires pay beginning July 1, PEBP learned of this solution at the May 10, 2017 Legislative Subcommittee Budget Closing Hearing. In April, PEBP provided the Legislative Counsel Bureau (LCB) multiple memorandums outlining the significant risk and issues with any solution beginning July 1, 2017, however, PEBP has now begun mobilizing all resources available to expedite this decision in anticipation of the Legislature approving the changes to statute this session. In the end, PEBP is pleased to see this group of participants receive relief as their premiums have reached unsustainable levels for many on fixed incomes. We applaud RPEN and AFSCME for their consistent dedication to Nevada s retiree population SALGBA CHALLENGE AWARD The PEBP Board s first Values Statement is: PEBP strives to be an innovative health and life benefits program. In support of innovation, PEBP developed a program at the start of Plan Year 2017 addressing high cost specialty drugs charged to the health plan. In certain circumstances

29 Executive Officer Report May 25, 2017 Page 3 (e.g. infusions), specialty drugs are administered in a medical setting by a medical professional to ensure no adverse reactions occur immediately after the drug is taken. These specialty drugs are traditionally purchased by the medical facility directly, avoiding the cost containment programs (discounts, rebates, etc.) health plans have, as well as providing opportunities for increased markups on those drugs. This issue is prevalent across the nation and panels / breakout sessions are dedicated to addressing these often exorbitant costs at national health plan conferences. At the 2017 State and Local Government Benefits Association (SALGBA) Conference in Anaheim, CA, an entire session hosted by CVS was dedicated to the medical management of pharmacy drugs. To summarize, PEBP s innovative program for managing specialty drugs on the medical side was as follows: Reviewed all claims associated with specialty drugs billed through HealthSCOPE (J-codes) Analyzed cost saving opportunities if facilities were required to purchase the specialty drugs through our Express Scripts Pharmacy Benefits Manager (PBM) contract and their specialty pharmacy Accredo. PEBP receives guaranteed discounts, rebates, and access to patient assistance programs through Express Scripts. Asked providers to purchase specialty drugs through Express Scripts where there were cost savings. For those providers who agreed to purchase through Express Scripts, PEBP anticipates saving $225,000 this plan year. Some providers refused to purchase through Express Scripts. For those who refused, PEBP provided two options: o Option 1: Direct negotiation with the provider at close to equal costs to Express Scripts. This option was exercised and PEBP projects savings of $380,000 this plan year. o Option 2: Ask members to switch providers. All members provided this option accepted it once PEBP described the savings to the member and the plan. The cost savings of this option are built into the savings above. PEBP then developed an application for the 2017 SALGBA Challenge in January. PEBP was notified we were a top three finalist in the challenge. During the SALGBA National Conference on May 9, 2017, PEBP was selected as the winner of the challenge. PEBP humbly accepted the award and we appreciate the dedication, hard work, and partnership with HealthSCOPE Benefits and Express Scripts as we made a noticeable difference in the fiscal management of the plan, while ensuring high success to quality providers for our membership. CONCLUSION PEBP is proud to receive national recognition for our efforts, and we are fortunate to have partners who are willing to help the state save money while continuing to provide access to high quality benefits.

30 Discussion and possible action regarding Towers Watson s OneExchange s Service Improvement Plan. (Chris Garcia, Towers Watson s OneExchange) (For Possible Action)

31 Service Improvement Plan Prepared by Submitted to Nevada Public Employees Benefits Program June 1, 2016 Updated for May 15, 2017

32 Nevada Public Employees Benefits Program Service Improvement Plan Contents Background... 3 Executive Summary... 3 Participant Experience Open Enrollment... 6 Participant Experience - Ongoing... 7 Communications... 8 Health Reimbursement Arrangement (HRA)... 8 Operations... 8 Service Improvement Plan Matrix... 9 Conclusion Nevada PEBP Historical Call Statistics Page 2 of 22

33 Nevada Public Employees Benefits Program Service Improvement Plan Background The purpose of this document is to provide information and outline steps needed to improve delivery of service for OneExchange to the Nevada PEBP retiree and dependent population. This Service Improvement plan will focus on improvement and development for different areas of OneExchange such as the Participant Experience, Communications, Health Reimbursement Arrangement (HRA) management, and Operations. The Service Improvement Plan is necessary as the calendar year of 2015 contained several challenges for OneExchange that negatively impacted our delivery to some of the members of the PEBP Board and a number of Nevada PEBP participants. Executive Summary The Executive Summary will provide an overview of updates made to the Service Improvement Plan from the prior update period to the current period. May 12, 2017 Update: HRA Onsite Assistance The Onsite HRA Assistance program at the Nevada PEBP office in Carson City continues to provide PEBP participants an opportunity to meet with an HRA Team Analyst one week per month with one-on-one appointments. The Analyst is also able to assist walk-in participants based on availability. o Below are details for the weeks when the HRA Team Specialist was available to assist participants at the PEBP office since the inception of the program through May, While the total number of in person meetings seems low, the HRA Team Specialist was also able to take phone calls from the Nevada PEBP Member Services Team as well as assist with inquiries. Feedback for the Onsite HRA Assistance program continues to be well received by those who have set up individual appointments or those that have walked-in to the office for assistance. Page 3 of 22

34 Nevada Public Employees Benefits Program Service Improvement Plan Onsite Assistance Dates Number of Appointments Number of Walk-ins 9/12 9/16/ /10 10/14/ /14 11/18/ /12 12/16/ /9 1/13/ /13 2/17/ /13 3/17/ /10 4/14/2017* N/A N/A 5/8 5/12/ *Please note that due to an unforeseeable issue, the April availability was not held in person. The appointments for April were rescheduled for May or were addressed over the phone where applicable. o Below are the upcoming dates in 2017 that have been confirmed for the Onsite HRA Assistance program at the Nevada PEBP office: June 12 th 16 th July 10 th 14 th August 14 th 18 th September 11 th 15 th Spring Retiree Meetings in Las Vegas, Carson City, and Reno Three days of Retiree Meetings were held on April 5 th, 6 th, and 7 th in Las Vegas, Carson City, and Reno. During these days, two different meetings held for Nevada PEBP retirees and dependents: One focusing on retirees that are ageing into Medicare and the other focusing on those that are already Medicare eligible. We had great turn out at these meetings, especially for those that were already Medicare Eligible and were looking for more information about their HRA or making changes to their existing plan(s). Page 4 of 22

35 Nevada Public Employees Benefits Program Service Improvement Plan Meeting Date and Location Age-in Meeting Attendees Medicare Eligible Meeting Attendees April 5 th Las Vegas ~10 ~48 April 6 th Carson City ~18 ~68 April 5 th - Reno ~15 ~67 Communications o The Experience Choice: HRA Refresh Communication was mailed to participants in April, The communication was mailed to those that were qualified for the HRA. The intent of the communication was to reminder participants how to effectively use their HRA Funding Account to be reimbursed for eligible expenses. The communication highlighted the following: Premium reimbursement methods Auto-Reimbursement Recurring Reimbursement Out-of-Pocket expense reimbursement Tips for Submitting Reimbursement Request Successfully o A new Announcing Your Personalized Reimbursement Request Form communication is being sent to participants starting on 6/5/2017. The communication will introduce the OneExchange enhanced Reimbursement Request Form which will replace the current generic Reimbursement Request Form. We updated the form to make it easier for participants to use and will allow claims to be processed more efficiently. Included with this announcement will be two Reimbursement Request Forms. If participants need additional copies of the Reimbursement Request Form, it can be found online or by calling OneExchange. The form is personalized with their name and address. It will also include the following: A new Barcode for faster claim processing What I Need to Do section on the front of the form What I Need to Know section on the back of the form. A QR (Quick Reference) Code for quick access to OneExchange s website. Page 5 of 22

36 Nevada Public Employees Benefits Program Service Improvement Plan Participant Experience Open Enrollment During the Medicare Open Enrollment season for 2016, which occurred from 10/15/ /7/2015, our Customer Service Team experienced longer wait times than expected for participants to reach our Benefit Advisors and Customer Service Team members. For Nevada PEBP Retirees, the average wait time during this period was minutes. The chart below reflects specific call data during the last 2 Open Enrollment seasons (2015 and 2016). The change from the 2015 to 2016 season shows the increase in call volume, wait time, and calls abandoned. Time Period Open Enrollment for 2016 (10/15/ /7/2015) Open Enrollment for 2015 (10/15/ /7/2014) Change from 2014 to 2015 Calls Received Average Handle Time Average Wait Time Calls Abandoned Abandonment Rate 8, minutes minutes 1, % 4, minutes 5.23 minutes % +3, minutes minutes +1, % The data confirms that the Open Enrollment Period for 2016 was larger than prior years and participants experienced a drastic difference in service during this time when compared to the prior year. Call volume increased by 43% compared to the prior year while the Average Wait Time increased by 58%. The number of calls abandoned increased by 74% and the call abandonment rate increased by 55%. While OneExchange has no direct control over call volume, we have identified several factors that helped lead to these increased service results this past Open Enrollment season. The factors include IVR/Telephony System Issues and Employee attrition. Details on this information are included in the Service Improvement Plan Matrix section later in this document. Page 6 of 22