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Pensions and Benefits
School Employees' Health Benefits Commission
Meeting Minutes 2011
Unless otherwise noted, meetings are held at 10:00 a.m. at the Office of the Division of Pensions and Benefits, 50 West State Street, Trenton, NJ.
** MEETING WILL BE HELD AT THOMAS EDISON STATE COLLEGE, PRUDENCE HALL, TRENTON, NJ.

School Employees’ Health Benefits Commission
Minutes, Meeting No 24
January 26, 2011; 10:00 AM

Adequate notice of this meeting was provided through the annual notice of the schedule of regular meetings of the Commission filed with and prominently posted in the offices of the Secretary of State.  The 2011 annual meeting schedule was mailed to the Secretary of State, Star Ledger and the Trenton Times on December 10, 2010.

The meeting of the School Employees’ Health Benefits Commission (Commission) was called to order at 10:18 AM, Wednesday, January 26, 2011. The meeting was held at the Division of Pensions and Benefits, 50 West State Street, Trenton, New Jersey.

ROLL CALL

The meeting was attended by the following members of the Commission and Division staff:

Wendell Steinhauer, Commissioner
Robert Peden, representing State Treasurer Andrew P. Sidamon-Eristoff
Thomas Gallagher, representing Commissioner Thomas B. Considine, Department of Banking & Insurance
David Earling, Chairperson
Kevin Kelleher, Commissioner
Cynthia Jahn, Commissioner (via telephone)

ALSO PRESENT: 

Rubin Weiner, Deputy Attorney General
David Pointer, Manager, Policy, Planning and Operations
Jean Williamson, Acting Secretary
Barbara Scherer, Health Benefits Program
Wendy Burns, Horizon Blue Cross Blue Shield of New Jersey
Rosemary Middlebrook, Horizon Blue Cross Blue Shield of New Jersey
David Perry, Horizon Blue Cross Blue Shield of New Jersey
Louisa Andrade, Horizon Blue Cross Blue Shield of New Jersey
Steven Wolinsky, Medical Director, Horizon Blue Cross Blue Shield of New Jersey
Dr. Candance Saldarini, Medical Director, Magellan Health Services
Susan Rizzni, Magellan Health Services
Angela Pearson, Medco Health Solutions (via telephone)
Bhavesh B Modi, RPh, Medco Health Solutions (via telephone)

A motion to approve the meeting minutes of November 17, 2010 was made by Commissioner Steinhauer, seconded by Commissioner Gallagher. Approved (5:0:1, Commissioner Earling abstained).

The following cases due to HIPAA regulations are seen in closed session, with motions and voting done in closed session.

Commissioner Kelleher made a motion to go into closed session under Resolution A. Commissioner Steinhauer seconded the motion.  All voted in favor. 

Case #SE011101 – (Member Present with Attorney) – This tabled Horizon NJ DIRECT15/Magellan appeal concerned a request to treat a dependent’s eating disorder as a biologically based mental illness (BBMI) under the plan.  In addition, there was an appeal for $1,875.00 for the overnight component of the partial hospitalization program; this portion of the appeal was withdrawn because the facility waived the fee.  The attorney gave an overview of the appeal in which she pointed out the mental health provision of the plan covers 90% of the actual in-network cost whereas the medical benefits for the outpatient services in-network would be covered at 100%.  It was established that the maximum out-of-pocket the member would incur for in-network benefits is $400.  In 2010, he paid approximately $376.    David Perry, Horizon BCBSNJ gave a summary of their position.  Chairman Earling made a motion to go into Executive Session, Commissioner Kelleher seconded the motion and all voted in favor.  Upon return from Executive Session, the attorney made final arguments. Commissioner Peden made a motion that the appeal be denied on the basis of precedent set by the State Health Benefits Commission that eating disorders are not a BBMI.  Commissioner Steinhauer seconded the motion.  DAG Weiner clarified that the Commission directed Horizon BCBSNJ in the past to make the payments pending the Commission’s decision.  Commissioner Peden clarified the motion by saying any payments already made shall not be returned but going forward eating disorders will be treated as non-BBMI under the Plan. Approved (Vote 6: 0: 0).

Case #SE011102 – This Medco appeal concerned a request to fill a prescription for Viagra for a quantity beyond the plan limits of twelve pills in a ninety day period. Commissioner Kelleher made a motion to deny this appeal based on the plan’s dispensing limit. Commissioner Peden seconded the motion.  Approved (Vote 6: 0: 0).

Case #SE011103 – This Medco appeal concerned a request to fill prescriptions for non-preferred medications and be charged the preferred co-pay amounts under the Retiree Prescription Drug Plan. Commissioner Earling made a motion to deny this appeal based on the design of the Retiree Prescription Drug Plan which provides a 3-tier benefit plan and does not allow for this type of exception.  Commissioner Peden seconded the motion.  Approved (Vote 6: 0: 0)
 
Case #SE011104 – This Medco appeal concerned a request to fill a prescription for Domperidone which is a medication that lacks U.S. Food and Drug Administration (FDA) approval. Commissioner Steinhauer made a motion to deny this appeal because the plan does not cover medications which lack FDA approval. Commissioner Peden seconded the motion.  Approved (Vote 6: 0: 0)

Case #SE011105 – (Representative Attended on behalf of Member) - This Horizon/NJ DIRECT10 appeal concerned a denial of benefits for expenses for a Home Health Aide, twenty-four (24) hours per day, seven (7) days a week. The member’s representative gave an overview of the appeal.  Commissioner Kelleher asked Horizon BCBSNJ for their side of the issue.  Wendy Burns, Horizon BCBSNJ stated there were a couple of issues.  The first is the provider of services is not registered with Medicare, and therefore, NJ DIRECT does not provide benefits.  The second issue is the fact that based on the record, the services being rendered by the aides are custodial in nature.  Commissioner Kelleher made a motion to deny the appeal based on the provider was not registered with Medicare in addition to services provided were custodial in nature.  Commissioner Steinhauer seconded the motion.  Chairman Earling made a motion to go into Executive Session under Resolution B.  Commissioner Gallagher seconded the motion. All voted favor.  Upon return from Executive Session, the Medicare opt-out provision of the plan was discussed.  Approved (Vote 6: 0: 0).
  
Case #SE0111006 –This Medco appeal concerned a request to fill a prescription for Viagra for a quantity beyond plan limits of twelve pills in a ninety day period. Commissioner Kelleher made a motion to deny this appeal based on the plan’s dispensing limit. Commissioner Steinhauer seconded the motion.  Approved (Vote 6: 0: 0).

Case #SE011107 – This Medco appeal concerned a request to fill a prescription for Cialis for a quantity beyond plan limits of twelve pills in a ninety day period. Commissioner Kelleher made a motion to deny this appeal based on the plans dispensing limit. Commissioner Steinhauer seconded the motion.  Approved (Vote 6: 0: 0).

Case #SE011108 – The Member had requested that the Commission’s denial of reimbursement for dental implants for her dependent son be forwarded to the Office of Administrative Law (OAL) for a hearing.  Commissioner Steinhauer made a motion to deny this request for a hearing at the OAL. Commissioner Peden seconded the motion. All voted in favor.

Case #SE011109 – A settlement offer was before the Commission in a case involving denial of benefits for an injury deemed work related.  The lien amount was for $3,564.69 and the proposal was for $2,376.42.  Commissioner Gallagher made a motion to accept the settlement proposal.  Commissioner Earling seconded the motion.  All voted in favor.

Case #SE011110 – A settlement offer was before the Commission in a case involving denial of benefits for an injury deemed work related.  The lien amount was for $4,632.65 and the proposal was for $2,000.00.  The recommendation from Socrates, Inc. was to ask for $3,000.00.  Commissioner Kelleher made a motion to deny the settlement and go back and request the amount of $3,000.00. Commissioner Steinhauer seconded the motion.  All voted in favor.

There being no other appeals, Commissioner Kelleher made a motion to return to open public session. Commissioner Steinhauer seconded it. All   voted in favor.

ISSUES

  1. Carrier Updates – A NJ DIRECT 2009 Medical Management Report stamped “Confidential” was included in the Commissioners’ binders.
  1. DEVA Report - David Pointer said the Executive Summary Report was in the Commissioner’s binders. Mr. Pointer requested that if the Commission had any questions concerning the report to direct those questions to him.  Commissioner Kelleher asked if the audit will be done again.  Mr. Pointer replied yes, in approximately 5 years. Mr. Pointer pointed out there are different levels of audits.   

There being no further business to transact, a motion was made to adjourn by Commissioner Steinhauer, seconded by Commissioner Kelleher. All voted in favor. The School Employees’ Health Benefits Commission meeting was adjourned at 12:45 PM.

  Respectfully submitted,
 

 

 

  Jean M. Williamson, CEBS
Acting Secretary
School Employees’ Health Benefits Commission

School Employees’ Health Benefits Commission
Minutes, Meeting No 25
March 23, 2011; 10:00 AM

Adequate notice of this meeting was provided through the annual notice of the schedule of regular meetings of the Commission filed with and prominently posted in the offices of the Secretary of State.  The 2011 annual meeting schedule was mailed to the Secretary of State, Star Ledger and the Trenton Times on December 10, 2010.

The meeting of the School Employees’ Health Benefits Commission (Commission) was called to order at 10:06 AM, Wednesday, March 23, 2011. The meeting was held at the Division of Pensions and Benefits, 50 West State Street, Trenton, New Jersey.

ROLL CALL

The meeting was attended by the following members of the Commission and Division staff:

Wendell Steinhauer, Commissioner
Robert Peden, representing State Treasurer Andrew P. Sidamon-Eristoff
Thomas Gallagher, representing Commissioner Thomas B. Considine, Department of Banking & Insurance
Kevin Kelleher, Commissioner
Cynthia Jahn, Commissioner

ABSENT:

David Earling, Chairman

ALSO PRESENT: 

Rubin Weiner, Deputy Attorney General
David Pointer, Manager, Policy, Planning and Operations
Jean Williamson, Acting Secretary
Barbara Scherer, School Employees’ Health Benefits Program
Wendy Burns, Horizon Blue Cross Blue Shield of New Jersey (Horizon BCBSNJ)
Rosemary Middlebrook, Horizon BCBSNJ
Dave Perry, Horizon BCBSNJ
Megan Mackensie, Horizon BCBSNJ
Dr. John O’Donnell, Medical Director, Magellan Health Services
Susan Rizzni, Magellan Health Services

Commissioner Steinhauer nominated Commissioner Gallagher as Interim Chairman for the meeting; it was seconded by Commissioner Kelleher. All voted in favor.

A motion to approve the meeting minutes of January 26, 2011 was made by Commissioner Steinhauer and was seconded by Commissioner Gallagher. All voted in favor.

The following cases due to HIPAA regulations are seen in closed session, with motions and voting done in closed session.

Commissioner Steinhauer made a motion to go into closed session under Resolution A. Commissioner Kelleher seconded the motion.  All voted in favor. 

Case #SE031101(Member Present) – This Horizon NJ DIRECT15/Magellan appeal concerned a denial of expenses for substance related residential treatment at Little Hill Foundation Alina Lodge. The member’s father gave a history of the member’s long time substance abuse and the lack of success in numerous outpatient clinics. Dr. John O’Donnell, Medical Director, Magellan Health Services gave an overview of the member’s clinical history. Based upon the information provided by Alina Lodge, it was determined the last medically necessary day for Residential Treat (RTC) was March 24, 2010.  At that point, the level of care was partial hospitalization (PHP) in accordance with the American Society of Addiction Medicine (ASAM) guidelines.  Endeavor House had this service available and was within geographic access of member’s house. This decision was verbalized to Ms. Apguard at the Alina Lodge and letter was mailed to member and the facility on March 26, 2010.  Commissioner Peden asked what the differences were between Alina Lodge and the Endeavor House.  Dr. O’Donnell said the Alina Lodge only offers RTC and does not have step down levels of care. The Endeavor House offers the RTC, PHP and step down programs. Commissioner Kelleher made a motion to go into Executive Session under Resolution B. Commissioner Steinhauer seconded the motion. All voted favor.  Upon return from Executive Session, Commissioner Gallaher made a motion to deny this appeal as requested for residential treatment but authorized Magellan to review what would have been the appropriate level of care. Dr. O’Donnell advised Magellan would have approved three weeks PHP and six weeks in an Intensive Outpatient Program, based on the in-network level of benefit Magellan would had paid $7,566.00. A discussion took place on the amount of reimbursement and Magellan was asked for the amount which would have been paid to a provider is out-of-network. Commissioner Gallagher withdrew his motion. Commissioner Kelleher made a motion to table this appeal to allow Magellan time to research the out-of-network rates for the lower level of care and to be prepared to present them at the next SEHBC meeting on May 25, 2011. Commissioner Steinhauer seconded the motion. Approved (Vote 5: 0: 0)
 
Case #SE031102 – This Medco appeal concerned a denial of a request to fill a prescription for Vaniqa cream.  Commissioner Kelleher made a motion to deny this appeal the drug is used for cosmetic purposes and is, therefore, excluded under the plan. Commissioner Peden seconded the motion.  Approved (Vote 5: 0: 0).

Case #SE031103(Member and Attorney Present)- This Horizon NJ DIRECT15/Magellan appeal concerned the level of reimbursement for an out-of-network provider. In a letter dated December 16, 2010, the Member waived his right to privacy and requested his hearing be open to the public.  Mr. Weissman, attorney for the member, stated based on two statutes the member is entitled to the additional reimbursement. Based on N.J.S.A. 52:14-17.29 “Reasonable and customary charges” involves charges based on the 90th percentile of the usual, customary, and reasonable (“UCR”) fee schedule.  Ingenix is an entity retained by the State of New Jersey to determine the UCR on which to base reimbursement levels.  The Ingenix database provides the UCR for all coded services.  N.J.S.A. 52:14-17.29 provides that SHBP members enrolled in NJ DIRECT10 and NJ DIRECT15 receive reimbursement for out-of-network services at 80% or 70%, respectively, of the reasonable and customary rate.  Since May 2009, the allowable rate for mental health services provided by Licensed Clinical Social Workers (LCSW) has decreased significantly. 

Commissioner Gallagher asked to hear from Horizon BCBSNJ.  Dave Perry, Horizon BCBSNJ, stated he presented the revised payment structure to the Commission in 2009.  The structure was changed because Horizon BCBSNJ determined the PHCS data does not accurately or adequately support behavioral health because the professional level of the rendering provider is not used in fee schedule. Commissioner Kelleher asked who authorized the payment plan for Horizon BCBSNJ to change it. The SHBC accepted the recommendation to adjust reimbursements according to the provider’s licensing.  Commissioner Kelleher said his understanding was that the SHBC holds the carriers contracts but wasn’t aware that the SHBC was able to make changes to the plans contracts. Commissioner Jahn made a motion to go into Executive Session under Resolution B. Commissioner Steinhauer seconded the motion. All voted favor.  Upon return from Executive Session, Commissioner Steinhauer made a motion to approve this appeal since the change to the payment structure had not been voted on by either Commission.  Commissioner Gallagher referenced two citations on page three of the two Final Administrative Determinations (FADs) that were handed out which in part the Commission can make changes to the plan to avoid unnecessary utilization.  This Commission needs to make a decision that is consistent with legal and administrative precedent established by the SHBC.  Commissioner Kelleher seconded the motion. Motion Failed (Vote 2: 3: 0, Commissioner Peden, Gallagher and Jahn voted nay).

Commissioner Kelleher asked if the Memorandum between the two commissions says the SEHBC has to follow the SHBC precedent. DAG Weiner said the precedent of the SHBC should be followed.  This commission can make a recommendation to the SHBC regarding the matter.  Commissioner Steinhauer made a motion to table this appeal until the Commission can meet with the SHBC.  Commissioner Kelleher seconded the motion. Motion Failed (Vote 2:3:0, Commissioner Peden, Gallagher and Jahn voted nay).  Commissioner Peden made a motion to deny this appeal to avoid inequity and unnecessary utilization.  Commissioner Jahn seconded the motion.  Approved (Vote 3: 2: 0, Commissioner Kelleher and Steinhauer voted nay.)
 
Case #SE031104 – The Commission had requested a Final Administrative Decision (FAD) be drafted for approval concerning the member’s request that the Commission’s denial of reimbursement for dental implants for her dependent son be forwarded to the Office of Administrative Law (OAL) for a hearing. The FAD was not available for review.  Commissioner Peden made a motion to table this matter. Commissioner Gallagher seconded the motion. All voted in favor.

Case #SE031105 – The Member had requested that the Commission’s denial to apply the mental health benefit for eating disorders for member’s dependent child be forwarded to the Office of Administrative Law (OAL) for a hearing.    Commissioner Kelleher made a motion to approve this request for a hearing at the OAL. Commissioner Jahn seconded the motion. All voted in favor.

There being no other appeals, Commissioner Steinhauer made a motion to return to open public session. Commissioner Kelleher seconded it. All   voted in favor.

ISSUES

  1. Carrier Updates –
    David Pointer said that UMDNJ is terminating from the Aetna network though they are still negotiating and Aetna is optimistic with the negotiations. 
     
    Dave Perry, Horizon BCBSNJ advised the Commission implementation of the Pain Management Program effective April 1, 2011. All Pain Management services would require prior authorization in order for claims to be paid. This would be a true Prior Authorization Benefit.  If the member does not get prior authorization for the services no benefits will be paid. This will reflect a 20% - 30% cost savings. The implementation will consist of notification to members, updating the member handbook. Reviews will be expedited to get claims adjudicated. During the implementation Horizon will be liberal with complaints that come in as you cannot reach 100% of those involved. However at some point, there will be no retroactive authorization. 

There being no further business to transact, a motion was made to adjourn by Commissioner Steinhauer, seconded by Commissioner Kelleher. All voted in favor. The School Employees’ Health Benefits Commission meeting was adjourned at 12:30 PM.

  Respectfully submitted,
 

 

 

  Jean M. Williamson, CEBS
Acting Secretary
School Employees’ Health Benefits Commission

School Employees’ Health Benefits Commission
Minutes, Meeting No 26
May 25, 2011; 10:00 AM

Adequate notice of this meeting was provided through the annual notice of the schedule of regular meetings of the Commission filed with and prominently posted in the offices of the Secretary of State.  The 2011 annual meeting schedule was mailed to the Secretary of State, Star Ledger and the Trenton Times on December 10, 2010.

The meeting of the School Employees’ Health Benefits Commission (Commission) was called to order at 10:07 AM, Wednesday, May 25, 2011. The meeting was held at the Division of Pensions and Benefits, 50 West State Street, Trenton, New Jersey.

ROLL CALL

The meeting was attended by the following members of the Commission and Division staff:

Wendell Steinhauer, Commissioner
Robert Peden, representing State Treasurer Andrew P. Sidamon-Eristoff
Thomas Gallagher, representing Commissioner Thomas B. Considine, Department of Banking & Insurance
David Earling, Chairman
Kevin Kelleher, Commissioner
Cynthia Jahn, Commissioner

ALSO PRESENT: 

Rubin Weiner, Deputy Attorney General
David Pointer, Manager, Policy, Planning and Operations
Jean Williamson, Acting Secretary
Barbara Scherer, School Employees’ Health Benefits Program
Wendy Burns, Horizon Blue Cross Blue Shield of New Jersey (Horizon BCBSNJ)
Rosemary Middlebrook, Horizon BCBSNJ
Dave Perry, Horizon BCBSNJ
Dr. Steven Wolinsky, Medical Director, Horizon BCBSNJ
Dr. Claudia Hanson, Medical Director, Horizon BCBSNJ
Dr. John O’Donnell, Medical Director, Magellan Health Services
Susan Rizzni, Magellan Health Services

A motion to approve the meeting minutes from the March 23, 2011 meeting was made by Chairman Earling, seconded by Commissioner Steinhauer and all voted in favor.

Jean Williamson requested the Commission go out of order from the agenda to proceed with the case remanded from the Appellate Division regarding the New Jersey Education Association (NJEA) and the Medco contract. The commission agreed and Ms. Williamson introduced Senior Deputy Attorney General Eileen Den Bleyker. DAG Den Bleyker advised the Commission the lawsuit contends the changes to the prescription drug plan were unlawful under relevant statutory law. The lawsuit addresses the legality of the process by which the contract was awarded to Medco and the changes in the prescription benefits allegedly implemented through the Medco contract. She said she was not prepared to address the matter today, but asked the Commission to schedule a Special Meeting in June to discuss this matter. Commissioner Peden asked what roll this Commission has with this matter. DAG Den Bleyker said the Commission would have the opportunity to review the Medco contract and make a determination on the issues raised. Chairman Earling asked for a summary of the case.  DAG Rubin Weiner said in order to discuss this case with the Commission certain commissioners may need to recuse themselves. Commissioner Jahn pointed out that there may not be enough voting members if the NJEA representatives recuse themselves. DAG Den Bleyker said the NJEA raised three challenges: 1. Was the Medco contract awarded properly? 2. Was the MOU breached? and, 3.Is the Preferred Drug Step Therapy program allowed under the statute?   DAG Den Bleyker also said that jurisdiction is retained by the Appellate Division. DAG Weiner explained the process that the NJEA would present their side, DAG Den Bleyker would present the contract side and he would counsel the Commission.  The Division will provide possible June dates for a Special meeting by e-mail. 

ISSUES

  1. Carrier Updates; David Pointer announced Newton Memorial Hospital returned to the Horizon Hospital Network effective May 1, 2011.
     
  2. Employer Updates; David Pointer said the 2011 year-to-date Report for New Education Employers and Termination of Education Employers was in the Commission books for their information.  

The following cases due to HIPAA regulations are seen in closed session, with motions and voting done in closed session.

Commissioner Gallagher made a motion to go into closed session under Resolution A. Commissioner Steinhauer seconded the motion.  All voted in favor. 

Case #SE051101(Member Present) – This tabled Horizon NJ DIRECT10/Magellan appeal concerned a denial of expenses for substance related residential treatment for a member at Little Hill Foundation Alina Lodge. The case was tabled at the March 23, 2011 meeting to allow Magellan time to research and provide the cost of the appropriate level of treatment at the out-of-network level of benefits. Jean Williamson advised the Commission Magellan had stated the appropriate level of treatment would have been three weeks of partial hospitalization (15 PHP Sessions) and six weeks of Intensive Outpatient Therapy three times a week (18 IOP Sessions). Magellan provided a chart furnishing the requested information.  The member’s father requested a copy of that chart. The father of the member gave an overview of what he presented at the last meeting. He added he researched the American Society of Addiction Medicine (ASAM) thoroughly and said policyholders have no way of understanding the levels of care in ASAM. Commissioner Kelleher made a motion to approve this appeal based on evidence and the documents before them.  Commissioner Steinhauer seconded the motion. Motion failed (Vote 2: 4: 0, Commissioner Peden, Gallagher, Jahn and Chairman Earling voted nay).  Chairman Earling made a motion to go into Executive Session under Resolution B. Commissioner Jahn seconded the motion and all voted in favor. Upon return from Executive Session, Commissioner Peden made a motion to deny the appeal, however, to reimburse the member the amount that would have been paid at the out-of-network level of benefits.  Chairman Earling seconded the motion.  DAG Weiner suggested the Commission go into Executive Session again. Commissioner Jahn made a motion to go into Executive Session under Resolution B.  Chairman Earling seconded the motion and all voted in favor. Upon return from Executive Session, Commissioner Peden withdrew his motion. Chairman Earling made a motion to deny the appeal. However based on the facts before them, specific circumstances and the member’s history, the Commission awarded the amount of $11,121.00 to be paid to the member. Commissioner Steinhauer seconded the motion. Approved (Vote 5: 1: 0, Commissioner Peden voted nay)   

Case #SE051102(Member Present) This Horizon/NJ DIRECT10 appeal concerned a denial of benefits for expenses for continuation of subacute rehabilitation.
The Member gave an overview of her appeal and advised the Commission the inpatient setting of rehabilitation provided her with the medical necessities she required. Dr. Wolinsky, Medical Director, Horizon BCBSNJ stated the subacute rehabilitation was denied since it was determined the Member had no daily rehabilitation or skilled nursing needs identified that required an inpatient setting.  The Committee however did approve an evaluation for a home visiting nurse and physical therapy.  Home rehabilitation is a safer setting, extended stays in a facility creates a risk for infections, bed sores etc. Chairman Earling made a motion to deny this appeal based on the records provided that medical necessity was not met. Commissioner Peden seconded the motion.  Approved (Vote 4: 2: 0, Commissioner Kelleher and Steinhauer voted nay).

Case #SE051103 –This Horizon NJ DIRECT10/Magellan appeal concerned a denial of continuation of benefits for expenses for an ineligible mental health provider. Dr. John O’Donnell, Medical Director, Magellan provided an overview of the appeal and an explanation of the level of education required for an RN to practice in an independent setting. This provider did not meet the criteria to treat the member for the condition being billed. Commissioner Steinhauer made a motion to go into Executive Session under Resolution B. Chairman Earling seconded the motion and all voted in favor. Upon return from Executive Session, Chairman Earling made a motion to deny this appeal because the provider is not licensed at the level of independent practice in New Jersey or New York. Commissioner Peden seconded the motion. All voted in favor. Approved (Vote 6: 0: 0).

Case #SE051104 –Chairman Earling made a motion to accept the draft of the FAD as written. Commissioner Peden seconded the motion.  All voted in favor. Approved (Vote 6: 0: 0).
 
There being no other appeals and no further business to transact, a motion was made to return to open session and adjourn by Commissioner Gallagher, seconded by Commissioner Jahn. All voted in favor. The School Employees’ Health Benefits Commission meeting was adjourned at 12:08 PM.

  Respectfully submitted,
 

 

 

  Jean M. Williamson, CEBS
Acting Secretary
School Employees’ Health Benefits Commission

 


School Employees’ Health Benefits Commission
Minutes, Meeting No 27
July 20, 2011; 10:00 AM

Adequate notice of this meeting was provided through the annual notice of the schedule of regular meetings of the Commission filed with and prominently posted in the offices of the Secretary of State.  The 2011 annual meeting schedule was mailed to the Secretary of State, Star Ledger and the Trenton Times on December 10, 2010 and revised notice was sent on July 11, 2011.

The meeting of the School Employees’ Health Benefits Commission (Commission) was called to order at 10:07 AM, Wednesday, July 20, 2011. The meeting was held at the Thomas Edison State College, 102 West State Street, Trenton, New Jersey.

ROLL CALL

The meeting was attended by the following members of the Commission and Division staff:

Robert Peden, representing State Treasurer Andrew P. Sidamon-Eristoff
Thomas Gallagher, representing Commissioner Thomas B. Considine, Department of Banking & Insurance (except for SE071101 appeal)
Gale Simon, representing Commissioner Thomas B. Considine, Department of Banking & Insurance (for SE071101 appeal only)
David Earling, Chairman
Kevin Kelleher, Commissioner
Cynthia Jahn, Commissioner

ABSENT:

Wendell Steinhauer, Commissioner
Joseph Del Grosso, Commissioner

ALSO PRESENT: 

Rubin Weiner, Deputy Attorney General
David Pointer, Manager, Policy, Planning and Operations
Jean Williamson, Acting Secretary
Barbara Scherer, School Employees ‘Health Benefits Program
Wendy Burns, Horizon Blue Cross Blue Shield New Jersey (Horizon BCBSNJ)
Rosemary Middlebrook, Horizon BCBSNJ
Dave Perry, Horizon BCBSNJ
Claudia Hanson, M.D., Medical Director Horizon BCBSNJ
Angela Pearson, Medco Health Solutions
Bhavesh B Modi, RPh, Medco Health Solutions
Kara Larsen, Medco Health Solutions

Chairman Earling made a motion to go out of order to hear the appeals first.  Commissioner Kelleher seconded the motion.  All voted in favor.

The following cases due to HIPAA regulations are seen in closed session, with motions and voting done in closed session.

Commissioner Kelleher made a motion to go into closed session under Resolution A.  Commissioner Jahn seconded the motion.  All voted in favor.

SE071101 - (Member Present) - This Horizon/NJ DIRECT10 appeal concerned a denial of benefits for expenses for a WalkAide device for the member’s son which was deemed experimental and investigational by Horizon BCBSNJ. Commissioner Gallagher recused himself and Gale Simon represented Commissioner Considine, DOBI, for this appeal. A brief overview of the appeal was provided by the member’s spouse. Dr. Claudia Hanson, Medical Director, Horizon BCBSNJ, gave a summary of Horizon’s position. Commissioner Kelleher made a motion to go into Executive Session under Resolution B. Chairman Earling seconded the motion. All voted in favor. Upon return from Executive Session, Commissioner Peden made a motion to deny this appeal based on evidence before them that the device is considered experimental and investigational and is not covered under the plan. Commissioner Simon seconded the motion. Approved (Vote 4: 1: 0, Commissioner Kelleher voted nay).

Commissioner Gallagher returned and Ms. Simon left the meeting.

SE071102 – Final Administrative Determination (FAD) – Commissioner Kelleher made a motion to accept the FAD draft concerning the denial of additional reimbursement for an out-of-network provider.  Chairman Earling seconded the motion.  All voted in favor. 

SE071103 – A settlement offer was before the Commission in a case involving denial of benefits for an injury deemed work related.  The lien amount was $52,060.87 and the proposed settlement amount was $2,500.00.  Commissioner Kelleher made a motion to authorize Socrates, a Horizon recovery subcontractor, to negotiate a resolution that calls for recovery between $2,500.00 and $5,000.00. Commissioner Gallagher seconded the motion.  All voted in favor.

SE071104 – A settlement offer was before the Commission in a case involving denial of benefits for an injury deemed work related. The lien amount was $4,500.48. Commissioner Gallagher made a motion to authorize Socrates, a Horizon recovery subcontractor, to negotiate a resolution that calls for recovery between $2,700.00 and $3,375.00. Commissioner Kelleher seconded the motion.  All voted in favor.

There being no further appeals, a motion was made to return to open session by Chairwoman Earling, seconded by Commissioner Kelleher. All voted in favor.

Commissioner Kelleher left the meeting.

ISSUES

  1. Carrier Updates; David Pointer advised the Commission there were no carrier updates.

  2. Employer Updates; David Pointer said the 2011 year-to-date report for New Education Employers and Termination of Education Employers was in the Commission books for their information.

  3. NJEA v F. Beaver, SEHBC, SHBC; Commissioner Kelleher recused himself from the issue. DAG Weiner advised the Commission that since there were only four Commissioners in attendance, there were not enough Commissioners present to vote; however the matter was placed on the agenda for the purpose of placing information on the record. He advised the Commission that there were two parts to the matter, a procedural part and a substantive part. The procedural part included hearing this matter prior to it going to the Appellate Division, and settling the record for this appeal. The substantive part involved addressing the issues raised by the appeal, including the propriety of awarding the pharmacy benefits manager (PBM) contract to Medco, and the legality of Medco’s implementation of a Preferred Step-Therapy Program (PDST).  Senior Deputy Attorney General (SDAG) Eileen Den Bleyker stated in efforts of settling the record the Commission received packets of material and documents from the Division of Purchase and Property (DPP) and three binders constituting the Medco Contract. Two of the binders contain the contract redacting all proprietary information and the remaining binder contains the redacted information.  Richard Friedman on behalf of the New Jersey Education Association (NJEA) argued that the Commission never approved a step therapy program which required members to try and fail a preferred drug prior to being covered for a non-preferred drug.  He stated that the program was neither presented to the Commission nor present in the PBM Request for Proposals.  He noted the arbitration decision in the matter of the Arbitration between the State of New Jersey and Communications Workers of America; Docket No: OER-10195, March 23, 2011, which he argued concluded that implementation of the PDST constituted a reduction in benefits, which was prohibited by statute. He also argued that the uniformity clause precludes the PDST from being applied to school employees when the arbitration prohibits its application to state employees.  Finally, Mr. Friedman cited to HMO regulations which he argued establishes a specific approval process for the use of non-preferred medications. SDAG Ben Bleyker responded that the arbitration should not be made a part of the record because it had to do with specific employees and their contracts.  She also stated that the uniformity clause permits variations in coverage for different groups of employees. Chairman Earling called a short recess at 11:20 AM. The meeting was resumed at 11:32 AM.  SDAG Den Bleyker concluded by referencing provisions in the plan that required step therapy and medical necessity prior to implementation of the PDST program. David Pointer provided an overview of the Pharmacy Benefits Manager RFP bid process, and responded to a number of questions from Mr. Friedman regarding the same. Angela Pearson, Medco Health Solutions provided an overview of the PDST program, and responded to questions from Mr. Friedman and Commissioners Gallagher, Peden and Earling regarding the same. Bhavesh B Modi, RPh, Medco Health Solutions, responded to several clinical questions. Chairman Earling requested Medco to provide statistics of approvals from the Coverage Reviews. Chairman Earling stated that the next step was to try and schedule a meeting in August to continue consideration of the matter.

  4. Performance Standards; David Pointer advised the Commission that all participating plans, NJ DIRECT, and the Health Organizations (HMO’s) are held to agreed-upon performance standards each year.  All performance standards were met by all of the plans. 

There being no further business, Commissioner Peden made a motion to adjourn which was seconded by Commissioner Gallagher. All voted in favor.  The School Employees’ Health Benefits Commission meeting was adjourned at 12:25 PM.

  Respectfully submitted,
 

 

 

  Jean M. Williamson, CEBS
Acting Secretary
School Employees’ Health Benefits Commission

School Employees’ Health Benefits Commission
Minutes, Meeting No 28
August 18, 2011; 1:00 PM

Adequate notice of this meeting was provided through the annual notice of the schedule of regular meetings of the Commission filed with and prominently posted in the offices of the Secretary of State.  The 2011 annual meeting schedule was mailed to the Secretary of State, Star Ledger and the Trenton Times on December 10, 2010 and revised notice was sent on July 11, 2011.

The meeting of the School Employees’ Health Benefits Commission (Commission) was called to order at 1:05 PM, Thursday, August 18, 2011. The meeting was held at the Division of Pensions and Benefits, 1st Floor Board Room, 50 West State Street, Trenton, New Jersey.

ROLL CALL

The meeting was attended by the following members of the Commission and Division staff:

Robert Peden, representing State Treasurer Andrew P. Sidamon-Eristoff
Thomas Gallagher, representing Commissioner Thomas B. Considine, Department of Banking & Insurance
David Earling, Chairman (via telephone)
Kevin Kelleher, Commissioner (via telephone)
Cynthia Jahn, Commissioner (via telephone)
Wendell Steinhauer, Commissioner (via telephone)

ABSENT:

Joseph Del Grosso, Commissioner

ALSO PRESENT: 

Rubin Weiner, Deputy Attorney General
David Pointer, Manager, Policy, Planning and Operations
Jean Williamson, Acting Secretary
Barbara Scherer, School Employees ‘Health Benefits Program
Wendy Burns, Horizon Blue Cross Blue Shield New Jersey (Horizon BCBSNJ)
Rosemary Middlebrook, Horizon BCBSNJ
Dave Perry, Horizon BCBSNJ

David Pointer told the Commissioners that the Employer Group Waiver Plan (EGWP) issue was removed from the agenda because the SEHBP Plan Design Committee did not yet decide whether or not to approve it.

The following cases due to HIPAA regulations are seen in closed session, with motions and voting done in closed session.

Commissioner Gallagher made a motion to go into closed session under Resolution A.  Commissioner Peden seconded the motion.  All voted in favor.

SE081101 - (Member Present with Attorney) - This Horizon/NJ DIRECT10 appeal concerned a request to treat an eating disorder as a biologically based mental illness (BBMI). It was noted that this member has a pending appeal before the Office of Administrative Law (OAL) concerning a previous hospitalization for an eating disorder which was denied by the Commission several months ago.  The current appeal is for hospitalization at the Center for Change, a non-participating facility located in Utah. The member’s attorney, Terry Thornton, gave an overview of the appeal and summarized why she believed coverage should continue for the member in this facility rather than be moved to an in-network facility.  Dr. Parrott, Magellan Health Services stated that the member has made progress and the member may be able to step down to a lower level of care.  A discharge planning conference will be held to make that determination.  There was some discussion about the benefit provided by the plan for in-patient hospitalization at a non-participating facility versus the benefits at a participating facility.  Ms. Thornton asked that coverage continue as it would for a BBMI pending final resolution of the initial appeal (all appeals are exhausted). Chairman Earling made a motion to go into Executive Session under Resolution B. Commissioner Peden seconded the motion and all voted in favor.  Upon return from Executive Session, the member returned to the Commission meeting without his attorney who had a conference call. He was willing to continue without his attorney being present.  Chairman Earling made a motion to approve the appeal for emergency continued coverage based on the finding of irreparable harm if the appeal is not granted and the uncertainty of the OAL outcome and subject to full reimbursement to the plan by the member upon an OAL decision upholding the Commission’s denial of the previous appeal and subject to medical necessity as determined by Magellan Health Services. Commissioner Steinhauer seconded the motion. All voted in favor.

There being no further business, Commissioner Gallagher made a motion to adjourn which was seconded by Commissioner Peden. All voted in favor. The School Employees’ Health Benefits Commission meeting was adjourned at 2:47 PM.

  Respectfully submitted,
 

 

 

  Jean M. Williamson, CEBS
Acting Secretary
School Employees’ Health Benefits Commission

School Employees’ Health Benefits Commission
Minutes, Meeting No 28
September 28, 2011; 10:00 AM

Adequate notice of this meeting was provided through the annual notice of the schedule of regular meetings of the Commission filed with and prominently posted in the offices of the Secretary of State.  The 2011 annual meeting schedule was mailed to the Secretary of State, Star Ledger and the Trenton Times on December 10, 2010 and revised notice was sent on August 16, 2011.

The meeting of the School Employees’ Health Benefits Commission (Commission) was called to order at 10:12 AM, Wednesday, September 28, 2011. The meeting was held at the Division of Pensions and Benefits, 50 West State Street, Trenton, New Jersey.

ROLL CALL

The meeting was attended by the following members of the Commission and Division staff:

Wendell Steinhauer, Commissioner
Robert Peden, representing State Treasurer Andrew P. Sidamon-Eristoff
Thomas Gallagher, representing Commissioner Thomas B. Considine, Department
of Banking & Insurance (For all but #SE091102)
Gale Simon, representing Commissioner Thomas B Considine, Department of Banking & Insurance (Via Telephone for the OAL Request Case #SE091102)
David Earling, Chairman
Kevin Kelleher, Commissioner
Cynthia Jahn, Commissioner
Joseph Del Grosso, Commissioner (Via Telephone)

ALSO PRESENT: 

Eileen Den Blyker, Senior Deputy Attorney General
Rubin Weiner, Deputy Attorney General
Diane Weeden, Deputy Attorney General
David Pointer, Manager, Policy, Planning and Operations
Jean Williamson, Acting Secretary
Wendy Burns, Horizon Blue Cross Blue Shield of New Jersey (Horizon BCBSNJ)
Dave Perry, Horizon BCBSNJ
Rosemary Middlebrook, Horizon BCBSNJ
Dr. Louis Parrott, Medical Director, Magellan Health Services
Sue Rizzni, Magellan Health Services
Angela Pearson, Medco Health Solutions (Via Telephone 10:12 AM – 11:40 AM)

A motion to approve the meeting minutes of July 20, 2011 and August 18, 2011 was made by Commissioner Kelleher, seconded by Commissioner Gallagher. Approved (Vote 5: 0: 2, Commissioner Steinhauer and Del Grosso abstained)

Issues

  1. NJEA v Director, Division of Pensions and Benefits, SEHBC, SHBC: Commissioner Kelleher and Steinhauer recused themselves from this matter.  Chairman Earling asked for a summary of the issue and DAG Weiner provided an overview of what was presented to the Commission on July 20, 2011.  He reminded the Commission there were not enough Commissioners present to take any action on the issue at the July 20 meeting and there was a quorum present at today’s meeting. He stated the Commission’s role is to settle the record; the Appellate Division will decide the case based on the record sent back to them.  There is a dispute between the parties as to whether the decision rendered on March 23, 2011 in an arbitration between the State and the Communication Workers of America should be part of the record in this case.  
    Also the Commission must decide whether to take any action with the issues raised with the contract and the legality of the Preferred Drug Step Therapy (PDST) program.

Chairman Earling made a motion to include the arbitration decision in the record along with all the other information presented today. Commissioner Del Grosso seconded the motion. Failed (Vote 2: 3: 0, Commissioner Peden, Jahn and Gallagher voted nay).  Chairman Earling made a motion to submit all information presented so far and all information presented today excluding the arbitration decision to the Appellate Division. Commissioner Jahn seconded the motion.  All voted in favor.  Commissioner Peden made a motion to go into Executive Session under Resolution B. Chairman Earling seconded the motion.  All voted in favor. Upon return from Executive Session, Commissioner Peden made a motion to deny all arguments of the plaintiff NJEA since the concept of the Step Therapy was present in the RFP, Medco’s response to the RFP and the Member Handbook, and the tried and failed method is a practical, standard method for administering step therapy and is an administrative detail that does not require Commission approval, Commissioner Jahn seconded the motion.  Motion Passed (Vote 4: 1: 0, Commissioner Del Grosso voted nay). Commissioner Peden motioned that since the PDST provides for therapeutically equivalent prescription drugs and there is an appeal process, PDST does not represent a reduction in benefits.  Commissioner Jahn seconded the motion.  Motion Passed (Vote 4: 1: 0, Commissioner Del Grosso voted nay).  Commissioner Del Grosso asked if this case sets a precedent for the future.  Commissioner Del Grosso asked whether those covered by the CWA arbitration decision get drugs without having to use the PDST.  David Pointer replied yes.  DAG Weiner said the DAG’s office will prepare a draft Final Administrative Determination for the Commission to review and vote on at the next meeting.  SDAG Den Bleyker advised the Commission this matter is due back to the Appellate Division by October 31, 2011.

  1. Carrier Updates: David Pointer announced St. Joseph Hospital in Patterson is terminating from the Horizon BSBSNJ network effective January 1, 2012, however discussions continue between Horizon BCBSNJ and the hospital.
  1. Employer Updates; David Pointer said the 2011 year to date Report for New Education Employers and Termination of Education Employers was in the Commission books for their information.  

The following cases due to HIPAA regulations are heard in closed session, with motions and voting done in closed session.

Commissioner Gallagher made a motion to go into closed session under Resolution A. Commissioner Steinhauer seconded the motion.  All voted in favor. 

Case #SE091101(Member Present) – Horizon NJ DIRECT10/Magellan Health Services appeal concerned a denial of benefits for Outpatient Applied Behavior Analysis (ABA) Therapy for the member’s son rendered by a provider deemed ineligible. A brief overview of the appeal was provided by the member concerning Magellan’s denied benefits for ABA Therapy rendered by Dr. Schnee, a non-participating provider from February 9, 2010 through May 30, 2010.  Claims were denied for that period because Dr. Schnee was not yet credentialed as a Board Certified Behavior Analyst-Doctoral (BCBA-D).  Wendy Burns, Horizon BCBSNJ said the Autism and Developmental Disabilities Mandate that became effective February 8, 2010 required the SHBP/SEHBP to follow the credentialing requirements.  The Bulletin was released by the Department of Banking and Insurance on January 14, 2010 explaining the credential requirements for ABA Therapy. Sue Rizzni, Magellan Health Services advised the Commission as of May 31, 2010 Dr. Schnee was board certified to provide the ABA Therapy.  Since Magellan’s network of participating ABA providers was still being formed during this time, Magellan agreed to negotiate a payment arrangement with Dr. Schnee, pending provider eligibility verification. This contract would allow services to be paid at the agreed upon rate and at the in network benefit level.  Chairman Earling made a motion to go into Executive session under Resolution B. Commissioner Steinhauer seconded the motion. All voted in favor. [Commissioner Jahn left the meeting at this time:  12:00.]  Upon return from Executive Session Commissioner Steinhauer made a motion to deny this appeal based on the certification requirements not being met, however, to allow for a transition period and make the payment in this case as if the provider was ABA certified on February 9, 2010. Chairman Earling seconded the motion.  Motion Passed (Vote 5: 1: 0, Commissioner Peden voted nay).

Case #SE091102 – The Member had requested that the Commission’s denial of benefits for expenses for a WalkAide device for his dependent son be forwarded to the Office of Administrative Law (OAL) for a hearing. Commissioner Gallagher recused himself and via telephone Gale Simon represented Commissioner Considine, DOBI, for this OAL request.

Chairman Earling made a motion to deny this request for a hearing at the OAL and to issue a Final Administrative Determination.  Commissioner Peden seconded the motion. Motion Passed (Vote 3: 2: 0, Commissioners Steinhauer and Kelleher voted nay). After the vote Ms. Simon left the meeting and Commissioner Gallagher rejoined the meeting.

Case #SE091103 – The Member had requested that the Commission’s denial of benefits for expenses for subacute rehabilitation be forwarded to the Office of Administrative Law (OAL) for a hearing. After a brief discussion, Commissioner Kelleher made a motion to forward this appeal to the OAL.  Commissioner Steinhauer seconded the motion. All voted in favor.

There being no further appeals, a motion was made to return to open session by Commissioner Steinhauer, seconded by Commissioner Kelleher. All voted in favor.

There being no further business to transact, a motion was made to adjourn by Commissioner Kelleher, seconded by Commissioner Steinhauer. All voted in favor. The School Employees’ Health Benefits Commission meeting was adjourned at 12:37 PM.

  Respectfully submitted,
 

 

 

  Jean M. Williamson, CEBS
Acting Secretary
School Employees’ Health Benefits Commission

Special School Employees’ Health Benefits Commission
Minutes, Meeting No 29
October 12, 2011; 1:00 PM

Adequate notice of this meeting was provided through the annual notice of the schedule of regular meetings of the Commission filed with and prominently posted in the offices of the Secretary of State.  The 2011 annual meeting schedule was mailed to the Secretary of State, Star Ledger and the Trenton Times on December 10, 2010 and revised notice was sent October 7, 2011.  

The meeting of the School Employees’ Health Benefits Commission (Commission) was called to order at 1:07 PM, Wednesday, October 12, 2011.  The meeting was held at the Division of Pensions and Benefits, 50 West State Street, Trenton, New Jersey.

ROLL CALL

The meeting was attended by the following members of the Commission and Division staff:

Wendell Steinhauer, Commissioner (via telephone)
Robert Peden, representing State Treasurer Andrew P. Sidamon-Eristoff
Ken Kobylowski, representing Commissioner Thomas B. Considine, Department of Banking & Insurance
David Earling, Chairman
Kevin Kelleher, Commissioner
Cynthia Jahn, Commissioner
Joseph Del Grosso, Commissioner (via telephone)

ALSO PRESENT: 

Eileen Den Bleyker, Senior Deputy Attorney General
Diane Weeden, Deputy Attorney General
Florence J. Sheppard, Acting Director Division of Pension and Benefits
David Pointer, Manager, Policy, Planning and Operations
Jean Williamson, Acting Secretary
Barb Scherer, School Employees’ Health Benefits Program
Angela Pearson, Medco Health Solutions
Edward Fox, Aon-Hewitt Consultants
Susan Marsh, Aon-Hewitt Consultants
James Christ, Aon-Hewitt Consultants

ISSUES

Chairman Earling made a motion to accept the SEHBP Plan Design Committee’s Plan Changes.  Commissioner Jahn seconded the motion. All voted in favor.

Edward Fox, Aon-Hewitt Consulting, gave an introduction and made general remarks concerning the 2012 proposed rates.  Susan Marsh, Aon-Hewitt Consulting, gave an overview of the 2012 Rate Recommendations for Medical and Prescription Drugs for the Active Employees and Retirees of the School Employees’ Health Benefits Program (SEHBP).  Also present from Aon-Hewitt Consulting was James Christ. The following is a summary:

Recommended Plan Year 2012
Active Employee and Retiree
Medical Rx Rate Renewal Recommendation


For Plan Year 2012, Aon Hewitt is recommending premium rate changes that in the aggregate represent an overall increase of 7.4% for SEHBP Active Employees and Retirees:

 
Employees
Early
Retirees
Medicare
Retirees
NJ DIRECT1O
10.0%
6.0%
0.0%
NJ DIRECT15
10.0%
6.0%
0.0%
Aetna HMO
10.0%
11.6%
0.0%
Cigna HMO    
10.0%
11.6%
0.0%
Rx Card Plan
11.4%
NA
NA
Average Change
10.1%
6.5%
0.0%

• This recommended rate renewal assumes:

— The Retiree Rx copays and Out-Of-Pocket Maximum for NJ DIRECT and the HMOs will be frozen at Plan Year 2011 levels, except that the Mail Generic copays will be reduced to $5;

— The SEHBP will migrate, effective 1/1/12, from the current RDS Medicare Rx integration approach to an Employer Group Waiver Program (known as EGWP Plus Wrap), which Aon Hewitt projects will result in Plan Year 2012 Retiree Rx savings of $41 million;

— New benefit options, as required by Chapter 78 and as summarized in Exhibit 7 of the renewal report (Pages 55-56), will be effective 1/1/12, but will likely have limited enrollment during Plan Year 2012;

— The revised Employee contribution schedule that went into effect
on July 1, 2011 will have little impact on Employee enrollment for the first year, since the current L5% of salary floor will exceed contributions generated by the new schedule for all Employees in the first year of the new schedule. In the second year (which begins July 1, 2012), many Employees will have increased contributions and the renewal projections assume that a small number of employees will drop coverage, which is more than offset by new employers joining the SEHBP. In addition the renewal projections assume that Plan Year 2012 will have 1,000 more Retirees than in prior years, due to Employees with 25 or more years of service retiring in response to increased Employee contributions.

— No other changes in Employee or Retiree benefits, other than those mandated by NJ or federal law, as outlined in the Renewal Report. Specific to Health Care Reform, the SEHBP will be impacted by:

• Coverage of Dependent Children to Age 26 (which increases costs $10 million)

• Elimination of Benefit Maximums (which increases costs $8 million)

• Early Retiree Reinsurance Program (which reduces costs by $37 million)

The renewal report summarizes a number of benefit plan design changes, each of which could further reduce plan costs.

— SEHBP Active Employee enrollment will increase by 2,800 in Plan Year 2012, and

— SEHBP Early Retiree enrollment will increase by 1,100 in Plan Year 2012, while Medicare Retiree enrollment will increase by 4,600.

• Aggregate differences in the rate changes for different benefit plans and coverage tiers, and between Actives and Retirees, reflect the impact of:

— Medicare Retiree medical trends have been well below industry norms for the past few years and we are projecting that the low trend levels will continue into Plan Years 2011 and 2012.

— While HMO claim trends have averaged about 3% higher than Horizon trends for a number of years, they appear to be moderating and we are therefore projecting that HMOs will trend at about the same rate as the Horizon plans in Plan Year 2012.

— Projected Retiree costs have been reduced due to projected savings from the change to EGWP+Wrap and from the Early Retiree Reinsurance Program.

— For Active premiums, increases vary by coverage tier, since the differences in costs by coverage tier have been revised based on actual SEHBP experience.

• Factors contributing to the overall recommended rate actions include:

— 7.7%average trend from Plan Year 2011 to Plan Year 2012, which is lower than industry trends;

— Higher trends for Early Retirees, which are partially offset by the Early Retiree Reinsurance credit;

— EGWP+Wrap savings which reduce Medicare Retiree projected costs,

— 2% margin added to the Plan Year 2012 Active premium rates in order to build up the Active Employee Claim Stabilization Reserve, and

— Early Retiree premium rates were reduced 3% to reflect a reduction in the Retiree Claim Stabilization Reserve.

• Plan Year 2012 projected costs for the SEHBP are $2.13 billion ($1.32   billion for Actives and $.81 billion for Retirees). Plan Year 2012 renewal premiums are set 2% higher than projected costs for Actives and 3% lower than projected costs for Early Retirees. This results in a projected $24 million gain for Actives and a projected $11 million loss for Retirees in Plan Year 2012.

• The 12/31/12 Claim Stabilization Reserve level for Actives is projected at 1.6 months of projected Plan costs,2O% below the recommended level of 2.0 months, so the slight gain will help restore the Active reserve to a more adequate level.

• Despite the projected $11 million loss, the Retiree Claim Stabilization Reserve is projected at a more than adequate level of 2.6 months of Plan costs as of 12/31/12.

Aon-Hewitt Consultants answered questions that were asked by the Commission concerning the Claims Stabilization Fund and the savings projected to be produced by the Employer Group Waiver Program (EGWP) plus Wrap.  The Division responded to questions concerning the grandfathered status of the current plans and the appeal process once grandfathered status is lost.

Commissioner Kelleher requested in the future Aon-Hewitt Consultants not include Exhibit 8 “Other Possible Benefit Changes for Consideration by the Plan Design Committee” as part of the Rate Renewal Recommendations Report since benefit changes are no longer a function of the Commission. 

Chairman Earling made a motion to approve the rate renewals.  Commissioner Kelleher seconded the motion. Approved (6: 1: 0, Commissioner Del Grosso voted nay).  

Final Administrative Determination (FAD) in the matter of NJEA v. Director, Division of Pensions, School Employees’ Health Benefits Commission State Health Benefits Commission – Eileen Den Bleyker, SDAG, Commissioner Kelleher and Steinhauer recused themselves from the case.  DAG Weeden explained that this matter had been remanded to the Commission from the Appellate Division for the Commission to settle the record on appeal and to make a decision on the merits of the appeal.  DAG Weeden further explained that based on the Commission’s actions at the September 28, 2011 meeting, the Division had prepared a FAD that was now before the Commission for its approval. Commissioner Jahn made a motion to approve the settlement of the record as set forth in the October 12th FAD.  Chairman Earling seconded the motion.  All voted in favor.  DAG Weeden explained that the FAD addressed the merits of the appeal as well as settlement of the record Commissioner Jahn amended the motion to approve the FAD including its determination on the merits of the appeal. Commissioner Peden seconded the amended motion.  All voted in favor.
 
There being no further business, Commissioner Del Grosso made a motion to adjourn which was seconded by Commissioner Jahn. All voted in favor.  The School Employees’ Health Benefits Commission meeting was adjourned at 2:00 PM.

  Respectfully submitted,
 

 

 

  Jean M. Williamson, CEBS
Acting Secretary
School Employees’ Health Benefits Commission


School Employees’ Health Benefits Commission
Minutes, Meeting No. 31
November 16, 2011; 10:00 AM

Adequate notice of this meeting was provided through the annual notice of the schedule of regular meetings of the Commission filed with and prominently posted in the offices of the Secretary of State.  The 2011 annual meeting schedule was mailed to the Secretary of State, Star Ledger and the Trenton Times on December 10, 2010 and revised notice was sent October 7, 2011.

The meeting of the School Employees’ Health Benefits Commission (Commission) was called to order at 10:10 AM, Wednesday, November 16, 2011. The meeting was held at the Division of Pensions and Benefits, 50 West State Street, Trenton, New Jersey.

ROLL CALL

The meeting was attended by the following members of the Commission and Division staff:

David Earling, Chairman
Joseph Del Grosso, Commissioner (via telephone)
Thomas Gallagher, representing Commissioner Thomas B. Considine, Department of Banking & Insurance
Cynthia Jahn, Commissioner
Kevin Kelleher, Commissioner
Robert Peden, representing State Treasurer Andrew P. Sidamon-Eristoff (via telephone)
Wendell Steinhauer, Commissioner

ALSO PRESENT: 

Eileen Den Bleyker, Senior Deputy Attorney General
Diane Weeden, Deputy Attorney General
David Pointer, Manager, Policy, Planning and Operations
Jean Williamson, Acting Secretary
Barbara Scherer, School Employees’ Health Benefits Program
Wendy Burns, Horizon Blue Cross Blue Shield New Jersey (Horizon BCBSNJ)
Rosemary Middlebrook, Horizon BCBSNJ
Cheryl Eagan, Horizon BCBSNJ
Dr. Claudia Hanson, Medical Director, Horizon BCBSNJ

A motion to approve the meeting minutes of September 28, 2011 was made by Commissioner Jahn, seconded by Commissioner Kelleher. All voted in favor.

A motion to approve the meeting minutes of October 12, 2011 was made by Commissioner Jahn, seconded by Commissioner Kelleher. All voted in favor.

ISSUES

  1. NJEA v F. Beaver, SEHBC, SHBC – Senior Deputy Attorney General (SDAG), Eileen Den Bleyker advised the Commission the New Jersey Education Association (NJEA) had submitted a settlement agreement and suggested the Commission go into Executive Session under Resolution B to discuss.  SDAG Den Bleyker noted that Commissioner Kelleher and Steinhauer recused themselves from this matter. Commissioner Gallagher made a motion to go into Executive Session under Resolution B. Chairman Earling seconded the motion. Upon returning from Executive Session Commissioner Gallagher made a motion to accept the settlement agreement with the NJEA.  Chairman Earling seconded the motion. Motion passed(Vote 5: 0: 0, Commissioner Steinhauer and Kelleher recused)

  2. Carrier Updates - David Pointer advised the Commission there were no carrier updates. 

Mr. Pointer said the 2012 Open Enrollment period closed on Friday, November 11, 2011 and so far five retiree applications were filed to enroll in the new plans.

  1. Employer Updates - Jean Williamson said the 2011 year-to-date report for New Education Employers and Terminations was in the Commission books for their information.

  2. 2012Meeting Schedule - Jean Williamson advised the Commission that meetings were scheduled for the fourth Wednesday of every other month beginning in January for calendar year 2012. Commissioner Steinhauer made a motion to approve the 2012 meeting dates.  Commissioner Kelleher seconded the motion. All voted in favor. 

The following cases, due to HIPAA regulations, are heard in closed session, with motions and voting done in closed session.

Commissioner Steinhauer made a motion to go into Closed Session under Resolution A.  Commissioner Del Grosso seconded the motion. All voted in favor.

Jean Williamson asked the Commission to go out of order to hear Case #SE111102 first due to the member’s medical condition. Chairman Earling made a motion to go out of order.  Commissioner Steinhauer seconded the motion. All voted in favor.
.
Case #SE111102 - (Member present with Edward Washburne with the Law Firm of McKenna, Du Pont and Carleen Thessen, member’s Power of Attorney)- This Horizon/NJ DIRECT10 appeal concerned a denial of benefits for expenses for private duty nursing (PDN), twenty-four (24) hours per day, seven (7) days a week.  Mr. Washburne provided an overview of the member’s appeal. Dr. Hanson, Horizon BCBSNJ Medical Director reviewed and summarized the policy for Private Duty Nursing.  Commissioner Kelleher made a motion to go into Executive Session under Resolution B.  Chairman Earling seconded the motion.  All voted in favor.  Upon return from Executive Session, Commissioner Steinhauer made a motion to continue the 24 hour, 7 day a week PDN until January 31, 2012 as long as Carleen accepts training in order to transition to a decrease in PDN to 16 hours per day, seven (7) days a week. The Commission asked Horizon BCBSNJ to establish a contact name for Carleen to work with directly. Also Horizon BCBSNJ was requested to provide monthly status reports to the Division on the progress of the training and an update to be provided to the Commission at the January 25, 2012 meeting. Commissioner Kelleher seconded the motion.  All voted in favor. Approved (Vote 7: 0: 0). DAG Den Bleyker asked the Motion of Cause be Withdrawn.  Mr. Washburne, the member’s attorney, confirmed that the action previously filed in Superior Court had been withdrawn.

Case #SE111101 – This division appeal concerned the denial of benefits for an overage disabled dependent.  A brief discussion took place between the Commission and the member concerning receipt of notification of the eligibility for a Disabled Dependent. The member said she never received notification that she was able to continue coverage for an overage disabled dependent.  Chairman Earling made a motion to go into Executive Session under Resolution B.  Commissioner Kelleher seconded the motion. Upon return from Executive Session, Commissioner Steinhauer made a motion to approve enrollment as of December 1, 2011 provided proof of disability and any other criteria is provided based on the Commission’s finding of inadequate notice by the employer.  Commissioner Jahn seconded the motion.  All voted in favor. Motion passed (Vote 7: 0: 0).

Case #SE111103 – The Member had requested that the Commission’s denial of benefits for expenses for a WalkAide device for his dependent son be forwarded to the Office of Administrative Law (OAL) for a hearing. On September 28, 2011, the Commission voted to deny the member’s request for a hearing at the OAL and to issue a Final Administrative Determination (FAD). Commissioner Gallagher recused himself from the case and left the meeting. Reconsideration of the Commission’s decision to issue a FAD was discussed. Commissioner Kelleher made a motion to approve this request for a hearing at the OAL. Commissioner Steinhauer seconded the motion.Motion passed (Vote 6: 0: 0).

There being no further appeals, Commissioner Steinhauer made a motion to return to open session, which was seconded by Commissioner Jahn. All voted in favor. 

Commissioner Kelleher asked the status of St. Joseph’s Healthcare System terminating from Horizon BCBSNJ Hospital Network.  David Pointer said negotiations did not look promising. Under the terms of Horizon BCBSNJ’s contracts, NJ DIRECT members may continue to use St. Joseph’s Healthcare System’s facilities at an in-network level of benefits through December 31, 2011 as a period for transition of care.  Beginning January 1, 2012 St. Joseph’s Healthcare System will no longer be in Horizon’s network hospitals. 

Mr. Pointer said due to Federal Health Care Reform (HCR) beginning January 1, 2012, the SHBP and the SEHBP will lose their grandfathered status. As a result, there are a few changes required by HCR to all plans administered by the Programs. After the internal appeal process with the medical or prescription drug carrier, members will have the option to have their appeals heard by the Commission or an independent review organization (IRO). Normally, the decision of the IRO is binding on the plan. If the member chooses to appeal to the IRO and their appeal is denied, they cannot present that same appeal to the Commission. 
 
There being no further business, Chairman Earling made a motion to adjourn, which was seconded by Commissioner Steinhauer.  All voted in favor. 

The School Employees’ Health Benefits Commission meeting was adjourned at 12:02 PM.

  Respectfully submitted,
 

 

 

  Jean M. Williamson, CEBS
Acting Secretary
School Employees’ Health Benefits Commission

 

 


 
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