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Pensions and Benefits
STATE HEALTH BENEFITS PROGRAM PLAN DESIGN COMMITTEE
MEETING MINUTES 2012
 
STATE HEALTH BENEFITS PROGRAM (SEHBP)
PLAN DESIGN COMMITTEE MINUTES, BY DATE




2012 Meeting #7 Minutes
September 10, 2012
State Health Benefits Program (SHBP) Plan Design Committee

Adequate notice of this meeting has been provided and prominently posted in the offices of the Secretary of State.  The meeting notice was mailed to the Secretary of State, Star Ledger and the Trenton Times on September 4, 2012. The meeting of the SHBP Plan Design Committee was called to order on Monday, September 10, 2012 at 1:13 p.m.  The meeting was held at Thomas Edison State College, Prudence Hall, 101 West State Street, Trenton, New Jersey, and was attended by the following members of the Committee, representatives of Aon Hewitt, Representatives of Express Scripts, and Division Staff:

Committee Members:

Richard Constable, Commissioner, Department of Community Affairs
John Hutchison, Senior Policy Advisor, Department of Environmental Protection
David Jones, Retired President, STFA
Jeff Keefe, AAUP-AFT
Ken Kobylowski, Commissioner, Department of Banking & Insurance
Steven Kreisberg, Director of Collective Bargaining and Health Care Policy, AFSCME
Marc Larkins, Chief Executive Officer, Schools Development Authority
Jim Leonard, Chief of Staff, Office of the Treasurer
Kevin Lyons, NJ State PBA
Brian McMonagle, NJ FMBA
David Ridolfino, Associate Deputy State Treasurer, Office of the State Treasurer
Hetty Rosenstein, NJ Area Director, CWA/District 1

Other Attendees:

Jeff Brown, Express Scripts
James Christ, Aon Hewitt Consultants
Edward W. Fox, Aon Hewitt Consultants
Bart Gerber, Express Scripts
Susan Marsh, Aon Hewitt Consultants
Doug Martucci, Division of Pensions and Benefits
Bhavesh B. Modi, RPh, Express Scripts
Angela Pearson, Express Scripts
David Pointer, Assistant Director NJ Public Employees’ Health Benefits Program
Florence J. Sheppard, Acting Director, Division of Pensions and Benefits
Diane Weeden, Deputy Attorney General
Jean Williamson, Acting Assistant Chief, Health Benefits Program

1. Sunshine Act Statement

The Sunshine Act Statement and the Executive Session Statement were read.

2. Roll Call

Roll Call was taken.  All were present.

3. Minutes

Committee Member Kreisberg made a motion to approve the minutes from the October 5, 2011 meeting.  Committee Member Constable seconded the motion.  The motion passed (10:0:2 Committee Members Leonard and Ridolfino abstained).

4. Naming of Chairperson(s)

Committee Member Constable made a motion to nominate Committee Member Kobylowski as Co-Chairperson.  Committee Member Leonard seconded the motion.  Committee Member Lyons made a motion to nominate Committee Member Rosenstein as Co-Chairperson.  Committee Member Kreisberg seconded the motion.  Committee Member Kobylowski clarified that the term for the Chairpersons is for one (1) year from the date of nomination, with the chairs alternating for each meeting.  The motion passed (12:0:0)

5. Current Plan Enrollment

Co-Chair Rosenstein asked who would be chairing the current meeting.  Co-Chair Kobylowski stated that Chairperson Rosenstein could chair the meeting.  Chairperson Rosenstein opened discussion on the current plan enrollment by asking for an explanation of the Plan Year 2013 Rate Renewal from Aon Hewitt.  Ed Fox gave an explanation, along with Susan Marsh.  Susan Marsh noted that the enrollment in the High Deductible Health Plans (HDHP) was so low that a decision was made to recommend that the State Health Benefit Commission freeze the premiums for the HDHP plans for Plan Year 2013 to encourage more people to look at the plans.  Chairperson Rosenstein asked if the same research and logic was applied to the 15/25 and 20/30 plans.  Susan Marsh answered no, since enrollment in the 15/25 and 20/30 plans were higher than the HDHP.  Committee Member Lyons commented that freezing the HDHP rates seems like a marketing strategy and asked who suggested it.  Susan Marsh responded that HDHP plans trend lower, so the rates for those plans should be lower.  Chairperson Rosenstein stated that the Plan Design Committee (PDC) agreed to risk pool all the SHBP plans together.  Committee Member Kreisberg stated that affirmative action should have to be taken to confirm the continued offering of HDHP plans since they were risk pooled separately from other plans, noting that this goes against the motion passed in the October 5, 2011 PDC meeting.  Susan Marsh responded that Aon pooled the experience from all plans to develop the rate increase and then froze the HDHP rates and that this was consistent with the language in the motion. Committee Member Constable asked if the point is that the HDHP plan rates should have been raised at the same percentage as the regular health plans.  Chairperson Rosenstein answered yes.  Committee member Kobylowski noted that the PDC cannot set rates.  Chairperson Rosenstein stated that the State Health Benefits Commission (SHBC) reviewed the rates on their own basis, and not with agreement of the PDC in mind, since the minutes from the October 5, 2011 PDC meeting were just approved earlier in the meeting.  She noted that she would like to send the rate approval back to the SHBC for further review.  Committee Member Kobylowski asked to send the minutes of the October 5, 2011 PDC meeting back to the SHBC.  Chairperson Rosenstein made a motion to ask the SHBC to review the 2013 rates for the HDHP with a copy of the minutes from the October 5, 2011 SHBPDC meeting minutes and the understanding that the committee discussed the fact that all plans should be risk pooled together on both October 5, 2011 and September 10, 2012.  The motion passed (10:2:0 Committee Members Larkins and Ridolfino voted nay).

6. RFP Results

Dave Pointer noted that the Division of Pensions presented an RFP for the administration of the medical plans to be effective on January 1, 2013.  Horizon and Aetna were awarded contracts for 2013 across all plans.  He stated that each plan would offer HMO, PPO, and HDHP products.  He also noted that a protest period was still ongoing, scheduled to end on Wednesday, September 12.  Committee Member Jones asked if Cigna was protesting.  Mr. Pointer responded that the Division was not aware of any protest, but could not be sure until the protest period ends.

7. Retiree Prescription Drug Copay Indexing

Chairperson Rosenstein asked if Aon Hewitt could give an update on the savings from the Medicare Part D EGWP plus Wrap integration.  Jim Christ from Aon Hewitt stated that they would include that in their discussion, and that the Committee could ask any additional questions they had if they were not covered.   Jim Christ gave the presentation, and explained that the goal of indexing is to keep the balance of retiree prescription drug cost sharing at 85% paid by the employer, and 15% paid by the member.  He stated that if the copays are not indexed, the costs will get closer to 88% employer paid, and 12% member paid.  Susan Marsh noted that the savings from the Medicare Part D EGWP integration are very close to the original projections.  Committee Member Jones requested documentation of the data used by Aon to project and divide the savings from the change to EGWP.  Committee Member Keefe asked for additional background on indexing. Susan Marsh responded by explaining the formula used by Aon to determine the total prescription drug costs to the plan.  Committee Member Leonard made a motion to go into Executive Session.  Committee Member Kobylowski seconded the motion.  All voted in favor.   

Upon return from Executive Session, Committee Member McMonagle made a request for a caucus.  A five minute break was taken.  Upon return from caucus, Committee Member Leonard made a motion to approve two (2) years of indexing as proposed by Aon.  Committee Member Ridolfino seconded the motion.  Committee Member Lyons made a motion to table the vote on Retiree Prescription Drug Copays until the next meeting.  Committee Member Jones seconded the motion.  The motion to table the vote on Retiree Prescription Drug Copays failed (6:6:0, Committee Members Kobylowski, Constable, Leonard, Ridolfino, Hutchison, and Larkins voted nay).  The motion for 2 years of indexing on Retiree Prescription Drug Copays also failed (6:6:0, Committee Members Rosenstein, Keefe, Lyons, Jones, Kreisberg, and McMonagle voted nay).

8. Prescription Drug Step Therapy Program (PDST) for State Employees

Angela Pearson from Express Scripts gave a presentation on the impact of turning off the PDST program for certain State Employees covered by an arbitration agreement, as well as Judiciary Employees.   Chairperson Rosenstein cited concerns with the program, saying that it was implemented unilaterally, that the list of non-preferred drugs targeted by the program included generic drugs, and that the decision to target certain drugs was based on financial considerations, rather than medical ones.  Committee Member Constable requested that Ms. Pearson clarify Chairperson Rosenstein’s concern.  Ms. Pearson stated that it is possible for a generic drug to be targeted in the PDST as generic drugs are not always the cheapest alternative.  She also stated that a member who wishes to stay on a non-preferred drug can do so by requesting a coverage review if their physician indicates that they need to stay on that drug.  Ms. Pearson also stated that the majority of members did not switch back to higher cost drugs after the PDST program was turned off.  Committee Member Keefe noted that physicians dislike these types of reviews and asked what the process entails if a doctor decides that he only wants his patient to take the specific drug that was prescribed.  Ms Pearson stated that the review process is simple and that the criteria are predetermined by a committee that is not employed by Express Scripts.  She stated that the basis of the coverage review is to determine whether a lower cost alternative will work or not.  She stated that a member can receive a higher cost drug if their physician states that the member tried the lower cost alternative medication and it failed to treat their condition. She stated that the majority of members do not request coverage reviews, and that in 85% of coverage reviews, the member is approved to take the non-preferred drug.   Chairperson Rosenstein stated that there is a concern that members’ prescriptions are denied if they are written for a targeted drug, and asked what the period of time is that members cannot fill their prescriptions.  Ms. Pearson responded that the coverage review can be requested at the point of service at the pharmacy and that the wait time for approval to be rendered depends on how quickly the member’s physician responds.  She stated that the average coverage review can be completed in hours, but that anomalies do occur, and reiterated that the process is dependent upon the response time of the physician.  Chairperson Rosenstein asked if the preferred drug list changes.  Ms. Pearson responded that it can change over time, but realistically, it does not change often.  She stated that the committee meets on a quarterly basis.  Committee Members Ridolfino and Leonard asked if Express Scripts can state that their decisions on which drugs are preferred and non-preferred are made on a clinical basis, rather than a financial one.  Ms. Pearson responded that there is a financial component to the decisions. She stated that Express Scripts cannot dictate what is recommended for a patient, but the drugs in the program are in classes that are determined to be therapeutically or clinically equivalent.  Chairperson Rosenstein noted that the drugs in the same class can have differences in them.  Ms. Pearson qualified that any manufacturers’ rebate received by Express Scripts is given to the plan.  She also clarified that Express Scripts is not making the determination on which drugs are targeted by the program.  There is a Pharmacy and Therapeutics (P&T) Committee that is not employed by Express Scripts that decides which drugs are targeted.  Committee Member Jones requested that Express Scripts provide a list of the doctors on the P&T committee.  Ms. Pearson replied that they could supply the list.  Committee Member Jones then brought up a concern that a member’s doctor may not be available to respond to a coverage review if the prescription is filled on weekend.  Ms. Pearson responded that there are processes in place to account for such problems, and that members are free to request a short term supply of medication from the pharmacist as well.  Committee Member Kreisberg made a motion to adopt Express Scripts’ proposal to reinstate the Preferred Drug Step Therapy Program.  Committee Member Keefe seconded the motion.  Committee member Leonard made a motion to go into Executive Session.  Committee member Constable seconded the motion.  Chairperson Rosenstein noted that there was a motion on the floor.  Committee Member Constable made a motion to table the motion until the conclusion of Executive Session.  Committee Member McMonagle seconded the motion.  All voted in favor (12:0:0).  All voted in favor of going into Executive Session (12:0:0).  Upon return from Executive Session, Committee Member Keefe spoke against the motion to reinstate the PDST program.  He stated that he would prefer to table the motion until further research could be done.  Committee Member Constable asked Ms. Pearson how many complaints she estimated there to be regarding the PDST Program.  Ms. Pearson responded that roughly 5 cases had been escalated to her attention.  Committee Member Keefe stated that a more appropriate question would be how many people have been denied a prescription at the point of purchase.  Bhavesh Modi from Express Scripts noted that there are charts on page 5 of the Express Scripts presentation that show how many coverage reviews were requested.  Committee Member Kreisberg stated that the number of members who requested coverage reviews does not reflect the number of members who were switched off of targeted drugs.  The motion to reinstate the PDST program failed (6:6:0, committee members Rosenstein, Keefe, Lyons, Jones, Kreisberg, and McMonagle voted nay).

9. Dental Plans

Chairperson Rosenstein noted that the committee was not going to be able to review the Division’s proposal on Dental Plans.

10.  Future meeting dates

Florence Sheppard noted that the next meeting would need to take place as soon as possible if any plan changes were anticipated to allow enough time for the Division to incorporate the changes for Open Enrollment.   The committee decided to meet again on Thursday, September 13, 2012 at 1:00 p.m.   Committee Member Kobylowski made a motion to adjourn, Committee Member Larkins seconded the motion.  All voted in favor (12:0:0).  The meeting adjourned at 3:52 p.m.

  Respectfully submitted,
 

 

 

  Florence Sheppard, Secretary

2012 Meeting #8 Minutes
September 13, 2012
State Health Benefits Program (SHBP) Plan Design Committee

Adequate notice of this meeting has been provided and prominently posted in the offices of the Secretary of State.  The meeting notice was mailed to the Secretary of State, Star Ledger and the Trenton Times on September 11, 2012. The meeting of the SHBP Plan Design Committee was called to order on Thursday, September 13, 2012 at 1:13 p.m.  The meeting was held at Thomas Edison State College, Prudence Hall, 101 West State Street, Trenton, New Jersey, and was attended by the following members of the Committee, representatives of Aon Hewitt, representatives of Express Scripts, and Division Staff:

Committee Members:

Richard Constable, Commissioner, Department of Community Affairs
John Hutchison, Senior Policy Advisor, Department of Environmental Protection
David Jones, Retired President, STFA
Jeff Keefe, AAUP-AFT
Ken Kobylowski, Commissioner, Department of Banking & Insurance
Steven Kreisberg, Director of Collective Bargaining and Health Care Policy, AFSCME (via telephone)
Marc Larkins, Chief Executive Officer, Schools Development Authority
Jim Leonard, Chief of Staff, Office of the Treasurer
Kevin Lyons, NJ State PBA
Brian McMonagle, NJ FMBA
David Ridolfino, Associate Deputy State Treasurer, Office of the State Treasurer
Hetty Rosenstein, NJ Area Director, CWA/District 1

Other Attendees:

James Christ, Aon Hewitt Consultants
Edward W. Fox, Aon Hewitt Consultants
Susan Marsh, Aon Hewitt Consultants
Doug Martucci, Division of Pensions and Benefits
David Pointer, Assistant Director NJ Public Employees’ Health Benefits Program
Florence J. Sheppard, Secretary
Diane Weeden, Deputy Attorney General
Jean Williamson, Acting Assistant Chief, Health Benefits Program

1. Sunshine Act Statement

The Sunshine Act Statement and the Executive Session Statement were read.

2. Roll Call

Roll Call was taken.  Committee Member Constable was absent.  Committee Member Kreisberg participated telephonically.

3. Minutes

Doug Martucci noted that the minutes from the September 10 meeting were not completed yet, but would be done in time for the next meeting.

4. Report from State Health Benefits Commission—High Deductible Health Plan Premiums

Dave Pointer noted that the State Health Benefits Commission was presented the meeting minutes from the October 5, 2011 PDC meeting as requested and were advised of the Committee’s discussion regarding risk pooling.  He stated that the Commission voted to uphold the 2013 HDHP plan rates as they were previously approved.  Committee Member Rosenstein asked what the vote was.  Mr. Pointer responded that the vote was 3:2.  Committee Member Lyons asked what the Division of Pensions’ intent was moving forward.  Mr. Pointer responded that the Division would implement the Commission’s rate approval, pending the results of the PDC meeting.  Committee Member Rosenstein stated that the HDHP plans were passed with risk pooling that means that rate increases were to be carried across the board by carrier.  Jeff Keefe stated that once the rate increases are not uniformly applied, the HDHP plan is withdrawn and must be re-voted on by the Plan Design Committee.  He stated that management designed the HD plans in exchange for all plans being risk pooled together.  He stated that as of 2013 there are no High Deductible Health Plans until the committee reaches a decision.  Committee Member Keefe then passed out a handout to the committee members and made the following motion:

Whereas: because the SHBC has adopted plan rates for the high deductible health plans that do not fully charge the high deductible health plans for the experience of the entire risk pool, the high deductible health plans that have been exempted from rate increases may not be offered in 2013. 

Therefore: the Committee resolves that for plan year 2013 and all subsequent plan years until changed by action of this Committee, the high deductible health plan designs shall be identical to the designs offered for plan year 2012 except that each enrollee in a high deductible health plan shall be provided with a Health Reimbursement Account (HRA) funded by the participating Employer in an amount equal to the in-network deductible in such high deductible health plan.  The HRA shall be sufficient to cover the entire deductibles for the enrolled member and dependents, as applicable.  Any portion of the HRA not used by the employee and his or her dependents in a plan year, will be rolled over for use in future years.  If applicable law limits the amount that may be provided in an HRA to an employee, the in-network deductible in the HDHP shall be reduced to match the HRA limit.

Committee Member Lyons seconded the motion.  Committee Member Leonard asked how the HRA differs from a Health Savings Account (HSA) and whether the HRA is the property of the employee if they terminate employment.  Committee Member Kreisberg noted that the employer retains ownership of the account and the funds need not be made available to the employee upon separation of employment.  Committee Member Leonard asked if the Committee should seek legal advice prior to voting on the motion.  Chairperson Kobylowski noted that legal advice would require executive session.  DAG Weeden noted that the issue of the condition on risk pooling came up on Monday (9/10) and that there is a difference in opinion on whether that condition was violated.  Committee Member Leonard noted that the PDC cannot set rates, and asked how the State Health Benefits Commission could be held to any Committee requirement regarding rates.  Committee Member Jones noted that he was the author of the motion that passed at the October 5, 2011 PDC meeting, and stated that the condition that was attached to the motion was clearly violated.  Committee Member Ridolfino noted that the motion was about pooling risk, that the Plan Design Committee cannot set rates, and that the Commission did their job by setting the rates.  Committee Member Jones agreed that setting rates is the Commission’s authority, but stated that the plan offerings are the PDC’s responsibility.  He stated that if the High Deductible Health Plan rates are treated differently than the other available plans, the High Deductible Plans cease to exist.  Committee Member Ridolfino noted that the October 5, 2011 motion states that the risk of all plans must be pooled together, which occurred.  Committee Member Keefe stated that the Committee was repeating itself and should move forward with a vote.  Committee Member Leonard stated that there are questions that need to be answered and that the Committee should further discuss health savings accounts and health reimbursement accounts.  Florence Sheppard asked if the motion could be considered plan design.  Committee Member Larkins asked how far the Committee’s authority extends, and whether the Committee could mandate that the employer fund the entire deductible.  DAG Weeden stated that she would need to research that question.  Committee Member Leonard asked if there was any forecast as to the premium for such a plan.  Committee Members McMonagle and Keefe both stated that the cost would have to be determined by Aon Hewitt.  The motion failed (6:5:0, Committee Members Kobylowski, Ridolfino, Leonard, Hutchison, and Larkins voted nay).

Committee Member McMonagle asked if the Division of Pensions acknowledged that the HDHP plans cannot be offered for plan year 2013.  Florence Sheppard stated that the question was a legal one.  DAG Weeden stated that the Committee would need to go into executive session in order to receive legal advice.  Committee Member Rosenstein asked if the HDHP plans were still going to be offered with rates frozen at 2012 levels.  Dave Pointer responded that the Division would offer the plans as currently scheduled unless directed otherwise by the Attorney General’s office.  Committee Member Rosenstein stated that the committee would seek super conciliation under Chapter 78.
Committee member Jones made a motion for EGWP and Retiree prescription copay rates to remain preserved in 2013 at exactly the same rates as 2012.  Committee Member Rosenstein seconded the motion.  Committee Member Rosenstein stated that union representatives were in favor of the motion, and that the Committee’s support of EGWP in plan year 2012 was connected to having a benefit for retirees.  She stated that a new motion and proposal are necessary to continue EGWP in plan year 2013.  Committee Member Jones stated that the Deputy Attorney General stated that the actions taken by the Committee in 2012 had conditions attached, and when the conditions change, it vacates the action.  Committee Member Leonard responded that he did not believe the Deputy Attorney General stated that, but rather said that one year of indexing to retiree copays applies without action by the Committee stating otherwise.  Committee Member Keefe agreed that is what was said, but stated that the Union representatives don’t agree.  Committee Member Leonard asked if the proposal was to leave the rates as they were in 2012.  Committee Member Rosenstein stated that EGWP in 2012 was tied to what the rates were at that time, and that EGWP does not exist if the rates are changed.  She stated there is a need for EGWP so the proposal is to offer EGWP in 2013, but with identical rates as in 2012.  Ed Fox from Aon Hewitt noted that the terms copays and rates were being used interchangeably, and that what Committee members were actually proposing was to keep the copays the same as they were, which does not necessarily mean that the rates stay the same.  Committee Member Rosenstein agreed that it was the copays that were being discussed.  Committee Member Lyons stated that the he did not feel that it was appropriate that the Committee went into closed session to discuss the copay indexing at the September 10th meeting, since it was only to discuss a clarification of a law.  He said that the interpretation was that there is an administrative code that would automatically index the copays unless the Committee addressed it.  DAG Weeden stated that if advice was needed the Committee should go into executive session.  Committee Member Lyons stated that he was not looking for advice, but rather a clarification of a law.  Committee Member Larkins stated that clarification of a law is legal advice.  Committee Member Lyons asked DAG Weeden if she could restate the administrative code.  Ms. Weeden stated that she did not have the code with her.  Committee Member Leonard stated that it was 17:9-6.10(f).  Committee Member Kobylowski asked for clarification on the relationship between EGWP and the retiree prescription copays.  Jim Christ from Aon Hewitt stated that there isn’t really a relationship between the two and that the idea from the previous years’ meetings was to return some of the savings from EGWP to the plan.  Ed Fox clarified that the former prescription drug plan arrangement was called the Retiree Drug Subsidy, which generated a subsidy of several million dollars to the program.  The decision to go with the Employer Group Waiver Program (EGWP) and to integrate the program with Medicare Part D was more beneficial to the plan, financially, than the Retiree Drug Subsidy.  So the Committee decided in 2012 to return some of those savings to the plan participants by freezing the copays and lowering the mail order generic copay to $5.  Committee Member Kobylowski noted that Aon Hewitt provided a memo that states the projected savings to the State from EGWP were reduced $4.1 million from $34.1 million to $30 million.  Susan Marsh from Aon Hewitt clarified that the numbers were projections that factored in the amount of savings generated so far, as well as information submitted by Express Scripts and other consultants.  Committee Member Lyons asked Ms. Marsh if her statement changed since the September 10th Committee meeting.  Ed Fox clarified that Susan was speaking about the savings for both the School Employees’ Health Benefits Program as well as the State Health Benefits Program combined being higher than initially projected.  A closer look at the projections showed that the savings for the School Employees’ Health Benefits Program are much higher than originally projected, while the State Health Benefits Program Savings are going be a little bit less than projected.  Committee Member Lyons asked what the Division’s intention was regarding retiree prescription copays since the Committee was unable to come to agreement on whether the copays should be indexed.  Dave Pointer stated that the copays would be indexed, under advice from the Attorney General’s office.  Committee Member Ridolfino asked if the purpose of indexing was to keep up with rising prescription drug costs.  Ed Fox stated yes.  Committee Member McMonagle stated that indexing the retiree copays would not reduce the amount of reimbursements the State receives from participating in EGWP.  Committee Member Rosenstein noted that retirees do not currently receive Cost of Living Adjustments (COLA) to their pension checks, which makes any increase in prescription drug costs a financial hardship.  Committee Member Jones asked Susan Marsh why the projections regarding savings that EGWP generated for the SHBP were less then was estimated at the 9/10 PDC meeting.  Susan reiterated that she was speaking to the total savings for both the SHBP and SEHBP at the previous meeting.  When she looked at the programs separately, she realized that the SHBP savings were $4 million less than anticipated, while the SEHBP savings were increased by a slightly larger number.  Committee Member Larkins stated that he opposed the motion due to the fact that the increase in costs for prescription drugs would be absorbed solely by the SHBP.  He stated that he felt a proposal for one year of indexing would be more appropriate.  Committee Member Rosenstein stated that the 2013 rates assumed no increase in the retiree prescription copays.  Dave Pointer stated that the Division of Pensions asked Aon Hewitt to calculate the rates based on no copay increase due to the fact that the PDC had not met yet.  He stated that the rates would be recalculated based on the copays being indexed according to statute.  Committee Member Leonard stated that Local Governments are in a difficult financial situation and that not indexing the copays leaves money that should be going to the State and to Local Governments on the table.  Committee Member Keefe stated that retirees are also in a difficult financial position.  The motion failed (6:5:0, Committee Members Kobylowski, Ridolfino, Leonard, Hutchison, and Larkins voted nay).  Committee Member Rosenstein stated that the union representatives would seek super conciliation and that they believe that copay indexing cannot take place until that occurs.

5. RFP Results

Dave Pointer stated that there were no protests to the results of the medical RFP and that the SHBP would move forward with Aetna and Horizon Blue Cross Blue Shield as its contracted medical carriers.

6. Preferred Drug Step Therapy Program (PDST) for State Employees

Chairperson Kobylowski asked if there was any discussion regarding the PDST-.  Dave Pointer asked if there was a resolution reached in regards to reinstating PDST for the CWA groups.  Committee Member Rosenstein stated that there was a vote to reinstate the program and it failed.

7. Discussion of Dental Plans

Dave Pointer noted that the committee members were provided a proposal for offering a low cost DPO plan for active employees as well as offering a DPO plan to retirees, plus altering the contribution levels for employees who participated in the plan.  He explained that it would not go into effect for January 1st and that the Division is working on developing a RFP and wanted to have a plan design for vendors to bid on.  Committee Member Lyons stated that some of the deductibles in the new plan were raised, while some of the claim codes were eliminated. 

Dave Pointer clarified that the copays in the new, lower cost DPO plan would have to be higher than the current plans, in order to keep the premium lower.  He also explained that the American Dental Association (ADA) sometimes changes or eliminates claim codes, and that any changes in the Dental expense plan regarding claim codes would be based on changes made by the ADA.  Committee Member Rosenstein stated that she didn’t  feel that a proposal that included altering or raising the contribution level for employees selecting the Dental Expense Plan would pass, and suggested that the Division create a new proposal for the new DPO plans without altering the contribution level for the Dental Expense Plan.   Committee Member Larkins made a motion to adopt the proposal for the new DPO plans as laid out in the memo from the Department of Treasury.  Jim Leonard seconded the motion.  The motion failed (5:6:0, committee members Rosenstein, Lyons, Jones, McMonagle, Keefe, and Kreisberg voted nay).

8. Future Agenda Items

Jim Leonard handed out informational material on the Asheville Project, and suggested that it be included as an agenda item at a future meeting.

9. Future Meeting Dates

Committee Member Lyons stated that he felt the committee should set up a regular meeting date and continue to meet year-round.  Chairperson Kobylowski agreed.  Dave Pointer explained to the committee the Divisions schedule for setting plan rates each year and suggested that any plan changes for 2014 be made with enough time to implement them for Open Enrollment.   Committee Member Rosenstein made a motion to adjourn.  Committee member Jones seconded the motion.  All voted in favor (11:0:0).  The meeting ended at 2:28 p.m.

  Respectfully submitted,
   
  Florence Sheppard, Secretary

2012 Meeting #9 Minutes
December 14, 2012
State Health Benefits Program (SHBP) Plan Design Committee


Adequate notice of this meeting has been provided and prominently posted in the offices of the Secretary of State.  The meeting notice was mailed to the Secretary of State, Star Ledger and the Trenton Times on December 12, 2012. The meeting of the SHBP Plan Design Committee was called to order on Friday, December 14, 2012 at 1:12 p.m.  The meeting was held at The Division of Pensions and Benefits, 50 West State Street, Trenton, New Jersey, and was attended by the following members of the Committee, representatives of Aon Hewitt, representatives of Express Scripts, and Division Staff:

Committee Members:

John Hutchison, Senior Policy Advisor, Department of Environmental Protection
David Jones, Retired President, STFA
Jeff Keefe, AAUP-AFT
Ken Kobylowski, Commissioner, Department of Banking & Insurance
Steven Kreisberg, Director of Collective Bargaining and Health Care Policy, AFSCME  (left at 3:20)
Marc Larkins, Chief Executive Officer, Schools Development Authority
Jim Leonard, Chief of Staff, Office of the Treasurer (left at 3:15)
Kevin Lyons, NJ State PBA
Brian McMonagle, NJ FMBA
David Ridolfino, Associate Deputy State Treasurer, Office of the State Treasurer
Hetty Rosenstein, NJ Area Director, CWA/District 1

Other Attendees:

James Christ, Aon Hewitt Consultants
Stacy Decemberle, Express Scripts
Edward W. Fox, Aon Hewitt Consultants
Bart Gerber, Express Scripts
Katherine Impellizeri, Aetna
Doug Martucci, Division of Pensions and Benefits
Dave Perry, Horizon Blue Cross Blue Shield
Kristen Plauschinat, Express Scripts
David Pointer, Assistant Director NJ Public Employees’ Health Benefits Program
Danielle Schimmel, Deputy Attorney General
Florence J. Sheppard, Secretary
Ken Vanderpyl, Express Scripts
Diane Weeden, Deputy Attorney General

  1. Sunshine Act Statement.
  2. The Sunshine Act Statement and the Executive Session Statement were read.

  3. Roll Call
  4. Roll Call was taken.  Committee Member Constable was absent.

  5. Minutes
  6. Chairperson Rosenstein asked if approval of the minutes from the September Committee meetings could be tabled to allow time for the Committee members to review the transcripts from those meetings.  Kevin Lyons made a motion to table the approval of the minutes.  Steven Kreisberg seconded the motion.  The motion passed (11:0:0).

  7. Mental Health Parity
  8. Ed Fox and Jim Christ from Aon Hewitt gave a presentation on the Federal Mental Health Parity mandate and the waiver that the SHBP has filed for each year since the mandate was created.  Committee Member Kreisberg noted that not filing for the waiver would cost the SHBP between $3.6-$6 million, and asked what the total amount the SHBP is projected to spend in 2013, which Jim Christ noted was approximately $3.4 billion.  Committee Member Kreisberg also asked what the percentage on in network versus out of network usage was for mental health claims.  Jim Christ noted roughly 40% of claim payments go to in network providers, while 60% of costs go to out of network providers.  Committee Member Keefe asked how the distinction is made between biologically based and non biologically based mental illnesses.  Dave Pointer from the Division of Pensions noted that State legislation makes the distinction.  DAG Weeden read from P.L. 1999, C. 441: Biologically-based mental illness means a mental or nervous condition that is caused by a biological disorder of the brain and results in a clinically significant psychological syndrome or pattern that substantially limits the functioning of the person with the illness.  She noted that the statute goes on to list several examples of biologically based conditions.  Committee Member Jones asked if the DSM IV is the guideline for determining whether a condition is biologically based.  DAG Weeden noted that the statute does not refer to the DSM IV.  Committee Member Lyons asked if claims for Post Traumatic Stress Disorder (PTSD) are trending up.  Ed Fox replied yes.  Chairperson Rosenstein noted that the Mental Health field overall has evolved in recent years, which led to HIPAA mandating parity.  She stated that a survey from roughly 20 years ago indicated that 90% of child services workers exhibit symptoms of PTSD.  She stated that public workers should be treated the same as those in private industry with regards to mental health parity.  Committee Member Kreisberg made a motion that all SHBP plan designs offered shall provide mental health parity as required under HIPAA as amended by Wellstone Domenici.  Committee Member Lyons seconded the motion.  Committee Member Leonard asked if there could be further cost analysis.  Jim Christ passed out a hand out that went over the financial ramifications of providing mental health parity.  Ed Fox noted that many plans file for the same exemption as the SHBP, and that the SHBP offers better coverage than private plans in many other areas.  Committee Member Ridolfino noted that the limits created by filing the exemption appear to affect members using out of network service providers the most.  He stated it may be better for the Committee to focus on strengthening the network.  Chairperson Rosenstein stated that the network for mental health providers is inadequate, and that only 40% go in network for a reason.  Dave Pointer responded that the SHBP carriers are present to respond to any inquiries on the strength of their respective mental health provider networks.  Dave Perry from Horizon Blue Cross Blue Shield stated that the 40%-60% split in mental health costs referred to earlier referred to percentage of dollars spent on claims, not a percentage of members utilizing in network versus out of network providers.  He stated that the issue of network disruption had to do to a change in the methodology of reimbursement.  Previously, level of degree did not factor in to the amount that a provider was reimbursed for services, where as now providers such as social workers and psychologists are reimbursed based partly on the level of education necessary to receive their titles. Committee Member Keefe noted that concerns at the University level include access to psychiatrists on short notice, and asked why people go outside the network for care.  Mr. Perry responded that Pediatric Psychiatrists are a larger problem then regular Psychiatrists.  He noted patients may utilize out of network providers due to concerns over keeping their issues private.  He also stated that that there is a question of how to attract doctors to the network, while still protecting the fiscal interests of the plan.  He noted that the SHBP’s out of network reimbursement levels are generous, which leads many providers to find no incentive to join the network.  Committee Member Kreisberg asked what the percentage of network usage is for non mental health claims.  Mr. Perry noted that it is roughly 80%, and that paying 20% or 30% coinsurance on a large medical claim would cost a plan member significantly more than paying the same percentage for a visit to a social worker.  He also noted that, according to GeoAccess reports, the Horizon mental health network is adequate, and that Horizon does make attempts to attract high volume out of network providers to join their network.  Ed Fox asked if the GeoAccess studies account for density.  Mr. Perry responded yes.  Committee Member Kobylowski asked what the percentage of patients using in network mental health providers, as opposed to the percentage of claim dollars.  Mr. Perry responded that he did not have the figure off the top of his head, but would estimate that 55% of services are in network.  Committee Member Ridolfino asked what the out of network coverage is for biologically based mental illnesses.  Mr. Perry responded that the member would be responsible for 20% or 30% coinsurance with no day limits depending on their plan, and that in network services would be covered 100%, again with no day limits.  Committee Member Jones asked if there are any studies that weigh the cost of claims to treat other conditions that arise out of not covering mental illnesses.  Jim Christ responded that he is not aware of any studies, but could try to find one.  Committee Member Jones stated that it seems it would be less costly to offer mental health parity than to cover physical illnesses that result from untreated mental illness.  Jim Christ noted that many mental illnesses are ongoing, and not cured.  Chairperson Rosenstein stated that many physical illnesses are also ongoing and not cured.  Committee Member Keefe stated that all inpatient treatment is subject to review for medical necessity, and that if a condition is serious enough for hospitalization, it seems unfair to subject one group to day limits.  A vote on the motion was taken.  The motion failed, (6:5:0 Committee Members Hutchison, Kobylowski, Larkins, Leonard, and Ridolfino voted nay)

  9. Wellness Programs
  10. Jim Christ proceeded to give a presentation on various Wellness Program designs.  He estimated that over time, there is a 6-1 return on investment in Wellness initiatives.  Committee Member Keefe stated that Biometric Measurement seems critical, and that Wellness Programs are expensive undertakings, even for a pilot program.  He stated that many studies say that the programs are not effective, and that the biggest issue they face is combating obesity, which is difficult for members to talk about.  Jim Christ responded that any information given by members is confidential, so there should be some comfort in that regard and that studies that say the programs are not effective may not take into account the fact that the programs don’t work until they are in place for a long time.  Many people are not aware of their Blood Pressure, Cholesterol, and other counts and the programs encourage them to get tested and discuss the counts with their physicians.  Committee Member Keefe asked how the member receives their incentives if their employer is not aware of the scores.  Mr. Christ responded that there are many ways to work around that issue, including that the vendor can inform the employer that the member met their goal, but not why.   Chairperson Rosenstein noted that CWA and AFSCME proposed the Pennsylvania wellness program in negotiations with the State, but were rejected.  Committee Member Keefe asked if Horizon and Aetna would be keeping track of the programs.  Mr. Christ noted that they would, and that some employers have a separate wellness vendor, which is something that the Committee could consider looking at down the road.  Chairperson Rosenstein noted that there may be crossover with Value Based plan design and Wellness Programs, and asked if there has been any study of Value Based Designs.  Mr. Christ responded yes, and stated that Value Based Plan Design could be incorporated along with Wellness Program implementation.  Committee Member Kreisberg stated that the current laws in New Jersey make it difficult to design and implement a Wellness Program, noting that the designs in the presentation use more disincentives for not complying than incentives for members to participate.  He stated he would like to see a more positive design utilized, as well as programs that influence service provider behavior.  Dave Pointer noted that Horizon has a Patient Centered Medical Home initiative that rewards providers for keeping their population healthy, and that roughly 60,000 members are in the program.  Chairperson Rosenstein stated that the CWA has been interested in Wellness Programs for a long time, and would be interested in exploring various Wellness Program designs that utilize more incentives.  Committee Member Leonard stated that the Chairperson of the School Employees Health Benefits Plan Design Committee was interested in forming a subcommittee consisting of members of both the State and School Employees Committees to form a consensus between the Committees on which directions they take and what programs are pursued by the Committees.  Committee Member Jones noted that costs are up 53% over the last 7-8 years, and asked what is driving those increases.  Ed Fox responded that typical components include plan utilization, technology, and cost shifting, among others.  Chairperson Rosenstein directed the conversation back to the topic of the subcommittee.  Committee Members Lyons and McMonagle agreed that it would be constructive.  Chairperson Rosenstein asked if there was a specific plan in place, and it was decided that the Chairs of the two Committees could get in contact and decide how to proceed.

  11. SOCRxATES Presentation (Express Scripts)
  12. Bart Gerber, Kristen Plauschinat, Stacy Decemberle, and Ken Vanderpyl from Express Scripts gave a presentation on the SOCRxATES program, which focuses on closing gaps in members’ adherence to their prescription drugs.  Chairperson Rosenstein asked if the savings listed accounted for the cost of copay waivers.  Stacy Decemerle responded that the copay waivers are accounted for in figures listed.  Committee Member Kreisberg asked how the program works for mail order customers.  Ms. Decemberle replied that the program is only for customers using retail pharmacies, either at an independent pharmacy, or a pharmacy located within a grocery store.  Committee Member Jones asked if the counseling program used is Screen Rx.  Bart Gerber replied that the SOCRxATES program is different, focusing solely on retail customers, but that the two plans are similar, as they both focus on closing adherence gaps.  Committee Member Kreisberg asked who bears the risk for the program if the costs wind up being more than the savings.  Mr. Gerber responded that there are no shared risks in the program, that data shows that the program does result in savings, but other programs utilizing SOCRxATES did not incorporate a copay waiver.

  13. Current Member Engagement Programs
  14. Dave Perry gave a short presentation on the member engagement programs currently in place for Horizon subscribers, including the Patient Centered Medical Homes (PCMH)

  15. Updated CPT Codes for DPO plans

    Katherine Impellizeri from Aetna gave a presentation concerning updated CPT codes from the American Dental Association.  Dr. Eckroth from Aetna was available on the phone to answer the Committee Members’ questions.  The Committee asked if the presentation could focus on those codes with copays attached to them.  Dr. Eckroth answered questions to explain the reasons behind the new codes.  Committee Member Lyons asked when the copay information was given to the Division of Pensions.  Katherine Impellizeri responded that it was originally given to the Division in the late fall, but was sent to the Health Benefits Commission before it was realized that Plan Design Committee action was required due to the fact that some of the codes included copays.  Committee Member Kobylowski made a motion to approve the new CPT codes.  Committee Member Ridolfino seconded the motion.  Committee Member McMonagle requested a caucus.  After the return from Caucus, Committee Member Lyons stated that the presentation was well done and informative, but asked if information requiring approval could be sent to the Committee earlier.  The vote was taken, the motion passed (9:0:0) Committee Members Kreisberg and Leonard left before the vote was taken.


  16. Consider Request from Pension and Health Benefit Review Commission to Review Proposed Legislative Bills

    Dave Pointer stated that the Pension and Health Benefit Review Commission reviews proposed legislation, but since the passage of Chapter 78, recommends not passing legislation on benefit changes, as they feel it usurps the authority of the Plan Design Committees.  Committee Member Jones asked if any analysis is done before the recommendations are made.  Mr. Pointer responded that they generally deny it based solely on the Committee’s authority.  Committee Member Jones suggested that the Committee communicate with the Legislature not to pass legislation until the Committee has a chance to review it.

  17. Future Meeting Dates

Chairperson Rosenstein stated that the Committee has decided to meet on the third Friday of each month, with a 1:00 p.m. start time going forward.  Marc Larkins, made a motion to adjourn.  Kevin Lyons seconded the motion.  The motion passed (9:0:0).  The meeting ended at 3:33 p.m.

  Respectfully submitted,
   
  Florence Sheppard, Secretary

 

 

 

 
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