Resolution - Health Benefits: Consider a resolution authorizing the Mayor to execute Contract 16694, by and between the City of Lubbock and BlueCross BlueShield of Texas (BCBSTX), to provide medical administrative services only (ASO), dental administration, pharmacy benefit management (PBM), Consolidated Omnibus Budget Reconciliation Act (COBRA) administration, and Medicare Navigator services. |
The City provides medical, dental, and prescription drug coverage for full-time City employees and their eligible dependents. Texas Government Code Section 175.002 allows retired City employees under the age of 65 to retain medical and dental coverage for themselves and eligible dependents at the same level of coverage as active employees. BCBSTX and Prime Therapeutics administer the medical, pharmacy, and dental plans. The City also purchases individual stop loss coverage that begins to pay should a participant’s annual claims exceed $700,000. The City issued a Request for Proposal (RFP 22-16694-TF), for the health plans on June 19, 2022. The proposal requested quotes for medical and dental administrative services, pharmacy benefit management (PBM), network utilization review, medical case management, disease management, COBRA administration, and Medicare Navigator services. The selection criteria in the RFP included:
- experience in servicing self-funded governmental entities, especially in Texas (10 Points);
- claims adjudication service(s) offered and the ability to deliver electronically integrated medical, care and disease management (10 Points);
- quality of provider network (15 Points);
- quality of medical management (15 Points);
- information services and reporting capabilities (10 Points);
- written and oral presentations and representations (10 Points);
- cost of coverage and services (20 Points), and
- ability to integrate with an outside PBM and the City’s free clinics (10 Points).
The RFP generated five responses for medical Administrative Services Only (ASO), Dental Administration, Pharmacy Benefit Management (PBM), Consolidated Omnibus Budget Reconciliation Act (COBRA) administration, and Medicare Navigator services.
BlueCross BlueShield of Texas (BCBSTX)
UnitedHealthcare
Scott and White Health Plans
CVS Health (PBM services only)
Delta Dental (Dental administration only).
Prior to finalizing the scores, the RFP Committee entertained presentations from the top two respondents, BCBSTX and UnitedHealthcare. The Evaluating Committee provided the following ranking of the proposers.
Proposer |
Points |
BlueCross BlueShield of Texas (BCBSTX) |
186.80 |
UnitedHealthcare |
170.43 |
Delta Dental |
162.30 |
Scott and White Health Plans |
156.42 |
CVS Health |
133.33 |
Guarantees The City requested proposers provide multiple-year rate guarantees on the life and disability products. BCBSTX quoted a 5-year rate guarantee, vs. a 3-year rate guarantee from UnitedHealthcare. The BCBSTX offer encompasses all aspects of the RFP for Healthcare and pharmacy administration, client management, claims management and strong financial reporting. BCBSTX has a proven history for claims adjudication accuracy and offer well-being health management as the integrated care and disease management services. Based on the overall program, including continuity of providers for members, performance and network discount guarantees, strength of the network, and stop loss premium, BCBSTX, the highest ranked proposer, is recommended as the most beneficial for the City and employees. |
The differential for BCBSTX was the high level of RX rebates quoted and that we currently enjoy. BCBSTX rebates are 42% higher, reducing the City’s administration and claims expense. BCBSTX also provides a Medical Rebate Credit affording the City additional savings. A Medical Rebate is a credit on infusion drugs billed through a facility setting. The RX rebates offset administrative fees. The offset equates to a reduction in costs of approximately $663,329. The 2023 claims projection for medical, prescription, and claims is $33,958,690 based on the current level of benefits. |