2011-01-21 BOD MeetingPUBLIC RISK MANAGEMENT OF FLORIDA
GROUP HEALTH TRUST
BOARD OF DIRECTORS MEETING
January 21, 2011
Sarasota, FL
10:00 a.m. Call To Order
AGENDA
Phil Wickstrom, Vice Chairperson
Consent�A2enda
✓ Request Approval of July 16 and October 15, 2010 Board Meeting Minutes
2. Request Approval of Treasurer's Report as of September 30, 2010
Any Board Member may request to have an item removed from the Consent Agenda and placed on the Regular
Agenda for further discussion.
Regular Agenda
3. xecutive Director's Report Ross Furry, Executive Director
A. Amended By -Laws — Florida State Statute 624.46223
Request Board Approval to Retain Roper & Roper, P.A. as Legal Counsel
VC. Request Board Approve One Night's Stay for Board Member and Alternate at
2011 PRM Conference from Surplus Funds
D. Establish 2011 Meeting Dates & Locations
Broker's Report Richard Schell, Gallagher Benefit Services
A. Year End Report FY 2009/10
B. Current Status Report
C. Large Claims Audit
D. Health Care Reform — 2011 Changes
E. Cost Containment 2011/12 Renewal
F. Marketing Update
5. Next Generation Report Bradley Taylor, NGE
A. Update on Automated Enrollment & Billing Process
B. Request Board Approval to provide Dependent Audit Services for New Members
joining PRM Group Health Trust
C. Introduction of new Florida Account Representative, Anna Smith
6. Blue Cross Blue Shield Report Robin MacDonald, BCBSFL
A. 2011 Renewal Implementation Timeline
7. Election of Chairperson
8. Board Member Items
Public Comment: State full name and address. Discussion must be limited to a maximum of flue (5) minutes per
person.
Adjournment
PUBLIC RISK MANAGEMENT OF FLORIDA
GROUP HEALTH TRUST
CONSENT AGENDA SUMMARY
January 21, 2011
1. Request Approval of July 16 and October 23, 2010 Meeting Minutes
Background: Meeting Minutes Attached
2. Request Approval of Treasurer's Report as of September 30, 2009
Background: Treasurer's Report Attached
Board Action:
Approved
Denied
Deferred
Other
1. BOARD MEETING MINUTES
7/16/10
10/15/10
PUBLIC RISK MANAGEMENT OF FLORIDA
GROUP HEALTH TRUST BOARD OF DIRECTORS MEETING
Terrace Hotel, Lakeland, FL
July 16, 2010
MINUTES
Attendance: Dee Gibson, City of Bartow; J. P. Murphy, Town of Belleair; Vivian Hunter,
City of Belle Glade; Deanna Rowe, City of Crystal River; Paul Erickson, DeSoto County
BOCC; Ann Isaacs, City of Eustis; Phyllis Kirk, City of Fort Meade; Mary Ann Dotson,
Glades County BOCC: Jane Long, Hardee County BOCC; Cindy West, Hendry County
Sheriff's Office; Sheila Densmore, City of Inverness; Lisa Smith, City of LaBelle;
Deanna Cox, Town of Lady Lake; Fred Moody, Levy County BOCC; Lisa Silvertooth,
Town of Longboat Key; Deborah Cline, City of Madeira Beach; Lester Baird, Port
LaBelle Community Development District; Phil Wickstrom, City of Punta Gorda; Martin
Lange, Sarasota /Manatee Airport Authority; Woody Hubbard, City of Temple Terrace;
Jennifer Valdes, City of Treasure Island; Terri Svendsen, City of Wauchula; Katrina
Bouthot, City of Zephyrhills
Chuck Coward represented the City of Indian Rocks Beach as a non - voting
representative.
Absent: Hamilton County BOCC, Hendry County BOCC, Holmes County BOCC, Town
of Kenneth City; City of Moore Haven, Okeechobee County BOCC; Okeechobee Utility
Authority, City of Perry, South Florida Conservancy District; Taylor County BOCC
Chairperson Paul Erickson called the meeting to order at 10:03 a.m. with a quorum
present. He welcomed new members, City of Fort Meade and City of Okeechobee, who
joined the Group Health Trust on 7/1/10 and 8/1/10, respectively.
Consent Agenda
1. Request Approval of May 14, 2010 Board Meeting Minutes
2. Request Approval of Treasurer's Report as of March 31, 2010
J. P. Murphy made a motion to approve the consent agenda. Jane Long
seconded the motion, and it was unanimously approved.
Regular Agenda
[Representative from Hendry County Sheriff's Office entered the meeting at 10:10 a.m.]
3. Broker's Report
A. Plan Status Report — For the period October 1, 2009 through May 31,
2010, employee enrollment is up 1.7% and dependent enrollment
7//16/10
Page 1
remained unchanged. Average claim cos(t'per er%ployee for the first
eight mont _ vv_s $ e2. Claims increased 9.1° over last year. The
broker us-. 10.5% .r trending claims this year. Prescription drugs
were 20.3 °. • ..I claims. Seven large claims exceeded the specific
deductible of $200,000. For the 8 -month period, plan costs totaled
$27,839,000 versus plan funding of $25,499,000 for a deficit of
$2` 3 40_QQ0. Surplus funds of $1,250,000 were utilized at the
beginning of the plan year to reduce members' premium. Due to large
claims and a shortfall in funding, a deficient of $2.3 million is projected
for the plan year. The Executive Director advised that the Group Health
Trust has surplus funds totaling $15 million and indicated surplus funds
ill be utilized to offset the deficit. Dental Plan cost for October
Vthrough May equaled $549,000 on funding of $657,000, resulting in a
plan surplus of $108,000.
B. 2010/11 Renewal Discussion — The broker provided scenarios,
identifying the impact on the Pool's renewal percentage. Without any benefit
changes and keeping a $200,000 Specific Deductible, the Pool would face a
30% increase. Mr. Schell advised that taking a pro- active approach, such as
performing prescription drug and medical audits, will provide an ongoing
positive impact on renewal costs. The broker and the Executive Director
recommended increasing the Specific Deductible to $300,000 and utilizing
$1.5 million from surplus funds to further reduce the Pool's overall renewal
increase to 11.5 %. Ms. Long made a motion to utilize $1.5 million from
surplus and increase the Specific Deductible to $300,000 for an overall
renewal increase of 11.5 %. Marty Lange seconded the motion, and it was
unanimously approved. Members will receive their renewal rates by email on
Monday, July 19th
C. Recruitment Status - It is anticipated that the City of Marianna and the
City of Fort Walton Beach will join PRM. Proposals have also been
submitted to the City of New Port Richey and the City of Gulfport.
D. Status on BCBS Large Claims Audit — The broker is awaiting approval
from Blue Cross Blue Shield to proceed with the audit.
E. Electronic Medical and Rx Audit — Benefit and Cost — The broker
advised medical and prescription drug audits would be cost effective,
and $45,000 was built into the renewal to reduce costs. The Executive
Director recommended authorizing the use of surplus funds up to
$50,000 for the audits. Any recouped savings from the audits will be
returned to surplus. Lester Baird made a motion to utilize up to
$50,000 from surplus funds for medical and prescription drug audits.
Mr. Murphy seconded the motion, and it was unanimously approved.
7//16/10
Page 2
F. Mental Health Parity — Paul Hebert, JD, reported on the Mental Health
Parity and Addiction Equity Act (MHPAEA) and Federal Regulations,
which become effective 10/1/10 for the Group Health Trust. Group
health plans must ensure that mental health and substance abuse
benefits are not more restrictive than similar benefits for medical and
surgical services. Blue Cross Blue Shield is currently testing all plans
to meet compliance requirements. Penalties for failing to comply are
$100 per day to a maximum of $5,000 a year for an entity or $500,000
a year for the Pool. A provision entitles non - federal, self- funded
governmental employers the ability to opt -out of the Federal plan.
However, Health Care Reform may have eliminated the opt -out option.
Mr. Hebert recommended compliance with the Mental Health Parity
rules effective 10/1/10. He advised another client is challenging the
law and if they are successful, PRM still has sufficient time to opt -out
prior to 10/1. An annual notice to CMS would be required for
continuance of the opt -out option. The Executive Director
recommended opting out if the opportunity arises. Mr. Hebert advised
that members are non - federal, governmental employers, but the Group
Health Trust is not. The Board of Directors would have to authorize
the PRM Group Health Trust to opt -out on their behalf. Mr. Baird made
a motion to authorize PRM to respond and opt -out on behalf of all
members if opportunity is available. Mr. Wickstrom seconded the
motion, and it was unanimously approved.
G Next Generation Enrollment (NGE) — Gary Kern, Account Manager
with NGE, provided an update on the following:
i. Status of Dependent Audit — The audit is 65% completed, and
it is estimated that a $250,000 savings will be realized. NGE
will provide Benefit Administrators with a report identifying
employees, dependents, and ineligible dependents at the end
of the audit. NGE does not remove anyone from plans.
ii. Update on Enrollment Eligibility Services — NGE is very
flexible and will develop a custom -built system for each entity.
Some members have elected to only utilize the on -line
service for PRM plans. Others are placing their entire benefit
package with NGE. The target date for all entities to be on-
line is 8/1/10 in order to provide open enrollment services.
7//16/10
Page 3
4. Executive Director's Report
A. New Florida State Statute for Pools — Effective 1/1/2011 per Florida
State Statute 624.46223, pools providing self- insurance for public
entities may not require its members to give more than 60 days notice
of their intent to withdraw. This will require a revision to the By -Laws.
The requirement for a super majority vote to reflect this By -Law change
has not yet been determined.
B. PRM Educational Conference — June 15 -17, 2011 — Plans are being
made to provide Group Health sessions on Wednesday afternoon,
rather than having break -out sessions on Thursday. Members were
appreciative of this opportunity to attend all sessions.
C. Meeting Attendance via Electronic Media — Mr. Furry requested Don
Roper, PRM "s Legal Counsel, to investigate the liability of using
electronic media for meetings with regard to the Sunshine Law.
Mr. Roper's overall recommendation was to contact the State Attorney
General for his opinion on Sunshine Law compliance. Trish Grainger
made a motion to obtain the Attorney General's opinion regarding
meeting attendance via electronic media and compliance with the
Sunshine Law. Deborah Cline seconded the motion, and it was
unanimously approved. Audio recordings of meetings are available
upon request to PRM.
5. Guest Speaker: Sheena Koshy, Blue Cross Blue Shield eTool Development,
MyBlueService — Ms. Koshy provided a presentation on tools and
enhancements available under MyBlueService. Pharmacy shopping to
compare drug prices is now available. WebMD may also be accessed
through MyBlueService. After completing a Personal Health Assessment,
individuals will receive ideas to improve their health risks. The Personal
Health Record allows individuals to record all medical information and
prescriptions in one location.
6. Election of Officers — The term of office for Chairperson and Treasurer
expires 9/30/10. Paul Erickson indicated his willingness to continue serving
as Chairperson. Mr. Baird made a motion to close nominations. Ms. Long
seconded the motion. By acclamation, Mr. Erickson was re- elected
Chairperson for a 2 -year term, beginning 10/1/10.
Jane Long indicated her willingness to continue serving as Treasurer.
Mr. Baird made a motion to close nominations. Terri Svendsen seconded the
motion. By acclamation, Ms. Long was re- elected Treasurer for a 2 -year
term, beginning 10/1/10.
7//16/10
Page 4
7. Members' Notice to Withdraw Membership — Mr. Furry reported on the status
of those entities who had given notices of their intent to withdraw 9/30/10:
City of Crystal River — Taking recommendation to remain with PRM to
their City Commission.
City of Eustis — Will remain with PRM.
Hamilton County BOCC — RFP (Request for Proposal) still out.
Hendry County BOCC — Their RFP was due 7/16.
Okeechobee County BOCC — Will remain with PRM.
8. Board Member Items
No Board Member items were brought forth for discussion.
The next Board of Directors Meeting will be held on October 15, 2010, at the
Sarasota Airport.
There was no Public Comment.
The meeting adjourned at 12:18 p.m.
Respectfully submitted,
Judith A. Hearn
Assistant Executive Director
Secretary, Health Trust Board of Directors
JAH:smb
O:1Judy \GHT \Board of Directors 7 -16 -10
7//16/10
Page 5
Bartow, City of
Belleair, Town of
Belle Glade, City of
Crystal River, City of
Desoto Co BOCC
Eustis, City of
Fort Meade, City of
Glades Co BOCC
Hamilton Co BOCC
Hardee Co BOCC
Hendry Co BOCC
Hendry Co Sheriff's Office
Holmes County BOCC
GROUP HEALTH TRUST
BOARD OF DIRECTORS MEETING
July 16, 2010 — 10:00 A.M. — Lakeland, FL
Board Member
Dee Gibson
P. Murphy
C c//
Vivian Hu ter
Alternate Member
Debbie King
Dea Rowe
Paul Erickson
Ann Isaacs
.:tki k
Phyllis Kirk
Robert Giesler
Jennifer Davis
Steve Whidden
Linda Stilson
Kay McCormick
Mike Adams
ita Zimmerman
Monty Merchant Sherry Fitzpatrick
Indian Rocks Beach, City of
Inverness, City of
Kenneth City, Town of
LaBelle, City of
Lady Lake, Town of
Levy Co BOCC
Longboat Key, Town of
Madeira Beach, City of
Moore Haven, City of
Okeechobee, City of
Okeechobee Co BOCC
Okeechobee Utility Auth.
Perry, City of
Port LaBelle CDD
Punta Gorda, City of
Sarasota - Manatee Airport
Sandy Sanders
AU :a,
Sheila Densmore
Elizabeth Atkinson
Thomas Goldberg Susan Scrogham
Fre• Moody
/V ?cc r
Lisa Silvertooth
Deborah Cline
Maxine Brantley
Robbie Chartier
John Hayford
Robert Brown, Jr.
Mary Jo Wilson
Tahia O'Neal
Jacqueline Martin
K
Trish Granger
Monica Mitchell
Melissa Arnold
Kim Long - Hopkins
Basil Coule
June Shiverg
Arlette Wright
Lange Anita Eldridge
South FL Conservancy
Taylor County BOCC
Temple Terrace, City of
Treasure Island, City of
Wauchula, City of
Zephyrhills, City of
David Davis
J r u fifer Valdes
James Braddock
Katrina Bouthot
Elsie King
LaWanda Pemberton
Kim Leinbach
Mark antos
T i Svendsen
- - 2 I.- - - - t - - I- - - • - - - - - - - - I - -
GUESTS
le, Ai-77100# • ,t
PUBLIC RISK MANAGEMENT OF FLORIDA
GROUP HEALTH TRUST BOARD OF DIRECTORS MEETING
Dan P. McClure Auditorium, Sarasota, FL
October 15, 2010
MINUTES
Attendance: J. P. Murphy, Town of Belleair; Mary Ann Dotson, Glades County BOCC:
Jim O'Rielly, City of Gulfport; Jane Long, Hardee, County BOCC; Cindy West, Hendry
County Sheriff's Office; Sandy Sanders, City of Indian Rocks Beach; Lisa Smith, City of
LaBelle; Fred Moody, Levy County BOCC; Lisa Silvertooth, Town of Longboat Key;
Deborah Cline, City of Madeira Beach; Lester Baird, Port LaBelle Community
Development District; Phil Wickstrom, City of Punta Gorda; Anita Eldridge,
Sarasota /Manatee Airport Authority; Elsie King, South Florida Conservancy District,
Woody Hubbard, City of Temple Terrace; Jennifer Valdes, City of Treasure Island;
James Braddock, City of Wauchula; Katrina Bouthot, City of Zephyrhills
Latrinda Jones represented DeSoto County BOCC as a non - voting representative.
Absent: City of Bartow, City of Belle Glade, City of Crystal River, City of Eustis, City of
Fort Meade, City of Fort Walton Beach, Hamilton County BOCC, Hendry County BOCC,
Holmes County BOCC, City of Inverness, Town of Kenneth City; City of Lady Lake, City
of Marianna, City of Moore Haven, City of Okeechobee, Okeechobee County BOCC;
Okeechobee Utility Authority, City of Perry, Taylor County BOCC, City of Umatilla
Vice Chairperson Phil Wickstrom called the meeting to order at 10:13 a.m.. He
welcomed the following new members: City of Fort Walton Beach, City of Gulfport, City
of Marianna, City of Okeechobee, and City of Umatilla.
Consent Agenda
1. Request Approval of July 16, 2010 Board Meeting Minutes
2. Request Approval of Treasurer's Report as of June 30, 2010
Due to the absence of a quorum, the Consent Agenda was not approved.
Regular Agenda
3. Broker's Report
A. Plan Status Report FY 2009/10 — For the period October 1, 2009
through July 31, 2010, average medical claim cost per employee per
month was $699. Prescription drugs were 17.6% of total claims. 32
large claims exceeded the specific deductible of $200,000 and
accounted for 19% of total net claims for the 10 -month period. Plan 'l
costs totaled $34,666,000 versus plan funding of $31,847,000 for a
10/15/10 Page 1
deficit of $2.8 million
r the 10 -month period. A deficit of $2.2 million
e plan year with surplus funds being utilized to offset
this amount. Dental Plan cost for October through July equaled
$670,000- ennding of $809,000, resulting in a plan surplus of
39,000.
B. Recruitment Status /New Members — From 17 proposals, 6 new
members joined the Group Health Trust, increasing membershi
for the plan year.
C. HealthCare Report Update — The broker reviewed legislative/
compliance updates.
A grandfathered plan will retain that status until 9/30/11, at which time
the status will need to be re- identified. Non - grandfathered plans must
meet additional requirements, such as preventive coverage.
The Early Retiree Reimbursement Program permits some group health
plans to be reimbursed 80% of claims incurred by early retirees (ages
55 -64) between $15,000 and $90,000. The program is funded to $5
billion and will cease on the earlier of 1/1/14 or when the funding is
exhausted. On behalf of the Group Health Trust, the broker submitted
an application to the Department of Health and Human Services
(HHS), which was approved on October 6th. Once guidelines are
received from HHS, the broker will work with Blue Cross Blue Shield to
identify eligible claims and submit for reimbursement to the Pool. The
Executive Director reiterated that this was handled pool -wide in
accordance with an earlier decision by the Board and any
reimbursement would be to the Group Health Trust.
The next Healthcare Reform concern relates to the elimination of over -
the- counter medications from flexible spending accounts on 12/31/10.
In accordance with the Board's decision at the July meeting, the broker
submitted PRM's request to opt out of the Federal Mental Health Parity
requirements. Approval was granted by the Centers for Medicare and
Medicaid Services (CMS) on 9/23/10. The broker provided a sample
Notice to Enrollees for members to distribute to employees prior to the
plan year.
D. Medicare Part D — Annual Open Enrollment for Medicare Part D is
November 15 to December 31. Members must distribute the
Creditable or Non Creditable Notification to their Medicare eligible
employees and retirees. Each entity is required to complete the on-
line Annual Employer Disclosure Notice to CMS by November 30th
10/15/10 Page 2
The Annual Employer Disclosure Notice to CMS is due
November 30, 2010
4. Next Generation Enrollment Report
A. Dependent Audit
i. Status of Original Project - Bradley Taylor and Vince Owen
presented the status report on the Dependent Audit:
32 separate audits conducted; 25 employees did not
ees sent)n incomplete documentation.
309 total ineligible depen is were found, a percentage of
9.6 %.
It was estimated that 75% of the ineligible dependents were
children.
Mr. Furry suggested a pool -wide policy be established that
members must remove all ineligible dependents from their
roster. He indicated that, in concurrence with the member,
NGE will notify ineligible dependents of their status in writing.
Several members voiced dissatisfaction over the Dependent
Audit process, including documents that NGE required to
determine eligibility for children. Members preferred having
employees sign an affidavit, affirming their child's eligibility.
Final completion date for Dependent Audit is October 22 "d
ii. Savings to Health Trust — NGE projected an annual savings of
$1.4 million. Woody Hubbard requested NGE provide each
member the savings incurred for their entity.
iii. Request Board Approval to continue contract with NGE
(Auditing Open Enrollment Changes, New Hires and Status
Changes) at no additional charge. No Board action was taken
due to the lack of a quorum. Mr. Hubbard recommended each
member's HR Department be responsible for administering
eligibility procedures for new hires going forward. NGE will
provide a sample communication for HR Departments to report
a change in coverage.
iv. Request Board Approval to provide Dependent Audit Service
for New Members joining PRM Group Health Trust at a cost of
$15 per audited dependent. Funds available from Surplus. No
Board action was taken due to the lack of a quorum.
10/15/10 Page 3
v. Process for Ongoing Auditing Work
[10 minute break — Meeting reconvened at 11:30 a.m.]
B. Automated Enrollment
i. Status of Current Project — Gary Kern reviewed each member's
status in regards to Automated Enrollment. NGE has not
received in -take documents or census information from several
members. Member administrator training is being scheduled.
ii. Expected Completion Date for all members so NGE is 100%
operational for all contracted services. October 22nd is the
anticipated completion date.
5. Blue Cross Blue Shield Report
A. Staff Changes — Robin MacDonald advised that Karen Toro will no
longer be assisting PRM. With the increase in members, Blue Cross
Blue Shield has assigned Brigid Gribbin as PRM's dedicated Account
Manager.
B. 2010/11 Renewal Process — Delays occurred in the renewal process
due to changes brought forth by Healthcare Reform. Members were
assigned individual group numbers in an attempt to have ID cards for
October 1, 2010. However, with Healthcare Reform, grandfathered
and non - grandfathered plans had to be identified and new plan
numbers assigned for non - grandfathered plans.
C. Medical /Rx Plan Changes /Enhancements — On grandfathered plans,
medical and pharmacy benefits remain the same. For members that
transitioned to non - grandfathered plans, Mental Health Parity remains
the same. However, member cost share for wellness is zero. Annual
maximums were eliminated. All diabetic supplies can be purchased
through the Pharmacy.
D. Status of ID Cards — All employees should receive ID cards by next
week.
6. Election of Chairperson — Due to the lack of a quorum, the election for
Chairperson was deferred until the next meeting. Jennifer Valdes,
Mr. Hubbard and Mr. Wickstrom have indicated their willingness to serve in
this capacity.
10/15/10
Page 4
7. Notice of Intent to Withdraw 9/30/11 — Hamilton County BOCC, Hendry
County Sheriff's Office, and Holmes County BOCC have submitted notices of
their intent to withdraw on 9/30/11.
8. New Law — Florida State Statute 624.46223 becomes effective 1/1/2011 and
provides that self- insurance pools for government entities cannot require its
members to give more than 60 days notice of intent to withdraw. Therefore,
effective 1/1/11, Articles 4.2 and 4.3 that require a 1 -year notice to withdraw
will be amended to reflect compliance of Florida State Statute 624.46223 that
requires no more than 60 days notice of intent to withdraw.
9. Board Member Items
A. Establish Meeting Dates & Locations for Calendar Year 2011 — Due to
lack of a quorum, no Board action was taken. Tentative schedule is:
January 21 — Dan P. McClure Auditorium, Sarasota
April 15 — Dan P. McClure Auditorium, Sarasota
July 15 — Terrace Hotel, Lakeland
October 21 — Dan P. McClure Auditorium, Sarasota
Deborah Cline suggested a meeting be held in the Tampa Bay area in
an attempt to get more member participation. Mr. Wickstrom requested
the PRM office canvass members for available meeting room
accommodations.
No other Board Member items were presented for discussion.
The next Board of Directors Meeting will be held on January 21, 2011, at the
Sarasota Airport.
There was no Public Comment.
The meeting adjourned at 12:18 p.m.
Respectfully submitted,
Judith A. Hearn
Assistant Executive Director
Secretary, Health Trust Board of Directors
JAH:smb
O: \Judy \GHT \Board of Directors 10 -15 -10
10/15/10
Page 5
GROUP HEALTH TRUST
BOARD OF DIRECTORS MEETING
October 15, 2010 — 10:00 A.M. — Sarasota, FL
Bartow, City of
Belleair, Town of
Belle Glade, City of
Crystal River, City of
Desoto Co BOCC
Eustis, City of
Fort Meade, City of
Fort Walton Beach, City of
Glades Co BOCC
Gulfport, City of
Hamilton Co BOCC
Hardee Co BOCC
Hendry Co BOCC
Board Member Alternate Member
Dee Gibson Debbie King
J. P. Murphy
Susan Lee
Vivian Hunter Diana Hughes
Deanna Rowe Linda Stilson
Rosa Holland Linda Nipper
Ann Isaacs
Phyllis Kirk
Robert Giesler
Kay McCormick
Dana Ware
Mike Adams
Rita Zimmerman
Jennifer Davis Karson Turner
Hendry Co Sheriff's Office
Steve Whidden
Holmes County BOCC
Indian Rocks Beach, City of
Inverness, City of
Kenneth City, Town of
LaBelle, City of
Lady Lake, Town of
Levy Co BOCC
Longboat Key, Town of
Madeira Beach, City of
Marianna, City of
Moore Haven, City of
Okeechobee, City of
Okeechobee Co BOCC
Okeechobee Utility Auth.
Perry, City of
Monty Merchant
San. y Sanders
Sheila Densmore
Thomas Goldberg
Lisa Smith
Fred Moody
j, /04 to cig
Sherry Fitzpatrick
Elizabeth Atkinson
Cheryl Chiodo
Susan Scrogham
Mary Jo Wilson
Tahia O'Neal
Jacqueline Martin
Lisa Silvertooth Trish Granger
Deborah Cline
Monica Mitchell
Maxine Brantley Melissa Arnold
Robbie Chartier Kim Long- Hopkins
John Hayford Basil Coule
Robert Brown, Jr.
Port LaBelle CDD
Punta Gorda, City of
Sarasota - Manatee Airport
South FL Conservancy
Taylor County BOCC
Temple Terrace, City of
Treasure Island, City of
Umatilla, City of
Wauchula, City of
Zephyrhills, City of
L-ster Baird
June Shivers
Martin Lange
David Davis
Latrina Harvey
Woo
bbard
Anita Eldridge
LaWanda Pemberton
Kim Leinbach
Mark Santos
Katrina Bouthot
Terri Svendsen
Rick Moore
GUESTS
c e\GL_ V; '"C/
2. TREASURER'S REPORT
AS OF 9/30/10
P.R.M. - GROUP HEALTH
BALANCE SHEET
SEPTEMBER 30, 2010
ASSETS
CURRENT ASSETS:
PETTY CASH $ 50.00
CASH - BB & T 16,725,077.28
CLAIMS ACCOUNT -BCBS (1,599,992.11)
A/R RE -INS RECOVERIES 1,502,954.06
A/R- MEMBERSHIP PREMIUMS 730,819.82
STATE ADMIN. FUND 446.13
TOTAL CURRENT ASSETS 17,359,355.18
TOTAL ASSETS
LIABIL111ES:
$ 17,359,355.18
LIABILTI'lES AND CAPITAL
ACCOUNTS PAYABLE $ 19,675.09
CLAIMS PAYABLE - ALL YEARS 2,051,587.00
TOTAL LIABILITES 2,071,262.09
CAPITAL:
FUND BALANCE 18,144,898.93
INCOME IN EXCESS OF EXPENSE (2,856,805.84)
TOTAL CAPITAL 15,288,093.09
TOTAL LIABILITIES & CAPITAL $ 17,359,355.18
REVENUES:
MEMBERSHIP PREMIUMS
INTEREST INCOME
TOTAL REVENUES
EXPENSES:
P.R.M. - GROUP HEALTH
INCOME STATEMENT
FOR THE TWELVE MONTHS ENDING SEPTEMBER 30, 2010
CURRENT MONTH YEAR TO DATE
$ 3,292,954.03 $ 39,682,859.45
3,722.16 68,144.79
3,296,676.19 39,751,004.24
AUDIT FEES 0.00
COMPBENEFITS 8,440.30
ACTUARIAL STUDY 0.00
NEXT GENERATION 16,170.00
MISCELLANEOUS EXPENSE 17,675.10
BC/BS MEDICAL ADMIN FEE 255,590.73
LOCAL AGENT EXP 1,146.00
LIFE PREMIUM 23,680.04
DENTAL PREMIUM 6,237.45
EAP 5,880.60
EXCESS INS AGGREGATE PREMIUM 9,254.85
EXCESS INS SPEC. LOSS PREMIUM 161,851.25
EXCESS INS CONVERSION FEE 2,824.25
VISION SERVICE PLAN 8,230.64
MEDICAL CLAIMS PAID -BCBS 3,296,774.78
DENTAL CLAIMS 71,081.02
PRM -EXEC P/R TRANSFER 4,345.00
TRANSFER ADMIN. EXPENSE 12,232.00
TOTAL EXPENSES 3,901,414.01
NET INCOME
16,000.00
92,169.89
2,800.00
64,512.30
21,161.10
3,062,464.68
14,268.00
284,596.48
78,567.80
70,133.85
110,380.86
1,930,369.50
33,684.30
99,030.40
35,765,184.18
763,568.74
51,822.00
147,096.00
42,607,810.08
$ (604,737.82) $ (2,856,805.84)
PUBLIC RISK MANAGEMENT OF FLORIDA
GROUP HEALTH TRUST
REGULAR AGENDA SUMMARY
January 21, 2011
3. Executive Director's Report
Ross Furry, Executive Director
A. °Amended By -Laws — Florida State Statute 624.46223
By -Laws have been amended to comply with Florida Statute 624.46223:
Pools providing self - insurance for public entities may not require its
members to give more than 60 days notice of their intent to withdraw at the
end of the policy year. PRM will email Amended By -Laws to Board
Members and file a copy with each entity's County Minutes Department.
B. Request Board Approval to Retain Roper & Roper, P.A. as Legal Counsel
Donovan Roper of Roper & Roper, P.A. serves as Legal Counsel for the
Property /Casualty Pool. With the growth of the Group Health Trust, the
Executiv 'rector recommends retaining his services at a monthly base fee
of $ 0.Q for Group Health Trust legal issues. Bio and contract attached.
/1
Board Action:
Approved
Denied
Deferred
Other
3.B. ROPER & ROPER, P.A.
Donovan Roper Bio
Contract
DONOVAN A. ROPER, ESQUIRE
Donovan was born on November 2, 1964 in St. Ann's Bay, Jamaica, West Indies. In
1983, he graduated from Clearwater High School in Clearwater and subsequently
attended and graduated from St. Petersburg Junior College in 1985 with an Associate of
Arts Degree, with honors. He then attended Florida State University, where he majored
in History, and in 1987, he graduated Cum Laude, with a Bachelor of Arts Degree.
Donovan next attended Stetson University College of Law in St. Petersburg, Florida and
obtained his Juris Doctor Degree upon graduation therefrom in 1990. During law school,
Donovan was employed as a law clerk for two years with the St. Petersburg law firm of
Blasingame, Forizs & Smiljanich, P.A., which specialized in tort litigation, bankruptcy,
and construction litigation. He also served as a law clerk with the Florida Attorney
General's Office, Department of Consumer Services. From 1990 to 1996, Donovan was
an associate attorney at the law firm of Dean, Ringers, Morgan, & Lawton, P.A., in
Orlando, Florida, and then on March 15, 1996, he established Roper & Roper, P.A. with
his wife and law partner, Teresa Schiele Roper, Esquire.
Roper and Roper, P.A., specializes in civil tort litigation, including personal injury, civil
rights, products liability, and wrongful death, for both Plaintiffs and Defendants. We also
litigate in Federal Longshore and Harbor Workers' Compensation Act and Federal
Jones Act claims, but from primarily a defense perspective.
Roper & Roper, P.A., takes great pride in representing both Florida municipal
corporations and county clients in both state and federal litigation, and in representing
the United States Government in Longshore Workers' Compensation matters.
Associations: The Florida Bar, American Bar Association, Association of Trial Lawyers
of America, The Florida Defense Lawyers's Assocation, Defense Research Institute,
Orange County Bar Association.
REPRESENTATION CONTRACT
THIS REPRESENTATION AGREEMENT (hereinafter the "Agreement ") is made
and entered into by and between PUBLIC RISK MANAGEMENT OF FLORIDA, INC.
GROUP HEALTH TRUST (PRMGHT), and the law firm of ROPER & ROPER, P.A., a
Florida Professional Association.
WITNESSETH:
WHEREAS, ROPER & ROPER, P.A. is a professional association made up of
attorneys duly licensed, authorized, and admitted to practice the profession of law in the State
of Florida, and
WHEREAS, PRMGHT desires to retain the legal services and representation of
ROPER & ROPER, P.A. and its attorneys for a period beginning on January _, 2011 to
, upon and subject to the following terms and conditions, and
WHEREAS, the parties desire to reduce to writing their agreements herein, and
NOW THEREFORE, in consideration of the premises and of the mutual covenants
and agreements hereinafter contained, the parties do hereby mutually covenant and agree
with each other as follows:
1. PRMGHT. does hereby retain ROPER & ROPER, P.A. for a period beginning
January , 2011 and ending on , or as may be extended by mutual consent
of the parties.
2. During the term of this Agreement, it is agreed that ROPER & ROPER, P.A.
shall represent PRMGHT. in all the legal matters which PRMGHT deems, in its sole
discretion, may require the services of ROPER & ROPER, P.A., except for those matters that
(a) ROPER & ROPER, P.A. may have a conflict of interest, or (b) are outside of ROPER &
ROPER, P.A.'s area of expertise, in which either event and at the request of PRMGHT,
ROPER & ROPER, P.A. will assist PRMGHT in securing competent legal counsel for any
such matter.
3. ROPER & ROPER, P.A. agrees to devote a sufficient amount of its time and
the time of its lawyers to adequately, properly and promptly represent PRMGHT in
connection with and as required by the legal matters for which PRMGHT requires ROPER
& ROPER, P.A.'s services during the term of this Agreement.
4. For the time period of January , 2011 through , ROPER &
ROPER, P.A. shall be compensated by PRMGHT for all legal services rendered, with the
exception of those services and matters identified in paragraph 5 below and also excluding
any out -of- pocket costs addressed in paragraph 7 and 8 below, a monthly retainer base
attorney's fee of One Thousand Five Hundred and No /100 Dollars, ($1,500.00), which shall
be due and payable on the first of each month.
5. In addition to the monthly base retainer fee due ROPER & ROPER, P.A., under
paragraphs 3 and 4 above, PRMGFIT shall compensate ROPER & ROPER, P.A. at the rate
of $125.00 per hour for all attorney time rendered in connection with any litigation and /or
arbitration defended or pursued on behalf of PRMGHT which is not covered by its insurance,
with the exception of property damage subrogation actions pursued or prosecuted on behalf
-2-
of PRMGHT and ROPER & ROPER, P.A. For any litigation defended or pursued by
ROPER & ROPER, P.A. on behalf of PRMGHT that is covered by its insurance, ROPER &
ROPER, P.A. shall be compensated by PRMGHT's insurance carrier for all attorney time at
a rate of $ 125.00 per hour or such other rate as negotiated between ROPER & ROPER, P.A.
and said insurance carrier, plus all expenses and costs incurred in connection with such
litigation. This paragraph, and Representation Contract, does not apply to property damage
subrogation claims or lawsuits which ROPER & ROPER, P.A. pursue or prosecute on behalf
of PRM.
6. Subject to the terms of paragraph 5 of this Agreement, ROPER & ROPER,
P.A., shall provide PRMGHT with monthly statements for each matter undertaken by
ROPER & ROPER. P.A., which shall reflect all services rendered for each matter, as well
as ROPER & ROPER, P.A.'s contemporaneous, actual and accurate time records for all legal
services rendered pursuant to this Agreement. These statements may be used by parties from
time to time to reevaluate the amount of the monthly base retainer fee paid to ROPER &
ROPER, P.A.
7. In addition to the monthly base retainer fee due ROPER & ROPER, P.A. under
paragraphs 3 and 4 above, PRMGHT shall pay for all expenses, fees and costs incurred to
retain the services of expert witnesses, court reporters, process service, clerk fees and other
expenses incurred to pay filing fees with various judicial and administrative agencies in
connection with any arbitration, judicial, administrative or other claims brought on behalf of
-3-
PRMGHT or against PRMGHT. Prior to any expenditure being made in excess of $100.00,
and where time reasonably permits, ROPER & ROPER, P.A. agrees to obtain approval from
PRMGHT, including all computer research. All necessary computer research shall be
reimbursed at $25.00 per daily research session, regardless of the number of minutes
researched per daily research session.
8. In the event ROPER & ROPER. P.A. is required to institute or defend any legal
action or arbitration proceeding on behalf of PRMGHT which results in its entitlement to
recover attorney's fees in the proceeding or action, PRMGHT shall be entitled to first be
reimbursed by the losing party for all hourly attorney's fees, costs and expenses incurred in
connection with such action or arbitration.
9. If any dispute or controversy between the parties arises out of or relates to this
Agreement, through breach thereof, or any performance or obligation due hereunder, and if
the dispute cannot be settled through direct negotiation, the parties agree first to try in good
faith to settle the dispute by mediation to be administered by the Florida Rules of Civil
Procedure governing mediations. The parties shall mutually agree on a qualified,
experienced mediator located in Lee County, Florida.
10. Any controversy or claim arising out of or relating to this Agreement, the
breach thereof, or the parties rights and obligations arising hereunder, not settled at
mediation, shall be resolved and determined by binding arbitration administered by the
American Arbitration Association under its Commercial Arbitration Rules, and judgement
on the award rendered by three (3) arbitrators shall be entered in any court having jurisdiction
-4-
thereof. The administrative costs of the American Arbitration Association shall be borne
equally by the parties and each party shall bear its own costs and expenses associated with
any such arbitration under this provision.
11. Venue for any and all legal actions and arbitration proceedings arising out of
or relating to this Agreement, the breach thereof or the parties rights and obligations arising
hereunder, shall exclusively lie in Lee County, Florida. This Agreement and the parties
rights and obligations due hereunder are governed by the laws of the State of Florida.
12. The parties agree that, during the first year of this Agreement, it may only be
terminated for good cause after 30 days prior written notice. Thereafter, this Agreement may
be terminated with or without good cause upon 30 days prior written notice. In the event
either party terminates this Agreement at any time, with or without cause, all attorney's fees,
costs and expenses due ROPER & ROPER, P.A. shall be paid in full prior to the effective
date of termination.
13. This Agreement is the entire agreement of the parties, and no other agreement
or modification on this contract, expressed or implied, shall be binding on either party unless
same shall be in writing and signed by both parties. This Agreement may not be orally
modified. Any modification must be in writing, expressly titled a modification or addendum
to this contract, attached to this contract, and signed by both parties.
14. This Agreement shall be binding upon the parties successors and assigns.
15. Any waiver of any breach or violation of either party's obligations under this
Agreement shall not be construed as a continuing waiver or consent to any subsequent breach
or violation.
-5-
16. This Agreement has been fully negotiated in an arm's length transaction and
it shall not be construed against either party. Each party has had the opportunity to employ
independent legal counsel and seek the advice from such counsel with respect to this
Agreement, its obligations, terms and implications. Neither party has relied upon the other
party prior to signing this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused their hands and seals to be
affixed hereon this day of , 2011.
ROPER & ROPER, P.A. PUBLIC RISK MANAGEMENT OF
FLORIDA, INC. GROUP HEALTH
TRUST
By: By:
Donovan A. Roper, President Ross Furry, Executive Director
PUBLIC RISK MANAGEMENT OF FLORIDA
GROUP HEALTH TRUST
REGULAR AGENDA SUMMARY
January 21, 2011
Executive Director's Report (continued)
C. Request Board Approve One Night's Stay for Board Member and Alternate at 2011
PRM Conference from Surplus Funds
The Board approved one night's stay at the 2010 PRM Conference.
33 -Board Members
33- Alternates
2010 Actual Reservations:
21 rooms @ $129 Daily Room Rate = $2,709 paid from GHT
2011 Estimated Room Cost:
June 15 -17, 2011 Conferenc — Hilton Beach Resort, Marco Island
39 -Board Members @ $12 Daily Room Rate = $ 5,031
39- Alternate Members @ $j,24 Daily Room Rate = 5,031
l ' ` Estimated Cost $10,062
Board Action:
[/ Approved
Denied
Deferred
Other
D. Establish 2011 Meeting Dates & Locations
April 15 — Dan P. McClure Auditorium, Sarasota
July 15 — Ter ce Hotel, Lakeland
October 21— Dig P. McClure Auditorium, Sarasota
Board Action:
Approved
Denied
Deferred
Other
L"
3.D. 2011 MEETING DATES
Group Health Trust
Board Meetings
2011
S
M
JANUARY
T W T
F
S
S
M
FEBRUARY
T W T
F
S
S
M
MARCH
T W T
F
S
S
M
APRIL
T W T
F
S
1
1
2
3
4
5
1
2
3
4
5
1
2
2
3
4
5
6
7
8
6
7
8
9
10
11
12
6
7
8
9
10
11
12
3
4
5
6
7
9
9
10
11
12
13
14
15
13
14
15
16
17
18
19
13
14
15
16
17
18
19
10
11
12
13
14
COP 16
16
17
18
19
20
®
22
20
21
22
23
24
25
26
20
21
22
23
24
25
26
17
18
19
20
21
22 23
2340
2441
25
26
27
Z88
29
27
28
27
28
29
30
31
24
25
26
27
28
29
30
MAY
JUNE
JULY
AUGUST
S
M
T W T
F
S
S
M
T W T
F
S
S
M
T W T
F
5
S
M
T W
T
F
S
1
2
3
4
5
6
7
1
2
3
4
1
2
1
2
3
4
5
6
8
9
10
11
12
13
14
5
6
7
8
9
10
11
3
4
5
6
7
9
7
8
9
10
11
12
13
15
16
17
18
19
20
21
12
13
14
15
16
17
18
10
11
12
13
14
16
14
15
16
17
18
19
20
22
23
24
25
26
27
28
19
20
21
22
23
24
25
17
18
19
20
21
23
21
22
23
24
25
26
27
29
30
31
26
27
28
29
30
24/31
25
26
27
28
29
30
28
29
30
31
SEPTEMBER
OCTOBER
NOVEMBER
DECEMBER
S
M
T W
T
F
S
S
M
T W
T
F
S
S
M
T W
T
F
S
S
M
T W
T
F
S
1
2
3
1
1
2
3
4
5
1
2
3
4
5
6
7
8
9
10
2
3
4
5
6
7
8
6
7
8
9
10
11
12
4
5
6
7
8
9
10
11
12
13
14
15
16
17
9
10
11
12
13
15
13
14
15
16
17
18
19
11
12
13
14
15
16
17
18
19
20
21
22
23
24
16
17
18
19
20
22
20
21
22
23
24
25
26
18
19
20
21
22
23
24
25
26
27
28
29
30
234
24/31
25
26
27
28
29
27
28
29
30
25
26
27
28
29
30
31
PUBLIC RISK MANAGEMENT OF FLORIDA
GROUP HEALTH TRUST
4. Broker's Report
REGULAR AGENDA SUMMARY
January 21, 2011
Richard Schell
Gallagher Benefit Services
A. Year End Report FY 2009/10
Mr. Schell will review the year end plan status report.
Attachment
B. Current Status Report
Mr. Schell will review the current plan status report.
Attachment
C. Large Claims Audit
PRM engaged Healthcare Analytics, a division of Gallagher Benefits, to
perform an audit of BCBS medical plan claims administration service to
determine if their service quality was optimal. Attachment
D. Health Care Reform — 2011 Changes - Attachment
E. Cost Containment 2011/12 Renewal • -t et.LZ- k
The broker will discuss methods of cost containment for he 2011 renewal
F. Marketing Update
The broker will report on current efforts to recruit new members.
Attachment
4.A. PLAN STATUS REPORT
FY 2009/10
Public Risk Management of Florida
Status Report October 1, 2009 through September 30, 2010
January 21, 2011 Board Meeting
Medical Claims Status (Page 1)
Gross paid claims for the months of October through September totaled $36,314,896. Net paid
claims after pending specific reinsurance reimbursements totaled $35,08�,46�. The average net
claim cost per employee through the plan year was $677 and represents 5% crease over the
prior year ($645). Employee enrollment increases 3% during the plan year. Dependent
enrollment changes less than 1 %. The Pool's dependent to employee ratio is 35.9% slightly lower
than normal, but not uncommon to public sector in Florida. The health plan net claims cost
trended at a 5% increase over the prior plan year. Lower than the anticipated medical and
prescription drug trend of 10.5 %.
Medical and RX (Page 2)
Prescription drug costs for the plan year totaled $6,549,004. Average monthly employee cost
(including dependent) was $126.37. National average with demographics which would include a
slightly higher dependent participation would be about $120.00 PEP. PRM is running slightly
higher due to richer than normal benefits and lower than normal dependent participation.
Large Claims Information (Page 3)
Through the plan's twelve months, twenty six claims exceeded fifty percent of the specific
deductible of $200,000, and the total paid amount was $5,601,178. Anticipated reimbursements
total $1,229,427. This is the amount of money the plan will receive from ING (plan reinsurer) in
the form of reimbursements for claims in excess of the Pool's specific deductible. Billed charges
through September totaled $14,851,852 and represent Blue Cross & Blue Shield discounts
averaging 62.3 %.
Plan Results (Pages 4 & 5)
Net paid claims for the twelve months totaled $35,026,430. Fixed costs, which include Blue
Cross claims paying function and network access, specific and aggregate reinsurance costs,
conversion privilege for covered members who have exhausted C.O.B.R.A. and can't obtain
coverage through the standard market and Pool Consortium fees. These fixed costs totaled
$5,423,561, combined with the net paid claims totaled $40,449,991 in overall plan costs. Plan
funding which includes the premiums paid by participating members totaled $38,136,418
resulting in a plan deficit of $2,313,573. This deficit results from a cost per employee of $784 per
employee versus per employee funding of $739, or a per employee shortfall of $45.00.
Dental Plan (Page 9)
Paid dental claims through September totaled $744,979 with administrative fees of $77,979.
Total plan costs of $822,958 versus funding of $962,083 resulted in a plan surplus of $139,125.
PUBLIC RISK MANAGEMENT OF FLORIDA
MEDICAL CLAIM STATUS
October 1, 2009 - September 30, 2010
Total Participants
Total Paid Claims
Minus Anticipated Specific Recoveries
Net Paid Medical Claims
Average Medical Claim per Employee per Month
51,822
$36,314,896
$1,229,427
$35,085,469
$477
Plan Year
2009/2010
2008/2009
2007/2008
Oct -09
4,241
1,547
$ 2,585,577
Nov -09
4,321
1,549
$ 3,263,639
Dec -09
4,321
1,548
$ 3,220,773
Jan -10
4,321
1,542
$ 3,269,738
Feb -10
4,322
1,545
$ 2,901,330
Mar -10
4,332
1,553
$ 3,721,777
Apr -10
4,331
1,552
$ 3,362,067
May -10
4,311
1,548
$ 2,707,299
Jun -10
4,301
1,550
$ 3,253,199
Jul -10
4,315
1,549
$ 1,573,308
Aug -10
4,361
1,559
$ 2,913,359
Sep -10
4,345
1,543
$ 3,542,830
TOTAL
51,822
18,585
$ 36,314,896
Total Participants
Total Paid Claims
Minus Anticipated Specific Recoveries
Net Paid Medical Claims
Average Medical Claim per Employee per Month
51,822
$36,314,896
$1,229,427
$35,085,469
$477
Plan Year
2009/2010
2008/2009
2007/2008
2006/2007
Net Paid Claims
$35,085,469
$30,410,657
$25,958,442
$22,528,510
Number of Employees
51,822
47,115
42,181
40,268
Avg. Claim Cost/Emp /Mo.
$677
$645
$615
$559+
Plan Year
2005/2006
2004/2005
2003/2004
2002/2003
Net Paid Claims
$20,174,517
$16,783,438
$ 12,548,744
$9,023,204
Number of Employees
38,326
36,681
32,896
25,187
Avg. Claim Cost/Emp/Mo.
$526
$458
$381
$358
Page 1
PUBLIC RISK MANAGEMENTOF FLORIDA
MEDICAL AND RX CLAIM STATUS
October 1, 2009 - September 30, 2010
Page 2
Oct -09
$ 460,569
$ 2,125,008
$ 2,585,577
Nov -09
$ 609,249
$ 2,654,390
$ 3,263,639
Dec -09
$ 574,422
$ 2,646,351
$ 3,220,773
Jan -10
$ 480,597
$ 2,789,141
$ 3,269,738
Feb -10
$ 497,197
$ 2,404,133
$ 2,901,330
Mar -10
$ 661,486
$ 3,060,291
$ 3,721,777
Apr -10
$ 495,717
$ 2,866,350
$ 3,362,067
May -10
$ 549,606
$ 2,157,693
$ 2,707,299
Jun -10
$ 620,999
$ 2,632,200
$ 3,253,199
Jul -10
$ 416,334
$ 1,156,974
$ 1,573,308
Aug -10
$ 525,901
$ 2,387,458
$ 2,913,359
Sep -10
$ 656,927
$ 2,885,903
$3,542,830
TOTAL
$ 6,549,004
$ 29,765,892
$ 36,314,896
Page 2
PUBLIC RISK MANAGEMENT OF FLORIDA
LARGE CLAIMS INFORMATION
$200,000 Specific Deductible
October 1, 2009 - September 30, 2010
Cluua ut
Am0
In. . s
Spouse - Desoto (2)
Employee - Desoto (C2)
Employee - Desoto (2)
Spouse - Hendry County (R04)
Spouse - Sarasota Manatee Airport (8)
Employee - Okeechobee BOCC (R09)
Employee - Levy County BOCC (13)
Spouse - Levy County BOCC (13)
Spouse - Hamilton BOCC (15)
Employee - Hamilton BOCC (15)
Dependent - Hardee County BOCC (22)
Employee - Hardee County BOCC (22)
Employee - Eustis (C27)
Employee - Eustis (27)
Spouse - Eustis (27)
Employee - Taylor County BOCC (31)
Employee - Punta Gorda (44)
Spouse - Inverness (52)
Employee - Bartow (59)
Employee - Treasure Island (68)
Spouse - Temple Terrace (R70)
Employee - Temple Terrace (C70)
Employee - Eustis (76)
Employee - Long Boat Key (R80)
Employee - Madeira Beach (81)
Dependent - Hendry Sheriff (85)
$1,180,882
$398,815
$198,815
$400,503
$233,567
$33,567
$309,631
$139,421
$0
$338,031
$134,815
$0
$399,508
$192,004
$0
$362,011
$122,112
$0
$538,349
$130,399
$0
$1,405,968
$144,616
$0
$1,096,423
$438,964
$238,964
$368,757
$191,940
$0
$262,760
$114,245
$0
$260,273
$117,289
$0
$772,261
$295,146
$95,146
$297,517
$176,418
$0
$944,191
$502,812
$302,812
$204,159
$150,245
$0
$292,531
$145,662
$0
$569,066
$200,897
$897
$859,646
$177,140
$0
$776,658
$227,996
$27,996
$724,060
$248,995
$48,995
$294,936
$130,928
$0
$266,076
$116,939
$0
$695,262
$275,213
$75,213
$389,188
$187,576
$0
$843,207
$407,023
$207,023
Total
$14,851,852
$5,601,178
$1,229,427
Page 3
PUBLIC RISK MANAGEMENT OF FLORIDA
CURRENT STATUS REPORT
October 1, 2009 - September 30, 2010
I
Net Paid Claims
$ 35,026,430
II
Fixed Costs:
Blue Cross Medical Administration
$ 3,032,179
Specific Premium @ $200,000
$ 1,921,877
Aggregate Premium
$ 109,895
Conversion Premium
$ 33,536
Consortium
$ 326,074
Total Fixed Costs
$ 5,423,561
Total Plan Costs
$ 40,449,991
III
Plan Funding
$ 38,136,418
Surplus/Deficit
$ (2,313,573)
Enrollment
Employee
51,594
Dependent
18,556
IMPORTANT: This analysis is for illustrative purposes only, and is not a guarantee of future
expenses, claims costs, managed care savings, etc. There are many variables that can affect
future health care costs including utilization patterns, catastrophic claims, changes in plan
design, health care trend increases, etc. This analysis does not amend, extend, or alter the coverage
provided by the actual insurance policies and contracts. Please see your policy or contact us for specific
information or further details in this regard.
Page 4
PUBLIC RISK MANAGEMENT OF FLORIDA
PLAN PROJECTION
October 1, 2009 - September 30, 2010
I
Expected Paid Claims
$ 35,026,430
1)
II
Fixed Costs:
Blue Cross Medical Administration
$ 3,032,179
2)
Specific Premium @ $200,000
$ 1,921,877
3)
Aggregate Premium
$ 109,895
4)
Conversion Premium
$ 33,536
5)
Consortium
$ 326,074
6)
Total Fixed Costs
$ 5,423,561
Total Plan Costs
$ 40,449,991
III
Plan Funding
$ 38,136,418
7)
Surplus/Deficit
$ (2,313,573)
PRM Surplus Subsidy
$ 1,250,000
Surplus/Deficit
$ (1,063,573)
Footnotes
1) Actual through September + [$706.31 ($847.57 less 20% Corridor) x 3773 EEs) x 0 mos ]
2) Actual through September +[4,345 (EEs) x $58.77 x 0 mos]
3) Actual through September + [$37.25 (composite specific) x 4,345 (Ees) x 0 mos
4) Actual through September +[ $2.13 x 4,345 (Ees) x 0 mos]
5) Actual through September + [ 4,345 (EEs) x $0.65 x 0 mos]
6) Actual through September + [ 4,345 (EEs) x $6.32 x 0 mos]
7) Actual through September+ [ $3,183,182 (September funding) x 0 mos]
IMPORTANT: This analysis is for illustrative purposes only, and is not a guarantee of future
expenses, claims costs, managed care savings, etc. There are many variables that can affect
future health care costs including utilization patterns, catastrophic claims, changes in plan
design, health care trend increases, etc. This analysis does not amend, extend, or alter the coverage
provided by the actual insurance policies and contracts. Please see your policy or contact us for specific
information or further details in this regard.
Page 5
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co
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Glades County BCC
Punta Gorda
Okeechobee BCC
Desoto County
Hendry County
Hendry Sheriff
Longboat Key
Levy County BCC
Hamilton County BCC
City of Crystal River
South Florida Conservancy
Holmes County BCC
ccS
7
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Hardee County BCC
City of Eustis
City of Perry
City of Zephyrhills
Taylor County BCC
U
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Town of Belleair
City of Inverness
Okeechobee Utility Authority
City of Bartow
City of Moore Haven
N
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City of Belle Glade
City of Treasure Island
City of Temple Terrace
Town of Lady Lake
City of Madeira Beach
City of Indian Rocks Beach
Indian Shores
Town of Kenneth City
Total
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$25,032,200
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$2,901,330
$3,721,777
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$3,542,830
$36,314,896
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$32,886,564
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$43,922,773
ry
N
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NM
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4,321
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4,322
4,332
4,331 1
4,311 1
4,301
4,315 1
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4,345
51,822
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PUBLIC RISK MANAGEMENT OF FLORIDA
Dental Plan Current Status
October 1, 2009 - September 30, 2010
Net Paid Claims (Actual)
$ 744,979
(1)
Fixed Costs:
Blue Cross Claims Administration
$ 77,979
(2)
Total Plan Costs
$ 822,958
(3)
Plan Funding
$ 962,083
Plan Balance
$ 139,125
Footnotes:
1) Actual claims as reported by Florida Combined Life
2) 18,790 (Ees) x $4.15
3) Actual Funding as reported by the entities
IMPORTANT: This analysis is for illustrative purposes only, and is not a guarantee of future
expenses, claims costs, managed care savings, etc. There are many variables that can affect
future health care costs including utilization patterns, catastrophic claims, changes in plan
design, health care trend increases, etc. This analysis does not amend, extend, or alter the coverage
provided by the actual insurance policies and contracts. Please see your policy or contact us for specific
information or further details in this regard.
Page 9
PUBLIC RISK MANAGEMENT OF FLORIDA
Dental Plan Projection
October 1, 2009- September 30, 2010
Net Paid Claims
$ 744,979
(1)
Fixed Costs:
Blue Cross Claims Administration
$ 77,979
(2)
Total Plan Costs
$ 822,958
Plan Funding
$ 962,083
(3)
Plan Balance
$ 139,125
Footnotes:
1) Actual through September+ [ 1,503 (EEs) x $ 45.99 ($50.14 less $4.15) x 0 mos
2) Actual through September + [1,503 (EEs) x $ 4.15 x 0 mos]
3) Actual through September + [$77,293 (September Funding) x 0 mos]
IMPORTANT: This analysis is for illustrative purposes only, and is not a guarantee of future
expenses, claims costs, managed care savings, etc. There are many variables that can affect
future health care costs including utilization patterns, catastrophic claims, changes in plan
design, health care trend increases, etc. This analysis does not amend, extend, or alter the coverage
provided by the actual insurance policies and contracts. Please see your policy or contact us for specific
information or further details in this regard.
Page 10
10/1/09 - 9/30/10
N
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N N °
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69 69
4.B. CURRENT STATUS REPORT
10/1/10-11/30/10
Public Risk Management of Florida
Status Report October 1, 2010 through November30, 2010
January 21, 2011 Board Meeting
Medical Claims Status (Page 1)
Gross paid claims for the months of October and November totaled $5,418,360. The Specific
Deductible was increased to $300,000 at renewal and Blue Cross is not reporting any claims
exceeding 50% of the specific deductible through November. The average cl. ' •• _ : - .
em.lo ee through the first two months of the plan year is $$552 and rep
er the prior year ($,6Z7J Keep in mind, we are very early in - . , n e. sults
ctuate. Employee enrollment is up 16% from October of the prior plan year and
dependent enrollment increased 10.6% during the same period and mostly attributable to new
membership. The Pool's dependent to employee ratio is at 34.7 %, down slightly from 35.7% the
prior year.
sents an 18.5%
Medical and RX (Page 2)
Paid prescription drugs totaled $993,016 through the two months reported, with the average
monthly employee cost (including dependent) at $1101.25. Like the medical, costs are down over
the two months reported.
Large Claims Information (Page 3)
No claims in excess of fifty percent of the specific deductible have been reported.
Plan Results (Pages 4 & 5)
Net paid claims for the first two months totaled $5,418,360. Fixed costs, which include Blue
Cross claims paying function and network access, specific and aggregate reinsurance costs,
conversion privilege, NGE enrollment fees and Pool Consortium fees, totaled $917, 931. These
fixed costs combined with net paid claims totaled $$6,336,291. Plan funding which the premiums
are paid by participating members totaled $7,557,861 resulting in a plan surplus of $1,221,569.
This is a result of funding of $813 versus cost per employee of $752. Year end projection
includes both actual claims and fixed costs combined with anticipated claims and fixed costs for
the remaining ten months. Projected year end results with just two months of actual experience
illustrates expected paid claims of $39,935,648, fixed costs of $5,259,541 for a total of
$45,195,190. Plan funding is projected at $45,265,604 for a year end projected surplus of $70,414
not inclusive of the pool subsidy of $1,750,000.
Dental Plan (Page 9)
Paid dental claims through November totaled $114,260 with administrative fees of $11,595.
Total plan cost equaled $125,855 versus funding of $155,535 resulting in a plan surplus of
$29,680 through the two months reported. Year end projection illustrates total plan costs of
$817,286 and funding of $908,391 for an expected year end surplus of $91,105.
PUBLIC RISK MANAGEMENT OF FLORIDA
MEDICAL CLAIM STATUS
October 1, 2010 - November 30, 2010
Oct -10
Nov -10
Dec -10
Jan -11
Feb -11
Mar -11
I. ,
May -11
Jun -11
Jul -11
Aug -11
Sep -11
TOTAL
4 921
4 887
1 707
1 697
$ 2,943,132
$ 2,475,228
9,808
3,404
$ 5,418,360
Total Participants
Total Paid Claims
Minus Anticipated Specific Recoveries
Net Paid Medical Claims
Average Medical Claim per Employee per Month
9,808
$5,418,360
$0
$5,418,360
$552
Plan Year
2010/2011
2008/2009
2007/2008
2006/2007
Net Paid Claims
$5,418,360
$30,410,657
$25,958,442
$22,528,510
Number of Employees
9,808
47,115
42,181
40,268
Avg. Claim Cost/Emp /Mo.
$552
$645
$615
$559
Plan Year
2009/2010
2008/2009
2007/2008
2006/2007
Net Paid Claims
$35,085,469
$30,410,657
$25,958,442
$22,528,510
Number of Employees
51,822
47,115
42,181
40,268
Avg. Claim Cost/Emp/Mo.
$677
$645
$615
$559
Plan Year
2005/2006
2004/2005
2003/2004
2002/2003
Net Paid Claims
$20,174,517
$16,783,438
$ 12,548,744
$9,023,204
Number of Employees
38,326
36,681
32,896
25,187
Avg. Claim Cost/Emp/Mo.
$526
$458
$381
$358
Page 1
PUBLIC RISK MANAGEMENTOF FLORIDA
MEDICAL AND RX CLAIM STATUS
October 1, 2010 - November 30, 2010
Page 2
F
Oct -10
$ 536,283
$ 2,406,849
$ 2,943,132
Nov -10
$ 456,733
$ 2,018,495
$ 2,475,228
Dec -10
$ -
Jan -11
$ -
Feb -11
$ -
Mar -11
$ -
Apr -11
$ -
May -11
$ -
Jun -11
$ -
Jul -11
$ -
Aug -11
$ -
Sep -11
$ -
TOTAL
$ 993,016
$ 4,425,344
$ 5,418,360
Page 2
PUBLIC RISK MANAGEMENT OF FLORIDA
LARGE CLAIMS INFORMATION
$300,000 Specific Deductible
October 1, 2010 - November 30, 2010
Page 3
PUBLIC RISK MANAGEMENT OF FLORIDA
CURRENT STATUS REPORT
October 1, 2010 - November 30, 2010
I
Net Paid Claims
$ 5,418,360
II
Fixed Costs:
Blue Cross Medical Administration
$ 517,568
Specific Premium @ $300,000
$ 274,624
Aggregate Premium
$ 17,164
Conversion Premium
$ 6,375
NGE
$ 40,213
Consortium
$ 61,987
Total Fixed Costs
$ 917,931
Total Plan Costs
$ 6,336,291
III
Plan Funding
$ 7,557,861
Surplus/Deficit
$ 1,221,569
Enrollment
Employee
8,368
Dependent
2,952
IMPORTANT: This analysis is for illustrative purposes only, and is not a guarantee of future
expenses, claims costs, managed care savings, etc. There are many variables that can affect
future health care costs including utilization patterns, catastrophic claims, changes in plan
design, health care trend increases, etc. This analysis does not amend, extend, or alter the coverage
provided by the actual insurance policies and contracts. Please see your policy or contact us for specific
information or further details in this regard.
Page 4
PUBLIC RISK MANAGEMENT OF FLORIDA
PLAN PROJECTION
October 1, 2010 - September 30, 2011
I
Expected Paid Claims
$ 39,935,648
1)
II
Fixed Costs:
Blue Cross Medical Administration
$ 3,096,438
2)
Specific Premium @ $300,000
$ 1,642,984
3)
Aggregate Premium
$ 102,687
4)
Conversion Premium
$ 6,375
5)
NGE
$ 40,213
Consortium
$ 370,845
6)
Total Fixed Costs
$ 5,259,541
Total Plan Costs
$ 45,195,190
III
Plan Funding
$ 45,265,604
7)
Surplus/Deficit
$ 70,414
PRM Surplus Subsidy
$ 1,750,000
Surplus/Deficit
$ 1,820,414
Footnotes
1) Actual through November + [$706.31 ($847.57 less 20% Corridor) x 4887 EEs) x 10 mos ]
2) Actual through November +[ (4887 EEs) x $52.77 x 10 mos]
3) Actual through November + [$28.00 (composite specific) x (4887 EEs) x 10 mos
4) Actual through November +[ $1.75 x (4887 EEs) x 10 mos]
5) Actual through November + [4887 (EEs) x $0.65 x 10 mos]
6) Actual through November + [ (4887 EEs) x $6.32 x 10 mos]
7) Actual through November + [ $3,770,774 (November funding) x 10 mos]
IMPORTANT: This analysis is for illustrative purposes only, and is not a guarantee of future
expenses, claims costs, managed care savings, etc. There are many variables that can affect
future health care costs including utilization patterns, catastrophic claims, changes in plan
design, health care trend increases, etc. This analysis does not amend, extend, or alter the coverage
provided by the actual insurance policies and contracts. Please see your policy or contact us for specific
information or further details in this regard.
Page 5
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PUBLIC RISK MANAGEMENT OF FLORIDA
Dental Plan Current Status
October 1, 2010 - November 30, 2010
Net Paid Claims (Actual)
$ 114,260
(I)
Fixed Costs:
Blue Cross Claims Administration
$ 11,595
(2)
Total Plan Costs
$ 125,855
(3)
Plan Funding
$ 155,535
Plan Balance
$ 29,680
Footnotes:
1) Actual claims as reported by Florida Combined Life
2) ( 1379 EEs) x $4.15
3) Actual Funding as reported by the entities
IMPORTANT: This analysis is for illustrative purposes only, and is not a guarantee of future
expenses, claims costs, managed care savings, etc. There are many variables that can affect
future health care costs including utilization patterns, catastrophic claims, changes in plan
design, health care trend increases, etc. This analysis does not amend, extend, or alter the coverage
provided by the actual insurance policies and contracts. Please see your policy or contact us for specific
information or further details in this regard.
Page 9
PUBLIC RISK MANAGEMENT OF FLORIDA
Dental Plan Projection
October 1, 2010- September 30, 2011
Net Paid Claims
$ 748,462
(1)
Fixed Costs:
Blue Cross Claims Administration
$ 68,824
(2)
Total Plan Costs
$ 817,286
Plan Funding
$ 908,391
(3)
Surplus/Deficit
$ 91,105
Footnotes:
1) Actual through November + [ 1379 (EEs) x $ 45.99 ($50.14 less $4.15) x 10 mo:
2) Actual through November + [ 1379 (EEs) x $ 4.15 x 10 mos]
3) Actual through November + [$75,286 (November Funding) x 10 mos]
IMPORTANT: This analysis is for illustrative purposes only, and is not a guarantee of future
expenses, claims costs, managed care savings, etc. There are many variables that can affect
future health care costs including utilization patterns, catastrophic claims, changes in plan
design, health care trend increases, etc. This analysis does not amend, extend, or alter the coverage
provided by the actual insurance policies and contracts. Please see your policy or contact us for specific
information or further details in this regard.
Page 10
10 /1 /10 - 9/30/11 Composite
Policy Year: Aggregate Factors
Composite: $45.99
Coverages: Dental
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Paid Claims: $ 112,1561
Attachment Point: $ 128,496
Total Participants
Total Paid Claims
Average Dental Claim per Employee per Month
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Hendry County
Hendry Sheriff
Punta Gorda
Sarasota
Okeechobee
Desoto County
Town of Long Boat Key
Hamilton County
City of Wauchula
City of Perry
Town of Belleair
U
yazt
Holmes County
South Florida Conservancy
City of Moore Haven
City of Fort Meade
Total I
4.C. LARGE CLAIMS AUDIT
Healthcare Analytics
a Division of Gallagher Benefit Services, Inc.
Public Risk Management of Florida
PERFORMANCE EVALUATION
OF
BLUE CROSS AND BLUE SHIELD OF
FLORIDA' S
MEDICAL PLAN CLAIMS ADMINISTRATION
BETWEEN
OCTOBER 1, 2008 AND SEPTEMBER 30, 2009
CONDUCTED
NOVEMBER 2010
Draft
December 20, 2010
TABLE OF CONTENTS
Section
Executive Summary 1
Audit of Paid Claims 2
Exhibits 3
EXECUTIVE SUMMARY
Background
1 -1
Public Risk Management of Florida ( "PRM ") offers multiple group health plans to its
subscribers and their dependents. Blue Cross and Blue Shield of Florida ( "BCBSFL ") serves as
the medical plan's third party administrator.
PRM engaged the Healthcare Analytics division of Gallagher Benefit Services, Inc., to conduct
an independent assessment of BCBSFL's medical plan claims administration service between
October 2008 and September 2009 in order to determine if the quality of their administrative
service was at the optimal level. This report contains the findings and recommendations of the
performance evaluation.
Evaluation Overview
The primary goal of the claim audit was to examine individual, previously processed, claim
transactions in detail to determine if each was processed according to PRM's benefit provisions,
industry -wide processing guidelines, and BCBSFL's established policies and procedures.
The audit population was comprised of all PRM claims incurred and processed by BCBSFL
between October 2008 and September 2009. This included 89,810 claims with a paid total of
$23,615,416.
The audit sample was made up of the 100 claims with the highest paid amounts within the audit
population with a total paid amount of $4,086,601.
Given that the sample is not statistically valid, we cannot project the administrative and financial
error incidence rates or the percent of benefits paid in error from in the audit sample to the entire
audit population with any reliable statistical validity. The extrapolations included in this report
are provided for illustrative purposes only.
The audit was completed during an onsite visit to BCBSFL's administrative offices located in
Jacksonville, Florida from November 8th through 12th, 2010. A summary of our conclusions and
recommendations follows.
Conclusions and Recommendations
• We recorded a total of 5 overpayments amounting to $32,901.65 and 2 underpayments
totaling $784.62 across the 100 claims selected for this audit. There were no
administrative or procedural errors. These figures extrapolate to $194,659.93 on a gross
basis and $185,591.90 on a net basis, when statistically projected to the entire audit
population. Note that these extrapolated figures are for reference purposes only and do
not represent recoverable amounts.
• The administrative error rate quantifies the incidence of processing errors that result in no
measurable financial effect on the claim. We assigned no administrative errors on this
EXECUTIVE SUMMARY
audit. BCBSFL's measured performance in this category of 0.00% is well within the
industry performance standard of 5.00 %.
1 -2
• The financial error rate quantifies the incidence of processing errors that result in
measurable overpayments or underpayments. The financial error rate from this audit of
7.00% is significantly worse than the industry performance standard of 3.00 %.
• The percent of benefit dollars paid in error is the most significant metric in any audit. It
represents the measure of the percent of PRM's benefit dollars that were mispaid by
BCBSFL. For the purposes of this calculation, the absolute value of all financial errors
(overpayments plus underpayments) is used. BCBSFL's performance in this most
important error category of 0.824% is within the industry performance standard of
1.00 %.
• As part of this audit, we conducted an independent analysis of BCBSFL's claims
processing turnaround time. Our analysis shows that BCBSFL achieved an average
turnaround time of 8.8 calendar days over the audit period while processing 83% of the
claims handled during this period within 14 calendar days. On a business day basis,
BCBSFL averaged 7.0 days and processed 80% within 10 business days. Our analysis
also shows that BCBSIL processed 98% of all PRM claims within 21 calendar days,
exceeding the industry standard of 95 %, but that the 99% of claims BCBSIL processed
within 30 days fell short of the industry standard of 100 %.
• We found 4 errors that were caused by applying too much or too little to the deductible
and out of pocket limits. BCBSFL's explanation is that high amount claims are
calculated manually as part of their High Amount Guidelines. The policy as stated
applies to claims with allowable amounts in excess of $75,000 for institutional claims and
$10,000 for professional claims, but it appears that all claims with high submitted charges
are included even if the allowable amount is eventually determined to be lower than the
guideline amounts. The manually calculated claims are subject to a series of checkpoints
and levels of review.
Potentially, other claims continue to be processed while these claims are being held, with
the result that the calculated deductible and out of pocket amounts are no longer correct
when the claim is released. While this might sometimes be the case, it looked to us as if
the deductible and out of pocket accumulators were largely being overlooked or
miscalculated. We recommend that BCBSFL's High Dollar Audit procedures be
amended to stipulate that the deductible and out of pocket calculations must be adjusted
to be correct at the time the claim is processed.
We assume that the goal of the BCBSFL High Amount Guidelines, as for any
administrator, are to apply an extra layer of review to such critical high dollar claims in
order to ensure proper adjudication and payment. It appears that BCBSFL's guidelines,
by relying on manual procedures, may be having the exact opposite result.
EXECUTIVE SUMMARY
1 -3
• We also found that a system load error had caused some outpatient claims to be
processed without the appropriate deductible prior to 11/30/09, when the system was
reportedly corrected. Since this potentially affected many claims, including those outside
of the scope of this audit, we recommend that BCBSFL create a report quantifying the
financial impact and reporting how the overpayments were resolved.
AUDIT OF PAID CLAIMS
Claim Audit Objectives
The primary goal of the claim audit was to examine individual, previously processed, claim
transactions in detail to determine if each was processed according to the PRM benefit
provisions, industry -wide processing guidelines, and BCBSFL's established policies and
procedures. Each audited claim transaction was completely readjudicated and examined to
determine processing correctness in:
• Claimant and provider eligibility verification
• Detecting duplicate claim payments
• Evaluating the medical necessity of submitted charges
• Applying preexisting condition limitations
• Applying utilization review requirements
• Recognition of negotiated provider discounts
• Determination of prevailing fees
• Detecting other insurance coverage
• Applying coordination of benefits ( "COB ") provisions
• Applying plan design provisions
• Calculation of benefit payment amounts
• Honoring benefit payment assignments
• Completeness of file documentation and information to process claims
• Communicating to claimants about ineligible expenses
• Turnaround time
• Identification and submission of claims eligible for stop -loss coverage
2 -1
The audit was completed during an onsite visit to BCBSFL's administrative offices located in
Jacksonville, Florida from November 8th through 12th, 2010. Healthcare Analytics'
representative was Ellen Helm, Senior Auditor. Our primary contact at BCBSFL for this project
was Jim Beck, Director of External Audit. While onsite, we referred claims in question to Kelly
Jones, Specialist, Internal Audit, for substantiation of procedures and sign -off on all processing
errors. She was supported by Tammi Vicknair, Business Analyst.
Claim Audit Population
The audit population included all PRM medical plan claims that were incurred and processed
between October 1, 2008 and September 30, 2009. The audit population included 89,810 claims
with a total payment amount of $23,615,416 (see Exhibit 1).
Claim Audit Sample
We selected the claim audit sample by first aggregating all bill lines and adjustments for each
claim number into the total amount of dollars paid. We then selected the 100 claim numbers
with the highest paid amounts as our sample. A listing of the sample claim numbers and the
dollar values appears in this report as Exhibit 2.
The entire sample included 100 claims or audit observations with a total paid amount of
$4,086,601 (see Exhibit 3). While the sample includes only 0.11% of the claims in the audit
population, it represents 17.3% of the population's total payments.
AUDIT OF PAID CLAIMS
2 -2
Claim Audit Findings
Given that the sample is not statistically valid, we cannot project the administrative and financial
error incidence rates or the percent of benefits paid in error from in the audit sample to the entire
audit population with any reliable statistical validity. The extrapolations included in this report
are provided for illustrative purposes only. The audit results are measured against industry
standards of quality performance.
In this report, we separate our audit findings by error type and draw the following distinctions:
• Financial errors resulting in measurable overpayments or underpayments
• Administrative errors having no measurable financial effect on the claim — that is, errors
in spelling, coding, or statistics and/or errors having a financial effect that cannot be
exactly measured (i.e., failure to pursue a COB opportunity)
• Benefits paid in error measures the effect of the financial errors on the amount of benefit
payments
For each potential error uncovered during the audit, BCBSFL was provided with an opportunity
to provide additional information upon which we could agree to remove the error. Absent such
information, BCBSFL was asked to sign off on all remaining errors. We were able to reach
agreement with BCBSFL on the error status of 5 out of 7 of the audited claims. Exhibit 4 lists
each of the individual errors recorded on this audit.
A total of 7 claims out of the 100 audited medical claims had at least one error assigned. There
were 5 claims with overpayments and 2 with underpayments. BCBSFL has not agreed to the
assignment of 2 of the overpayments. Further details are provided later in this report.
Administrative Error Rate
The administrative error rate quantifies the incidence of processing errors that result in no
measurable financial effect on the claim. We assigned no administrative errors on this audit.
BCBSFL's measured performance in this category of 0.00% is well within the industry
performance standard of 5.00 %.
Administrative Error Rate
Administrative Error Rate
0.00%
Industry Standard
5.00%
Financial Error Rate
The financial error rate quantifies the incidence of processing errors that result in measurable
overpayments or underpayments. The financial error rate from this audit of 7.00% is
significantly worse than the industry performance standard of 3.00 %.
Financial Error Rate
AUDIT OF PAID CLAIMS
2 -3
Financial Error Type
Error Rate
Error Rate
Overpayments
5.00%
0.805%
Underpayments
2.00%
0.019%
Total Financial Error Rate
7
'
Industry Standard
3.00%
1.000%
Percent of Benefits Paid In Error
The percent of benefit dollars paid in error is the most significant metric in any audit. It
represents the measure of the percent of PRM's benefit dollars that were mispaid by BCBSFL.
For the purposes of this calculation, the absolute value of all financial errors (overpayments plus
underpayments) is used.
BCBSFL's performance in this most important error category of 0.824% is within the industry
performance standard of 1.00 %. In terms of total dollars, this error rate extrapolates to
$194,659.93 on a gross basis and $185,591.90 on a net basis, as shown below. Note that these
extrapolated figures are for reference purposes only and do not represent recoverable amounts.
Percent of Benefit Dollars Paid in Error
Financial Error Type
Error Rate
Projected
Dollar Value
Overpayments
0.805%
$190,125.92
Underpayments
0.019%
$4,534.02
Total Dollars Mispaid
0.824%
$194,659.93
Industry Standard
1.000%
$236,148.89
Turnaround Time
As part of this audit, we conducted an independent analysis of BCBSFL's claims processing
turnaround time (see Exhibit 5). Our analysis shows that BCBSFL achieved an average
turnaround time of 8.8 calendar days over the audit period while processing 83% of the claims
handled during this period within 14 calendar days. On a business day basis, BCBSFL averaged
7.0 days and processed 80% within 10 business days. Our analysis also shows that BCBSIL
processed 98% of all PRM claims within 21 calendar days, exceeding the industry standard of
95 %, but that the 99% of claims BCBSIL processed within 30 days fell short of the industry
standard of 100 %.
Error Details
We recorded a total of 5 overpayments amounting to $32,901.65 and 2 underpayments totaling
AUDIT OF PAID CLAIMS
2 -4
$784.62 across the 100 claims selected for this audit. There were no administrative or
procedural errors.
Insufficient Coinsurance Applied
Observation #5 was an inpatient hospital claim for a retired employee of PRM enrolled in the
BlueChoice Plan. The $90,619.66 in charges was adjudicated and payment of $69,833.18 was
released to the provider of services. The entire allowable amount of $69,833.18 was paid at
100 %. Our review of the claim revealed that the member was $191.35 short of meeting their
$1,500.00 out of pocket limit, therefore that amount should have been applied as coinsurance.
BCBSFL has agreed to an overpayment of $191.35, which they believe is a result of an examiner
failing to check on the out of pocket amount as of the date the claim was processed.
Insufficient Deductible and Coinsurance Applied
Observation #83 involved inpatient hospital services for a retired PRM employee in the
BlueChoice Plan. The $34,833.50 in charges went through adjudication and a payment of
$21,947.75 was made based on an allowable amount of $21,314.57 plus the access fee of
$633.18. When we audited the claim, we found that the $500.00 deductible had not been met
and that the out of pocket accumulator was short $695.61 of the $1,500.00 limit. As a result, the
claim was underpaid by $1,195.61. BCBSFL has declined to agree to this error because there
was a previous claim where the $500.00 deductible and the appropriate amount of coinsurance
should have been applied and were not. Our contention is that at the time this claim was
processed, the $500.00 deductible and $695.61 still needed to be applied.
Excess Coinsurance Applied
Observation #26 was an inpatient hospital claim for the newborn dependent of a PRM employee
in the BlueChoice plan. The $51,677.62 in charges was adjudicated and a payment of
$51,677.62 was sent to the provider of service. The payment was based on the DRG allowable
amount of $51,806.77 minus a $200.00 deductible and $770.74 in coinsurance. However, our
review of the member's account revealed that the out of pocket limit of $1,500.00 had already
been met. In fact, a total of $3,438.27 had been applied to the member's out of pocket amount
through several claims including this sample claim. We are charging an underpayment of
$770.74 because that was the amount applied on this claim. However, we recommend that the
out of sample claims that contributed to the excess out of pocket also be recalculated to correct
the additional underpayments. BCBSFL has agreed to the $770.74 underpayment on the sample
claim as well as additional underpayments made on out -of- sample claims.
Observation #92 involved inpatient hospital services for a retired PRM employee enrolled in the
BlueChoice Plan. The $68,677.00 in charges went through adjudication and a payment of
$22,422.24 was released to the provider of services. This payment was based on an allowable
amount of $23,109.79 with $687.55 applied to the out of pocket limit. Our review of the claim
determined that only $673.67 was needed to satisfy the $1,500.00 out of pocket amount, leading
to an underpayment of $13.88. BCBSFL has agreed to this underpayment and has attributed it to
a miscalculation by the examiner.
All 4 of the errors described above were caused by applying too much or too little to the
deductible and out of pocket limits. BCBSFL's explanation is that high amount claims are
calculated manually as part of their High Amount Guidelines. The policy as stated applies to
claims with allowable amounts in excess of $75,000 for institutional claims and $ 10,000 for
AUDIT OF PAID CLAIMS
2 -5
professional claims, but it appears that all claims with high submitted charges are included even
if the allowable amount is eventually determined to be lower than the guideline amounts. The
manually calculated claims are subject to a series of checkpoints and levels of review.
Potentially, other claims continue to be processed while these claims are being held, with the
result that the calculated deductible and out of pocket amounts are no longer correct when the
claim is released. While this might sometimes be the case, it looked to us as if the deductible
and out of pocket accumulators were largely being overlooked or ignored. We recommend that
BCBSFL's High Dollar Audit procedures be amended to stipulate that the deductible and out of
pocket calculations must be adjusted to be correct at the time the claim is processed.
We assume that the goal of the BCBSFL High Amount Guidelines, as for any administrator, are
to apply an extra layer of review to such critical high dollar claims in order to ensure proper
adjudication and payment. It appears that BCBSFL's guidelines, by relying on manual
procedures, may be having the exact opposite result.
Insufficient Copayment Applied
Observation #92 was a claim for outpatient hospital services for an employee of PRM who was
enrolled in the BlueCare Plan. The $51,762.74 in charges was adjudicated and a payment of
$20,571.61 was made to the provider of services. This payment represented the full allowable
amount for the services. According to the plan document, a copayment of $100.00 should have
been applied. BCBSFL agreed to this $100.00 overpayment. They reported that the system was
not initially loaded properly to apply the $100.00 copayment. The system was updated on
11/30/09 to correct impacted claims.
Since this was a systemic error which potentially affected many claims, we recommend that
BCBSFL create a report quantifying the financial impact and reporting how the overpayments
were resolved.
Provider Discount Calculated Incorrectly
Observation #32 was an outpatient hospital claim for the spouse of a PRM employee in the
BlueChoice Plan. The $85,903.31 in charges was adjudicated and a payment of $46,557.53 was
sent to the provider of service. BCBSFL's standard procedure is to list the bill lines for
outpatient services on an individual basis. In this instance, the examiner lumped all the bill lines
in a single entry, which caused the allowable expense to come up incorrectly. Had the lines been
entered correctly, the allowable amount payable would have been $46,544.84 instead of
$46,557.53, resulting in an overpayment of $12.69. BCBSFL has agreed to this $12.69
overpayment.
AUDIT OF PAID CLAIMS
2 -6
Primary Benefits Paid In Error
Observation #47 was an inpatient hospital claim for a PRM employee enrolled in the BlueChoice
Plan. The $59,186.50 in charges went through adjudication and a payment of $31,402.00 was
made to the provider of service. The employee had switched from active to retiree status as of
the date of service, 08/01/09, but BCBSFL was not notified until 09/28/09. Since the retired
employee was over 65, Medicare became primary as of 08/01/09. BCBSFL did not request a
refund of the overpaid amount, but the provider sent it back because they were also reimbursed
by Medicare. BCBSFL did not agree to this overpayment because the payment had already been
recovered. We are charging an error because the claim should have been recalculated when
BCBSFL was informed that the employee was retired and that Medicare was primary.
EXHIBITS
Exhibit 1: Population Statistics
Exhibit 2: Sample Listing
Exhibit 3: Sample Statistics
Exhibit 4: Error Listing
Exhibit 5: Turnaround Time Statistics
3 -1
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4.D. HEALTH CARE REFORM - 2011 CHANGES
PRM Group Health Trust
Compliance Update for 2011
The following provides a brief highlight on various welfare benefit compliance items of concern
for 2011. This summary is by no means an exhaustive list of the requirements that employers
and plan sponsors must meet.
Items Currently in Effect
Mandated Changes due to Healthcare Reform and Mental Health Parity: Due to the issuance
of new laws and regulations, all plans were updated as of October 1, 2010 to do such things as:
• eliminate of lifetime limits on essential benefits;
• provide coverage to children through the age of 26;
• eliminate of preexisting condition exclusions for children under 19; and
• satisfy the mental health parity requirements.
In addition, plans that are no longer "grandfathered" were updated as of October 1, 2010 to
do such things as:
• provide 1st dollar coverage for certain defined preventive services;
• provide certain patient protections impacting access to physicians and emergency care;
and
• update existing claims procedures and adding an external review process.
Flexible Spending Accounts: Effective January 1, 2011, medical FSAs can no longer reimburse
for over - the - counter medications.
Items with Delayed Effective Dates
W -2 Reporting of Value of Benefits — Under Healthcare Reform, the value of benefits was to be
included on the 2011 Form W -2 for employees. The IRS has suspended this reporting
requirement for 2011, so employers do not need to report the value of benefits on their
employees' Form W -2s.
Grandfathering
As you are all aware, the PRM Group Health Trust maintains numerous plan design options —
some of which are "grandfathered" and some of which are "non - grandfathered ". Prior to your
October 1, 2010 renewal, you all made decisions whether or not to retain your grandfathered
status for the plans you offer. If you retained your grandfathered status for some or all of your
plans, you will have to again go through the analysis prior to the October 1, 2011. Things that
might cause you to lose grandfathered status on a particular plan would be adding a new plan
option, or passing on too great a percentage of renewal increases to your employees.
Again, this is intended as a brief synopsis of things that have happened and things to come. We
will continue to keep you updated in the future.
4.F. MARKETING UPDATE
PRM MARKETING 2011
co
3
.5
Collecting data
Collecting Data
'Collecting Data
Date Proposal
Mailed to Group
Proposal Due
Date
Date Received
From Glen
I
Date Sent To Glen
Date Info. Recvd.
From Group
December
Pending
Pending
Effective
Date
1 -Oct
10/1/2011
10/1/2011
J
Current Carrier
cs.
Humana
c.•
Contact/Number/e-mail
Bill Kisker
Thomas Sharpe
Group
Central County Water District
City of Arcadia
City of Lighthouse Point
1/6/2011 PRM Marketing log 2010
PUBLIC RISK MANAGEMENT OF FLORIDA
GROUP HEALTH TRUST
REGULAR AGENDA SUMMARY
January 21, 2011
5. Next Generation Enrollment
Bradley Taylor, NGE
A. Update on Automated Enrollment & Billing Process
B. Request Board Approval to provide Dependent Audit Services for New
Members joining PRM Group Health Trust at a cost of $15 per audited
dependent. Funds available from surplus.
Board Action:
Approved
Denied
Deferred
Other
C. Introduction of new Florida Account Representative, Anna Smith
,R
r •2
(LqlLl'r��. T!
6-124.1-4 t
January 21, 2011
BlueCross BlueShield
of Florida
An Independent tiaansee o► the
Blue Croce and Shia Shield Assonance_
Saving Strident' and Buslmsses of Florida.
To: All PRM Members
RE: GRANDFATHERED & NON - GRANDFATHERED PLANS
The current product portfolio that Public Risk Management offers to its members contains both
Grandfathered plans and Health Care Reform Non - Grandfathered plans. Most PRM groups have either all
Non - Grandfathered or all Grandfathered plans in their individual group portfolios; however some groups
have a combination of both Non - Grandfathered and Grandfathered. While each specific plan offers its own
schedule of benefits, in general, there are a few key differences between Grandfathered and Non -
Grandfathered plans that are outlined as follows:
• Preventative /Wellness- Non - Grandfathered plans cover wellness at $0 cost share to the member.
With Grandfathered plans, the member will continue to pay the applicable cost share based on
location of service, (i.e. office visit copay).
• Diabetic Supplies -Under a Non - Grandfathered plan, all diabetic supplies are covered under the
Pharmacy benefit, and must be obtained through a participating retail pharmacy. Grandfathered
plans allow for diabetic supplies to be obtained through a DME provider (insulin /syringes can still be
obtained at a retail pharmacy).
• Extended Rx Supply -for members on maintenance medications, Non - Grandfathered plans will allow
for a 3 month supply to be filled at a retail pharmacy. Grandfathered plans will allow a 1 month
supply to be filled at a time.
• Specialty Drugs- Non - Grandfathered plans limit specialty drugs to a 30 day supply through Caremark.
Grandfathered plans allow specialty drugs to be covered up to a 90 day supply through PrimeMail.
PLEASE NOTE: Non - Grandfathered plans begin with a "0" preceding the plan number (i.e. HMO 042,
BlueOptions 03559, BlueChoice 0702)
PUBLIC RISK MANAGEMENT OF FLORIDA
GROUP HEALTH TRUST
REGULAR AGENDA SUMMARY
January 21, 2011
6. Blue Cross Blue Shield Report Robin MacDonald
E. 2011 Renewal Implementation Timeline — attachment
7. Election of Chairperson
The Board of Directors must elect a Chairperson to fill Paul Erickson's
vacancy for the 2 -year term that expires 9/30/12.
Phil Wickstrom anct Jennifer Valdes have indicated their willingness to serve
in this capacity. Bios attached.
Nominations will also be taken from the floor prior to election.
Board Action:
Chairperson
8. Board Member Items
The next meeting will be held at the Dan P. McClure Auditorium in Sarasota on April 15, 2011,
beginning at 10:00 a.m.
Public Comment: State full name and address. Discussion must be limited to a maximum of five (5)
minutes per person.
Adjournment
6.A. BCBS REPORT
2011 RENEWAL TIMELINE
Effective: October 1, 2011
Account Name: Public Risk Management
Implementation Timeline
RESPONSIBILITY
BCBSF and Public Risk
Management
BCBSF and Public Risk
Management
BCBSF and Public Risk
Management
BCBSF and Public Risk
Management
BCBSF and Public Risk
Management
BCBSF and Public Risk
Mana ement
BCBSF and Public Risk
Management
Public Risk Management
BCBSF
BCBSF and Public Risk
Management
BCBSF and Public Risk
Management
BCBSF and Public Risk
Management
STATUS
COMPLETED
TARGET
Week of 07/04/11
Week of 07/04/11
Week of 07/04/11
Week of 07/11/11
Week of 07/11/11
Week of 07/11/11
Week of 07/11/11
Week of 07/11/11
Week of 07/18/11
Week of 07/11/11
Week of 07/18/11
Week of 07/11/11
START
TARGET
Week of 07/04/11
Week of 07/04/11
Week of 07/04/11
Week of 07/04/11
Week of 07/04/11
Week of 07/04/11
Week of 07/11/11
Week of 07/11/11
Week of 07/11/11
Week of 07/11/11
Week of 07/11/11
Week of 07/11/11
E.
E-4
U
Complete initial meeting/call with Public Risk
Management
- Confirm contact information
- Schedule follow-u • calls
Obtain current group structure (divisions /locations)
*We should be made aware of all new entities at
this time. Cut off for adding new entities is
08/08/11.
Design new group structure
Begin review of Benefit Checklist for each plan
Discuss open enrollment needs and schedule
- Provide sample of enrollment materials
- Identify other support needs
Begin review of enrollment and billing
administration (Eli. ibili and Billie I Checklist)
Review and approve Benefit Summary
*At this stage final benefits should be elected and
all chan es should be communicated to BCBSF.
Review and approve additional enrollment
materials. Provide locations and mailing address
Order and mail enrollment materials to locations
Obtain approval of group structure
Cut off for adding new entities is 08/08/11.
Obtain approval of enrollment and billing (premium
or administrative services fee) administration
(Eligibility and Billing Checklist)
Confirm benefit plan details
* Final benefit decisions are required for this
Effective: October 1, 2011
Account Name: Public Risk Management
N
BCBSF and Public Risk
Management
BCBSF and Public Risk
Management
BCBSF and Public Risk
Management
BCBSF and Public Risk
Management
BCBSF and Public Risk
Management
BCBSF and Public Risk
Mana : ement
BCBSF and Public Risk
Management
BCBSF and Public Risk l
Management
Week of 07/25/11
Week of 07/11/11
Week of 09/05/11
Week of 07/18/11
Week of 07/25/11
Week of 07/25/11
.-■
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Week of 07/18/11
Week of 07/18/11
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step. This includes any special admin options or
Medicare products.
- Review benefit checklists with Public Risk
Management
- Identify benefit revisions, if any
o Submit benefit revisions for approval
Obtain approval of benefit plan details
* Cannot move forward without final benefits.
(Special Product Requests/Benefit Checklists)
Finalize date for receipt of enrollment information
*The final date to receive enrollment is 09/05/10
to insure timel enrollment and ID cards.
If automated enrollment
* This process needs to be complete by 09/05/11
- Send accepted data values
- Schedule and complete testing
If Administrative Services Only (ASO), review
Claims Administration checklist
Determine agreements to be signed and send to
Public Risk Management
- If ASO: Administrative Services Agreement
(ASA) with attachments
- FSA/HRA ASA A i eements, if a..licable
Review coordination of benefit process
*This only applies to new entities.
Review transition of coverage and case management
process
If ASO, review and finalize claims invoicing
N
Effective: October 1, 2011
Account Name: Public Risk Management
7. ELECTION OF CHAIRPERSON
Board Officers
Phil Wickstrom Bio
Jennifer Valdes Bio
PUBLIC RISK MANAGEMENT OF FLORIDA
GROUP HEALTH TRUST
BOARD OFFICERS
(10 -1 -10)
Vacant, Chairperson
Term: 10 -1 -10/12
Phil Wickstrom, Vice - Chairperson
Term: 10 -1 -09/11
Jane Long, Treasurer
Term: 10 -01 -10/12
(boardofficers 10- 1- 10.doc)
PHILIP WICKSTROM
HUMAN RESOURCES MANAGER
CITY OF PUNTA GORDA
326 West Marion Avenue
Punta Gorda, FL 33950
Please accept this as my request for consideration by the Public Risk Management Group
Health Trust Board to fill the vacant position of Chairman.
I have a broad base of experience from which to draw, including private and public sector risk
management, and health benefits design and administration. I have actively participated in the
Group Health Trust since 2002, both as a general member and as Vice Chairman of the Board. I
am extremely interested in serving as Chairman.
Prior to my appointment as Human Resources Manager with the City of Punta Gorda, I was
Human Resources Director and Risk Manager for the City of Wauchula. During my tenure
there, 1 was instrumental in the City of Wauchula becoming a member of the PRM Group Health
Trust. Since then, I have taken a very active role in Health Trust Board meetings and affairs, and
have aggressively promoted the Health Trust to other agencies with whom I regularly come into
contact. I have an excellent relationship with both the PRM staff and the staff at Gallagher
Benefit Services, Inc.
I continue to blend our employees' concerns regarding benefits design with a strong desire to
ensure fiscal responsibility and stability. I am not afraid to fight for what is best for the
employees covered by our plan offerings, yet I also understand the realities of today's health
coverage costs.
Once again, I am extremely interested in continuing to serve the PRM Group Health Trust as
Chairman. Thank you for your consideration.
Jennifer Valdes is the Human Resources Director and Risk Manager for the City
of Treasure Island. Through these roles, she is responsible for all human resources
functions, from recruiting and retention, contract negotiations, labor and
employee relations, benefits, risk management, safety, liability and workers
comp.
Prior to coming to Treasure Island, Jennifer was the Human Resources Officer for
the City of Gulfport for seven years, and also has worked in the private sector of
Human Resources. She also served as an active PRM board member on the
casualty program. She has worked with and been actively involved with PRM
for eight years, and has demonstrated her commitment to the program and its
members through her active roles and participation.
In addition, as the Human Resources Director for the City of Treasure Island, was
responsible for renewing the health insurance program. I had the opportunity to
review and analyze bids, as well as prepare a recommendation to the City
Manager, Commission and employees. Through this process I familiarized myself
with this program, and effectively communicated the benefits the PRM program
has to offer.
Jennifer holds a BA in Human Resources from the University of South Florida, and
a Masters of Business Administration from Florida Atlantic University. Additionally,
she is a nationally certified professional in Human Resources.
REVOLUTIONIZING BENEFITS ADMINISTRATION THROUGH PEOPLE, PROCESS AND TECHNOLOGY
PAGE 1
PRM Entity Timeline and Dependent Audit Process
• Pre -Audit Communication Work: Week of February 14, 2011
• Initial Letter announcing Audit mailed on: February 21, 2011 and therefore, the
start date for the Dependent Eligibility Audit
• First Automated Outbound Phone Call placed on: March 14, 2011
• Follow -up Letter mailed on: March 28, 2011
• Customized memo for each employee detailing what is outstanding (memo hand
delivered by Employer): April 11, 2011
• Second Automated Outbound Phone Call placed on: April 18, 2011
• Deadline for Employees to Postmark required documentation: April 22, 2011
• Date of mailing of Certified Letters detailing the fact that a dependent has been
removed from the medical plan: April 26, 2011
• Timing of appeals process for employees to postmark documentation: April 26,
2011 to May 6, 2011
• Recap meeting to discuss appeals and total value of removed dependents: Week of
May 9, 2011
Net
Generation
ENR011MENT,1NC
PRM Entity
February 21, 2011
«AddressBlock»
RE: Dependent Eligibility Audit
«GreetingLine»
As part of our efforts to provide quality health benefits while managing costs, PRM Entity is conducting a
Dependent Eligibility Audit. You are receiving this letter because you have dependents covered by PRM
Entity's medical, dental and /or vision plans and will need to respond by April 18, 2011. PRM Entity has
contracted with Next Generation Enrollment to perform this audit.
In order to verify the eligibility of your dependents under PRM Entity's benefit plans, please follow these
steps and respond as quickly as possible:
1. Read this letter carefully and note the deadline for compliance —April 22, 2011. Refer to the
Frequently Asked Questions and answers starting on page 3.
2. Review the eligibility language associated with our benefit plans on page 5. This wording explains who is
eligible under our insurance plans.
3. Once you understand our eligibility language, review the Documentation Requirements listed on page 6.
In order for you to verify eligibility and to continue to cover the dependents shown in the table on page
7, you must gather the necessary documentation as listed and you must provide what is
requested for ALL covered dependents.
4. We realize the sensitivity of the documents we are asking you to provide. To protect your information,
follow the instructions which include blacking -out personal information such as Social Security numbers
not needed for this audit. Next Generation Enrollment has taken the proper steps to safeguard your
documentation including the use of encrypted hard drives and secure servers. To avoid any potential
concerns you may have, please black -out all personal information that is not required to verify
your dependents.
5. Once you have gathered your documentation, complete the Dependent Eligibility Audit Remittance
Form (page 7) and if applicable, the Over -age Dependent Affidavit (page 8). For your convenience, these
two pages are printed front and back on green paper. Mail the green remittance form and your
documentation to Next Generation Enrollment.
6. If you are not able to provide the required documentation and your dependent is no longer eligible for
benefit coverage, please notify Next Generation Enrollment immediately. Effective that day, dependents
no longer eligible for coverage will be removed from the medical, dental and /or vision plans. PRM Entity
reserves the right to review the circumstances and benefit plan expenses paid for any ineligible
dependent(s) covered under our benefit plans. Any such expenses may be recouped and other
corrective action may be taken based upon the particular situation.
7. IF YOU CHOOSE NOT TO FULLY DOCUMENT A COVERED DEPENDENT, INSURANCE COVERAGE
WILL BE CANCELLED EFFECTIVE APRIL 22, 2011.
8. If you have questions about this audit or problems gathering your information, contact Next Generation
Enrollment at the number below. They are going to be your first source for answers and support. Next
Generation Enrollment's hours of operation are from 8 a.m. to 8 p.m. ET Monday- Friday.
Next Generation Enrollment
Dependent Audit Processing Center — PRM Entity
455 Pettis Ave. SE
PO Box 527
Ada, MI 49301
(888) 266 -1732 (toll -free phone)
Thank you for your cooperation and assistance with this Dependent Eligibility Audit.
Sincerely,
Person's Name
Person's Title
PRM Entity
Page 2 of 8
J
FREQUENTLY ASKED QUESTIONS
Q: What is a Dependent Eligibility Audit and why did I receive this letter?
A: A Dependent Eligibility Audit requires all employees who have dependents covered under our medical,
dental and vision benefit plans to provide proper documentation to verify the eligibility of dependents
covered by the PRM Entity's medical, dental and vision plans. It is a way to make sure that PRM Entity
provides benefits to only those who are eligible. To make sure covered dependents are eligible under PRM
Entity's plan, you will need to provide the necessary documentation.
Q: Why is PRM Entity conducting a Dependent Eligibility Audit?
A: Providing quality benefits to our employees is an important part of our strategy that focuses on our
people and our culture. To sustain a quality and comprehensive plan, we must act as good stewards by
ensuring eligibility requirements are met for these benefits. Simply enrolling a dependent in the health plan
is not proof of dependent eligibility. The audit is a very important component of controlling the cost of
health benefits for our employees and for maintaining the integrity of the PRM Entity plan. The Board is
required to verify that all health insurance plan premiums are being spent on only those that are eligible.
Q: Who is Next Generation Enrollment?
A: Next Generation Enrollment is an independent audit group working with PRM Entity to conduct and
manage the audit process. Look for these logos in the communication mailings.
Net
Generation
ENROLLMENT, INC
DOCUMENTATION REQUIREMENTS /AUDIT PROCESS
Q: What do I do if I am having trouble getting my documentation?
A: You can contact the Next Generation Benefit Center toll -free at (888) 266 -1732 to discuss your issue with
a representative. The representative will instruct you on where to obtain required documentation and how to
order new documents if needed.
Q: How can I be sure that my documents are secure during this process and what happens to my
documentation once the audit is complete?
A: Next Generation Enrollment takes a number of precautions to assure the security of all Dependent Audit
materials. All personal information will be treated as confidential and sensitive documents will be stored in a
safe and secure manner. Upon receipt, all documentation is scanned and stored electronically on a password
protected and encrypted server. The paper documentation is stored securely until the completion of the
audit at which time it will be shredded and destroyed.
Q: Can I fax or email the documentation to the Benefit Center?
A: The information needs to be sent via mail for more accurate reporting. If you are concerned about
receipt of documents, consider certifying your letter through the U.S. Post Office.
Q: Can electronically submitted tax returns be submitted as verification documentation?
A: Yes. A printout of page one of your electronically submitted tax return showing your claimed
dependent(s), along with a printout of the Certificate of Electronic Filing is acceptable documentation.
Q: What happens if I don't return the required documentation before the deadline?
A: It is very important that you return the required documents on time. If you do not return the required
documentation, coverage for your dependents will be terminated effective April 22, 2011.
Page 3 of 8
Q: Will I receive confirmation once my documentation is received?
A: Yes. Next Generation Enrollment will mail or email (if an email address is provided) a confirmation notice
once your verification is complete. If your documentation was processed but was determined to be
incomplete, Next Generation Enrollment will send a notice to you explaining the reason why.
Q: Getting and sending the required documents will be an inconvenience for me—is it really going to
be worth it in cost savings for PRM Entity?
A: Many public entities have experienced significant cost savings because of dependent audits. Dependent
audits have proven to be a prudent operating procedure and administrative best practice. PRM Entity
continues to look for effective strategies to control health benefits costs, so that the health benefits program
remains affordable and sustainable for our employees. We need your participation, time, and support to help
us achieve this goal
ELIGIBILITY REQUIREMENTS
Q: How will the new healthcare reform legislation impact dependent eligibility?
A: Effective October 1, 2010 dependent children up to age 26 became eligible for medical coverage
regardless of their student status, marital status or residency.
Q: What if I have a dependent insured under my plans who is no longer eligible?
A: If you have a dependent insured on your benefit plans who is not eligible, you will need to report that to
Next Generation Enrollment as soon as possible by sending in the remittance form indicating your
dependent is ineligible. This will allow you to explore different coverage options including COBRA, if
applicable.
Q: I am required to cover my divorced spouse under court order. How do I do this if my spouse is
considered ineligible?
A: A divorced spouse does not qualify as a dependent and, therefore, may not be covered as a dependent
under the plan. He /she may be eligible for COBRA coverage. Contact your HR department for information.
Q: My dependent child works for PRM Entity. Can I still cover him /her?
A: If your child was hired as an employee who is eligible for benefits then he /she must enroll for his /her
own coverage and cannot be considered a dependent on your plan.
CONTACT INFORMATION
Q: Who do I call if I have questions?
A: You can call the Next Generation Benefit Center toll -free at (888) 266 -1732.
Page 4 of 8
ELIGIBILITY LANGUAGE FOR PRM'S MEDICAL PLANS - NON -
GRANDFATHERED
Eligible Dependents include:
• The Employee's Spouse
• The Employee's:
o Natural children;
o Stepchildren;
o Children placed for adoption, legally adopted children, and foster children;
o Children for whom either the cardholder or cardholder's spouse is the legal guardian or
custodian; or
o Any children who, by court order, must be provided health care coverage by the cardholder or
cardholder's spouse.
To be considered Eligible Dependents, children's ages must fall within the age limit.
a. Has reached the end of the Calendar Year in which he or she becomes 26, but has not reached the
end of the Calendar Year in which he or she becomes 30 and who:
i. Is unmarried and does not have a dependent;
ii. Is a Florida resident or a full -time or part -time student;
iii. Is not enrolled in any other policy or plan
iv. Is not entitled to benefits under Title XVII of the Social Security Act; and
v. When:
a. Enrolling for the first time under the Covered Employee's policy after the end of the Calendar
Year in which he or she becomes 26; or
b. Re- enrolling after the end of the Calendar Year in which he or she becomes 26 with no gap in
Creditable Coverage longer than 63 days.
b. In case of the handicapped dependent child, such child is eligible to continue coverage, beyond the
limiting age of 30 as a Covered Dependent if the dependent child is:
i. Otherwise eligible for coverage under the Group Health Plan;
ii. Incapable of self- sustaining employment by reason of mental or physical handicap; and
iii. Chiefly dependent upon the Covered Employee for support and maintenance provided that the
symptoms or causes of the child's handicap existed prior to the child's 30th birthday.
This eligibility shall terminate on the last day of the month in which the dependent child no longer
meets the requirements for extended eligibility as a handicapped child.
• The newborn child of a Covered Dependent child. Coverage for such newborn child will automatically
terminate 18 months after the birth of the newborn child.
Note: If a Covered Dependent child who has reached the end of the Calendar Year in which he or she becomes 30 and has a
dependent of his or her own (e.g., through birth or adoption), such newborn child will not be eligible for this coverage
and the Covered Dependent child will also lose his or her eligibility for this coverage. It is the Covered Employee's sole
responsibility to establish that a child meets the applicable requirements for eligibility. Eligibility will terminate on the last day
of the month in which the child no longer meets the eligibility to be an Eligible Dependent.
Page 5 of 8
REQUIRED
DOCUMENTATION
PLEASE PROVIDE COPIES, NOT ORIGINAL DOCUMENTS.
They will not be returned to you. Black -out Social Security numbers on all documents.
Your information will be kept confidential.
Spouse
Husband/Wife
Submit the following:
• Copy of marriage certificate (not license)
OR
• Copy of 2009 federal tax return showing employee and
spouse (SUBMIT FRONT PAGE AND SIGNATURE PAGE
ONLY)
AND
• Signed and dated Remittance Form (page 3)
Birth and Adopted Dependent Child(ren)
All Children who have not reached the end of the
Calendar Year in which they become 26
Submit one of the following:
• Copy of birth certificate
OR
• Copy of adoption papers
OR
• Copy of amended birth certificate naming the employee as
the parent
AND
• Signed and dated Remittance Form (page 3)
Dependents who have reached the end of the Calendar
Year in which they become 26 but have not reached
the end of the Calendar Year in which they become 30
Submit one of the following:
• Copy of birth certificate
OR
• Copy of adoption papers
OR
• Copy of amended birth certificate naming the employee as
the parent
AND
• Demonstrate your child's dependency through ONE of the
following methods
1. Official school schedule for 2011 spring
semester listing child's name. Online printout is
acceptable.
2. Proof of residency showing that the child
resides in Florida (i.e. driver's license, letter addressed to
child from school, cell phone bill, etc.)
AND
• Signed and dated Remittance Form (page 3)
• Signed and dated Over -age Dependent Affidavit (page 4)
Other Dependents
Totally and Permanently Disabled
Submit all of the following that apply:
• Physician letter with a Statement of Total and Permanent
Disability, completed and signed by the dependent's
physician (stamped signature not acceptable)
• Current proof of residency for child
• Copy of SSI award if eligible
• Birth certificate
• Signed and dated Remittance Form (page 3)
• Signed and dated Over -age Dependent Affidavit, if
applicable (page 4)
Court Appointed Dependent(s) — (Legal Guardian,
Foster Child(ren), Court- ordered) who have not reached
the end of the Calendar Year in which they become 26
Submit the following:
• Current court order dated within 90 days of this letter
• Signed and dated Remittance Form (page 3)
Court Appointed Dependent(s) — (Legal Guardian,
Foster Child(ren), Court- ordered) who have reached the
end of the Calendar Year in which they become 26 but
have not reached the end of the Calendar Year in which
they become 30
Submit the following:
• Current court order dated within 90 days of this letter
• Demonstrate your child's dependency through ONE of the
following methods
1. Official school schedule for 2011 spring
semester listing child's name. Online printout is
acceptable.
2. Proof of residency showing that the child resides
in Florida (i.e. driver's license, letter addressed to child from
school, cell phone bill, etc.)
AND
• Signed and dated Remittance Form (page 3)
• Signed and dated Over -age Dependent Affidavit (page 4)
PLEASE DO NOT PROVIDE ORIGINAL
DOCUMENTS.
They will not be returned to you.
Page 6 of 8
PRM DEPENDENT AUDIT DOCUMENTATION REMITTANCE FORM
MAKE SURE TO RETURN THIS PAGE WITH YOUR DOCUMENTATION
Please submit the required documentation for your eligible dependent(s) along with this page and return it to
human resources. If one of your dependents should be removed from coverage, put a check mark in the
appropriate column of the table below which best describes your situation. Lastly, if you wish to be informed
through email when your documentation is received and audited, you may provide your email address below.
Your documentation must be submitted by April 22, 2011.
Employee Name: «First_Name» «Last_Name»
Email Address:
Covered Dependent(s):
Relationship
First Name
Date of Birth
Remove Dependent*
«DependentlRelationship»
«DependentlFirstName»
«DependentlDOB»
1.
❑
2.
❑ 3.
❑
4.
❑
« Dependent2Relationship»
« Dependent2FirstName»
«Dependent2DOB»
1.
❑
2.
❑ 3.
❑
4.
❑
« DependentlRelationship»
« DependentlFirstName»
«Dependent3DOB»
1.
❑
2.
❑ 3.
❑
4.
❑
« Dependent4Relationship»
« Dependent4FirstName»
«Dependent4DOB»
1.
❑
2.
❑ 3.
❑
4.
❑
« Dependent5Relationship»
« Dependent5FirstName»
«Dependent5DOB»
1.
❑
2.
❑ 3.
❑
4.
❑
« Dependent6Relationship»
« Dependent6FirstName»
«Dependent6DOB»
1.
❑
2.
❑ 3.
❑
4.
❑
*Please note those dependents you want to remove according to the below reasons:
1. Divorce
2. Child is not eligible
3. Not a legal guardian
4. Other. Please specify for each dependent:
I, «First_Name» «Last_Name », certify that the above information pertaining to my dependents is accurate and truthful. I
understand that all benefits will be revoked and I may be charged with any associated claims costs and that PRM may seek
legal action against me if it is determined at a later date that I intentionally misrepresented the details of my dependents and
their medical insurance eligibility.
Employee Signature Date
(Please see the Over -age Dependent Affidavit on the reverse side of this page)
Page 7 of 8
OVER -AGE DEPENDENT AFFIDAVIT
This page is only applicable if you are insuring a dependent child who has reached the end of the Calendar Year
in which he or she becomes 26 but has not reached the end of the Calendar Year in which he or she becomes 30.
I, «First_Name» «Last_Name », declare that the following statement is true and correct:
If my covered child has reached the end of the Calendar Year in which he or she becomes 26, but has not reached
the end of the Calendar Year in which he or she becomes 30, I certify that my child:
• Is unmarried and does not have a dependent;
• Is a Florida resident or a full -time or part -time student;
• Is not enrolled in any other policy or plan
• Is not entitled to benefits under Title XVII of the Social Security Act:
In the case of a disabled dependent child, such child is eligible to continue coverage, beyond the limiting age of
30 as a Covered Dependent if the dependent child is:
• Otherwise eligible for coverage under the Group Health Plan;
• Incapable of self- sustaining employment by reason of mental or physical handicap; and
• Chiefly dependent upon the Covered Employee for support and maintenance provided that the symptoms
or causes of the child's handicap existed prior to the child's 30th birthday.
Based upon the current facts and circumstances, any dependent child(ren) who has reached the end of the
Calendar Year in which he or she becomes 26 but has not reached the end of the Calendar Year in which he or she
becomes 30 identified as a covered dependent on the reverse side of this page (the "PRM ENTITY DEPENDENT
AUDIT DOCUMENTATION REMITTANCE FORM "), is an eligible dependent for purposes of the medical plan and
such individual is in one of the above eligible classes of dependents. By signing below, I also understand that
coverage for me and /or my covered family members under the Plan may be rescinded retroactively if I make an
intentional misrepresentation of fact or if I perform an act, practice or omission which constitutes fraud.
Employee Signature Date
Page 8 of 8