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PEBB Board Meeting Minutes, August 15, 2006
Public Employees’ Benefit Board
Tuesday, August 15, 2006 12 p.m. to 4:30 p.m. - Minutes
PEBB Board Room
775 Court St NE, Salem OR
Approved 19/19/2006
Board MembersPresent
Diane Lovell, Chair
Peter Callero
David Hartwig
Rocky King
Sue Nelson
Paul McKenna
Rich Peppers
Jeanene Smith

PEBB Staff Present
Bobbie Barott
Lisa Krois
Lydia Lissman
Zue Matchett
Scott Smyth
Rebecca Sweatman
Jean Thorne
Consultants Present
Pam Hodge, Aon
Dennis Monagham, Aon
Dennis Tierney, Aon
Guests Present
Sally Hill, Providence Health Plans
Gordon Hoberg, ODS
Diana Jones, Regence BCBSO
Kelley Kaiser, Samaritan Health Systems
Bill Lindekugel, Kaiser Permanente
Scott Loftin, ODS
Renee Mcdonald, Regence BCBSO
Megan Myrick, Willamette Dental
Stephen Petruzelli, Willamette Dental
Paul Pfinster, AFLAC
David Scearce, The Standard Insurance Co.
Dr. Joe Siemienczuk, Providence Health Plans
Diane Skutack, BenefitHelp Solutions
Kim Waldroff, BenefitHelp Solutions
Ryan Webster, Providence Health Plans
Denise Yunker, Oregon University Systems
Welcome and Approval of Minutes
Operations Subcommittee Report
Member Appeal
Update on Flexible Spending Accounts
Wellness Update
Implementing the Vision – Discussion with Kaiser
Parameters for Review of Opt-Out
Disposition of ODS Stabilization Fund
Federal Reporting on Post-Employment Benefits
Health Risk Assessments
General Public Comment
Other Business
Welcome and Approval of Minutes
Diane Lovell called the meeting to order.  Rocky King moved to approve the minutes from the July 18, 2006 meeting.  Rich Pepper seconded the motion.  The motion passed unanimously.
Diane Lovell announced her appointment of Sue Nelson to the Operations Subcommittee.  Diane is resigning from membership on the subcommittee, although she intends to continue attending the meetings.
Operations Subcommittee Report
Paul McKenna provided an overview of the Operations Subcommittee meeting.  The Subcommittee is recommending the Board adopt administrative rule changes.  Board attachment 2 (doc) outlines changes to OAR 101-040-0080.  This rule allows PEBB and agencies to correct errors made by the employee when selecting benefits and errors that occur due to processing.  The proposed changes will update portions of the rule that are obsolete with the implementation of pebb.benefits, will simplify language, will streamline the process for members and agencies and improve overall customer service.  Specifically, it will: 1) reduce the time period for correcting employee errors beyond the eligibility or QSC date to a maximum period of 90 days rather than 120 days; and 2) allow employees 30 days from receipt of the first pay check of the new plan year or benefit summary to correct errors, rather than 60 days from the first of the new plan year.
David Hartwig seconded the Subcommittee’s motion.  The motion passed unanimously.
Board attachment 3 (doc) outlines changes to OAR 101-020-0040.  The changes improve readability, delete excessive wording and eliminate unnecessary references to other OARs.  Under the current rules, although members can retroactively enroll a newborn up to their first 12 months of life, it specifies that if that enrollment does not occur within the first 60 days, the enrollment needs to be appealed to PEBB.  The proposed change will allow agencies to make the retroactive enrollment without an appeal to PEBB.
Rocky King seconded the Subcommittee’s motion.  Rich Peppers asked whether this shifts workload to the agencies.  Lydia Lissman explained that it makes it easier on the member.  The Agency Advisory Committee supports this change.  Hearing no further discussion, the motion passed unanimously.
Paul McKenna indicated that the Subcommittee also recommends an amendment to the contract with Saber Consulting for work on pebb.benefits.  This contract was formerly held by DAS IRMD, although paid by PEBB.  The contract is now directly between PEBB and Saber.  The contract allows for one-year extensions.  The Subcommittee is recommending a one-year extension with corresponding funding.
David Hartwig seconded the motion.  The motion passed unanimously.
Member Appeal
Lydia Lissman reviewed Board attachment 4, which outlines an appeal to the Board from a member whose appeal had previously been denied by the Operations Subcommittee.  The member lives and works outside the Kaiser service area and has for 2 ½ years but had mistakenly been allowed to remain with Kaiser coverage.  The employing agency discovered the error and reported it to a PEBB Benefit Analyst in February 2006.  PEBB staff contacted the member requesting that he enroll in the Regence plan.  Since February, the member appealed three times to administrative staff.  The staff denied the request, but allowed the member to remain on the plan through August 31, 2006 in order to find new providers and coordinate the change of service.  The member appealed this determination to the Operations Subcommittee in June.  The Subcommittee denied the member’s request to remain on the Kaiser plan through the year.  The member is now requesting a full Board decision on an appeal, asking to remain on the Kaiser plan through the 2006 plan year.  OAR 101-020-0030 requires that members who move out of the service area must reenroll in medical or dental insurance coverage in the new location within 60 days of the date the eligible individual changes residence.
Rocky King moved to uphold the decision of the Operations Subcommittee and deny the appeal.  Sue Nelson seconded the motion.  The motion passed unanimously.
Update on Flexible Spending Accounts
Lydia Lissman reviewed Board attachment 5 (doc), which provides an overview of participant activity in the Health Care and Dependent Care FSAs.  Of the $113,665 cost paid to the Third-Party Administrator for administration of the program in 2005, $55,754 was funded through the Stabilization Fund ($200,000 was transferred from the Stabilization Fund in 2005 to help offset administrative costs).  At this time, PEBB staff is projecting that sufficient cash will be available (including the transferred funds) to cover administrative costs through 2007, although those projections are subject to change. 
Jeanene Smith asked whether other employers establish a minimum contribution level for participants.  Scott Smyth noted that the federal government (as an employer) has a minimum of $250 per year.
Diane Lovell asked that this item be scheduled for discussion next spring so that the Board can revisit the issue of administrative costs for 2008.
Wellness Update
Lisa Krois presented an update on worksite screenings (Board attachment 6 doc).  Phase I areas (where only Regence is available) have begun screenings.  Seven have been held to date, with another 20 scheduled.  They have each averaged 30 employees being screened.  Phase II areas (with multiple health plans) are being scheduled for September and October.  At the suggestion of the Council of Innovators, an exit survey is being conducted of employees participating to better assess the value of the screenings.  Flu shot clinics will then be scheduled for October and November.
Peter Callero asked whether we know what percentage of employees are taking advantage of the screenings.  Lisa will get that information.  Rocky King asked what type of coaching occurred at the end of the screenings.  Lisa explained that participants will be given information linking them to resources from their particular plan.  Rich Peppers asked when findings from the survey will be available.  They will be available after Phase II.
David Hartwig mentioned the Statewide Safety and Wellness Leadership Initiative that is being undertaken.  The primary focus is on safety and workers’ compensation costs, but the agency heads who are part of the leadership committee have also indicated a need to link to employee wellness. 
Implementing the Vision – Discussion with Kaiser
Bill Lindekugal introduced Dawn Hayami, Kaiser’s Director of Population Care, and Gary Morgan, Vice President for Products and Business Development.  Gary discussed the bigger picture of working with PEBB.  He noted that the Board’s Vision is focused on integrating care, improving patient safety and saving money.  These are all areas in which Kaiser has extensive experience.  He indicated that Kaiser sees technology as a critical means to help meet those objectives.
Dawn Hayami presented information on the information technology tools being made available to Kaiser Permanente physicians.  The Electronic Medical Record (EMR) includes evidence-based decision supports built into it.  The evidence base is determined by Kaiser’s Care Management Institute, which is a national investment focused on moving evidence into practice.  Kaiser also has implemented kp.org for members; about 30% of members in this region have now registered.  Kaiser is now focusing on providing technological supports that will allow providers to get to the right patient information more quickly, including allowing providers to see their performance and patient needs across their patient load.  It will enable the provider team to do more outreach and coordination of patient care.
It was noted that Kaiser is seeing upswings in secured e-mails with providers; on-line appointment-setting will roll out later this year.  They are also looking at how they can better integrate the Added Choice product with Kaiser.  Challenges in working with PEBB include getting data to us and understanding how Pay-for-Performance (P4P) might work in a system where physicians are salaried.  Kaiser is focusing on what PEBB is trying to accomplish with P4P, rather than on the mechanism itself.
Jean Thorne asked about the status of the Added Choice product in this market.  Gary Morgan indicated that they are seeing growth beyond their initial expectations.  Kaiser currently has about 13,000 enrolled in Added Choice in this market, up from 9,000 18 months ago.  It is a key part of Kaiser’s strategy.  Over time, about 80% of enrollees utilize tier one exclusively.
Parameters for Review of Opt-Out
Jean Thorne reviewed Board attachment 7 (doc).   The opt-out policy has not been reviewed for several years, so the Board wanted to review it for 2008, both in terms of performing due diligence and to assess the policy’s alignment with the Board’s Vision and statutes.  The Board utilized this issue in the morning work session as a way to define the types of information it needs before making a decision on the policy.  Staff will bring back an interim report in December with the information requested, including an analysis of the options, their implications and a recommendation.  At that time, the Board will determine what stakeholders it needs to solicit input or feedback from.  A final report and recommendations would then be scheduled for February 2007.
Disposition of ODS Stabilization Fund
Lydia Lissman reviewed Board attachment 8 (revised) (doc) concerning the ODS Stabilization Fund.  ODS maintains a reserve fund on behalf of PEBB.  Under the ODS contract, ODS places premiums not expended during the contract year into the reserve fund.  This is then available for PEBB to use to offset future premium increases or to use in other ways within PEBB’s statutory authority.  It can be transferred to PEBB at any time.  ODS will become a self-insured plan with PEBB beginning in 2007, so the Board needs to determine the disposition of the PEBB reserve fund account held by ODS.  As of the end of 2005, the amount in the reserve was $10,910,472.
Staff recommends retaining $4 million in the ODS reserve fund at this time to establish an operating claim reserve account, with the balance to be transferred to PEBB.  This will mean that PEBB staff would not need to deal with weekly transfers.  Staff further recommends that PEBB work with ODS on a fund transfer process that will be mutually agreeable, since funds are currently invested by ODS.  The contract permits PEBB to call for the transfer at any time, but ODS requests a minimum of 60 days’ notice to facilitate liquidation of its investments.  Staff also recommends delaying a decision on any additional reserve from 2006 until ODS, PEBB staff and Aon have determined a method for handling claims run-out from the fully-insured contract and for any other transition issues identified.  (The 2006 reserve amount will be determined in April 2007.)
In response to a question, Lydia indicated that the interest rates PEBB receives were the same whether invested by ODS or by the State Treasury.  David Hartwig asked how the $4 million amount was determined.  Lydia indicated that claims are running at $1.5 million per month.  If an amount that high is determined not to be necessary, then an additional amount could be transferred.
Rocky King moved the staff recommendation, but with the transfers occurring before the end of the year, with 60 days’ notice.  David Hartwig seconded the motion.  Hearing no further discussion, the motion passed unanimously.
Federal Reporting on Post-Employment Benefits
Dennis Monaghan of Aon Consulting reviewed Board attachment 9 (ppt).  New federal requirements call for actuarial reporting by state and local governments on retiree health benefits.  Although PEBB retirees self-pay for their health benefits, the fact that their claims are pooled with active employees means there is an implicit subsidy.  That subsidy needs to be accounted for under the new requirements, both for current retirees and future retirees.  Governments will then need to determine whether to pre-fund any, some or all of that obligation, whether other plan design changes may be necessary, etc.  Reporting will be required every 2 years.
Jean Thorne noted that the Board will approve a contract next month for the actuarial work to be completed.  The decision of what, if anything, to do when the results from that work are known is an issue that will also need to involve the Governor’s Office, the State Treasurer and PEBB.  That is because the amount of the liability may affect the State’s bond rating.
Health Risk Assessments
Lisa Krois reviewed Board attachment 10 (doc) on the uses and possible values of member participation in Health Risk Assessments (HRAs).  What is clear from the research is that the completion of the HRA by itself is of little value; it needs follow-through with the member’s medical home or health plan.  Employers often use HRAs to collect data on health risks of their employees.  Even when PEBB offered a single HRA through its former contract with WebMD, the response rate was so low that it was not statistically valid.  The telephone survey conducted through DHS Public Health is a more valid tool for capturing that type of information for PEBB.  The draft message included in the attachment is still being reviewed by the health plans.  Jean Thorne indicated that is was important for the Board to understand the value of the HRAs if considering possible incentives for their completion.
General Public Comment
Other Business
Jean Thorne introduced Rebecca Sweatman as the new Program Development Analyst; she is working closely with Lisa Krois.  She also distributed the agenda for training on September 12th for new Board and Commission members.  Although Sue Nelson has received an invitation, if any other members would like to attend, they should contact Jean.