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Public Employees' Benefit Board Minutes, September 19, 2006
Public Employees’ Benefit Board
Tuesday, September 19, 2006 10:30 a.m.. to 4:00 p.m. - Minutes
PEBB Board Room
775 Court St NE, Salem OR
Approved 10/17/2006
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
Ingrid Norberg
Scott Smyth
Rebecca Sweatman
Jean Thorne
Consultants Present
Pam Hodge, Aon
Dennis Monagham, Aon
Dennis Tierney, Aon
Guests Present
Yuen Chin, Willamette Dental
Gordon Hoberg, ODS
Diana Jones, Regence BCBSO
Bill Lindekugel, Kaiser Permanente
Scott Loftin, ODS
Renee McDonald, Regence BCBSO
Mary McKay. Rengence BCBSO
Julie Marshall, Cascade Center
Megan Myrick, Willamette Dental
Paul Pfinster, AFLAC
David Scearce, The Standard Insurance Co.
Helen Sherman, Regence BCBSO
Kim Waldroff, BenefitHelp Solutions
Denise Yunker, Oregon University Systems
Welcome and Approval of Minutes
Overview of Meeting
Operations Subcommittee Report
Relative Weighting of Tiers
Council of Innovators Update
Evidence-based Care Update
Summary of Second Quarter Reports from Health Plans
Issues to Address in Expansion of Self-Insurance
Implementing the Vision – Report from Regence
Rx Exceptions and Trends
Bariatric Surgery
Initial Discussion on Dental RFP
Survey Results on timing of Board’s Decisions
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 August 18, 2006 meetings (Bdattach.1 & 2).  Rich Peppers seconded the motion.  The motion passed unanimously.
Jean Thorne introduced Claire Kemmerer, new Executive Assistant for PEBB.
Diane Lovell reviewed the discussion framework adopted at the August Board retreat. 
Operations Subcommittee Report
Paul McKenna provided an overview of the Operations Subcommittee meeting.  Primary discussion of extending over age eligibility to include 1) mental disability 2) developmental disability 3) examine requirement for member to be covered by PEBB at threshold age (looking at modifications) and  4) what happens if they become eligible after threshold age.  The subcommittee determined they needed further information on eligibility rules and rate impact and will carry on the discussion at the October 10 meeting.  Operations Subcommittee will have an update report at the October Board mtg. 
Paul McKenna outlined policy packages that were approved for inclusion in the DAS 2007-09 agency request budget:  1)  One permanent Program Analyst (replaces limited duration position) for Pebb.Benefits system; 2)  One permanent Program Analyst 4 (replaces limited duration position) for effective management of health plan performance and medical wellness and funding for  a consultant; and 3) provides limitation to conduct surveys and development of electronic medical records (Bdattach.3 & Bdattach.4) (doc). 
The Subcommittee recommends the Board approve an amendment to the current Aon contract to conduct an actuarially study of retiree health benefits now required under federal accounting standards (GASB 45).  Paul McKenna moved to adopt the recommendation to amend the contract.  Peter Callero seconded the motion.  The motion passed unanimously.
Jean Thorne distributed copies of the DAS Strategic Plan and the PEBB Business Plan that outline how PEBB will fit in to the goals and strategies of the DAS Strategic Plan (Bdattach.5 (pdf), 5a (doc), & 6 (doc)).
Relative Weighting of Tiers
Pam Hodge presented handout, Relative Weighting of Family Status Tiers (Bdattach.7).  The Board had earlier indicated it wished to review and reconsider the weighting of family status tiers for the 2008 plan year.  This is the initial discussion to help frame the information the Board needs to make a future decision.  The handout provided an overview of the issues, some options and initial listing of information needed for Board decision making.
Diane Lovell asked the Board to use the framework agreed upon at the August meeting for the discussion on this topic.  That frame work includes: 1) policy definition;  2) policy implications; and 3) information needed.  Discussion on policy definition and implication included:
  • Insuring as many employees and their families as possible
  • Affordability to retirees
  • Transparency in costs (explicit subsidies), although it was argued that the basic premise of the insurance pooling is about cross-subsidizations
  • Better outcomes
  • Healthier work force
  • Reduction in shift to public programs.
Diane Lovell asked staff to frame a possible policy definition for consideration at the next meeting.  An initial discussion was then held on the information the Board will need to make a decision.
Information Needed:
  • Identify the constituency [characteristics] – retirees, part-timers, COBRA, etc.
  • What methods are other employers using to subsidize family coverage?  (Look at industry standard, but deal with in collective bargaining.)
  • What is Washington PEBB doing and what are their outcomes in terms of dependent coverage?
  • Do other public sector employers have a composite rate?
Diane Lovell suggested not going further until staff has come back with a policy definition and implication(s), before requesting additional information.
Council of Innovators (COI) Update
Lisa Krois reviewed the members’ roster and meeting timeline and topics for action (Brdattach.8) (doc).  Two additions:  Phil Jackson is a member and new COO of Providence and Jeanene Smith is the Board representative for the group. 
Diane Lovell stated that an update on the COI will be a standing Board agenda item and invited Board members to attend COI meetings as possible. 
Evidence-based Care Update
Lisa Krois provided an update on the Council of Innovators work on Evidence-based Care(Brdattach.9) (doc):  The Council of Innovators is encouraging evidence based care for PEBB employees by examining program costs and identifying treatments and/or conditions with the most potential for improving quality of care and cost reduction.  Back pain/spinal care is an initial area for consideration given the high incidence of back surgeries in Oregon and the proportion of PEBB costs going to back care.
Rocky King asked how relative the presented data is to PEBB.  Lisa Krois responded that the group is looking at compiling the data in different ways to better understand utilization and whether physicians are adhering to the guidelines. 
Jean Thorne noted that the group is looking more closely at PEBB data (vs. commercial population) to understand position and potential need for change with physicians and patients.
Solutions are being explored in the areas of adherence to guidelines by providers, decision support tools for the patient, and member education in the prevention of back problems.
Summary of Second Quarter Reports from Health Plans
Lisa Krois presented the Second Quarter Summary report on implementation of the Vision (Brdattach.10) (doc).  The handout contains updated responses from plans on the items PEBB was not clear about.  Overall, the Plans have put forward thoughtful implementation strategies to follow the guidelines and vision.    
Diane Lovell asked if PEBB can assist in any way with hospital participation in LeapFrog reporting.  Jean Thorne noted The Oregon Coalition of Health Care Purchasers, together with Intel, is identifying hospitals to participate and if they decide not to participate, they may be reported on LeapFrog as “not disclosing”.  Some hospitals will be reporting, but there is need to engage in further discussion to encourage this type of transparent reporting. 
Issues to Address in Expansion of Self-Insurance
Diane Lovell reviewed the Board’s desire to consider expansion of self-insurance and needed to have a better sense of the issues involved in that.  This is the initial Board discussion on this topic.
Pam Hodge reviewed the white paper (Brdattach.11) (pdf), which provides an overview of the issues and an initial list of information needed for future Board decision-making.  Board had indicated need for additional time to explore implications of self-funding when looking at changing funding arrangements / programs for the membership.  The attachment outlines advantages, disadvantages, additional needed information, and proposed timeliness.  Aon will report in February to provide information on what others are doing in this area.
Implementing the Vision – Discussion with Regence
Rod Summer, Director of National Accounts; Dr. Terry Olson, Medical Director; Dr. Ralph Prows, Chief Medical Officer; and Stephanie Dryfuss, VP for Provider Relations presented.
Regence is committed to developing improved clinical outcomes for PEBB members throughout the state, increased transparency of information, comprehensive member support, increased engagement, and to collaborating with health care consumers, purchasers, and providers to build a better health care system.
There is alot going on at Regence, but the work of the PEBB vision is the most exciting - not just in terms of PEBB members, but all of Regence.  The activities they have taken on have been leveraged across all Regence members (2.7 million).
Clinical Performance Measurement Reports:  Quality Reports were sent to the providers the end of August showing their performance on a set of clinical indicators in comparison to their peers.  The ultimate game plan is that by end of 2007 provider quality and cost information will be transparent.   Regence is working closely with the providers to get engagement so the data they release is valid and defendable.  Information is actionable down to the layer of individual member.  A group can use these reports to drill down and address the clinical issues as a team. 
Pilot Programs for System Improvement:    Clinical Performance Improvement Projects, Diabetes Pay for Condition, Patient Satisfaction, and Regence e-Health are the pilot programs currently supported.  Challenges in 2007 will be to expand and include smaller groups/ offices.  Regence, along with other partners, is looking for ways to support the smaller offices. 
Regence feels they have more work to do around member engagement and transparency.  Most members do not understand the concept of a medical home.  Integration and connecting the dots will be key in developing and increasing use of medical home. 
Rx Exceptions and Trends
Jean Thorne addressed the requested data summarized in Brdattach.12 (pdf)  & 13 (pdf), which provide information on 2nd quarter co-pay exceptions and prescription drug trends for all plans.  
  • Co-Pay Exceptions:  Overall, co-pay exception requests have dropped significantly from 1st quarter request.
  • Prescription Trends:  Over all, generic utilization has increased significantly.  She noted that the Regence report was based on plan costs, not total costs, so that will be revised for inclusion with the final minutes.  Also, she will be checking with Samaritan to determine whether the costs amounts listed are correct.
Helen Sherman, Regence BCBS, reported that the number of requests for co-pay exceptions were much less that anticipated and will probably stay at this level.  Approvals and non-approvals have stayed the same and the turnaround time is less than two business days.  Since January, changes have been made to handle members using chronic medications, particularly medications that are infrequently prescribed or for infrequent conditions.  Reference materials have been increased to ensure the physicians are up to date. 
Diane Lovell asked for anecdotal information as to why the number of appeals are not as significant as thought to be originally.  Helen stated the choices the members are making have changed – members have moved to generic brands.  Common reasons for denied requests are because either there is no documentation or alternatives have not been tried.  A member whose request has been denied will get a call the day the decision is made and is sent the decision in writing.  The doctor receives the decision by FAX the day it is made.   The majority of the time, specifics are in the communication giving reason for denial; only on very complicated cases is this information missing. 
With the increase in available generics, it is not surprising to see the shift from non-preferred brands to generics.  For commonly prescribed medication, there are more generics available while those members requiring preferred brands still have that option.
Regarding percent of members using the benefit, PEBB prescription usage is cyclical and is down for all of Regence.  One cannot draw the conclusion that members have gone off a prescription.  Cold/flu season has not hit yet.  Total costs has gone down since 2005 (plan paid and member paid).  Data will be available with the minutes.
Bariatric Surgery
Jean Thorne provided an overview of 2nd quarter activity for bariatric surgery (Bdattach.14) (doc), but noted some inconsistencies in the way counts are between plans.   
Diane Lovell asked how this information lines up in relation to numbers being higher than projected.  How do we synch up with national standards and PEBB population?  Jean Thorne will provide this information later.
Rocky King asked about the costs and complication rate.  Jean Thorne stated that data will be included in each plans annual report.  Starting with Regence, we will be looking at groupings for costs and share that with the other plans for comparable data across the plans. 
Initial Discussion on Dental RFP
The Board had earlier determined it wished to issue an RFP for dental services for plan year 2008 and beyond.  This is the initial Board discussion on framing the RFP.
Pam Hodge reviewed Bdattach.15, which provides an overview and some of the key issues to be considered.
  • What plan design(s) should be included?  Respondents could be asked to bid a standard design, then also suggest alternatives.
  • What source documents might be available to determine evidence-based dental treatments?
  • Is there anything comparable to disease management on the dental side?
  • Should the maximum benefit be increased?
  • How deeply should the Board be involved in evaluating the proposals?  Could it be a subcommittee? 
Jean Thorne asked if it would be possible for Aon to compile data over the past years regarding members going over the limit for a discussion for later date.
Pam Hodge noted there is a growing interest to integrate dental and medical programs to ensure total clinical quality care.  The tentative timeline has the Board considering this further over the next two meetings, with the release of the RFP to be after the holidays. 
Diane Lovell asked if the proposed timeframe is acceptable to the group.  All agreed.  Jean Thorne suggested to use the ODS standard plan design and have everyone bid on that along with suggested alternatives. 
Survey Results on Timing of Board’s Decisions
Jean Thorne reminded the group of the discussion to change decision timing on odd years.  Determination was that 4-6 weeks could make a big difference in process (May vs. end of June), but would not significantly change the bids received.  The Board has asked that union leadership be surveyed on this possible change.  Summary of responses were discussed (Bdattach.16) (doc). 
Paul McKenna moved that the Board conclude its decision-making process in early to mid May in odd-numbered years, but to reconsider that timeline as necessary to address special circumstances.  Rich Peppers seconded the motion.  The motion passed unanimously. 
General Public Comment
Other Business
Jean Thorne addressed the new Open Enrollment handbook in the board packets.  PEBB is pushing online access and has cut down on number of copies produced.  Training has been completed for agency staff and it was well received.