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PEBB Board Meeting Minutes, October 17, 2006
Public Employees’ Benefit Board
Tuesday, October 17, 2006 10:30 a.m. to 4:30 p.m. - Minutes
PEBB Board Room
775 Court St NE, Salem OR
Approved 11/21/2006
Board MembersPresent
Diane Lovell, Chair
Peter Callero
David Hartwig
Sue Nelson
Paul McKenna
Rich Peppers
Jeanene Smith
PEBB Staff Present
Bobbie Barott
Sandy Johnson
Claire Kemmerer
Lisa Krois
Lydia Lissman
Zue Matchett
Scott Smyth
Rebecca Sweatman
Rick Schoonover
Jean Thorne
Consultants Present
Pam Hodge, Aon
Dennis Tierney, Aon
Council of Innovators
Stephanie Dryfuss, Regence
Seth Garber, Kaiser Permanente
Phil Jackson, Providence
Kelley Kaiser, Samaritan Health Plans
Ralph Prows, Regence
Joe Siemienczuk, Providence
Rick Wopat, Samaritan Health Plans
Guests Present
Gary Allen, Willamette Dental
Claudia Grimm, OMIP
Gordon Hoberg, ODS
Salley Hill, Providence
Diana Jones, Regence BCBSO
Larry Kirsch, IMR Health Economics
Ron Klein, AFLAC
Bill Lindekugel, Kaiser Permanente
Megan Myrick, Willamette Dental
Paul Pfinster, AFLAC
Ralph Prows, Regence BCBSO
Linnea Saris, OMIP
David Scearce, The Standard Insurance Co.
John Schaberg, The Standard Insurance Co.
Kim Waldroff, BenefitHelp Solutions
Ryan Webster, Providence
Welcome and Approval of Minutes
Overview of Agenda
Evaluation of Vision
Operations Subcommittee Report
Coverage of Overage Dependents
Weighting of Tiers
Update on Self-Insurance
Consideration of Self-Insurance Expansion
Potential Elements in By-laws
Possible Benefit Additions for 2008
Dental RFP – Update
Rewarding Plan Performance / Update on Council of Innovators
General Public Comment
Other Business
Welcome and Approval of Minutes
Diane Lovell called the meeting to order. Rich Peppers moved to approve the minutes from the September 19, 2006 meeting (Bdattach.1) along with a revised Bdattach.13 from that meeting. Jeanene Smith seconded the motion.  The motion passed unanimously.
Evaluation of Vision
In helping prepare the Board to develop its work plan for 2007, representatives of the Council of Innovators were asked to join the Board for a discussion of some key questions.
Lisa Krois presented Bdattach.2 and group discussion lead to the following key points:
What should the key areas of focus be for the coming year? Why?
  • Maintain focus – report to members what kind of progress is being made on each of the elements of the Vision; include information on what they can do to help achieve the Vision
  • Align incentives (plans, providers, members) – fee-for-service doesn’t support Vision; need payment systems and patient incentives aligned with Vision; recognize that self-insured plans don’t share in gains (note: disagreement noted from another plan)
  • Reward plan alignment with Vision – but recognize that each plan may be at a different place and have different barriers, for instance, Providence has a structure for a medical home, but challenge is how to engage the members
  • Consider that the concept of the medical home may be different based on the member’s health status
  • Should focus more on member self-management and health promotion and improvement; need aggressive well-thought out strategy
  • Member incentives – how to prioritize which 2-3 pieces are most important?
  • May vary based on health plan; give leverage for each plan to develop
    • PEBB could prioritize across all plans, plus allow each plan to develop plan-specific incentives out of a pool of funding
    • Should look at evidence base for incentives, e.g. disease management may have more value than wellness
  • Evidence-based management to support member self management
  • Evidence-based plan design
  • Support adoption of EHR; recognize that some elements flow from each other (e.g. EHR supports evidence-based care)
  • Member engagement with vision
What are specific steps that could be taken?
  • Need to be balanced and not get too myopic; recognize this isn’t a 1-year project, but will take 5-10 years to move an entire system
  • Would like a wide range of activities to move forward
  • Requires interventions over a sustained period of time
Given the past year’s experience, what elements/requirements of the RFP seem less important at this point – and why?
  • Reexamine elements of quality reporting for hospitals
  • Are hospitals focused on being compliant rather than trying to improve?
    • Wouldn’t want to throw out any requirements, as they are all intertwined
    • Which are most meaningful to get hospitals to do what is important?
    • Different hospitals are in different places on a continuum – what is most applicable to that hospital?
  • HRAs (in current form)
  • Prioritize reporting requirements – emphasize priority requirements with plans (reporting) and with members (communications)
  • Reporting of PCPs with EMRs (Regence)
  • Reexamine behavioral health integration requirements – no one model has been found to be better; need to look at demographics of population

Where do the plans need PEBB’s assistance in implementing the Vision? What ideas could be explored for PEBB to provide that assistance?
  • Reexamine concept of medical home
    • look at it in light of Advanced Medical Home concept
    • reaffirm that the medical home is not as an end in itself, but as a path to better outcomes
    • need help in engaging members to embrace the concept
  • With providers and members around public reporting of performance
    • Have consistency across plans as to member incentives
    • Need to figure out a way for ASOs to gain share and fund provider and member incentives; share in cost containment and quality improvement (disagreement from another ASO as to whether ASOs are appropriate and need to prefund provider incentives)
Jeanene Smith offered the following groupings for consideration:
  • Incentivizing innovations
  • Continuum payor- member
  • Member engagement/self management
  • Evidence-based process
    • Health care
    • Management
  • Definitions/ better measures
    • Prioritization
The group agreed that there needed to be further definitions and more information gathered before they would be able to prioritize the developed lists.  It was also discussed that the prioritization would be very different between the plans.  Lisa Krois will do a follow-up e-mail survey to capture more detailed information requested by the group. 
Operations Subcommittee Report
Paul McKenna presented Bdattach.3 regarding the expected shortfall in funds for administrative costs of COBRA due to fewer participants than projected.  For 2006, $8,000 is the amount of  projected shortfall.  The Operations Subcommittee recommends that the Board authorize the use of stabilization funds to cover the 2006 shortfall and, if necessary, a shortfall in 2007.  Peter Callero seconded.  The motion passed unanimously.
Paul McKenna presented Bdattach.4 regarding the administrative fees for self-insured plans These fees were imbedded in the premiums approved by the Board, but need to be specifically approved by the Board.  The Operations Subcommittee recommends the Board approve the ASO fees as specified in the handout.  Rich Peppers seconded.  The motion passed unanimously.
Overage Dependants
Pam Hodge highlighted the revision to the document presented at the September meeting (Bdattach.5).  Updated information includes policy definition and implications; data submitted by Washington PEBB, and City of Portland data.  Proposed guidelines for Oregon PEBB are very similar to how Washington PEBB manages services to overage dependents.  City of Portland clarified the five criteria that must be satisfied before a dependent is found eligible (page 3). 
Kaiser is concerned about the potential additional cost of extending coverage to overage dependents who are not covered by PEBB when the dependent attains the otherwise limiting age. Kaiser believes that the rate impact may exceed 4% of total premium.  A conference call with [their] chief actuary developed the following compromise:  should the Board wish to pursue relaxing the continuous coverage requirement, a settlement procedure would be put in place where Kaiser Permanente would track the incremental costs of the changes and a financial settlement similar to current practice with Regence (mental health parity) would take place. 
Pam Hodge then reviewed the recommendations for the group. 
The Operations Subcommittee recommends the Board adopt the recommendations in Bdattach.5. Sue Nelson seconded. 
Questions/comments from public:
  • Sally Hill, Providence:  Does this include self-funded plans?  Pam Hodge answered Yes.
  • Diana Jones, Regence: asked which types of cases would need to be reviewed on an annual basis.  Lydia Lissman expressed PEBB’s reliance on the carrier’s medical judgment in cases where recovery is possible, but noted an annual review may be more germane in areas of mental illness.
  • Peter Callero asked if improvement in a mental health [condition] would cease eligibility.  If a patient becomes sick again, is it possible for the member to become re-eligible?  Lydia Lissman stated the person would be able to port the policy or move to COBRA if they become ineligible.  If they relapsed, they may be able to come back if they had continuous coverage.  PEBB staff will need to discuss the details.
Dianne Lovell asked for vote of the outstanding motion. The motion passed unanimously.
Lydia Lissman outlined two appeals pending adoption of the new policy by the Board.  Appeal 1:  is a developmentally disabled dependent, age 26, who meets criteria for coverage, but not continuous coverage under a  PEBB sponsored plan because the employee was a new hire to the State.   Appeal 2:  Contacted PEBB prior to dependent turning age 24 and was recently diagnosed with a severe mental illness.  PEBB does not know specifics on the conditions or dependent’s ability/inability to sustain self-employment.  Overall, the policy should become effective with the new plan January 1, 2007 and  [PEBB] would make members aware of this coverage.  For Appeal 1, enrollment should be allowed to become effective November 1, 2006, following a determination of eligibility.  For Appeal 2,  request the carrier to expedite the process to determine if the dependent meets all the criteria; if so enrollment would be effective the first of the month following eligibility. 
Peter Callero moved to adopt staff recommendations on the two appeals.  Sue Nelson seconded.  The motion passed unanimously. 
Weighting of Tiers
Jean Thorne noted that the Board had an initial discussion of this issue at its September meeting, but that staff was asked to draft a policy definition and policy implications (Bdattach.6).    
Diane Lovell asked if the group felt comfortable with the paragraph on policy definition. 
David Hartwig asked about any precedence this might set for other populations within membership (i.e., rural, cash back, etc.) and statement of  “…cost-shift to other public and private employers.”   Jeanene Smith suggested adding the word “minimize” to the sentence. 
Diane Lovell asked by consensus whether the group was comfortable adopting the definition as amended.  Hearing no comments, the group will move on to policy implications. 
Jean Thorne reviewed the policy implications outlined on page 2.   
Paul McKenna asked how these implications relate to weighting of the tiers.  Jean Thorne stated the first implication is not only in PEBB purview, but also premium contribution and subject to collective bargaining.  The second implication relates to understanding the interrelationship of this issue with the results of the GASB analysis regarding implicit subsidies for retirees.
David Hartwig expressed the importance for this board to articulate over riding policies of mutualization of members and employees.  This Board has never articulated such a policy and believes the Board needs a broader discussion around mutualization, then come back to the more specific issues. 
Diane Lovell asked that staff develop such a document for further Board discussion.
Update on Self-Insurance
Scott Smyth presented Bdatach.7.  At this time, PEBB self-insured plans are projected to break even in 2006.   Lydia Lissman cautioned that it is still early in the cycle and a small period from which to draw a conclusion. 
Considerations in Self-Insurance Expansion
Jean Thorne noted that, at its September meeting, the Board began a discussion about issues to address in considering further expansion of self-insurance.  The Board had asked staff to return with a proposed policy definition and policy implications to help frame further discussions. 
Lydia Lissman reviewed Bdattach.8, which includes such proposed language.  She noted that the Operations Subcommittee had reviewed these suggestions as well.
Board members noted that there had been some differences of opinion among members of the COI about the possible impact of self-insurance on the ability to implement the Vision.  Members suggested the need for a deeper discussion about these different perspectives.  David Hartwig noted that the Vision changes the landscape.  We should no longer be confined to pure models of fully-insured vs. ASOs, but should consider issues such as reinvestment in support for the Vision (for fully-insured models) and gain-sharing (for ASO models).
Jean Thorne provided copies of Board attachment 11 from the September 19th meeting, which had identified the advantages and disadvantages of further expanding self-insurance, as well as an initial list of information the Board may need to consider this further.  In addition to the items listed there, Board members identified other information needed as:
  • Perception of current plans on how those models either support or create barriers to implementation of the Vision
  • Models being used by other private and public sector employers, including hybrid models
  • Projected PEBB reserves as of 2007, including information on the sustainability of the reserves, trending and how they could be replenished if necessary
  • An understanding of the pros and cons for each of the policy implications listed
Staff and consultants will continue to work through these issues for future Board discussion.
Potential Elements in By-laws
Jean Thorne presented Bdattach.9 for discussion, which outlines potential elements in PEBB By-laws.  The Board has approved various processes over the years, but needs to consolidate them into by-laws.  No timeline is set; staff could start working on policy definition and implications over the next year. 
Diane Lovell stated staff could work on this or give the task to a subcommittee to come back to the Board with recommendations. 
The group expressed full confidence in staff working on it.
Possible Benefit Additions in 2008
The Board annually reviews potential areas in which it might offer additional optional benefits to members.  If PEBB were to pursue any of these, it would require development of RFPs.
Lydia Lissman reviewed Bdattach.10, which summarizes services vendors have put forward.
Group questions were whether any of the proposed additional services would duplicate EAP services, what member interest may be in them, and whether they align with the Board’s Vision.
Diane Lovell asked the group for a motion for PEBB to pursue any of the additional optional services.  Hearing none, the issue does not move ahead.    
Jean Thorne stated that PEBB could continue to promote new EAP services in the monthly newsletter.
Dental RFP Update
Pam Hodge presented revised 2007 Dental RFP Planning.  Additions are policy issues and timeline for moving ahead.  Timeline is to send the RFP out to public January 5, 2007 with responses due back February 16, 2007. 
Rich Peppers felt a time element should be added for members to formally address the Board with comments.  Jean Thorne stated the Board does not have to make a decision for another month so the timeline could slide one month to allow for membership feedback of critical elements. 
Pam Hodge summarized the recommended 2008 plan design process:
  1. Request RFP baseline pricing on PEBB’s current “core” plan designs, including:
    • ODS Traditional (provides broadest statewide network)
    • ODS Part-Time/Retiree (provides lower cost option for PT & retirees)
  2. Allow vendors to quote deviations where they cannot administer current plan designs (e.g., Willamette Dental) – PEBB may consider at its discretion
  3. Request vendors to propose alternative plan designs that would promote RFP objective (evidence-based dentistry, integration of medical/dental care)
  4. Reevaluate appropriateness of current plan designs for 2008 based on latest market intelligence gleaned from proposals (evidence-based plan design models, cost, network availability)
  5. Request revised pricing from finalists through “Hypotheticals” in RFP Finalist Negotiation process
  6. Make tentative contract awards for 2008 based on finalist responses to RFP Hypothethicals, including determination of:
  • Number of vendors,
  • Type of plans (Traditional, PPO, DHMO)
  • Plan design details e.g., calendar year maximums   
Diane Lovell asked if the group was in consensus on the presented materials and process.  The group response was Yes.
In response to a question from the last Board meeting, Pam Hodge cited 2005 ODS data showing 3.8% reached the maximum benefit and 2006 (ytd) 2.2% have reached that level.  
Rep Kropf asked if there is data on the percentage of our members who reached lesser amounts ($1,000 or less).  Peter Callero asked for information on what percentage of members use their benefit.  Data will be mined. 
Update on Council of Innovators Update
Lisa Krois.  The Council of Innovators was continuing discussion/work on evidence based care for back pain, spinal conditions, and what each plan has in place. COI has had initial discussion on use of beta-blockers after heart attack. 
Rewarding Plan Performance
Lisa Krois presented Bdattach.11, addressing the PEBB Board’s desire to look more closely at whether and/or how it might reward performance by health plans and/or provider groups. 
The rationale around rewarding performance links payment with evidence-based care and alignment with clinical guidelines.  In the RFP, PEBB encouraged health plans to establish pay for performance for its providers.  In addition, PEBB encouraged plans to establish infrastructure to support enhanced quality (e.g. electronic medical records, performance feedback, etc.).  Lisa outlined the five key models across the nation and their approaches to rewarding for performance. 
Group discussion yielded a need for further information and feedback that is more concrete from carriers.  The Board expressed interest in looking further into this topic, but need more information on what models are out there and details on guidelines/structure.
Diane Lovell instructed Lisa Krois to come back to the Board with additional research and input from the carriers, including looking at a full range of incentives (members, providers, plans).
General Public Comment
Other Business
ODS Reserves:  Diane Lovell recalled the Board’s decision to allow the transfer of funds before the end of the year.  ODS has asked the transfer to wait until January 4, 2007 to avoid loss of revenue.  A motion to reconsider the original Board decision was made by Paul McKennaDavid Hartwig seconded.  The motion passed unanimously.
Rich Peppers moved to permit ODS to transfer funds on or about January 4, 2007.    David Hartwig seconded.  The motion passed unanimously.
PEBB’s Wellness Six-week Walking Program:  PEBB staff walked a total of 1.8 millions steps or the equivalence of 890 miles (Salem to LA, CA).  Miriam Martinez was first place, Jean had second place and Lisa was third.