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PEBB Meeting Minutes, June 20, 2006
Public Employees’ Benefit Board
Tuesday, June 20, 2006 1:00 to 4:30 p.m. - Minutes
PEBB Board Room
775 Court St NE, Salem OR
                                                                                                                                                         
 
Approved 7/18/06
Board MembersPresent
Diane Lovell, Chair
Peter Callero
David Hartwig
Rocky King
 
Rep. Jeff Kropf
Paul McKenna
Jeanene Smith

PEBB Staff Present
Bobbie Barott
Dena Comer
Sandy Johnson
Isabel Joslen
Lisa Krois
 
Lydia Lissman
Ingrid Norberg
Rick Schoonover
Jean Thorne
 
Consultants Present
Pam Hodge, 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
Julie Marshall, Cascade EAP
Megan Myrick, Willamette Dental
Sue Nelson, Department of Human Services
JoAnn Olney, Regence BCBSO
 
Audrey Schumacher, Providence Health Plans
Diane Skutack, BenefitHelp Solutions
Rob Sumner, Regence BCBSO
Deborah Tremblay, Oregon Judicial Dept
Kim Waldroff, BenefitHelp Solutions
Ryan Webster, Providence Health Plans
Don Wiggins, The Standard Insurance Co.
Cheryl Willcoxen, SEIU
Denise Yunker, Oregon University System
Agenda
Welcome and Approval of Minutes
Overview of Meeting
Operations Subcommittee Report
Benefit Plans for 2007
Promoting Evidence-Based Care
Issues for Plans to Address in Upcoming Meetings
Update on Communications Efforts
General Public Comment
Other Business
 
Welcome and Approval of Minutes
Diane Lovellcalled the meeting to order and introduced Sue Nelson, Deputy Chief Administrative Officer of the Department of Human Services, who is scheduled for confirmation on June 21 as the Board’s newest member.
Peter Callero moved to approve the minutes from the May 16, 2006 meeting.
David Hartwig seconded the motion.
Hearing no further discussion, the motion passed unanimously.
 
Overview of Meeting
Jean Thorne explained that the Board will make decisions on the 2007 medical and dental plans, and will have an initial discussion around approaching work on evidence-based care and integrating it into PEBB’s work (further discussion will be a regular item on future agendas). The medical plans will attend the July and August meetings for discussion on the status of the Vision implementation. In advance of those discussions, the Board has been provided with the plans’ first quarter summaries and has been asked to assist with framing the questions. An update will be provided on the efforts of the Communications and Engagement Advisory Committee, followed by other business.
 
Operations Subcommittee Report
Paul McKenna provided a report on the June 13 Operations Subcommittee meeting, which included updates on the Customer Service Team, the budget, and a report from the Agency Advisory Committee. The Subcommittee heard three appeals, which were all denied. An issue regarding over age dependents will be addressed by the Board after further consideration by the Subcommittee in August.
 
Benefit Plans for 2007
Jean Thorne referred to Bd attach.2 and explained that in 2005, the Board released a comprehensive Request for Proposals (RFP) for its medical plans for services beginning in 2006 based on the concepts included in the Vision.  Medical plans selected during that process were as follows:
  • Kaiser Permanente HMO – full-time plan and part-time/retiree plan
  • Kaiser Permanente Added Choice POS – full-time plan and part-time/retiree plan
  • Providence Choice PPO – full-time plan
  • Regence Blue Cross Blue Shield of Oregon (RBCBSO) – full-time plan and part-time/retiree plan
  • Samaritan Select PPO – full-time and part-time/retiree plan
 
Because PEBB is seeking extensive changes in the health care delivery system, the RFP indicated that the Board was interested in developing partnerships with the selected plans.  To that end, the contracts were to be renewable on an annual basis for 3 years.  Criteria for renewal included but were not limited to progress in implementing the Vision and proposed rates for services.
 
PEBB’s dental plans have not yet gone through a similar RFP process, although the Board anticipates issuing an RFP for dental services beginning in plan year 2008.
 
In considering its priorities for 2006, the Board discussed not actively pursuing changes in plan design for 2007, given that the experience under the new contracts would have been limited to only a few months.  The Board reviewed draft renewal letters at its February 2006 meeting.  The final letters were issued by the Board’s consultant, Aon Consulting, on February 22, 2006, with responses due March 24, 2006.  All plans were asked to respond to at least the following issues:
 
  • Provide proposed rates for services in 2007, with no changes in plan design from 2006;
  • Discuss willingness to work with PEBB on establishing uniform customer service standards and penalties for failure to meet performance guarantees;
  • Identify any suggested contract changes for 2007; and
  • Update progress in implementing Vision elements identified in their RFP responses for 2006 and 2007, including work plans for certain Vision deliverables not yet in place.
 
PEBB currently contracts for dental benefits with the following plans:
  • Kaiser Permanente Dental
  • ODS – Traditional Plan, Preferred Plan, Part-time/Retiree Plan
  • Willamette Dental
 
The Board reviewed draft renewal letters at its February 2006 meeting.  The final letters were issued by the Board’s consultant, Aon Consulting, on February 22, 2006, with responses due March 17, 2006.  All plans were asked to respond to at least the following issues:
  • Provide proposed rates for services in 2007, with no changes in plan design from 2006; and
  • Identify any suggested contract changes for 2007.
 
Because the Board entered into 2-year contracts (for plan years 2006 and 2007) with its current vendors (Vision Services Plan for eye care and Standard Insurance for life, disability and accidental death and dismemberment), there was no need to issue renewal requests for those services. 
 
The Board met in executive session on April 18, May 17, and June 13 to review plan responses, identify issues for further follow-up by consultants and staff and review responses to that follow-up.  No decisions were made in executive session.
 
KAISER
Diane Lovell expressed appreciation for the progress Kaiser is making toward the Vision.
 
Rocky King moved to continue offering two full-time Kaiser Permanente plans – the Kaiser HMO Plan and the Kaiser Added Choice Plan – for 2007, with a rate increase of 10.5% for both, for employees who either live or work at least 50 percent of the time in specific zip codes in the Kaiser service area in the following counties:  Benton, Clackamas, Clark County (WA), Columbia, Hood River, Linn, Marion, Multnomah, Polk, Washington and Yamhill counties.
Peter Callero seconded the motion.
Dennis Tierney explained that for the most part the Kaiser rate increases are based on community-wide information. On a scale of high-to-low, PEBB is in the middle with respect to a rate change in comparison to other groups.
Hearing no further discussion the motion passed unanimously.
 
Rocky King moved to notcontinue the member incentive for new enrollment in the Kaiser HMO for 2007.
David Hartwig seconded the motion.
Peter Callero opposed the motion, explaining that PEBB needs one more year to consider the effects, and to allow time to determine if word of mouth amongst new-hires will increase participation.
Paul McKenna opposed the motion based on the 37 percent in the post open enrollment survey who said the incentive made a difference in their decision to enroll in Kaiser. He believes the savings should be looked at as multi-year.
David Hartwig supported the motion and would like the Board to discuss more the incentives and the impacts to the decisions that members make. He added that he favors incentives through plan design, rather than as cash.
Rocky King explained that he would like to see a cost break for all Kaiser HMO members, not just those newly-enrolling.
Diane Lovell asked if their could be a more in-depth discussion later in the summer regarding incentives.
Jean Thorne explained that the Stabilization Fund expenditures are under limitation. PEBB would need to go to Emergency Board (E-Board) in August for approval of limitation, and the incentive information would have to be left out of the open enrollment materials and inserted later once the approval was given.
Rep. Kropf explained that the decision must be made today in order to be considered by the August E-Board.
Hearing no further discussion, the Board voted as follows:
Peter Callero: nay
David Hartwig: aye
Rocky King: aye
Diane Lovell: aye
Paul McKenna: nay
Jeanene Smith: aye
The motion passed with a vote of 4-2.
 
Rocky King moved to accept Kaiser’s proposed contract change to include language in the Evidence of Coverage to explicitly state that the respite care benefit for hospice patients and hospice caregivers is one consecutive stay in a 30-day period, not to exceed five days. 
Jeanene Smith seconded the motion.
Hearing no further discussion, the motion passed unanimously.
 
PROVIDENCE
Diane Lovell complimented Providence on their work toward the Vision.
 
Rocky King moved to continue offering the Providence Choice full-time PPO plan for 2007.  This plan will be available to members living or working in Multnomah, Clackamas, Washington or Yamhill counties.
Peter Callero seconded the motion.
Hearing no further discussion, the motion passed unanimously.
 
Rocky King moved to notaccept the plan design changes as proposed by Providence for 2007.
David Hartwig seconded the motion.
Rocky King suggested that such changes should not be looked at in isolation of one plan and one year. Perhaps this could be considered in 2008.
Peter Callero concurred.
Hearing no further discussion the motion passed unanimously.
 
Rocky King moved to notoffer member incentives as proposed by Providence for 2007.
Paul McKenna seconded the motion.
Rocky King explained that he would like to have a longer-term discussion about the value of completing a health risk assessment (HRA).
Jean Thorne indicated this is an agenda item for the Council of Innovators.
David Hartwig suggested that this idea could be discussed in the future as a possible way to incorporate wellness.
Hearing no further discussion, the motion passed unanimously.
Rocky King moved to establish the following self-insured premium rates for the Providence PPO plan for 2007:
2007 Providence Choice PPO Rates
(Self-insured at Aon Recommended Rates, Not Including VSP Routine Eye Care Services)
Employee
Employee & Spouse/Partner
Employee & Child(ren)
Employee & Family
$645.75
$865.30
$742.62
$884.68
Paul McKenna seconded the motion.
Hearing no further discussion, the motion passed unanimously.
 
REGENCE
Diane Lovell stated that Regence is doing a good job on the Vision elements and is showing a lot of innovation.
 
Rocky King moved to continue offering the Regence full-time PPO plan for 2007, with no changes in plan design from 2006, and with an overall rate increase of 8.56%. This plan will be available statewide and for those living in counties out-of-state.
Peter Callero seconded the motion.
David Hartwig asked how the rate compares with Oregon and nationwide trends.
Dennis Tierney explained that PEBB is doing very well overall and provides an excellent package for a very reasonable price.
Hearing no further discussion, the motion passed unanimously.
 
The Board considered whether PEBB should change the package of disease management services it receives through its contract with Regence BCBSO for 2007. Dennis Tierney explained that while Regence agrees with the potential for better member health it cannot say to what extent. If there is a gain in excess of 1 percent of the premium, Regence would exchange dollar for dollar up to the cost of the additional coverage. The Regence alternative is for gains in excess of 2 percent, Regence would share up to $1.80 per dollar of the cost of the additional coverage. He recommends this second option.
 
Rocky King moved to notchange the package of disease management services it currently receives in its contract with Regence BCBSO for 2007, but to accept the proposed refunding arrangement of up to $9.88 per contract per month (180% x $5.49 = $9.88) after gains in excess of 2%, and to work with Regence to have some PEBB-specific reporting for future evaluation.
Peter Callero seconded the motion.
David Hartwig stated that this is not just a consideration of cost but of members with health issues.
Hearing no further discussion, the motion passed unanimously.
 
Rocky King moved to notenter into a self-funded contract with Regence BCBSO for 2007.
Jeanene Smith seconded the motion.
Diane Lovell explained that the discussion on future self-funding will be part of the Board’s work over the coming year.
Hearing no further discussion, the motion passed unanimously.
 
Rocky King moved to notaccept Regence’s proposal that if PEBB terminates its group coverage (contract) with Regence, continuation of hospital services for a hospital member at the time the contract ends will be restricted to those instances when the coverage for the member is immediately replaced by other group coverage.
Paul McKenna seconded the motion.
Hearing no further discussion, the motion passed unanimously.
 
Rocky King moved to accept Regence’s proposal to eliminate the 3rd internal level of appeal available to members under the current contract. 
Peter Callero seconded the motion.
Hearing no further discussion, the motion passed unanimously.
 
Peter Callero moved to accept Regence’s proposal to clarify that Medicare entitlement as a qualifying COBRA event is restricted to instances where it results in a loss of active coverage.
Paul McKenna seconded the motion.
Hearing no further discussion, the motion passed unanimously.
 
Peter Callero moved to notaccept Regence’s proposal to specify that members are eligible to continue coverage under FMLA or Non-FMLA leave, but not both.

Paul McKenna seconded the motion.
Hearing no further discussion, the motion passed unanimously.
 
Peter Callero moved to accept Regence’s proposal to add a provision to the member handbook clarifying the Durable Medical Equipment (DME) rental fee will not exceed the reasonable purchase price and will apply only when the item is available for purchase.
David Hartwig seconded the motion.
Hearing no further discussion, the motion passed unanimously.
 
SAMARITAN
Diane Lovell acknowledged Samaritan’s good work toward the Vision elements.
 
Peter Callero moved to continue offering the Samaritan Select full-time PPO plan for 2007, with no changes in plan design from 2006.  The plan will be available to members living in Linn, Benton or Lincoln counties.
Jeanene Smith seconded the motion.
Hearing no further discussion, the motion passed unanimously.
 
Peter Callero moved that PEBB notmove from its current self-insured arrangement with Samaritan to a fully-insured arrangement.
David Hartwig seconded the motion.
Hearing no further discussion, the motion passed unanimously.
 
Paul McKenna moved to establish the following self-insured rates for the Samaritan PPO plan for 2007 (zero percent rate increase):
2007 Samaritan Select PPO Rates
(Self-insured at Aon Recommended Rates, Not Including VSP Routine Eye Care Services)
Employee
Employee & Spouse/Partner
Employee & Child(ren)
Employee & Family
$650.49
$871.66
$748.07
$891.18
Jeanene Smith seconded the motion.
Hearing no further discussion, the motion passed unanimously.
 
PART-TIME RETIREE
Peter Callero moved to continue offering the following part-time/retiree plans for 2007 from Regence BCBSO, Kaiser and Samaritan to eligible part-time employees and retirees, with no changes in plan design from 2006 (both part-time employees and retirees have the option of choosing either full-or part-time plans):
Kaiser
Regence
Samaritan
Enrollees must live or work in specific zip codes in the following counties:
 
Benton
Clackamas
Clark County, WA
Columbia
Hood River
Linn
Marion
Multnomah
Polk
Washington Yamhill
Statewide
 
Out-of-state counties
Enrollees must live in the following counties:
 
Benton
Lincoln
Linn
David Hartwig seconded the motion.
Hearing no further discussion, the motion passed unanimously.
 
Peter Callero moved to offer a part-time/retiree plan from Providence in 2007 to eligible part-time employees and retirees, with the plan design similar to that of Regence except there would be a full deductible of the first $500 per person, $1500 per family for Providence.
Paul McKenna seconded the motion.
David Hartwig asked if adding the part-time plan would impact the rate.
Dennis Tierney explained that at this time the premium reflects a reasonable rate, and there would be no rate change.
Hearing no further discussion, the motion passed unanimously.
 
Peter Callero moved to continue mutualization of the renewal increase for Regence FT PPO and PT/Retiree PPO plans.
Paul McKenna seconded the motion
David Hartwig suggested adding this to the list of issues for future analysis.
Diane Lovell replied that this will be added as a fall agenda item.
Hearing no further discussion, the motion passed unanimously.
 
Peter Callero moved to continue the rural subsidy for members living in the following counties:  Baker, Crook, Curry, Deschutes, Gilliam, Grant, Harney, Jackson, Jefferson, Josephine, Klamath, Lake, Malheur, Morrow, Sherman, Tillamook, Umatilla, Union, Wallowa, and Wheeler, and in out-of-state zip codes adjacent to these counties.
Paul McKenna seconded the motion.
David Hartwig noted that the Board is going to discuss this for future analysis for review of policy direction.
Hearing no further discussion, the motion passed unanimously.
Peter Callero moved to continue the current payment structure for those employees choosing to opt-out of medical coverage because of the availability of other group insurance.  Members who are eligible and choose to opt out of medical coverage will receive a monthly payment of $233 (prorated for part-time employees according to hours worked compared to full-time). The cost of their mandatory dental and basic life premiums will be deducted from that amount pretax. The balance will be added to their monthly pay as taxable income.
Paul McKenna seconded motion.
David Hartwig stated that the Board intends to review this for policy direction in 2008.
Hearing no further discussion, the motion passed unanimously.
 
Peter Callero moved to continue to offer the Kaiser Dental Plan for 2007 with no changes in plan design, with the rate increase of 13.9%.
Jeanene Smith seconded the motion.
David Hartwig asked why Kaiser has the highest rate increase, in comparison to the dental rates in the other plans.
Jean Thorne explained that the rate has always been higher because of the plan design.
Dennis Tierney explained that the rate is reflective of what it costs to maintain the same level of benefits for the coming year.
Hearing no further discussion, the motion passed unanimously.
 
Peter Callero moved to continue to offer the ODS dental plans for 2007.
Paul McKenna seconded the motion.
Hearing no further discussion, the motion passed unanimously.
 
Peter Callero moved to notaccept the benefit changes proposed as follows by ODS:
  • Add one additional cleaning per year for diabetic members enrolled in the ODS Healthy Mouth program.
  • Add a cleaning for pregnant women enrolled in the ODS Healthy Mouth, Healthy Body program during the third trimester of pregnancy regardless of standard frequency limitations.
  • Add coverage for ViziLite.
  • Add coverage of brush biopsies.
David Hartwig seconded the motion.
Peter Callero added that this is consistent with the Board’s decision to not include plan design changes this year.
Diane Lovell noted that these changes could be considered in the context of a dental RFP, which is tentatively scheduled for later this year.
Hearing no further discussion, the motion passed unanimously.
 
Peter Callero moved that PEBB move from its current funding arrangement with ODS (fully-insured, refunding contract) to a self-insured arrangement.
Jeanene Smith seconded the motion.
Peter Callero outlined that the advantages of moving to a self-funded arrangement with ODS, as follows:
  • Provide projected savings for $411,000 for 2007 while exposing PEBB to minimal downside risk;
  • Allow PEBB to gain additional experience with self-funding arrangements in preparation for possible self-funding of more medical plans in 2008;
  • Provide additional cash flow advantages in 2007;
  • May allow PEBB to consider wider choice of vendors for the dental RFP to be issued later this year.
The disadvantage is a minimal financial risk.
Diane Lovell added that while it will be a stretch, PEBB staff have indicated that they can accommodate the extra work load.
Hearing no further discussion, the motion passed unanimously.
 
Peter Callero moved to adopt the following self-insured premium rates for ODS plans for 2007 (zero rate increase):
2007 ODS Dental Monthly Rates
(Self-insured at Aon Recommended Rates)
 
 Plan
Employee
Employee & Spouse/Partner
Employee & Child(ren)
Employee & Family
Traditional Plan
$66.07
$88.54
$75.98
$90.52
Preferred Option
$61.03
$81.78
$70.18
$83.61
Part-time and Retiree Plan
$47.54
$63.71
$54.68
$65.14
David Hartwig seconded the motion.
Hearing no further discussion, the motion passed unanimously.
 
Peter moved to continue to offer the Willamette Dental Plan in 2007, with no changes in plan design.
Jeanene Smith seconded the motion.
Hearing no further discussion, the motion passed unanimously.
 
Diane Lovell recognized the hard work of staff, consultants and plans and thanked them for their efforts.
 
Promoting Evidence-Based Care
Lisa Krois referred to Bd attach.3 and reported that at the last Council of Innovators meeting the group discussed how to collaboratively promote evidence-based care. This rich discussion will likely be on the Council’s agenda for the remainder of 2006. In the short term, the group is considering cost drivers and conditions that have the potential for improving quality of care and reducing cost. The Council will target high-cost, high-volume services to identify those where it appears that evidence-based guidelines are not being consistently followed. In the longer term, the Council will look at incorporating successful models of evidence-based benefit design. The Council will explore how the Oregon Health Plan Prioritized List might serve as the basis for PEBB’s plan design, either for potential pilots and/or statewide adoption. The Council will also explore other models in addition the prioritized list.
 
Diane Lovell asked what data is used to determine if best practice guidelines are being followed.
Lisa Krois replied that there are a couple of resources; the Dartmouth Atlas is one.
Jean Thorne explained that once the issue of non-adherence has been identified, where to apply the incentive or to influence change must be determined. She added that this subject is not something that can be addressed a couple of times, but will be a short- and long-term effort toward the Board’s Vision.
 
Issues for Plans to Address in Upcoming Meetings
Lisa Krois referred to Bd attach.4 and reported that verbal reporting is scheduled for each of the plans at the July and August Board meetings.
 
Jean Thorne explained that this document reflects suggested dialogue the Board may have with the plans.
Lisa Krois clarified that the progress reports included in the document are specifically regarding those elements that were not in place in 2006. They include only what PEBB identified as needing to be implemented by the end of 2006.
 
The Board had no suggested changes to the framework and agreed that it is ready to go to the plans as proposed.  
 
Update on Communications Efforts
Lisa Krois referred to Bd attach.5 and explained that at its May meeting the Board asked for a menu of methodologies toward the evaluation of the Communication and Engagement Advisory Committee (CEAC). She provided an overview of the evaluation themes and data collection methods as outlined by the Committee, taking into account PEBB’s staffing resources. PEBB will be working with the plans to create a discussion tool for several focus groups. The focus group will be used in concert with surveys to evaluate and revise PEBB’s communication plan.
 
Peter Callero asked if the group will evaluate communication between the physician and the member.
Lisa Krois explained that the group is focusing on consistent messages to members.
David Hartwig asked about evaluation theme #2 regarding developing the Vision. The development of the Vision has been done. It might be more important for the members to have confidence in how the Board makes its decisions.
Lisa Krois clarified that this question is really getting at whether members truly understand all the work that is being done towards the elements of the Vision, and why.
 
Ingrid Norberg referred to Bd attach.6 and explained that the document represents a preliminary plan with the objective that an element of the Vision is communicated in each PEBB newsletter.
 
David Hartwig suggested referring members to the carrier websites for the information. This could also be another opportunity to partner with the plans.
Lisa Krois explained this has been discussed, as well as partnering with Unions to include PEBB information in their newsletters if possible.
 
General Public Comment
None.
 
Other Business
Jean Thorne announced that Lydia Lissman has accepted the position as PEBB’s Director of Operations. Lydia was previously serving on a job rotation from DHS and is now a permanent staff member.
 
A DVD on the Oregon Coalition of Health Care Purchasers’ March event is available if Board members would like to view it. It includes a detailed presentation on PEBB’s Vision and the RFP process, as well as the health plans’ responses to the RFP.
 
Jim Dameron of the Patient Safety Commission has asked for assistance in putting together a policy summit on health care-associated infections. He is not asking PEBB for financial support, but if he can get financial support he has asked to list PEBB as a sponsor.
 
The Board agreed to allow the Commission to list PEBB as a sponsor.
 
Meeting Adjourned