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Public Employees' Benefit Board Meeting Minutes, Oct. 16, 2007
Public Employees’ Benefit Board
Tuesday, October 16, 2007, 10:30 a.m. to 4:30 p.m. - Minutes
DAS General Services Building, Basement/Mt Mazama Room
1225 Ferry St SE, Salem
Approved 12/18/07

Board Members Present
Diane Lovell, Chair
Sue Nelson, Vice Chair
Peter Callero
Paul McKenna
Senator Bill Morrisette
Rich Peppers
Jeanene Smith
PEBB Staff Present
Bobbie Barott
Dena Comer
Wendy Edwards
Lydia Lissman
Mona McMullen
Brian Olson
Margaret Smith-Isa
Rebecca Sweatman
Jean Thorne
Guests Present
Thandi Clements, VSP
Claudia Grimm, OR Medical Insurance Pool
Kristina Herron, Providence Health Plans
Sally Hill, Providence Health Plans
Gordon Hoberg, ODS
Diana Jones, Regence BCBSO
Bill Lindekugel, Kaiser Permanente
Scott Loftin, ODS
Renee McDonald, Regence BCBSO
Megan Myrick, Willamette Dental
Paul Pfinster, AFLAC
David Scearce, The Standard Insurance Co.
Steve Schmick, Kaiser Permanente
Diane Skutack, BenefitHelp Solutions
Tamara Strauss, Samaritan Health Systems
Deborah Tremblay, OR Judicial Department
Chandra Wahrgren, ODS
Betty Wilton, OR Prescription Drug Program
Consultants Present
Barbara Wall, Aon Consulting
Overview of Meeting
OregonPrescription Drug Program
Status on Achieving the Vision Part II: Regence
Status on Achieving the Vision Part II: Samaritan
Bariatric Surgery Update
Wellness Update
Operations Subcommittee Report
Report on 2006 and 2007 FSAs
Opt-Out Policy
PEBB Connect
Standard Demutualization
Rural Subsidies – Part II
November Strategic Planning
Public Comment
Diane Lovell called the meeting to order.
Overview of Meeting
Lydia Lissman explained that today’s meeting will include an update on the status of the Oregon Prescription Drug Program for the Board’s consideration (for 2009), followed by a presentation on the status of Regence and Samaritan toward achieving the Vision. The Board will hear an update and initial cost projections for bariatric surgery, and an overview of PEBB’s leadership in employer wellness activities, PEBB wellness grants, and wellness metrics. The meeting will also include reports from the Operations Subcommittee, PEBB Operations, and on the Flexible Spending Account (FSA) for 2006 and 2007. Presentations will then be provided on the Opt-Out policy, PEBB Connect, Standard Demutualization, and Rural Subsidy. Finally, the Board will discuss strategic planning for 2009 and planning for the November retreat.
OregonPrescription Drug Program
Missy Dolan, Administrator of Oregon Prescription Drug Program (OPDP), presented background and highlights of the program. She explained that the ODPD was authorized in 2003 with limited eligibility and was launched in 2005. The Northwest Prescription Drug Consortium was formed in 2006. Additionally, Ballot Measure 44 expanded the program to include all underinsured Oregonians in 2006. In 2007, Senate Bill 362 expanded the program to include private sector groups and labor organizations.
She explained that the OPDP “Pool” was created with the goals of increasing access to prescription drugs by uninsured Oregon residents; providing transparency in prescription drug contracting; and reducing dollars spent on prescription drugs by promoting evidence-based purchasing. Components of the program include the individual discount card and group program. To date, enrollment is nearing 40,000 uninsured and 46,000 groups.
She reported that Washington’s PEBB has received extraordinary service from ODS; six months of their data has been run through ODS showing significant savings. Washington PEBB would be willing to teleconference in to a future Board meeting or to be of other assistance if needed. 
Peter Callero asked how individuals are recruited into the programs.
Missy Dolan replied through AARP, Oregonians for Health Security, other advocacy groups, and grants from the Attorney General. Other efforts include mailings to clinics, faith-based organizations, healthcare forums, and health fairs, as well as outreach to labor organizations and local government organizations. An 800-number is available for individuals to contact ODS and become enrolled in minutes. Some pharmacies have fliers, and the information is on the Web site in addition to other methods of communications.
Jeanene Smith praised Missy and her three-person staff for all of their efforts in bringing the program thus far.
Paul McKenna asked for clarification on the cash-back performance guarantee.
Missy Dolan explained that if reports indicate unsatisfactory performance there would be a financial penalty to ODS.
Jean Thorne asked if any plans have fully-insured medical with the Rx carved out.
Missy Dolan replied not currently, on either a self-insured or a fully-insured basis.
Jean Thorne asked if the program allows for any step therapies or utilization management programs and feedback to prescribers.
Missy Dolan replied that anything like this could be provided. There will be multiple formularies and the flexibility exists.
Senator Morrisette asked if any data is available regarding possible savings for the state of Oregon.
Missy Dolan replied that while no claims data is available for PEBB yet, Washington employee claims have shown a 2% savings.
Diane Lovell stated that when the Board considered carving out Rx one of the considerations was integration of services. She inquired how this flows within the program.
Missy Dolan replied that all insurers in Oregon except Regence carve out Rx and contract for Pharmacy Benefit Management (PBM). So far, there have been no integration problems.
Status on Achieving the Vision Part II: Regence
Margaret Smith-Isa referred to Bdattach.1 and explained that the Request for Proposals (RFP) 7210 issued by the PEBB outlined requirements for comprehensive, integrated plans for the delivery of medical and pharmacy benefits to PEBB members based on the Board’s Vision for 2007. 
Developed based on technical recommendations provided in the Foundation for Accountability’s report, Implementation of Vision 2007: Report on Communications and Technical Implementation Strategies, the RFP asked plans submitting proposals to respond to specific criteria within each Vision domain that established “minimum requirements” and “high rating” characteristics to guide the proposal evaluation process. Recognizing that implementing certain of the criteria included in the RFP would require longer-term implementation efforts, the RFP also outlined a general schedule for phased implementation.
She provided a report including a matrix summarizing key criteria that were identified as “minimum requirements” and “high rating” within each of the seven Vision domains during the proposal evaluation process, as well as a summary of the status of PEBB Vision implementation for Regence BlueCross BlueShield.
Margaret Smith-Isa commented that looking back to the Vision and the weighting of the scoring, perhaps it would be good to determine how medical home is defined. Of note is Regence’s new disease management program. It might be a good idea for the Board to examine this internal Regence program and how it compares to the Advicare program. She further explained that claims data is not yet sensitive enough to capture medical home data. Future efforts could be explored to better capture this.
Diane Lovell added that a major challenge is how to motivate members to participate in the medical home system.
Status on Achieving the Vision Part II: Samaritan
Margaret Smith-Isa referred to Bdattach.2 and, as with Regence in the previous presentation, she provided a report including a matrix summarizing key criteria that were identified as “minimum requirements” and “high rating” within each of the seven Vision domains during the proposal evaluation process, as well as a summary of the status of PEBB Vision implementation for Samaritan Select Health Plan.
Senator Morrisette asked if there are any implications of not participating in Leapfrog reporting.
Margaret Smith-Isa replied that PEBB is currently having focus meetings with non-participating hospitals to encourage participation. Some hospitals have expressed concerns regarding limits in resources such as staffing and time.
Jean Thorne explained that PEBB, OEBB, and other stakeholders including the OCHCP recently met with Sacred Heart Hospital in Eugene. They stated that Leapfrog reporting that this would require about 80 hours of resources. This doesn’t seem like a huge resource, and all hospitals are being encouraged to participate.
Margaret Smith-Isa added that hospitals have been informed that PEBB is encouraging members to look to Leapfrog, so this is an incentive to participate.
Jean Thorne asked if there is any sense of what services are being utilized by network providers versus independent providers.
Margaret Smith-Isa replied that Samaritan has more network providers for primary care.
Bariatric Surgery Update
Rebecca Sweatman referred to Bdattach.3 and provided a high-level overview of the 2006 administrative data reports on bariatric surgery for each plan, as well as next steps. She noted that based on the 2005 evidence-based report by Dr. Helfand of Oregon Health Science University’s Center for Excellence, estimates for annual bariatric surgery approvals were 60 for those with a BMI range 35-39, 160 for BMI range 40-49, and 210 for BMI range of 50+. The actuals reflect that most of the surgeries have been approved for those with BMI of 40+, and utilization of the benefit is lower than projected in the report.
Diane Lovell asked if long-term data on patient outcomes will be available for tracking.
Rebecca Sweatman replied that there would be variation due to small PEBB numbers, and it would be difficult to draw valid conclusions. PEBB would need to risk-adjust, which would require bringing in an expert to assist in establishing the proper methodology for doing so. There are national efforts through the Centers of Excellence examining how to report, but it would be very resource-intensive to do the risk-adjusting for just the PEBB population.
Wellness Update
Rebecca Sweatman referred to Bdattach.4 and reported that there has been robust interest and  activity around wellness during the first half of 2007. Fifteen wellness grants have been approved, one application is pending, and other agencies have expressed interest in submitting proposals. She reviewed highlights for the period and provided a detailed summary of the wellness grant program, worksite health screenings, flu shot clinics, Free and Clear Quit for Life® program, StayWell (State Agency Health and Wellness Council), Worksite Wellness Guidelines Development Workgroup, the PEBB wellness Web page, and the State Employee Health Survey.
Worksite Screenings
Regarding worksite screenings, she explained that there have been program improvements for those who are determined extreme high risk. Professionals from the health plans and Wellness 2000 make the determination, and during the counseling session those who fall into this category are referred to their provider, and the individual’s health plan is notified for follow up.
Jean Thorne commented that the plans have gotten much more invested in the screenings, and are looking at ways to be more involved in screening-type efforts.
Free & Clear Quit for Life® Programs
Jean Thorne reported that the Deputy Director of DAS is looking into a possible statewide smoke-free campus policy, which includes chewing as well as smoking tobacco.
Lydia Lissman explained that there will be additional administrative costs to PEBB to bring the Free & Clear program up to 100 percent benefit alignment, based on discussion at the August Board meeting. There will be no resulting change in premiums.  
State Employee Health Survey
Rebecca Sweatman reported that Aon will be doing an industry scan regarding wellness metrics and methodologies and will provide the Board with a report at a future meeting.
Operations Subcommittee Report
Lydia Lissman reported that the October 9 Operations Subcommittee meeting included summaries on the FSA for 2006 and 2007, as well as a contracts status update. PEBB is ahead of last year’s schedule as dental contracts have gone to the Department of Justice, and the medical contracts will go soon. 
Bobbie Barott reported that E-mail and phone call volume was very heavy during the first week of Open Enrollment. The second week was slower, but phone volume has increased again after last night’s statewide E-mail. Member Services has received several questions regarding the dependent certification process and fewer questions about the dental benefit changes, and the pebb.benefits system seems to be working better this year. Members report being happy with the hearing aid benefit. She explained that having all the information available on September 1 helped to get questions addressed prior to the beginning of Open Enrollment. Overall, calls have been the same or lower in volume than in 2006.
Report on 2006 & 2007 FSAs
Wendy Edwards referred to Bdattach.5 and provided an overview of the dependent care and health care flexible spending accounts (FSA) for 2006. She explained that forfeitures accumulate when employees have contributed into their FSA but did not use all of their contributions during the year and grace period. Forfeitures are offset by overpayment costs that occur for health care accounts. She noted that BHS delivered the 2006 final forfeiture report in late September 2007; therefore, PEBB staff will spend the next month reviewing and fully reconciling the 2006 final forfeiture report, and she will update the Board if a transfer to or from the Stabilization fund is recommended.
She referred to Bdattach.6 and explained that at this time, PEBB staff is projecting sufficient funds available in the PEBB Flexible Spending Account due to the forfeitures from plan year 2006. 
For the plan year 2008, PEBB is negotiating contact terms and conditions with ASI Flex, the new third party administrator for dependent and health care flexible spending accounts. ASI Flex is offering a debit card feature to PEBB members that will cost an additional $1.50 PMPM in administrative expenses; however, it is considered a marketing and convenience tool that is anticipated to significantly increase enrollment. PEBB staff will be closely monitoring Open Enrollment statistics and provide the Board with an update in the next few months regarding the health care and dependent care flexible spending accounts, as well as options to consider for future planning regarding FSAs.
Peter Callero suggested that if PEBB is going to offer placing funds into member FSAs as incentives, it may want to conduct a survey on why members forfeited funds from the Kaiser incentive.
Opt-Out Policy
Barbara Wall of Aon Consulting referred to Bdattach.7 and explained the history and effects of the provision to allow an employee with other group coverage to opt out of PEBB medical coverage. She provided a summary of facts regarding the 3,046 employees who currently have elected to opt out, as well as the probable impact and outcomes if the provision were eliminated, if there was a moderate increase in the opt-out payment, or if the arrangement were to remain the same. Aon recommended postponing the decision on opt out until the decision on funding mechanisms for the medical coverage is made for 2009.
After discussing the options, the Board made no proposed changes to the opt-out policy.
PEBB Connect
Wendy Edwards referred to Bdattach.8 and explained that communication consultants advised PEBB to promote the composition of the Board and how its makeup benefits employees and the state. In keeping with that advice and to encourage ongoing member communication, PEBB staff implemented pebb.connect.
In September, staff requested that DAS implement pebb.connect@state.or.us, an E-mail address to connect employees with the Board. Initial communication in September introduced this E-mail address along with information on the Board’s makeup (who Board members are, where they work and whom they represent). Communications on the topic will be ongoing. She outlined the flow of inquiries in PEBB Connect and staff recommendations for timely Board responses.
Diane Lovell commented that it would be unwieldy for all Board members to review and approve responses. She suggested that the initial review and response be delegated to one labor and one management representative, with the Board receiving a regular report of all inquiries and responses.
The Board decided that the PEBB Communications Coordinator will draft responses on behalf of the Board (3-4 day turnaround). One labor (Peter Callero) and one management (Rocky King) representative from the Board will review responses before they are sent.
Standard Demutualization
Lydia Lissman explained that according to the Standard Demutualization settlement, a balance of approximately $22 million remains with the PEBB Stabilization Fund after the transfer of funds to the Oregon Health Sciences University. A future Board discussion will address the use of those funds.
Rural Subsidies – Part II
Barbara Wall of Aon Consulting referred to Bdattach.9 and summarized the current arrangements, costs and options for consideration of the rural subsidy provision.
Lydia Lissman explained the following the key items for Board consideration:
  • Does the Rural Subsidy support the PEBB Vision?
    1. Appropriate market and consumer incentives that encourage the right care at the right time
    2. Benefits that are affordable to the state and employees
  • Has the purpose of the Rural Subsidy changed?
    1. To adjust costs for members who live in areas where Regence is the sole plan andwhere there are an insufficient number of providers in the Regence network
  • What factors might the Board consider in making a decision about the Rural Subsidy? 
    1. The extent to which there remains an insufficient number of providers in the Regence network by county
    2. Data included in the analysis:
      1. The percentage of employees within the county who reside in the key medical service area
      2. The community standard for medical care areas for specialty care (where do people in the county generally go for specialist care)
      3. The percentage of primary care providers in the key medical service area that are in the Regence
      4. The number of specialists in the key medical service area that are in the Regence network
      5. The number of specialists in the community specialist care site that are in the Regence network
Barbara Wall explained that the estimated cost is based on a Regence Cost Containment report and defines an average amount allowed and the average contract savings. The estimate is based on recent census figures in the 20 counties, and the savings to PEBB for moving all 20 counties to the PPO arrangement from the rural subsidy would be 1.5% of premium, or $3.8 million.
Lydia Lissman provided demographic information for all Oregon counties as well as enrolled members and primary care availability.
Rich Pepper commented that the only area that stands out is Klamath Falls.
Barbara Wall replied that it’s really an issue of contracting, as there are many providers there who refuse to contract.
Peter Callero asked if are there reasons other than money for not contracting with Regence.
Jeanene Smith suggested that it’s difficult to say, but it may be based on not wanting to be part of a plan. Her experience is that most providers would prefer to be part of Regence.
Diane Lovell suggested this issue be set aside; rather, define the future state – where PEBB would like to be in keeping with the Vision, then go back and examine this data.
Sue Nelson concurred.
Diane Lovell stated that the Board will revisit this item at a future meeting.
November Strategic Planning
Diane Lovell reported that Diana Bianco has agreed to facilitate the retreat, which will be held on November 20 in place of the regular Board meeting.
The Board discussed the topics to be addressed at the November strategic planning retreat, as follows:
  • Medical home & collaboration with Care Oregon
  • Review previous parking lot issues (identified for future work)
  • Working with OEBB
  • Key changes, strategies, and talking points for key changes and achievements
  • Partnerships – who they are; how the Vision is achieved through partnerships
  • Standards for applying evidence-based medicine (when there is no evidence)
  • Where to invest resources to advance Vision (priorities)
  • Specific role of wellness to the Vision
  • Look to successes – how to incent reforms; pay attention to day-to-day operations and continue to do those well
  • Identify Vision, current activities, partnerships, top priorities
  • At end of day:
    • Reprioritization of work (or narrowing down)
    • Capture work in bigger topics/strategies
  • What we want to accomplish in Board meetings
    • Commitment to time
Other Business
Jean Thorne reported that on November 13 PEBB will receive the Employer Excellence in Value Based Purchasing Award through the National Business Coalition on Health (NBCH), a non-profit organization of employer-based health coalitions. PEBB is being recognized for their leadership and ability to convene different health care stakeholders around a common agenda of health system reform through value based purchasing.
Diane Lovell reported that she attended a recent OEBB planning retreat and volunteered PEBB Board members to assist as needed. Additionally, she has agreed to serve as a representative of PEBB on the Delivery System Subcommittee of the Oregon Health Fund Board. She also reported that the Health Resources Commission will be establishing a subcommittee around autism, and she will keep the Board apprised of activities in the event they may wish to send a representative to the meetings.
Jean Thorne reported that on Thursday, CareOregon will do a presentation to representatives of all health plans, SEIU Local 49, SAIF and others (including Diane Lovell and Jeanene Smith) regarding opportunities for collaboration.
Public Comment
Meeting Adjourned