2015-28904 Reso RESOLUTION NO. 2015-28904
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE
RECOMMENDATIONS OF THE FINANCE AND CITYWIDE PROJECTS
COMMITTEE, WAIVING BY 5/7TH VOTE THE FORMAL BIDDING
REQUIREMENTS AND AUTHORIZING THE CITY MANAGER TO
NEGOTIATE AND EXECUTE A CONTRACT WITH AVMED FOR THE
PROVISION OF ADMINISTRATIVE SERVICES ONLY FOR THE CITY'S
SELF-INSURED HEALTH CARE PROGRAM TO BE EFFECTIVE
MARCH 1, 2015. THROUGH SEPTEMBER 30, 2016, WITH HUMANA
ALSO PROVIDING CONTINUED AND ALTERNATIVE HEALTH CARE
INSURANCE THROUGH SEPTEMBER 30, 2016, FINDING SUCH
WAIVER TO BE IN THE BEST INTEREST OF THE CITY; AND
FURTHER, DIRECTING THE ADMINISTRATION TO ISSUE AN
INVITATION TO NEGOTIATE (ITN) FOR THE PROVISION OF
ADMINISTRATIVE SERVICES ONLY FOR THE CITY'S SELF-INSURED
HEALTH CARE PROGRAM TO BE IMPLEMENTED BEGINNING
OCTOBER 1, 2016.
WHEREAS, the City's current administrative services only (ASO) provider, Humana
Insurance Company ("Humana"), dissolved its relationship with the Baptist Health Care System
("Baptist"); and
WHEREAS, the dissolution of such relationship resulted in all affiliated hospitals, urgent
care centers, and health care practitioners associated with Baptist being out-of-network
providers for all City of Miami Beach employees who elected health care coverage as a benefit
of employment; and
WHEREAS, approximately 24% of covered employees and retirees live south west of 56
Street where the majority of health care providers are associated with the Baptist Hospital
Health Care System; and
WHEREAS, claims associated with Baptist providers represented between 9.9% -
17.7% of the City's health plan spending between 2011 and June 2014; and
WHEREAS, health care services through an out-of-network provider are either not an
option or, if available, are subject to higher out-of-pocket expenses for covered employees and
retirees; and
WHEREAS, AvMed has a relationship with Baptist and will be able to provide improved
health care coverage to City employees; and
WHEREAS, the Finance and Citywide Projects (FCWP) Committee members reviewed
the status of the City's health care benefit program. on December 12, 2014 and then at its
January 7, 2015 meeting, recommended the following: AvMed should provide a health care
insurance program, in addition to Humana, as an ASO provider effective March 1, 2015; the
Baptist Health Care System should be reintegrated as an in-network provider to insured City
employees and retirees; and staff should issue an Invitation to Negotiate (ITN), the results of
which should be implemented October 1, 2016.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission hereby accept the recommendations of the Finance and Citywide Projects
Committee and waive, by 517th vote, the formal bidding requirements and authorize the City
Manager to negotiate and execute a contract with AvMed for the provision of administrative
services only for the City's self-insured health care program to be effective March 1, 2015
through September 30, 2016, with Humana also providing continued alternative health care
insurance through September 30, 2016, finding such waiver to be in the best interest of the City;
and further, directing the Administration to issue an Invitation to Negotiate (ITN) for the provision
of administrative services only for the City's self-insured health care program to be implemented
beginning October 1, 2016.
PASSED AND ADOPTED this /V day of J(intact/ , 2015.
ATTEST:
Philip Le - E1, :r
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APPROVED AS TO
FORM & LANGUAGE
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COMMISSION ITEM SUMMARY
Condensed Title:
A resolution of the Mayor and City Commission of the City of Miami Beach, Florida, accepting the
recommendation of the Finance and Citywide Projects Committee to authorize the Manager to negotiate
and execute a contract with AvMed for the provision of administrative services only for the City's self-
insured health care program to be effective March 1, 2015, with Humana coexisting and providing
continued health care insurance through September 30, 2015, and hereby waive by 5/7tns vote, the formal
competitive bidding requirement, finding such waiver to be in the best interest of the City; and further,
directing the administration to issue an invitation to negotiate for the provision of administrative service
only for the City's self-insured health care program to be implemented beginning October 1, 2016.
Key Intended Outcome Supported:
Streamline the delivery of services; ensure expenditure trends are sustainable over the long run
Item Summary/Recommendation:
On December 12, 2014 and January 7, 2015, the Finance and Citywide Projects Committee (FCWPC)
members discussed the effects of the Baptist Health Care System and its affiliated health care providers
not being in-network through Humana, the City's Administrative Services Only (ASO) carrier.
A report run early last fall showed that 24% of the covered employees and retirees living south of 56 SW
Street(as they are closer to Baptist Hospital than any other health care facility in the area) are affected by
his change.
Claims associated with Baptist providers represented between 9.9% - 17.7% of health plan spending
between 2011 through June 2014.
After lengthy discussion the FCWPC members found that health care coverage that does not include the
Baptist Health Care System and its affiliated health care practitioners as part of its network unacceptable.
Therefore, the Administration was directed to negotiate with AvMed to coexist with Humana effective
March 1, 2015; to negotiate with AvMed to have the company by the sole ASO carrier October 1, 2015
through September 30, 2016; and to issue an ITN to gauge other carriers' interest in working with the City
as of the benefit plan year beginning October 1, 2016.
The Administration recommends adoption of the FCWPC's recommendations.
Advisory Board Recommendation:
At the January 7, 2015, Finance and Citywide Projects Committee meeting, members voted to negotiate
with AvMed to coexist with Humana effective March 1, 2015; to negotiate with AvMed to have the
company by the sole ASO carrier October 1, 2015 through September 30, 2016; and to issue an ITN to
gauge other carriers' interest in working with the City as of the benefit plan year beginning October 1,
2016.
Financial Information:
Source of Amount Account
Funds: 1
2
OBPI Total
Financial Impact Summary: This action should not have a financial impact as ASO fees are based on
a per person served. Therefore, employees will be covered by one of two carriers, not both.
City Clerk's Office Legislative Tracking:
Sylvia Crespo-Tabak, Human Resources Director
Sign-Offs:
Department i D' actor ACM/ Ai O City eager
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MIAMI BEACH E 1—)11-1\
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MIAMI BEACH
City of Miami Beach, 1700 Convention Center Drive,Miami Beach, Florida 33139,www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Philip Levine and Member of t e City Co ission
FROM: Jimmy L. Morales, City Manager
DATE: January 14, 2015
SUBJECT: A RESOLUTION OF THE MAY R AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE
RECOMMENDATIONS OF THE FINANCE AND CITYWIDE PROJECTS
COMMITTEE AND AUTHORIZE THE CITY MANAGER TO NEGOTIATE
AND EXECUTE A CONTRACT WITH AVMED FOR THE PROVISION OF
ADMINISTRATIVE SERVICES ONLY FOR THE CITY'S SELF-INSURED
HEALTH CARE PROGRAM TO BE EFFECTIVE MARCH 1, 2016, WITH
HUMANA COEXISTING AND PROVIDING CONTINUED HEALTH CARE
INSURANCE THROUGH SEPTEMBER 30, 2015, AND HEREBY WAIVE
BY 5/7THS VOTE, THE FORMAL COMPETITIVE BIDDING
REQUIREMENT, FINDING SUCH WAIVER TO BE IN THE BEST
INTEREST OF THE CITY; AND FURTHER, DIRECTING THE
ADMINISTRATION TO ISSUE AN INVITATION TO NEGOTIATE (ITN)
FOR THE PROVISION OF ADMINISTRATIVE SERVICES ONLY FOR
THE CITY'S SELF-INSURED HEALTH CARE PROGRAM TO BE
IMPLEMENTED BEGINNING OCTOBER 1, 2016.
BACKGROUND
On December 12, 2014 and January 7, 2015, the Finance and Citywide Projects Committee
(FCWPC) members discussed the effects of the Baptist Health Care System and its affiliated
health care providers not being in-network through Humana, the City's Administrative Services
Only (ASO) carrier.
DISCUSSION
Effective August 14, 2014, negotiations between Humana, the City's Administrative Services Only
(ASO) carrier, and the Baptist network ended in a deadlock. As a result, all Baptist Hospitals,
physicians and associated health care practitioners are out of network providers for City of Miami
Beach employees who take advantage of the health care coverage benefits associated with
employment with the City.
Based on a report showing employees and retirees living south of 56 Street (as they are closer to
Baptist Hospital than any other health care facility in the area) 24% are affected by his change.
Commission Memorandum
Accepting FCWPC's Recommendation Regarding AvMed
January 14, 2015 Page 2 of 3
Claims associated with Baptist providers represented between 9.9% - 17.7% of health plan
spending between 2011 through June 2014.
To address the needs of affected employees in the most expeditious way, staff looked at
piggybacking on an existing ASO contract with another public sector entity. The contract between
Miami-Dade County and AvMed appeared to be the most promising as the rates are competitive
and the network in the tri-county area extensive, including Baptist and its affiliated providers.
The City considered piggybacking the County's contract and discarded the option due to the fact
that by definition piggybacking requires that the City adopt the County's program as is. Given the
differences between what the County and the City offer and the confusion that moving to a
completely different program within a benefit plan year that just began would create, the City and
its advisors, Gallagher Benefits Services (Gallagher) thought is best not to abandon Humana
altogether but to explore three other options.
At the December 12, 2014 meeting, the Administration sought the FCWPC's recommendation as
to which of three available options the City should pursue. They included:
1. No change in carrier — staying with Humana and encouraging the organization to make
every effort to re-engage Baptist as a network provider.
2. Co-habitate — contract with AvMed as a second carrier with Humana. The considerations
regarding this option include verifying that AvMed will offer the City the same administrative
fees as the County and that Humana will participate in a dual carrier offering. Gallagher
would have to request a full re-pricing of claims by AvMed to assess the financial
implication of a partial replacement and analyze the access and disruption of providers
comparing the AvMed and Humana networks to educate employees who might elect
coverage through AvMed; implement the City's current plan designs on AvMed's platform
and assess the financial implications of prescription management (rebate credits/pricing)
and whether it could be provided on a dual carrier offering and/or of it is more
advantageous or even possible to continue with a single carrier for prescription
management.
3. Migrate to AvMed -via negotiations as only carrier.
At that time, the FCWPC recommended that AvMed cohabitate with Humana effective March 1,
2015, and the City issue Invitations to Negotiate (ITN) to gauge other carriers' interest in working
with the City as of the new benefit plan year October 1, 2015.
Shortly after the FCWPC's recommendation to issue an ITN, AvMed advised the Administration,
through the City's benefits consultant, Gallagher Benefits Services (Gallagher), that
implementation was too costly and labor-intensive to provide the service for only a guaranteed six-
month period (March to September).
As an administrative services only (ASO) provider, AvMed, or any other such provider, would have
to:
• Establish an account structure for five medical plans with three separate divisions: active
employees; retirees and those former employee or dependents now covered through
COBRA
• Configure each plan to include the identification of covered services, exclusions, limitations,
Commission Memorandum
Accepting FCWPC's Recommendation Regarding AvMed
January 14, 2015 Page 3 of 3
authorization requirements, age restrictions and limits
• Create funding invoices to meet the City's requirements
• Establish group-specific bank accounts
• Assign an experienced management team to be trained in the City's medical, finance and
specific benefit designs and exclusions
• Notify key network providers of the City's benefit packages
• Train an AvMed representative to be onsite to assist during open enrollment
• Develop and produce materials, including provider directories, benefits comparisons and
benefit and coverage summaries
• Create and distribute ID cards
• Set up dedicated phone lines for the anticipated participants' use during the open
enrollment period
• Identify employees who elect to be covered through AvMed to determine if they need
transition of care, case management, disease management, specialty pharmacy or home -
health services to assign case managers to reach out to them
To meet the March 1 deadline, whether with AvMed or any other provider, the City and provider
staff will have to focus their energies full-time to have a successful two-week open enrollment
period, February 9 through February 20, for coverage to begin March 1.
At the January 7 meeting, the Administration's recommendation was to make no carrier changes
during the balance of the plan benefit year, encourage Humana to assist members in finding in-
network practitioners to replace their former Baptist affiliated health care providers and for the City
with the new benefit plan year.
to issue the ITN for implementation p y
CONCLUSION
After lengthy discussion the FCWPC members found that health care coverage that does not
include the Baptist Health Care System and its affiliated health care practitioners as part of its
network unacceptable. Therefore, the Administration was directed to negotiate with AvMed to
coexist with Humana effective March 1, 2015; to negotiate with AvMed to have the company by the
sole ASO carrier October 1, 2015 through September 30, 2016; and to issue an ITN to gauge other
carriers' interest in working with the City as of the benefit plan year beginning October 1, 2016.
The Administration recommends adoption of the FCWPC's recommendations.
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