97-22318 RESO
RESOLUTION NO. 97- 22318
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THlG
CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RANKING Of
PROPOSALS RECEIVED AND AUTHORIZING THE ADMINISTRATION
TO ENTER INTO NEGOTIATIONS WITH THE NUMBER-ONE RANI<En
FIRM, AMERICAN DENTAL PLAN, PURSUANT TO REQUEST FOR
PROPOSALS NUMBER 19-96/99 TO PROVIDE GROUP MANAG En
CARE/INDEMNITY DENTAL INSURANCE FOR EMPLOYEES ANn
RETIREES; SHOULD THE ADMINISTRATION NOT BE ABLE TO REACl [
AGREEMENT WITH AMERICAN DENTAL PLAN, AUTHORIZING TH11:
ADMINISTRATION TO NEGOTIATE WITH THE SECOND-RANKEU
FIRM, PRUDENTIAL INSURANCE COMPANY OF AMERICA
WHEREAS, the City is seeking to provide group managed care/indemnity dental insurmc .~
for employees and retirees; and
WHEREAS, the City issued a Request for Proposals (RFP 19-96/99) for providing th.~
required services on November 5, 1996; and
WHEREAS, notices and specification packages for the Requests for Proposals were issuec
to eighty-seven firms, resulting in six responses; and
WHEREAS, the Office of Risk Management, the Group Insurance Board, and the Health Advi~:or I
Committee evaluated the proposals received and selected the firm of American Dental Plan as th.~
top-ranked firm, and the firm of Prudential Insurance Company of America as the second-ranke 1
firm.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND ClTv
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and Cit I
Commission herein accept the ranking of proposals received and authorize the Administratiol t)
enter into negotiations with the number-one ranked firm, American Dental Plan, pursuant to RF)
Number 19-96/99 to provide group managed care/indemnity dental insurance for employees an 1
retirees; and should the Administration not be able to reach agreement with American Dental Plar,
the Administration is authorized to negotiate with the second-ranked firm of Prudential Insuranc.~
Company of America.
PASSED and ADOPTED this 19th day of March, 199
4--
AT~:~r ~QAL
CITY CLERK
APPROVED AS 'irQ
FORM & LANGU""E
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CliTY OF MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
~ci.miami-beach.f1.us
COMMISSION MEMORANDUM NO. J 35, q 1
TO:
Mayor Seymour Gelber and
Members of the City Commission
DATE: March 5, 199"
SUBJECT: Request to Accept t Ranking of Proposals Received and to Authorize th .~
Administration to Enter into Negotiations for a Contract with the Number-On.~
Ranked Firm, American Dental Plan, Pursuant to RFP Number 19-96/9~:' t'i'
Provide Group Managed Care/Indemnity Dental Insurance for Employees ami
Retirees; Should the Administration Not Be Able to Reach Agreement Witll!l
American Dental Plan, to Authorize the Administration to Negotiate with th.~
Second-Ranked Firm, Prudential Insurance Company of America.
FROM: Jose Garcia-Pedrosa
City Manager
ADMINISTRATION RECOMMENDATION:
To accept the ranking of proposals and authorize the Administration to negotiate a contract.
CONTRACT AMOUNT AND FUNDING:
$666,405. (Annual Estimate) Premium contributions will be split 50/50 betwee 1
employee/retiree deductions and City contributions. City contribution funding i;
available from Budget Accounts of various departments, subject to OMB appro va .
This estimate is based on the existing number of employees and retirees eorollel i 1
each ofthe plans and based on a two-tier rate structure.
BACKGROUND:
The City of Miami Beach issued RFP Number 19-96/99 on November 5, 1996, to solicit bids for th.~
group managed care/indemnity dental insurance program. The City's Administration prepared th.~
bid specifications with the bid objectives requested being developed in conjunction with the Gr~>u)
Insurance Board and the Health Advisory Committee.
The Group Insurance Board is comprised of the presidents of the American Federation of S1att.,
County and Municipal Employees (AFSCME), and the Communications Workers of Americ 1
(CW A), a retiree representative and three Administration representatives. The Health Adviwr I
Committee is a fourteen member City board comprised of individuals from the community who ar.~
involved with the health industry.
Six responses were received on December 3, 199~and the Office of Risk Management analyzed aJ
of the bids received and presented a Preliminary Report to the Group Insurance Board on Januarl
24, 1997.
Agenda Item C ~ I-'i...
Date 3-1 tll
RFP NO. 19-96/99
Page Two
March 5, 1997
BACKGROUND: (Continued)
The Board ranked the top three finalists based on the premium cost, number of dentists, finan::ial
rating, rate guarantee periods, references, and comparison of benefit levels. On February :lrd,
representatives from the top three ranked companies were invited to make a presentation before th~
Group Insurance Board on their respective companies and bid proposals. There was a question :lllll
answer session which allowed all the Group Insurance Board members and two members from th.~
Health Advisory Board the opportunity to discuss any concerns or questions that the Board hall
regarding their proposals.
After careful consideration of the top three companies, the Group Insurance Board votei;l
unanimously to negotiate with the top finalist, American Dental Plan. If, for any reason th.:
negotiation discussion fails, the Group Insurance Board recommended proceeding with the seccnd..
ranked finalist, Prudential Insurance Company.
A Final Report prepared by the Office of Risk Management is attached for City Commission revie",.
ANALYSIS:
Request for Proposal Number 19-96/99 was advertised on November 6, 1996. A pre-bid mee:in.~
was held on November 14, 1996, and the bid opening date was December 3, 1996. Seventy-e 19l t
notices and nine specification packages were mailed, resulting in six responses.
Responses were received from the following insurance carriers:
American Dental Plan - Humana Health Care Plans
Bankers Insurance Group - Oral Health Services
CIGNA Health Care - Prudential Insurance Company
Upon review of all of the bids, it was determined that the following firms did not meet the City's bi .:1
specifications and would not be considered:
Humana - did not include a benefit sheet outlining the benefit levels within the plan,and the y
also specified that their plan was not applicable to retirees residing outside of tbe
South Florida area.
After careful consideration and review of the remaining proposals, the Board's primary cone err s
were the maximum benefit allowed under the plans; satisfaction and performance level of all tre
plans (references); out-of-pocket expense for the members; and premium cost. The Group Insur.m( e
Board had the following concerns about the bids received:
OHS - premium costs were relatively high compared to the other proposals; least favorab e
dentist/member ratio; largest percentage rate of premium towards administrative eos 1:;
and highest number of closed practices.
CIGNA - premium costs were relatively high compared to the other proposals; considerab e
number of closed practices in Dade and Broward counties.
RFP NO. 19-96/99
Page Three
March 5, 1997
ANALYSIS: (Continued)
Bankers - absence of dentist fee limits would likely result in more rapid depletion of the $1, )011
annual benefit allowed under this plan; other plans provide a managed care option
that has lesser costs and offers an unlimited annual benefit; and many users lad:
sophistication needed to properly assess dentists' credentials and do not want th.:
burden of conducting fee comparisons to control their costs. These concerns ar,.:
addressed in managed care programs. Lastly, this plan has only recently begull SIt
it is not possible to evaluate user satisfaction over a long term.
Prudential - premium cost if no benefit reductions are made to the present plan.
The following chart compares the estimated premium cost for the top three finalists as seen by th .:
Group Insurance Board; our present premium cost; and the premium rates prior to October 1, 1 S'9E ,
i.e. prior to Prudential's 32.7% premium rate increase. The figures were based on the September I,
1996 head counts for illustrative purposes:
Company
Plan
Sinl:le
American
MC
IND
6,259.14
8,505.00
Bankers
Plan B
Plan C
18,153.63
18,491.22
Prudential
(New)
11,909.25
13,851.00
DMO
IND
Dual
22,836.33
Prudential Dual
(Presently)
21,507. 75
Prudential Dual 16,204.32
(Old) - Prior to October 1, 1996
Family
17,740.80
23,028.75
53,612.34
53,991.51
38,720.00
35,315.20
64,539.33
60,782.10
45, 799.14
Total
Annually
23,999.94
31.533.75
55,533.69
666,404.28
71,765.97
72,482.73
861,191.64
869,792.76
50,629.25
49.166.20
99,795.45
1,197,545.40
87,375.66
1,048,507.92
82,289.95
987,478.20
62,003.46
744,041.52
*
MC = Managed Care plan; IND = Indemnity Plan; Dual = Both Managed Care & Indemnity plan.
RFP NO. 19-96/99
Page Four
March 5,1997
ANALYSIS: (Continued)
Based on all the concerns of the Board, it was determined that American Dental Plan had the be! t
proposal for the employees and retirees of the City of Miami Beach. American has a large numbEr
of governmental agencies as clients; best dentist/patient ratio; best premium rates; offered a thre.~
tier rate structure; and included additional benefits (vision, prescription and contact lens replacemer t
program) at no cost to the City and its employees and retirees.
On February 20, 1997, the Health Advisory Committee and the Group Insurance Board had aj)ir t
meeting to discuss the RFP responses, summary analysis and additional information provided dui.n .~
the dental presentations. After some discussion among both boards, the Health Advisory Committe.~
recommended that the City Administration enter into negotiations with American Dental Plan.
CONCLUSION:
The Commission should accept the ranking recommended by the Group Insurance Board and th.~
Health Advisory Committee and authorize the Administration to commence negotiations with th.~
recommended insurance carrier.
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