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RESOLUTION 92-20568 • . . CITY OF MIAMI BEACH CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139 OFFICE OF THE CITY MANAGER TELEPHONE: (305) 673-7010 FAX: (305) 673-7782 COMMISSION MEMORANDUM NO. / 392— Mayor Seymour Gelber and DATE? /22 /92 Members of the City Commission FROM: Roger M. Car1t n A AL; City Manager SUBJECT: AWARD OF BID NO. 101-91/96, CITY OF MIAMI BEACH GROUP MANAGED CARE MEDICAL, HMO AND MEDICARE SUPPLEMENT PLANS ADMINISTRATION RECOMMENDATION: The Administration recommends to the City Commission that our Group Managed Care Medical and Medicare Supplement Plans be awarded to Humana Health Insurance Company of Florida, Inc. , and our HMO Plan be awarded to Humana Medical Plan, Inc. for a one year period commencing October 1, 1992 , with options to renew for four additional one-year periods. BID AMOUNT AND FUNDING: $5 , 304 , 000 . (Annual Estimate) Split 50/50 between employee/retiree deductions and City contributions . City contribution funding is available from Budget Accounts of various departments, subject to OMB approval . BACKGROUND: Due to changes in the group insurance market and in the City Commission and Administration, it appeared to be in the best interest of the City to solicit bids for the entire group insurance program at this time . Towers Perrin, the City ' s Benefit Consultant, and the Administration prepared the bid specifications, with the bid objectives and benefit changes requested being developed in conjunction with the Group Insurance Board which is comprised of administration, employee and retiree representatives . Invitation to Bid No. 101-91/96 was released on May 14 , 1992 , and bids were received on June 18 , 1992 . Towers Perrin evaluated all the bids received and presented a Preliminary Report - Review of 1992 Bid Proposals and Initial Recommendations to the City Administration and the Group Insurance Board on July 10, 1992 . On July 13 , the Group Insurance Board voted to recommend the award of the bid for Group Managed Care Medical and Medicare Supplement Plans to Humana Health InsuraAc e Company of Florida, Inc. and for HMO Plan to Humana Medical Plan, Inc. , commencing October 1 , 1992 . It is recommended that the awards be for a one year period, with options to renew for four additional one year periods , A Final Report, prepared by Towers Perrin, has been distributed with the agenda package, for your review. Jo Fur a1 APPROVED V AGENDA /0, ITEM - M.�agement and Eu,.get DATE1L—L. _ C df • 1 AWARD OF BID NO. 101-91/96, CITY OF MIAMI BEACH GROUP MANAGED CARE MEDICAL, HMO AND MEDICARE SUPPLEMENT PLANS July 22 , 1992 Page Two ANALYSIS: ADVERTISEMENT DATE: May 12 , 1992 PRE-BID MEETING DATE: May 22 , 1992 , 9 : 00 A.M. BID OPENING DATE: June 18 , 1992 , 4 : 00 P.M. NOTICES MAILED: Fifty-Four (54 ) SPECIFICATIONS MAILED: Forty-Four (44 ) REPLIES : Fifteen15 ( ) , including 1 Non-responsive bid, and 7 "No Bid" responses Bids were received from: AV-MED Health Plan (PPO & HMO) CAC Ramsey (HMO) Humana Health Care Plans (PPO, HMO, Medicare Supplement) ITT Hartford (Medicare Supplement only) Miami Dade Health Plan (HMO) PCA Health Plans of Fla . , Inc. (HMO) Vision Service Plan (Vision care) Non-Responsive Bid: Self Funding Administrators, Inc . (no signature on proposal page) "No Bide responses: Addison Financial Services, Inc. Aetna. Blue Cross/Blue Shield Capital American Colonial Life & Accident Insurance Co. Family Health Plan, Inc. Hunt Insurance Group Towers Perrin evaluated the bids, with the following results. It was determined that the following firms did not meet the City ' s bid specifications , and would not be considered: ITT Hartford - does not offer coverage for all Medicare retirees Vision Service Plan - City does not sponsor a stand-alone vision care program at this time Proposals from the following companies were not considered because they were for HMO coverage only (no indemnity/PPO Plans quoted) : CAC Ramsey Miami Dade Health Plan PCA Health Plans of Florida, Inc. The proposal from AV-MED Health Plan was disqualified because they indicated that PPO coverage would not be offered to retirees outside the AV-MED service area . Humana offered their current program, with no benefit changes at the current inforce rates for the PPO and HMO plans. The Medicare Supplement Plan rates are scheduled to increase by 17 . 4% , subject to Florida Department of Insurance approval . 31 • AWARD OF BID NO. 101-91/96, CITY OF MIAMI BEACH GROUP MANAGED CARE MEDICAL, HMO AND MEDICARE SUPPLEMENT PLANS July 22 , 1992 Page Three ANALYSIS (Continued) : With Humana remaining as the only viable bidder, the Group Insurance Board commenced negotiations. The following agreements were reached: Rate increases for 10/1/93-9/ 30/94 plan year are guaranteed not to exceed a maximum of 8% for HMO and 11% for PPO (negotiated down by the Board from Humana ' s first offer of 12% and 15% respectively) Reasonable and customary reimbursement levels for services incurred by out-of-area retirees will be established within 5% of the 90th percentile of the HIAA database CONCLUSION: Because Humana remained the only viable bidder, and because a reasonable agreement was negotiated, the Group Insurance Board voted to recommend awarding the bid to Humana, and the Administration concurs with that decision. (v, RMC:EJD: j f • SERVICE AGREEMENT BETWEEN CITY OF MIAMI BEACH AND HUMANA MEDICAL PLAN, INC. & HUMANA HEALTH INSURANCE COMPANY OF FLORIDA, INC. FOR MEDICAL BENEFITS COVERING CITY OF MIAMI BEACH EMPLOYEES, RETIREES AND DEPENDENTS This is an agreement, made and entered into this 1st day of October , 1992 , by . and between: The City of Miami Beach, hereinafter referred to as "City" AND, Humana Medical Plan, Inc. , and Humana Health Insurance Company of Florida, Inc. , their successors and assigns, hereinafter referred to as "Humana" . WITNESSETH, in consideration of the City awarding Invitation to Bid No. 101-91/96: Group Managed Care Medical, HMO and Medicare Supplement Plans to Humana for a one (1) year term and the mutual terms, conditions, promises, covenants and payments hereinafter set • forth, the City and Humana agree as follows: I. PROVISIONS OF AGREEMENT 1. Open Enrollment/Educational Sessions The City will schedule the annual Open Enrollment sessions at various locations and times, and will notify Humana Account Services at least two weeks prior to the first sessions. From one to three other times during the plan year, educational sessions will be conducted again at various locations and times, as agreed by the City and Humana. Humana will provide a representative to conduct benefit presentations at these sessions. 4 2 . HMO and PPO Plans Packets Humana will prepare and distribute by U.S. mail HMO and PPO Plans packets at least two weeks in advance of the commencement of the City's annual Open Enrollment. The City administration will assist in the development of an Open Enrollment announcement to be included in each packet, and review information to be included in the packets in advance of printing and distribution. Mailing labels will be provided by the City. Any packets returned for incorrect address will be given to the City administration to send to the employee or retiree. 3 . Provider Directories In addition to the HMO and PPO provider directories distributed at Open Enrollment, Humana shall mail to each 1 • • ' member a new directory or a list of changes to the previous directory not less than once each calendar quarter. Humana will also notify the City administration in writing of additions, changes or deletions which occur in the interim. Humana must honor all claims for deleted providers until the next directory or list of changes is mailed to the members. HMO Plan members are to be advised by Humana by mail of reassignments to new centers due to cancellation of center contracts. Notification is to be thirty (3 0) days prior to the reassignment date, or as expeditiously as possible if contract cancellation is effective in less - - than 3u days. . Each calendar quarter, Humana shall provide a list of providers such as home health care, extended care facilities, durable medical equipment, hospice and other such providers contracted with Humana. Each calendar quarter, Humana shall identify the contracted providers for anesthesiology, pathology, radiology, and emergency physician group at each contracted PPO hospital in South Florida Service Area. Also, Humana shall provide assistance to plan members in identifying PPO contracted outpatient facilities billing as hospital facilities. 4 . Identification Cards For new enrollees and members with plan or coverage changes, including Open Enrollment, Humana will process the enrollment or change no later than three weeks upon receipt by the Humana Billing office in Louisville, Kentucky. The member is responsible for informing the City group insurance section of the Personnel Department. If Humana fails to do so, Humana Account Services must contact providers to arrange for coverage of medical care required. The Account Services representative will be responsible for having the identification card(s) produced and sent to the member. 5. PPO Plan Late Entrants Employees and/or dependent(s) requesting enrollment in the Humana PPO Plan after Open Enrollment has ended or after the 30 day eligibility period will complete the appropriate Enrollment or Change Form, including the Medical Statement. The completed form will be sent by the City to the Humana Billing office for handling. If additional information is required from Humana, Humana will send a written request for any additional 2 information postmarked within two weeks of the application' s receipt by the Humana underwriting department as logged in their computer data base. The applicant will have a minimum of six weeks from the date of Humana ' s request to the date postmarked on the envelope returning the information to Humana. Humana Account Services is to keep the City administration advised of the status of late entrant applicants. 6. Claims and Correspondence Responses Humana agrees to correspond directly with PPO and HMO members regarding the status of any claims submitted which have not been resolved within 30 days of the date of receipt by Humana. The City administration shall notify Humana of post-30 day claims via claims transmittal forms and copies of claims, or the member may provide notice to Humana in writing with a copy of the claim in question attached. Humana shall respond in writing, or verbally with a follow-up in writing, to the member (or the City administration, if the member can not be contacted) . Information will include the status of the claims, reasons for any delays, and the name and telephone number for a Humana contact person to receive additional information. Responses shall be received by the member (or the City administration, if the member can not be contacted) within 14 calendar days (which includes return mail time) of Humana 's receipt of the request. FAILURE TO COMPLY WILL RESULT IN A $100 PER CALENDAR DAY PENALTY TO BE PAID BY HUMANA UPON WRITTEN NOTIFICATION BY THE CITY TO HUMANA. THE AFFECTED MEMBER WILL RECEIVE ONE-HALF OF THE PENALTY, to be applied by the City to the member's healthcare plan premium deduction. This penalty may be waived only by mutual agreement between the City and Humana. 7 . "Threatening Letter" Responses Any time a PPO or HMO member receives a letter from a PPO or non-PPO provider threatening legal action, referral to a collection agency or other negative action which could jeopardize the member' s credit standing because of Humana ' s delay or failure to pay claims, Humana shall respond, in writing or verbally with a follow-up in writing, to the member and the City administration with an explanation of the status of any claims submitted within the past 30 days. The City administration shall notify Humana of threatening letter via claims transmittal form and copy of all relevant information available. Humana 's response shall include the status of the claims, reason for any delays, and the name and telephone number for a Humana contact person to received additional information. Responses shall be received by the member (or the City administration, if the member can 3 not be contacted) within 14 calendar days (which includes return mail time) of Humana ' s receipt of the request. FAILURE TO COMPLY WILL RESULT IN A $100 PER CALENDAR DAY PENALTY TO BE PAID BY HUMANA UPON WRITTEN NOTIFICATION BY THE CITY TO HUMANA. THE AFFECTED MEMBER WILL RECEIVE ONE-HALF OF THE PENALTY, to be applied by the City to the member' s healthcare plan premium deduction. This penalty may be waived only on a case-by-case basis, by mutual agreement in writing between the City and Humana. 8. Dedicated Servic.'s in Humana Effective October 1, 1992 . a. Humana agrees to process PPO Plan-claims for City of Miami Beach members, both • employees and retirees, in a claims processing unit dedicated exclusively to ' special ' (including Service Agreement) accounts. Humana will maintain experienced staffing in this claims processing unit to insure timely and accurate processing according to plan benefits. Effective November 1, 1992 , a random sample of 10% of Medicare primary claims submitted each calendar quarter shall be audited. A report shall be provided to the City. b. Humana agrees to place a Service Representative within the City of Miami Beach Personnel Department office on a full-time basis. The Representative will be authorized to resolve PPO and HMO problems brought to the Representative to handle. Also, the Representative will be authorized to resolve Gold Plan (Medicare Supplement) claims problems, coordinating activities with the South Florida Group Medicare Representative. The Representative will have a computer terminal on-line with Humana to provide information upon request regarding claims, enrollment and billing. In the event of a change in Representatives, the City will be provided with a resume of the proposed representative ' s qualifications and experience. 4 • Should the Representative be scheduled to be absent from the office more than three (3) consecutive business days, telephone calls to the Representative will be rerouted to the Account Services Analyst under the supervision of the Account Services Supervisor. Humana shall arrange for periodic visits to the City of Miami Beach office as determined necessary by both parties. c. Humana agrees to provide ready access to a Utilization Specialist to assist HMO and PPO members with medical issues including PPO prior authorizations, PPO pre-admission certifications, PPO length of stay issues and discharge planning; HMO referrals, access to HMO primary care physicians, and obtaining authorizations for emergency and outpatient care. Access for employees and retirees will be via the in-house Service Representative. 9 . HMO and PPO Plans - Changes in Benefits When Humana changes a plan benefit, the City administration shall be notified at least 60 days prior to the proposed effective date of the change. All changes must be agreed to by the City administration at least 30 days prior to the actual implementation date. All plan members must be notified by announcement mailed to their home addresses at least 15 days prior to implementation, once such change has been agreed to by the City administration. FAILURE TO COMPLY WILL RESULT IN A $100 PENALTY PER MEMBER ADVERSELY AFFECTED, TO BE PAID BY HUMANA UPON WRITTEN NOTIFICATION BY THE CITY TO HUMANA. EACH AFFECTED MEMBER WILL RECEIVE ONE-HALF OF THE PENALTY, to be applied by the City to the member's healthcare plan premium deduction. ALSO, AN EXCEPTION WILL BE REQUESTED AND APPROVED TO PROVIDE THE BENEFIT AT THE PREVIOUS LEVEL UNTIL THE CHANGE IS APPROVED BY THE CITY ADMINISTRATION AND NOTIFICATION PROVIDED TO THE PLAN MEMBERS. 10. HMO Plan Physician Appointments Humana guarantees that all "emergency" medical care required by covered City members will be available within 24 hours of notification by the covered member or his representative (i.e. family member, friend, hospital or other provider) to one of the following Humana offices: Preadmission Review/Prior Authorization in Louisville, Kentucky at (800) 523-0023 ; Customer Services at Miami, Florida at (800) 521-4882 or (305) 623-2400 ; or the 5 member' s primary care physician office or, if after office hours, the physician's answering service. Further, Humana guarantees that each covered City member requiring "urgent" medical care due to illness or injury (but not considered an "emergency") will be able to secure an appointment and have treatment provided by a Primary Care Physician or, if deemed medically necessary (and authorized by the patient's HMO Center) , a specialist within 72 hours (including weekends and/or observed Federal holidays) of notification by the covered member or his representative (i.e. family member, friend, or a City Group Insurance representative) . Notification shall be to the member' s Humana primary care Physician's office or, if after hours, the physician' s answering service; or Customer Services in Miami, Florida at (800) - 521-4882 or (305) 623-2400. FAILURE TO COMPLY WILL RESULT IN A $100 PER CALENDAR DAY PENALTY TO BE PAID BY HUMANA UPON WRITTEN NOTIFICATION BY THE CITY TO HUMANA. THE AFFECTED - MEMBER WILL RECEIVE ONE-HALF OF THE PENALTY, to be applied by the City to the member's healthcare plan premium deduction. ALSO, AN EXCEPTION WILL BE REQUESTED BY THE CITY AND APPROVED BY HUMANA TO PROVIDE PLAN BENEFITS FOR THE FOLLOWING: (a) ONE EMERGENCY ROOM OR OFFICE VISIT (INCLUDING MEDICALLY NECESSARY SERVICES SUCH AS TESTS AND/OR PROCEDURES) FOR "EMERGENCY" SERVICES INCURRED BY THE MEMBER IF "EMERGENCY" SERVICES WERE NOT AVAILABLE BY THE END OF THE 24 HOUR PERIOD. HUMANA'S PENALTY WOULD BE LIMITED TO $100 (ONE CALENDAR DAY) . (b) ONE OFFICE VISIT FOR "URGENT" SERVICES (INCLUDING MEDICALLY NECESSARY SERVICES SUCH AS TESTS AND/OR PROCEDURES) INCURRED BY THE MEMBER IF "URGENT" SERVICES WERE NOT PROVIDED BY THE END OF THE 72 HOUR PERIOD. HUMANA'S PENALTY WOULD BE LIMITED TO $100 (ONE CALENDAR DAY) . Humana agrees that any covered City member requiring specialty care shall be referred to an appropriate specialist and have treatment provided within two (2) weeks of the Primary Care Physician visit if the patient' s health and well-being would be compromised by a delay in specialty care beyond the two (2) week period. Otherwise, specialty care shall be provided within four (4) weeks of the Primary Care Physician visit. If an appropriate specialist is not contracted by the patient 's HMO Center, Humana shall arrange for treatment to be 6 • • • provided within the time frames and guidelines set forth above in this paragraph. FAILURE TO COMPLY WILL RESULT IN A $100 PER CALENDAR DAY PENALTY (UNTIL IN COMPLIANCE OR AS NOTED BELOW) , TO BE PAID BY HUMANA UPON WRITTEN NOTIFICATION BY THE CITY TO HUMANA. THE AFFECTED MEMBER WILL RECEIVE ONE-HALF OF THE PENALTY, to be applied by the City to the member' s healthcare plan premium deduction. ALSO, AN EXCEPTION WILL BE REQUESTED BY THE CITY AND APPROVED BY HUMANA TO PROVIDE PLAN BENEFITS FOR THE FOLLOWING: (a) ONE OFFICE VISIT FOR SPECIALTY SERVICES (INCLUDING MEDICALLY NECESSARY SERVICES SUCH AS TESTS AND/OR PROCEDURES) INCURRED BY THE_ MEMBER IF SPECIALTY SERVICES WERE • NOT PROVIDED BY THE END OF THE TWO (2) WEEK PERIOD, IF THE PATIENT'S HEALTH AND WELL-BEING WOULD " BE COMPROMISED BY A FURTHER DELAY. HUMANA'S PENALTY WOULD BE LIMITED TO $100 TIMES THE NUMBER OF CALENDAR DAYS FROM THE END OF THE TWO (2) WEEK PERIOD UNTIL THE DATE OF THE SPECIALTY VISIT. (b) ONE OFFICE VISIT FOR SPECIALTY SERVICES (INCLUDING MEDICALLY NECESSARY SERVICES SUCH AS TESTS AND/OR PROCEDURES) INCURRED BY THE MEMBER IF SPECIALTY SERVICES WERE NOT PROVIDED BY THE END OF THE FOUR (4) WEEK PERIOD. HUMANA'S PENALTY WOULD BE LIMITED TO $100 TIMES THE NUMBER OF CALENDAR DAYS FROM THE END OF THE FOUR (4) WEEK PERIOD UNTIL THE DATE OF THE SPECIALTY VISIT. II. TERM OF AGREEMENT This Agreement shall commence on October 1, 1992 and terminate September 30, 1993 . The City administration and Humana have the option to renew this Agreement annually upon mutual consent. 7 A III. PERFORMANCE OF SERVICE NOTIFICATION Humana shall receive notices regarding performance of service addressed to the following: Rahila Khan, Account Services Manager Humana Health Care Plans 3400 Lakeside Drive Miramar, Florida 33027 Telephone: (3 05) 626-5216 The City administration shall receive notices regarding performance of service addressed to the following: • • Dee Martinez, Employee Benefits Coordinator Personnel Department City of Miami Beach 1700 Convention Center Drive Miami Beach, FL 33139 Telephone: (305) 673-7526 IV. PAYMENT OF PENALTIES Any time penalties are incurred by Humana pursuant to the terms of the Agreement, the City administration will submit a written invoice to Humana detailing the dates, City member names, identification numbers and alleged performance failures. Humana must agree to or dispute these penalties within 20 days of receipt. If Humana agrees that the penalty is justified, Humana will acknowledge the penalty and inform the City administration in writing within 10 days of the decision. Humana will pay these agreed-to penalty amounts to the City administration within the following 30 days. If Humana does not agree that the penalty is justified, Humana will inform the City administration in writing within 10 days of the decision. A meeting between the City administration and Humana will be held within 30 days to resolve the alleged penalty through negotiations. V. ENTIRE AGREEMENT All provisions contained within this Agreement, the City of Miami Beach Invitation to Bid No. 101-91/96 and Humana' s Bid Response represent all the terms and conditions agreed to by the City administration and Humana. In the event of a discrepancy between these documents, the order of priority of the documents shall be as follows: 8 This Agreement Humana ' s Bid Response City of Miami Beach Invitation to Bid No. 101-91/96 The City administration and Humana recognize that in order to comply with applicable state laws that Humana must file a document with the State of Florida Department of Insurance setting forth the benefits and coverage to be provided by Humana under the terms of this Agreement, Humana' s Bid Response and City of Miami Beach Invitation to Bid No. 101-91/96. -The City administration and Humana acknowledge that the document to be provided to the state is not a full and accurate representation of the terms and conditions as set forth in this Agreement, City of Miami Beach Invitation to Bid No. 101-91/96 and Humana 's Bid Response. 9 IN WITNESS WHEREOF, the parties have made and executed this Agreement on the respective dates under each signature: CITY OF MIAMI BEACH BY: Mayor CITY OF MIAMI BEACH Attest: City Clerk Approved 4'4;1 o form by the City Atto ey' Office 2 BY: /4.--/ J .�/ V4,1 HUMANA HEALTH CARE PLANS HUMANA HEALTH INSURANCE COMPANY OF FLORIDA, INC. CORPORATE SEAL) -°' 77:77"-t1 ef BY: Executive Director DATE: i2 I ici. 1a2 HUMANA MEDICAL PLAN, INC. CORPORATE SEAL) BY: /—` (--- IA17) . Executive Director DATE: 121 z.. qz-zusly ORIGINAL RESOLUTION NO. 9/20568 Bid award No. 101-91/96, C.M.B. Group Managed Care Medical,HMO and Medicare Supplement Plans.