2013 nmrhca day one board book
DESCRIPTION
NMRHCA Annual Board Meeting Day OneTRANSCRIPT
(PLEASE FIND THE AGENDA/TABLE OF CONTENTS ON PAGE 5.)
REGULAR MEETING
OF THE
BOARD OF DIRECTORS
July 9 & 10, 2013 Sagebrush Inn & Conference Center
1508 Paseo Del Pueblo Sur Taos, New Mexico
2012 January February March April 1
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2014 JANUARY FEBRUARY MARCH APRIL
S M T W T F S S M T W T F S S M T W T F S S M T W T F S 1 2 3 4 1 1 1 2 3 4 5 5 6 7 8 9 10 11 2 3 4 5 6 7 8 2 3 4 5 6 7 8 6 7 8 9 10 11 12 12 13 14 15 16 17 18 9 10 11 12 13 14 15 9 10 11 12 13 14 15 13 14 15 16 17 18 19 19 20 21 22 23 24 25 16 17 18 19 20 21 22 16 17 18 19 20 21 22 20 21 22 23 24 25 26 26 27 28 29 30 31 23 24 25 26 27 28 23 24 25 26 27 28 29 27 28 29 30 30 31 S M T W T F S S M T W T F S S M T W T F S S M T W T F S
MAY JUNE JULY AUGUST S M T W T F S S M T W T F S S M T W T F S S M T W T F S 1 2 3 1 2 3 4 5 6 7 1 2 3 4 5 1 2 4 5 6 7 8 9 10 8 9 10 11 12 13 14 6 7 8 9 10 11 12 3 4 5 6 7 8 9 11 12 13 14 15 16 17 15 16 17 18 19 20 21 13 14 15 16 17 18 19 10 11 12 13 14 15 16 18 19 20 21 22 23 24 22 23 24 25 26 27 28 20 21 22 23 24 25 26 17 18 19 20 21 22 23 25 26 27 28 29 30 31 29 30 27 28 29 30 31 24 25 26 27 28 29 30 31 S M T W T F S S M T W T F S S M T W T F S S M T W T F S
SEPTEMBER OCTOBER NOVEMBER DECEMBER S M T W T F S S M T W T F S S M T W T F S S M T W T F S 1 2 3 4 5 6 1 2 3 4 1 1 2 3 4 5 6 7 8 9 10 11 12 13 5 6 7 8 9 10 11 2 3 4 5 6 7 8 7 8 9 10 11 12 13 14 15 16 17 18 19 20 12 13 14 15 16 17 18 9 10 11 12 13 14 15 14 15 16 17 18 19 20 21 22 23 24 25 26 27 19 20 21 22 23 24 25 16 17 18 19 20 21 22 21 22 23 24 25 26 27 28 29 30 31 26 27 28 29 30 31 23 24 25 26 27 28 29 28 29 30 31 30 S M T W T F S S M T W T F S S M T W T F S S M T W T F S
Board of Directors Annual Meeting July 9 & 10, 2013 2
July 2013
Mr. Julian Baca
Designee of PERA Executive Director
33 Plaza La Prensa
Santa Fe, NM 87507
PO Box 2123
Santa Fe, NM 87504-2123
Mr. Doug Crandall
Retired Public Employees of New Mexico
PO Box 20607
Albuquerque, NM 87154-0607
Ms. Jan Goodwin, Executive Director
Educational Retirement Board
PO Box 26129
Santa Fe, NM 87502-0129
(W) 505-476-7759
Ms. Elizabeth Jeffreys
Active State Employee
State Personnel Board
State Personnel Office
2600 Cerrillos Road
Santa Fe, NM 87505
(W) 505-827-7701
The Honorable Mr. Wayne Johnson
NM Association of Counties
Bernalillo County Commissioner
One Civic Plaza, NW
Albuquerque, NM 87102
Ms. Karen Brown
Deputy County Commissioner
Bernalillo County, District 5
505-468-7212 (office)
505-462-9821 (fax)
The Honorable Mr. James B Lewis
NM State Treasurer
2055 South Pacheco Street
Suite 100 & 200
Santa Fe, NM 87505-5135
(W) 505-955-1120
(Fax) 505-955-1195
Mr. Terry Linton
Governor’s Appointee
1204 Central Ave. SW
Albuquerque, NM 87102
505-247-1530
Mr. Joe Montaño, Secretary
NM Assoc. of Educational Retirees
5304 Hattiesburg NW
Albuquerque, NM 87120
(H) 897-9518
Ms. Olivia Padilla-Jackson
NM Municipal League
Director, Financial Services
City of Rio Rancho
W: 505-896-8761
Mr. Wayne Propst
Executive Director
Public Employees Retirement Association
PO Box 2123
Santa Fe, NM 87504-2123
W: (505) 476-9301
Mr. Alfredo Santistevan, President
Designee of NM State Treasurer
505-228-4487
Ms. Karen Sucher
NEA-NM, Classroom Teachers Assoc., & NM
Federation of Educational Employees
PO BOX 1983
Tijeras, NM 87059
Phone: 505-286-8702
Mr. Tom Sullivan, Vice President
Superintendents’ Association of NM
800 Kiva Dr. SE
Albuquerque, NM 87123
505-330-2600
Board of Directors Annual Meeting July 9 & 10, 2013 3
Regular Meeting
ROLL CALL
July 9, 2013
Member in Attendance
Mr. Santistevan, President
Mr. Sullivan, Vice-President
Mr. Montaño, Secretary
Mr. Baca
Mr. Crandall
Ms. Goodwin
Ms. Jeffreys
Mr. Johnson
Mr. Linton
Ms. Padilla-Jackson
Ms. Sucher
Board of Directors Annual Meeting July 9 & 10, 2013 4
Annual Meeting of the
NEW MEXICO RETIREE HEALTH CARE AUTHORITY
10:00 AM
July 9, 2013
Sagebrush Inn & Conference Center
1508 Paseo Del Pueblo Sur
Taos, New Mexico
Call to Order Mr. Santistevan, President PAGE
Roll Call to Ascertain Quorum Ms. Beatty, Recorder 4
Pledge of Allegiance Mr. Santistevan, President
Approval of Agenda Mr. Santistevan, President 5
Approval of Regular Meeting Minutes Mr. Santistevan, President 7
June 4, 2013
Election of Board Officers Mr. Santistevan, President
Consent Agenda—Board Travel Mr. Santistevan, President
Any Board Member or Designate—IFEBP
59th Annual Employee Benefits Conference,
October 19—23, 2013, Las Vegas, NM,
Any Board Member or Designate—NASACT
Annual Conference, August 10—14, 2013, Boston, MA
Public Forum and Introductions Mr. Santistevan, President
Provider Presentations Mr. Tyndall, Executive Director
Express Scripts, Inc. 15
Presbyterian Health Plan 29
Blue Cross Blue Shield of New Mexico 58
(Recess for lunch at the pleasure of the Board)
Actuarial Presentations Mr. Tyndall, Executive Director 82
Solvency Mr. Petersen, Segal 104
Dr. Madalena, Data Warehouse
GASB Mr. Petersen 107
Review and Discussion of Naprapathic Services Mr. Santistevan, President 108
Review and Discussion of Life Insurance Mr. Santistevan, President 110
Wellness and Disease Management Update Mr. Tyndall, Executive Director 114
(Recess until 9:00 AM, July 10, 2013, in the same location)
Board of Directors Annual Meeting July 9 & 10, 2013 5
RETIREE HEALTH CARE AUTHORITY/REGULAR BOARD MEETING REGULAR MEETING ACTION SUMMARY
June 4, 2013
Item Action Page #
APPROVAL OF AGENDA ..................................... Approved ..................................................... 8
APPROVAL OF MINUTES:
April 2, 2013 ...................................................... Approved ..................................................... 8
3RD QUARTER BUDGET UPDATE .................. Informational ................................................. 8
FIVE YEAR LOOK-BACK .................................. Informational ................................................. 9
HEALTH CARE REFORM ................................ Informational ................................................ 10
LEGISLATIVE ACTIVITY ................................... Informational ................................................ 10
PRELIMINARY DISCUSSION:
PLAN YEAR 2014 CONSIDERATIONS ........... Informational ................................................ 11
DATE AND LOCATION FOR NEXT
REGULAR MEETING ...................................... Informational ................................................ 14
Board of Directors Annual Meeting July 9 & 10, 2013 6
MINUTES OF THE NM RETIREE HEALTH CARE AUTHORITY/BOARD OF DIRECTORS REGULAR MEETING
June 4, 2013
CALL TO ORDER
A Regular Meeting of the Board of Directors of the New Mexico Retiree Health Care Authority was called to order on this date at 9:30 a.m. in the NMRHCA Board Room, 4308 Carlisle Boulevard, N.E., Albuquerque, New Mexico.
ROLL CALL TO ASCERTAIN QUORUM
A quorum was present, as follows:
Members Present:
Mr. Alfredo Santistevan, President, [designee of the Honorable James B. Lewis, NM State Treasurer]
Mr. Tom Sullivan, Vice President Mr. Joe Montaño, Secretary Mr. Doug Crandall Ms. Jan Goodwin Ms. Elizabeth Jeffreys [by telephone] Mr. Wayne Johnson Mr. Terry Linton Ms. Olivia Padilla-Jackson Ms. Karen Sucher
Members Excused:
Mr. Julian Baca
Staff Present:
Mr. Mark Tyndall, Executive Director Mr. David Archuleta, Deputy Director Ms. Deb Vering, Chief Financial Officer Ms. Ramona Martinez, Director, Public Affairs Mr. Tomas Rodriguez, IT Director Ms. Judith S. Beatty, Recorder
Others Present:
[See sign-in sheet.]
PLEDGE OF ALLEGIANCE
Mr. Crandall led the pledge.
PUBLIC FORUM AND INTRODUCTIONS
Mr. Tyndall introduced Ms. Debbie Vering, Chief Financial Officer. Ms. Vering comes to the NMRHCA from the Department of Health, where she was finance director of the Developmental Disabilities Support Division.
Board of Directors Annual Meeting July 9 & 10, 2013 7
Mr. Crandall introduced Mr. Gerald Chavez, president of the Retired Public Employees of New Mexico.
APPROVAL OF AGENDA
Mr. Crandall moved approval of the Agenda, as published. Ms. Goodwin seconded the motion, which passed unanimously by voice vote.
APPROVAL OF REGULAR MEETING MINUTES: APRIL 2, 2013
Ms. Goodwin moved for approval of the Minutes of the April 2, 2013, meeting, as submitted. Ms. Padilla-Jackson seconded the motion, which passed unanimously by voice vote.
3RD QUARTER BUDGET UPDATE
Mr. Archuleta presented the Q3 review, with the following highlights:
Health Care Benefit Fund
— As of March 31, 2013, there is a surplus of $28.9 million. — Management projects an annual solvency fund contribution of $39.7 million in
FY13. — In FY13, there has been a 5% growth in participation combined with a 5.5%
increase in claim costs through Q2. However, claims costs appear to be slightly down through Q3 as the plan design changes appear to be placing downward pressure on claim costs.
— Current projections assume sufficient budget balances exist to cover claim costs through the remainder of FY13.
— Revenues have increased by 10.8% through Q3, including a 13.6% increase in ER-EE revenue.
Program Support Fund
— Management is projecting a reserve of $186,000 resulting from staff vacancies and close monitoring of expenditures.
— Since July 2012, NMRHCA has transferred $15 million to the SIC. In July 2013, an estimated $6.5 million will be transferred to the SIC.
Ms. Padilla-Jackson asked that future reports compare the approved budget versus Management’s projections as well as how the projected budget is tracking with actual expenditures.
Mr. Tyndall noted that NMRHCA now has 23 FTEs and two vacant positions.
FIVE-YEAR LOOK BACK
Mr. Tyndall reviewed highlights:
— Since March 2009, when the fund balance dropped to its lowest point of $122.8 million, it has risen (at April 30) to $273 million.
— This steady increase is the result of better market conditions, better returns from its investment account, premiums being set at the appropriate amounts,
Board of Directors Annual Meeting July 9 & 10, 2013 8
better management of the plan designs, and an increase in EE-ER contributions. This has allowed the agency to contribute a total of $60 million to the fund since FY11.
— In 2009, actual expenditures were $209 million, and this has risen to $258 million in FY14. In 2009, the agency spent $200 million on its 40,000 members, or about $417 per member per month. In FY14, the cost for each member will be exactly the same, but with 51,000 members.
— In 2008, solvency projections showed the agency would be running a $30 million deficit in 2013. In 2013, this has been turned around to a $33 million surplus, but the agency will start deficit spending in 2018-2019 with no changes.
— Since 2006, the NMRHCA has been charged an average of 18 basis points per year, a highly competitive rate for active management and four times less than an LFC estimate of 75 basis points to outsource such management services.
— Looking at medical premium costs to members on an average basis (recognizing that not all plans were/are the same), in 2008—2009 the average deductible was $190. Now, it is about $600. People are paying more out of pocket when they access care, but premiums have been kept level.
— Since 2008, the Medicare Supplement Plan went up from $115 to $150, or a 6% annual increase. The agency is discussing a product or plan design that would fit in the middle of that rate.
— Based on the most recent quarterly report from the SIC, the 1-year return to the NMRHCA is 8.74%; for the 10-year period, returns are at 8.76%.
Mr. Tyndall said he would look into the benchmark the SIC is using.
Chairman Santistevan commented that it is important for the agency to be able to illustrate graphically how cost-cutting measures and changes implemented by the Board and staff have prevented costs from being passed on to the membership.
Responding to the Chair about the effects of the sequester (federal budget cuts), Mr. Tyndall said a 2% reduction in the subsidy received by NMRHCA through Express Scripts amounts to about $17,000 to $18,000 monthly, which is relatively minor. He said the main concern is how the sequester may be affecting the providers in terms of their ability to provide care to members, but the agency has not heard anything from members about not receiving care, etc.
Mr. Montaño said he would be interested to know whether the SIC has looked into when the NMRHCA can begin investing in alternative investment vehicles, and suggested that the SIC provide an update at the July annual retreat.
Mr. Tyndall agreed to talk with SIC staff, but said it will be important to look at investment vehicles that still provide enough liquidity to the portfolio to allow the agency to draw on the fund when necessary.
Board of Directors Annual Meeting July 9 & 10, 2013 9
HEALTH CARE REFORM
Mr. Tyndall reviewed an updated timeline on the Impact of Federal Health Care Reform on the NMRHCA, with the following highlights:
— Closing of the donut hole, which started in January 2012, has worked out better than originally thought, and the NMRHCA will receive about $6.7 million in extra reimbursements through CMS.
— In January 2013, NMRHCA began paying Patient-Centered Outcomes Research Institute Fee of $2 per pre-Medicare member per year through 2019. Cost: $250,000 over 7-year period.
— January 2014: Medicare Advantage plans will be required to have a loss ratio of no less than 85%. They are fairly close to that.
— January 2014: Initial recommendations from Medicare Independent Payment Advisory Board (IPAB), will be implemented absent congressional action.
— January 2014: Coverage to be available for all individuals and small businesses (even those with pre-existing conditions) through NM-based Health Benefits Exchange.
— January 2014: Medicaid Expansion to adults with incomes up to, possibly, 133% of the federal poverty level.
— January 2018: High Cost Health Insurance Tax (‘Cadillac Tax’) to be implemented. Actuarial value of plans at this point is still to be determined, but likely to include some current NMRHCA options. Excise tax of 40% of value above this point to be imposed if changes are not made.
Mr. Tyndall said he would request Board action (an attestation of intent) in July on the Cadillac Tax, which is an excise tax for any health plan that offers a program with an actuarial value above a set level, i.e., ‘how rich it is’. At the current time, if a retiree plan has a value above $11,800, there is an excise tax of 40% for anything above that. He said Premier Plus, for example, has an actuarial value of about $9,000, but it is likely that NMRHCA will bump up against the excise tax at some point if adjustments aren’t made to the plan.
Ms. Goodwin asked what it would do to the NMRHCA’s unfunded liability were the Board to make changes to avoid the 40% excise tax.
Mr. Tyndall responded that it would lower it. The last official GASB valuation shows an unfunded liability of $3.6 billion; and if changes were not made, it would rise to $3.8 billion; and with plan design changes, the $3.6 billion would drop to $3.4 billion.
In closing, Mr. Tyndall commented that the Affordable Care Act has both positive and negative aspects to it, but if the NMRHCA were to add up the revenue that it has provided to the agency, and then subtract out the fees paid as a result of it, it has been a very positive thing financially. He added that it would continue to be positive unless the Board decides to keep the plan so rich that it pays the Cadillac Tax, because that would cost a lot of money over time.
Board of Directors Annual Meeting July 9 & 10, 2013 10
LEGISLATIVE ACTIVITY
Mr. Tyndall reported that the NMRHCA had an entry conference with staff at the Legislative Finance Committee, which has on its work plan a program evaluation of the cost effectiveness of plans comprising the IBAC: Risk Management Division, NM Public School Insurance Authority, Albuquerque Public Schools, and NMRHCA. He said the initial conversation went well, and the program is tentatively set for completion in October 2013.
Mr. Tyndall said NMRHCA has a presentation scheduled before the Investments & Pensions Oversight Committee later this week.
Mr. Tyndall said an LFC presentation originally set for July has been postponed to later in the year.
[Break]
PRELIMINARY DISCUSSION OF PLAN YEAR 2014 CONSIDERATIONS
Mr. Tyndall reviewed preliminary staff recommendations for plan year 2014.
Options extending solvency to 2030:
Adjust all self-insured medical rates by X% in accordance with current loss ratio.
Projected savings: N/A
Total members affected 40,261S
Average impact per retiree: Varies according to plan (avg. $15/month)
Impact on solvency: Already part of valuation
Mr. Tyndall said the adjustment amount could not yet be determined because not all the data is in from the most recent plan design changes that went into effect this year.
Continue to phase out “Family Coverage” subsidies for retirees with multiple dependent children (from 50% to 25%)
Projected savings: $304,000
Total members affected 536 retirees/670 members
Average impact per retiree: $69/month
Impact on solvency: Already part of valuation
Possible alternative: Reduce subsidy from 50% to 37.5% to allow additional time for retirees/dependents to accommodate changes. Savings would be reduced by half, but total subsidy removal would phase in from 2 years (as originally proposed) to 5 years. This extension would not have a material effect on solvency.
Implement graduated minimum age requirement (to receive subsidies)
Scenario: minimum retirement age of 55 required to receive subsidy with 10-year grandfather period
Board of Directors Annual Meeting July 9 & 10, 2013 11
Projected savings: $7.8 million
Total affected members: N/A
Average impact per retiree: N/A
Impact on solvency: Gain 1 year
Ms. Padilla-Jackson said this is a move in the right direction, and asked Mr. Tyndall to create a 5-year phase-in model.
Reduce copayments for insulin back to 2013 levels
Scenario: Plan design changes in 2013 added coinsurance to mail order, which increased most members’ share to $100 for a 90-day supply (up to a flat $50 copayment). The change was intended to incent use of lower priced medications (including generics) where possible. There is no generic insulin (it is a biologic) and setting the copayment back provides a better opportunity for higher member compliance.
Projected savings: ($540,000)
Total members affected 2,700
Average impact per retiree: Up to $200/year savings per member
Impact on solvency: No material impact
Ms. Goodwin asked if there are possibilities of expanding this into other medications and treatments, and Mr. Tyndall responded that there are, and this can be considered where it makes financial sense. He added that NMRHCA wants to make sure that when it increases copays, etc., it does not end up creating more medical costs because somebody does not get their medication. He said there has not been much indication that is happening yet, but there has been enough feedback from retirees to indicate that this is a possibility.
Mr. Tyndall said he would like the Board to begin discussions on the following options, as well.
Ms. Goodwin stressed that the Board should start looking at ways of being fully funded at some point. GASB is going this is the way, and once the different municipal members and school district members learn more about it, pressure from them will be increasing. She said, “I think it behooves us to get out in front of that so we can be masters of our destiny.” Otherwise, changes may be legislated because the Board was not proactive.
Mr. Tyndall said another $200 million per year would put the NMRHCA on the road to being fully funded.
Ms. Padilla-Jackson said the Board should be looking at this annually. The Board needs to know where it is today and where it will be in 5 years, 10 years, and 30 years. In addition to looking at just cash solvency, she would like to see a goal to increase that to at least 20 years. In addition, she would like to see what the status is on the ARC and where that would put the agency in year 5. She agreed with Ms. Goodwin that it is self-defeating simply to not look at this because it looks unattainable.
Mr. Tyndall agreed to provide more details for the July meeting.
Board of Directors Annual Meeting July 9 & 10, 2013 12
In terms of moving to 100% funding, Mr. Tyndall said the agency was created in 1990 and existed in a particular accounting model for 16 years before GASB introduced these requirements, and it will take a while to catch up. He commented that to get out of a $3.6 billion unfunded liability is daunting, and there is no moderate path to that goal.
Chairman Santistevan said the July discussion about GASB should include the recommendations expected from the rating agencies.
Ms. Goodwin asked that the July agenda include discussions on: reductions in health care cost trends; ways of working with the state and cities to create healthier employees and retirees; and the life insurance benefit, which contributes to unfunded liability. She said the agency should be as aggressive as possible.
Board members discussed possibilities for increasing Employee/Employer contribution levels, which would require legislative approval.
Mr. Tyndall said a possible alternative that would still keep the solvency period along with the other elements of the 5-year plan up to 2040 would increasing the employee percentage by .75%, which is what the NMRHCA asked for in the last session, and only increasing the employer contribution by .5%. The Board would have to decide whether it would be willing to proceed with this if the employer piece were removed.
Chairman Santistevan suggested the July meeting include major discussion on whether or the NMRHCA should proceed with a request at the next session, which is 30 days, or wait until the following year for the 60-day session.
Ms. Padilla-Jackson said she thought the NMRHCA should propose something to the Legislature in the next session; even if there is no appetite for it, perhaps an implementation schedule could be considered. She said the point is to be proactive and “keep beating the drum.”
Mr. Sullivan asked Mr. Tyndall to develop solvency scenarios based on each .25% drop in contributions on both sides.
Ms. Padilla-Jackson noted another issue local government and municipal employees will be struggling with is the 5-year phase-out of the hold harmless distributions, which will have a strong impact in 2017. Ms. Padilla-Jackson also noted, with any increase in employer contributions, there are fewer dollars to allocate to raises, which is a top priority for legislators.
Options extending solvency to 2034:
Increase years of service required to receive maximum subsidy
Scenario: Require 25 years of service to receive maximum subsidy (rather than 20) with proportional reduction of subsidy levels for all years worked below the maximum with 5-year grandfather period.
Projected savings: $4 million
Total affected members: N/A
Average impact per retiree: N/A
Impact on solvency: Gain 1 year
Board of Directors Annual Meeting July 9 & 10, 2013 13
Reduce pre-Medicare retiree subsidies
Scenario: Reduce maximum subsidy level for pre-Medicare retirees from 65% to 60%.
Projected savings: $3.4 million
Total affected members: 11,200
Average impact per retiree: $25.20/month
Impact on solvency: Gain 1 year
Reduce pre-Medicare spousal subsidies
Scenario: Reduce maximum subsidy level for pre-Medicare spouses from 40% to 25%.
Projected savings: $3.2 million
Total affected members: 4,200
Average impact per retiree: $72/month
Impact on solvency: Gain 1 year
Implement enhanced wellness program
Scenario: Create premium differential/incentives for health status and/or participation in wellness or disease management programs
Projected savings: $3 million
Total affected members: 25,000
Average impact per retiree: $25/month
Impact on solvency: Gain 1 year
DATE AND LOCATION FOR THE NEXT REGULAR BOARD MEETING:
JULY 9 & 10, 2013, TAOS SAGEBRUSH INN, 1508 PASEO DEL PUEBLO SUR, TAOS, NM
OTHER BUSINESS
None.
ADJOURNMENT
Its business completed, the NMRHCA Board adjourned the meeting at 12:55 a.m.
Alfredo Santistevan, Chair Joe Montaño, Secretary
Board of Directors Annual Meeting July 9 & 10, 2013 14
1PROPRIETARY AND CONFIDENTIAL © 2013 Express Scripts Holding Company. All Rights Reserved.
Your Collaborative Planning Guide
New Mexico Retiree Health Care Authority
07/9/2013
Board of Directors Annual Meeting July 9 & 10, 2013 15
2PROPRIETARY AND CONFIDENTIAL © 2013 Express Scripts Holding Company. All Rights Reserved.
Top Line Performance Metrics - Comparison Plan Cost PMPM is $161.69, a 2.3% trend over the previous period
Generic Fill Rate (GFR) increased 4.1 percentage points to 81.4%
Member Cost Share increased slightly; driven by 1/1/13 copay changes
Description 7-12 - 5-13 7-11 - 5-12 Change 7-12 - 5-13 7-11 - 5-12 Change 7-12 - 5-13 7-11 - 5-12 Change
Avg Members per Month 40,160 39,255 2.3% 18,095 17,846 1.4% 22,065 21,409 3.1%
Number of Unique Patients 37,720 36,629 3.0% 16,693 16,349 2.1% 21,959 21,224 3.5%
Pct Members Utilizing Benefit 93.9% 93.3% 0.6 92.2% 91.6% 0.6 99.5% 99.1% 0.4
Total Plan Cost $71,430,361 $68,218,686 4.7% $21,644,159 $20,649,100 4.8% $49,786,202 $47,569,586 4.7%
Total Adjusted Rxs 1,415,484 1,377,815 2.7% 414,451 409,434 1.2% 1,001,033 968,381 3.4%
Average Member Age 64.7 64.6 0.2% 53.0 53.1 -0.1% 74.2 74.1 0.1%
Plan Cost PMPM $161.69 $157.99 2.3% $108.74 $105.19 3.4% $205.12 $202.00 1.5%
Plan Cost per Adjusted Rx $50.46 $49.51 1.9% $52.22 $50.43 3.6% $49.73 $49.12 1.2%
Nbr Adjusted Rxs PMPM 3.20 3.19 0.4% 2.08 2.09 -0.2% 4.12 4.11 0.3%
Generic Fill Rate 81.4% 77.4% 4.1 80.5% 76.9% 3.5 81.8% 77.5% 4.3
Home Delivery Utilization 48.4% 50.2% -1.8 48.1% 50.4% -2.3 48.6% 50.1% -1.5
Member Cost % 16.0% 15.5% 0.4 15.9% 16.3% -0.3 16.0% 15.2% 0.8
Specialty Percent of Plan Cost 23.2% 20.6% 2.6 26.3% 25.0% 1.3 21.8% 18.7% 3.1
Specialty Plan Cost PMPM $37.51 $32.53 15.3% $28.65 $26.30 8.9% $44.77 $37.73 18.6%
Formulary Compliance Rate 97.4% 97.0% 0.4 96.7% 96.4% 0.3 97.7% 97.2% 0.4
New Mexico Retiree Health Care Authority - Combined
New Mexico Retiree Health Care Authority - Commercial
New Mexico Retiree Health Care Authority - EGWP
Board of Directors Annual Meeting July 9 & 10, 2013 16
3PROPRIETARY AND CONFIDENTIAL © 2013 Express Scripts Holding Company. All Rights Reserved.
Top Line Performance Metrics – by Population Generic, home delivery and formulary compliance rates for both the Commercial and
EGWP RHCA populations remain well above respective peer groups
Utilization (rxs PMPM) and specialty plan cost PMPM remain higher for both populations compared to peer groups
Member cost share remains lower for both populations compared to peer groups
Description 7-12 - 5-13 7-12 - 5-13 1-13 - 5-13 7-12 - 5-13 7-12 - 5-13
Average Member Age 64.7 53.0 44.2 74.2 75.6
Plan Cost PMPM $161.69 $108.74 $109.52 $205.12 $162.31
Plan Cost per Adjusted Rx $50.46 $52.22 $60.94 $49.73 $48.32
Nbr Adjusted Rxs PMPM 3.20 2.08 1.80 4.12 3.36
Generic Fill Rate 81.4% 80.5% 77.5% 81.8% 76.4%
Home Delivery Utilization 48.4% 48.1% 28.4% 48.6% 33.1%
Member Cost % 16.0% 15.9% 16.1% 16.0% 19.6%
Specialty Percent of Plan Cost 23.2% 26.3% 21.6% 21.8% 16.6%
Specialty Plan Cost PMPM $37.51 $28.65 $23.63 $44.77 $26.98
Formulary Compliance Rate 97.4% 96.7% 95.8% 97.7% 95.8%
Government - Over 65
Population
Government Advisory
Panel (GAP)
RHCA - Combined
RHCA - Commercial
RHCA - EGWP
Board of Directors Annual Meeting July 9 & 10, 2013 17
4PROPRIETARY AND CONFIDENTIAL © 2013 Express Scripts Holding Company. All Rights Reserved.
Historical Performance
Increase
To Drive Down
GFR & Home Delivery
Utilization
Plan Cost PMPM $
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
$140
$145
$150
$155
$160
$165
$170
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
Pla
n C
ost P
MP
M $
Key Metrics by Quarter
Plan Cost PMPM $ Generic Fill Rate % Member Cost % Home Delivery Utilization %
*
* Includes data through May 2013
Board of Directors Annual Meeting July 9 & 10, 2013 18
5PROPRIETARY AND CONFIDENTIAL © 2013 Express Scripts Holding Company. All Rights Reserved.
Top 10 Indications
The largest trend is in Cancer, at 25.6%
The largest negative trend is in High Blood Cholesterol, at -9.4%
2 % Change
1 1 DIABETES 110,224 7,242 $7,922,970 58.3% $17.93 1 109,235 7,038 54.4% $16.86 6.4%
2 2 HIGH BLOOD CHOLESTEROL 149,324 15,617 $5,975,368 74.0% $13.53 2 147,992 15,360 67.7% $14.93 -9.4%
3 6 CANCER 8,700 1,176 $4,978,627 91.7% $11.27 4 8,193 1,121 91.9% $8.97 25.6%
4 4 HIGH BLOOD PRESS/HEART DISEASE 273,895 20,152 $4,952,001 92.2% $11.21 3 264,649 19,494 89.5% $11.20 0.1%
5 3 INFLAMMATORY CONDITIONS 4,395 535 $4,411,890 33.2% $9.99 5 4,259 524 32.4% $8.61 16.0%
6 8 ASTHMA 32,017 5,355 $3,564,253 28.3% $8.07 6 32,082 5,017 5.0% $8.59 -6.0%
7 7 ULCER DISEASE 72,530 9,356 $3,416,748 84.1% $7.73 7 68,950 9,101 82.2% $7.45 3.9%
8 12 MENTAL/NEURO DISORDERS 17,508 1,941 $2,929,744 65.3% $6.63 8 16,874 1,871 53.7% $7.01 -5.3%
9 5 MULTIPLE SCLEROSIS 701 79 $2,754,584 0.0% $6.24 9 811 83 0.0% $6.46 -3.5%
10 9 DEPRESSION 62,575 7,300 $2,751,725 88.4% $6.23 10 59,853 7,003 83.9% $6.01 3.6%
Total Top 10: 731,869 $43,657,908 78.4% $98.83 712,898 73.4% $96.08 2.9%
Differences Between Periods: 18,971 $2,171,362 5.0% $2.75
Peer = Express Scripts Peer 'Government' market segment
Plan Cost PMPM
Plan Cost PMPM Rank
Adjusted Rxs Patients
Generic Fill Rate
Plan Cost PMPM
Top Indications by Plan Cost
7-12 - 5-13 7-11 - 5-12
RankPeer Rank Indication
Adjusted Rxs Patients Plan Cost
Generic Fill Rate
Represent 61.1% of your
total Plan Cost
Board of Directors Annual Meeting July 9 & 10, 2013 19
6PROPRIETARY AND CONFIDENTIAL © 2013 Express Scripts Holding Company. All Rights Reserved.
1/1/2013 Home Delivery Copay Changes
Overall Member Cost is 16.0%, up from 15.5% in the previous period
Copay changes made to home delivery on 1/1/2013 have saved an estimated
$844,807 through May YTD ($641,767 for EGWP and $203,040 for Commercial)
Member Cost Share
Plan Cost vs. Member Cost
Previous Member Cost %
Current Member Cost %
19.9%
26.3%
16.9%
22.7%
20.9%
27.0%
17.6%
24.6%
12.6%
17.3%
9.9%
18.8%
11.2%
14.5%
8.0%
20.7%
16.0%
21.4%
12.7%
21.1%
15.5%
20.2%
11.7%
23.0%Generic
Preferred Brand
Non-Preferred
Brand
Overall
Retail Home Delivery
Total
16.0% 15.3% 15.6% 15.5% 14.9% 14.5% 16.6% 17.7%
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
Plan Cost Member Cost Member Cost %
Board of Directors Annual Meeting July 9 & 10, 2013 20
7PROPRIETARY AND CONFIDENTIAL © 2013 Express Scripts Holding Company. All Rights Reserved.
RHCA Clinical Program
ProgramRHCA Plan Cost Savings
Commercial EGWP
Time Period 07.11--05.12 07.12--05.13 07.11--05.12 07.12--05.13
Preferred Drug Education Programs $12,641 --$3,162 $27,491 $1,142
Coverage Management Programs• Prior Authorization• Smart Prior Authorization (step therapy)• Quantity Duration
$897,753 $1,299,738 $3,250,826 $3,660,369
Preferred Drug Step Therapy Program $349,956 $265,483
Total Savings $1,260,350 $1,562,059 $3,278,317 $3,661,511
Board of Directors Annual Meeting July 9 & 10, 2013 21
8PROPRIETARY AND CONFIDENTIAL © 2013 Express Scripts Holding Company. All Rights Reserved.
Top Line Performance Metrics: Specialty Specialty PMPM trend at 15.3% for
RHCA compared to 9.7% for GAP
Variance in trend between RHCA and GAP based on higher utilization and lower member cost share for RHCA
Description RHCAGAP (Jan-May
2013)Pct Members Utilizing Specialty 4.5% 1.4%
Plan Cost PMPM $37.51 $23.63
Plan Cost per Adjusted Rx $1,394.58 $2,133.12
Adjusted Rxs PMPM 0.03 0.01
PMPM Trend 15.3% 9.7%
Member Cost % 1.5% 2.2%
Specialty Key Statistics
0
1 1 31.6% $2.45 28.8% $1.19
2 2 18.3% $1.39 14.5% $0.77
3 4 25.5% $0.72 4.5% $0.04
4 6 18.1% $0.20 -1.4% -$0.01
5 16 153.9% $0.19 43.1% $0.10
6 10 51.1% $0.19 10.7% $0.04
7 11 49.3% $0.18 -1.5% $0.00
8 15 71.1% $0.15 -24.5% -$0.05
9 7 20.9% $0.12 30.3% $0.05
10 8 17.2% $0.09 89.5% $0.23
CNS/AUTONOMIC DISORDERS
IMMUNE SERUMS
VIRAL INFECTIONS
INFLAMMATORY CONDITIONS
PULMONARY HYPERTENSION
BONE CONDITIONS
ENDOCRINE DISORDERS
IRON TOXICITY
Government Advisory Panel Trend
(Jan-May 2013)
Indication
Current Plan Cost
Rank
Plan Cost PMPM % Change
Plan Cost PMPM $ Change
Total Trend
Plan Cost PMPM % Change
Plan Cost PMPM $ Change
SKIN CONDITIONS
Top Specialty Trend Drivers
RankCANCER
Cancer and Inflammatory conditions are the top trend
drivers for both RHCA and GAP, and increasing at a faster rate for RHCA
Board of Directors Annual Meeting July 9 & 10, 2013 22
9PROPRIETARY AND CONFIDENTIAL © 2013 Express Scripts Holding Company. All Rights Reserved.
Projected Biosimilar Savings
$0
$20
$40
$60
$80
$100
$120
$140
2012 2014 2016 2018 2020 2022
Millions
Projected Sales: No Biosimilars Projected Sales: With Biosimilars
$250 Billion Through 2024
Board of Directors Annual Meeting July 9 & 10, 2013 23
10PROPRIETARY AND CONFIDENTIAL © 2013 Express Scripts Holding Company. All Rights Reserved.
*Includes all drugs with patent expirations through 2013Source: U.S. Drug spend estimates are based on IMS Health data for 2011 (if available), manufacturer reported U.S. sales or a percent of manufacturer
reported worldwide annual sales of the drug. The patent expiration dates of the biologic products is current as of November 2012. The availability of biosimilars is highly variable due to litigation, patent challenges, FDA’s establishment of a aBLA pathway, or other factors.
$6.7
$2.3
$10.9
$3.7
$1.2
$4
$6.7
$2.7
Overall U.S. Market Opportunity (in $ Billions)
$38.2 Billion Biosimilar Opportunity81 biotech products with patent expirations through 2020
2013* 2014 2015 2016 2017 2018 2019 2020Benefix®
Cerezyme®
Erbitux®
Humulin RLeukine®
Neulasta®
Neupogen®
Humatrope®
Humalog®
Novolog®
Campath®
Epogen®
Lantus®
Procrit®
Pulmozyme®
Rituxan®
Synagis®
Berinert®
Elitek®
Humira®
Reopro®
Tysabri® Apidra®
Pegasys®
Remicade®
Xolair®
Actemra®
Avastin®
Herceptin®
Levemir®
Orencia®
Intron A®
Lucentis®
PegIntron®
Simulect®
Vectibix®
Board of Directors Annual Meeting July 9 & 10, 2013 24
11PROPRIETARY AND CONFIDENTIAL © 2013 Express Scripts Holding Company. All Rights Reserved.
Appendix
Board of Directors Annual Meeting July 9 & 10, 2013 25
12PROPRIETARY AND CONFIDENTIAL © 2013 Express Scripts Holding Company. All Rights Reserved.
Top Line Performance Metrics - Combined Plan Cost PMPM is $161.69, a 2.3% trend over the previous period
Generic Fill Rate (GFR) increased 4.1 percentage points to 81.4%, well ahead of the Government Advisory Panel
Member Cost Share increased slightly; driven by EGWP copay changes
Description 7-12 - 5-13 7-11 - 5-12 Change
Avg Subscribers per Month 40,160 39,255 2.3%
Avg Members per Month 40,160 39,255 2.3%
Number of Unique Patients 37,720 36,629 3.0%
Pct Members Utilizing Benefit 93.9% 93.3% 0.6
Total Plan Cost $71,430,361 $68,218,686 4.7%
Total Adjusted Rxs 1,415,484 1,377,815 2.7% 7-12 - 5-13 1-13 - 5-13
Average Member Age 64.7 64.6 0.2% 75.6 44.2
Plan Cost PMPM $161.69 $157.99 2.3% $162.31 $109.52
Plan Cost per Adjusted Rx $50.46 $49.51 1.9% $48.32 $60.94
Nbr Adjusted Rxs PMPM 3.20 3.19 0.4% 3.36 1.80
Generic Fill Rate 81.4% 77.4% 4.1 76.4% 77.5%
Home Delivery Utilization 48.4% 50.2% -1.8 33.1% 28.4%
Member Cost % 16.0% 15.5% 0.4 19.6% 16.1%
Specialty Percent of Plan Cost 23.2% 20.6% 2.6 16.6% 21.6%
Specialty Plan Cost PMPM $37.51 $32.53 15.3% $26.98 $23.63
Formulary Compliance Rate 97.4% 97.0% 0.4 95.8% 95.8%
New Mexico Retiree Health Care Authority
Government - Over 65
Population
Government Advisory
Panel (GAP)
Board of Directors Annual Meeting July 9 & 10, 2013 26
13PROPRIETARY AND CONFIDENTIAL © 2013 Express Scripts Holding Company. All Rights Reserved.
Top Line Performance Metrics - Commercial Plan Cost PMPM is $108.74, a 3.4% trend over the previous period
Generic Fill Rate (GFR) increased 3.5 percentage points to 80.5%
Specialty Plan Cost PMPM is $28.65, an 8.9% trend over the previous period
Description 7-12 - 5-13 7-11 - 5-12 Change
Avg Subscribers per Month 18,095 17,846 1.4%
Avg Members per Month 18,095 17,846 1.4%
Number of Unique Patients 16,693 16,349 2.1%
Pct Members Utilizing Benefit 92.2% 91.6% 0.6
Total Plan Cost $21,644,159 $20,649,100 4.8%
Total Adjusted Rxs 414,451 409,434 1.2% 1-13 - 5-13 7-12 - 5-13
Average Member Age 53.0 53.1 -0.1% 44.2 41.4
Plan Cost PMPM $108.74 $105.19 3.4% $109.52 $97.40
Plan Cost per Adjusted Rx $52.22 $50.43 3.6% $60.94 $58.40
Nbr Adjusted Rxs PMPM 2.08 2.09 -0.2% 1.80 1.67
Generic Fill Rate 80.5% 76.9% 3.5 77.5% 76.0%
Home Delivery Utilization 48.1% 50.4% -2.3 28.4% 18.6%
Member Cost % 15.9% 16.3% -0.3 16.1% 18.5%
Specialty Percent of Plan Cost 26.3% 25.0% 1.3 21.6% 21.3%
Specialty Plan Cost PMPM $28.65 $26.30 8.9% $23.63 $20.71
Formulary Compliance Rate 96.7% 96.4% 0.3 95.8% 94.0%
New Mexico Retiree Health Care Authority - Commercial
Government Advisory
Panel (GAP)
Government - State
Board of Directors Annual Meeting July 9 & 10, 2013 27
14PROPRIETARY AND CONFIDENTIAL © 2013 Express Scripts Holding Company. All Rights Reserved.
Top Line Performance Metrics - EGWP Plan Cost PMPM is $205.12, a 1.5% trend over the previous period
Generic Fill Rate (GFR) increased 4.3 percentage points to 81.8%
Specialty Plan Cost PMPM is $44.77, a 18.6% trend over the previous period
Description 7-12 - 5-13 7-11 - 5-12 Change
Avg Subscribers per Month 22,065 21,409 3.1%
Avg Members per Month 22,065 21,409 3.1%
Number of Unique Patients 21,959 21,224 3.5%
Pct Members Utilizing Benefit 99.5% 99.1% 0.4
Total Plan Cost $49,786,202 $47,569,586 4.7%
Total Adjusted Rxs 1,001,033 968,381 3.4% 7-12 - 5-13 7-12 - 5-13
Average Member Age 74.2 74.1 0.1% 75.6 77.4
Plan Cost PMPM $205.12 $202.00 1.5% $162.31 $255.07
Plan Cost per Adjusted Rx $49.73 $49.12 1.2% $48.32 $58.10
Nbr Adjusted Rxs PMPM 4.12 4.11 0.3% 3.36 4.39
Generic Fill Rate 81.8% 77.5% 4.3 76.4% 72.7%
Home Delivery Utilization 48.6% 50.1% -1.5 33.1% 53.5%
Member Cost % 16.0% 15.2% 0.8 19.6% 14.2%
Specialty Percent of Plan Cost 21.8% 18.7% 3.1 16.6% 16.3%
Specialty Plan Cost PMPM $44.77 $37.73 18.6% $26.98 $41.49
Formulary Compliance Rate 97.7% 97.2% 0.4 95.8% 94.1%
New Mexico Retiree Health Care Authority - EGWP
Government - Over 65
Population
Medicare - EGWP
Board of Directors Annual Meeting July 9 & 10, 2013 28
New Mexico Retiree Health Care Authority
Presbyterian Health Plan July 2013
1
Board of Directors Annual Meeting July 9 & 10, 2013 29
2
Our Purpose
Presbyterian serves
to improve the health
of the patients,
members, and
communities we
serve.
2
Board of Directors Annual Meeting July 9 & 10, 2013 30
Introductions
Katherine SilvaAccount Manager(505) [email protected]
Amy Olcott, RNPopulation Health Project Manager(505) [email protected]
Tim RiveraDirector, Account Service and
Retention(505) 923-8230
3
Board of Directors Annual Meeting July 9 & 10, 2013 31
About us…
• Founded in 1908, Presbyterian Healthcare Services has served New Mexicans for more than 100 years.
• Presbyterian Health Plan was established in 1986 and has grown to become the largest health plan in New Mexico with more than 400,000 members.
• New Mexicans serving New Mexicans: Presbyterian is the only locally owned and operated integrated health care delivery system.
• Modern Healthcare ranks Presbyterian #16 in the U.S. for the top 100 Most Integrated Healthcare Networks.
4
Board of Directors Annual Meeting July 9 & 10, 2013 32
What does Presbyterian do for the NMRHCA• Customer Service• Claims• Appeals• Network • Meetings and collateral• Wellness • Value of Integration • Care Management • Innovations in Healthcare
5
Board of Directors Annual Meeting July 9 & 10, 2013 33
Presbyterian Health Plan Enrollment
• PPO Non – Medicare– Premier Plus – 2,453– Premier – 4,903– 41% of Pre-Medicare Membership
• Medicare Presbyterian Senior Care (HMO)– Plan 1 – 2,128– Plan 2 –1,038– 10% of Medicare Membership
– 22% of Total Membership
*6
Board of Directors Annual Meeting July 9 & 10, 2013 34
Presbyterian Customer Service Center (PCSC) ResultsOne Call
– Pay bill– Check claims– Request ID Card– Schedule apt with PMG primary or specialist
– Took over 3,500 calls in 2012
Service Levels – Consistently answering 80% of all calls within 30 seconds or less (Average Speed
of Answer – 9 seconds for 2013)
Abandoned Calls – Less than < 4%
Patient and Member Satisfaction– Customer satisfaction over 92%!
7
Board of Directors Annual Meeting July 9 & 10, 2013 35
Claims
• Non Medicare NMRHCA July 2012 - YTD Claims Count – 97,733
• Non Medicare NMRHCA July 2011- June 2012 Claims Count – 94,848
8
Board of Directors Annual Meeting July 9 & 10, 2013 36
Appeals
• Non-Medicare NMRHCA July 2012 - YTD • 64 Level 1 (internal) appeal reviews – all
processed timely• 23 Level 2 (Maximus) appeal reviews – all sent to
Maximus timely • 6 decisions overturned by Maximus
9
Board of Directors Annual Meeting July 9 & 10, 2013 37
Network – 46% Overall Discount • Eight hospitals in seven
communities
• Nineteen Primary Care Clinics– Over 1,600 PCPs
• Seven Urgent Care Clinics
• Clinics in over twenty five specialties– Over 7,000 Specialists
• Employ 600+ physicians
10
Board of Directors Annual Meeting July 9 & 10, 2013 38
Meetings and Collateral
• Attend all regular and special Board meetings
• Attend state-wide enrollment meetings
• Produce member collateral
• Provide Quarterly reports and monthly data transfer to NMRHCA Data Warehouse
11
Board of Directors Annual Meeting July 9 & 10, 2013 39
12
Integrated Healthcare Delivery System
Board of Directors Annual Meeting July 9 & 10, 2013 40
13
Our Integrated System• Presbyterian Heart Group
– Nationally Recognized Physicians– Among the most advanced cardiac care units and
rehabilitation programs in New Mexico– Only pediatric heart surgery services in the state
• Presbyterian Women’s Center– Dedicated to improving the health of women of all ages and their families– Nearly 7,000 babies born each year– State of the art Neonatal Intensive Care Unit (NICU)
• Presbyterian Children’s Medical Center– Rachel’s Courtyard– Team of more than 300 pediatric care providers
• Presbyterian Kaseman Hospital– Partnership with MD Anderson (one of three locations outside of Texas)
Access to the most advanced radiation treatments in Albuquerque
Board of Directors Annual Meeting July 9 & 10, 2013 41
14
Care Management and Disease Management• Transition of Care (switching medical carriers)
– Scheduled upcoming surgical procedure– 2nd or 3rd trimester of pregnancy– Serious medical condition that requires ongoing care
• Case Management for Acute Conditions– Transplant Services– High-Risk Pregnancy– Coordination of complex care
• Disease Management– Diabetes– Coronary Artery Disease (CAD)– Asthma– Congestive Heart Failure (CHF)– Chronic Obstructive Pulmonary Disease (COPD)
Board of Directors Annual Meeting July 9 & 10, 2013 42
Resources and Tools
Staff of 4 Medical Directors• Meets with clients to review utilization and medical
initiative.
Predictive Modeling• Risk stratifies members who are the highest risk
for a catastrophic event• Assigned a level of care based on their needs
15
Board of Directors Annual Meeting July 9 & 10, 2013 43
16
MyPresOnline
• Look up your benefit information• Check the status of your membership• Change your PCP (optional)• View the status of your claims• Request replacement ID cards• Send Customer Service a question online
www.phs.org/aps
Board of Directors Annual Meeting July 9 & 10, 2013 44
Treatment Cost Calculator Well Child visit new (5-11)
17
Board of Directors Annual Meeting July 9 & 10, 2013 45
Wellness
The program includes:
• Dedicated RN • Flu shots• Access to Personal Health Assessment• Screenings• Clinical reports & medical director analysis• Customized health fairs• Educational materials• My CD Program
18
Board of Directors Annual Meeting July 9 & 10, 2013 46
WebMD for members
• Online personal health management site
• Personal Health Assessment (PHA) to •Identify personal health risks; •Provides recommendations for improving those risks;•Easy-to-use tools to help make healthy lifestyle changes;•Confidential personalized report instantly.
• Includes a Health Record tool that allows members to securely compile and store immunization records, medical history, allergies, and more to create a health record summary for their physicians.
19
Board of Directors Annual Meeting July 9 & 10, 2013 47
Staying healthy
• Screening RemindersEncourages members to get preventive screenings such as mammograms and pap smears.
• Smoking Cessation Program
• Value Added Benefits – Valuable discounts for:– Acupuncture– Massage Therapy – Chiropractic– Vision
20
Board of Directors Annual Meeting July 9 & 10, 2013 48
Nurse Advice Line
• 24/7 telephone triage of symptoms, medical advice/information, and medical/ behavioral health referrals
• Services are provided by NurseAdvice™ New Mexico– Links to 911– Able to receive questions via email– Staffed by registered nurses living in New Mexico
21
Board of Directors Annual Meeting July 9 & 10, 2013 49
Discharge Planning & Management
• Discharge planning via a personal visit:– follow-up care; review discharge instructions & medications
• RNs call all patients who have been discharged to home within 72 hours– Check on medical status, medication, mental and physical state– Follow up appointments where applicable
• Results include:– Reduction in readmissions and urgent care/emergency room visits– Increase in patient satisfaction– Top 10 Ranking for Lowest Readmission Rate.
22
Board of Directors Annual Meeting July 9 & 10, 2013 50
Diagnostic Imaging Management• Administered through HealthHelp
– Provides physicians with current ordering guidelines and best practices for radiology utilization
– Eliminates unnecessary and improper testing and treatment– Establishes quality standards for imaging and radiology services
• Medical cost savings to date:– CAT - $285,000– PET - $38,000– MRI - $2,000,000 over two years
23
Board of Directors Annual Meeting July 9 & 10, 2013 51
Behavior Health Care Management
• Coordinates medication, follow-up visits, and connecting with providers
• Monitors inpatient admissions for level and appropriateness of care; instrumental in lowering readmission rates to 6%
• Crisis line available 24/7
24
Board of Directors Annual Meeting July 9 & 10, 2013 52
Rio Rancho’s First Hospital• $165 Million investment
• More than 90 patient beds
• New Mexico’s First 21st Century Hospital
• 66 acres – east of Unser Blvd and north of Black Arroyo Blvd
• Largest project in our 100+ year history
25
Board of Directors Annual Meeting July 9 & 10, 2013 53
Hospital at Home Care Model
• An alternative to traditional hospital admission for uncomplicated cases of heart disease, pneumonia, dehydration, and other conditions.
• Helps patients in need receive hospital-level care in the comfort of their home.
• Once or twice daily doctor, nurse, or aide visits - supplemented by TeleHealth video monitoring
• Physician and nursing coverage 24 hours/7 days a week
• More than 50% savings compared to traditional inpatient care
• Available only to Presbyterian Health Plan Members
26
Board of Directors Annual Meeting July 9 & 10, 2013 54
Patient Centered Medical Home• Alternative model in delivering care
– Proactive team approach to health care led by a Primary Care Physician and includes team members from behavioral health, pharmacy, care management and diabetes educators
– Makes office visits more efficient– Empowers patients to be more
involved in their health
• Clinical Outcomes– BP improvement in 73% of patients– HgbA1c improvement in 58% of patients– LDL improvement in 73% of patients
27
Board of Directors Annual Meeting July 9 & 10, 2013 55
Closing: Our ValueInnovation and evolving processes to lower healthcare costs,
without sacrificing quality and satisfaction:
– Only integrated health care system in New Mexico– Average discounts: 40-46%– Unique discharge planning management– Access to MD Anderson Radiation Treatment Center– Future cost savings initiatives
28
Board of Directors Annual Meeting July 9 & 10, 2013 56
People helping People. It’s our tradition.
29
Board of Directors Annual Meeting July 9 & 10, 2013 57
Presented by:
Blue Cross and Blue Shield of New Mexico (BCBSNM)
Board of Directors Annual Meeting July 9 & 10, 2013 58
What does BCBSNM do for the NMRHCA?
• Customer service• Claims• Appeals• Network• Meetings and collateral• Wellness tools including Health Assessments (HA) for the
non-Medicare members• Care management (all members)
2Board of Directors Annual Meeting July 9 & 10, 2013 59
BCBSNM Enrollment by Plan• PPO Non-Medicare
o Premier Plus – 4,618 o Premier – 5,923 o TOTAL: 10,541* (out of total non-Medicare membership of
17,885 – 59%)
• Medicareo BCBSNM Medicare Supplement – 22,303* (out of total Medicare
membership of 30,371 – 73%)
• Of BCBSNM’s 48,256 total members, 68 percent (32,844 members) are NMRHCA members
*Reported by NMRHCA
3Board of Directors Annual Meeting July 9 & 10, 2013 60
Customer Service
• NMRHCA January – June 2013o Calls Received and Answered – 10,405o Average Speed of Answer (ASA) – 25 secondso First Contact Closure – 91.35 percent
• NMRHCA 2012o Calls Received and Answered – 22,023o Average Speed of Answer (ASA) – 25 secondso First Contact Closure – 92.68 percent
4Board of Directors Annual Meeting July 9 & 10, 2013 61
Claims
• NMRHCA 2013 YTD (May) claims count – 190,155o 49,497 Non-Medicareo 140,658 Medicare
• NMRHCA 2012 claims count – 692,149o 167,157 Non-Medicare
o 524,992 Medicare
5Board of Directors Annual Meeting July 9 & 10, 2013 62
Appeals
• September 26, 2012 – May 1, 2013o 154 cases received
• September 26, 2012 – May 1,2013o 135 cases closed within allowed timeframe per Department of
Insurance (DOI) regulations
Note: Five appeals did not meet the DOI timeframe and that appeal cases were deemed approved per the regulation. Four of those claims were from a Doctor of Oriental Medicine (DOM) that sent 30+ appeal requests in one letter.
6Board of Directors Annual Meeting July 9 & 10, 2013 63
Networks
• 21,619 contracted PPO providers within New Mexico• National coverage
o 96 percent of U.S. hospitalso 91 percent of U.S. providers
• Worldwide coverage (contracted with PPO providers in 195 countries)
• Average discounto Professional, outpatient, and inpatient YTD for NMRHCA through
May 2013 – 46.6 percent
7Board of Directors Annual Meeting July 9 & 10, 2013 64
Meetings and Collateral
• Attend all regular and special board meetings
• Attend state-wide enrollment meetings
• Produce member collateral
• Monthly reports/claims extract to Segal
8Board of Directors Annual Meeting July 9 & 10, 2013 65
Performance Guarantees• PPO Non-Medicare and Medicare
July 1, 2012 – Current = $34,844.78o Medical claims processing accuracyo Financial payment accuracyo Medical claims turnaround timeo Customer service (ID card turnaround and accuracy, average speed of answer,
abandonment rate)o Account management – team performance appraisalo Report deliveryo Network discount savings
• PPO Non-Medicare and MedicareJuly 1, 2011 – June 30, 2012 = $0.00Note: Based on BCBS Association Member Touchpoint Measures
9Board of Directors Annual Meeting July 9 & 10, 2013 66
• Total current, active open cases – 16
• Total Targeted – 190 (includes 25 carryover)
• Refused or could not contact - 76
• Total cases closed at reporting period – 114 (Cases were managed and met goal; no further progress)
Case Management (April 1, 2012 – March 31, 2013)
10Board of Directors Annual Meeting July 9 & 10, 2013 67
Disease Management (April 1, 2012 – March 31, 2013)
• 10,731 nonMedicare membership• 3,389 members touched• 857 mailings unique members – Condition
management communication (Does not include any preventive mailings which is 2,055 more)
• 1,467 members Targeted• 477 successful engagements (unique participants
verbally consenting to participate)• 39 physician collaboration
11Board of Directors Annual Meeting July 9 & 10, 2013 68
American Imaging Management (AIM)
• Effect of reduced utilization trend created $5.9 million in annual value for BCBSNM
• Experts estimate that 30-40 percent of all outpatient imaging is unnecessary
• Radiology Quality Initiative (RQI) programs improve health by:
o Eliminating unnecessary radiation exposure to patientso Promoting the most appropriate, efficient, and cost-effective diagnostic
imaging serviceso Encouraging standardization of medical practice patterns
12Board of Directors Annual Meeting July 9 & 10, 2013 69
Self Service: Blue Access for MembersSM
Members can:• Check status of claims• View Explanations of Benefits• Communicate with Customer
Advocates through email• View provider selections• Order new ID cards or print a
temporary copy• Link to Wellness site (Well
onTargetSM)
Claims and Customer Service
13Board of Directors Annual Meeting July 9 & 10, 2013 70
1-800-973-6329
Advice anytime –Around-the-clock health and wellness advice from licensed professionals
24/7 Nurseline
Our 24/7 Nurseline is here
to help• Nurses provide health
advice and information
• AudioHealth Library®
includes topics such as kicking the smoking habit
• Program usage reports are available to employer groups
Available in English and Spanish
14
• 746 calls YTD, of which 422 required the attention of a clinician; 70 percent were redirected to a more appropriate level of care
Board of Directors Annual Meeting July 9 & 10, 2013 71
Blue365® Member Discount Program
Weight Management –Discounts at Jenny Craig®´
on membership and food
Vision Care & Eyewear –Discounts on eyewear, contact lenses, and laser vision correction surgery
Dental Products – Discounts on Procter & Gamble oral care bundles
Hearing Aids – Discounts on hearing aids for members, parents, and grandparents
Under the My Health tab
15Board of Directors Annual Meeting July 9 & 10, 2013 72
The NEW Integrated Provider Finder®
• Combines real member cost, quality, patient experience, and advanced demographics information in one easy, intuitive site to drivereal change in member behavior
• BlueCard® PPO cost & quality data integrates with real-time benefit information to deliver an accuratepicture of member share
• Retail experience with responsive, easy-to-navigate web design with multiple access points
• Available to members and non-members*
Online provider search engine and care decision support tool
*Cost information only available to PPO / CDHP members
16Board of Directors Annual Meeting July 9 & 10, 2013 73
Integrated Approach
17Board of Directors Annual Meeting July 9 & 10, 2013 74
Integrated Approach
18Board of Directors Annual Meeting July 9 & 10, 2013 75
Member Liability Estimator Features
• Cost for specific procedures based on benefits and accumulations
• Displays deductible, copayment, and coinsurance
• Quality measurement information
• “Learn More about this Treatment” (alternatives to surgery)
• Alternative options:o Lower costo Closer locationso Alternative to hospitals
19Board of Directors Annual Meeting July 9 & 10, 2013 76
Portal Highlights• Health Assessment• Member dashboard• Self-directed courses• Trackers and tools• Health & wellness content• Food and exercise diary• Social networking• Text messaging • Life Points rewards• Fitness program
20Board of Directors Annual Meeting July 9 & 10, 2013 77
21Board of Directors Annual Meeting July 9 & 10, 2013 78
22Board of Directors Annual Meeting July 9 & 10, 2013 79
23Board of Directors Annual Meeting July 9 & 10, 2013 80
Questions?
Board of Directors Annual Meeting July 9 & 10, 2013 81
Copyright © 2013 by The Segal Group, Inc., parent of The Segal Company. All rights reserved.
New Mexico Retiree Health Care AuthorityActuarial, Claims, and Demographics StudyJuly 9, 2013
Board of Directors Annual Meeting July 9 & 10, 2013 82
Copyright © 2013 by The Segal Group, Inc., parent of The Segal Company. All rights reserved.
Objective & Primary Actuarial Tasks CY2014 Expenditure Estimate Review of CY2012 Incurred Claims
• Cost and Utilization Trends by Type of Service• Claims Distribution• Comparison to Facility and Professional
Benchmarks
Demographic Analysis & Risk Scores• Understanding Enrollment Risk• Age Distribution & Age Risk Factor by Carrier• Non-Medicare Health Status by Plan, Carrier, and
County
Board of Directors Annual Meeting July 9 & 10, 2013 83
2
Objective & Primary Actuarial Tasks
Goal: Improve understanding of RHCA benefit structure and dynamics and how they relate to the sustainability of affordable benefit options
Primary Actuarial Tasks for NMRHCA GASB Valuation Develop funding projections (both short-term and long-term)
– Retiree Contributions + Other Revenue = Benefits Costs + Operating Expenses + Surplus Contribution (or Loss)
Develop Calendar Year Target Rates as basis for Retiree Contributions– For fully insured benefits, typically equals negotiated premium or estimated
renewal premium– For self-funded benefits, project claim payments and administration expenses
for calendar year
Board of Directors Annual Meeting July 9 & 10, 2013 84
3
CY2014 Expenditure Estimate
Review recent claims experience May 2012 through April 2013
Underwriting adjustments to claims experience Provider contract changes (BCBS Lovelace Hospital discounts) Plan changes effective January 1, 2013 Convert to per member per month Adjust from paid basis to incurred basis
Project claims forward at assumed trend from midpoint of experience period to midpoint of projection period (November 1, 2012 to July 1, 2014) 8% per annum for 20 months = 13.7% increase
PDP Revenue and Rx Rebates are estimated separately under different assumptions
Authority to set final rates resides with Board based on staff recommendationBoard of Directors Annual Meeting July 9 & 10, 2013 85
Copyright © 2013 by The Segal Group, Inc., parent of The Segal Company. All rights reserved.
Objective & Primary Actuarial Tasks CY2014 Expenditure Estimate Review of CY2012 Incurred Claims
• Cost and Utilization Trends by Type of Service• Claims Distribution• Comparison to Facility and Professional
Benchmarks
Demographic Analysis & Risk Scores• Understanding Enrollment Risk• Age Distribution & Age Risk Factor by Carrier• Non-Medicare Health Status by Plan, Carrier, and
County
Board of Directors Annual Meeting July 9 & 10, 2013 86
5
2012 Non-Medicare Claims
Type of Service 2012
Encounters% of 2012
Encounters 2012 Paid
% of 2012 Paid
Inpatient Hospital Facility 1,257 0.3% $14,303,304 18.7%Outpatient Hospital Facility 8,076 2.1% $4,310,269 5.6%Emergency Room Facility 1,206 0.3% $1,137,493 1.5%Anesthesia 1,777 0.5% $920,545 1.2%Surgery 26,195 6.9% $7,123,420 9.3%Lab / Path 53,345 14.0% $11,200,481 14.6%Evaluation and Management 48,742 12.8% $3,639,111 4.7%Well Visits 3,961 1.0% $529,269 0.7%Emergency Room Professional 2,598 0.7% $1,214,753 1.6%Chiropractic 10,262 2.7% $161,656 0.2%Medicine 53,499 14.1% $7,323,941 9.6%Injections 9,492 2.5% $4,817,701 6.3%DME 6,707 1.8% $1,541,903 2.0%Retail Pharmacy 107,220 28.2% $6,061,944 7.9%Mail Order Pharmacy 33,565 8.8% $9,875,006 12.9%Other 12,699 3.3% $2,527,262 3.3%Total 380,601 100.0% $76,688,058 100.0%
Blue Cross Blue Shield of New Mexico Non-Medicare
Type of Service 2012
Encounters% of 2012
Encounters 2012 Paid
% of 2012 Paid
Inpatient Hospital Facility 644 0.3% $7,679,424 19.2%Outpatient Hospital Facility 5,481 2.5% $1,992,993 5.0%Emergency Room Facility 1,228 0.6% $354,752 0.9%Anesthesia 1,113 0.5% $639,480 1.6%Surgery 16,637 7.6% $5,240,557 13.1%Lab / Path 32,126 14.7% $5,538,294 13.9%Evaluation and Management 29,703 13.5% $2,165,887 5.4%Well Visits 3,016 1.4% $384,351 1.0%Emergency Room Professional 1,275 0.6% $656,390 1.6%Chiropractic 3,530 1.6% $59,071 0.1%Medicine 26,451 12.1% $3,032,009 7.6%Injections 4,577 2.1% $2,241,853 5.6%DME 4,114 1.9% $481,606 1.2%Retail Pharmacy 65,948 30.1% $3,190,552 8.0%Mail Order Pharmacy 17,703 8.1% $5,013,123 12.6%Other 5,728 2.6% $1,243,623 3.1%Total 219,274 100.0% $39,913,965 100.0%
Presbyterian Healthcare Services Non-Medicare
Inpatient facility charges continue to be the highest cost service
Surgery made up a higher percentage of Presbyterian claims than BCBS claims (13.1% > 9.3%) Surgery has consistently comprised a higher percentage of Presbyterian claims
than BCBS claims since 2008, with the spread increasing since 2010
Board of Directors Annual Meeting July 9 & 10, 2013 87
6
2012 vs 2011 BCBS Non-Medicare Claims Experience
Type of Service
2012 Encounters per 1,000 Members
2011 Encounters per 1,000 Members
% Change
2012 Paid per
Encounter
2011 Paid per
Encounter%
Change2012 Paid
PMPY
2011 Paid
PMPY%
ChangeInpatient Hospital Facility 121 102 18.5% $11,379 $12,198 -6.7% $1,376 $1,245 10.5%Outpatient Hospital Facility 777 735 5.7% $534 $537 -0.6% $415 $395 5.0%Emergency Room Facility 116 110 5.7% $943 $922 2.4% $109 $101 8.1%Anesthesia 171 155 10.6% $518 $531 -2.4% $89 $82 7.9%Surgery 2,520 2,465 2.2% $272 $260 4.7% $685 $640 7.0%Lab / Path 5,133 4,856 5.7% $210 $200 4.9% $1,078 $971 10.9%Evaluation and Management 4,690 4,375 7.2% $75 $72 3.1% $350 $317 10.5%Well Visits 381 369 3.3% $134 $131 1.9% $51 $48 5.2%Emergency Room Professional 250 222 12.5% $468 $481 -2.8% $117 $107 9.3%Chiropractic 987 971 1.7% $16 $16 -2.5% $16 $16 -0.8%Medicine 5,148 4,879 5.5% $137 $123 11.1% $705 $601 17.2%Injections 913 692 31.9% $508 $499 1.8% $464 $345 34.3%DME 645 581 11.1% $230 $217 5.9% $148 $126 17.7%Retail Pharmacy 10,317 9,165 12.6% $57 $51 9.9% $583 $472 23.7%Mail Order Pharmacy 3,230 2,878 12.2% $294 $280 5.3% $950 $804 18.1%Other 1,222 1,055 15.8% $199 $195 2.0% $243 $206 18.1%Total 36,621 33,610 9.0% $201 $193 4.5% $7,379 $6,478 13.9%
Blue Cross Blue Shield of New Mexico Non-Medicare
Increased utilization was a trend driver for the BCBS population BCBS encounters PMPM increased to 3.05 in 2012 from 2.80 in 2011
Board of Directors Annual Meeting July 9 & 10, 2013 88
7
2012 vs 2011 Presbyterian Non-Medicare Claims Experience
Type of Service
2012 Encounters per 1,000 Members
2011 Encounters per 1,000 Members
% Change
2012 Paid per
Encounter
2011 Paid per
Encounter%
Change2012 Paid
PMPY
2011 Paid
PMPY%
ChangeInpatient Hospital Facility 89 121 -26.9% $11,925 $7,150 66.8% $1,057 $867 21.9%Outpatient Hospital Facility 754 672 12.3% $364 $349 4.0% $274 $235 16.8%Emergency Room Facility 169 156 8.5% $289 $275 5.2% $49 $43 14.1%Anesthesia 153 136 12.6% $575 $553 4.0% $88 $75 17.1%Surgery 2,289 2,230 2.6% $315 $283 11.3% $721 $631 14.2%Lab / Path 4,420 4,299 2.8% $172 $167 3.5% $762 $716 6.4%Evaluation and Management 4,087 3,884 5.2% $73 $70 4.9% $298 $270 10.3%Well Visits 415 423 -1.8% $127 $120 6.5% $53 $51 4.6%Emergency Room Professional 175 157 11.5% $515 $503 2.3% $90 $79 14.1%Chiropractic 486 480 1.1% $17 $17 -3.5% $8 $8 -2.4%Medicine 3,639 3,492 4.2% $115 $102 12.2% $417 $357 16.9%Injections 630 710 -11.3% $490 $491 -0.2% $308 $349 -11.5%DME 566 534 5.9% $117 $113 3.6% $66 $60 9.7%Retail Pharmacy 9,074 8,433 7.6% $48 $44 11.2% $439 $367 19.6%Mail Order Pharmacy 2,436 2,269 7.4% $283 $262 8.0% $690 $595 16.0%Other 788 762 3.4% $217 $340 -36.2% $171 $259 -34.0%Total 30,170 28,758 4.9% $182 $173 5.5% $5,492 $4,962 10.7%
Presbyterian Healthcare Services Non-Medicare
Presbyterian members utilized the plan less than BCBS members Presbyterian encounters PMPM increased to 2.51 in 2012 from 2.40 in 2011
Board of Directors Annual Meeting July 9 & 10, 2013 89
8
Claims Distribution – Non-Medicare Medical only
In 2012 11.0% of non-Medicare members incurred annual Medical claims in excess of $10,000, up from 10.1% of members in 2011
In 2012, 75.4% of non-Medicare Medical claims were incurred by the 11.0% of members with annual claims in excess of $10,000
Annual Claims2012 % of Members
2012 Cumulative % of Members
2011 % of Members
2011 Cumulative % of Members
2012 Medical Paid
% of 2012 Medical Paid
Cumulative % of 2012 Medical
Paid
2011 Medical
Paid% of 2011
Medical Paid
Cumulative % of 2011
Medical Paid$0 15.5% 15.5% 15.7% 15.7% $0 0.0% 0.0% $0 0.0% 0.0%$1-$100 2.5% 18.0% 2.7% 18.4% $22,392 0.0% 0.0% $23,484 0.0% 0.0%$100-$300 9.7% 27.7% 9.8% 28.3% $292,334 0.3% 0.3% $288,535 0.3% 0.4%$301-$800 16.7% 44.4% 17.0% 45.3% $1,406,324 1.5% 1.8% $1,386,426 1.6% 2.0%$801-$5,000 36.3% 80.8% 36.3% 81.6% $12,234,301 13.1% 14.9% $12,011,509 14.1% 16.1%$5,001-$10,000 8.3% 89.0% 8.3% 89.9% $9,118,636 9.7% 24.6% $8,940,387 10.5% 26.5%$10,001-$15,000 3.4% 92.4% 3.3% 93.3% $6,500,769 6.9% 31.6% $6,194,903 7.3% 33.8%$15,001-$20,000 1.9% 94.3% 1.7% 94.9% $5,133,728 5.5% 37.0% $4,380,220 5.1% 38.9%$20,001+ 5.7% 100.0% 5.1% 100.0% $58,972,902 63.0% 100.0% $52,166,358 61.1% 100.0%Medical Total 100.0% 100.0% $93,681,386 100.0% $85,391,822 100.0%
Board of Directors Annual Meeting July 9 & 10, 2013 90
9
Facility Benchmarks
Combines Non-Medicare and Medicare experience
Measure
NMRHCA CY2012 Result
CY2012 Benchmark
Result*
Ratio of NMRHCA to Benchmark
Inpatient admissions per 1,000 members 93.45 91.12 1.0256Inpatient days per 1,000 members 381.16 370.11 1.0298Outpatient hospital encounters per 1,000 members 502.44 496.45 1.0121Emergency room encounters per 1,000 members 348.45 352.45 0.9887
* Benchmark result has been adjusted based upon age and gender
Board of Directors Annual Meeting July 9 & 10, 2013 91
10
Professional Benchmarks
Combines Non-Medicare and Medicare experience
Measure*NMRHCA
ResultBenchmark
Result**
Ratio of NMRHCA to Benchmark
Evaluation and Management 4.35 4.78 0.9106Well Visits 0.39 0.29 1.3440Anesthesia 0.47 0.44 1.0621Surgeries 0.86 0.88 0.9821Radiology 2.37 2.09 1.1318Pathology 3.65 3.55 1.0268Medicine 4.22 4.00 1.0549Injectables 0.81 0.77 1.0521Total 17.13 16.82 1.0187
* Measures are on a per member per year basis** Benchmark result has been adjusted based upon age and gender
Board of Directors Annual Meeting July 9 & 10, 2013 92
Copyright © 2013 by The Segal Group, Inc., parent of The Segal Company. All rights reserved.
Objective & Primary Actuarial Tasks CY2014 Expenditure Estimate Review of CY2012 Incurred Claims
• Cost and Utilization Trends by Type of Service• Claims Distribution• Comparison to Facility and Professional
Benchmarks
Demographic Analysis & Risk Scores• Understanding Enrollment Risk• Age Distribution & Age Risk Factor by Carrier• Non-Medicare Health Status by Plan, Carrier, and
County
Board of Directors Annual Meeting July 9 & 10, 2013 93
12
Understanding Enrollment Risk
Enrollment risk exists in many forms. With two plans and carriers being offered, specific risks include: Risk that competing plans do not get enrollees with similar age/gender profiles Risk that competing plans do not get enrollees with similar average health status Risk that competing plans do not have equivalent cost impact on RHCA due to
benefit level
Unmanaged, enrollment risk drives up overall plan cost. Members are not incented to elect the plan which would be in the best financial interest of RHCA.
Plan designs that do not adjust for enrollment risk frequently result in adverse selection against the plan Adverse selection is the process whereby the plan participant has enough
information to determine that one course of action presents a financial advantage to them, and also to the detriment of RHCA– For example, you are offered a new Honda or BMW and the BMW costs you
only $1,000 more
Board of Directors Annual Meeting July 9 & 10, 2013 94
13
NMRHCA Members Age 40+ & Claims PMPY
234
834
2,323
4,297
8,578
9,687
7,616
5,365
3,714
2,628
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
‐
2,000
4,000
6,000
8,000
10,000
12,000
40 to 44 45 to 49 50 to 54 55 to 59 60 to 64 65 to 69 70 to 74 75 to 79 80 to 84 85+
Med
ical + Rx Pa
id per M
embe
r CY2
012
Mem
ber C
ount
Age Range
Board of Directors Annual Meeting July 9 & 10, 2013 95
14
Non-Medicare Members by Age and Carrier
Age Group2012
Members% of 2012 Members
2011 Members
% of 2011 Members Difference
BCBSNM 40 to 44 115 1% 100 1% 0.2%Non-Medicare 45 to 49 378 4% 374 4% 0.1%
50 to 54 1,134 13% 1,127 13% 0.3%55 to 59 2,341 27% 2,369 27% 0.0%60 to 64 4,848 55% 4,967 56% -0.6%
BCBSNM Average Age 8,816 53.3 years 8,937 53.7 years -0.4 yearsPresbyterian 40 to 44 106 2% 81 1% 0.3%Non-Medicare 45 to 49 398 7% 352 6% 0.2%
50 to 54 1,041 17% 876 16% 1.3%55 to 59 1,596 26% 1,501 27% -0.8%60 to 64 2,919 48% 2,714 49% -1.0%
Presbyterian Average Age 6,060 51.6 years 5,524 52.2 years -0.5 yearsTotal 40 to 44 221 1% 181 1% 0.2%Non-Medicare 45 to 49 776 5% 726 5% 0.2%
50 to 54 2,175 15% 2,003 14% 0.8%55 to 59 3,937 26% 3,870 27% -0.3%60 to 64 7,767 52% 7,681 53% -0.9%
Non-Medicare Average Age 14,876 52.6 years 14,461 53.1 years -0.5 years
Excludes members under age 40, over age 64, and those for whom age is not available
In 2012, 59% of non-Medicare members enrolled in BCBS, down from 62% in 2011
Decimal places beyond 0.1 years are not displayed, but are incorporated in Difference calculation
Board of Directors Annual Meeting July 9 & 10, 2013 96
15
Age Group2012
Members% of 2012 Members
2011 Members
% of 2011 Members Difference
Presbyterian less than 55 32 1% 24 1% -0.1%Medicare 55 to 59 44 1% 29 1% 0.1%Advantage 60 to 64 120 4% 77 3% 0.4%
65 to 69 1,562 50% 1,172 52% -2.6%70 to 74 919 29% 660 30% -0.2%75 to 79 298 10% 185 8% 1.2%80 to 84 103 3% 52 2% 1.0%
85+ 57 2% 36 2% 0.2%Presbyterian Average Age 3,135 69.5 years 2,235 69.3 years 0.2 yearsMedicare less than 55 240 1% 239 1% -0.1%Total 55 to 59 360 1% 325 1% 0.0%
60 to 64 812 3% 683 2% 0.2%65 to 69 9,650 32% 8,352 30% 2.1%70 to 74 7,594 25% 7,158 26% -0.4%75 to 79 5,340 18% 5,171 18% -0.8%80 to 84 3,692 12% 3,647 13% -0.8%
85+ 2,612 9% 2,489 9% -0.2%Medicare Average Age 30,300 73.2 years 28,064 73.5 years -0.3 years
Medicare Members by Age and Carrier
Age Group2012
Members% of 2012 Members
2011 Members
% of 2011 Members Difference
BCBSNM less than 55 151 1% 167 1% -0.1%Medicare 55 to 59 255 1% 247 1% 0.0%Supplement 60 to 64 548 2% 497 2% 0.1%
65 to 69 6,442 29% 5,948 28% 1.2%70 to 74 5,471 24% 5,416 25% -0.6%75 to 79 4,186 19% 4,151 19% -0.5%80 to 84 3,117 14% 3,085 14% -0.4%
85+ 2,172 10% 2,037 9% 0.3%BCBSNM Average Age 22,342 73.8 years 21,548 74.0 years -0.1 yearsLovelace less than 55 57 1% 48 1% 0.1%Medicare 55 to 59 61 1% 49 1% 0.1%Advantage 60 to 64 144 3% 109 3% 0.4%
65 to 69 1,646 34% 1,232 29% 5.3%70 to 74 1,204 25% 1,082 25% -0.3%75 to 79 856 18% 835 20% -1.8%80 to 84 472 10% 510 12% -2.1%
85+ 383 8% 416 10% -1.8%Lovelace Average Age 4,823 72.6 years 4,281 73.5 years -0.9 years
The Presbyterian Medicare Advantage plans continue to have a higher proportion of Medicare beneficiaries under age 70 enrolled
Decimal places beyond 0.1 years are not displayed, but are incorporated in Difference calculation
Board of Directors Annual Meeting July 9 & 10, 2013 97
16
Age Risk Factor by Carrier
Assumes retiree age 40-44 has a risk factor of 1.0 and shows expected cost as a multiple of retiree age 40-44.
Non-Medicare members in Presbyterian are expected to be 2.7% less costly than BCBSNM non-Medicare members based on age
Presbyterian Medicare members are expected to be 4.2% less costly than BCBSNM Medicare members and 2.8% less costly than Lovelace Medicare members based on age
Non-Medicare2012 Age Risk
FactorBCBSNM 1.83Presbyterian 1.78
2012 Age Risk Factor
BCBS Medicare Supplement 2.80Lovelace Medicare Advantage 2.76Presbyterian Medicare Advantage 2.68
Medicare
Board of Directors Annual Meeting July 9 & 10, 2013 98
17
Non-Medicare Health Status Risk Index by Carrier
Carrier Plan2012 Risk
IndexBCBSNM Premier Plus 1.0376BCBSNM Premier 0.7337
Presbyterian Premier Plus 0.9217Presbyterian Premier 0.6598
Premier Plus 0.9970Premier 0.7016
Total Non-Medicare
Based on 2012 membership:
Premier Plus participants are anticipated to be 42.1% less health than Premier participants
BCBS participants are anticipated to be 15.3% less healthy than Presbyterian participants
Board of Directors Annual Meeting July 9 & 10, 2013 99
18
Continuing Non-Medicare Members’ Health Status Risk Index by Plan
The high Risk Index of members switching from Premier to Premier Plus illustrates adverse selection
2011 Plan 2012 Plan Members
% of ContinuingNon-Medicare Membership
2012 Risk Index
Premier Plus Premier Plus 6,568 48.9% 0.9897Premier Premier 6,514 48.5% 0.7145Premier Premier Plus 77 0.6% 1.1779
Premier Plus Premier 271 2.0% 0.722013,430 100.0% 0.8519
Board of Directors Annual Meeting July 9 & 10, 2013 100
19
Non-Medicare Health Status Risk Index versus Medical + Rx Claims PMPY
A relativity factor of 1.00 represents the RHCA average of the entire non-Medicare population Counties are displayed in order of descending membership, with the greatest number of
members residing in Bernalillo County Counties with a gap between the line and the bar deliver care more cost effectively at their risk
level than all New Mexico counties on average
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
Relativ
ity to
NMRH
CA Average
Cost Relativity to RHCA Average Risk Relativity to RHCA Average
Board of Directors Annual Meeting July 9 & 10, 2013 101
20
Non-Medicare Risk Score-Normalized Medical + Rx Claims PMPY by County
All claim amounts have been normalized to reflect the average health status of the entire NMRHCA non-Medicare population residing in New Mexico
Counties are displayed in order of descending membership, with the greatest number of members residing in Bernalillo County
Red bars indicate Counties with a higher than average cost of care
Board of Directors Annual Meeting July 9 & 10, 2013 102
2121
Questions?
Board of Directors Annual Meeting July 9 & 10, 2013 103
Assumption Prior Assumption -- July 2010 Prior Assumption -- July 2011 Prior Assumption -- July 2012 Current Assumption -- July 2013
Asset BalanceUse February 28, 2010 fund balance of
$160,952,669 as an estimate for 7/1/2010 balance
Use May 31, 2011 fund balance of $216,000,000 as an estimate for
7/1/2011 fund balance
Use April 30, 2012 fund balance of $232,787,612 as an estimate for
7/1/2012 fund balance
Use May 31, 2013 fund balance of $279,487,430 as an estimate for
7/1/2013 fund balanceInvestment Return 7.75% No Change No Change No Change
Annual Growth in PayrollFY10 payroll estimated to be
$4,025,201,436, increasing 0% through 6/30/12 and 4% thereafter
FY11 payroll estimated to be $4,170,000,932, increasing 0% through
6/30/13 and 4% thereafter
FY12 payroll estimated to be $3,876,220,608, increasing 0% through
6/30/13 and 4% thereafter
FY13 payroll estimated to be $3,983,932,770, increasing 2% through
6/30/14 and 4% thereafter
9.14% No Change No Change No Change
Contribution Rates (Employer/Employee)Public Safety, et al 2.292%/1.146% in 2011-2012 No Change No Change: 2.50%/1.25% No Change
2.500%/1.250% beginning 7/1/2012Other Occupations 1.834%/0.917% in 2011-2012 No Change No Change: 2.00%/1.00% No Change
2.000%/1.000% beginning 7/1/2012Annual Growth in Retirees
Non-Medicare1.75% annually through 6/30/2015,
then based on FY2009 open valuation output table until 2022, 0.5% thereafter
No Change1.75% annually through 6/30/2015,
then based on FY2009 open valuation output table
No Change
Medicare 5.8% through 6/30/2019, then based on FY2009 open valuation output table No Change 5.8% through 6/30/2015, then based on
FY2009 open valuation output table No Change
Retiree Ancillary Costs Assumed to equal premium expenses and is paid fully by retirees No Change No Change No Change
Pension Tax Revenue $13,302,240 for FY10,increasing 12% thereafter
$14,898,485 for FY11,increasing 12% thereafter
$16,686,304 for FY12,increasing 12% thereafter
$18,688,658 for FY13,increasing 12% thereafter
HB 728/573 Revenue $3 million annually, no sunset No Change No Change No Change
Annual Growth in PDP Revenue (PMPM)
0% growth in CY11, one half Medicare Trend growth thereafter: Increased for
donut hole closure 4% CY11, 1% CY12 through CY20.
No Change: half of Medicare Rx trend, plus 1% for donut hole closure CY12
through CY20No Change No Change
Rx Rebates
Rebates of $6,632,592 received in FY10, increasing at retiree growth rate less 3% annually through FY13, and at
retiree growth rate thereafter
Rebates of $5,736,750 estimated for FY11, increased at retiree growth rate less 3% annually through FY13, and at
retiree growth rate thereafter
Rebates of $6,424,123 estimated for FY12, increased at retiree growth rate less 3% annually through FY13, and at
retiree growth rate thereafter
Rebates of $5,798,571 estimated for FY13, increased at annual retiree
growth rate
Rx Manufacturers Discounts NA NA
Based on Medco's estimated CY12 PMPM revenue from manufacturers
and Federal Reinsurance, increased at retiree growth rate
Based on ESI's estimated CY13 & CY14 PMPM revenue from manufacturers and Federal
Reinsurance, increased at retiree growth rate
Percentage of Covered Payrollfor Public Safety, et al
New Mexico Retiree Health Care AuthorityBaseline Assumptions for Long-Term Solvency Projections
Board of Directors Annual Meeting July 9 & 10, 2013 104
Short Term Interest $104,000 projected by Sara for FY10, increasing 0.0% annually
$34,752 projected by Sara for FY11, increasing 0.0% annually
$14,099 projected by Sara for FY12, increasing 0.0% annually
$54,802 projected for FY13, increasing 0.0% annually
Subrogation $317,655 received in FY10, increased at retiree growth rate plus 0%
$313,328 estimated for FY11, increased at retiree growth rate
$293,136 estimated for FY12, increased at retiree growth rate
$389,857 estimated for FY13, increased at retiree growth rate
TrendMedical
Medicare Advantage Varies by each of three vendors based on leveraged trend
Varies by vendor through CY2013, 8.00% thereafter 8.00% No Change
Medicare Supplement 8.00% No Change No Change No ChangeMedicare Rx 8.00% No Change No Change No ChangeNon-Medicare Medical 8.00% No Change No Change No ChangeMental Health Included in Medical Trend No Change No Change No ChangeNon-Medicare Rx 8.00% No Change No Change No Change
Medical RatesAssumed to increase at Trend
AssumptionAssumed to increase at Trend
AssumptionAssumed to increase at Trend
Assumption
Annual Non-Medicare rate increases of 8% in 2014-2016, 3% Non-Medicare thereafter, 6% Medicare Supplement
rate increases in 2014+
Life Insurance 0.00% No Change Assumes level total premium on Basic Life for duration of projection
Assumes level total premium on Basic Life for duration of projection
Dental
Weighted average of 7% increase in United Concordia premiums and 9%
increase in Delta Dental premiums for FY11, 6% thereafter
No Change: 6% annually No Change No Change
Vision 5.00% No Change No Change No Change
Program SupportPer Wayne, $2,756,500 for FY11-FY13, increasing 2.5% annually
thereafterNo Change Per Sara, $2,684,000 for FY13,
increasing 2.5% annually thereafter$2,651,000 budgeted for FY2014,
increasing 2.5% annually thereafter
Administrative Services FeeBaseline determined based on
information from Mark/Sara for 2011, increasing 2.00% annually thereafter
no increase to ASO fees for FY12, increasing 2.00% annually thereafter; ASO column includes Comparative
Effectiveness Research fees of $1.00 PMPY in CY2012 and $2.00 PMPY in
CY2013-CY2019
Baseline determined based on information from Mark/Sara for 2013-
2016, increasing 2.00% annually thereafter
Medical based on information from Mark for 2013-2016, increasing 2.00%
annually thereafter; Rx based on existing contract terms in place through
6/30/2014
Plan Design ChangesMedical No changes for 1/1/2011
Medicare No changes for 1/1/2013 No changes for 1/1/2014 or beyond
Non-Medicare
Premier Plan coinsurance maximum increased from $3,000 to $4,000 effective 1/1/2011; No changes
assumed for 1/1/2012
Increase specialist copay by $15
Consolidation of Non-Medicare plans in CY17, annual plan changes
thereafter to keep projected claims beneath Cadillac Tax threshold
RxChange mail order cost-sharing from copay to coinsurance; increase non-
preferred brand cost-sharingNo changes for 1/1/2014 or beyond
MedicareNon-Medicare
Basic Life and AD&D No new entrants No new entrantsAnnual Index in Cadillac Tax Thresholds N/A N/A N/A 3%Annual Increase in PCORI Fee N/A N/A 0% 3%Board of Directors Annual Meeting July 9 & 10, 2013 105
Member Cost Share*Retiree
Medicare 50% No Change No Change No ChangeNon-Medicare 35% No Change No Change No Change
SpouseMedicare 75% No Change No Change No ChangeNon-Medicare 60% No Change No Change No Change
Child(ren)Medicare 100% No Change No Change No ChangeNon-Medicare 100% No Change No Change No Change
5259249_v.
Yellow highlighting indicates assumptions that are varied between the Baseline Scenario and Alternate Scenarios(s).
Board of Directors Annual Meeting July 9 & 10, 2013 106
Fiscal YearBeginning
BOY InvestedAssets
EmployerContribution
EmployeeContribution
RetireeMedical
RetireeAncillary
Tax & HB 351 Revenue
Medicare PDP & Manufacturers
Discount MiscellaneousTotal
RevenueInvestment
Income Medical/Rx Basic LifeAncillaryPremiums ASO Fees
Program Support
TotalExpenditures
Rev. - Exp. Excluding Inv.
IncomeFiscal Year
EndEOY Invested
Assets07/01/2013 $279,487,430 $83,129,299 $41,564,649 $100,759,068 $23,306,901 $23,931,297 $25,923,798 $6,667,543 $305,282,555 $22,903,211 $231,944,639 $4,409,647 $23,306,901 $10,894,627 $2,651,000 $273,206,813 $32,075,742 06/30/2014 $334,466,38307/01/2014 $334,466,383 $86,454,471 $43,227,235 $111,972,550 $25,398,260 $26,443,053 $28,540,647 $6,927,311 $328,963,529 $26,921,006 $259,244,909 $4,409,647 $25,398,260 $11,390,568 $2,717,275 $303,160,660 $25,802,869 06/30/2015 $387,190,25807/01/2015 $387,190,258 $89,912,650 $44,956,325 $124,654,385 $27,932,099 $29,256,219 $31,013,889 $7,254,898 $354,980,465 $30,686,902 $290,246,283 $4,409,647 $27,932,099 $12,067,703 $2,785,207 $337,440,939 $17,539,526 06/30/2016 $435,416,68507/01/2016 $435,416,685 $93,509,156 $46,754,578 $137,777,276 $30,647,284 $32,406,966 $33,856,793 $7,579,320 $382,531,372 $34,060,514 $323,536,029 $4,409,647 $30,647,284 $12,935,948 $2,854,837 $374,383,745 $8,147,627 06/30/2017 $477,624,82607/01/2017 $477,624,826 $97,249,522 $48,624,761 $150,395,042 $33,558,701 $35,935,802 $36,839,208 $7,870,723 $410,473,758 $37,055,655 $354,723,707 $4,409,647 $33,558,701 $13,830,186 $2,926,208 $409,448,448 $1,025,310 06/30/2018 $515,705,79107/01/2018 $515,705,791 $101,139,503 $50,569,751 $163,953,721 $36,653,683 $39,888,098 $39,892,084 $8,183,857 $440,280,698 $39,465,098 $394,439,398 $4,409,647 $36,653,683 $14,736,034 $2,999,363 $453,238,125 ($12,957,428) 06/30/2019 $542,213,46207/01/2019 $542,213,462 $105,185,083 $52,592,541 $178,552,019 $39,992,352 $44,314,669 $43,037,495 $8,351,008 $472,025,168 $41,190,099 $430,409,227 $4,409,647 $39,992,352 $15,596,210 $3,074,347 $493,481,784 ($21,456,617) 06/30/2020 $561,946,94407/01/2020 $561,946,944 $109,392,486 $54,696,243 $194,296,405 $43,544,127 $49,272,430 $46,207,593 $8,657,038 $506,066,323 $42,306,179 $470,618,485 $4,409,647 $43,544,127 $16,464,391 $3,151,206 $538,187,856 ($32,121,534) 06/30/2021 $572,131,59007/01/2021 $572,131,590 $113,768,186 $56,884,093 $211,156,296 $47,353,639 $54,825,121 $49,347,443 $8,960,449 $542,295,228 $42,603,297 $514,692,484 $4,409,647 $47,353,639 $17,432,720 $3,229,986 $587,118,477 ($44,823,249) 06/30/2022 $569,911,63807/01/2022 $569,911,638 $118,318,913 $59,159,457 $229,294,769 $51,415,271 $61,044,136 $52,589,142 $9,257,080 $581,078,767 $41,883,358 $562,484,537 $4,409,647 $51,415,271 $18,421,004 $3,310,736 $640,041,195 ($58,962,428) 06/30/2023 $552,832,56807/01/2023 $552,832,568 $123,051,670 $61,525,835 $248,715,753 $55,763,963 $68,009,432 $55,863,938 $9,549,977 $622,480,567 $39,944,482 $614,324,333 $4,409,647 $55,763,963 $19,428,905 $3,393,504 $697,320,352 ($74,839,785) 06/30/2024 $517,937,26507/01/2024 $517,937,265 $127,973,736 $63,986,868 $269,634,498 $60,417,865 $75,810,564 $59,256,350 $9,838,850 $666,918,731 $36,543,694 $670,958,989 $4,409,647 $60,417,865 $20,465,361 $3,478,342 $759,730,204 ($92,811,473) 06/30/2025 $461,669,48607/01/2025 $461,669,486 $133,092,686 $66,546,343 $291,943,931 $65,337,803 $84,547,832 $62,785,696 $10,114,792 $714,369,082 $31,409,719 $732,314,009 $4,409,647 $65,337,803 $21,507,906 $3,565,300 $827,134,666 ($112,765,583) 06/30/2026 $380,313,62207/01/2026 $380,313,622 $138,416,393 $69,208,197 $315,677,438 $70,609,851 $94,333,572 $66,425,274 $10,388,073 $765,058,799 $24,225,391 $799,262,635 $4,409,647 $70,609,851 $22,578,096 $3,654,433 $900,514,662 ($135,455,863) 06/30/2027 $269,083,15007/01/2027 $269,083,150 $143,953,049 $71,976,525 $341,277,531 $76,307,969 $105,293,600 $70,111,565 $10,665,293 $819,585,532 $14,624,525 $872,196,237 $4,409,647 $76,307,969 $23,685,089 $3,745,794 $980,344,736 ($160,759,204) 06/30/2028 $122,948,47107/01/2028 $122,948,471 $149,711,171 $74,855,586 $369,106,932 $82,473,361 $117,568,832 $73,819,742 $10,947,369 $878,482,993 $2,159,116 $953,104,931 $4,409,647 $82,473,361 $24,833,432 $3,839,438 $1,068,660,810 ($190,177,816) 06/30/2029 ($65,070,229)07/01/2029 ($65,070,229) $155,699,618 $77,849,809 $399,410,813 $89,230,730 $131,317,092 $77,600,442 $11,244,828 $942,353,332 $0 $1,043,500,896 $4,409,647 $89,230,730 $26,049,019 $3,935,424 $1,167,125,716 ($224,772,384) 06/30/2030 ($289,842,614)07/01/2030 ($289,842,614) $161,927,603 $80,963,801 $432,778,172 $96,733,266 $146,715,143 $81,406,413 $11,569,029 $1,012,093,427 $0 $1,144,916,952 $4,409,647 $96,733,266 $27,355,572 $4,033,810 $1,277,449,247 ($265,355,820) 06/30/2031 ($555,198,434)07/01/2031 ($555,198,434) $168,404,707 $84,202,353 $469,674,184 $104,963,358 $163,960,960 $85,214,767 $11,909,869 $1,088,330,198 $0 $1,259,139,384 $4,409,647 $104,963,358 $28,735,697 $4,134,655 $1,401,382,742 ($313,052,544) 06/30/2032 ($868,250,977)07/01/2032 ($868,250,977) $175,140,895 $87,570,447 $509,953,657 $113,946,571 $183,276,276 $89,251,541 $12,263,028 $1,171,402,415 $0 $1,386,071,848 $4,409,647 $113,946,571 $30,194,639 $4,238,022 $1,538,860,726 ($367,458,311) 06/30/2033 ($1,235,709,289)07/01/2033 ($1,235,709,289) $182,146,531 $91,073,265 $553,595,644 $123,627,469 $204,909,429 $93,510,264 $12,616,503 $1,261,479,105 $0 $1,525,972,053 $4,409,647 $123,627,469 $31,700,563 $4,343,972 $1,690,053,703 ($428,574,599) 06/30/2034 ($1,664,283,888)07/01/2034 ($1,664,283,888) $189,432,392 $94,716,196 $600,543,083 $134,119,891 $229,138,560 $98,171,112 $12,976,025 $1,359,097,259 $0 $1,679,286,787 $4,409,647 $134,119,891 $33,280,961 $4,452,571 $1,855,549,857 ($496,452,599) 06/30/2035 ($2,160,736,486)07/01/2035 ($2,160,736,486) $197,009,688 $98,504,844 $651,305,248 $145,392,177 $256,275,187 $103,443,640 $13,332,919 $1,465,263,703 $0 $1,847,909,958 $4,409,647 $145,392,177 $34,921,404 $4,563,886 $2,037,197,073 ($571,933,370) 06/30/2036 ($2,732,669,856)07/01/2036 ($2,732,669,856) $204,890,075 $102,445,038 $706,014,370 $157,495,014 $286,668,210 $109,247,417 $13,686,779 $1,580,446,903 $0 $2,032,949,170 $4,409,647 $157,495,014 $36,614,919 $4,677,983 $2,236,146,734 ($655,699,831) 06/30/2037 ($3,388,369,687)07/01/2037 ($3,388,369,687) $213,085,678 $106,542,839 $764,955,748 $170,541,714 $320,708,395 $115,217,006 $14,041,978 $1,705,093,359 $0 $2,236,230,583 $4,409,647 $170,541,714 $38,357,124 $4,794,932 $2,454,334,001 ($749,240,642) 06/30/2038 ($4,137,610,329)
Assumptions with Fiscal Year Basis: FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029+2.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%2.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50%1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25%2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%7.75% 7.75% 7.75% 7.75% 7.75% 7.75% 7.75% 7.75% 7.75% 7.75% 7.75% 7.75% 7.75% 7.75% 7.75% 7.75%1.75% 1.75% 1.53% 1.27% 1.02% 1.30% 1.21% 1.09% 1.23% 0.89% 1.46% 0.87% 0.59% 0.54% 1.30% varies5.80% 5.80% 7.28% 6.83% 6.46% 5.75% 5.49% 5.10% 4.75% 4.56% 4.07% 4.07% 3.82% 3.66% 3.31% varies0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Assumptions with Calendar Year Basis: CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 CY2020 CY2021 CY2022 CY2023 CY2024 CY2025 CY2026 CY2027 CY2028 CY2029+8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%
0.00% 0.00% 0.00% -6.98% 0.00% -6.39% -5.93% -5.68% -6.03% -6.18% -6.42% -6.62% -6.25% -6.70% -6.91% -6.61%0.00% 0.00% 0.00% -6.98% 0.00% -6.39% -5.93% -5.68% -6.03% -6.18% -6.42% -6.62% -6.25% -6.70% -6.91% -6.61%0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Medicare Advantage Plans 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Basic Life and AD&D -- cover new Retirees (Y/N) N N N N N N N N N N N N N N N N
Premium Rates for Self-funded Plans effective 1/1:35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00%60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00%50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00%75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00%8.00% 8.00% 8.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%8.00% 8.00% 8.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%8.00% 8.00% 8.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00%
5259249_v.
Medicare Supplement % IncreaseNon-Medicare Child % Increase
Annual Growth in Retirees age 65+Rx Rebate Trend
Annual Growth in Retirees under age 65Annual Investment Return
Medicare Supplement
Non-Medicare Medical Claims Trend
Benefit Modifications effective 1/1:
Non-Medicare Retiree % IncreaseNon-Medicare Spouse % Increase
Medicare Medical Claims Trend
Lovelace Medicare Advantage Premium Increase
Medicare Spouse Rate Share (20+ years of service)Medicare Retiree Rate Share (20+ years of service)
New Mexico Retiree Health Care Authority Long-Tem Solvency ModelingProjected Year of Insolvency: FY2029
Baseline Scenario: 2% Payroll Growth in FY2014; Consolidation of Non-Medicare Plans in 2017; Annual Non-Medicare Medical Plan Changes in 2019+; Annual Non-Medicare Rate Increases 8% in 2014-2016, 3% Non-Medicare thereafter, 6% Medicare Supplement Rate Increases in 2014+
Non-Medicare Spouse Rate Share (20+ years of service)
Non-Medicare Premier Plus
Non-Medicare Retiree Rate Share (20+ years of service)
Medicare Prescription Drug
Non-Medicare Prescription Drug
Non-Medicare Prescription Drug Claims TrendMedicare Prescription Drug Claims TrendAnnual Growth in PDP Revenue
Non-Medicare Premier
REVENUE EXPENDITURES
Presbyterian Medicare Advantage Premium Increase
Public Safety, et al Annual Payroll Growth
Public Safety, et al Employer RatePublic Safety, et al Employee RateOther Occupations Employer RateOther Occupations Employee Rate
Other Occupations Annual Payroll Growth
Board of Directors Annual Meeting July 9 & 10, 2013 107
Review and Discussion of Naprapathic Services
Background Information
Effective July 1, 2013 the State of New Mexico, Risk Management Division modified its FY13 plan design
to provide the following cost sharing arraignment when receiving Chiropractic, Acupuncture and
Naprapathic Services:
Based upon an extrapolation of the State of New Mexico’s membership – including average per member
costs and utilization patters (see appendix A), the following cost projections apply to NMRHCA’s
membership:
Options for incorporating Naprapathic Services as part of NMRHCA’s benefit offering from a cost neutral
perspective include:
1. Increasing pre-Medicare specialist visit copays from $35 and $45 under the Premier
Plus/Premier Plans
2. Reducing the annual benefit maximums for the Chiropractic, Acupuncture and Naprapathic
services (combined) to $1,000
3. Decreasing the Medicare Supplemental benefit maximum for Acupuncture Services from $1,500
to $1,000 combined with Naprapathic Services.
FY13
Pres HMO Lovelace HMO BCBS PPO BCBS PPO
Preferred Non-Preferred
Chiropractic/Acupuncture
$30 (up to $1500
combined plan year)
$30 (up to $1500
combined plan year)
$40 (up to $1500
combined plan year)40%
Naprapathic
$30 (up to $1500 per plan
year)
$30 (up to $1500 per plan
year)
$40 (up to $500 per plan
year)40%
FY14
Pres HMO Lovelace HMO BCBS PPO BCBS PPO
Preferred Non-Preferred
Chiropractic/Acupuncture
$40 (up to $1500
combined plan year)
$40 (up to $1500
combined plan year)
$50 (up to $1500
combined plan year)
(up to $1500 combined
plan year)
Naprapathic
$50 (up to $500 per plan
year)
$50 (up to $500 per plan
year)
$50 (up to $500 per plan
year)
50% (up to $500 per plan
year)
A B C D E F G H
Current
Membership
% of Service
Users
Projected #
of Users
Demographic
Multiplier D x E
Avg Per
Member Cost
Per Member
Costs X
Members
NMRHCA
Premier 10,847 5.86% 636 1.33 845 $169.14 $142,989.85
Premier Plus 6,956 5.86% 408 1.33 542 $169.14 $91,697.01
Medicare Supplement 22,543 5.86% 1,321 1.33 1,757 $169.14 $297,171.59
Total 40,346 5.86% 2,364 1.33 3,144 $169.14 $531,858.45
Board of Directors Annual Meeting July 9 & 10, 2013 108
Appendix A
SONM 2012 Costs - Presbyterian Health Plan Only
Members Visits Total Paid
Chiropractic Services 5,832 10,798 $ 234,987.94
Acupuncture 3,271 6,113 $ 374,508.95
Naprapathy 2,462 4,235 $ 416,417.11
Per Member
Members Visits Total Paid
Chiropractic Services 5,832 10,798 $ 40.29
Acupuncture 3,271 6,113 $ 114.49
Naprapathy 2,462 4,235 $ 169.14
Per Visit
Members Visits Total Paid
Chiropractic Services 5,832 10,798 $ 21.76
Acupuncture 3,271 6,113 $ 61.26
Naprapathy 2,462 4,235 $ 98.33
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Wellness and Disease Management Program UpdateMark Tyndall, Executive DirectorJuly 9, 2013
P: 505.222.64204308 Carlisle Blvd. NE Suite 104Albuquerque, NM 87107
www.nmrhca.org
Board of Directors Annual Meeting July 9 & 10, 2013 114
Our Mission is to Improve Members’ HealthI. Population-Based Wellness Program
II. Enhanced identification of Members with Diabetes and Coronary Artery Disease for participation in Disease Management (DM) Programs
III. Identify and quantify measurable results of the DM programs
Board of Directors Annual Meeting July 9 & 10, 2013 115
I. Population-Based Wellness Program Medical Plan Designs (100% coverage for CDC and
Preventive Services Task Force-recommended care)
On-Site Biometric Screenings and Immunizations at all enrollment meetings and educational events
Personal Health Assessments with direction to appropriate life-style management services
24-Hour Nurse Advice Lines
Educational Materials Reminder mailings (i.e. “Time for your mammogram”) Health and wellness manual
3
Board of Directors Annual Meeting July 9 & 10, 2013 116
I. Population-Based Wellness ProgramPlan Design effectiveness in driving preventive care
Preventive Care Visits – 39% up from 34% (Benchmark 29%)
Cholesterol Screening Rate – 60% same as 2012 (Benchmark 46%)
Colon Cancer Screening Rate – 20% up from 19% (Benchmark 20%)
Mammogram Screening Rate – 56% up from 53% (Benchmark 47%)
Cervical Cancer Screening Rate – 34% up from 31% (Benchmark 37%)
0%
10%
20%
30%
40%
50%
60%
70%
NMRHCA %
Board of Directors Annual Meeting July 9 & 10, 2013 117
I. Population-Based Wellness ProgramExecution of population-based screenings and immunizations
Screenings Available Since 2010 (3 years)
Over 1,700 screenings have been performed
Body Mass Index Body Fat % Waist Circumference Blood Pressure Cholesterol Glucose A1C Kits
1,738 flu shots administered
232 pneumococcal vaccines administered
Education information provided to members by a Healthier at Home book, Eat Right for Life cookbook and brochures.
Board of Directors Annual Meeting July 9 & 10, 2013 118
I. Population-Based Wellness ProgramScreening Results BMI About 66% of NMRHCA members screened were either
overweight or obese National Average: 63%
Blood Pressure About 37% of NMRHCA members screened had high
blood pressure National Average: 33%
A smaller subset of individuals has been tracked through all three years of screenings
6
Board of Directors Annual Meeting July 9 & 10, 2013 119
2010 to 2012 BMI Comparison at Enrollment Meetings
20101
201027
201031
201021
20100
20121
201234
201225
201219
20121
0
5
10
15
20
25
30
35
40
BMI <19 underweight BMI >=19 and <25Normal
BMI >=25 and < 30Overweight
BMI >=30 and <40Obese
BMI >=40 ExtremeObesity
Num
ber o
f Par
ticip
ants
Body Mass Index (BMI) Criteria
Body Mass Index (BMI) Data
Board of Directors Annual Meeting July 9 & 10, 2013 120
I. Population-Based Wellness Program Ongoing Efforts
Wellness-focused newsletters (January’s edition was dedicated to wellness) and emphasis in all agency communication
Screenings and Immunizations will continue to be offered at all enrollment meetings in the fall
24 Hour Nurse Hotline will continue to be offered –Over 1,200 calls taken in 2012 with some care redirection provider (decrease unnecessary ER utilization)
Continued age and gender appropriate educational material sent to members (i.e. mammogram reminders, etc.)
8
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II. Enhanced Methods of Identifying Members with Chronic Disease Medical & Prescription Claims
Results of screening events
Personal Health Assessment (PHA) 260 members have completed the PHA
Utilization Management
NurseAdvice New Mexico Line
Physician Referrals
Member or Family Referrals
Behavior Health Referrals
Vendors
Board of Directors Annual Meeting July 9 & 10, 2013 122
II. Enhanced Methods of Identifying Members With Chronic Diseases Results
Diabetes Data has identified 2,421 members as being diabetic Approximately 13% of overall membership 420 members are currently actively engaged in the
Disease Management program (up from 232)
Coronary Artery Disease (CAD) Data has identified 547 members with CAD Approximately 3% of overall membership 68 members are currently actively engaged in the
Disease management program (up from 45)
10
Board of Directors Annual Meeting July 9 & 10, 2013 123
II. Enhanced Methods of Identifying Members With Chronic Disease Disease Management Program
Disease Management Programs
Presbyterian – Healthy Solutions BCBS – Blue Care Connect
Both Programs provide phone support, educational services and clinical support services (navigating the system) for their chronically ill participants
Programs also provide access to Case Management for acute care episodes
Board of Directors Annual Meeting July 9 & 10, 2013 124
III. Identify and Measure Quantifiable Results of DM Programs Diabetes DM Program Goals 80% of members with A1C greater than 9 will decrease
their A1C by 1 point 80% of members with LDL greater than 100 will decrease
LDL to 100 or less Reduction of weight by 10% 80% of members will have blood pressure at or below
standards
CAD DM Program Goals 80% of members with LDL greater than 100 will decrease
LDL to 100 or less Reduction of weight by 10% 80% of members will have blood pressure at or below
value
12
Board of Directors Annual Meeting July 9 & 10, 2013 125
III. Identify and Measure Quantifiable Results of DM Programs - Presbyterian Diabetes 71% of members with A1C > 9 decreased their A1C by 1
point in 2012 (Goal 80%) 34% of participants decreased their LDL below 100
(Goal 80%) 17% of participants have decreased their BMI by at
least 1 level
Coronary Artery Disease (CAD) 38% of participants have decreased their LDL below 100
(Goal 80%) 100% of participants have improved their blood
pressure to meet national clinical guidelines (Goal 80%)
13
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Quality Measures for Diabetic Care - Presbyterian
Board of Directors Annual Meeting July 9 & 10, 2013 127
The Manage Your Chronic Disease (MyCD) Program
What is the My CD Program? A six week self management Workshop
Facilitated by trained and certified individual – 2 leaders per workshop
Developed by Dr. Kate Lorig at Stanford University
For Adults of all ages with chronic health conditions such as: diabetes, arthritis, asthma, heart disease, depression, hypertension
Board of Directors Annual Meeting July 9 & 10, 2013 128
Building Self Management SkillsHelps people gain the self
confidence to take part in maintaining and managing their chronic health conditions
Develops problem solving and decisions making skills
Participants utilize the buddy system to help with motivational skills
Board of Directors Annual Meeting July 9 & 10, 2013 129
2012 Workshop Schedule
Location # of Workshops # of ParticipantsAlbuquerque 2 28Las Cruces 1 12Santa Fe 1 8
SPRING 2012
Location # of Workshops # of ParticipantsAlbuquerque 3 66Roswell 1 12Santa Fe 3 35
FALL 2012
113 TOTAL PARTICIPANTS
Board of Directors Annual Meeting July 9 & 10, 2013 130
III. Identify and Measure Quantifiable Results of DM Programs - BCBS Over 3,300 members “touched”
Identified Gaps In Care were reduced from 40% to 25%
Diabetic Retinal Screenings increased from 80% to 98%
Nephropathy Screening increased from 54% to 92%
43% of participants completed the Weight Management program
61% of participants showed BMI improvement
18
Board of Directors Annual Meeting July 9 & 10, 2013 131
4.38% (1.67%)
BOBBOB
19% (8.5)27.85% (14.85%)31.34% (15.95)
3.36% (2%)14.4% (9%)28.82% (14.5%)31% (15%)-188
Q’1 2012
Q’1 2013
48%
52%
76%
24%
59%
41%
82%
18%
Board of Directors Annual Meeting July 9 & 10, 2013 132
Program Check UpI. Population-Based Wellness Program
- Medical Plan Designs (100% coverage for CDC and Preventive Services Task Force-recommended care) –Wellness utilization at or above benchmarks for most services
On-Site Biometric Screenings and Immunizations at all enrollment meetings and educational events – Approximately 2,000 screened and immunized
Personal Health Assessments with direction to appropriate life-style management services – Only 260 completed to date (after two years)
24-Hour Nurse Advice Lines - Over 1,200 calls with some redirection from ER (ER utilization decreased in 2012)
Educational Materials Reminder mailings (i.e. “Time for your mammogram”) Health and wellness manual
20
Board of Directors Annual Meeting July 9 & 10, 2013 133
Program Check Up (continued)II. Enhanced Methods of Identifying Members
With Chronic Disease
488 (up from 277 a year ago) chronically ill members are actively engaged in DM programs.
Still a large percentage of potential participants are yet to participate
Increased utilization of personal health assessment would provide greater access to either DM or lifestyle management/coaching
21
Board of Directors Annual Meeting July 9 & 10, 2013 134
Program Check Up (continued)III. Identify and Measure Quantifiable Results of DM Programs
Progress made toward collection of clinical data. Emphasis will continue to be placed on provider-based data/interactions
Encouraging signs of improved clinical outcomes for actively engaged program participants
Increased utilization of personal health assessment would provide greater access to either DM or lifestyle management/coaching
22
Board of Directors Annual Meeting July 9 & 10, 2013 135
Overall Assessment
Grade: B
Wellness and DM programs are demonstrably producing positive results with members that engage them
Improvements can be made in identifying and routing members into the programs
Elements of clinical data remain difficult to measure in some provider settings
Board of Directors Annual Meeting July 9 & 10, 2013 136