meeting notice and agenda - pebp.state.nv.uspublic comment in writing to pebp attn: laura landry 901...

MEETING NOTICE AND AGENDA

AGENDA

1. Open Meeting: Roll Call

2. Public Comment

Public comment will be taken during this agenda item. No action may be taken on any matter raised

under this item unless the matter is included on a future agenda as an item on which action may be

taken. Persons making public comments to the Board will be taken under advisement but will not be

answered during the meeting. Comments may be limited to three minutes per person at the discretion

of the chairperson. Additional three minute comment periods may be allowed on individual agenda

items at the discretion of the chairperson. These additional comment periods shall be limited to

comments relevant to the agenda item under consideration by the Board. Persons unable to attend the

meeting and persons whose comments may extend past the three minute time limit may submit their

public comment in writing to PEBP Attn: Laura Landry 901 S. Stewart St, Suite 1001 Carson City NV

89701, Fax: (775) 684-7028 or [email protected] at least two business days prior to the meeting.

Persons making public comment need to state and spell their name for the record at the beginning of

their testimony.

3. PEBP Board disclosures for applicable Board meeting agenda items. (Dennis Belcourt,

Deputy Attorney General) (Information/Discussion)

Name of Organization: Public Employees’ Benefits Program Board

Date and Time of Meeting: May 24, 2018 9:00 a.m.

Place of Meeting: The Legislative Building 401 South Carson Street,

Room #1214 Carson City NV 89701

Video Conferencing:

Audio Streaming Website:

The Grant Sawyer State Office Building 555 East

Washington Avenue, Room #4401 Las Vegas NV

89101

www.pebp.state.nv.us

STATE OF NEVADA

PUBLIC EMPLOYEES’ BENEFITS PROGRAM 901 S. Stewart Street, Suite 1001

Carson City, Nevada 89701

Telephone (775) 684-7000 (800) 326-5496

Fax (775) 684-7028


PATRICK CATES

Board Chairman

BRIAN SANDOVAL

Governor

DAMON HAYCOCK

Executive Officer

Public Employees’ Benefits Program Board

May 24, 2018 Agenda –

4. Consent Agenda (Patrick Cates, Board Chair) (All Items for Possible Action)

Consent items will be considered together and acted on in one motion unless an item is removed to be

considered separately by the Board.

4.1. Approval of Action Minutes from the April 27, 2018 PEBP Board Meeting.

4.2. Acceptance of Health Claim Auditors’ quarterly audit findings for HealthSCOPE

Benefits for the timeframe of January 1, 2018 – March 31, 2018.

5. Discussion and possible action regarding the framework for development of the Agency

Budget Request for the 2020-2021 Biennium. (Celestena Glover, Chief Financial Officer)

(For Possible Action)

6. Discussion and possible action on the development of a strategy for employee and retiree

choice for healthcare providers on both PEBP’s Consumer Driven Health Plan (CDHP) and

Exclusive Provider Organization (EPO) Plan. (Damon Haycock, Executive Officer) (For

Possible Action)

7. Discussion and possible action on a 3-year contract extension (through 2023) opportunity

with The Standard for voluntary life insurance and short term disability insurance. (Cari

Eaton, Contract Manager) (For Possible Action)

8. Executive Officer Report. (Damon Haycock, Executive Officer) (Information/Discussion)

9. Public Comment

Public comment will be taken during this agenda item. Comments may be limited to three

minutes per person at the discretion of the chairperson. Persons making public comment need

to state and spell their name for the record at the beginning of their testimony.

10. Adjournment

The supporting material to this agenda, also known as the Board Packet, is available, at no charge, on the

PEBP website at www.pebp.state.nv.us/board.htm (under the Board Meeting date referenced above).

An item raised during a report or public comment may be discussed but may not be deliberated or acted

upon unless it is on the agenda as an action item.

All times are approximate. The Board reserves the right to take items in a different order or to combine

two or more agenda items for consideration to accomplish business in the most efficient manner. The

Board may remove an item from the agenda or delay discussion relating to an item on the agenda at any

time. The Board reserves the right to limit Internet broadcasting during portions of the meeting that need

to be confidential or closed.

We are pleased to make reasonable efforts to assist and accommodate persons with physical disabilities

who wish to attend the meeting. If special arrangements for the meeting are necessary, please notify the

PEBP in writing, at 901 South Stewart Street, Suite 1001, Carson City, NV 89701, or call Laura Landry

at (775) 684-7020 or (800) 326-5496, as soon as possible so that reasonable efforts can be made to

accommodate the request.

Public Employees’ Benefits Program Board

May 24, 2018 Agenda –

Copies of both the PEBP Meeting Action Minutes and Meeting Transcripts are available for inspection,

at no charge, at the PEBP Office, 901 South Stewart Street, Suite 1001, Carson City, Nevada, 89701 or

on the PEBP website at www.pebp.state.nv.us. For additional information, contact Laura Landry at (775)

684-7020 or (800) 326-5496.

Notice of this meeting was posted on or before 9:00 a.m. on the third working day before the meeting at

the following locations: NEVADA STATE LIBRARY & ARCHIVE, 100 N. Stewart St, Carson City;

BLASDEL BUILDING, 209 East Musser Street, Carson City; PUBLIC EMPLOYEES’ BENEFITS

PROGRAM, 901 South Stewart Street, Suite 1001, Carson City; THE GRANT SAWYER STATE

OFFICE BUILDING, 555 East Washington Avenue, Las Vegas; THE LEGISLATIVE BUILDING, 401

South Carson Street, Carson City, and on the PEBP website at www.pebp.state.nv.us, also posted to the

public notice website for meetings at www.leg.state.nv.us/App/Notice and https://notice.nv.gov. In

addition, the agenda was mailed to groups and individuals as requested.

http://www.pebp.state.nv.us/

https://notice.nv.gov/

1. 1. Open Meeting; Roll Call

2. 2. Public Comment

3. 3. PEBP Board disclosures for applicable Board

meeting agenda items. (Dennis Belcourt, Deputy Attorney General) (Information/Discussion)

4. 4. Consent Agenda (Patrick Cates, Board Chair) (All

Items for Possible Action) Consent items will be considered together and acted on in one motion unless an item is removed to be considered separately by the Board. 4.1. Approval of Action Minutes from the April

27, 2018 PEBP Board Meeting. 4.2. Acceptance of Health Claim Auditors’

quarterly audit findings for HealthSCOPE Benefits for the timeframe of January 1, 2018 – March 31, 2018.

4.1. 4. Consent Agenda (Patrick Cates, Board Chair) (All

Items for Possible Action) Consent items will be considered together and acted on in one motion unless an item is removed to be considered separately by the Board. 4.1. Approval of Action Minutes from the April

27, 2018 PEBP Board Meeting.

STATE OF NEVADA

PUBLIC EMPLOYEES’ BENEFITS PROGRAM

BOARD MEETING

The Richard H. Bryan Building

PEBP Board Room, Suite 1002

901 South Stewart Street


Video conferenced to:

Nevada State Business Center

3330 West Sahara Avenue

Tahoe Room, Suite 430

Las Vegas, Nevada 89102

---------------------------------------------------------------------------------------------------------------------

ACTION MINUTES (Subject to Board Approval)

April 27, 2018

MEMBERS PRESENT

IN CARSON CITY: Mr. Don Bailey, Vice Chair

Ms. Ana Andrews, Member

Mr. John Packham, Member

Mr. Glenn Shippey, Member

Mr. Tom Verducci, Member

MEMBERS PRESENT

IN LAS VEGAS: Mr. Chris Cochran, Member

Ms. Linda Fox, Member

Ms. Christine Zack, Member

MEMBERS PRESENT

VIA PHONE: Mr. Patrick Cates, Board Chair

Ms. Leah Lamborn, Member

FOR THE BOARD: Mr. Dennis Belcourt, Deputy Attorney General

FOR STAFF: Mr. Damon Haycock, Executive Officer

Ms. Celestena Glover, Chief Financial Officer

Ms. Laura Rich, Operations Officer

Ms. Nancy Spinelli, Quality Control Officer

Ms. Laura Landry, Executive Assistant

1. Open Meeting: Roll Call

Vice Chair Bailey opened the meeting at 8:30 a.m.

2. Public Comment

Public Comment in Carson City:

Douglas Merrill - Chief Medical and Academic Officer of Renown

Priscilla Maloney - Representative of AFSCME retirees

Dr. Ross Golding - Medical Director and founder of Reno Diagnostic Center

Eric Kraemer - Radiologist at Reno Diagnostic Center

Joelene Hoover - Nurse at Saint Mary’s

John Griffin - Griffin Company on behalf of Saint Mary’s

Helen Lidholm - CEO of Saint Mary’s Health Network

Katie Grimm - Chief Nursing Officer of Saint Mary’s

Ed Epperson - CEO of Carson Tahoe Health

Cynthia Mullins - Nevada Resident

Ricky Burdick - State of Nevada Employee

Allen Olive - CEO of Northern Nevada Health System

Mike Heit - State of Nevada Retiree

Tammy Evans - Spouse of State of Nevada Employee

Rochelle Nielson - Nurse at Saint Mary’s

Peggy Lear Bowen - Retiree Participant - Grateful for the meeting and for the

recommendation of a program that offers choice as well as the transparency of the PEBP

Board and PEBP staff. Does not want to be held hostage by Hometown Health, had

difficulty getting an EpiPen in an emergent situation due to preauthorization issues and

pharmacy choice.

Ron Milbank - Nevada Resident

Heather Schofield - Registered Nurse at Saint Mary’s

Pauline Medina - Saint Mary’s Neonatal Intensive Care Employee

Kelly Wilshire - Relative of PEBP Member

Public Comment in Las Vegas:

Ty Windfeldt - Hometown Health

3. PEBP Board disclosures for applicable Board meeting agenda items. (Dennis Belcourt,

Deputy Attorney General) (Information/Discussion)

4. Approval of Action Minutes from the April 20, 2018 PEBP Board Meeting. (For Possible

Action)

Board Action on Item 4

MOTION: Motion to approve the Action Minutes from the April 20th Meeting.

BY: Member Tom Verducci

SECOND: Member Ana Andrews

VOTE: Unanimous; the motion carried.

Disclosure

Member Leah Lamborn disclosed that she has ended her engagement with the Law Firm that

works for the charity care organization who is affiliated with Renown.

5. Discussion and possible action on the changes to the network currently approved for the

PEBP Consumer Driven Health Plan (CDHP) through June 30, 2021 and to provide for a

network for the Exclusive Provider Organization plan, Action to include but not be limited

to:

A. (1) Adding the Exclusive Provider Organization (EPO) population in Plan Year

2019 to the existing Hometown Health Providers PPO network and (2) revising

the existing Hometown Health Providers PPO network contract to include cost

controls for northern Nevada hospital systems of care (For Possible Action); or

B. Contracting for a new network to serve the EPO population starting Plan Year

2019. Available options include: Sierra Healthcare Options, Inc.; Anthem Blue

Cross and Blue Shield Nevada; and Aetna (Damon Haycock, Executive Officer)

(For Possible Action)

6. Discussion on new information received by PEBP since the March 22, 2018 Board meeting

affecting the Saint Mary's and Carson Tahoe Health Medicare-Plus Reimbursement Model

Pilot Program contracts and possible action to include but not limited to:

A. Moving forward with the Board approved contracts with Saint Mary's and Carson

Tahoe Health;

B. Or:

1) Halting/Discontinuing the pilot program, canceling the contract with Saint Mary's,

and withdrawing the request for the contract to be included for consideration by

the Nevada Board of Examiners (For Possible Action);

2) With respect to a proposed Carson-Tahoe pilot program discontinuation of

contract negotiations (Damon Haycock, Executive Officer) (For Possible Action)

Items 5 & 6 were taken together

Board Action on Item 5 & 6

FIRST MOTION:

MOTION: Motion to move forward with the Board approved contracts with Saint Mary’s

and Carson Tahoe Health.

BY: Member Christine Zack

SECOND: Member Tom Verducci

IN FAVOR: Member Chris Cochran, Member Tom Verducci, Member Christine Zack

OPPOSED: Member Ana Andrews, Vice Chair Don Bailey, Chair Patrick Cates, Member

Linda Fox, Member Leah Lamborn, Member John Packham, Member Glenn

Shippey

VOTE: Three in favor, seven opposed; the motion failed.

SECOND MOTION:

MOTION: Motion to move forward with staff recommendation.

BY: Member Chris Cochran

SECOND: Chair Patrick Cates

IN FAVOR: Member Ana Andrews ,Vice Chair Don Bailey, Chair Patrick Cates, Member

Chris Cochran, Member Linda Fox, Member Leah Lamborn, Member John

Packham, Member Glenn Shippey, Member Tom Verducci

OPPOSED: Member Christine Zack

VOTE: Nine in favor, one opposed; the motion carried.

7. Public Comment

Public Comment in Carson City:

Peggy Lear Bowen – Retiree Participant – Make sure that all records are kept open and

public, and include north, south and rural populations in upcoming contracts. Empower

Damon Haycock to negotiate and do not include state purchasing, PEBP needs its own

voice and to be independent. Believes Governor Sandoval is wrong and may be receiving

bad advice from those who have been in control in the past who want to maintain their

control. Called to Patrick Cates to be a liaison to the Governor and not the one making

the motions. Hopes the Board will revisit the idea of having an AG that works exclusively

for PEBP.

Mike Heit – State of Nevada Retiree

Chair Patrick Cates – In response to Peggy Bowens comment, Chair Cates stated that he

has never received instructions from the governor on how to vote on any issue. It is his

understanding that Governor Sandoval wants the Board to conduct business as they see

fit for the benefit of the members in accordance with the law.

Public Comment in Las Vegas:

There was no public comment in Las Vegas.

8. Adjournment

Vice Chair Bailey adjourned the meeting at 11:14 a.m.

4.2. 4. Consent Agenda (Patrick Cates, Board Chair) (All

Items for Possible Action) Consent items will be considered together and acted on in one motion unless an item is removed to be considered separately by the Board. 4.2. Acceptance of Health Claim Auditors’

quarterly audit findings for HealthSCOPE Benefits for the timeframe of January 1, 2018 – March 31, 2018.

Claims and System Audit Report

for

Audit Period: PEBP Plan Year 2018, Quarter Three January, February and March 2018

Audited Vendor:

Submitted By:

Health Claim Auditors, Inc. May 2018

TABLE OF CONTENTS

Executive Summary 1 – 4 Procedures/Capabilities/Supporting Data 5 – 14 Introduction 5 Breakout of Claims 5 Payment/Financial Accuracy 5-6 History of Performance Guarantee Performance 7 Claim Payment Turnaround 8 Customer Service 8-9 Soft Denial Claims 10 Overpayments 11-12 Subrogation 13 Large Utilization 13 Dedicated Team Members 14 HSB System, Policy and Procedures 15 HCA Claim Audit Procedures 16 Specific Claim Audit Results 16 - 25 The following categories are reviewed each quarterly audit, however, because of their constant properties, the detail of each category will only be displayed within the first quarter audit of the PEBP fiscal year unless a change or defect is detected: *HSB System *HSB Policy/Procedure *Eligibility *Deductibles, Benefit Maximums *Unbundling/Rebundling *Concurrent Care *Code Creeping *Procedure, Diagnosis, Place of Service *Experimental/Cosmetic Proc *Medical Necessity Guidelines *Patterns of Care *Mandatory Outpatient/Inpatient Procedures *Duplicate Claim Edits *Adjusted Claims *Hospital Discounts *Hospital Bills and Audits *Filing Limitation *Unprocessed Claim Procedures *R&C/Maximum Allowance *Membership Procedures *COBRA *Provider Credentialing *Coordination of Benefits *Medicare *Controlling Possible Fraud *Security Access *Quality Control/Internal Audit *Internet Capabilities *Communication, U/R and Claims Depts. *Claim Repricing *Banking and Cash Flow *Reporting Capabilities *General System

HCA 04/18 Page 1 St.NV.PEBP/HSB 3rd Qtr PY 18

EXECUTIVE SUMMARY

Audited Random Selection Data Total number of claims: 500 Total Charge Value of random selection: $ 833,409.19

Total Paid Value of random selection: $ 257,490.95

Performance Guaranteed Metric Results Metric Guarantee Measurement Actual Pass/Fail

Payment Accuracy

> 98% of claims audited are to be paid accurately

98.6%

Pass

Financial Accuracy

> 99% of the dollars paid for the audited claims is to be paid accurately

99.7%

Pass

Claim Processing Turnaround Time

- 99% of all claims processed within 30 days.

99.9% Pass

Customer Service

-Telephone Response Time: < 30 seconds. -Telephone Abandonment Rate: < 2%. -First Call Resolution: > 95%

28.5 sec. 1.97% 98.65%

Pass Pass Pass

Data Reporting

-100% of standard reports within 10 business days of completion -Annual/Regulatory Documents w/in 10 business days of Plan Year end

No Exceptions

Noted

Pass

Disclosure of Subcontractors

-Report access of PEBP data within 30 calendar days -Removal of PEBP member PHI within 3 business days after knowledge

No Exceptions

Noted

Pass

Previous Recommendation(s) HCA is pleased to report that all previous recommendations accepted by the PEBP

Board of Directors has been implemented and/or in the process of application. Newly adopted/approved applied out-of-area allowable rates with Aetna network PEBP approved the use of the Aetna network rates adjudication for out-of-area claims for members who reside outside Nevada effective 01 July 2016. The PEBP Executive Officer requested an ongoing review of this network application to ensure

PEBP that the savings being obtained currently are greater than the previous out-of- area network rates used net of the Per Participant Per Month (PPPM) fees to access the network and in compliance with savings promised.


For PEBP’s Plan Year 2017 plus the first three quarters of PEBP’s Plan Year 2018, claims in this category had a total eligible amount of $23,853,337 to be adjudicated under the Aetna network. The average discount acquired for these claims in PY 17 was 49.5%, and 47.0% for the first three quarters of PY 18. When this data is compared to the average discount achieved for the periods under the previous utilized network, it is HCA’s unbiased opinion that the discounting applied for these claims gained an estimated additional savings of $3,276,907 for PEBP. Reporting this gain minus the Per Participant Per Month (PPPM) of eligible participants, the net additional savings amount of $2,944,614 is realized for the PEBP plan for the first seven (7) quarters of utilization of this new network.

Effective 01 July 2017, PEBP approved the use of the Aetna network for out-of-area claims for members who reside in Nevada but travel outside of Nevada for health care. For PEBP’s first two quarters of PEBP’s Plan Year 2018, claims in this category had a billed amount of $11,058,913 that were eligible to be adjudicated under the Aetna network. The average discount acquired for these claims was 49.6% for PY18 to date (Qtr 1 - Qtr 3). When this data is compared to the average discount of 32.1% achieved for the periods under the previous utilized network, it is HCA’s unbiased opinion that the discounting applied for these claims gained an estimated additional $1,935,571 for PEBP. Reporting this gain minus the Per Participant Per Month (PPPM) of eligible participants, an additional net savings amount of $313,998 is realized for the PEBP plan for the first three (3) quarters of utilization of this new network for this category. Medicare Part B allowable

There are circumstances when a member is insured with Medicare part “A” only and opts not to enroll in Medicare Part “B”. When this circumstance deals with retirees and their dependents, the SPD language states that the Plan will estimate the Part “B” allowance and only pay the 20% coinsurance portion. When the member is active, HSB is to pay as the primary for services.

Reference no. 143 is a circumstance where the participant is prime with Medicare due to end stage renal failure but in an active status with the plan. The HSB system displays that “the member opted not to enroll in Medicare Part B & Medicare is prime for Part A only. HSB is to pay as primary for services that could have been paid by Medicare Part B had the member enrolled”. This member file had thirteen (13) services provided from the same vendor and same revenue code services in a two (2) month period for a total charge amount of $379,714.59. Two (2) service dates were allowed at 120% of Medicare which resulted in a 4.15% allowance of billed charges. The other eleven (11) claims had Aetna network allowances applied which allowed 21.2% of billed charges. The differential between the application of these methods for these claims is estimated in excess of $64,000 (allow 4.15% vs. 21.21% of BC).

HCA recommends that PEBP approve the methodology most appropriate for consistent and accurate application of HealthSCOPE adjudication in this circumstance.


Trends/Issues

The audit revealed the following issues or trends detected from the random selection and bias selected claims. Please note: the reference numbers in bold type are claims from the random selection and are included within the statistical calculations. Reference numbers in normal type were identified as issues in bias claims as defined earlier and are not included within the statistical calculations of this audit. Specific information regarding supporting reference numbers can be found in the Audit Results Section in numerical sequence, which begins on page 16. Medical services paid as preventive; Supporting reference nos. 035, 190 and 405

Incorrect rate; Supporting reference nos. 079 and 507

Incorrect Rate caused by SHO 3+ months retrospective contract change; Supporting reference no. 426

COB calculated incorrectly; Supporting reference nos. 033 and 485

Claim denied in error; Supporting reference nos. 113 and 406

Preventive services paid as medical; Supporting reference nos. 155 and 202

Anesthesia processing procedure for MD/CRNA not followed; Supporting reference no. 003

Not covered service paid; Supporting reference no. 130

Aetna allowable versus UCR not used in processing; Supporting reference no. 143

Vision service paid as medical; Supporting reference no. 204

Claim paid after term date; Supporting reference no. 324

Claim should have COB’d as Medicare versus commercial; Supporting reference no. 363

Incorrect procedure code entered; Supporting reference no. 430

RX claim paid by PBM after termination date (Non HSB issue); Supporting reference no. 233


The audit revealed the following issues, which appear to be administered properly by HSB but should be brought to client attention for proper notification or verification. Specific information regarding supporting reference numbers can be found in the Audit Results Section in numerical sequence, which begins on page 16. Multiple surgical guidelines not applied by large hospital facility; Supporting reference no. 285 System display issue when issuing two checks due to member’s prepayment; Supporting reference nos. 146 and 190 Optometrist paid at in-network level due to only one contracted Optometrist in Carson City; Supporting reference no. 045 Possible subrogation claim paid due to total charges under $1000.00 threshold; Supporting reference no. 089 Diversified Dental default allowable is 75% of billed charges on unlisted code; Supporting reference no. 153 Possible subrogation claim paid despite being over total charges of $1000.00 threshold; Supporting reference no. 397 Dignity free standing emergency room not contracted with SHO; Supporting reference no. 454 Retiree retroactively enrolled in Medicare Part A; Supporting reference no. 510 Four (4) year old claim paid due to patient’s incapacity to reply to subrogation request when initially sent; Supporting reference no. 511


CLAIM PROCEDURES/SYSTEM CAPABILITIES/SUPPORT DATA

Introduction

In April 2018, Health Claim Auditors, Inc. (HCA) performed a Claims and System Audit of HealthSCOPE Benefits (HealthSCOPE) located in Little Rock, Arkansas on behalf of The State of Nevada Public Employees’ Benefits Program (PEBP).

This audit was performed by collecting information to assure that HealthSCOPE is doing an effective job of controlling claim costs while paying claims accurately within a reasonable period of time.

This report was presented to HealthSCOPE for any additional comments and responses on 26 April 2018. Breakdown of Claims Audited

The individual claims audited were randomly selected from PEBP’s claims listings as supplied by HealthSCOPE. These claims had dates of service ranging from October 2014 to March 2018 and were processed by HealthSCOPE from 01 January 2018 through 31 March 2018 (PEBP’s Third Quarter Plan Year 2018). These claims were stratified by dollar volume to assure that HCA audited all types of claims. The audit also includes large dollar paid amounts that are considered as bias* selected claims.

*Bias claims are not part of the random selection but were audited by HCA because of some “out of the ordinary” characteristic of the claim. There are multiple criteria to identify the “out of the ordinary” characteristics. Examples are duplicates, CPT up coding, exceeding benefit limits, etc.

The breakdown of the 500 random selected claims audited is as follows: Type of Service Charge Amount Paid Amount Paid Distribution No. of Claims Medical $ 258,484.45 $ 90,653.71 35.2% 329 Outpt. Hospital $ 232,678.09 $ 49,606.82 19.3% 45 Inpt. Hospital $ 284,716.55 $ 89,913.02 34.9% 6 Dental $ 57,530.10 $ 27,317.40 10.6% 120 TOTAL $ 833,409.19 $ 257,490.95 100% 500

Payment Accuracy Per PEBP, the Service Performance Standards and Financial Guarantees Agreement for the payment accuracy is to be 98% or above of claims adjudicated are to be paid correctly or a penalty of 2.5% of Quarterly Administration Fees for each percentage (%) point, or fraction thereof, below performance guarantee is to be applied. Payment Accuracy is calculated by dividing the total number of claims not containing payment errors in the audit period by the number of claims audited within the random selection.


The Payment Accuracy Percentage of the number of claims paid correctly from the HealthSCOPE random selection for this audited quarter is 98.2%.

Number of claims: 500 Number of claims paid incorrectly: 8 Percentage of claims paid incorrectly: 1.6% Number of claims paid correctly: 492 Percentage of claims paid correctly: 98.6%

Payment Accuracy for the past four quarters

Financial Accuracy

Per PEBP, the Service Performance Standards and Financial Guarantees Agreement for the financial accuracy of the total dollars paid for claims adjudicated is to be paid correctly at 99% or above or a penalty of 2.5% of Quarterly Administration Fees for each percentage (%) point, or fraction thereof, below performance guarantee is to be applied. Financial Accuracy is calculated by dividing the total audited dollars paid correctly by the total audited dollars processed within the random selection.

The Financial Accuracy Percentage of paid dollars remitted correctly on the HealthSCOPE claims selected randomly for this audited quarter is 99.7%.

This audit reflected ninety-four and nine tenths percent (94.9%) of the audited errors within the valid random selection were overpayments.

Paid dollars audited $ 257,490.95 Amount of paid dollars remitted incorrectly $ 622.45 Percentage of Dollars paid incorrectly 0.24% Paid Dollars of claims paid correctly $ 256,868.50 Percentage of Dollars Paid correctly 99.76%

Financial Accuracy for the past four quarters


Historical Statistical Data of Performance Guarantees

The following reflects the historical statistical data since the origin of PEBP medical claims administration by HealthSCOPE. The entries designated in bold red type are measurable categories with underperformance of the Service Performance Guarantees Agreement.

Period Audited Payment Accuracy

Financial Accuracy

Turnaround Time

Telephone Response

Telephone Abandon Rate

First Call Resolution

1st Qtr PY 2012 95.7% 98.6% 7.6 days :17 1.43% N/A 2nd Qtr PY 2012 93.3% 97.3% 12.7 days :12 1.16% N/A 3rd Qtr PY 2012 96.8% 98.6% 3.7 days :18 1.32% N/A 4th Qtr PY 2012 95.8% 99.5% 11.4 days :14 0.93% N/A

1st Qtr PY 2013 97.2% 99.4% 10.4 days :20 1.06% N/A

2nd Qtr PY 2013 98.5% 99.3% 7.3 days :11 0.87% N/A

3rd Qtr PY 2013 98.0% 95.7% 6.4 days :25 1.98% N/A

4th Qtr PY 2013 98.4% 99.7% 6.2 days :29 1.61% N/A

1st Qtr PY 2014 98.8% 99.6% 5.4 days :14 0.84% N/A

2nd Qtr PY 2014 99.2% 99.2% 5.9 days :29 1.96% N/A

3rd Qtr PY 2014 98.0% 98.5% 5.2 days :30.5 1.92% N/A

4th Qtr PY 2014 99.0% 99.8% 4.4 days :28 1.96% N/A

1st Qtr PY 2015 98.8% 99.27% 4.9 days :29.4 1.94% N/A

2nd Qtr PY 2015 99.0% 99.35% 8.1 days :22 1.18% N/A 3rd Qtr PY 2015 98.6% 99.8% 5.9 days :29.7 1.97% N/A

4th Qtr PY 2015 99.6% 95.6% 4.9 days :29.4 1.91% N/A

1st Qtr PY 2016 99.0% 98.9% 4.8 days :29.1 1.94% N/A

2nd Qtr PY 2016 98.6% 99.7% 3.5 days :24.0 1.14% N/A

3rd Qtr PY 2016 98.8% 98.53% 5.3 days :29.0 1.96% N/A

4th Qtr PY 2016 99.0% 99.52% 6.3 days :29.5 1.98% N/A

1st Qtr 2017 99.0% 99.23% 6.6 days :29.8 1.93% N/A

2nd Qtr 2017 99.6% 99.78% 4.3 days :29.3 1.96% N/A

3rd Qtr 2017 98.2% 93.83% 3.7 days :29.8 1.97% N/A

4th Qtr 2017 99.0% 99.66% 4.6 days :29.3 1.98% N/A

1st Qtr 2018 99.2% 99.83% 4.4 days :26.0 1.61% 98.79% 2nd Qtr 2018 99.6% 99.9% 4.3 days :12.8 1.12% 98.28% 3rd Qtr 2018 98.6% 99.7% 3.5 days :28.5 1.97% 98.65%


Turnaround Time

Per the Service Performance Standards and Financial Guarantees Agreement, the turnaround time for payments of claims is measured in calendar days from the date HealthSCOPE receives the claim until the date of process. Ninety nine percent (99%) of complete claims adjudicated are to be processed within thirty (30) calendar days, excluding federal holidays, or a penalty of two percent (2.0%) of Quarterly Administration fees for each two and a half percent (2.5%) of non-compliance complete claims is to be applied. HCA had requested the report that reflects the measurement of this issue. This report reflected that 99.99% of “complete” claims were processed within 30 calendar days, in compliance with the performance guarantee. This report also displayed the total turnaround process time for all claims at 3.5 days.

Turnaround Time Measurements

The turnaround time, measured only from the random selected claims, for Medical claims was 9.7 calendar days, Out Patient Hospital claims was 8.7 calendar days, In Patient Hospital claims was 10.0 calendar days and Dental claims was 2.5 calendar days.

During the audit period of 01 January 2018 to 31 March 2018, HealthSCOPE had received 1,239 PEBP e-mail inquiries for information via the internet. The average turnaround time for these inquiries was less than 24 hours (24:00) with the exclusion of those received on a holiday and/or weekend day. Customer Service Satisfaction

Per the Service Performance Standards and Financial Guarantees Agreement, the telephone response time reflects all calls must be answered within thirty (30) seconds or a penalty of one percent (1%) of Quarterly Administration fees for each second in non-compliance is to be applied. HCA has reviewed the appropriate report for the PEBP third fiscal quarter Plan Year 2018, which revealed the average incoming answer speed to be 28.5 seconds (0:28.5). The telephone response time was 31 seconds for January 2018, 24 seconds for February 2018 and 30 seconds for March 2018.

Telephone Response Time (average)


Per the Service Performance Standards and Financial Guarantees Agreement, the abandonment rate must be under two percent (2%) of total calls or a penalty of one percent (1%) of Quarterly Administration fees for each percentage point or fraction thereof in non-compliance is to be applied. Please note: this performance measurement was changed from 3% as the measured benchmark for previous plan years. HCA has reviewed the appropriate report for the PEBP third fiscal quarter Plan Year 2018, which revealed the abandoned calls ratio to be 1.97%. The telephone abandonment rate was 2.39% for January 2018, 1.42% for February 2018 and 2.04% for March 2018.

Telephone Abandonment Rate

Per the Service Performance Standards and Financial Guarantees Agreement, ninety five percent (95%) of incoming PEBP member problems must be resolved to conclusion on the first call or a penalty of one percent (1%) of Quarterly Administration fees for non-compliance is to be applied. HCA has reviewed the appropriate report for the PEBP third fiscal quarter Plan Year 2018, which revealed that HealthSCOPE documented 98.65% of incoming calls were brought to completion on the first call.

Incoming Calls Concluded with First Call

HealthSCOPE has eighty plus (80+) Customer Service Reps (CSRs), of which, the majority are in the Little Rock office with an average of eight (8) years experience.

Health SCOPE currently has eighteen (18) CSRs dedicated to the PEBP plan.

HealthSCOPE stated that customer service hours of operation will be applied to PEBP direction for proper service levels.

Benefit data is supplied by electronic documentation so that the analyst may explain benefit information to clients, members and providers by HealthSCOPE.

HealthSCOPE stated that the customer service representatives will not have the ability to make system changes.

HealthSCOPE’s telephone conversations are documented for future reference.

HealthSCOPE does have an audit process for Customer Service Representatives.

HealthSCOPE is able to monitor trends/errors found through Customer Service.

HealthSCOPE can conduct customer service satisfaction surveys to determine employee satisfaction of claims administration and service upon client request.


Soft Denied Claims

The audit identifies the volume of claims adjudicated and placed in a “soft denied” status. HCA recognizes and respects the need to place certain claims in a soft denied status such as claims that require additional information or special calculation of payment. It is HCA’s opinion that these amounts are the result of HealthSCOPE conducting due diligence and resolution of the issues and trends including those previously detected in previous audits. It is important to include this data within this report to disclose the outstanding unpaid claims that could create an artificial debit/savings during the time that these claims were adjudicated. Note: The measurement of this data was provided as a “snapshot” report. The report reflected the “soft edit” amounts as they were reported on the specific day that the report was recorded.

The report for the current claims placed in a “soft denied” status reflect a total of 4,144 claims representing $ 17,375,843.66.

Soft Denied claims history: Audit Period Total Number of Claims Charge Amount Value of Soft Edits

1st Qtr PY 2012 2,607 $ 7,544,177.55 2nd Qtr PY 2012 4,068 $10,697,954.53 3rd Qtr PY 2012 1,536 $ 6,472,249.56 4th Qtr PY 2012 559 $ 2,205,318.16 1st Qtr PY 2013 1,053 $ 3,413,738.12 2nd Qtr PY 2013 1,107 $ 5,019,961.70 3rd Qtr PY 2013 1,023 $ 4,179,542.34 4th Qtr PY 2013 1,094 $ 3,049,481.74 1st Qtr PY 2014 1,389 $ 3,853,629.07 2nd Qtr PY 2014 1,157 $ 2,510,539.33 3rd Qtr PY 2014 1,621 $ 7,873,432.21 4th Qtr PY 2014 1.487 $ 4,665,197.77 1st Qtr PY 2015 1,404 $ 5,901,903.17 2nd Qtr PY 2015 1,668 $ 6,930,288.41 3rd Qtr PY 2015 2,897 $10,800,874.08 4th Qtr PY 2015 2,498 $10,685,255.24 1st Qtr PY 2016 3,071 $13,027,717.82 2nd Qtr PY 2016 2,543 $13,547,682.34 3rd Qtr PY 2016 2,871 $10,360,017.78 4th Qtr PY 2016 3,107 $15,262,995.27 1st Qtr PY 2017 2,580 $ 8,558,641.28 2nd Qtr PY 2017 3,876 $15,960,661.94 3rd Qtr PY 2017 3,696 $18,864,824.74 4th Qtr PY 2017 4,768 $20,217,736.28 1st Qtr PY 2018 3,926 $15,683,180.63 2nd Qtr PY 2018 4,073 $20,576,701.38 3rd Qtr PY 2018 4,144 $17,375,843.66


Overpayments

The previous PEBP health plan administrator (UMR) provided HealthSCOPE with a report displaying the outstanding identified overpayments reflecting a grand total of outstanding overpayments at $1,751,949.42. HealthSCOPE conducted much research on these overpayments and found that 507 of these claims were deemed as no longer valid due to providers showing items that were already paid to UMR, corrected claims were sent to resolve the issue, etc.

HCA requested an overpayment report that reflects the identified current outstanding overpayments incurred since the beginning of the contract period with HealthSCOPE. This report reflected a current total of 4,956 (an increase of 1,155 from the previous report) overpayments with a potential recovery value of $1,817,528.00 (an increase of $306,162.39) for HealthSCOPE. Detailed information regarding outstanding overpayments can be reviewed in a separate Supplemental Report, which for confidentiality purposes is not included in this report but is made available to PEBP staff should they request it. HSB’s policy is to keep all identified overpayments active for potential recoupment(s The breakout of overpayments identified by the year paid are as follows: Period # of Claims Due/Potential Recovery

- Fiscal Year 2012 170 $ 65,350.94 - Fiscal Year 2013 743 $ 234,524.74 - Fiscal Year 2014 487 $ 97,380.26 - Fiscal Year 2015 960 $ 168,419.58 - Fiscal Year 2016 705 $ 274,373.89 - Fiscal Year 2017 1,028 $ 438,737.87 - Fiscal Year 2018 863 $ 538,740.72

TOTAL 4,956 $1,817,528.00


Of the 863 current (Plan Year 2018) identified outstanding overpayments (HSB only), 44.6% were found to be caused by external sources that are not a cause of the HealthSCOPE adjudication processes. Breakout of the HealthSCOPE’s most current (PY18) overpayments (by claim count) are listed by reason as follows:

32.60% Incorrect Rate Applied 18.10% Corrected HTH Network Pricing 15.66% Provider caused, rebilled, charges billed in error, corrected EOB 10.90% Incorrect Benefit Applied 7.66% No COB on file 4.41% COB incorrectly calculated or not applied 3.02% Retro termination 2.55% Service not covered 1.16% Duplicate 0.58% Adjusted after medical review 0.58% Processed under the incorrect provider 0.58% Industrial and/or possible Workers Compensation claim 0.58% Paid PPO provider as NON PPO 0.46% Pharmacy claim deductible/Co-Insurance error 0.35% Processed under incorrect patient 0.23% Subrogation error 0.23% Incorrect assignment applied 0.23% Claim(s) paid after termination 0.12% First Health Pricing Adjustment

Subrogation

HCA requested a subrogation report that can be reviewed in a separate Supplemental Report, which for confidentiality purposes is not included in this report. It is made available to PEBP staff should they request it.

This report reflects open subrogation claims representing a current potential recovery

amount of $3,318,022.94; a decrease of $1,268,674.28 from the previous quarter. Reports received from HealthSCOPE reflect that subrogation recoveries for the audited period was $46,418.95. After contingency fees were paid, PEBP received $34,814.21.


HealthSCOPE system will apply a pursue and pay subrogation policy as directed by PEBP. Per HealthSCOPE, subrogation is determined and pursued on all claims where the total amount paid equals to or exceeds $1000 (one thousand). HealthSCOPE does identify possible subrogation cases internally. HealthSCOPE utilizes a third party vendor for recovery of monies. Vendors are paid a contingency of which the administrator receives a portion of and disclosed within RFP 1983 for Third Party Claims Administration. HealthSCOPE does not conduct auditing of outstanding subrogation cases sent to their vendors, but sends any cases not picked up by the main vendor to another vendor for review. HealthSCOPE depends on the external vendors to conduct the appropriate International Classification of Diseases (ICD) sweep checks for subrogation detections. HealthSCOPE is currently utilizing the new ICD-10 conversions and the coding has been completed within their system. Per HealthSCOPE, claims related to Worker’s Compensation are denied. Recoupment and payments for subrogation claims are assigned as directed by PEBP. High Dollar Claimants

Per the request of PEBP staff, HCA has requested a report to identify the number of active, retiree or COBRA elected participants or dependents who have obtained a plan paid level of $750,000.00 or greater.

This report reflected forty-two (42) members and eighteen (18) dependents for a total of 60 active participants, who have obtained this level of plan payment participation representing an accrued dollar paid amount of $80,912,660.70.


Personnel

The audit included a review of the HealthSCOPE personnel dedicated or assigned to PEBP. The current Organization Chart for individuals assigned to the PEBP plan, is, with changes, as follows:

State of Nevada Manager; Vice President – Quality Assurance; Sr. Vice President Operations Customer Care; Executive Account Manager; Client Relations Manager; Financial Operations Director; Provider Maintenance Specialist; Financial Analysts, 3 individuals; Funding Supervisor; Claims Administration Director; Claims Administration Supervisors; 2 individuals; Claims Analysts, CHANGE, 2 individuals deleted and 2 individuals added for a total

of 12 individuals; Eligibility Director; Eligibility Supervisor; Customer Service Vice President; Customer Service Director; Customer Service Representatives, CHANGE, 2 individuals deleted and 2 individuals

added for a total of 18 individuals; Scanning Services Manager; Recoveries Manager; Recoveries Specialists, 2 individuals; Vice President Data Services; Senior Data Analyst; Chief Information Officer; Data Architect Computer Domain Hosting (CDH) Services Manager; Sr. Vice President-Legal and Compliance; COBRA Service Manager; Customer Care Supervisor; Customer Care Representatives, total of 3 individuals.


HealthSCOPE System Overview

This section details the HealthSCOPE adjudication system capabilities and operations as they pertain to the PEBP Health Plan. These operations typically do not change on a regular basis and remain redundant within subsequent audit reports, thereby, are only displayed within the first quarterly audit report for the fiscal year. The quarterly audit includes the review of the following operations, however, if any changes or defects are identified, they will be reported immediately within the audited period report: HealthSCOPE Policy/Procedures Eligibility Deductibles, Out-of-Pocket and Benefit Maximums Unbundling/Rebundling Concurrent Care Code Creeping Procedure, Diagnosis and Place of Service Experimental and Cosmetic Procedures Medical Necessity/Potential Abuse Guidelines and Procedures Patterns of Care and Treatment for Physicians Mandatory Outpatient/Inpatient Procedures Duplicate Claim Edits Adjusted Claims Hospital and Other Discounts Hospital Bills (UB-92) and Audits Filing Limitations Unprocessed Claims Procedures Reasonable/Customary and Maximum Allowances Membership Procedures COBRA Administration Provider Credentialing Coordination of Benefits Medicare Controlling Possible Fraudulent Claims and Security Access Quality Control and Internal Audit Internet Capabilities Communication between Utilization Review (UR) and Claims Department Claim Repricing Capabilities Banking and Cash Flow Reporting Capabilities General System Security


HCA CLAIM AUDIT PROCEDURES

HCA selects a valid random sampling of claims from the client's current detailed claims listings. The third party administrator is advised of the audit and requested to provide either limited system access or paper reproduction of the entire file associated with each random claim.

Each random claim and file is reviewed comparing eligibility and benefits to information provided by the client. Third party administrator personnel are questioned regarding any discrepancies. Entire files are reviewed to assure the client that deductibles, out-of-pockets benefit maximums and related claims are processed correctly. This allows HCA to verify all details of the client's benefit plan.

Audit statistics involve only those claims chosen in the random selection. If a randomly selected claim HealthSCOPE been recalculated or corrected prior to the release of the random selection for the audit, an error was not charged for the original miscalculation. HCA will, at its opinion, comment on any claim in the random claim history to illustrate situations it feels the client should be aware of or specific areas requiring definition.

A payment error is charged when an error identified in claim processing results in an under/ overpayment or a check being paid to the wrong party. Assignment errors are considered payment errors since the plan could be liable for payment to the correct party.

In situations where there is disagreement between HCA and the third party administrator as to what constitutes an error, both sides are presented in the report. Final determination of error rests with the client.

AUDIT RESULTS Listed below are the errors or issues of discussion found by this audit while processing the claims for PEBP. Ref. No. 003 Medical HSB claim no. Overpayment - $539.00 Audited claim: 00810 QK QS chg 1100.00 allow/pd 1078.00 Claim xxxxxx: 00810 QS QX 1100.00 708.50 Anesthesia claims in the past were paid 50/50% of full allowable between QK and QX services. Should both of these claims have been paid at full allowance or split between the two? HSB response: Claim was flagged for MD/CRNA. Analyst did not Follow P&P regarding anesthesia. OP $539.00.


Ref. No. 033 Dental HSB claim no. Overpayment - $6.00 COB’d w/UHC D0120 chg 50.00 OI allow 31.00 OI pd 6.00 D1110 97.00 97.00 0.00 D2332 209.00 209.00 0.00 Adjudicated as: D0120 allow 31.00 pd 31.00 D1110 68.00 68.00 D2332 118.00 94.40 Shouldn’t the D0120 only paid the $25.00 (pt responsibility) as other Insurance paid $6.00? HSB response: Analyst did not enter OI payment of $6.00. $6.00 OP. Ref. No. 035 Medical HSB claim no. Overpayment - $3.68 83519 chg 184.48 allow/pd 18.40 (DX – E785) 1) Why is claim being paid at 100% as neither individual nor family OOP met? NOT charged in statistical calculation. Note to client for information only. 2) Claim xxxxxx same DOS, provider also paid at 100% - same DX HSB response: 1) HM visit is on Txxxxxx – Dr. P. The lab on these claims are referring physician N. T. System picked up other visit. $3.68 OP. 2) Same as above. $17.73 OP. Ref. No. 045 Medical HSB claim no. NOT charged in statistical calculation. Note to client for information only. Per trans msg on claim xxxxxx “cannot use ASA pricing per website this is a non-PPO provider” Per trans msg on audited claim “process as in net per 50 mile rule” Why is this being paid as in-net per 50 mile rule since patient lives in Carson City and provider is located in Carson City? 99212 chg 59.00 allow 59.00 (x80%) pd 47.20 HSB response: There is only 1 contracted optometrist in Carson City. Due to non-availability – clm processed in network with U/C. Ref. No. 079 Medical HSB claim no. NOT charged in statistical calculation. Note to client for information only. Audited claim allowed $70.00 x 80% = 56.00 paid on 1/15/18 Claim xxxxxx adjusted for rate on 2/16/18, allowed $44.00 x 80% = 35.20 System reflects SHO contract updated effective 1131317 for PEBP. When was the update received by HSB? HSB response: File was received 10/30/17. This was inadvertently missed in updates & was not loaded until 1/15/18.


Ref. No. 089 Medical HSB claim no. NOT charged in statistical calculation. Note to client for information only. 99283 chg 609.00 allow 426.30 x 80% = 341.04 paid on 1/13/18 Claim xxxxxx is for facility bill denied on 1/9/18 requiring accident questionnaire. Sine facility bill was denied on 1/9, should audited claim have also been denied for accident info? HSB response: No error. Total charge under $1,000.00 threshold. Ref. No. 113 Medical HSB claim no. NOT charged in statistical calculation. Note to client for information only. Claim xxxxxx paid 8/21/17 contained 99232 DOS 8/14/17 Dr. A Claim xxxxxx pd 9/2/17 contained 99232 DOS 8/14/17 different doctor – Dr. W. but denied as dup. Audited claim is adjustment to now pay CPT 99232 from Dr. W & paying an additional 88.70. Shouldn’t 99232 have been paid on claim xxxxxx and not denied as a dup? HSB response: No error. Audited claim was corrected on 1/17/18. Initial claim Txxxxxx 8/14/17 DOS was denied in error. Appeal received 1/10/18. Ref. No. 130 Outpatient Hospital HSB claim no. NOT charged in statistical calculation. Note to client for information only. Claim for screening mammo: REV 403 CPT 77063 chg 53.44 allow/pd 29.16 403 77067 331.00 162.19 Per trans msg under claim xxxxxx dated 2/16/18 appears that audited claim should have denied CPT 77063. 77063 is for digital mammo – not allowed by plan? HSB response: No error. This was corrected when post pay QA audited trans on 2-16-18 prior to this audit.


Ref. No. 143 Outpatient Hospital HSB claim no. NOT charged in statistical calculation. Note to client for information only. This patient is prime with Medicare effective 7/1/16 due to end stage renal failure. System states member opted not to enroll in Medicare Part B & Medicare is prime for Part “A” only. HSB is to pay as primary for services that could have been paid by Medicare Part B had the member enrolled. 1) Please explain the audited claim allowable: REVs 270, 271, 304, 636 & 821. Chg $11,472.53 allowed $415.03 (negotiated) 2) Other claims with same provider: DOS 7/3/17 chg $19,912.20 allow $8,364.00 Aetna network 6/12/17 $51,843.63 $9,133.60 “ “ 6/26/17 $45,682.86 $9,133.60 “ “ 7/10/17 $50,635.40 $9,133.60 “ “ 7/31/17 $10,653.06 $2,091.00 “ “ 8/7/17 $24,016.60 $6,273.00 “ “ 8/14/17 $15,361.70 $6,273.00 “ “ 6/2/17 $32,950.37 $2,091.00 “ “ 6/5/17 $18,550.86 $ 830.06 negotiated 6/19/17 $18,579.52 $4,182.00 Aetna network 7/17/17 $27,543.77 $8,364.00 “ “ 7/24/17 $52,512.09 $9,133.60 “ “

A) If negotiated rate for audited claim was only $415.03, why was Aetna rate applied for all of the other claims?

B) Is audited claim paid at Medicare Part B at approx. 20% of allowable? C) Per system claims are to be paid as if paid w/Medicare Part B. If so, wouldn’t the claims other than DOS’ 5/31/17 and 6/5/17 be overpaid? Note: These claims are for provider FMC Waynesboro only. File has 1349 claims. Audited claim allowed at 120% Medicare and others at Aetna network rates. HSB response: This patient was using a very expensive dialysis provider. Aetna gave XXX XXXX the go ahead that we could attempt to negotiate with the provider. When they refused our outreach, we then paid using percentage of Medicare for claims received after our request. The patient subsequently switched providers as well. Additional HSB response: We were given the opportunity on this claim to carve out the dialysis benefit, which we used to benefit the plan. The provider refused negotiation, therefore the claim is processed at UCR and there is no underpayment on the audited claim. HCA note: It is our opinion that all the claims identified in this circumstance should have been adjudicated uniformly and reflects an approximate overpayment of $64,000 by the PEBP Plan.


Ref. No. 146 Medical HSB claim no. NOT charged in statistical calculation. Note to client for information only. 99214 chg 200.00 allow 80.00 Per contract allow = less of 40% BC or MDC 75. System displays draft #xxxxxx pd 80.00 to provider, draft #xxxxxx pd 56.77 to the insured. Shouldn’t only $23.23 have been paid to the provider versus $80.00? HSB response: Display issue. Attached are EOB & ECHO printouts for payments. HCA Note: Attached printouts verify that $23.23 was paid to the provider and $56.77 to the member. Ref. No. 153 Dental HSB claim no. NOT charged in statistical calculation. Note to client for information only. D9940 – occlusal guard Chg 380.00 allow 285.00 ded 100 x80% pd 148.00 This 9940 is not on the Diversified Dental contract & do not see a default language on chart. Please explain the 25% discount applied? HSB response: Diversified default is 75% allowable on unlisted codes. Ref. No. 155 Medical HSB claim no. NOT charged in statistical calculation. Note to client for information only. Patient had colonoscopy/endo on same DOS Surgeon’s bill split w/surgeries colon = 100% benefit, endo = 80% benefit. Facility split correctly. Anesthesia bill clm xxxxxx, has DX Z86010 Anesthesia bill all paid at 80% benefit. Is the circumstance always paid at 80% or is there a method to split out the routine colonoscopy? HSB response: Agree should be processed at 100%. Anesthesia cannot be split. UP $134.00. Ref. No. 190 Medical HSB claim no. NOT charged in statistical calculation. Note to client for information only. Original claim paid at 100% as HM under claim xxxxxx paid on 1/25/18 paid 100.80 – member prepaid 100.00 Audited claim is adjustment to now pay as illness 1) Why was claim originally paid as HM? 2) Member prepaid $100.00. Appears 2 checks have been sent out – one for 80.64 to provider (draft #xxxxxx) and one to insured (draft #xxxxxx) for 79.84. Shouldn’t we have only paid the provider $0.80 versus 80.64? HSB response: 1) Wrong category selected. Caught in QA process. 2) This is a display issue. We have requested it be reviewed. Attached is EOB and ECHO printouts to verify payment. HCA Note: Attached printouts verify that $0.80 was paid to the provider and $79.84 to the member.


Ref. No. 202 Medical HSB claim no. Underpayment - $10.59 84153 chg 148.48 allow 25.06 pd 25.06 85025 42.18 10.59 ded 10.59 pd 0.00 Both services have DX E669 and Z6831. Appears associated OV charge paid at 100% under Wellness program. Should the 85025 lab have been paid at 100%? HSB response: Yes. Lab ordered by Obesity Care provider. Referring physician is OC provider. $10.59 UP. Ref. No. 204 Medical HSB claim no. Overpayment - $20.00 92015 chg 25.00 allow 25.00 pd 20.00 DX – H5213 myopia 99214 150.00 150.00 120.00 H35372 pucker of macula Shouldn’t the 92015 service have $25.00 copay applied versus 80% benefit due to DX of myopia? HSB response: Yes. Should have paid under routine. OP - $20. Ref. No. 233 Outpatient Hospital HSB claim no. NOT charged in statistical calculation. Note to client for information only. Member termed 1/1/18. 3 RX’s have been paid for DOS after term: Claim xxxxxx DOS 1/5/18 pd 6.40 pd on 1/5/18 xxxxxx 1/5/18 50.38 1/5/18 xxxxxx 1/5/18 14.78 1/5/18 HSB response: EE termed 1-1-18. Terminated on 1/8/18. RX paid prior to receiving termination. PBM does the RX claims. We do not see this often. PBM gets same eligibility. Ref. No. 285 Outpatient Hospital HSB claim no. NOT charged in statistical calculation. Note to client for information only. 43236.51.59 chg 154.59 allow 123.67 43239.51.59 154.23 123.38 43248 185.40 148.37 494.22 395.37 Claim xxxxxx same provider, same DOS: 31638 chg 274.06 allow 219.25. Discount rate for this provider is 80% BC. Since 31638 would be considered primary procedure, shouldn’t the 43236.51 & 43239.51 & 43248 have been reduced by multiple surgical guidelines? HSB response: Mayo Clinic makes reductions prior to billing. HSB contract used. No error. HCA Note: Primary service allowance is 219.25, so mathematically Reflects that audited services were not reduced for MSG at 50%. Additional HSB response received on 26 April 2018: the contract with Mayo does not allow for multiple surgery reductions, so those claims were correctly adjudicated.


Ref. No. 324 Medical HSB claim no. NOT charged in statistical calculation. Note to client for information only. Member termed 1/1/18 1) Shouldn’t claim have been denied after term date? NOT charged in statistical calculation. Note to client for information only. 2) The following claims paid after term (clms not reversed) Xxxxxx DOS 1/30/18 pd 461.30 pd on 2/9/18 Xxxxxx 1/30-2/2/18 13,428.78 2/21/18 Xxxxxx 1/30/18 112.73 2/22/18 Xxxxxx 1/30/18 248.33 2/26/18 Xxxxxx 1/31/18 135.00 2/14/18 Xxxxxx 1/31/18 387.52 3/5/18 Xxxxxx 2/7/18 150.00 2/17/18 Xxxxxx 1/29/18 150.00 2/12/18 Xxxxxx 1/17/18 150.00 1/22/18 Xxxxxx 1/17/18 10.68 2/15/18 Xxxxxx 1/7/18 1081.85 2/6/18 Xxxxxx 1/7/18 802.40 2/7/18 Xxxxxx 1/22/18 132.12 1/30/18 Xxxxxx 1/22/18 150.00 2/1/18 Xxxxxx 1/22/18 30.71 2/1/18 Xxxxxx 1/4/18 63.64 2/1/18 Xxxxxx 1/15/18 30.71 1/26/18 Xxxxxx 1/9/18 150.00 1/20/18 17,675.77 Note: Appears first denied claim is claim xxxxxx DOS 1/30/18 which was denied on 3/6/18. HSB response: 1 & 2) Retro term of 1/1/18 entered on 3/6/18 by client. Month end report for paid after term date runs on 10th of the following month & was distributed on 4/12/18. We are in progress of working this report and adjusting these claims. Ref. No. 363 Medical HSB claim no. Underpayment - $21.43 97140 chg 67.34 97530 67.65 134.99 Medicare allowed 67.28 Medicare paid 45.85 Pt responsibility 21.43 Claim xxxxxx DOS 1/16/18: 99213 chg 108.00 M/C allow 72.38 applied 72.38 to deductible. Audited claim allowed full billed charges to be applied to deductible but other claim applied the Medicare allowed amount. Is this correct? HSB response: The provider submitted claim as commercial insurance COB instead of Medicare. Claim will be reconsidered.


Ref. No. 397 Medical HSB claim no. NOT charged in statistical calculation. Note to client for information only. Claim for anesthesia services. Chg 2240.00 pd 912.00 on 3/20/18 Claims for hospital & physician denied on 3/13/18 for further info Shouldn’t we have denied this claims as well for the same reason? HSB response: No error. Subro originally released in 2013. Patient Confirmed in April that this is related. No third party liability. Ref. No. 405 Medical HSB claim no. Overpayment - $21.75 Claim for 81002 (a/pd 3.54), 96372 (a/pd 8.00), 96372-59 (a/pd 8.00), 99214-25 (a/pd 48.11), J0696 (a/pd 0.63) & J1580 (a/pd 1.58) All services except for 99214-25 have only DX of N390 – UTI. OV has second DX of Z124. 1) Why were all services paid at 100%? Shouldn’t only the OV have paid at 100%? HSB response: Analyst error. Claim will be reconsidered and additional training provided. OP $21.75. Ref. No. 406 Medical HSB claim no. NOT charged in statistical calculation. Note to client for information only. Claim initially came in on 2/6/18 & denied on 2/16/18 w/RC 372 – denying claim… illness CPT billed w/preventive ICD code on claim xxxxxx Provider resubmitted claim (audited) with exact same CPT & ICD codes and claims was paid on 3/20/18. Shouldn’t we have paid claim xxxxxx versus denying? (Both claims for CPT 99202 w/ DX’s of Z1283, D225, D2261 & D2262) HSB response: This is a bias claim. No this should not have been denied. Z DX code directed this claim to ineligible due to combination with CPT code. Will resent to programming as dermatology does not bill 993XX codes. Ref. No. 426 Outpatient Hospital HSB claim no. NOT charged in statistical calculation. Note to client for information only. Provider – St. Rose Dominican Claim pd as: REV 762 – 55.3% (7047 x 55.3% = 3896.99) 636 – 19.2% (259 x 19.2% = 49.73) CT Scan = 1005.00 4951.72 x 80% = 3961.39 Contract was revised on 4/11/18 effective for 1/1/18 and rate for observation room & REV 636 changed.


Shouldn’t claim be adjusted to now pay as: REV 762 7047.00 x 53.2% = 3749.00 636 259.00 x 19.19% = 49.70 CT Scan = 1005.00 4803.70 x 80% = 3842.96 Claim overpaid 118.43 HSB response: No error. We did not receive updated contract until 4-11-18 that is retro to 1-1-18. Contract is being loaded and reports will be generated to identify impacted claims for reconsideration. Ref. No. 430 Vision HSB claim no. NOT charged in statistical calculation. Note to client for information only. Original claim xxxxxx – DX H5213 myopia S0620 chg 130.00 applied to deductible on 9/18/17 Entered into system as 50620 Adjusted on 3/13/18 for S0620 & paid 95.00 as vision HSB response: Original claim submitted and keyer entered 50620 instead of S0620. Caught in QA and claim corrected prior to this audit. No error. Ref. No. 454 Outpatient Hospital HSB claim no. NOT charged in statistical calculation. Note to client for information only. Provider – Dignity Flamingo 99282 chg 982.13 allow 785.70 pd at 100% OOP met This provider repriced under STRAT at 785.70 Is this facility contracted under SHO as was the ER physician? HSB response: Provider is not contracted w/SHO. Per SHO they have not contracted any of the free standing emergency rooms. Ref. No. 485 Medical HSB claim no. NOT charged in statistical calculation. Note to client for information only. Medicare COB – Medicare allowed 156.84, Medicare paid 122.96 We paid claim as: allow 156.84 ded 156.84 pd 0.00 1) Claim xxxxxx paid on 3/14/18 for DOS 2/5/18 from same provider pd as: Chg/allow 100.00 ded 100.00 pd 0.00 Medicare allowed 83.75 and paid 65.66 Shouldn’t we have used Medicare allowed of 83.75 and that amount go towards deductible same as audited claim? 2) See also claim xxxxxx Medicare allowed 107.69 – we used charge of 158.50 to go towards deductible. HSB response: 1) Yes we should. Claim will be reconsidered. 2) Yes. Claim will be reconsidered.


Ref. No. 507 Inpatient Hospital HSB claim no. NOT charged in statistical calculation. Note to client for information only. Provider – Carson Tahoe Hospital REV 110 x 29 x 2448.40 x 1.049 = 74,482.77 202 x 1 x 4051.60 x 1.049 = 4,250.13 206 x 8 x 3394.10 x 1.049 = 28,483.29 Surgical add-on 2448.40 x 1.049 = 2,568.37 REV 636 70,917.20 x .42 = 29,785.22 139,569.78 HTH allowed: 142,138.42 Please explain adjudication as could not match HSB response: Calculation attached. See emails. HCA Note: The calculation in the attached emails from HTH show as: 110 – 2568.38 x 29 = 74,483.02 202 – 4250.14 206 – 3560.41 x 8 = 28,483.28 Surg add-on 2568.38 Rev Code – 70917.20 x 42% = 29,785.23 This totals to $139,570.05. Appears that original allowance included a second surgical add-on amount of 2568.64. Ref. No. 510 Inpatient Hospital HSB claim no. NOT charged in statistical calculation. Note to client for information only. Originally patient on Medicare Part B – no Part A Per trans msg facility received notification from retiree that he retroactively enrolled in Medicare Part A effective 4/1/17 on March 19, 2018 and rebilled inpatient admission to Medicare Part A for reimbursement – note dated 4/4/18 Appears overpayment – HSB now requesting Medicare EOB clm xxxxxx on 4/4/18. HSB response: Retiree retroactively enrolled under Medicare. Claims Reconsidered & overpayments corrected. No error. Ref. No. 511 Inpatient Hospital HSB claim no. NOT charged in statistical calculation. Note to client for information only. Claim was received on 11/20/14, processed on 12/1/14 EOB states request for accident info, subro Claim not received back until 2/20/18, paid on same date HSB response: Provider submitted the initial bill within timely filing period. Because of the patient’s incapacity, they were unable to reply regarding accident details. The provider provided extensive documentation to allow us to make a decision based on the claim documentation with the subrogation vendor.

Little Rock / Columbus / El Paso / Indianapolis / Los Angeles / Nashville / St. Louis www.healthscopebenefits.com

May 11, 2018 Public Employees’ Benefits Program Board State of Nevada 901 Stewart Street, Suite 1001 Carson City, NV 89701 Subject: Audit Results January 1, 2018 – March 31, 2018 Dear Public Employees’ Benefits Program (PEBP) Board: HealthSCOPE Benefits appreciates the opportunity to respond to the audit performed by Health Claim Auditors for the third quarter of Plan Year 2018. The audit included 500 claims with paid amounts totaling $257,490.95. HealthSCOPE Benefits is extremely pleased to have met all performance guarantees for this audit period. We take the quality of our work very serious and continue to review quality improvement opportunities within our organization, as well as with our vendors. All previous HCA recommendations from the quarterly audits are considered resolved, as they have been implemented and/or in the process of application. We continue to be pleased with the financial savings we are able to provide on the PEBP account. We saved PEBP an additional $1,308,420 through non-network negotiations, subrogation and transplant savings in the third quarter of Plan Year 2018. We appreciate the quarterly audit process and the interaction between Health Claims Auditors, PEBP, and HealthSCOPE Benefits as it provides for continuous improvement in our service. Sincerely,

Mary Catherine Person President

27 Corporate Hill Little Rock, AR 72205

5. 5. Discussion and possible action regarding the framework

for development of the Agency Budget Request for the 2020-2021 Biennium. (Celestena Glover, Chief Financial Officer) (For Possible Action)

AGENDA ITEM X Action Item

Information Only

Date:

May 24, 2018

Item Number: V

Title: Budget Framework – Fiscal Years 2020 and 2021

Summary

This report addresses the budget building concepts for the 2019-2021 Biennium (Fiscal

Years 2020 and 2021). PEBP’s budget request must be submitted to the Budget Office in

the Governor’s Finance Office by August 31, 2018.

There will be no cap or reductions required of state agencies in submitting the agency

request budget. State agencies are however, required to identify critical needs, prioritize

their requests, and include only the most important priorities in the budget submissions.

This report briefly discusses the following:

1. Base Budget and Maintenance

2. Enhancement Decision Units

a. In-House Full-Time Counsel

b. PEBP Salary Adjustments

c. Reclassify Financial Analyst Position

d. Technology Investment Notices

Report

Base Budget and Maintenance

The Base Budget establishes a base amount using FY 2018 actual expenses. The base

budget includes salaries, travel, training and office operations (printing, rent, postage,

information technology, etc.) as well as the base amounts for self-insured claims

payments, self-insured administration, and fully insured products. Maintenance decision

units will be used to make adjustments to the base budget, statewide inflation, medical

inflation, as well as adjustments to the IBNR, Catastrophic, and HRA reserve categories.

STATE OF NEVADA

PUBLIC EMPLOYEES’ BENEFITS PROGRAM 901 S. Stewart Street, Suite 1001


Telephone (775) 684-7000 (800) 326-5496

Fax (775) 684-7028


PATRICK CATES

Board Chairman

BRIAN SANDOVAL

Governor

DAMON HAYCOCK

Executive Officer

Budget Framework Report

May 24, 2018

Page 2

Enhancement Decision Units

Enhancement decision units are used to request additional funding for new projects or the

expansion of existing projects, to include staffing, operational supplies, and technology.

Any request by the Board for budget adjustments will need to be identified at the May

meeting so they can be incorporated into the budget to be submitted on August 31, 2018.

PEBP is recommending including the following enhancements to its budget along with

any other adjustments identified by the Board.

1. In-House Full-Time Counsel – PEBP relies heavily on the Attorney General’s (AG)

office for services in response to litigation, requests for information, and personnel

matters. PEBP will work with the AG’s office to develop the request to transfer a

position from their office to be housed within PEBP’s offices. If the AG’s Office

ultimately decides not to support PEBP’s request, PEBP is requesting the assignment

of a full-time counsel position in accordance with NRS 287.043(4): “The Board may

engage the services of an attorney who specializes in health plans and health care

law as necessary to assist in carrying out the Program.” 101,501 in Fiscal Year 2020

and 134,108 in Fiscal Year 2021.

2. PEBP Salary Adjustments – PEBP reported to the Board at its meeting on March 22,

2018 the disparity in staff pay and the greater responsibilities and complexity of their

duties. Additionally, Chair Cates discussed “compaction” at the top of state

government making it difficult to recruit and retain leadership staff. PEBP has

representation on the state’s HR Working Group overseen by Chair Cates (as his role

as Director of the Department of Administration). This group will be submitting an

assessment on salary adjustments for unclassified Directors/Administrators. One of

the current plans is to request a 5% increase. Following suit, PEBP will include a

decision unit to increase Executive Staff salaries by 5% to coincide with this

recommendation. 33,270 in Fiscal Year 2020 and 33,270 in Fiscal Year 2021.

3. Reclassify Financial Analyst Position – PEBP’s Financial Analyst position was

established in July 2003 in an attempt to meet the need for in-house actuarial services.

Actuaries are compensated at a significantly higher rate (sometimes double) than the

level at which this analyst position was created. Over time this position has become

the support role to the Chief Financial Officer with an opportunity to succeed the

CFO when the position becomes vacant. To allow for appropriate succession planning

and opportunity, PEBP is requesting the reclassification of the Financial Analyst

position to an Administrative Services Officer 2, Grade 39. Many qualified staff are

reluctant to leave a relatively secure position with the classified service where they

may receive step increases as well as overtime pay for a salaried position that is

perceived to be less secure. Reclassifying this position would provide PEBP

additional recruitment and retention opportunities. 4,560 in Fiscal Year 2020 and

3,707 in Fiscal Year 2021.

Budget Framework Report

May 24, 2018

Page 3

4. Technology Investment Notice (TIN) – TINs are required to be submitted by all

Executive Branch agencies making or planning an Information Technology

Investment including enhancements to existing systems and applications as well as

replacement computer equipment costing $50,000 or more. This was due to

Enterprise IT Services (EIT) on or before April 6, 2018. In order to meet the deadline

PEBP submitted two TINs to EITS. One of which includes routine replacement of

computer equipment and the other for a cloud based solution that will allow PEBP to

reduce the number of servers and storage arrays scheduled for replacement as well as

provide enhanced disaster recovery capabilities. 100,067 in Fiscal Year 2020 and

118,166 in Fiscal Year 2021.

PEBP’s total requested budget enhancements for Fiscal Years 2020 and 2021 is

approximately $528,649 ($239,398 in Fiscal Year 2020 and $289,251 in Fiscal Year

2021).

Recommendation

Approve the budget framework as presented, with the ability to make technical

adjustments throughout the budget building process, and/or direct staff regarding any

additional/replacement decision units desired for inclusion in the Agency Requested

Budget.

6. 6. Discussion and possible action on the development

of a strategy for employee and retiree choice for healthcare providers on both PEBP’s Consumer Driven Health Plan (CDHP) and Exclusive Provider Organization (EPO) Plan. (Damon Haycock, Executive Officer) (For Possible Action)

AGENDA ITEM X Action Item Information Only

Date: May 24, 2018

Item Number: VI

Title: Provider Choice Strategy

SUMMARY This report addresses the significant provider and member feedback received over the last three months regarding provider quality and choice within PEBP’s health plans.

REPORT BACKGROUND On November 30, 2017, the Public Employees’ Benefits Program (PEBP) Board approved a new Strategic Plan (https://pebp.state.nv.us/wp-content/uploads/2017/12/2017-PEBP-Strategic-Plan-FINAL.pdf). In this Strategic Plan, a series of values were stated to include “Fairness” and “Collaboration.” The overall goals were categorized into four sections: Program Administration, Transparency, Collaboration, and Communication. For this report’s purposes, we are going to highlight the following goals:

1. Develop and provide benefits desired by employers and members; 2. Improve the member experience; 3. Optimize opportunities; and 4. Evolve the Program through partnership with current and future vendors/partners

The Strategic Plan also specifically calls out opportunities and threats in the SWOT analysis. For this report we are highlighting two:

1. Opportunities: Increase access to care (Medicare-plus contracting) 2. Threats: %-off billed provider contracts with our network

Furthermore, the Strategic Plan also highlights three overall strategies:

1. Increase access to care 2. Improve the member experience 3. Reduce costs to the program

https://pebp.state.nv.us/wp-content/uploads/2017/12/2017-PEBP-Strategic-Plan-FINAL.pdf

https://pebp.state.nv.us/wp-content/uploads/2017/12/2017-PEBP-Strategic-Plan-FINAL.pdf

Provider Choice Strategy May 24, 2018 Page 2 When combined, the values, goals, opportunities, threats, and overall strategies provide a roadmap for analysis, recommendation and decision-making. At the November 30, 2017 Board meeting, PEBP recommended and the Board approved a pilot program to implement Medicare-plus reimbursement with a hospital system previously unavailable in-network to PEBP members. In the months after, significant pushback was leveraged from PEBP’s PPO network owned by a competing hospital system. Concerns were raised by the PPO network over “exclusivity” language in the existing contract, however the ultimatum to exclude the new Exclusive Provider Organization (EPO) plan members form the existing network, the threat of increased hospital rates, the critical lack of remaining time and a lack of affordable alternatives ultimately led to PEBP’s recommendation to pause this pilot. At the April 27, 2018 Board meeting, the Board made the difficult decision to pause the pilot and continue with the arrangement with our PPO network with new cost controls on their hospital system. Although this result was far from optimal, PEBP believes it was the best available at the time. During the meeting, significant and numerous comments were provided by healthcare entities, physicians and nurses, and employees and their families. PEBP arranged an overflow conference room and still there was standing room only. Story after story was told regarding quality issues and concerns over lack of provider choice. TOPICS FOR DISCUSSION

• Current Marketplace • Current Contracts • Current Strategies • Choice vs. Cost Relationship • Quality vs. Cost Relationship • Factors to Consider • Recommendation

CURRENT MARKETPLACE PEBP has three main regions we provide members healthcare:

1. Northern Nevada: less providers, less competition, high cost, %-off billed models, exclusivity

2. Southern Nevada: most providers, most competition, low cost, Medicare models, open access

3. Rural Nevada: least providers, no competition, highest cost, %-off billed models, low access

We provide out-of-state services but the bulk of our care is isolated to these three locations. CURRENT CONTRACTS PEBP currently maintains contracts with:

Provider Choice Strategy May 24, 2018 Page 3

1. Hometown Health Providers: PPO Network services statewide. They partnered with Sierra Healthcare Options (SHO) in southern Nevada to provide seamless access to PPO services in-state.

a. Contract Term: Through June 30, 2021 b. Highlights:

i. Exclusivity with Renown in Reno, NV ii. New cost controls on Renown each year

iii. %-off billed and per diem provider contracts predominantly in northern/rural Nevada

2. HealthSCOPE Benefits: Out-of-State PPO Network through Aetna. a. Contract Term: Through June 30, 2022 b. Highlights:

i. Open access model ii. Wraps around Nevada and provides services nationally

iii. Significant savings over former provider (First Health) CURRENT STRATEGIES Narrowing the Network PEBP’s current in-state network contracts were originally signed in 2013 with the acceptance of a narrower network (exclusivity) in certain circumstances. This may have been developed to ensure lower costs from a hospital system (Renown). Adjusting the Benefit PEBP has put in place many programs to help members choose providers and/or save money:

• Since 2011, PEBP has required all non-emergent lab work to be performed at free standing labs (unless no lab exists within 50 miles of a hospital) to reduce the overcharging of lab work.

• Since 2012, PEBP has required the use of Centers of Excellence for bariatric surgeries and transplants.

• Since 2016, PEBP has aggressively managed specialty drugs billed on the medical plan by steering to certain providers.

• Since 2017, PEBP has implemented a telemedicine virtual visit provider (Dr. on Demand) and reference based pricing on hip and knee replacement surgeries by dedicating exclusive facilities to reference price these services.

• Starting this year, PEBP will be implementing an incentivized transparency vendor (Healthcare Bluebook), expanding reference based pricing to infusions, and developing a new plan (EPO) to replace the northern/rural Nevada HMO establishing all of the above to the EPO membership.

CHOICE VERSUS COST There are two prevailing ideologies for choice versus cost:

1. Less choice = more guaranteed volume = lower costs: the idea is that fixed costs are spread over a larger volume so cost savings should be realized. Example: Hometown Health’s exclusivity with Renown results in lower rates in that contract.


2. More choice = more competition = leaner offerings = lower costs: the idea is competition forces providers to become efficient and highlight quality and costs to increase volume. Example: southern Nevada has a robust and mature provider network resulting in lowest costs to PEBP.

QUALITY VERSUS COST Again there are two prevailing ideologies for quality versus cost:

1. Higher quality = higher cost: the idea is that the development of higher quality means more resources are needed and therefore more costs are passed on to the purchaser. Example: doctors who offer concierge services and make themselves available at any time to their patients provide higher quality but charge a lot for these services.

2. Higher quality = better outcomes = less complications and less overall care = less costs: the idea is investing in higher quality upfront saves the costs of continued lower quality services and avoidable care. Example: going to a highly rated hospital for joint replacement surgery, paying more than a lower rated hospital, but avoiding complications and unnecessary additional costs to recover from a less than optimal procedure.

FACTORS TO CONSIDER There are numerous factors to consider, from the topics above, to other opportunities still unknown to PEBP today. We have presented multiple models of reimbursement, from %-off billed and per diems (unfavorable and risky) to Medicare benchmarking (national standard and defensible), however there are still more models to explore like bundled payments (negotiating one payment for all associated care like a surgery, recovery, nursing, physical therapy, durable medical equipment, etc.) and shared savings models. Regardless of the chosen strategy, PEBP members must not be required to accept less than a minimum quality of care. Below are some questions to ask and answer to develop the PEBP strategy moving forward:

1. Do we understand the nuances of the regional marketplaces we have? 2. Are we willing to sunset current contracts to adhere to a new strategy? 3. Will any new strategy compliment or contradict current successful strategies? 4. Where do we sit on the choice versus cost ideology? 5. Where do we sit on the quality versus cost ideology? 6. How much market disruption are we willing to create? 7. Do we know all the opportunities available? 8. Do we have the right partners today? Are they supportive or unsupportive of our vision

and goals? RECOMMENDATION PEBP would like the Board to address the factors and questions above, providing strategic direction to PEBP to develop an evolved strategy moving forward. Pending the results of the discussion, PEBP may change its recommendation below, but for purposes of this report, PEBP recommends the following:

1. Assess the available opportunities by developing and issuing a Request for Information (RFI) in June 2018;


2. Present findings to the Board at the July 26, 2018 Board meeting with recommendations; 3. If applicable, develop and issue a Request for Proposal (RFP) August/September 2018; 4. Present RFP results to the Board at the November 29, 2019 Board meeting; 5. Provide the Board with a contract(s) for ratification at the January 2019 Board meeting;

and 6. Implement any new service(s) July 1, 2019.

7. 7. Discussion and possible action on a 3-year contract

extension (through 2023) opportunity with The Standard for voluntary life insurance and short term disability insurance. (Cari Eaton, Contract Manager) (For Possible Action)

AGENDA ITEM X Action Item Information Only

Date: May 24, 2018

Item Number: VII

Title: Contract Extension Report

SUMMARY This report requests the Board authorize staff to complete a contract extension between PEBP and The Standard for Voluntary Life Insurance services for PEBP members at a reduced rate and Short Term Disability services for PEBP members at a flat rate for Plan Years 2020 through 2023.

REPORT THE STANDARD VOLUNTARY LIFE & SHORT TERM DISABILITY PEBP entered into two 6 year contracts with The Standard for Voluntary Life Insurance services and Voluntary Short Term Disability services effective June 1, 2014 resulting from RFP # 3103 and RFP # 3105. The Standard initiated an early discussion for an opportunity to extend the current contracts at reduced rates for our members. Because the experience for the Voluntary Life program has been good for the past 5 years, The Standard has offered a rate reduction effective July 1, 2019 that will be guaranteed for the next 4 years. This offer also includes a guarantee to hold rates flat for Short Term Disability coverage through the contract term. It is important to note that the Voluntary Life rate reductions differ by age band. Some bands have reductions less than 20%; some have reductions higher than 20%. The total overall savings to PEBP members based on March, 2018 enrollment data is a 21% savings.

Contract Extension Report May 24, 2018 Page 2

Participant Group

Enrollment (3/1/18)

Current Annual

Premium

Revised Annual

Premium

Total Projected Savings

(Annual $)

Total Projected Savings

% Employee Life 2,488 $1,188,122 $891,042 $297,080 25%

Spouse Life 814 $215,914 $166,859 $49,055 23% Retiree Life 1,537 $843,225 $716,741 $126,484 15%

TOTAL 4,839 $2,247,261 $1,774,642 $472,619 21% RECOMMENDATION PEBP recommends the Board authorize staff to complete a contract extension between PEBP and The Standard for Voluntary Life Insurance services in contract # 15503 for PEBP members at a reduced rate and Short Term Disability services in contract # 15504 for PEBP members at a flat rate for Plan Years 2020 through 2023.

8. 8. Executive Officer Report. (Damon Haycock,

Executive Officer) (Information/Discussion)

AGENDA ITEM Action Item X Information Only

Date: May 24, 2018

Item Number: VIII

Title: Executive Officer Report

SUMMARY This report will provide the Board, participants, public, and other stakeholders information on the overall activities of PEBP.

REPORT PLAN YEAR 2019 OPEN ENROLLMENT UPDATE PEBP began open enrollment on May 1, 2018. This year, PEBP opted to save costs by forgoing the overflow call center staffing with our eligibility and enrollment partner and refocusing efforts internally to meet needs. PEBP activated a multi-pronged approach to call center activities:

1. PEBP updated the phone system menu to help direct members to the appropriate section/partner.

2. Redirected password resets from the call center to our IT staff. 3. Redirected payments and finance questions from the call center to our Accounting staff.

The following statistics showcase the results over the first half of open enrollment: 4/30-5/15 Total Calls Avg Speed to

Answer Abandon Rate Call Handle

Time MSU 2383 :14 .01% 5:00 PW 831 :20 .02% 2:53 Accounting 134 :15 .06% 4:31

MSU: Member Services Unit (Standard Call Center staff) PW: Password Resets (shifted to IT) Accounting: Payments and Inquiries (shifted to Accounting) Total aggregate statistics:

• Average Calls Per Day: 279

Executive Officer Report May 24, 2018 Page 2

• Average Abandonment Rate: .015% • What are People Calling About: PW Resets (24.4%), General Questions (10.3%), Plan

Changes/inquiries (14.7%), Coverage (7.8%) • Total Number of MSU Emails: 1601

PEBP was able to save costs on the overflow function and redirect to the programming of the new Premier (EPO) Plan in the eligibility system. With the statistics above, we are confident we have and will continue to meet the demand for customer service internally. PPO NETWORK UPDATE After a couple of weeks of further negotiations, PEBP was able to sign a PPO network amendment on May 15, 2018 with Hometown Health Providers to include the Exclusive Provider Organization (EPO) membership and put in place cost controls on Renown as announced at the April 27, 2018 Board meeting. The amendment is being routed through the state process for a July 1, 2018 implementation date. PEBP WINS TWO AMERICAN BUSINESS AWARDS (STEVIE AWARDS) On May 1, 2018, PEBP was informed we were selected from nominations nationwide as winner of two top ranking awards from the 16th annual American Business Awards. PEBP received a Gold Stevie Award for Organization of the Year – Non-Profit or Government - Large and a Silver Stevie Award for Most Innovative Company of the Year – Up to 100 Employees. Please see attached official press release announcing this success. We are proud of the recognition and are excited to showcase Nevada as a national leader in both organizational accomplishments and innovation across both the public and private sector. SALGBA 2018 NATIONAL CONFERENCE On April 29 – May 2, 2018, PEBP sent staff members to join a couple of PEBP Board members to attend the 2018 State and Local Government Benefits Association (SALGBA) National Conference in Jacksonville, Florida. On day 2 of the conference, PEBP with our partners (HealthSCOPE Benefits and Express Scripts) presented to a breakout session of attendees on the year-over-year strategies and innovation implemented in the program since 2011. Later in the day, PEBP with Duke University presented to a general session of all conference attendees on state employee health plans as leaders and drivers of value. Both sessions were well received and PEBP was provided positive feedback. 2019 SALGBA REGIONAL CONFERENCE During the 2018 SALGBA National Conference, PEBP was informed we were confirmed to host the 2019 Regional Conference at the Hilton Lake Las Vegas Resort in Henderson, Nevada. The conference will be held on January 15-16, 2019. A preliminary schedule has been developed and PEBP is currently coordinating with SALGBA leadership various sessions, speakers, and events for this conference. We anticipate having a final agenda available in November.

Executive Officer Report May 24, 2018 Page 3 CONCLUSION PEBP is experiencing a successful open enrollment implementing a new plan and ensuring members have access to the providers they need. We appreciate the opportunity to receive awards and be showcased as national leaders in public sector benefits.

901 S. Stewart Street, Suite 1001

Carson City, NV 89701

p: 775.684.7020

f: 775.684.7028

pebp.state.nv.us

FOR IMMEDIATE RELEASE

May 4, 2018

Media Contact:

Krystle Borgman, Nevada Public Employees’ Benefits Program, 775-684-7020, [email protected]

The State of Nevada, Public Employees’ Benefits Program

Honored as Gold and Silver Stevie® Award Winners for the 2018 American Business Awards®

Stevie winners will be presented with their awards on June 11, in New York

Carson City, Nevada –The State of Nevada, Public Employees’ Benefits Program (PEBP) is proud to announce it was

recently selected from nominations nationwide as winner of two top ranking awards from the 16th annual American

Business Awards. PEBP was selected as winner of a Gold Stevie® Award in the category of Organization of the Year -

Non-Profit or Government - Large category. And, it was selected winner of a Silver Stevie® Award in the category of

Most Innovative Company of the Year - Up to 100 Employees category.

“PEBP is honored to be recognized by The American Business Awards for our program accomplishments and

innovation,” said Executive Officer Damon Haycock. “Every success and accomplishment we achieve fulfills our mission

to provide State and local employees, retirees and their dependents access to high quality benefits at affordable prices.

70,000 members demand nothing less.”

The American Business Awards are the U.S.A.’s premier business awards program. All organizations operating in the

U.S.A. are eligible to submit nominations – public and private, for-profit and non-profit, large and small.

Nicknamed the Stevies for the Greek word meaning “crowned,” the awards will be presented to winners at a gala

ceremony at the Marriott Marquis Hotel in New York on Monday June 11. More than 3,700 nominations from

organizations of all sizes and in virtually every industry were submitted this year for consideration in a wide range of

categories

More than 200 professionals worldwide participated in the judging process to select this year’s Stevie Award winners.

“The nominations submitted for The 2018 American Business Awards were outstanding. The competition was intense,

and those recognized as Stevie Award winners should be immensely proud of this accomplishment,” said Michael

Gallagher, president and founder of the Stevie Awards.

Details about The American Business Awards and the list of 2018 Stevie winners are available at

www.StevieAwards.com/ABA.

About PEBP

PEBP administers to Nevada state and local employees, retirees, and their families a group health and life insurance

program which offers comprehensive medical, prescription drug, dental, vision, life, and long-term disability insurance.

The organization is responsible for designing and managing a quality health care program for approximately 43,000

primary participants and 27,000 covered dependents, totaling over 70,000 lives. https://pebp.state.nv.us/

About the Stevie Awards

Stevie Awards are conferred in seven programs: the Asia-Pacific Stevie Awards, the German Stevie Awards, The

American Business Awards®, The International Business Awards®, the Stevie Awards for Women in Business, the Stevie

mailto:[email protected]

http://www.stevieawards.com/ABA

https://pebp.state.nv.us/

Awards for Great Employers, and the Stevie Awards for Sales & Customer Service. Stevie Awards competitions receive

more than 10,000 entries each year from organizations in more than 60 nations. Honoring organizations of all types and

sizes and the people behind them, the Stevies recognize outstanding performances in the workplace worldwide. Learn

more about the Stevie Awards at http://www.StevieAwards.com.

Sponsors of The 2018 American Business Awards include HCL America, John Hancock Financial Services and SoftPro.

###

http://www.stevieawards.com/

9. 9. Public Comment

10. 10. Adjournment