HomeMy WebLinkAboutContract 37688-A1 T
XAetna "ITr SECRET .
ONTRACT Nd
Renewal of and Amendment to Administrative Services Agreement(Draft)
ASA-889000
This instrument amends and renews Agreement Number ASA-889000 (hereinafter"Agreement")
between City of Fort Worth (hereinafter"Customer")and Aetna Life Insurance Company
(hereinafter"Aetna")for services performed by Aetna for the Guarantee Period(s)January 01,
2009 through December 31, 2009.
I. Term
Section 2 of the Agreement is hereby amended to read as follows:
Term. The initial Services Agreement Period is from 01/01/2005 through 12/31/2005; the
second Services Agreement Period is from 01/01/2006 through 12/31/2006; the third
Services Agreement Period is from 01/01/2007 through 12/31 2007; the fourth Services
Agreement Period is from 01/01/2008 through 12/31/2008. Those periods and all
subsequent year to year renewals, which shall occur unless either party gives notice as
provided in Section 4 herein, shall be referred to as "Services Agreement Periods."
II. Service and Fee Schedule Revisions
A. The "Network Access Services" subsection of the "Medical Products" section of the "Service
and Fee Schedule" attached to the Agreement is hereby amended in pertinent part to read as
follows:
Indemnity
Services Aetna Medical/Medicare Direct
Choice TM
POS II
III. Network Access Services Included N/A
Total Fee
(Per Employee Per Month)
Fifth Services Agreement Period POS II- $35.56 $24.05
(01/01/2009 thru 12/31/2009) MedQuery- MedQuery- not included
$1.00
Sixth Services Agreement POS II- $36.27 $24.53
Period (01/01/2010 thru MedQuery- MedQuery- not included
12/31/2010) $1.00
All portions of "Network Access Services" not specifically amended s a�� p
and effect. ��GGGG++ ART
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,)D-06-09 P02 : 21 IN
B. The "Medical Products"section of the "Service and Fee Schedule"attached to the Agreement
is hereby amended to add a new subsection VI to read as follows:
Indemnity
Services Aetna ChoiceTM Medical/Medicare
POS II Direct
VI. Disease Management $1.50 Not Available
(Disease/Condition
Management)
C. The "National Advantage Access Fee" subsection of the "Medical Products" section of the
"Service and Fee Schedule"attached to the Agreement is hereby amended to read:
National Advantage Program (NAP)Access Fee:
40%of Aggregate Savings. The fee will be included in Plan Benefit
Funding Request from Bank.
D. The "Service and Fee Schedule" attached to the Agreement is hereby amended to add the
following provisions following the subsection entitled "Late Payment Charges":
Guarantee: Aetna will guarantee that the savings associated with the Disease
Management and MedQuery Programs will be two times the Disease
Management and MedQuery guarantee period administrative service fees to a
maximum of the total combined fee.
Penalty and Measurement Criteria: Aetna reports will be used to determine
savings. Aetna is willing to place 100% of the Disease Management and
MedQuery guarantee period administrative service fees at risk. There is no
penalty should the ratio of savings to program costs be greater than a 2:1 ratio. If
the ratio of achieved savings to the total service fees paid for Disease
Management and MedQuery is less than a 2:1 ratio, Aetna will reduce its
compensation to ensure the City of Fort Worth will save two times the service
fees paid for these programs. There will be a maximum reduction of one times
the combined Disease Management and MedQuery guarantee period
administrative service fees.
Example: If the guarantee period administrative fees for the Disease
Management and MedQuery program are $150,000 we will guarantee that the
guarantee period Disease Management and MedQuery program savings will be
two times the fees paid. If actual guarantee period Disease Management and
MedQuery program savings are $200,000, the guarantee period administrative fee
reduction would be $50,000. This $50,000 reduction would lower the service fees
paid to $100,000 resulting in a 2:1 ratio of program savings to program costs.
Page 2 of 5
III. Disease Management Program
The "Description of Services Addendum" attached to the Agreement is hereby amended to
add Section V to read as follows:
V. Disease Management Services
Customer has the option to purchase the Aetna's disease management program
"powered"by the proprietary CareEngine System. The program applies
thousands of evidence-based clinical rules to aggregated member medical,
pharmacy, and lab results along with self-reported data to uncover potential errors
and instances of sub-optimal care. The rules are applied on a continuous basis to
all members of a covered population to find clinical improvement opportunities.
For each opportunity identified, a"care consideration"is generated that identifies
the clinical issue(s) found, and suggests a change in treatment that the evidence-
based literature and treatment guidelines indicate would improve the patient's
care. These care considerations are communicated to treating physicians each
time a care improvement opportunity is identified by the CareEngine system.
Members participating in our Disease Management program are assigned to a
Nurse Care Manager who acts as their"personal health coach" around their
specific conditions. The Nurse Care Manager provides one-on-one education and
support to the member in understanding his/her health needs and how to best
leverage physician visits through informed communication.
Disease Management provides comprehensive support for 34 chronic conditions
that:
■ Focuses on both physicians and patients in effecting behavior changes
leading to improved clinical and financial outcomes.
■ Identifies and targets impactable clinical issues that are communicated to
physicians and patients with specific actions that can be taken to improve
patient care.
■ Customizes member engagement and education activities and intensity
according to the member's specific clinical issues and medical needs.
■ Creates a strong value proposition in that it targets resources to those
members most likely to benefit from disease management interventions.
■ Designs interventions and plans of care around the member's complete set
of conditions and co-morbidities in order to maximize care and anticipate
potentially harmful interactions between disease states.
Page 3 of 5
The following is a list of the 34 conditions included with Disease Management:
Vascular Neuro-Geriatric
■ Peripheral Artery Disease ■ Seizure Disorders
■ Cerebrovascular Disease/Stroke ■ Migraines
■ Congestive Heart Failure (CHF) ■ Parkinsonism
■ Coronary Artery Disease (CAD) ■ Geriatrics
■ Diabetes—Adult& Pediatric
■ Hypertension Cancer
■ Hyperlipidemia ■ Cancer(General)
■ Breast Cancer
Pulmonary ■ Lung Cancer
■ Asthma—Adult &Pediatric ■ Lymphoma/Leukemia
■ Chronic Obstructive Pulmonary ■ Prostate Cancer
Disease(COPD) ■ Colorectal Cancer
Orthopedic/Rheumatologic Renal
■ Rheumatoid Arthritis (RA) ■ Chronic Kidney Disease
■ Osteoporosis ■ End Stage Renal Disease
■ Osteoarthritis (OA)
Other
Gastrointestinal ■ Cystic Fibrosis
■ Gastro Esophageal Reflux Disease ■ HIV
(GERD) ■ Hypercoagulable State (Blood
■ Chronic Hepatitis Clots)
■ Peptic Ulcer Disease ■ Chronic Low Back Pain
■ Inflammatory Bowel Disease ■ Sickle Cell Disease—Adult&
(Crohn's Disease and Ulcerative Pediatric
Colitis) ■ Weight Management(Obesity)
As additional conditions or diagnoses are added to Aetna's Disease Management
program, those conditions and diagnoses shall be automatically added to
Customer's Disease Management coverage at no additional cost per employee.
IV. National Advantage Program Addendum Revision
The"National Advantage Program Addendum" attached to the Agreement is hereby
amended to add a new subsection III (17)(3)to read as follows:
Page 4 of 5
3. The itemized bill review ("IBR") is included and is offered at no
additional cost. IBR is a new feature of NAP for self-funded programs. In-
patient facility bills with submitted expenses of $20,000 or more in an Aetna-
contracted facility (excluding per diem arrangements) are reviewed for incorrectly
billed expenses prior to claim adjudication. Plan Sponsors must participate in the
NAP in order to elect IBR.
All portions of the "National Advantage Program Addendum" not specifically amended shall
remain in full force and effect.
V. All terms and provisions of the original Agreement between Customer and Aetna
shall remain in full force and effect through December 31, 2009 except as specifically amended
herein.
IN WITNESS WHEREOF, the parties hereto have caused this Services Agreement to be
executed by their duly authorized representatives.
CITY OF FORT WORTH AETNA LIFE INSURANCE
COMPANY
("CUSTOMER") ("AETNA")
By: q�"_ By:=
9�7��Ao
Karen Montgomery Alan G. Paschke
Assistant City Manager Aetna National Accounts Government &
Labor Underwriting Manager
Date:—
Date: 02/17/2009
ARP 0 E TO
FOR AN GAhITY:
ASSI NT ATTORNEY
Attested by:
OFFICIAL RECORD
l CITY SECRETARY
Marty Hendrlxl Ity SAY FT.WORTHY TX
M&C Review Pagel of 2
Official ctc Of the City 03 Fort I'Volth, 1 exas
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COUNCIL ACTION: Approved on 12/16/2008
DATE: 12/16/2008 REFERENCE NO.: G-16402 LOG NAME: 14AETNA2009
CODE: G TYPE: NON-CONSENT PUBLIC NO
HEARING:
SUBJECT: Authorize Fourth Renewal of Contract with Aetna Life Insurance for Administration of City's
Self-Funded Group Health Benefit Program with Estimated Administrative Fees and Stop-
Loss Premiums Totaling $5,096,129.00
RECOMMENDATION:
It is recommended that the City Council authorize the City Manager to execute a fourth renewal of an
agreement with Aetna Life Insurance for administration of the City's self-funded group health benefit
program with estimated administrative fees and stop-loss premiums totaling $5,096,129.00 beginning
January 1, 2009, and expiring December 31, 2009.
DISCUSSION:
The City of Fort Worth's (City) health benefits program is self-funded and utilizes a third-party
administrator to process claims. Aetna Life Insurance (Aetna) has been the third-party administrator
of group health benefits for the City of Fort Worth since January 1, 2005. Since Aetna became the
administrator of the Plan, the claims experience has been better than national and local trends. The
original contract provides for three date-specific renewals through December 31, 2008, and for the
possibility of yearly renewals thereafter. Aetna has proposed administrative fees for calendar years
2009 and 2010. It has also offered premiums for stop-loss coverage for 2009.
The recommendation to renew the Aetna contract is based on Aetna's assistance in controlling the
cost of the health plan while maintaining member satisfaction. Moreover, since the City is in Phase I
of implementing an Enterprise Resource Planning (ERP) system, staff recommends against changing
third-party administrators because doing so may cause delays in configuring and implementing the
system. Since Phase I of the ERP project will not be completed until 2010, Aetna has provided
renewal fees through 2010 should the City choose to renew the contract for an additional period.
The associated cost and fees for plan administration and reinsurance during calendar year 2009
based upon the current level of enrollment are as follows:
Administration Fee - Aetna will receive a monthly administrative fee of$36.56 per employee or retiree
who is not eligible for Medicare and $24.05 for each retiree eligible for Medicare. During calendar
year 2009, the City is expected to pay Aetna $3,495,296.00 in administrative fees. These monthly
fees represent an increase of two percent over the administrative fees for calendar year 2008. Aetna
is guaranteeing that they will not increase administrative fees by more than two percent for
2010. Aetna has offered the City an option to include Aetna Disease Management Program for an
additional fee of$1.50 per month per employee and non-Medicare retiree in 2009. Although the fee
http://apps.cfwnet.org/council_packet/mc_review.asp?ID=10821&councildate=12/16/2008 12/21/2009
M&C Review Page 2 of 2
for this additional service would be approximately $125,000.00 for calendar year 2009, Aetna has
indicated that the expected savings would be greater than this amount.
Stop-Loss Premium - Specific Stop-Loss coverage protects the health plan from additional costs once
benefits for an individual have exceeded an attachment point. Currently the Plan has an attachment
point of $350,000.00 for the Specific Stop-Loss coverage. Aggregate Stop-Loss coverage will provide
up to $3,000,000.00 in benefits if actual claims exceed 125 percent of the expected claims. The City
is expected to pay a maximum amount of$1,600,833.00 in stop-loss premiums in calendar year
2009. The cost of Specific Stop-Loss coverage has increased due to the overall increase in medical
costs and because of a number of large claims incurred by plan members in 2008.
Summary of expected charges from Aetna during-calendar year 2009:
Administration Fee $ 3495296.00
Stop-Loss Premiums $1,600,833.00
Total $ 5096129.00
Aetna Life Insurance company has committed to 30 percent M/WBE participation during the term of
the contract.
FISCAL INFORMATION/CERTIFICATION:
The Financial Management Services Director certifies that funds are available in the current operating
budget, as appropriated, of the Group Health and Life Insurance Fund. The amounts shown below
are the expected cost for Fiscal Year 2008-2009, 75 percent of the calendar year amounts.
TO Fund/Account/Centers FROM Fund/Account/Centers
FE85 534830 0145820 $1,933,387.00
FE85 534830 0148540 660 670.00
FE85 534840 0148520 $a77,283.00
FE85 534840 0148540 $250,757.00
Submitted for City Manager's Office by: Karen Montgomery (6222)
Ori ip nating Department Head: Karen Marshall (7783)
Additional Information Contact: Mark Washington (8552)
ATTACHMENTS
http://apps.cfwnet.org/council_packet/mc_review.asp?ID=10821&councildate=12/16/2008 12/21/2009