San Angelo City Council 10-15-13 acap presentation
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  • Dan gives high level overview on MV

San Angelo City Council 10-15-13 acap presentation San Angelo City Council 10-15-13 acap presentation Presentation Transcript

  • COMPASS IS REVOLUTIONARY HEALTHCARE City of San Angelo City Council Update October 15, 2013
  • COMPASS IS REVOLUTIONARY HEALTHCARE MAY 15, 2012 REVIEW OF CITY‟S CHALLENGE – THE 2012 PLAN YEAR The Charge: • Lower Overall Costs • Maintain Benefits • No Increase to the Employee/Employer Funding The Challenge: • Health Risks of Employees Declining • Procurement Process Showed Marginal Savings – Insurance Carriers’ Network Discounts Similar at 58% – Administrative Costs Not Enough to Offset Projected Claim Cost Increase – No Administrator Able to Deliver Lower Costs
  • COMPASS IS REVOLUTIONARY HEALTHCARE MAY 15, 2012 REVIEW – ACAP HEALTH ENGAGED • Former Insurance Executive with contracting knowledge • Data warehouse to assess physician/hospital performance • Based on the knowledge of the providers‟ current costs: – – – – First Step: Contacted hospitals‟ CEOs on COSA‟s objectives Second Step: Requested fixed cost financial arrangement Third Step: Analyzed the hospitals‟ contracts Finally: Resolved financial outliers to identify best financials • Selection of Community resulted in a projected 35% facility cost savings from current • ACAP‟s paid on a results-based model - % of actual savings
  • COMPASS IS REVOLUTIONARY HEALTHCARE MAY 15, 2012 COUNCIL REQUEST • Health Plan is realizing savings today • Year to date (as of April), we estimate the plan has saved over $250,000 • The health fund reserves are healthy • Seeking approval to pay ACAP for services rendered on a shared savings basis • Need assistance from ACAP to address additional shared savings opportunities
  • COMPASS IS REVOLUTIONARY HEALTHCARE 2012 CONTRACT STATUS • 9/11: City Leadership authorized work under a percentage of savings arrangement – The City currently has a 30% and a 40% Shared Savings Contract for specific Aetna services • 5/15/12: Council Meeting, Councilmember Hirschfeld motioned for Staff to formalize a contract on a percentage of savings basis; seconded by Councilmember Farmer, with unanimous approval – Weekly outreaches to Staff to initiate contracting process • 9/12: Instructed that new City Manager had to approve before taking addendum back to Council
  • COMPASS IS REVOLUTIONARY HEALTHCARE WORK ENTAILED TO DELIVER SAVINGS • Multiple visits to San Angelo • Numerous conference calls to the Hospitals and with City leadership • Sophisticated data analysis model built to compare hospital financial responses • Line by line claims analysis to assess actual claim savings results • Three year contracted rates with local hospital
  • COMPASS IS REVOLUTIONARY HEALTHCARE NOV 7, 2012 REVIEW - CLAIM SAVINGS Claim Analysis Jan - Feb 2012 Mar - June 2012 Grand Total Actual SACMC Cost Avg. Cost on Old Rate Total Savings Revenue Amt Due $89,370 $182,253 $92,883 $27,865 $369,269 $458,639 $587,503 $769,757 $218,233 $311,117 $65,470 $93,335 • Compared each 2012 facility claim under new contract to the 2011 facility claim cost • Comparison was taken down to the line item CPT level (individual claim level) in both files for the highest possible accuracy • 2013 and 2014 Savings will adjust the 2011 facility claims by market average increases to compare to more aggressive fixed costs negotiated by ACAP
  • COMPASS IS REVOLUTIONARY HEALTHCARE Category Compliant Members Non-Compliant Total Eligible Members Members Cancer 447 1,142 1,589 28% Diabetes 381 339 720 53% Respiratory & Other 55 274 329 17% Vascular 399 915 1,314 30% Wellness 857 3,649 4,506 19% Grand Total 2,139 6,319 8,458 25% % Compliant 8
  • COMPASS IS REVOLUTIONARY HEALTHCARE 2012 CONTRACT STATUS • 11/7/12: Met with new City Manager, CFO and Director of HR – Interim City Manager/CFO confirmed that the financial terms reviewed in meeting were agreed to by City‟s leadership – Director of HR clarified specific next steps in meeting, and City Manager stated that she was to take contract to next City Council meeting in November – 11/9/12: Contract addendum sent, with 30% Shared Savings • Note, this was the 3rd time a contract was provided with the same financial terms – 11/9/12: Confirmation email received, “I‟m so very glad that Daniel is on board and we are moving forward. I met with Daniel yesterday about the addendum going before Council. He definitely wants it to go on the next agenda, which is November 20”.
  • COMPASS IS REVOLUTIONARY HEALTHCARE 2013 CONTRACT STATUS • 2/28/13: Rescheduled call occurred and request for additional information • 3/1/13: Detailed overview of work provided • 3/17/13: Follow-up call scheduled to review scope, and City Manager stated, “committed to be fair in the payment for the financial savings attained by the City and agreed in principle to considering a prospective agreement which accounted for the results delivered” – City Manager requested financial options • 3/27/13: Two financial options provided as requested • 8/28/13: During call, City Manager stated that he now wanted a settlement payment “for the value rendered” • 9/19/13: During call, reviewed settlement payment and agreed to review with City Council
  • COMPASS IS REVOLUTIONARY HEALTHCARE FINANCIAL RESULTS 2012 AND 2013 Year Avg EEs* Total Medl Claims* Cost/EE/Yr 2011 1,335 $3,930,688 $2,945 2012 1,307 $3,260,329 $2,495 $1,100,000* Jan-Aug ‟13 1,296 $2,403,689 $1,855 $1,289,000 2014 Proj Net Save $1,497,000 • Direct contract resulted in immediate savings each year – Projected at $3,886,000 for three year period • Savings derived at comparing 2011 hospital rates (adjusted for trend) to guaranteed rates for 2012 thru 2014 with 3% escalators vs estimated trend rate of 8% • The health risk of the population has NOT been addressed $496,000 reinsurance for large claimants in YTD 2013 • New Community Leadership and Shannon interested in competing for City‟s business at renewal for 2015 *Totals Provided by Holmes Murphy
  • COMPASS IS REVOLUTIONARY HEALTHCARE CHALLENGES FOR EXECUTING A CONTRACT • 9/26/13: Email received stating the challenges – “Initially the City was told that ACAP was an affiliate of Holmes Murphy, and later found this not to be correct.” • RESPONSE: ACAP IS A WHOLLY-OWNED DIVISION OF HOLMES MURPHY; PART OF DIVISION MERGED WITH COMPASS JAN. 2013 – “Yes, staff was authorized by City Council to negotiate a contract with ACAP, yet state law does not allow public funds to be expended for prior services...approvals must come before the work is engaged. Therefore any shared savings agreement would require execution of the agreement prior to the savings being realized.” • RESPONSE: EVEN THOUGH COUNCIL AUTHORIZED CONTRACT NEGOTIATIONS MAY „12, WE NEVER ENTERED INTO DISCUSSIONS, SO EFFECTIVE DATES WERE NOT DISCUSSED – “Negotiations to a 30% shared savings rate have yet to be confirmed by any of the City employees involved in 2011, and without a signed agreement approved by City Council, the City has been unable to proceed.” • RESPONSE: 30% NOTED IN 11/7/12 PRESENTATION, AND 30% NOTED IN EACH CONTRACT ADDENDUM PROVIDED
  • COMPASS IS REVOLUTIONARY HEALTHCARE REQUEST OF CITY COUNCIL • Based on projected savings of $3,887,000 for 2012-2014, payment of $1,116,000 (30% of savings) due – Payment of $717,000 (30% of savings) for 2012 and 2013 Projected Savings • Settlement option: $500,000 – 13% of Projected Savings • Please approve payment for services provided and financial savings delivered