REQUEST FOR PROPOSAL

    HEALTH INSURANCE RISK-SHARING PLAN AUTHORITY
            ACTUARIAL SERVICES CONTRACT




       ...
TABLE OF CONTENTS


                                                                                                      ...
HIRSP Authority Actuarial Services Contract RFP

                                                                         ...
HIRSP Authority Actuarial Services Contract RFP

                                                                         ...
HIRSP Authority Actuarial Services Contract RFP


1.0   General Information

      1.1   Introduction and Background

    ...
HIRSP Authority Actuarial Services Contract RFP


            twenty percent of plan cost is funded by health care provide...
HIRSP Authority Actuarial Services Contract RFP


            Eligibility as a Result of Action by an Insurer:
           ...
HIRSP Authority Actuarial Services Contract RFP


            •   The individual's most recent period of creditable covera...
HIRSP Authority Actuarial Services Contract RFP

                   Effective January 1, 2009
       HIRSP Non-HSA Benefit...
HIRSP Authority Actuarial Services Contract RFP


      1.4   Summary of HIRSP Cost-Sharing Requirements by Plan

        ...
HIRSP Authority Actuarial Services Contract RFP


              Drug Co-payments and Annual Out-of-Pocket Maximums
       ...
HIRSP Authority Actuarial Services Contract RFP

          Household           Medical Deductible                         ...
HIRSP Authority Actuarial Services Contract RFP


      HIRSP Medicare Supplement
          Household    Medical Deductibl...
HIRSP Authority Actuarial Services Contract RFP


      1.7   Plan Administration

            HIRSP day-to-day insurance ...
HIRSP Authority Actuarial Services Contract RFP


            1.8.2   Assessment of Insurers
                    An assess...
HIRSP Authority Actuarial Services Contract RFP

                    that the appropriate discount is applied to derive th...
HIRSP Authority Actuarial Services Contract RFP


             •   Policyholder means an individual who is enrolled as a m...
HIRSP Authority Actuarial Services Contract RFP


2.0   STATEMENT OF OBJECTIVES

      The purpose of the contract for Act...
HIRSP Authority Actuarial Services Contract RFP


3.0   PROCUREMENT AND CONTRACTING INFORMATION

      3.1   Procuring and...
HIRSP Authority Actuarial Services Contract RFP

            Any oral responses, information, dates, or advice (including ...
HIRSP Authority Actuarial Services Contract RFP


      3.5   Contract Term

            The contract shall be effective o...
HIRSP Authority Actuarial Services Contract RFP


4.0   PREPARING AND SUBMITTING A PROPOSAL

      4.1   General Instructi...
HIRSP Authority Actuarial Services Contract RFP

            with the words “Cost Proposal, HIRSP Actuarial Services” and ...
HIRSP Authority Actuarial Services Contract RFP


      4.5   Proposal Organization and Format

            Proposals shou...
HIRSP Authority Actuarial Services Contract RFP


      4.7   Oral Presentations

            Vendors may be required to m...
HIRSP Authority Actuarial Services Contract RFP


5.0   PROPOSAL SELECTION AND AWARD PROCESS

      5.1   Preliminary Eval...
HIRSP Authority Actuarial Services Contract RFP


      5.4   Evaluation Criteria

            The proposals will be score...
HIRSP Authority Actuarial Services Contract RFP

            Any written notice of intent to protest the intent to award a...
HIRSP Authority Actuarial Services Contract RFP


6.0   GENERAL PROPOSAL REQUIREMENTS

            Provide the following c...
HIRSP Authority Actuarial Services Contract RFP

                   to satisfy the actuarial services objectives of the HI...
HIRSP Authority Actuarial Services Contract RFP

             assigned to the project. The results of the reference checks...
HIRSP Authority Actuarial Services Contract RFP

            •   A statement identifying any and all subcontractors that w...
HIRSP Authority Actuarial Services Contract RFP


7.0   TECHNICAL REQUIREMENTS

      The proposer’s response to the follo...
HIRSP Authority Actuarial Services Contract RFP

            Actuarial Services must be performed by actuaries with the pr...
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  1. 1. REQUEST FOR PROPOSAL HEALTH INSURANCE RISK-SHARING PLAN AUTHORITY ACTUARIAL SERVICES CONTRACT LATE PROPOSALS WILL BE REJECTED THE HIRSP AUTHORITY RESERVES THE RIGHT TO REJECT ANY OR ALL PROPOSALS
  2. 2. TABLE OF CONTENTS Page No. 1.0 GENERAL INFORMATION...................................................................................1 1.1 Introduction and Background........................................................................................1 1.2 Overview of HIRSP Eligibility Requirements...............................................................2 1.3 Overview of HIRSP Benefit Plans.................................................................................4 1.4 Summary of HIRSP Cost-Sharing Requirements by Plan.............................................6 1.5 Premium, Deductible and Drug Coinsurance Subsidy Program....................................7 1.6 Covered Services...........................................................................................................9 1.7 Plan Administration.....................................................................................................10 1.8 Overview of the HIRSP Funding Model.....................................................................10 1.9 Scope of the Project.....................................................................................................12 1.10 Definitions and Acronyms.........................................................................................12 1.11 Access to Program Information for Proposers...........................................................13 2.0 STATEMENT OF OBJECTIVES..........................................................................14 3.0 PROCUREMENT AND CONTRACTING INFORMATION............................15 3.1 Procuring and Contracting Entity................................................................................15 3.2 Clarification or Revisions to Specifications and Requirements..................................15 3.3 Vendor Conference......................................................................................................16 3.4 Calendar of Events.......................................................................................................16 3.5 Contract Term..............................................................................................................17 3.6 Letter of Intent to Submit Proposal..............................................................................17 4.0 PREPARING AND SUBMITTING A PROPOSAL............................................18 4.1 General Instructions.....................................................................................................18 4.2 Incurring Costs.............................................................................................................18 4.3 Submitting the Proposal...............................................................................................18 4.4 Use of Subcontractors..................................................................................................19 4.5 Proposal Organization and Format..............................................................................20 4.6 Multiple Proposals.......................................................................................................20 4.7 Oral Presentations........................................................................................................21 4.8 Withdrawal of Proposals..............................................................................................21 5.0 PROPOSAL SELECTION AND AWARD PROCESS........................................22 5.1 Preliminary Evaluation................................................................................................22 5.2 Proposal Scoring..........................................................................................................22 5.3 Right to Reject Proposals and Negotiate Contract Terms...........................................22 5.4 Evaluation Criteria.......................................................................................................23 5.5 Award and Final Offers...............................................................................................23 5.6 Notification of Intent to Award....................................................................................23 5.7 Appeals Process...........................................................................................................23 6.0 GENERAL PROPOSAL REQUIREMENTS.......................................................25 6.1 Designation of Primary Contact Person.......................................................................25 -i-
  3. 3. HIRSP Authority Actuarial Services Contract RFP Page No. 6.2 Organization Capabilities.............................................................................................25 6.3 Financial Statements....................................................................................................26 6.4 Desired Experience Qualification................................................................................26 6.5 Staff Qualifications......................................................................................................26 6.6 Proposer Client List and References............................................................................26 6.7 Contractor Location and Staffing.................................................................................27 6.8 Disaster Recovery Plan................................................................................................27 6.9 HIPAA Compliance.....................................................................................................27 6.10 Transmittal Letter.......................................................................................................27 7.0 TECHNICAL REQUIREMENTS.........................................................................29 7.1 Actuarial Services........................................................................................................29 7.2 Performance Standards................................................................................................31 7.3 Constraints Upon Contractor.......................................................................................32 7.4 Detailed Transition Plan..............................................................................................32 7.5 Data Collection and Reporting.....................................................................................33 8.0 COST PROPOSAL..................................................................................................34 8.1 General Instructions and Information on Preparing Cost Proposals............................34 8.2 Method of Invoicing and Payment...............................................................................34 8.3 Allocation of Actuarial Fees........................................................................................34 8.4 Format for Submitting Cost Proposals.........................................................................34 8.5 Fixed Price Period........................................................................................................34 8.6 Inflationary Adjustment...............................................................................................34 9.0 SPECIAL CONTRACT TERMS AND CONDITIONS.......................................36 9.1 Executed Contract to Constitute Entire Agreement.....................................................36 9.2 Applicable Law and Compliance.................................................................................36 9.3 Contractor Nondiscriminatory Employment Practice Requirement............................36 9.4 Data Management Requirements................................................................................36 9.5 Public Record Access..................................................................................................37 9.6 Hold Harmless.............................................................................................................37 9.7 Force Majeure..............................................................................................................37 9.8 Certification of Independent Price Determination.......................................................37 9.9 Independent Capacity of Contractor............................................................................38 9.10 Performance Review and Remedies..........................................................................38 9.11 Contractor Compensation Remittance ......................................................................39 9.12 News Releases...........................................................................................................39 9.13 Right to Publish..........................................................................................................39 9.14 Contract Term and Termination.................................................................................39 10.0 REQUIRED FORMS.............................................................................................40 11.0 ATTACHMENTS..................................................................................................41 ATTACHMENTS..............................................................................................41 A. DESIGNATION OF CONFIDENTIAL AND PROPRIETARY INFORMATION 42 -ii-
  4. 4. HIRSP Authority Actuarial Services Contract RFP Page No. B Cost Proposal Form..................................................................................................43 -iii-
  5. 5. HIRSP Authority Actuarial Services Contract RFP 1.0 General Information 1.1 Introduction and Background The purpose of this document is to provide interested parties with information to enable them to prepare and submit a proposal for an Actuarial Services contract, to provide actuarial services for the Health Insurance Risk-Sharing Plan Authority (HIRSP Authority). The HIRSP Authority intends to use the results of this solicitation to award a contract for the actuarial services. The HIRSP Authority is a Wisconsin public body corporate and politic. The HIRSP Authority was established under Chapter 149, Wis. Stats., for the purpose of maintaining and administering the insurance risk-sharing pool known as the Health Insurance Risk-Sharing Plan (HIRSP), and assumed responsibility for administration of HIRSP effective July 1, 2006. HIRSP provides individual health care insurance policies to Wisconsin residents who cannot obtain health insurance in the commercial individual health insurance market or who lose their employer- sponsored coverage. HIRSP functions as a health insurer, and issues policies to eligible individuals under four indemnity benefit plans and one Medicare supplemental plan. HIRSP also provides health care policies to persons who are entitled to continuation of coverages under federal law including the Health Insurance Portability and Accountability Act (HIPAA) under Title XXII, P.L.104-191. Individuals who lose their employer-sponsored group health insurance coverage and meet certain criteria may enroll in HIRSP without serving a pre-existing condition waiting period. As of August 31, 2008, total program enrollment in HIRSP was 16,344. The HIRSP Authority qualifies as exempt from federal income taxation pursuant to Internal Revenue Code Section 501 (c) (26). An application for recognition of the HIRSP Authority’s tax-exemption under Section 501(c)(26) is currently pending before the Internal Revenue Service. The HIRSP Authority administrative office exercises executive managerial oversight of the HIRSP plan. The HIRSP Authority is supervised by a board of directors comprised of thirteen voting members who are nominated by the governor and ratified by the senate. The board of directors also includes the commissioner of insurance or his designee as a non-voting board member. Four of the appointed directors represent insurers participating in the plan, four of the directors represent health care providers, and three of the directors represent consumer interests, including two directors who have coverages under HIRSP benefit plans. One director represents small business, and one director represents the public. The HIRSP Authority derives all funding for its plan costs and policyholder subsidy costs through a funding formula prescribed by s. 149.143, Wis. Stats. Sixty percent of plan cost is funded by insurance policy premiums paid by policyholders, twenty percent of plan cost is funded through assessments levied on insurance companies that write health insurance coverages in Wisconsin, and -1-
  6. 6. HIRSP Authority Actuarial Services Contract RFP twenty percent of plan cost is funded by health care providers through discounts on payments remitted by the HIRSP Authority as consideration for covered health care services rendered to HIRSP enrollees. HIRSP enrollees who have annual income of less than $32,999 are eligible for subsidized assistance for premium payments, health care deductible payments, and drug co-payments. The costs for funding the low-income policyholder subsidies are paid on an equal-share basis by the assessed insurance companies and the participating health care providers. The HIRSP Authority executive staff and board of directors are responsible for oversight of all financial matters related to the HIRSP plan including monitoring of HIRSP financial performance and establishing the annual HIRSP operating budget. The annual budgetary process includes utilization of actuarial projections and modeling to estimate annual program costs and revenue requirements, and entails the establishment of annual premium rates, policyholder subsidy levels, deductible and coinsurance amounts, the setting and collection of insurer assessments, and the adjustment of provider payment rates, as necessary, to meet program funding requirements. HIRSP has no marketing staff and incurs no sales commissions. Policy acquisition costs are minimal and are expensed as incurred through the payment of one-time referral fees, in the amount of $40 for each policy issued, which are remitted to insurance agents who assist individuals with the HIRSP application process. All health insurers that do business in Wisconsin are required by law to notify individuals about HIRSP if an insurer declines to provide health care coverage. Individuals may also apply directly to HIRSP. 1.2 Overview of HIRSP Eligibility Requirements Eligibility requirements for HIRSP are specified in state law. Wisconsin residents are eligible to enroll in HIRSP as a result of having health insurance coverage rejected or limited by an insurer, as a result of having tested positive for human immunodeficiency virus (HIV), or being eligible for Medicare due to disability or as a result of the loss of group sponsored health care coverage. An individual who is eligible for HIRSP based on the action of an insurer, an HIV diagnosis, or a Medicare qualified disability cannot receive coverage for services related to a pre-existing medical condition during the first six months of HIRSP benefit coverage. An individual who is eligible for HIRSP due to the loss of group sponsored health coverage is not required to serve a waiting period for coverage of pre-existing conditions. A HIRSP policyholder enrolled in a HIRSP indemnity insurance plan who attains the age of 65 becomes eligible to continue as a HIRSP enrollee in the HIRSP Medicare Supplement Plan. Individuals who are eligible for Medicaid or the Wisconsin BadgerCare program are not eligible for enrollment in HIRSP. As of February 1, 2008, all children under 19 years of age in Wisconsin became eligible for BadgerCare. -2-
  7. 7. HIRSP Authority Actuarial Services Contract RFP Eligibility as a Result of Action by an Insurer: Individuals under the age of 65 may apply for enrollment in HIRSP if, during the nine months prior to the application, they received and submitted with their application any of the following, based wholly or partially on medical underwriting considerations: • Notice of rejection or cancellation of coverage from two health insurers. • Notice of reduction or limitation in coverage, including restrictive riders, from an insurer if the effect of the reduction is to substantially reduce coverage compared to the coverage available to a person considered a standard risk for the type of coverage provided by the plan. • Notice of an increase in premium of 50% or more for a current policy, unless the increase is applicable to all of the insurer's health insurance policies then in effect. • Notice of a premium for a prospective policy from two or more insurers that is 50% or more in excess of the premium that would be paid by persons considered a standard risk for similar coverage. • Receipt of any of the above notices from a person who is an insurance intermediary (that is, an insurance broker or agent acting only on his or her authority) is not sufficient to qualify an individual for participation in the plan. An individual cannot be certified as eligible for participation in HIRSP without having actual receipt of one or more of the appropriate qualifying notices. Eligibility as a Result of Certain Specified Diseases or Disabilities: Individuals under the age of 65 may also be eligible for coverage under HIRSP without having received any of the notices described above if they have certain specific diseases or disabilities. Persons may enroll in HIRSP if they submit evidence of: • A positive test for the human immunodeficiency virus or an antibody to HIV. • Coverage under Medicare because of a disability, defined as a condition which causes the individual to be unable to perform substantial, gainful activity because of a physical or mental impairment which will last at least 12 months. Other Persons Eligible for HIRSP: Persons who meet the definition of an "eligible individual," under s. 149.10 (2t), Wisconsin Statutes, are also eligible to enroll in HIRSP. An eligible individual is an individual for whom all of the following apply: • The aggregate of the individual's period of creditable coverage is 18 months or more. • The individual's most recent period of creditable coverage was under a group health plan, governmental plan, federal governmental plan or church plan, or under any health insurance offered in connection with any of those plans. • The individual does not have creditable coverage and is not eligible for coverage under a group health plan, Part A, Part B, or Part D of Medicare or Medical Assistance or any successor program. -3-
  8. 8. HIRSP Authority Actuarial Services Contract RFP • The individual's most recent period of creditable coverage was not terminated for any reason related to fraud or intentional misrepresentation of material fact or a failure to pay premiums. • If the individual was offered the option of continuation coverage under a federal continuation provision or similar state continuation program, the individual elected the continuation coverage. • The individual has exhausted the continuation coverage. 1.3 Overview of HIRSP Benefit Plans All HIRSP plans provide coverage for major medical and prescription drug expenses. Policyholders are responsible for paying premiums, annual deductibles, medical coinsurance, and prescription drug co-payment amounts. HIRSP offers the same benefit plans and options to “eligible” individuals (HIPAA portability requirements) and to all other applicants. Four indemnity health insurance plans are offered to non-Medicare eligible individuals. The plans include: HIRSP 1,000, a $1,000 deductible plan; HIRSP 2,500, a $2,500 deductible plan; HIRSP 5,000, a $5,000 deductible plan; and HIRSP Health Savings Account, which has a $3,500 medical and drug deductible requirement and qualifies for the tax-deductible status of an individual HSA account. The HIRSP Medicare Supplement plan is available to persons who are eligible for Medicare health benefits. The available HIRSP plans and options are described in the following tables: -4-
  9. 9. HIRSP Authority Actuarial Services Contract RFP Effective January 1, 2009 HIRSP Non-HSA Benefit HIRSP 1,000 HIRSP 2,500 HIRSP 5,000 HIRSP Medicare HIRSP Health Savings HIRSP Health Plans Supplement Account Savings Account Premium reductions Yes (Low-Income Subsidy Yes (Low-Income Subsidy Yes (Low-Income Yes (Low-Income Premium reductions Yes (Low-Income available if you qualify summarized below) summarized below) Subsidy summarized Subsidy summarized available if you qualify Subsidy summarized below) below) below) Medical deductible $1,000 per year $2,500 per year $5,000 per year $500 per year Medical/Drug deductible $3,500 per year (you pay) (you pay) Medical deductible Yes (Low-Income Subsidy Yes (Low-Income Subsidy Yes (Low-Income No Medical deductible Yes (Low-Income reductions available if summarized below) summarized below) Subsidy summarized reductions available if you Subsidy summarized you qualify below) qualify below) Medical Coinsurance 20% of allowed amount 20% of allowed amount $1,000 20% of allowed No Medical Coinsurance (you 20% of allowed (you pay) $1,000 per year per year amount $1,000 per pay) amount year Individual medical $2,000 per year $3,500 per year $6,000 per year $500 per year Drug Coinsurance (you 20% of allowed out-of-pocket pay) amount maximum (your total expenditures for medical deductible and medical coinsurance, after which HIRSP will pay at 100%) Family medical out-of- $4,000 per year $7,000 per year $12,000 per year $1,000 per year Individual medical/drug $2,100 per year pocket maximum (all coinsurance maximum family members must be on the same plan) Drug Co-pay (you pay) $10 Tier 1 / $30 Tier 2 $10 Tier 1 / $30 Tier 2 $10 Tier 1 / $30 Tier $10 Generic / $30 Individual medical/drug $5,600 per year Up to a maximum of $2,000 Up to a maximum of $2,000 per 2 Brand out-of-pocket maximum per year year Up to a maximum of Up to a maximum of (your total expenditures $2,000 per year $1,500 per year for deductible and coinsurance, after which HIRSP will pay at 100%) Drug out-of-pocket Yes (Low-Income Subsidy Yes (Low-Income Subsidy Yes (Low-Income Yes (Low-Income Family out-of-pocket $11,200 per year maximum reductions summarized below) summarized below) Subsidy summarized Subsidy summarized maximum (all family available if you qualify below) below) members must be on the same plan) Pre-existing condition Yes (refer to “Pre-existing” Yes (refer to “Pre-existing” Yes (refer to “Pre- Yes (refer to “Pre- Out-of-pocket maximum Yes (refer to “Pre- waiting period summarized below) summarized below) existing” existing” summarized reductions available if you existing” summarized summarized below) below) qualify below Maximum lifetime $1,000,000 $1,000,000 $1,000,000 $1,000,000 Pre-existing condition Yes (refer to “Pre- benefit waiting period existing” summarized below) Maximum lifetime benefit $1,000,000 Low-Income Subsidy: Available for policyholders with household incomes of less than $32,999. HIRSP 1,000 / HIRSP 2,500 / HIRSP 5,000 – subsidized premium, medical deductible, and drug out-of-pocket maximum HIRSP HSA – subsidized premium and medical/drug deductible Pre-existing: If an individual is eligible for HIRSP based on medical condition, HIRSP does not cover services or medications related to a pre-existing injury or illness, including maternity, during the first six months of HIRSP coverage. A pre-existing injury or illness is a condition, whether physical or mental, regardless of the cause of the condition, which was diagnosed or for which medical advice, care, or, treatment was recommended or received during the six months immediately preceding the HIRSP policy effective date. -5-
  10. 10. HIRSP Authority Actuarial Services Contract RFP 1.4 Summary of HIRSP Cost-Sharing Requirements by Plan Policyholders enrolled in HIRSP indemnity benefit plans are required to satisfy medical deductible, medical coinsurance, drug co-payment, and maximum out-of-pocket expenditure requirements, which are calendar-year based and vary by plan option. Once the deductible, coinsurance, and co-payment out-of-pocket maximums have been met, HIRSP pays 100% of covered expenses for the remainder of the calendar year. HIRSP Medicare Supplement policyholders are required to satisfy calendar year medical deductible and drug co-payment out- of-pocket maximums. In the event that any part of a policyholder’s deductible amount is satisfied due to a claim incurred during the last three months of the year, the policyholder’s deductible amount for the following calendar year is reduced by an equal amount. HIRSP 1,000 plan policyholders pay the first $1,000 of covered expenses as a medical deductible. Policyholders with qualifying income levels pay reduced deductibles. After the medical deductible has been met, policyholders pay 20% of the next $5,000 of covered expenses as medical coinsurance, up to a maximum of $1,000. All remaining covered medical services are paid by HIRSP. HIRSP 2,500 plan policyholders pay the first $2,500 of covered expenses as a medical deductible. Policyholders with qualifying income levels pay reduced deductibles. After the medical deductible has been met, policyholders pay 20% of the next $5,000 of covered expenses as medical coinsurance, up to a maximum of $1,000. All remaining covered services are paid by HIRSP. HIRSP 5,000 plan policyholders pay the first $5,000 of covered medical expenses as a medical deductible. Policyholders with qualifying income levels pay reduced deductibles. After the medical deductible has been met, policyholders pay 20% of the next $5,000 of covered expenses as medical coinsurance, up to a maximum of $1,000. All remaining covered medical services are paid by HIRSP. HIRSP Health Savings Account (HSA) policyholders pay the first $3,500 of covered medical and drug expenses as a combined deductible. Policyholders with qualifying income levels pay reduced deductibles. After the combined deductible has been met, policyholders pay 20% of covered expenses up to a maximum of $5,600 annually. After the $5,600 policyholder liability is met, HIRSP pays 100% of the remaining covered medical and drug services. HIRSP Medicare Supplement policyholders pay the first $500 of covered medical expenses as medical deductible and are not eligible for deductible reductions. The plan requires no medical coinsurance; therefore, HIRSP pays the full Medicare deductible and coinsurance for covered medical expenses once the $500 deductible has been met. HIRSP also wraps around the Medicare Part-D drug benefit with a maximum policyholder liability of $1,500 annually. Annual family medical out-of-pocket maximums, not including drug coinsurance, apply to family members who are on the same plan; the maximums are $4,000 for HIRSP 1,000, $7,000 for HIRSP 2,500, $12,000 for HIRSP 5,000 and $1,000 for the HIRSP Medicare Supplement. The maximum out-of-pocket cost for a family that has more than one member enrolled in the HSA is $11,200, including drugs, and is set by federal law. -6-
  11. 11. HIRSP Authority Actuarial Services Contract RFP Drug Co-payments and Annual Out-of-Pocket Maximums Policyholders in each indemnity plan must pay drug co-payments of $10 per prescription for Tier 1 drugs and $30 for Tier 2 drugs. Policyholders in the Medicare Supplement plan must pay drug co-payments of $10 for generic drugs and $30 for branded drugs. Maximum out-of-pocket co- payments are $2,000 for HIRSP 1,000, HIRSP 2,500 and HIRSP 5,000, and $1,500 for HIRSP Medicare Supplement. HIRSP Health Savings Account has an annual individual drug co- payment out-of-pocket maximum of $5,600 and a family out-of-pocket drug maximum of $11,200 (both are combined medical and drug maximum out-of-pocket costs). Once the drug co- payment out-of-pocket maximums have been met, HIRSP pays 100% of allowed prescription drug costs for the remainder of the calendar year. Lifetime Benefit Maximum The lifetime benefit maximum for all HIRSP plans is $1,000,000. The benefit maximum is the total amount that can be paid out to a HIRSP enrollee over the course of his or her lifetime, and includes both medical and drug benefits. 1.5 Premium, Deductible and Drug Coinsurance Subsidy Program Low-income policyholders who qualify may apply for reduced premiums, medical deductible and drug coinsurance. The qualification criteria and amount of these reductions are specific to the respective HIRSP plan and the annual household income level of the policyholder. Approximately 25 percent of HIRSP policyholders receive subsidies. Beginning January 1, 2009, the HIRSP low-income subsidy program offers premium discounts for all policyholders with household income below $32,999, regardless of benefit plan. A deductible discount is available to HIRSP 1,000, HIRSP 2,500, HIRSP Health Savings Account (HSA) and HIRSP 5,000 policyholders. The deductible discount for HIRSP HSA policyholders is a combined medical and drug deductible discount. HIRSP also offers a drug maximum out-of- pocket subsidy for all plans, including the HIRSP Medicare Supplement plan, except the HSA due to the combined medical/drug deductible. The following tables summarize the subsidy discounts available to low-income HIRSP policyholders as of January 1, 2009. HIRSP 1,000, 2,500 and 5,000 Plans Household Medical Deductible Drug Out-of-Pocket Premium Discount Income Discount Maximum $33,000 and No Discount No Discount $2,000 Above $32,999-29,999 $100 15% $1,250 $25,000 - $100 20% $1,000 29,999.99 $20,000 - $100 25% $750 24,999.99 $17,000 – $200 29% $600 19,999.99 -7-
  12. 12. HIRSP Authority Actuarial Services Contract RFP Household Medical Deductible Drug Out-of-Pocket Premium Discount Income Discount Maximum $14,000 – $300 34% $525 16,999.99 $10,000 – $400 39% $450 13,999.99 Less than $500 43% $375 $10,000 HIRSP Health Savings Account (HSA)* Household Medical Deductible Drug Out-of-Pocket Premium Discount Income Discount Maximum $33,001 and No Discount No Discount Not Applicable Above $33,000-30,000 $100 15% Not Applicable $25,000 - $100 20% Not Applicable 29,999.99 $20,000 - $100 25% No Applicable 24,999.99 $17,000 – $200 29% No Applicable 19,999.99 $14,000 – $300 34% No Applicable 16,999.99 $10,000 – $400 39% No Applicable 13,999.99 Less than $500 43% No Applicable $10,000 * The medical and drug benefit in the HSA plan is a combined benefit; therefore, a cap on out-of-pocket drug costs is not available. The maximum out-of-pocket cost of the HSA plan is set by federal law and is currently $5,600, unless you qualify for a reduced deductible. -8-
  13. 13. HIRSP Authority Actuarial Services Contract RFP HIRSP Medicare Supplement Household Medical Deductible Drug Out-of-Pocket Premium Discount Income Discount Maximum $33,001 and No Discount No Discount $1,500 Above $33,000-30,000 No Discount 10% $500 $25,000 - No Discount 10% $250 29,999.99 $20,000 - No Discount 10% $125 24,999.99 $17,000 – No Discount 20% $125 19,999.99 $14,000 – No Discount 25% $125 16,999.99 $10,000 – No Discount 30% $125 13,999.99 Less than No Discount 35% $125 $10,000 1.6 Covered Services HIRSP indemnity plan benefits are consistent with Alternative Two in Section 8 of the NAIC Model Health Plan for Uninsurable Individuals Act. HIRSP benefit plans provide coverage of usual, customary and reasonable charges for medically necessary and appropriate services rendered by Wisconsin Medicaid-certified physicians. A partial list of covered services includes the following: • Physician and Hospital services • Medical-surgical services • Anesthesia services • Consultations • Prescription drugs • Home care • Radiology services • Laboratory services • Skilled nursing care • Hospice care • Transplant services • Durable medical equipment • PET scans and MRA studies • Dental repair related to an injury -9-
  14. 14. HIRSP Authority Actuarial Services Contract RFP 1.7 Plan Administration HIRSP day-to-day insurance operations are performed by a third-party plan administrator under an administrative services agreement with Wisconsin Physicians Service Insurance Corporation (WPS). The WPS plan administration of HIRSP operations commenced April 1, 2005. The administrative services agreement provided for an initial termination date of April 1, 2008, with three one-year renewals possible. The agreement was extended through March 31, 2010, at the July 2008 Board of Directors Meeting. Business-operation services currently provided under the administrative services agreement include eligibility determination, policyholder and provider services, claims and systems administration, medical management, data collection and reporting, subrogation, coordination of benefits, disaster recovery, pharmacy benefit management, and actuarial services. The third- party plan administrator maintains the HIRSP general ledger and other financial accounts and records necessary to effectively administer HIRSP, and prepares monthly financial statements and HIRSP Monthly Reports and Annual Reports. HIRSP pharmacy benefit management services are currently performed by the third party contractor Navitus Health Solutions, and actuarial services are currently performed by the third-party contractor Milliman, Inc. HIRSP has established a direct contract for pharmacy benefit management services with MedTrak Pharmacy Services, LLC, effective January 1, 2009. The objective of this RFP is to establish a direct contract between HIRSP and an actuarial service provider, to commence effective February 1, 2009. 1.8 Overview of the HIRSP Funding Model The HIRSP Authority derives funding for its plan costs and policyholder subsidy costs through a statutory funding formula prescribed by s. 149.143, Wis. Stats. Plan costs include claim costs and administrative expenses necessary to provide HIRSP contractual plan benefits, and exclude the costs of providing policyholder subsidies. As provided by the statute, sixty percent of HIRSP plan cost is funded by insurance policy premiums paid by policyholders, twenty percent of plan cost is funded through assessments levied on insurance companies that write health insurance coverages in Wisconsin, and twenty percent of plan cost is funded by health care providers through discounts on payments remitted by the HIRSP Authority as consideration for health care services rendered to HIRSP enrollees. The cost of policyholder subsidies is shared equally by insurers and participating providers and is in addition to those parties’ requirements for plan cost funding. The HIRSP plan does not receive any funding from state government appropriation of general purpose revenues. 1.8.1 Policyholder Premiums HIRSP policyholders have a statutory requirement to fund 60% of HIRSP program costs through payment of insurance premiums. The full premium rates for HIRSP policyholders who are not eligible for a premium subsidy are determined during the annual budget planning process, and are established through actuarial modeling of projected annual revenues and plan costs. Chapter 149, Wis. Stats., provides that HIRSP subsidized premium rates are established as discounted from the HIRSP full premium rates, with discounts of 10% to 43% depending on annual household income. Averaged premium rates for unsubsidized HIRSP Policyholders equal 119.5% of the standard-risk rate for the second quarter of 2008 through the fourth quarter of 2008. -10-
  15. 15. HIRSP Authority Actuarial Services Contract RFP 1.8.2 Assessment of Insurers An assessment to provide funding contribution for HIRSP program costs is levied on commercial insurance companies that issue health insurance coverages in Wisconsin. The commercial insurers have a statutory requirement to fund 20% of HIRSP plan costs plus one-half of the premium, deductible, and prescription drug subsidies that are granted to qualified low-income policyholders. An insurer having written health insurance premiums in one calendar year is legally obligated to participate in the HIRSP assessment which will be issued in the subsequent calendar year. Section 149.13, Wis. Stats., provides that each insurer participating in the assessment pays a proportionate share of the total assessment that corresponds to that insurer’s proportionate share of the aggregate premiums charged for health insurance coverages issued in Wisconsin in the prior calendar year. Assessment receipts are recognized as earned revenue during the budget period for which the assessments are levied as a funding contribution. Assessments for current year funding are billed to insurers semi-annually in January and July. The January billing is a provisional estimate that is calculated based on annual health insurance premiums written during the second-prior year. Assessment billings in July are calculated using premium written data from the immediate prior year, and are calculated to true-up the January assessment billing so that all of the assessment billed and paid in the current year is calculated based on the immediate prior year health insurance premiums written in Wisconsin. 1.8.3 Health Care Provider Contributions A payment discounting methodology to provide funding contribution for HIRSP program costs is applied to health care providers who bill for health care services rendered to HIRSP enrollees as HIRSP plan benefits. Participating providers have a statutory requirement to fund 20% of HIRSP plan costs plus one-half of the premium, deductible, and prescription drug subsidies that are granted to qualified low-income policyholders. Provider contributions are obtained by reducing the amount remitted by the HIRSP Authority to participating providers as consideration for billed services. The discount between HIRSP-defined usual and customary charges and the amount allowed as payment equals the provider contribution. Provider contributions represent expense payments forgone and are not a source of revenue. The basis for calculating HIRSP program costs is usual and customary charges derived using a HIRSP Fee Schedule, which is based on actuarial analysis of HIRSP claim experience and analysis of generalized medical payment billing and payment practices in the health care industry. The HIRSP Fee Schedule payment rates serve as the usual and customary rates, to which a discount is taken to derive the HIRSP allowed payment amount. For most health care services, the current discount factor applied to HIRSP Fee Schedule rates to derive the HIRSP allowed amount is approximately 29%. The provider contribution discount exceeds 20% because providers contribute 20% of plan costs plus 50% of policyholder subsidy costs. HIRSP has historically performed periodic actuarial analysis and review of the provider payment methodology to ensure that providers are adequately and fairly compensated and -11-
  16. 16. HIRSP Authority Actuarial Services Contract RFP that the appropriate discount is applied to derive the health provider funding contribution that is required by statutes. The discount of usual and customary costs has been 28.5% for the past several years. 1.9 Scope of the Project The Contractor will perform actuarial services for HIRSP as described in this RFP including, but not limited to, performing an annual survey of standard rate development, performing an annual Interim Accrual Reconciliation and determination of Reconciliation balances of HIRSP's three funding constituencies, preparation on a prospective basis of an annual operating budget, preparation of monthly reports of estimated unpaid medical and pharmacy claims based on actuarial analysis of historic paid claim files, calculation of premium rates for benefit plans, determination of the usual and customary provider contribution discount rates, and various ad- hoc analysis such as benefit design changes or responses to Board or Legislative inquiries. The Contractor must have the flexibility to meet and respond to the changing requirements of HIRSP, including: increasing enrollment, new initiatives, or policy changes requiring additions or changes to benefit designs or discounting arrangements, or other related responsibilities for HIRSP. If significant changes in the Contractor’s responsibilities are required, the HIRSP Authority will attempt to provide the Contractor with as much lead time as possible. 1.10 Definitions and Acronyms The following definitions and acronyms are used throughout the RFP: • Board of Directors means HIRSP Authority Board of Directors. • Contract means the agreement to be executed between the selected proposer and the HIRSP Authority to accomplish the purposes specified in this RFP. • Contractor(s) means proposer(s) awarded the contract resulting from this RFP to provide HIRSP actuarial consultant services. • HIPAA means Health Insurance Portability and Accountability Act. • HIRSP means the Health Insurance Risk-Sharing Plan. • Health Insurance Risk-Sharing Plan Authority (HIRSP Authority) means the public body corporate and politic established under Ch. 149, Wis. Stats., responsible for the executive administration of HIRSP. • OCI means Office of the Commissioner of Insurance. • Proposer or Vendor means a firm submitting a Proposal in response to the RFP. • Provider means Wisconsin Medicaid Certified Health Care Provider. -12-
  17. 17. HIRSP Authority Actuarial Services Contract RFP • Policyholder means an individual who is enrolled as a member of a HIRSP health benefit plan, has paid premiums, and is eligible to receive benefits under a HIRSP policy. • RFP means Request for Proposal. • State means State of Wisconsin. • Wisconsin Medicaid Program (MA) means the program operated by the Wisconsin Department of Health and Family Services under Title XIX of the Federal Social Security Act, Ch. 49, Wis. Stats., and related State and Federal rules and regulations. 1.11 Access to Program Information for Proposers Proposers are encouraged to view information regarding HIRSP on the HIRSP Authority website at www.hirsp.org. Information available at the website will assist proposers in the preparation of proposals. Available information includes the most recent HIRSP Annual Report, the HIRSP Outline of Coverage, the HIRSP Policy, Premium Tables, application materials, HIRSP newsletter, etc. While a reasonable attempt is made to maintain accurate and up-to-date information on the website, the HIRSP Authority makes no assurances or guarantees that all information and data displayed are accurate or complete. The HIRSP Authority disclaims responsibility for the accuracy or completeness of the information displayed on the HIRSP Authority website. If any materials, documentation, information, or data displayed on the website are discovered to be inaccurate and/or incomplete, such inaccuracy or incompleteness shall not constitute a basis for challenging the contract award or contract rejection, nor shall it provide a basis to renegotiate a payment amount or rate after contract award. Requirements specified in the RFP shall take precedence over any documentation on the website if a conflict exists. -13-
  18. 18. HIRSP Authority Actuarial Services Contract RFP 2.0 STATEMENT OF OBJECTIVES The purpose of the contract for Actuarial Services is to provide the HIRSP Authority with comprehensive professional actuarial services that are required in operating a solvent, cost-effective, efficient and customer-friendly risk-sharing health benefits program in conformance with all applicable state and federal regulations. Objectives include contracting with an organization that will: • Ensure a smooth transition with minimal disruption to financial oversight of HIRSP performed by the HIRSP Board of Directors and executive management, and minimal disruption to HIRSP operations administered by WPS, from contract implementation and throughout the contract term, including the transition to the succeeding Actuarial Services contractor. • Demonstrate a proven ability to provide comprehensive actuarial services in actuarial work on private sector individual health insurance, private sector small employer health insurance, private sector managed care environments, and risk-sharing insurance plans similar to HIRSP. Must demonstrate ability to perform the required actuarial services in a cost-effective manner and assure compliance with all state and federal regulations throughout the contract period. • Demonstrate proven excellence in Client Relations and the ability to service organizations similar to HIRSP. • Incorporate continuous quality improvement principles and practices in all aspects of operation. • Demonstrate data management capabilities to include the production of timely and accurate cost, statistical and utilization reports for program analysis and use as management tools. • Incorporate quality assurance best practices such as periodic peer reviews and independent evaluation processes to assure that the contractor’s work product is based on appropriate actuarial methodologies, is free of material error, and meets the highest professional standards of the actuarial industry. • Maintain the physical capacity and the overall motivation to maintain the highest level of responsiveness to the Board of Directors and HIRSP administrative management, to serve the actuarial service needs of HIRSP in a timely and effective manner. -14-
  19. 19. HIRSP Authority Actuarial Services Contract RFP 3.0 PROCUREMENT AND CONTRACTING INFORMATION 3.1 Procuring and Contracting Entity The HIRSP Authority is the issuer of this RFP and is the sole point of contact during the vendor selection process. The HIRSP Authority administrative staff will administer the contract resulting from this RFP. The Contract Administrator and RFP Manager will be Amie Goldman, HIRSP Authority Chief Executive Officer. 3.2 Clarification or Revisions to Specifications and Requirements Any questions concerning this RFP must be submitted in writing on or before October 31, 2008, to: Amie Goldman, CEO HIRSP Authority 33 East Main Street Suite 230 Madison, WI 53703 Fax: (608) 441-5776 E-mail: jferris@hirsp.org Vendors are expected to raise any questions, exceptions, or additions they have concerning the RFP document at this point in the RFP process. If a vendor discovers any significant ambiguity, error, conflict, discrepancy, omission, or other deficiency in this RFP, the vendor should immediately notify the above named individual in writing by the date above, of such error and request modification or clarification of the RFP document. In the event that it becomes necessary to provide additional clarifying data or information, or to revise any part of this RFP, such revisions, amendments, and/or supplements will be provided to vendors who have submitted a letter of intent to submit a proposal in accordance with section 3.6 of this RFP. Each proposal shall stipulate that it is predicated upon the terms and conditions of this RFP and any supplements or revisions thereof. All contact with HIRSP Authority employees concerning the RFP is prohibited, except as authorized by Amie Goldman, CEO, the RFP Manager, during the period from date of release of the RFP until the notice of intent to contract is released. Violations of these conditions may, at the sole discretion of the HIRSP Authority, be considered sufficient cause for the HIRSP Authority to reject a bid, irrespective of any other consideration. All written questions submitted on or before October 31, 2008, or at the Vendor Conference will be answered in writing by the HIRSP Authority. Questions received after the due dates specified will not be answered. To the extent practicable, a proposer’s questions will remain as written. However, the HIRSP Authority may consolidate and paraphrase questions received. -15-
  20. 20. HIRSP Authority Actuarial Services Contract RFP Any oral responses, information, dates, or advice (including telephonic responses, information and/or advise, and any oral responses given during the Vendor Conference) received by a prospective proposer from the HIRSP Authority or HIRSP Authority staff shall not, in any manner whatsoever and whether before or after the release of this RFP, be binding on the HIRSP Authority, unless followed-up and explicitly confirmed and stated in writing by the Contract Administrator. 3.3 Vendor Conference A vendor conference will be held on November 6, 2008, at 10:00 A.M. Central Standard Time to respond to questions and to provide any needed additional instruction to vendors on the submission of proposals. The vendor conference will be held via teleconference at the administrative office of the HIRSP Authority, located at 33 East Main Street, Suite 230, Madison, Wisconsin. If no questions are received, the HIRSP Authority reserves the right to cancel the vendor conference. All vendors who intend to respond to the RFP are strongly encouraged to participate in the vendor conference. Prospective proposers will have an opportunity to request clarification of any uncertainties that may exist in the RFP. The HIRSP Authority reserves the right to hold the conference in an alternative location, and if so will post the location of the alternative room/location unless there is sufficient time to notify proposers by mail. 3.4 Calendar of Events Listed below are specific and estimated dates and times of actions related to this RFP. The actions with specific dates must be completed as indicated, unless otherwise changed by the HIRSP Authority. In the event that the HIRSP Authority finds it necessary to change any of the specific dates and times in the calendar of events listed below, it will do so by issuing a supplement to this RFP. There may or may not be a formal notification issued for changes in the estimated dates and times. Date Event October 22, 2008 Date of issue of the RFP October 27, 2008 Letter of Intent to Submit Proposal due October 31, 2008 Last day for submitting written questions November 6, 2008 Vendor teleconference Mail responses to questions and notification to November 14, 2008 vendors of supplements or revisions to the RFP November 21, 2008 Proposals due from vendors by 4:00 p.m. CST As Deemed Necessary Oral presentations December 23, 2008 Notification of intent to award sent to vendors February 1, 2009 (est.) Contract start -16-
  21. 21. HIRSP Authority Actuarial Services Contract RFP 3.5 Contract Term The contract shall be effective on the date specified in the contract through December 31, 2009, with four possible one-year renewal options from January 1st of each of the successive four calendar years. The earliest effective date will be February 1, 2009 3.6 Letter of Intent to Submit Proposal Prospective proposers are requested to submit a Letter of Intent to Submit Proposal by October 27, 2008. The Letter of Intent shall clearly and completely identify the prospective proposer and the full name, title, complete street address, office telephone number, e-mail address, and fax number of the prospective proposer’s contact person. It shall also be clearly marked as Letter of Intent to Propose to Provide Actuarial Consultant Services to HIRSP. The Letter of Intent should be sent by October 27, 2008 to: Amie Goldman, CEO HIRSP Authority 33 East Main Street Suite 230 Madison, WI 53703 Fax Number: 608.441.5776 E-mail: jferris@hirsp.org Failure to submit a timely and complete Letter of Intent will not preclude the submission of a proposal, nor does submission of a timely and complete Letter of Intent require that the prospective proposer submit a proposal. However, only those prospective bidders submitting a timely and complete Letter of Intent will remain on the mailing list for: A. RFP addenda or clarifications (if any); B. Answers to oral and written questions; C. Notices of changes to the procurement schedule specified below (if any); and D. Other important information from the HIRSP Authority regarding this RFP. Such mailings will be sent to the contact persons identified in the respective Letters of Intent. -17-
  22. 22. HIRSP Authority Actuarial Services Contract RFP 4.0 PREPARING AND SUBMITTING A PROPOSAL 4.1 General Instructions The evaluation of the proposal and selection of a contractor will be based on the information submitted in the vendor’s proposal and references (and oral presentations if required by the HIRSP Authority). Failure to respond to each of the requirements in the RFP may be the basis for rejecting a proposal. Elaborate proposals (e.g., expensive artwork) beyond that sufficient to present a complete and effective proposal are not necessary or desired. The HIRSP Authority reserves the right to reject any or all proposals deemed by the HIRSP Authority as not meeting the provisions contained herein. The HIRSP Authority will not accept late or incomplete proposals. All proposals are to be complete when they are submitted. Failure to submit a complete proposal may be the basis for rejecting a proposal. 4.2 Incurring Costs The HIRSP Authority is not liable for any costs incurred by proposers in replying to this RFP. 4.3 Submitting the Proposal Proposers must submit an original and four copies of their proposal and all materials required for acceptance of their proposal by 4:00 p.m. November 21, 2008, to: Amie Goldman, CEO HIRSP Authority 33 East Main Street Suite 230 Madison, WI 53703 All proposals must be time-stamped in the HIRSP Authority by the above stated time. Proposals not so stamped will not be accepted. Proposers mailing their proposals or using a commercial delivery service must allow sufficient time for delivery of their proposals by the specified time. Proposals submitted by fax or e-mail, in whole or in part, shall be rejected. Late proposals shall be rejected and will be returned unopened. There are no exceptions. All proposals must be packaged, sealed and show the following information on the outside of the package: • Proposer’s name and address • Proposal to Provide Actuarial Services for HIRSP • Proposal due date – November 21, 2008, at 4:00 p.m. CDT An original plus three (3) copies of the Cost Proposal Form (Attachment B) must be sealed and submitted as a separate part of the proposal. (Refer to sections 4.5 and 8.0 for additional instructions regarding the Cost Proposal.) The outside of the envelope must be clearly labeled -18-
  23. 23. HIRSP Authority Actuarial Services Contract RFP with the words “Cost Proposal, HIRSP Actuarial Services” and the name of the vendor and due date. The Cost Proposal is due to the addressee on the due date and time noted above. Faxed, E-mailed and late Proposals will not be accepted. 4.4 Use of Subcontractors In the event of a proposal submitted jointly by two or more organization, one (1) organization must be designated as the prime contractor, and the prime contractor will be solely responsible for assuring the performance of all aspects of the contract. All other participants shall be designated as subcontractors. Any use of subcontractors for this contract shall meet the requirements of this RFP. Once the Letter of Intent to Award a Contract is issued and a contract is awarded, the use of subcontractors by the prime contractor (for any portion of the scope of work) is subject to the prior written consent of the HIRSP Authority (whether or not such subcontractor(s) were identified in the prime contractor’s proposal). The HIRSP Authority may request such additional information and/or written assurances as deemed necessary to ensure that only qualified, competent vendors perform services under the RFP and contract, and to ensure that the scope of work is performed in a professional manner. No services performed under this contract may be subcontracted without the prior written consent of the HIRSP Authority, and the HIRSP Authority must approve any vendors that will serve as subcontractors for HIRSP. At any time during the contract period, the contractor shall not subcontract out, in whole or in part, any portion of the scope of work to an individual(s), corporation(s), partnership(s), agent(s), subsidiary(ies), or public agency(ies) without the express prior written consent of the HIRSP Authority. If subcontractors are to be used, the proposer must clearly explain the subcontractor participation. Subcontractors are required to abide by all terms and conditions of the contract. The prime contractor will be responsible for contract performance, including the oversight of and responsibility for all delegated/subcontracted functions, when subcontractors are used. -19-
  24. 24. HIRSP Authority Actuarial Services Contract RFP 4.5 Proposal Organization and Format Proposals should be typed and submitted on 8.5 by 11-inch paper bound securely. Proposals should be organized and presented in the order and by the number assigned in the RFP. Proposals must be organized with the headings and subheadings listed below. Each heading and subheading should be separated by tabs or otherwise clearly marked. Technical Proposal Cover Page Executive Summary of Proposal Response to General Proposal Requirements (Section 6.0) Organization Capabilities Financial Statements Staff Qualifications Proposer Client List and References Oral Presentation and Materials Transmittal Letter Designation of Primary Contact Person Location and Staff Disaster Recovery Plan HIPAA Compliance Response to Technical Requirements (Section 7.0) Actuarial Services Performance Standards Constraints Upon Contractor Detailed Transition Plan Data Collection and Reporting Required forms (Section 10.0) Designation of Confidential and Proprietary Information No mention of the cost proposal may be made in the Technical Proposal of this RFP. Cost Proposal (see Attachment B) Cost Proposal Form The vendor must submit its Cost Proposal on the form provided in Attachment B according to the instructions provided. Failure to provide any requested information in the prescribed format may result in disqualification of the proposal. 4.6 Multiple Proposals Multiple proposals from a vendor will be permissible; however, each proposal must conform fully to the requirements for proposal submission. Each such proposal must be submitted separately and labeled as Proposal #1, Proposal #2, etc., on each page included in the response. -20-
  25. 25. HIRSP Authority Actuarial Services Contract RFP 4.7 Oral Presentations Vendors may be required to make oral presentations, which will be scored by the evaluation committee, regarding their written proposals. Key personnel of the vendor, to include any subcontractor personnel designated with the direct responsibility for the areas they are presenting, shall conduct the oral presentation. No outside consultants shall be used in the presentation. The purpose of the oral presentation would be for the vendor to demonstrate understanding of the requirements of the prospective contract and demonstrate its capability, including staffing, to meet those requirements. The presentation shall not be a marketing or sales presentation. The presentation shall address the vendor’s technical solution to the RFP technical requirements. 4.8 Withdrawal of Proposals Proposals shall be irrevocable until contract award unless the proposal is withdrawn. Proposers may withdraw a proposal in writing at any time up to the proposal closing date and time or upon expiration of three (3) business days after the due date. To accomplish this, the written request must be signed by an authorized representative of the proposer and submitted to: Amie Goldman, CEO HIRSP Authority 33 East Main Street Suite 230 Madison, WI 53703 If a previously submitted proposal is withdrawn before the proposal due date and time, the proposer may submit another proposal at any time up to the proposal closing date and time. -21-
  26. 26. HIRSP Authority Actuarial Services Contract RFP 5.0 PROPOSAL SELECTION AND AWARD PROCESS 5.1 Preliminary Evaluation Proposals will be reviewed initially to determine if mandatory proposal requirements, as listed in Section 7.0 of this RFP, are met. Failure to meet mandatory requirements may result in rejection of the proposal. In the event that all vendors do not meet one or more of the mandatory requirements, the HIRSP Authority reserves the right to continue the evaluation of the proposals and to select the proposal which most closely meet the requirements specified in this RFP. Any proposal failing to provide all response requirements as specified in this RFP, and in the prescribed format, may be removed from further consideration and the vendor notified accordingly. 5.2 Proposal Scoring Accepted proposals will be reviewed by an evaluation committee and scored against the stated criteria. A proposer may not have contact with any member of an evaluation committee except at the HIRSP Authority’s direction. The committee may review references and/or request interviews, and use the results in scoring the proposals. The evaluation committee’s scoring will be tabulated and proposals ranked based on the numerical scores received. Various costing methodologies and models are available to analyze the cost information to determine the lowest cost to the agency. The HIRSP Authority will select one method for scoring costs and will use it consistently throughout its analysis of all the cost proposals. The selected methodology will be available after the HIRSP Authority issues a notification of intent to award the contract. 5.3 Right to Reject Proposals and Negotiate Contract Terms The HIRSP Authority reserves the right to reject any and all proposals and to negotiate the terms of the contract, including the award amount, with the top scoring proposers, prior to entering into a Contract. -22-
  27. 27. HIRSP Authority Actuarial Services Contract RFP 5.4 Evaluation Criteria The proposals will be scored using the following criteria: Description Points 1. General Proposal Requirements (see Section 6.0) 200 a. Organization Capabilities b. Financial Statements c. Staff Qualifications d. Proposer Client List and References e. Oral Presentation and Materials 2. Technical Proposal Requirements (see Section 8.0) 400 a. Actuarial Services b. Performance Standards c. Constraints upon Contractor d. Detailed Transition Plan e. Data Collection and Reporting 3. Cost Proposal (see Section 9.0) 400 Total 1,000 total 5.5 Award and Final Offers The HIRSP Authority will compile the final scores (technical proposal and cost proposal) for each proposal. The award will be granted in one of two ways. The award may be granted to the highest scoring responsive and responsible proposer. Alternatively, the HIRSP Authority may negotiate with the highest scoring proposer or proposers or may request they submit final and best offers. 5.6 Notification of Intent to Award All vendors who respond to this RFP will be notified in writing of the HIRSP Authority’s intent to award the contract(s) as a result of this RFP. 5.7 Appeals Process Notices of intent to protest and protests must be made in writing. Protesters should make their protests as specific as possible and should identify statutes and provisions that are alleged to have been violated. -23-
  28. 28. HIRSP Authority Actuarial Services Contract RFP Any written notice of intent to protest the intent to award a contract must be filed with: Amie Goldman, CEO HIRSP Authority 33 East Main Street Suite 230 Madison, WI 53703 Fax: (608) 441-5776 E-mail: jferris@hirsp.org The notice must be received in the HIRSP Authority office no later than five (5) working days after the notice of intent to award is issued. Any written protest must be received within ten (10) working days after the notice of intent to award is issued. -24-
  29. 29. HIRSP Authority Actuarial Services Contract RFP 6.0 GENERAL PROPOSAL REQUIREMENTS Provide the following comprehensive information required under subsections 6.1 through 6.6 for the proposer and, in separate and independent sets of documents, for each respective proposed subcontractor to the proposer. 6.1 Designation of Primary Contact Person In conducting any services under an agreement resulting from this proposal, the Contractor shall designate in writing a primary contact person to open and maintain lines of communication with the HIRSP Authority. The primary contact person may not be changed without written notification to the HIRSP Authority. All initial contacts and meetings with the Contractor shall be arranged through the HIRSP administrative staff. 6.2 Organization Capabilities 6.2.1 Provide a statement identifying the formal name, title, type of business, business address, location of the proposer or subcontractor business entity’s principal offices, and an identification of any other location or site which is proposed to provide any services or resources in the execution of duties of this RFP. 6.2.2 Provide a brief history of the proposer or subcontractor business entity and the firm’s experience over the past five (5) years, especially in providing comprehensive actuarial services similar to those required in this RFP for private sector individual health care and/ or governmental high-risk pool health insurance programs similar to HIRSP. Your response should include, but not be limited to, the following: • Names and types of programs • Specific dates and length of contracts or renewals • Scope of your involvement • Number of clients/customers served • Specific outcomes 6.2.3 Advise of any outstanding significant legal actions pending against the proposer or proposed subcontractors. Please provide a detailed summary of the cause of action and the current status of each action, including an evaluation of expected outcome and an estimate of any potential financial liability that would result if the outcome of the action is adverse to the proposer or proposed subcontractor. 6.2.4 Advise of any potential conflict of interest that exists for the proposer or subcontractor. Rationale of mitigating circumstances regarding this contract may be explained. If no conflict of interest exists, provide an express statement in you response of the absence of conflict of interest. 6.2.5 Describe your organization’s capability to provide the actuarial services required in this RFP. Provide specimen copies of representative analytical documents and reports prepared for existing or former client entities which illustrate and demonstrate the contractor’s ability to provide documentary information and analytical reports sufficient -25-
  30. 30. HIRSP Authority Actuarial Services Contract RFP to satisfy the actuarial services objectives of the HIRSP authority as expressed in the RFP technical requirements in Section 7.0. 6.3 Financial Statements The proposer and each proposed subcontractor (if any) shall submit independently audited financial statements for the financially responsible business entity for the last two (2) completed fiscal years. If the proposer or subcontractor is a subsidiary, provide an organization chart of the parent holding company structure, and provide audited financial statements for the ultimate parent company and for any significant intermediate holding companies. Audited financial statements must include: • Balance sheet • Statement of revenues, expenses & changes in net assets (profit & loss statement) • Statement of cash flows • Notes to financial statements • Management discussion and analysis • Auditors’ reports and statements 6.4 Desired Experience Qualification The HIRSP Authority desires that the actuarial services contractor have experience and expertise that specifically pertains to high-risk pool and indemnity insurance operations and actuarial services. Provide description of the proposer’s experience and qualifications with regard to the following desired criteria of experience qualification: 1. Have recent, demonstrated experience in policy and benefit language interpretation and composition. 2. Have recent, demonstrated experience with high-risk pool operation or similar commercial insurance experience, 3. Have recent, demonstrated experience with public policy and legislative processes. 4. Have recent, demonstrated experience with establishing the actuarial value of benefit variations and provider payment rates. 6.5 Staff Qualifications Describe the proposed staffing for this proposal. Provide resumés describing the educational and work experiences for each of the key staff who would be assigned to the project. Identify the percentage of time that key assigned staff will have available to devote to the HIRSP actuarial services contract. 6.6 Proposer Client List and References Proposers must include in their RFPs a list of all significant client organizations, including points of contact (name, address, telephone number, and e-mail address). Identify the general provisions of client contracts, including the effective date and termination date and a high-level summary of the contractual relationship and the contracted services offered. The HIRSP Authority reserves the right to contact any clients listed, however the proposer may be required to recommend a maximum of five organizations that can be used as references. Selected organizations may be contacted to determine the quality of work performed and personnel -26-
  31. 31. HIRSP Authority Actuarial Services Contract RFP assigned to the project. The results of the reference checks will be provided to the evaluation team and used in scoring the written proposals. 6.7 Contractor Location and Staffing The actuarial contractor’s key staff must be readily accessible to interact with HIRSP Authority executive management, and from time-to-time must be available to participate in scheduled and add-hoc face-to-face meetings and telephone conference meetings. Mandatory participation is required for certain meetings of the Board of Directors, certain meetings of Committees of the Board, and various meetings with executive management. Describe your plans for meeting this requirement, and provide a work plan that details the following: • The location (by city) of each proposed physical site(s) of contractor operations for services provided under this contract; • The anticipated date(s) for locating staff at each site(s); • The timing of hiring and training of all project staff; and • The anticipated number of staff for each location if more than one location is proposed. Describe program coverage in the event of employee absences, including long-term illness or interim hiring periods, and how continuity and project leadership will be maintained in the absence of the Project Manager or other key managerial positions. 6.8 Disaster Recovery Plan Proposers will be required to have a disaster recovery plan, satisfactory to the HIRSP Authority, that will assure that key program operations of the proposer will remain operational in the event of unintended business interruption caused by major systems failure or other emergency circumstances. Please provide documentation of your organization’s comprehensive disaster recovery plan. Include information regarding any disaster recovery successes experienced. 6.9 HIPAA Compliance The actuarial contractor must be able to perform all HIRSP business services, activities, or functions, such that the HIRSP Authority remains in compliance with all final regulations implementing the Health Insurance Portability and Accountability Act (HIPAA) including, but not limited to, the following; Transactions and Code Sets, Employer Identifier, Privacy, Security and National Provider Identifiers (NPI). 6.10 Transmittal Letter The Transmittal Letter must be on the official business letterhead of the prime Contractor submitting the proposal, and must be signed by an individual authorized to legally bind the proposer. It must be part of the Technical Proposal. The Transmittal Letter must include the following statements: • An individual authorized to legally bind the proposer is signing the Transmittal Letter; • The proposer is the prime contractor and is a corporation or other legal entity; -27-
  32. 32. HIRSP Authority Actuarial Services Contract RFP • A statement identifying any and all subcontractors that will be responsible for fulfilling the requirements of this RFP; • No attempt has been made or will be made by the proposer to induce any other person or firm to submit or not to submit a proposal; • No cost or pricing information has been included in the Transmittal Letter or the Technical Proposal; • The Technical and Cost Proposal are valid for a minimum of six (6) months from the proposal due date; • The person signing this proposal is authorized to make decisions on behalf of the proposer’s organization as to the prices quoted and that the person has not participated, and will not participate, in any action contrary to the above statement; and • Assure that the proposer will agree to execute and fulfill a contract according to the conditions and terms specified in this RFP. -28-
  33. 33. HIRSP Authority Actuarial Services Contract RFP 7.0 TECHNICAL REQUIREMENTS The proposer’s response to the following requirements will serve to evaluate the contractor’s capabilities for performing HIRSP actuarial services. The HIRSP Authority is seeking a Contractor with experience in and capacity for providing comprehensive actuarial services for a health insurance program, subject to the HIRSP program’s specific requirements. The Technical Requirements are identified under the general headings 7.1.through 7.5. For each of the technical requirements under the general heading 7.1, Actuarial Services, including 7.1.1 through 7.1.6, your proposal must be organized to address, in order, each of the following: 1. Your proposed technical solution. 2. Your strategies to monitor and assure quality. 3. Your recommended performance standards. 1) Your proposed technical solution: Provide a comprehensive narrative assessment of the work to be performed, the proposer’s ability and approach, and the resources necessary to fulfill the requirement. Describe how your organization will support that technical requirement. Include in your description, your organization’s proposed staffing and technological solution to meet the technical requirement in the most cost-effective manner possible. Please note that some of the technical requirements in this section list specific required tasks. These are intended to provide proposers with additional information about program requirements. Your response need not address each specific task but rather describe how your staffing and technological solution will address the technical requirement. 2) Your strategies to monitor and assure quality: Describe how your organization will assure and monitor the quality and confidentiality of the associated services, data and information provided to the HIRSP Authority. 3) Your recommended performance standards: The Actuarial Services Contractor will be required to meet specific performance standards throughout the contract period. Describe the specific performance standards your organization recommends in order to assure quality for each particular technical requirement. The actual performance standards that the Actuarial Services Contractor will be required to meet will be specified in the contract and will be based, in part, on the staffing and technical solutions of the selected proposer. Therefore, your proposal must detail performance standards appropriate to services you propose and should also include proposed appropriate financial penalties for performance standards that are not met. 7.1 Actuarial Services The Actuarial Services Contractor must provide actuarial services necessary for HIRSP Authority management and the HIRSP Authority Board of Directors to make appropriate decisions, consistent with statutory requirements and sound financial practices. Actuarial services are vital to matters such as establishing the annual HIRSP operating budget, preparation of the annual financial reconciliation, annual projections of medical and pharmacy claims and program costs, and the establishing of premiums rates, insurer assessments, and provider payment rates that are needed to provide for annual program funding. -29-
  34. 34. HIRSP Authority Actuarial Services Contract RFP Actuarial Services must be performed by actuaries with the professional designation of Associate of the Society of Actuaries (ASA) or Fellow of the Society of Actuaries (FSA). In addition, actuarial services must be performed by individuals with the professional designation of Member of the American Academy of Actuaries (MAAA). Duties of the Actuary include but are not limited to: 7.1.1 Establishing the annual operating budget and financial reconciliation of the prior calendar year in sufficient time for the HIRSP Authority management and Board to approve prior to September 30th of each year. This will require attendance at Board and Committee meetings and detailed presentations regarding budget development and recommendations. 7.1.2 Monitor operating budget as approved by the Board: • On a monthly basis, project the cash reserves adequate to pay all claims. • On an annual basis, prepare an actuarial opinion of loss liability estimates. • Use prior years plan enrollment, claims data, health care costs, and utilization trends to project HIRSP claim and administrative expenses. • On a quarterly basis, prepare loss ratio analysis and reports for analytical and financial reporting purposes. 7.1.3 Annually, conduct an industry survey of Wisconsin commercial health insurers to determine industry standard premium rates for a benefit package equivalent to the plans offered by HIRSP: • Select the top carriers that make up approximately 90 percent of the total volume as determined by policy and premium volume. • Choose the plan offered by these companies that provides the most comparable premium, coverage, deductible and coinsurance to the HIRSP plan and actuarially adjust, as necessary, for differences in coverage, benefits, effective date, and duration. • Calculate the HIRSP premium rate as a percentage of the standard rate to meet state laws and for federal grant reporting purposes. • Set HIRSP premium rates in conformance with state law. Premiums for the indemnity benefit plans can be no higher than 200 percent of the standard rate. Medicare Supplement Plan premiums are set based on the criteria set in the law, and can be no higher than 200 percent of the standard rate. Total premiums must be set at a level necessary to fund 60 percent of the costs of the program. • Calculate the discounts appropriate for low-income subsidy premium rates according to state law, and estimate the annual cost of the low-income subsidy program. -30-

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