* This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting. [ Work Session on July 25, 2023] [00:00:05] ALL RIGHT. THE CITY COUNCIL OF THE CITY OF LEAGUE STATE TEXAS WILL NOW CONVENE IN A WORK SESSION ON JULY 25TH, 2023 AT 5:00 PM UH, ANDY MANN. TOM CONES HERE. TOM CRUISE HERE. JOHN BONE HERE. JUSTIN HICKS. YEP. CHAD TRESSLER HERE. SAUNDERS HERE. ALL RIGHT. UH, WE'LL NOW GO TO PUBLIC COMMENTS. YOU'RE THE ONLY PUBLIC. WOULD YOU GUYS LIKE TO COMMENT ? NO. OKAY. WE GET YOU IN THE NEXT MEETING. PRESENTATION REGARDING F Y 2324 HEALTHCARE STOP-LOSS OPTIONS. FONTANA. GOOD EVENING. IT IS FIVE O'CLOCK NOW. SO I SAY GOOD EVENING, MR. MAYOR. COUNCIL MEMBERS. I APPRECIATE THE OPPORTUNITY TO BE HERE. MY NAME IS JULIAN FONTANA, UH, WITH HUB INTERNATIONAL. WE SERVE AS THE CONSULTANT FOR THE CITY'S EMPLOYEE BENEFITS, UH, PROGRAM. AND, UM, WE'VE DONE A R F P FOR THE STOP-LOSS REINSURANCE FOR THE HEALTH PLAN FOR THE COMING, UH, PLAN YEAR, STARTING OCTOBER ONE. AND SO IN CONJUNCTION WITH, UH, PURCHASING AND HUMAN RESOURCES, UH, HUB CONDUCTED A STOP-LOSS, R F P. UH, IT WAS ADVERTISED PUBLICLY IN THE PAPER AND DISTRIBUTED TO ALL AVAILABLE MARKETS, UH, CURRENT STOP-LOSS REINSURANCE POLICY WITH BLUE CROSS BLUE SHIELD. UM, THEY PROPOSED A 12.15% PREMIUM INCREASE AND 0.09% AGGREGATE ATTACHMENT FACTOR, UH, INCREASE FOR THE CURRENT $125,000 SPECIFIC DEDUCTIBLE. ALTERNATIVE PROPOSALS WERE RECEIVED FROM STEALTH PARTNERS. UH, THEY INCLUDED BERKSHIRE HATHAWAY, SUN LIFE, SYMETRA, AND VOYA. UH, HUB ALSO, UH, REQUESTED PROPOSALS FOR HIGHER SPECIFIC DEDUCTIBLES GENERALLY WILL EVALUATE THE POTENTIAL TO INCREASE THE DEDUCTIBLE IN CONSIDERATION FOR LOWER PREMIUMS. UH, BUT THE PREMIUM SAVINGS PROPOSED AT THIS CYCLE, UM, VERSUS THE ADDITIONAL RISK THAT WOULD BE ASSUMED, DON'T WARRANT A CHANGE AT THIS TIME. SEE, MOVING INTO SECTION TWO, THE STOP LOSS R F P SUMMARY SHOWS THE MARKET RESPONSE, WHICH I JUST COVERED. UH, BLUE CROSS BLUE SHIELD, THE INCUMBENT, AND THEN THOSE REMITTED BY STEALTH PARTNERS. UM, A LATE PROPOSAL SUBMISSION WAS RECEIVED FROM SA BENEFIT SERVICES, UH, HOWEVER RECEIVED AFTER THE PRO UH, DEADLINE AND WAS DISQUALIFIED BY PURCHASING ACCORDINGLY. SO THESE ARE THE PROPOSALS THAT WERE RECEIVED. THE CURRENT, THE FIRST COLUMN SHOWS THE CURRENT PLAN WITH THE $125,000 SPECIFIC DEDUCTIBLE. IT COVERS CLAIMS INCURRED IN 24 MONTHS AND PAID IN 12 MONTHS. SO IT COVERS THE ENTIRE PRIOR PLAN YEAR AS WELL AS THE CURRENT PLAN YEAR, UH, FOR CLAIMS PAID DURING THAT PERIOD. AND INCLUDES AGGREGATE COVERAGE FOR, UH, GROSS CLAIMS UTILIZATION IN THE PLAN. UM, CURRENT PREMIUM LOOKS LIKE 1,000,004 MILLION 449, 9 71, AND THE PROPOSED MILLION 626 0 76, A 12.15% INCREASE. THE MOST COMPETITIVE OFFER WAS 18.23%. AND THEN, UH, BERKSHIRE HATHAWAY MUCH HIGHER AT 39%. UH, THE PROPOSAL RECEIVED FROM BLUE CROSS BLUE SHIELD IS, UH, FIRM AND FINAL. UM, AGAIN, WE LOOKED AT DEDUCTIBLES OF 150 AND 175,000, BUT THE PREMIUM SAVINGS, UH, COMPARED TO THE NUMBER OF LARGE CLAIMANTS THAT THE CITY GO BACK ONE. YEP. THIS IS 150,000. THE SAVINGS WAS $63,000. I'M SORRY, 61,252. ON AVERAGE, THE CITY HAS HAD FIVE CLAIMANTS IN EXCESS OF $125,000 FOR THE LAST, UH, TWO TO THREE PLAN YEARS. CAN YOU PULL UP THE LARGE CLAIM REPORT? DO WE HAVE THE LARGE CLAIM REPORT? NOT HERE. WHERE ARE THE LARGE CLAIMS COMING FROM? THERE ARE SOME CANCERS IN, IN THE GROUP. LET ME GET MY LAPTOP. THE AGGREGATE [00:05:01] CONTRACT? YEAH. SO YOU BUY TWO DIFFERENT KINDS OF STOP LOSS. YOU BUY SPECIFIC STOP LOSS, WHICH IS ON EACH INDIVIDUAL CAPPED AT 1 25 AND AGGREGATES ON THE WHOLE PLAN. AGGREGATE CONTRACT IS 12 24 12. THAT MEANS IT GOES BACK 24 MONTHS FORWARD 12 MONTHS. OKAY. IT'S THE COVER OF THE RISK IN BETWEEN. SO IT KIND OF CUT TO THE CHASE AND WHAT I WAS, WHAT I WAS THINKING HERE, AND WE TALKED ABOUT THIS BEFORE, UM, I MEAN CLEARLY I GUESS BLUE CROSS THE WAY TO GO, UH, BUT I WOULD LIKE TO LOOK AT CARVING OUT THE SPECIALTY, MOVING IT TO THE THREE 40 B. WE FINISHED THE PROGRAM ALREADY AT THE HEALTH DISTRICT AND ARE MOVING THE COUNTY THAT WAY RIGHT NOW. SO THERE'S POSSIBILITY OF, OF ROUTING THE CITY THROUGH THE SAME PROGRAM. UH, I THINK WHEN WE LOOKED AT IT, I DON'T REMEMBER THE EXACT NUMBER, BUT I THINK THERE WAS $700,000 IN CLAIMS GOING THAT WAY. PROBABLY BE ABOUT A 60% SAVINGS ON THERE. SO PRETTY SIGNIFICANT SAVINGS, UH, TO, TO PULL THAT OUT. AND YOU SHOULD STILL BE ABLE TO COLLECT THE REBATES FROM E S I, BUT EVEN IF IT, EVEN IF YOU LOSE SOME OF THE REBATE, IT'S STILL GONNA PAY FOR ITSELF. SO IF WE COULD LOOK AT THAT AND EXPLORE THAT. THIS IS FOR A TEN ONE THAT YES, SIR. OKAY. WHAT ARE YOU TALKING THERE? SO, YEAH, JUST IT'S A DIFFERENT WAY OF BUYING THE, BUYING THE SPECIALTY DRUGS, THE EXPENSIVE DRUGS DIRECTLY FROM THE COUNTY AS OPPOSED TO A FOR-PROFIT PHARMACY. OKAY. SO NOT PULLING 'EM, BUT JUST BUYING 'EM FROM DIFFERENT SOURCE. PULLING THEM OUT OF THE E S I CONTRACT. 'CAUSE RIGHT NOW WE BUY THEM DIRECTLY FROM E S I, SO WE BUY THEM THROUGH E S I, SPECIALTY PHARMACY, OBVIOUSLY EXPRESS SCRIPTS BIG FOR-PROFIT. YEAH. UH, PLAYER, IF WE BUY 'EM FROM THE HEALTH DISTRICT, IT'S A LOT, IT'S A LOT CHEAPER. AND THEN THE HEALTH DISTRICT RETAINS A PORTION OF THE PROFIT, WHICH BY LAW HAS TO BE REINVESTED INTO INDIGENT CARE IN GALVESTON COUNTY. OKAY. SO THE PROFIT THAT IS MADE IS THEN REINVESTED AND IT CUTS THE, THE MONEY GOING TO THE TO E S I DO, WE HAVE RECORDS ON HOW MANY SPECIALTY DRUGS THAT WE DO HAVE. I MEAN, IS THERE A WE DO A LIST WITHOUT GIVING PEOPLE'S NAME? YEAH. IT DOESN'T HAVE PEOPLE'S NAMES ON IT, BUT WE DO HAVE THAT. WE DO HAVE THAT LIST. UH, IS THERE QUITE A FEW FOR LEAGUE CITY? LIKE 10, BUT IT, IT'S ABOUT THREE QUARTERS OF A MILLION DOLLARS PER YEAR. PER YEAR, OKAY. SO IT'S ABOUT 10 PEOPLE, SEVEN, $750,000. THAT JUST KIND OF SHOWS YOU HOW EXPENSIVE. NOW THESE ARE MEDICATIONS THEY CAN STILL GET YEAH, STILL GET 'EM. WE'RE, WE'RE NOT, WE'RE NOT CUTTING TO WHERE, OH, YOU NEED THIS MEDICATION. NO, WE'RE NOT GONNA PAY 'EM. NO, THEY STILL GET 'EM. THEY JUST GET 'EM FROM SOMEBODY ELSE. OKAY. OKAY. WOULD THAT ALSO LOWER THEIR COPAY? YEAH. SO WHAT I WOULD PROPOSE AND WHAT THE COUNTY DID IS THE COUNTY ELIMINATED THEIR COPAY. SO THEY NO LONGER HAVE TO PAY FOR THE DRUG. THEY JUST HAVE TO GET IT THROUGH THE COUNTY, HELP THROUGH THE COUNTY HEALTH PLAN DRUG. AND IT SAVES 'EM MONEY. EXACTLY. NOW, DOES THAT LIMIT PHARMACIES IN ANY WAY? SO IT'S ALREADY LIMITED. SO THESE ARE, AND REMEMBER THESE ARE INJECTABLE DRUGS. OKAY. SO THESE ARE INJECTABLE DRUGS. AND RIGHT NOW THEY CAN ONLY GET THEM THROUGH E S I THROUGH, THROUGH THROUGH E S I, THROUGH OUR PBMS SPECIALTY PHARMACY. IT DOESN'T CHANGE YOUR NORMAL MEDICATION THAT YOU JUST GO GET AT CVSS OR ANYTHING LIKE THAT. IT ONLY CHANGES THOSE INJECTABLE DRUGS. A LOT OF THOSE DRUGS ARE UPWARDS OF, I MEAN, IT'S MULTIPLE THOUSANDS OF DOLLARS A MONTH FOR THOSE DRUGS. YOU WERE SAYING THAT I THOUGHT MAYBE IT WAS GOING TO WHERE WE, THEY HAD TO GO TO THE COUNTY TO GET ALL THE PRESCRIPTIONS? NO, JUST THE JUST THE ONE AND THEY DELIVER IT TO YOUR HOUSE? YEAH, THEY DELIVER IT DIRECTLY TO YOUR HOUSE. AND THE REASON THEY DELIVER THOSE DRUGS IS THEY'RE SUPER, UH, SENSITIVE. RIGHT. SO THEY'RE VERY EXPENSIVE. THEY CAN'T AFFORD TO BE SITTING ON A, A PORCH OR SOMETHING LIKE THAT. MM-HMM. . SO THEY'RE DELIVERED TO THE HOUSE AND YOU HAVE TO SIGN OFF ON 'EM. UH, SOME OF THOSE DRUGS CAN BE 10,000, $20,000 A DOSE. SO THEY, THEY TREAT 'EM, THEY TREAT 'EM PRETTY. UH, WHAT WAS THE PROGRAM CALLED MARY? IT'S CALLED A THREE 40 B. PHARMACY ARRANGEMENT THREE 40 B. YEAH. AND THAT'S THE THREE 40 B SPEAKS THE PORTION OF THE TAX CODE THAT COVERS IT. AND ESSENTIALLY WHAT IT DOES IS IT ALLOWS AN ENTITY THAT IS THREE 40 B QUALIFIED. IN THIS CASE THE HEALTH DISTRICT IS THREE 40 B QUALIFIED TO ACCESS THE MEDICAID PRICING FOR THE DRUG. AND THEN IF YOU BECOME AN, UH, A PATIENT OF THEM, THEY CAN PASS THAT PRICING ONTO YOU. SO THE PERSON, THE PEOPLE THAT WOULD NEED THE DRUG AT, UH, LEAGUE CITY WOULD DO A TELEMEDICINE VISIT, BECOME AN ESTABLISHED PATIENT, AND THEN GET THE DRUGS FROM THEM. SOUNDS LIKE A WIN WAY. YEAH, IT IS. SO IT SAVES, IT REDUCED THE COUNTY'S COST BY ABOUT 1.5 MILLION, UH, SO FAR. UH, AND WE, SOME OF THE OTHER ENTITIES IN THE COUNTY ARE, ARE EXPERIENCING THAT SAME, THE COUNTY HEALTH [00:10:01] DISTRICT WILL MAKE ABOUT 10% OF WHAT THEY SAVE ON THAT CAN RETAIN THAT SAVINGS. AND LIKE I SAID, THE, THE REASON THREE 40 B EXISTS IS TO GET EXTRA FUNDING TO, UH, ORGANIZATIONS LIKE THE HEALTH DISTRICT. AND SO THEN THEY'LL TAKE THAT 10%, WHICH IN THIS CASE ABOUT 75 GRAND AND THEY USE THAT AT COASTAL HEALTH AND WELLNESS TO PAY FOR INDIGENT CARE. AND, AND THROUGHOUT THE WHOLE, THE WHOLE COUNTY IS THAT IN THIS PLAN THAT'S NOT IN HERE? SO I, WHAT I WOULD SAY IS THAT WE TAKE, WE GO AHEAD AND WE, WE ACCEPT THE RECOMMENDATION, WELL, NOT IN THIS MEETING, BUT EVENTUALLY WHEN WE DO, WE ACCEPT THE RECOMMENDATION FOR BLUE CROSS IS $150,000 I S L AND THEN WE IMPLEMENT THE PROGRAM, BUT WE GO BACK TO BLUE CROSS BECAUSE WHATEVER, HOW MANY OF THESE CLAIMS OR LARGE CLAIMS ARE COMING FROM, UH, PHARMACEUTICALS, I ASSUME IT'S, IT'S FAIRLY SIGNIFICANT AND WE'RE DEFINITELY GONNA SEE IT ON THE AGGREGATE AS WELL. AND WE GO BACK AND USE THAT AS A BARGAINING CHIP TO REDUCE THE STOP LOSS EXPENSE OF BLUE CROSS. SO ARE YOU WANTING ME TO REQUEST A PROPOSAL FROM BLUE CROSS? INCLUDING THAT. OKAY. AND WOULD YOU HAVE THE PLAN SPECIFICS THAT I CAN SHARE WITH THEM? I DO. WE CAN GET WITH IT AND I GET THE, I'LL RUN IT FOR YOU. YEAH. OKAY. AND YOU DID SAY 150,000, BUT YOU MEANT THE CURRENT 125. I MEANT HUNDRED 25. GOOD CATCH. YES SIR. UM, SO CURRENTLY WHAT'S IN FRONT OF ME? YEAH, THE, THERE'S FIVE LARGE CLAIMANTS CURRENTLY FOR THIS PLAN YEAR. UM, ONE IS, UH, LUNG ISSUE, UH, TWO ARE CANCERS AND UM, THERE'S ENCEPHALITIS ON ON ONE. SO TWO OR THE 2 3, 3 OF THE FIVE ARE LONG TERM AND ONGOING AND TWO ARE INCIDENTAL. UM, AND I CAN LOOK AND WHAT WAS THE, THE TOP PHARMACEUTICAL COSTS? I DON'T, IF YOU DON'T HAVE IT, THAT'S OKAY. I DIDN'T INCLUDE IT IN IN THE PRESENTATION. YOU SAID SOME ONCE ALREADY. I DID, BUT YEAH, WE'LL WE CAN DEFINITELY LOOK THAT. WE'LL, OKAY. WE'LL GET BACK WITH IT. YEAH. OKAY. ALRIGHT. ARE THERE ANY OTHER QUESTIONS? DOES ANY OF THIS AFFECT, UH, SECONDARIES OR HOW, HOW, HOW? NO, THIS IS AN OVERALL UMBRELLA POLICY FOR THE HEALTH PLAN ITSELF. SO THE COVERAGE IS INSIDE, UH, COORDINATION OF BENEFITS OF THE PLANS OF COVERAGE ARE NOT IMPACTED AT ALL. OKAY. I'M, I WAS JUST CURIOUS 'CAUSE I HAVE, WE HAVE TWO POLICIES MM-HMM. FOR US, MY WIFE. YEAH. THIS IS JUST A GLOBAL OVERALL AND THERE'S UH, NO PLAN TO CHANGE IN BENEFITS OTHER THAN WHAT I R S RECOMMENDATIONS OR REQUIREMENTS ARE. OKAY. I'M GLAD WE HAVE AN EXPERT ON THE DIOCESE UP HERE. 'CAUSE IT LIKE THE ONLY THING THAT YOU GOTTA REALLY SPEAK UP ON THIS ONE RATTLING OFF NUMBERS. I'M LIKE WHAT? WELL, I APPRECIATE YOU, YOUR KNOWLEDGE AND YOUR EXPERTISE. MAYOR. HE, HE AND JULIAN SPENT A LOT OF TIME TOGETHER. WE DID FOLLOW EACH OTHER AROUND. I LEARNED A LOT. OH, THANKS. THANK YOU FOR SUCKING UP . IT IS APPRECIATED. AND THAT'S IT. WELL, GREAT. OKAY. ALRIGHT. AT UH, FIVE 13 THERE BEING NO FURTHER BUSINESS. THIS MEETING IS ADJOURNED. * This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting.