ALC-Executive Subcommittee

Good morning call the executive subcommittee thereof seed gather to order and now. First on the agenda we have amend the contract with the reduction horns and recognized record Garrity. Thank you bye thank you Marty Garrity with the pure of Legislative Research but with the regards to the clay case of McLean be the state of Arkansas in which Senator Hickey as Speaker Shepherd are named defendants the executive subcommittee authorized the bureau to enter into a contract with Dover Dixon for their representation in their official capacity recently we received information that at least one member of the General Assembly one other member of the General Assembly was going to be subpoenaed to testify in that trial because the interests of that member aligned with Speaker shepherds and Senator Hickey is interest the request is that Dover Dixon assist any members with regards to depositions or subpoenas evidentiary matters in their official capacity as long as those same there's no conflict between the interests of Speaker Shepherd Senator Hickey. So I would need it this body would need to authorize me to amend the letter of engagement with Dover Dixon to include representation of other members who may be subpoenaed to testify or submit documents or depositions. Any questions from the committee. And if not I have a motion to authorize director Gerd. I have a motion Senator Bledsoe second from center for urban. All in favor aye. Opposed. That is basis thank you. Thanks we have a consideration of the adoption of the EBT benefits report and will recognize culture Wardlaw and Mr Jake please if you can the title please identify yourself record and you're recognized president. Thank you Mr. spin off. Fun summer with this we started back during the session just a little background of started back during the session working on working with a consultant to go through the EBT public school and state employees insurance program on March fifteenth we hired of. An R. P. was released in on may twenty first I'm sorry we hired the Siegel group with that to see a group went through and looked at all our systems and they made a few observations one of the biggest observations of our pharmacy contracts and how we pursuit our pharmacy vendors. So through that of they had made numerous recommendations and this week we went in our last week we went in and adopted a lot of those recommendations and we didn't give E. B. D. a chance to To re speared are talk about how those recommendations would impact the system so today what I wanted to do was kind of go through each topic and let Jake have a moment to talk through these and go through it so with that we'll go to plan designs if you guys want to follow along with me on the panel page two of the executive summary and let me add that we do have the Siegel group of. Tune in with those of Patrick Kane and Matt yes personally thank yes Sir sorry I didn't say that so with the plan designs the biggest change there was is there was a little bit of benefit offerings to one to one plan verses in other and this actual change has a cost of about four million dollars to it to align those plan designs so if you will bear with me I'll let Jake talk to the plan designs sure so there were the Jake please the department's mission should services employee benefits there were two aspects of the plan designs that the Siegel group recommended in plan design I learned is kind of a little bit of insurance industry term for the amount that the member pays when they go to the doctor when they go to the pharmacist so this isn't the premium that they paid to have the coverage this is the co pays this is the co insurance this is the Max out of pocket and it's it's the part of the insurances as insurers we tried it to maybe change to tweak to guide behavior a little bit the first was the we had identified in the super definitely identified that we have your co pay. The to some extent the weight so that the way it's structured encourages people go to the emergency room as opposed to an urgent care facility that's more expensive so that would that change would I think hopefully drive some behavior to reduce costs the plan we certainly don't have a problem with that. They also recommended that the plan designed for the public school employees the change to mimic that of the state employees so that the state and public school employees would have the same deductibles copays coinsurance and Max out of pockets. This would be a benefit for the public school employees would be a cost the sequel folks estimate of the cost will be about four million we don't necessarily have a problem with doing that although we do think that we need to have a conversation about to what extent are we moving to combine the two plans because if we are moving to do complying the two plans that is an area where I think that we would have some concerns. Any questions to this point. Senator Hammer you're recognized. Would you be just Pacific in short what your main concerns would be about combined into plants. Sure household try be short They're two different populations with two different funding sources the really if the load more you look at it the more it kind of you understand how the moneys flow we think that combining the two populations into a single fund will ultimately the. Create some liability for the state for misusing funding federal funding maybe my clothes off funding on a local level such as property taxes and alternately I don't understand what the benefit of it would be. Call Mr. But if the overall goal achieved lowering premiums if you could work through all those issues or concerns that you have and it resulted in lower premium cost. Would not produce a benefit that would ultimately make whatever adjustments have to be made in order to create that pathway fort worth it. My overall goals the lower cost of the plan not necessarily the premiums that the members pay. And anything that we can do to reduce the frankly explosive growth and health care costs I think we need to do so while I understand that this would be a huge benefit of potentially four in the short run one part of our population it would expose another part of our population to increase liability and at the end of the day I don't understand how combining the two plans would help in that overall goal of lowering fundamentally the cost of providing health insurance. Thank you sure. Represent Dotson you're recognized thank you Mr in this this may be four more for representative Wardlaw then then you Jake but throughout this entire discussion over the many months of meetings we've had and various things I understand we've had a desire to try to make some parity between the two two as far as benefits and deductibles and and and that sort of thing but I the if the intent is to combine the two plans I've missed that and I just want to be clear and put it on record that that is not the intent or the goal that we've been moving toward is to try to bring the overall cost of the plan make sure that they're parity between the two plans and we're not in any way moving to combine them is that the same understanding you have represented Wardlaw I would agree in one of the biggest problems of plans and I think that comes later in his recommendations but I'll go and talk about it was the way that we contribute to the plans from the state level and one of problems with that is with the way we have contributed we have terminal one based on the budgeted position and on the other off of positions that elected to take the coverage and when you do that you set up the plan almost for failure because you're not contributing the same amounts to two plans therefore you've always had a huge deficit when it comes at a public school plan versus a state plan where you had all these open positions as we've all became more aware of lately so in doing this and bringing the benefits in a line we're going you're going to see later there's gonna be a recommendation to bring the contributions in line as well but I have never. It in my word to put out the intent of actually combining the two plants because I agree with Jake the liabilities one will become liabilities of the other and that's not fair to the employment bases but we want to make sure that we're contributing an equal amount and we're also offering the same benefits to the two employee bases of and we haven't done that one plan has been richer than the other one and it's been richer to that then the other one because it's have more money than the other one but if we're fixing the contribution side we should be able to fix that the reward side I guess is the way I put it thank you for making that clear I mean that that is the understanding I've worked for obviously we can't speak for future legislatures but for the purposes of this study and and where we're at thanks for making that very clear thank. Okay thank you Hendren proceed okay so we'll move on to the medical side. A single win in and looked at Blue Cross blue shield and they compared BlueCross BlueShield of ministration feeds to other systems in other states and market numbers in those numbers came back Blue Cross blue shield fared out really well they also looked at Blue Cross blue shield's discounts and in their words their best in class of so we're getting really good bang for our Buck of Blue Cross blue shield but they did have a few recommendations there that we are to watch and well those things ours we should always review to improve our ministry of terms we should all evaluate our total cost of care approach rather than discounting fees and we should we should really start paying attention to our different diagnoses it cost us a lot of money diabetes is one of the number one diagnoses that we spend a lot of money on and there's going to be some other stuff and recommendations in a minute when it comes to diabetes but they run a lot of savings to be had there under medical because like I said we're we're getting a really good bang for our Buck of Blue Cross blue shield so if there's any questions on medical move on to pharmacy. So we're going to pharmacy which is one of the biggest pieces to the to the pa. We look review Wardlaw allege Mr. Anything if I could up and we have a good relationship with Blue Cross they've been the T. PA the third party administrator for the plan for decades and our our consultants have certainly borne out costs of the plan or something they're very good at that said we're committed to making sure that we put out robust competitive RF peas on a regular basis so on there are some really good ideas and civil report we certainly want to test those by making sure that we're taking advantage of a competitive bidding process and getting continue to get those savings. Thank you. And proceed. so when we go in the pharmacy one of the major pieces of the pharmacy program is making sure that we collect the rebates so when we look at our program verses the programs across the U. S. some of the other programs benchmark show that they're twenty five to thirty percent rebate programs when you look at Arkansas we're eleven to twelve percent so there's a lot of money being left on the table when it comes to the rebates so what the recommendations are some for an RFP that describes the flexibility desired in program including for example customary foreman Custom clinical rules in a role of independent pharmacies so what that role the independent pharmacies is we want to make sure that we protect Arkansas pharmacies in this when you look at Alabama if you look at other states when they done their RSP they were very descriptive in our speed to make sure they took care of those brick and mortar pharmacies in those rural communities and even in urban communities that take care of those citizens a bill or to answer questions when you get that drug in the mail no way to talk to a pharmacist when you're able to go to that brick and mortar you're gonna get those instructions and be able to make it through through that that interaction episode with that drug will require bidders to provide proposals with minimal discounts and rebate guarantees clarifying to find all terms and plans received a hundred percent passed through a manufacturer benefits potentially request trends and guarantees required bidders to proposed guaranteed rates so with this we we per receiver Siegel that the savings will be twenty five to fifty million dollars annually. There's also a problem with Act eleven oh four which was the insulin bill back during the session in any recommendations it is to repeal that bill and I think there is an effort to have that done in a. Upcoming special session so with that I'll turn over to Jake in and take any questions of so like on the medical side we absolutely want to test out what has been proposed a recommended here in our of P. which we're going to have to issue we have to put our peas regularly I will admit there's some skepticism on our side that a lot of what Segal is promising it is correct there's some some confusion on our side about how we get to those numbers but we certainly concede that there's some good ideas and they're and the best way to test whether or not they are indeed correct is to go ahead and put them in our of P. and test the market. In law Segal's. Information comes from other states where this has been done if you seen anything that discredited. We'll so the we have an unusual system here one of the reasons I think that for example representative Wardlaw talked about our percentage on rebates being lower than other states to some extent that's of a result of our emphasis on generics and we have a very high generic utilization rates in Arkansas cheap and there obviously just as effective they don't come with rebates so if you chase those cheaper bottom line drugs one of the by products as you may not get the rebates. that said the last time we really put out for bid the up of our of P. for our pharmacy PBM contract was twenty eighteen I want to say twenty sixteen. In my understanding is that the market may have changed since then and that there are opportunities that are out there certainly when you're looking at the kind of savings that we're looking at as well as the pressure that's on the plan I think that we have to take advantage of every opportunity we can. Senator Hammer you're recognized. Share. When you when you talk about testing so we put out our if he. And you get the our feedback are you going to are you talk about like a pilot program included in that discussion before you just turn the whole population over to a new concept even though they are to be made right that out are so that we don't get too far down the. The wrong path in the event it doesn't work out. I really like the idea of pilot programs but we have to have a pharmacy programs we have a current contract for pharmacy program that will expire at some point and so we have to have a new pharmacy program to replace the one we've got but I think we need to do is really and and the Siegel group was really good about emphasizing this is taking our time to be smart and and judicious in how we write the are you to make sure that once that our of peas written in a way that covers all of our bases deducted does exactly what we wanted to do the way competitive bidding works is once you've written that our opinion put it on the street to some extent you lose control the process you don't know necessarily which vendors are going to be it or what there be it's going to be or how they respond so you really have to take control of that are on the front and do a good job in and I think one of the part of the recommendation on this are fees that we don't narrowly right it to where we don't get any bids because one of the problems we saw in the twenty sixteen I believe it's one of those years I don't remember either Jake but there are few was written in a manner to where. The UAMS system was doing part of that. PBM part of this deal and no one bid on it because of that there was only one bidder in that are to be we want to make sure that we open this RFP process up to where we have multiple bidders therefore you create competition and that rebate percentage goes up yeah we we had we we actually have more than one better but we did not have the big three there's there's three PBMs that really run about ninety percent of the market place and they did not fit the current vendor that we have met impact is the largest privately held PBM that's out there we have a couple things that we do on our side that we like that we think are effective at reducing costs Citigroup felt that if we stop doing those things we might be able to bring in more competition there for and up at a better place. Share can ask questions back on the medical report. Yes I'm gonna know who Nick you go to thank you back on the medical let me ask you of I thank you minister believes their ministry cost is like three percent or less as opposed to and I I'm I'm not sure the total number of people that they insure but I know it's a significant amount when she got that Siegel look at like how the Municipal League handles their administration of portion of their plans or did they just simply compared against insurance companies like Blue Cross blue shield or any other big brands that that did it that the answer lies know they looked at other states in other of public employee systems not. Not within our state elected state program it other states are compared will to ours and public school public employees and public school employees or compared to ours so they looked at box persons box not box out of the box sure. Okay thank you. The representative Dotson you're recognized thank you Mister chair Jake at. The RFP process in order to be able to get the bids I I understand you're saying it's being written very carefully will you be working with like the single group to try to get those types of recommendation or those are recognized written properly in order to to make sure we get the best bang for our Buck that there I think that's suggesting that we're getting that's really yet to be determined okay. I mean I would strongly encourage. Trying to go to if they're the ones making the recommendations and suggesting that we can get this level of expertise this this type of R. F. P. that results then they would probably know how to. Worded properly so just as a suggestion to consider. Good. Not seeing any other questions. Okay became a percent rise and I just ignored it okay so senator Irvin yeah I guess you're in the map by placer I will you're recognized adjournment. Good morning Senator Rice. Thank you Mr chair of just back on that on the medical when it talks about carving out components of the contract to implement more point solutions from the specialty vendors as that would be written with that be also taken into consideration where these specialty vendors may be located and the reason I ask that is you know again just like we have our considerations for giving for the independence rule pharmacies you know I also want to make sure folks that are living in rural parts of the state of Arkansas are going to have to travel you know past some place that they're used to to another you know to our place that's two hours away if you do that type of a solution. Up to. I'm are I mean either one of you can an answer later on in the report we are gonna get into some of the recommendations regarding the specialties and and how they get structured I think we haven't really got there yet certainly anything we do if it's going to be available to a hundred sixty thousand our cans is a need to be statewide right and and I think that one of I don't want to speak for Siegel but my assumption is. if these plans are gonna be affected people have to be able to use right okay that the access is the big issue that I'm asking about I would say access is number one on every piece of this hi in which is one reason not referred to those local brick and mortar pharmacies I mean that access point has to be available. Well yeah and I think it's important on both sides of of that question medical and pharmacy thank you. Thank you saying no more questions or a person. Okay so we'll move on to the Medicare retiree coverage you guys know this that this topic right here's what started this whole rodeo of last September so. We met when they looked at that and then Jake was very much aware of this there was some savings last year to cutting the pharmacy benefits and moving those people to a Medicare advantage plan for pharmacy what we're looking at here is moving on there for medical and pharmacy and basically the what what they want to do here is I want to Rick prepare an RFP to go after a Medicare advantage plan provider to provide to all the employees so therefore these this person will become the BlueCross BlueShield for the for the retirees so what you would do to make sure this works as you would have to educate the the retirees to make sure they understand that this is not throwing him out the door this is actually taking care of and providing insurance you would also set it up to where it all enrolls these people and to the Medicare advantage plan but allows for them to opt back if they had a need to so you would take somebody with a cancer or with a high medical need and they want to stay where they're at they would be able to do that we would want to make sure they would be able to do that you would set the black plan designs up so there are is equivalent is they can be to the current situation you would make sure that the of prescription drug coverage for the PSC that was cut can be reassigned so what that means is back in two thousand seven we took off the prescription drug coverage for retirees on the school employees this would reinstate that and what you hear we still have a say the number even reinstating a benefit that large so you would structure the contributions to incentivize the Medicare advantage plans to lower the premiums and year old that savings to both the state and the retiree that way your premiums wouldn't be through the roof and the state could enjoy in that savings as well so based on the Ray. It's that we were able to get from some bids that we ask for firms that Seagal asked for looks like the savings on this plan could be thirty four to forty thirty four million to forty one million dollars total so as you can see we're racking up A good amount of savings just with pharmacy and Medicare advantage plans without all turn it over to Mr Billy. And so we've looked at the end this is a recommendation that I think that were interested in as well I think that we've some. We look at something similar to this last year I think the going forward this is going to be appointed discussion every year regardless of when we end up enacting it because the amount of savings potentially on the table or significant every year we are going to look at an increased cost we're looking at a seven hundred million dollar program that's growing significantly so that kind of growth bags the sorts of questions or or or basis sorts of answers that the Medicare advantage plan can promise. Like the pharmacy recommendations there's some skepticism a little bit on our side to make sure that some of the you can have your cake and eat it too is true but we agreed that explore the market place putting together in our of P. that really works for everybody. Is in the best interest of the state and. Of I would think the vast majority of folks covered by the plan. Senator Irvin you're recognized. So I am I'm remember correctly that. That's not me I think it's is okay. I. we need somebody mute that's. Listen and can maybe. Okay that was my dog barking when my phone rang but anyway I'm so I'm I remember in last last time last year when this it was that they had to find their own Medicare advantage plan is that and I remember that correctly and that was where a lot of the. First confusion came from so this is an RFP for one Medicare advantage plan versus them going and finding their own right okay I just wanted to make sure that was what I understood we learned a lot from last year and there's a lot of those lessons that I don't want to recreate they need to communicate the need to really thoughtfully prepare out on R. F. P. to really get a good handle on who the winners are and if there is anyone who's not winning how much and what can we do to help them. and really taking our time in doing it right I think it's going to be a priority we'll it in the and one of the biggest points to this is Anna and I think I mentioned it is you want to make sure the plan designs or is close to equivalent and that's the reason you have to go through the RFP process if you remember last year this got a letter saying you're gonna right and you're welcome to sign up to any Medicare advantage plan you can find a vendor for in your local area this is not that right okay right and I wanna make that is clear is is is water is this right here is that we will have a Medicare advantage plans under the system that will be as I said before as quickly as possible former to flurries when it comes to pharmacy will be is this is the same. That way these folks will have the same coverage but the advantages for that in the rebates for that and can you may want to speak to this at the federal level are huge right so that's where that savings comes in is you're able to to tap into that so yeah it's a it's a big deal and I think we were all on the right track last year we just didn't do it the right way and communication was not followed through to the membership in a way that educated them to make them feel comfortable and to approaching those plans right when you throw out to the market listen I can't tell you yeah what drugs I get and what insurance I should be on the bill to pay for those drugs nor can my constituents and nor should they have been responsible for that that's not what this is yes not I agree and I I just wanted to make some happy to chime in and whatever questions you have and we for you to go ask can limited time will You can comment on the savings and the education piece so I'm the yeah the Medicare advantage the I mean this is pretty much the gold standard for most states around the country now they've been in place for a while there's a lot of uncertainty probably like a seven eight years ago when he CA was Startin because a lot of cuts and all that stuff if you look at anything that's right now it's like there's a continued effort to expand those programs so there's not gonna be funding there's a lot of stability in the program I've had some clients I think the rates we got from you all on this you don't get better rates when you actually go on the market so I think our numbers are actually will end up being much better than what we. Hey in there I think these are very conservative the benefit programs and you basically they're different because. With with your enrollment you can. Of a retiree will be able to go to any Medicare provider so it doesn't necessarily have to be it's not what's different than what would be public offer you have with a network there is an they do have a network in place but doesn't is not relevant for you guys means so as long as they accept Medicare will be covered by this program the other managers are there's a there's a a number of additional benefits that retire you'll get you know there's there's gym memberships there's supplemental hearing aids there's done All there there's all these other add on benefits of the program and I think one of our presentations we listed all the different kind of components the satisfaction rate with them a plans are incredibly high right now so yeah you guys attempted I guess to do that RT if you try to do an adequate for the pharmacy program to my understanding But I don't know the whole details run but with the combined and may add pharmacy together the cost reductions that you get and you may say that are significant on the medical side which help offset costs on the pharmacy side that's what the PSC group No Way able to offer of a medical and pharmacy benefit which pharmacy the benefit for I agree at a cost that similar last locally then the current premium you're paying with your supplemental plan and just you know that the rate that you spend on your supplemental plans right now it is so high I mean over four dollars for a lot of them as just a minute later an incredible rate that I I think that's the highest the any state and. I work with so thank you have a lot of opportunity there so I relied money the water entered into your question but I think it's a tremendous value it will be a plan option in other states report was a plan option I've got an eighty five percent membership in the Medicare advantage plan same kind of structure your role in the opt out of the line and and you know some of those have been in place number seven eight nine ten years and you know they're not the membership is growing if anything. Thank you thank you Mister chair I just wanna make sure we outline the differences between what we're doing this year versus what we did last year and why it's so significant and I think I totally agree with the recommendation is going to make sure you know we're that's clearly communicated and and I appreciate the work on that very very much if I could just jump in on there just to emphasize a couple things one of the recommendations of the sequel report was that there was an opt out so that the folks did not want to go to the Medicare advantage plan if they wanted to stay with the current process to be allowed to do so. also this would be a big benefit for teachers this would be something we would be extending or making that benefit richer for them so the public school site which is more than half of our our plan would would the retiree folks would benefit the other point I want to make is that the real benefit to the plan isn't necessarily of the way it all works isn't because we're going to ship this off to some private sector employer whose going to bring the providers out or did members the thing that really makes it work is that the federal government provide significant subsidies and that's really the thing that makes it all run. I've heard some folks say that if we do this that their boxes going to get court at the end of the day. I don't know that that will be the case I certainly my expectation is that where those savings are going to come is really because the federal government as may disappoint of emphasis and really added a lot of subsidies to. If the federal government I think a great. Point of it too is it in the basement and like they would be for certain lands the other the other big savings as a medical management is about. Is there anything else. Senator Hammer you're recognized I guess so. How is the current structure not allow us to tap into those same federal savings that we haven't been realizing them all along that we can't that we can could not have been doing it as we are structured. Well the pharmacy side. The pharmacy side you could have a an equity placing you could do similar sort of stuff for the pharmacies the on the medical side you don't you have a Medicare supplement plan you don't have a Medicare advantage plan so the way the federal government does it. That they'll actually pay the Blake the healthcare provider whether it's you know in the manual under the providers they paid and the amount and then. Medicare about loop now I mean they pay all the providers the Medicare rates but you can't you I have that structure to right now to do that. Okay thank you. Okay you see that there was one more point and at think it's under other but I'll go and bring it up now because it ties into retirement there was some discussion to make a minimum requirement of participation before retirement so what that would mean is if you don't take the insurance out why you're working at the agency or the school then you wouldn't be eligible for that insurance as a retiree I think during the discussions in executive committee that the number five came up I've heard two and a half and I've heard ten I don't know that we've ironed that out yet are talked talked it through and figure out what that requirements going to be but one of the problems we have seen this people don't participate in a plan when they're healthy and then they want to just bait when they retire so we're going to have to put in some type of requirement there it's not one at the current moment of but that is part of the recommendation as well and like I said by or under the topic of retirement I'll bring that up so Mr furs no further questions all move forward to clinical. So. So when we when we talk about medical while go I guess we could put clinical under that discussion but when you get under clinical won the big topics has been the wellness checks the country as a whole health population is decline in Arkansas is nineteen different so when you look at the wellness check we've been more of a self service and we need to move that to read to a resort. To a a result based that we we look at our resort. And we identify whether we're getting our money back from check in on the of wellness checks we need to roll out a comprehensive plan when it comes the diabetes management we need to increase communication about oncology with a focus on centers of excellence. We we we need to talk through and conduct feasibility studies and relate models and on site clinics. We need to maintain a bariatric program one the biggest discussions in the last twelve years our eleven years of me being a legislature have been that we need to do away with the bariatric program what we found here and what we heard from from a doctor here in Arkansas was is that when you have a very after surgery there is a percentage that are cured from diabetes we've we're curing from diabetes were no longer bonnet strips were no longer bind insulin it there's a there's a huge cost savings to those plans so we want to make sure that we're incentivizing that in it and we want to remove those caps of when it comes to those pet persons that could have a chance of cure so right now the way those caps or set up a lot of those diabetic patients are eligible for those type surgeries they're not they're not being looked at so the estimated savings under this part is ten to fourteen million dollars and it's really going to be driven by the engagement of these different programs and engagement of diabetics and pre diabetics some of the recommendations are longer term and therefore there will be an investment on the front and I think that some of the discussion from EVD is do we invest on the front end or do we pay claims on the front end and I think that's a valid discussion that we should all have because one of the things we've notices we've been so tight for cash and in the past and the present that is really hard to invest in a long term program when you got to pay a claim a claim for personagens life threatening of position so with that off a lead on Mr bleeped out. And representative war laws absolutely right the we've been very tight for cash and just all my perspective on a lot of these programs is that there's a lot of promise to them and it sounds great on the front end but we have seen in the last ten fifteen years D. B. D. a lot of programs assigned a grade on the front and not work and they end up being expensive day and up causing a lot of rigmarole for the members a lot of work on our end and when I ask what we getting out of that program what's the return on it where's the savings. The I can't find it and we end up having to pull the program one of the things we've talked about a lot is having a pilot program. Established. Within the EBT world so that when the medical innovation is an amazing thing right there's great new ideas come along constantly but not all of them are great so having a way to really define out what success looks like and how we should invest the limited amount of funding we've got for those longer term savings I think will be really helpful we have very limited funds is represent Wardlaw said and whenever we make investments like this in two. A new programs new ideas we're taking funds that could be used to pay claims and keep rates lower and moving them forward into ideas that not always are totally proven so while I think some of these recommendations certainly a warrant exploring an and and some investment maybe on down the road we are certainly skeptical of some of the. No holes savings projection was based on diabetes program and that from our perspective is no number that you can lock into we have we have plenty of studies on experience on that I understand the the prior program but not a word but the is working actually for the diabetes programs there's success rate on reversals is incredibly high so we haven't put anything in for you know the numbers that we do and they're strictly related to diabetes program so good to be others related Musco skeletal and on the virtual programs yes I'm sure there is but we haven't that's what we said we really need to look at that there there's new forms the clinics coming out right now that are trying to gain access in the rural areas which is you know working with you all providers in those areas and partnering so there's a lot of code actually opened up a lot of opportunity in a and because of that knowledge you to really take a leap so I think there's you know in the next few years the heir still see a lot of opportunity in that space but as far as I recommendations right now the diabetes thing. You know the company we've seen in place a few different ones are all generating returns notice and a lot of actually doing a guarantee is that they don't even take any bees if they don't give us your properties and get reduced so it's it's a exactly when when they look at the insulin medications before and after and if they don't achieve the reduction that they said they they don't take being sought but it's a great program so all I would say is that with the escalation diabetes I will put that one on the back burner thank you know it's pretty much across the country people are getting more with the understaffing new medications and they're actually you know having success in reversing the disease will not just. Okay not to anymore questions you receive. Thank you Mr chair so get into the release date the. Nuts and bolts of it now so let's talk about reserve and funding strategies. So when I look at the way we fund our model one of the key notes I took from the very first meeting was is that state of Arkansas is really low in contribution compared to other states on what we pay in even on the state employee's side so one thing that they told us as we go forward we need to up the state contribution on state employees and the teachers of program and then one thing we've we've really failed at in the past is having a reserve so every time we built up a reserve we they're made our plans richer are we've used our reserve to pay plan to pay claims and we've done that to the point that we basically have no reserves going forward I think we're okay today but the plan is those reserves play out in the year before the year twenty twenty three starts and I'd be calendar year not fiscal year so one thing we want to do and one thing they recommended here in the in the report is to establish a reserve and establish a target so with that target they've got a range of twelve to four to sixteen percent what we decided is is we want to make sure there's fourteen percent reserves claims paid all the time in that in that reserve count. We want to use those twelve and sixteen numbers as triggers so if you follow me through When that account goes down to twelve percent a trigger would go off that would initiate funding and I either a higher premium or higher contribution rate to achieve that fourteen percent a reserve. It in and also the opposite respect if the reserve hit sixteen percent or higher you would see a savings to the. To the employee R. A. savings to the state and so we get back to that fourteen percent And I will talk about the PSC funding model of. Later on Mister chair so I'll be glad to take any questions on the reserve funding. Not seeing questions feeling. So we've talked a lot about how we fund the plan the single report was absolutely correct the. When you compare Arkansas our surrounding states if you break down the cost of insurance between the employer and the employee the employer portion is is not nearly where it needs to be how do we manage that and how do we make sure that we're not late you know living off of our reserves were not. rushing in to fix a broken program every decade or so and when we fix it we don't a lot of money in it and then we walk away thinking that the problem solved instead what we need to do is develop a process where going forward this is. Managed properly we take some of the drama the the consternation the frustration out of the process and we make it a lot smoother. How we do that is is going to be something I think we have to work or I've I've. I like the idea of certainly having percentages or folks say we need a little more than fourteen percent but I think there's a lot of room to work there particularly if we Institute things like and then a PD which would reduce some of the risk the plan has going forward that's a Medicare advantage plan. The trigger process I think we also would be very helpful for the plan I want to talk a little more about how we actually institute that within the state budget. And I just generally this is the sort of thing that I'm hoping that we can develop a process so that we're looking and thinking strategically and long term and and thoughtfully so we can avoid these kinds of things in the future and I would add two of. What Mr believed it said Justin is one of the biggest pieces recommendation is that we're not. We don't we don't budget for next year going forward with the B. D. we have to budget over a multi year and budgeting over multi year what absolutely answer those questions were how it affects or or where it would affect the state budget and I think that's got to be taken into effect we try to do a biennium we may have to look at a four year budget when it comes to a DVD or even a six year budget when it comes the V. D. so that we can make sure that we're getting these target points and make sure that they're having the funds they need to invest in the programs that create savings down the road yeah I don't want surprises I understand. There any questions. Continue so with that I'll skip over and go into the funding changes when it comes to the public school fund plan when we look at that you're given a hundred sixty one dollars to the matrix funding matrix when it comes to public schools for eligible employees you're only getting back what employees actually elected to take that insurance so when you look in the state we talked about while ago the parity between the plans and what we were looking at fix and well this is the biggest piece of that pie because when you when you're given that seventy five million dollars per year that's what that equates to across the board we're getting back a hundred six million so people think we're getting more than we're putting in we're actually getting back less than what we're putting in to school districts are putting in that extra so what you find in it is in the I hate to call it this but the richer districts they're able to match to lower that premium cost of their teachers as a recruitment tool and we we do not want to affect that we want them to be able to keep doing that but we want to be able to somewhat equalized that across the state so what happens is every year there's always a different deficit deficit when it comes to public school through the Public School Fund over department of ed they put in an average of about fifty five just fifty seven million dollars a year to fill that deficit. What we've done in somebody's recommendations as we've taken that amount of money we divided that into them number of eligible employees and what we're coming up with a calendar of contribute to per eligible employee that will be moved over to what they call categorical funds so no longer be in the matrix and no longer go to the school district it will go straight into EVD to fund a program which should levelized those premium cost across the whole state and will allow those schools that give extra to still be able to give extra so that gets real confusing and I'll be happy to try to answer any questions anybody has but that's the conversation we're still a little ways away from having language in a bill we had a meeting yesterday with the Department of it in the day that gets a little tricky had a couple places but finding out what that number's going to be is is where we're at and department of ed had a proposal to raise the number in the matrix but in doing that we're not insuring that that all that money comes back to the B. D. and we have to have it in the B. D. so With that I guess I'll take any questions and Jake you're welcome to comment on that we invite a great I don't see in here though. Really of DO we did have a conversation yesterday and that's something we haven't really taken a position on I think it's it's getting get really the nitty gritty and adequacy and and and school funding formula which is very complicated and complex but it's at the end of the day of all the things we've talked about it here we've got to level as the funding and we've got to make sure that that that particular piece of the puzzle because it's always the problems always been on the teacher's side impart that is a state funding issue is making sure that that little piece is sufficient to meet the needs plan so this is very important. And and I will rest assure the committee that adequacy has been the front piece of this conversation all the way through and yesterday the the chairs of education were invited and they will be involved in all those conversations going forward but that is topic number one of any piece of this is to making sure that we do not. Not meet adequacy going through this are we do not mess up adequacy by pulling this out of fun but we've been assured that moving its categorical still meets the definition under adequacy so that that has been number one thought on everybody said going through. I don't see any questions St okay so that will move on to other. So one of the biggest pieces to this we found over the years has been legislation comes up every year that affects EVD insulin is the best example at the moment but bariatric surgery back eleven years ago there's different bills get introduced those bills get introduced without any scrutiny at all on the front end so when you look at our retirement plans when you look at the scope of practice when you look at any of those other places where bills actually affect state budget education we require those bills to have some type of scrutiny when it comes to an actuary or where it comes to a budget impact statement or anything and what we've came to hear an insulin kind of taught us the number one lesson is that we need to have some type II actuary on staff with the bureau that looks and everyone's Bills that can tell us what ongoing pitcher that bill's going to look like and how it affects EBD so there will be a joint rules change proposal that will set up some joint rules between the house and Senate that require these bills to go through that type of scrutiny so that the member has a lot of times members on knowing what that impact would be but just so that member this proposed bill in the legislature voting on that bill will know what that impact is going forward so that's one of the big pieces to me as being able to prevent some of those impacts one of the other parts of other is we have to create a new governing board structure Senator Hickey and I ran a bill that move the governing board or did away with the governing board and moved over to the board of finance one thing we promised in the well of the house and Senate is that we would go back to a representation board I don't know that we're. We're satisfied at the moment of where we need to be on a governing board we made it clear yesterday to II V. D. that that bill may not be available for read until January we were open avid in December but it's becoming to be a little hard target to hit then they once thought of that that piece is going to have to be addressed before the fiscal session so with that I'd be happy to take any questions. This is a reminder and and Richmond Wardlaw cover it in the members that come up with with bills and some good sounding ideas and it's happened in the past it doesn't always make the wheels come off but it loosens Lugnuts and you have enough people do that and we brought back a situation so I up wrongly urge that we'd be able to score that are to. Look at the impact of it Senator Irvin you're recognized Hey thank you I agree with this recommendation as well I would just ask if it's a house and Senate Joint rule that would cover so it so as to make sure it would cover the legislation no matter which committee and ended up in because you you may see these bills go through education through insurance and commerce or also three public health most likely so making sure that it's a a rule that will cover the legislation verses the specific committee I think it's important would you see a lot of a go through enters commerce yes of one thing I didn't say when I was talking about the board of directors and it's unrelated to send urban's question but I do want to say that is Jake's been very open with us on the board of directors and done a very good job of sending us an outline of how he would like to see some subcommittee set up in different things to make sure everyone the problems we saw the boards they didn't act so when when things got bad money got tight they didn't go in an act they didn't able they can act on a rate increase they didn't act on things that could've curve some of those problems and what we want to see in this new board of directors is we want to see a board actually works we'll see a board that will go in an act before we end up into a two hundred million dollar deficit or before we end up taking some major benefit like pharmacy away from our retirees away from our retirees and one thing I do want to say is Jake you can always work with as well as you should but. He has been very open on the board of directors and I do want to give them some credit where credit is due. Thank you will let you divisions. I thank you and the other that I think that the child's world wrestling with is how do we create a board that can make the tough decisions when you are likely to make a lot of folks upset but you have to make that decision to keep the plan floating ahead and keep avoiding and and avoid the problems that we had recently had we had we structure that plan to do that I will say that if we do the other parts right the other parts of all the stuff we've been talking about that decision making process should be a lot easier so I think it all has to work together to to come to come where we want to go. Okay not seeing any questions. So Mr with that I will conclude with saying that. We think it's safe to say that conservatively if we adopt these recommendations in their entirety and and guitarist please correct and everything right we should see a about a seventy million dollar savings per year This could be huge to our system and if we fix our funding problems with the school with the PSC program and we're able to come up with a. A very robust and budgeted funding issue and be able to apply the medical CPI to those funding formulas we should be able to see a program that could sustain itself for a long time to come we've said here I've been in legislature long enough to say I've said here once before and thought we had it fixed I want to leave here knowing that we have it fixed and with that I'd be happy to take any questions and I appreciate adoption of the final report. The going to Senator Bledsoe. I'm sorry Senator Hickey we use and you said this representative will Wardlaw during your conversation just clarification your motion. We're we're not looking at the time to combine a ASEAN PSE funds together because that is actually part of this report on page fifty one. So. Thank you. Senator Hammer you're recognized thank you Mr I realize when we hire firms that they have some proprietary information that you know can't be shared as far as our source and I mean I think what's B. forces is a good step in the right direction my my question is with regards to verification of the estimates that are given in their we are setting up pretty high expectation what have we done to verify that the recommendation is being given to us by Siegel if we can't get access to maybe other states other places where they've had success and proven success there were actually gonna be able to meet those numbers or not sit here two three years down the road sorely disappointed. Well I think the key and that is is the making sure the recommendations are adopted in their entirety of. I don't I don't think that same sentiment exist over DVD but one of the things can will regenerate behind me from Siegel is is that if we don't adopt these. In their entirety meaning that we pursue the The New are speak process for pharmacy we pursue a RFP process with a Medicare advantage plan provider and we make sure to implement some type of investment for long term diabetes management program bariatric surgery program then we're not going to see the savings that are recommended here in the report. And and to add on to that I'll tell you there good ideas I think that they're certainly worth exploring but as far as the fiscal impact or the cost recommendations they are not numbers that I anticipate we will be budgeting around so we will be structure in our funding requests going forward well we certainly intend to do everything that the legislature requires us to do or that we think is in the best interest the plan as far as funding goes we're going to ask for the amount of money that we think we need. And you know what that is are you a little more time with well it's to some extent depend upon the actions taken by the General Assembly in response to this report but for example if we put out an RFP for Medicare advantage plan we will certainly hope that the fiscal impact that Segal projects is not only correct but might even be conservative but we aren't necessarily gonna budget around that. Okay thank you. Remember not so anymore questions It would take a motion to adopt the report which would exclude combining the PSE and I. S. E. that was in the report it also would not include legislation which will come later. I have a motion the second all in favor aye. Post. It is adopted. Thank you for your presentation very good. Okay are. Last thing that we have. Today is the on the discussion state budget revenue forecast consultant services they are the. In the best deal Lars there's gonna president and at least and it will come up. Please recognize yourself and you're recognized president thank you Mr chair Jill there be of Legislative Research at least in it pure of Legislative Research. And Mister chair at I'm not sure what exactly how you want us to proceed it was my understanding and that you know we're going to discuss whether or not to move forward today with the proposals you had received. Senator Hickey you're recognized. I will I believe at this time that we need to Just continue to hold this to let us continue looking to see if we want to move for. Good any other questions from committee. If not the rep Richmond Dotson you're recognized. Thank you Mr I I'm just. When we say continue to hold it one see what we're holding it for for how long what are we thinking in this. This is got to be and put in place by January so. We're getting closer every day sure ma'am Mr hi yes Sir of course with everything that transpired we got such varying Input back from these. There's been discussions with the core center samples here but the representative Jett we're having those discussions With revenue tax members and chairs just to see if we need to how we need to move forward with this it could be possibly that we decide that we're not going to. there may be a recommendation that we don't take any of these before it's over we're just at this point we're we're trying to move slowly to be prudent in our decisions. Just. Just as a. I mean we've got on our feet out here are we going to put it back out for another request for proposal or are we looking at Having these commended president and trying to select one at some point. like the schedules respectfully center dot I mean representative Dotson I don't think that that decisions of animating or either way at this time that's why we need just to needs more time to make that decision which I would hope that I understand you ask the time I would hope that we would be there by next month and how we want to want to go forward all right hold until next month thank you I would hope so yes Sir. Okay anymore questions on this. If not without the objection with this whole that until next month and thank you all for being here presenting seeing no other. Business for the committee we are Jr. Please give me we are recessed. At the call of the chair.