ALC-Executive Subcommittee

If the lobbyist out here. So with that we'll start off the day with Dr Sam Bledsoe to give us a Oversight on bariatric surgery. Touch Bledsoe if you would introduce yourself for the committee and you're recognized start. But. When it turns red all right thank you much good morning my name is Dr Sam Bledsoe on the physician and bariatric surgeon at the Barre asking metabolic institute operate primarily out of encore Medical Center which is the new hospital that was just opened up on I. thirty Brian it's an honor to be here first I want to thank senator rice for the invitation to speak I'd also like to thank representative Wardlow for allowing me to be here I also want to thank us senator Hammer he's not just my personal Senator but he's also the senator for encore Medical Center and I appreciate his help today I'm gonna jump right in here because I've got about ten minutes and so I just wanted to come back to the single presentation and and say they did a great job with their presentation and I agree with their recommendations and my hope is not to interject myself into the discussion more than just around out of their presentation and add a few more details to what was already said to be a resource if necessary. So I thought a good place to start would be Justin defining obesity obesity is a disease of the disease of excess fat storage and its associated with other medical problems as well if you start with the fact that it's a disease there's a lot of things that just naturally flow from what comes with policy decisions for instance how tightly to control access to potential treatments and if it's a disease you approach it differently than if it's a problem with self discipline there are several reasons as to why person struggles with their weight in the disease of obesity obviously there's a behavioral component to it for some people it may be a large component for other people it may be a relatively small component because there's other things to consider with people who are obese us something that we know sort of intuitively but don't necessarily talk about a lot is the genetic component it's the old nature versus nurture debate a lot of studies have been done to try to discern how much your genetics plays a role versus how much your environment plays a role in your weight and overwhelmingly what they found is that genetics accounts for a majority of our body habitus for instance there are studies of identical twins who been separated at birth overwhelmingly they found they are more like their genetic parents instead of their adoptive parents the same thing happened when they look at adoptive studies are the kids more like their adoptive parents or more like the biological parents overwhelmingly they're more like their biological parents so genetics plays a significant role in our struggle with obesity there's also environmental causes as well according to a study in the New England journal of medicine a person's chance of becoming obese increases by fifty seven percent of a close friend becomes obese during the same time period if the adult sibling becomes obese the chances go up by forty percent in a spouse becomes obese the chances go by thirty seven percent the lancet also did an interesting study aren't showing a strong association between high densities of GM and gems in a particular area and also how much lower their BMI was of the page of the people who were in that same area and so the obvious conclusion is that environment exerts a real influence on you when your choices are the pressures exerted on your different if you sell donuts verses if you sell running shoes. And when you zoom out you look at obesity from a national level what you see is a disease that affects the entire country but particularly the southern states in fact this area has been WBC belt Arkansas has a thirty seven point four percent obesity rate ranking us in the top five consistently in currently third in the country about obesity isn't just a cosmetic problem here's a CDC graphic for the death rates for heart disease heart disease is epidemic in the state of Arkansas heart disease is the number one killer in the state in our Kansans rank fifth in the country with cardiovascular disease death rates you'll notice of this cardiovascular disease belt looks an awful lot like the obesity bill then of course there's diabetes diagnosis for diabetes is growing in the state over three hundred sixty thousand people in Arkansas have diabetes that's fourteen point eight percent of the population in addition almost eight hundred thousand our Kansans have pre diabetes currently we are fifth in the nation when it comes to diagnosis of diabetes you'll notice the diabetes belt looks similar to the cardiovascular disease belt which looks similar to the obesity bell it's just all the same bill. And not only diabetes and cardiovascular disease but obesity is a risk factor for many other diseases in fact there's a list of thirty to forty diseases that occur at a higher rate in the obese population when compared to the normal weight population and in order to address many of these diseases weight loss is required but it has to be an amount that is clinically relevant. The single testimony hit this on the head they said quote once your BMI's at a certain level any other weight loss program won't make a clinically significant impact to reverse disease and this is borne out of the literature over and over again for instance this manuscript came out of Great Britain where they looked at millions of health records look at who is obese and who is still obese ten years later and what they found was very discouraging they said quote in morbidly obese patients the annual probability of achieving normal weight was one and one thousand two hundred ninety for men and one and six hundred seventy seven for women they also said that for morbidly obese patients the annual probability of achieving a five percent reduction in body weight was one eight for men and one in seven for women. So I would echo Siegel's testimony that weight loss is very difficult in the patient population the bariatric surgery is looking to assist and clinically relevant weight loss is very important for the patient's health but these improvements in patient health can also result in cost savings to the system and this is important as well. I was very pleased to hear the Siegel of from Siegel that are very after coverage is in fact saving the state money Segal testified Arkansas Arkansas begins to see a return on investment in year one and has a fully paid for procedure by your for they even took the very thorough step of checking their numbers within the system and then verifying it with Blue Cross so those are checked and cross check numbers but I'm not terribly surprised either because that dovetails with what we see in the literature in fact Siegel reference this very article in stated in one of their handouts that quote even ignoring potential quality of life and length of life benefits as well as disability and work loss third party payers can rely on bariatric surgery paying for itself through decreased comorbidities within two to four years in quote your plan recoup sits costs without even factoring in all the savings you know one of the big areas of savings for your plan was in the area of diabetes and Siegel pointed this out very specifically according to them in your current plan they're just over thirteen thousand type two diabetics costing nearly a hundred and thirty seven million dollars per year and bariatric surgery save your plan thirty seven percent per member per month for those members opting for surgery a big area of savings is in the decrease medication costs and this is true in your plan in this is also true nationally one of the National City showed a seventy seven percent decrease in diabetic and blood pressure medications after bariatric surgery and one of the reasons for this cost savings and diabetes that many people don't know is this and that's the effect on diabetics is immediate after the surgery that's really important that's why you see the savings in the first year they go into the operating room diabetic and they leave the operating room not diabetic they have a lost a pound Dave this effect on on diabetes and and their blood sugar is independent of that weight loss in fact after surgery I stop all the diabetic medications immediately and we send them home normally on no medications and sometimes with a few of their medication certainly decreased numbers of medications and that happens the majority of the time. The last thing that I want to highlight as it relates to cost savings is is this quote from C. one they said that's up from the side the best costs discount is the service that didn't have to happen that's brilliant meaning that if you prevent something from occurring you saved a hundred percent the problem is that it's so hard to quantify the heart attack that never happened and bariatric surgery has a long proven track record of exactly this preventing things before they happen. I saw this lady BT has a particular interest in addressing the care and the costs in these for diseases which are big cost drivers for the system Allen with briefly hitting these four areas and how bariatric surgery can prevent or postpone diseases in each area first in field of diabetes there are people that are known to be a high risk for developing diabetes and bariatric surgery reduces the diabetes incidence by seventy eight percent complications from diabetes can also be prevented there are studies that show a decreased risk of developing eye problems which lead to blindness chronic kidney disease leading dialysis vascular disease leading the leg amputations the greatest study just came out of lancet a few months ago showing that a diabetic that has bariatric surgery adds an average of nine point three years on to their life that's an unbelievably positive result so specially concerning diabetics we aren't just treating disease although we are doing that we are adding more years and healthier years on to their life in fact the response of diabetes the bariatric surgery so great that the American diabetes association recommends bariatric surgery for diabetics with a BMI of over forty. So there also convincing studies on the cardiovascular field in this is because modifiable risk factors are being addressed the diabetes high blood pressure the sleep apnea high cholesterol and all the others for instance there's a forty four percent reduction in the risk of having a heart attack after Dr up for diabetics after bariatric surgery Klatt base the strokes are decreased by sixty nine percent after bariatric surgery new onset atrial fibrillation was decreased by twenty nine percent in the group that had bariatric surgery according to one main strip even heart failure response the bariatric surgery heart failure exacerbations which is a major cause of hospitalizations and costs to the system they were found to be reduced by over forty percent after bariatric surgery has been shown to cancer incidence is decreased by twenty four percent and there is a forty six percent decrease cancer mortality in bariatric surgery patients I'll be giving a talk to the VA system on Friday on liver disease and bariatric surgery and one cancer in particular that pops into my mind is liver cancer and what they found is that in bariatric surgery there's an eighty nine percent lower prevalence of liver cancer in patients who had bariatric surgery and musculoskeletal world we receive a lot of referrals from orthopedist press to perform weight loss surgery in order to qualify the morbidly obese patients they don't like to operate on people with a BMI of over forty because where's the out and it also increases the risk of complications and so patient has a fresh knee replacement may only get one the as opposed to having to have to later on down the road if they've had bariatric surgery and they lose that weight there are a lot of studies that show decreased pain scores particularly in the weight bearing joints of the back hips the knees after bariatric surgery so there's that suggestion that weight loss surgery may allow for the postponement of joint replacement surgery. Of course we can go on and on but in order to be respectful of our time constraints I'll close by saying this your current system only allows for a few hundred people per year and people are so desperate to have bariatric surgery but the night before enrollment people stay up until midnight so that they can log into the system and reserve a spot if they wait very long even a few hours to a day they may find that that door has shut may have to wait until next year to re apply for the system this the need and demand for this life saving procedure is great in the state of Arkansas and if it's okay with the chairman I'd be happy to take any questions. I do have a question off of your last remarks there we were told by single we had never hit our caps in the surgery so how come they're having to wait to next year are is it so many people signed up that we could head are capped yes Sir ollowing through yes thank you for the the questions a representative that's that's correct there's only certain number of patients that are allowed and so it so it's not just the money it's the number of patients And so what happens is they sign up and then once you hit that number of patients it's turned off. Thank you. Senator Hickey. The. Me at the wrong. Thank you thank you just in regards to that I had the same question. In the legislation because we looked at that session I thought it was just a dollar number were were the number of patients coming in is that under some rule because I don't remember that being in the actual statute I believe it is in the rule and I believe it's four hundred patients per year if I'm not mistaken and that the man is very very high in fact when I come and talk to the patients when I go into the room and they say they're staying up until midnight and they'll just sit there and click the button until they're allowed to at the sign up so I believe it's the of the number of patients is where it's coming from it's not the dollar amount okay. Mr out they will research it a little bit and see what's transpiring thank you I believe that's correct. Representive right you're recognized you should thank you thank you Mr god bless so could you go over just a tad of hell this operation takes place in what portion of the body that it cover Sir yes Sir thank you for the question I have really appreciated so there's two major procedures that are done around the country and that's the gastric bypass and basically we just take a little piece of stomach often make a pouch and then we re route the intestine back up to that pouch so when you eat it goes into your esophagus into the pouch and then into the intestine which goes around the stomach that's what's called the gastric bypass your bypassing the stomach of the other procedure that we do a lot of impact it's probably eighty to ninety percent of what I do it's the sleeve gastrectomy that's where we actually cut out a part of the stomach the stomach is a big bag like organ and we just turned into into a banana shaped organ so we just cut out a part of the stomach and there's nothing left behind there's no form bodies or anything it's just a sleeve of somebody that we leave behind and assist the reshaping that's what we call the sleeve because that's the that's the shape of the some of them were done. Senator Hammer. Thank you Mr on that on that three hundred is it I think it's the same language three million per population you know to the to the state employees and then to the public school teachers but Besser member on that research somebody has it maybe three hundred but when physician sit down they have to go through criteria first in order to be eligible to get the surgery and if they're not willing to you know what lifestyle changes and all those other things then then there is not a candidate for the surgery which may account for why the low numbers does that sound correct that that may be correct that's that's kind of a outside of my area copies later that is my understanding is that it's more capped based on the patient's or AFP and practicality maybe I should say that it is a big cat by the patients and not by the number and it may be very well what you're saying Senator right now I think once the door closes it's a year before anybody can re enter even if a hundred of those three hundred get disqualified because they don't want to the required lifestyle changes to choose physicians required before they get to surgery and all that kind of stuff. Here's here's the last question on ask Is. Your your physician that does this so you council people come and want to get this kind of surgery based on your history of dealing with patients what do you see that our current approach to providing health insurance is doing to actively help or not doing to help prevent obesity. Very good questions Senator. You know I I always a physician so I was like to treat diseases and so I would encourage as as much ability to treat diseases as we can and and your particular plan you've got a lot of diabetics in the system and I would think that would be a real home run for the system itself is to be able to open it up to the diabetics in particular as much as you possibly can there's a few other diseases I think of that are also kind of home runs as well sleep apnea non alcoholic fatty liver disease is another one I think also making sure that it's open for people who need to lose weight in order to have another another procedure for instance of the orthopedic procedures that I mentioned there are people who are having bone on bone arthritis in their knees in their hips I've had people come in wheelchairs and they can't they can't walk because of their joint problems and they can have their joint replacement surgery until they lose weight and so that would be another area where I think that we can promote the health of our Kansans by allowing those people in particular kind of to move to the front of the line so how big of a battle you have with the insurance companies fighting you as far as not wanting to pay for the bariatric surgery because it's just the the battle between physician and insurance company thank you Mr. But thank you for the question again as far as for Arkansas state insurance I don't think it's very difficult for us but there are other insurance companies that are very difficult in their the requirements are are very challenging and kind of onerous and they almost seem to be designed to kind of prevent access to the benefits that they've been paying for that's not so much with with art with our program here I do get the feeling that we're we're trying to promote health in the state of Arkansas for that before of our population here some insurance companies in fact don't even cover it so that's obviously a impediment so that pay cash for it fifty percent as I think the last number I saw maybe lower maybe a bit higher but there's a a large a large percentage of our cans of don't even have access to bariatric surgery because of their insurance their insurance does not offer it so they either have to pay for cash for out of pocket or they had there's a lot of people are going to a foreign countries in order to have the procedure done as well and so there there is an opportunity there in my opinion. Thank you senator. Representative berry you're recognized thank you German Bledsoe what what is the of the preferred method or the most effective method of the two procedures that you had mentioned in the cost difference between the two. Thank you for the question so the preferred method right now would be the sleeve gastrectomy and that's probably eighty percent of what's going on in the country right now that certainly eighty percent of my practice and and so that is probably the preferred for most people the cost on that one is lower than that for the gastric bypass and Eighty three percent cure rate for diabetes if you have a gastric bypass the other people that so I've been the heavily towards gastric bypass or those that have severe reflux it's almost a hundred percent curative for severe reflux and so for the people who have severe reflux and that are diabetic at least get them to think about the a gastric bypass a little bit more of the sleeve is also very good for diabetes it has a sixty six percent cure rate across the board and so it's also very good procedure for diabetes that is mostly good for reflux although there are times when your reflux can get worse with the sleeve which is why I kind of been them towards the by pass and cost wise again the sleeves a little bit is a little bit cheaper than the bypass of the bypass is a little bit more extensive it's a little bit more aggressive of the surgery and so the complication rates are just a little bit higher for the bypass when compared to the sleeve as well okay thank you thank you Mr yes thank you. Senator Chesterfield you're recognized. Thank you so much Mister during the morning docked Bledsoe morning I've known several folks have gotten this surgery. Some of them have been very successful but there are also those that went right back to doing what they were doing and regain the weight. What is the what is. The percentage of those who. For a good of a worse went back to doing exactly what they were doing before and put themselves in jeopardy after the surgery and gained the weight back thanks for the question is a very very common question you know we do about two hundred fifty thousand of these year across the country and when you do a lot of something if there is a percentage five percent rate of whatever that ends up being a whole lot of people and so that so I would just say first of all don't don't judge the whole based on the few right and so one study that they've they've done show that after fifteen years about ninety percent of the weight loss was maintained that was one study that was done that's over the long term other studies show us similar results and all of them I would add are vastly superior to medical weight loss medical weight loss is is very depressing because they usually use of lose about five maybe ten percent of their body weight and usually comes back after a year in fact when you read the medical weight loss literature it's very depressing it's very difficult to lose weight on your own and keep that weight off and then I would also add the same thing as a as far as the resolution of the diabetes some states have have a show that a maintenance of diabetes resolution you know ten twelve years out and so and again nothing in the medical literature comes close to anything when it comes to diabetics so there is a percentage of people to gain the weight back I usually tell people five ten percent for the by pass ten twenty percent for the sleeve and certainly one of the things we try to do in our program as we try to encourage people to come back if they're struggling and there's by the way does all sorts of reasons why people struggle I might add I had a a gentleman whose wife passed away and he got into a depression and and he went back to his old friend food any game that you gain some of his weight back fortunately he came back at a time or we could do something to help them out because we just psychologists to work with this exercise physiologist the work with us and we're able to intervene on some of these things are not all that is related to just you know lacking in discipline right to some of it is is the real things are happening to real people in life hitting you between the eyes and that's what we're here for to to support the people after the procedure because I think that's also very very important as well that's a great way to encourage that because. As I think one of the main problems that I saw and in a couple of my friends with the surgery some bad things happen in their lives they've gone down a size seven. a figure to die for and then you go back up to twenty four so I'm just trying to figure out how we can make sure that that happens is it just your practice that provides the support so that individuals can keep it off or is it a part of this whole process that we're talking about that would allow individuals to have. The counseling that they need the support that they need because bariatric surgery or the other means nothing if an individual goes back to doing exactly what they were doing before right thank you for the question again and I would like to think the other per other practices are doing the same now we're a larger practice so we can offer more services to the patients and so everybody gets dietary counseling exercise counseling and psychological evaluation before they have surgery that's a hundred percent and so nobody goes it goes through without those three things and we also encourage them very strongly to be following up with this in fact one of the things that they found in the literature is that follow up correlates well with weight loss and pro probably part of that is is is just the accountability that takes place within and so we do encourage people to come back and that's for life and I tell them it's like a marriage is still death do us part now not everybody follows that and and so in that that makes me very sad for them because we did go to sue some trouble into some expense in order to have that happen I think it's a smaller percentage than what than what we think it is because again and we're doing a quarter million of anything and there's a five percent rate or ten percent rate is ten percent rate of weight regain its twenty five thousand people per year that are going back and we're forgetting about the other you know two hundred twenty five thousand that are maintaining that are doing very very well afterwards and so that's something else that we need to consider by the way ninety five percent of people say they have a higher quality of life after the surgery which is also important as well but I do think I thank you for the question because that is very very important have that and I would like to think that all of my colleagues offer the follow up that that's needed as well because that is important thank you. Representative was. Thank you Mr chairman Dr under your presentations great and I have a one question what about those of us who don't have a way to challenge the our type two diabetic the this is secretary surgery available for those or is it just limited to those who have a challenge with the way. That that's a fantastic question in fact I will personally go down to be my thirty okay and so now insurance won't even cover it unless you're be mice thirty five or greater now all the literature says they can go down to be in my thirty you can have one of the procedures I would recommend a sleeve to that particular person and the results are fantastic in fact that person will lose weight down their ideal body weight most the time they their diabetes goes away resolves at least improves and and so but they do have to qualify if your BMI is normally do weight loss procedure on you then I mean that's not a good situation but if you're be my sign off then you certainly qualify no insurance company will pay for their and that so that that is the catch but that is something that that we research greatly and it's all in the literature going down to be my thirty and that in diabetics because if there is a very positive return for people like that thank you for the question. If I may did you say that it's a hundred percent cure rate on on the the ones who are not white challenged no Sir I I if I said that that was a mistake it's the numbers are still very similar and it depends a lot on on how bad your diabetes is okay so let me give an example so in the literature what we say is that if your diabetes has been around for eight to ten years or longer than you're gonna be harder to cure if it's been around for less than eight to ten years you'll be able to easier if you're on insulin you're harder to cure if you're not on insulin then that that it's easier to cure and so what I would I love is seeing the person come in who was just diagnosed six months ago who's on met foreman okay just one little oral medication right because that person almost a hundred percent almost a hundred percent the person that comes in who's been a diabetic for twenty five years and has an insulin pump on their hip that person is going to be a challenge and and it's harder to cure them now you may get among lower doses of insulin you may have their that diabetes may be less brittle you they may have a drop in hemoglobin A. one C. O. or something along those lines maybe get off the insulin but it's harder to cure those people the longer that you wait the more severe their diseases which is why you want to get early versus late. And that's by the way why the American diabetes association recommends to be much over forty just go straight to surgery all the other stuff just go straight to surgery. Thank you doctor thank you regulations thank you for your efforts thank you Mr chairman. Representative Crawford you're recognized thank you I'm over here hi heather two questions How much does it cost to have the surgery. Both of those the different ones in my other question is I had a family member who went out of country. To get this done how do doctors State saw I'd look at that when they run into issues and they have to be seen here what those are those are great questions first question was cost and I can I'm every insurance company is a little bit different but so I can say the cost for the sleeve is going to be around fifteen twenty thousand the gastric bypass probably twenty twenty five but I'm not sure what your program reimburses us specifically but that's that I get you in the ballpark there as far as people going out of the country you know I don't have a problem per se if somebody does that my suggestion would be to if if you don't want to come see me go see one of one of my competitors I don't really consider anybody competitor all here trying to help people out and help their health because if there is a problem that pops up we can take care of it I'm I have had to take care many people have gone out of the country in the end up in our emergency room and we're happy to take care of anybody who has a health problem will certainly save their life or do anything necessary in order to help them out but you know they don't have the follow up that they should they don't have the pre operative education that they should and I think that when you look at the results the results are going to be quite as good in fact some people have suggested that it that there's maybe an ethical thing there because the follow up is so important in this procedure that if if you just do a procedure with no intention at all follow up there's a little bit of a problem there and so my suggestion would be to find somebody within the states that intends on following up with you or have some kind of a plan for follow up after the surgery we're happy to help anybody out who has a significant health problem following yes ma'am. do you know. The price difference between going out of the country and here do you have any idea yes ma'am I do thank you for the question it's probably in the six to ten thousand dollar range if you go out of the country okay so it's is significantly different but not so significantly six significantly that my thought would be if you can get the ten grand to go down down some other country just wait maybe another six months year year and a half and then you can have it with the person down the road from you who can in turn take care of you and give you the proper counseling before give you the proper support before have the procedure and then if there's any issues that pop up which they will as small percentage of the time that you have somebody there who can help you who actually knows what was done and and knows your history and it's a much better situation in my opinion thank you thank you. A recognized co chair rice for statement. Thank you Dr Bledsoe for presenting excellent job I let me say this the is is someone who probably had a little bit of a skeptical mind on bariatric at one point and I'm glad brought up that a country Stephania commented on this in a meeting either in law relative in a different state that did that scare Sullivan death and thankfully made a drastic change in a young person's life who is now happen to be in education was at that time but also in the of the the person that she knew that was over a person or a more items available that did not have the follow up and eventually the past that was wildly from. Possibly a box surgery waters those are things that I've become a little more interested in the health aspects you've covered that very well. Got all my answers promotion this morning to thank you for being here thank you president. Thank you senator. Thank you Dr Bledsoe very informative. With that we will call of the White Davis with the B. R. X.. If you would Mr Davis you can introduce yourself for the record and you're recognized start your presentation the server. Good morning I'm doctor Dwight Davis and I'm the director of the evidence based prescription drug program at the UAMS college of pharmacy and last week the testimony that was provided by Siegel there was mention that EBR acts was involved in the management of the prescription drug program four of the employee benefits division and there were some questions that surfaced about who is the B. R. acts what is the B. R. X. do how they conduct their business and and so the purpose my presentation is to provide that overview of what A. B. R. acts or who we are what we do while we're in place and how we how we manage the plan so I'm gonna walk through some slides and then at the end I'll I'll do my best to address any questions that you may have first of all of the evidence based prescription drug program is a program within the UAMS college of pharmacy we were formed in two thousand four primarily to help construct and manage the preferred drug list or the drug formulary for the Arkansas Medicaid program we worked all in that contract lasted through twenty sixteen but round two thousand four we also entered into a consulting contract with the employee benefits division and that those responsibilities have grown over the years significantly and of in the last few years AS you the Arkansas state police in the Arkansas Municipal League have adopted the EBT formula airy and the in the entire Approach that that EVD employees the University of Arkansas System we we manage that plan but they have a different governance structures so same philosophy we guide them on which drugs to cover in their develop development the formular we also manage the Arkansas Public employee claims divisions workers comp program The one thing that you know the one to point out that Is that that that list of clients to us represents an important collaborative partnership this work for a really long period of time and so anyway we hope that brings value to the state in terms of the partnership we'll just discuss that or at least provide some information about how it was established how it came to be how it operates and you know what it means up until twenty sixteen A. B. deal EVD employed one of the big three PBMs actually was Optum and thank you a provided complete a PBM services for the plan and we experienced of the plan and and everyone all the stakeholders experience significant issues with Optum in that range from lack of transparency on how rebates were were being reported they were paying about three million dollars a year with no documentation so we could really make good drug coverage decisions as a result there was reluctance on implementing the plan design that the board had actually agreed to and and for to be enforced and also we received by on a regular basis you know issues from community pharmacies about being paid below cost and and all of the the reimbursement issues and and all of those things that we experienced first hand. Eventually wound up in some of the most aggressive PBM legislation that this General Assembly has has passed over the last few years so we were experiencing that the other thing is that when the A. issue plan the Arkansas Municipal League plan and our own plan universe of Arkansas System. moved for a roll wit what we had one of the you know you A. systems had CVS Caremark back up until two thousand eight a issue and Municipal League used Optum same experience so of the inflexibility and so in twenty sixteen the plan we we partner with them and and took or of the opportunity to basically dismantle the traditional PBM model the war the one that's created you know a lot of the issues that you that you all had to deal with and so we did that to shift to the control in the accountability back to the to this end and you know just of the ability to control costs and oversight back to the plan side as opposed to the PBM being in control that there's an art P. released many impact who's a PPL be it on the R. F. P. and we only were looking for claims processing and pharmacy network those two services those are things that PBMs do really well they have these large networks you can go to any state get a prescription filled their visa master card transaction of claims processing transaction works very well they're good at that so that's what we were looking for in terms of the the services that EVR ex provides and so what we did is we took the entire suite of services that are traditional pharmacy benefit would include and we split him up and so. Impacted claims processing in the pharmacy network we through our clinical faculty to all of the drug reviews we we review all the new and existing drugs we make recommendations to HB days drug utilization and evaluation committee and their board in those that board decides what the benefit needs to be we offer and enforce the drugs or the the plans drug coverage policies we establish and maintain the drug formulary and after that after the benefit is set in the the the formula airy the entire benefit is because you know the clinical betting has been done on what drugs that that the plan needs to cover then the rebate of strategy follows along that so it matches the clinical set up of the formula Terry not the other way around and so we do the rebate contracting and we started that in twenty sixteen. And so we also work with Matt impact to ensure that the plans benefit design is implemented or are programmed into their adjudication system to ensure the claims process accurately in the plan operates as it as it's designed. just a little bit about the philosophy because anyone explain this because this is very different than what you would normally see in a traditional PBM approach. The A few of the of the I guess guiding principle so to speak that we have that that guides our philosophy it all starts with an evidence based review of drugs and that's key because the FDA approved drugs in the FDA has a fairly low bar on how they approved drugs so we see drugs all the time being approved to be marketed that really don't do a lot their high cost but they have low value in so it's with the cost of drugs these days and limited financial resources of the plan we feel at that vetting process is critical on the front end. And so. How in that should be the first step in that piece that component of everything we do I believe is the most significant cost savings feature that we have in because it results in the year when we go to the to the do you see any BT's board to recommend drug coverage about seventy percent of the drugs that we'll evaluate over a year will be recommended for exclusion we continually look at new evidence as it's made available. And so in occasionally when news new evidence services we we will add drugs to coverage we may have type criteria on the usage to ensure that the correct patients ins now correct conditions are being covered. But that's an ongoing process we also have a closed formulary so that means that no drugs are covered and last the plan consciously decides to add those to coverage. We don't want to cover drugs that's not going through the clinical vetting process. And then for those drugs that we do cover that we have prior authorization criteria on. We we apply peer reviewed published data to drive those coverage criteria in that Neil that's referencing and Senator Bledsoe as ACT ninety seven this year that that specifically states peer reviewed published evidence as a basis because this is where the rubber meets the road we have these coverage policies we have physicians that need these drugs they call our call center speak with a pharmacist or a physician and and exchange information and that's where a lot of these of these these coverage decisions are made we also advocate strong generic coverage policies as Siegel stated EVD has a ninety two percent generic right so that means ninety two percent of every prescription filled is a generic drug rebates are not paid on generic drugs and so that's what they're what they're lower in cost and patients we on when generics are used for the most part in the plan certainly wins. With all that said. We believe that our rebate strategy should be driven by the evidence based formulary so we establish the clinical foundation first and then the rebate strategy follows along behind that rather down we find drugs that that generate large rebates and go at it to coverage because with our review process as I mentioned before seventy percent of the drugs recommended for exclusion a lot of those drugs. Would would earn a rebate and so we should like this statement doctor doctor Bledsoe and made or I think it might be offered to Siegel slide that the the most cost is a most effective cost savings is the service that didn't occur we don't believe in chasing or opening up the the the the highway so to speak to pay for low value drugs in high cost drugs just to chase a rebate on the back in a couple of the other features that we have. is that reference based pricing that's been mentioned in in Segal's presentation that also incentivizes generic drug use and I think that adds to the hygienist rate that eighty days produced back when we implemented about twelve categories in twenty twelve the estimated annual savings to E. D. was about twenty million dollars will be Reference based pricing protects the plant from drug inflation and it also protects the plan from coupon usage because those drug coupons or intended to get the benefit design of the planned so you've got a four five hundred dollar drug patient walks in the co pays eighty dollars and the the patient or the plan picks up the balance but yet the coupons used in the patient walks out with a five hundred dollar drug. With no skin in the game and so coupons can be problematic reference based pricing for Texas from the effects of that. The other thing is that we have speaking of specialty drug coupons and and and a single mention this we have a program law the drug manufacturers that make the specialty drugs the drugs that are account for about one percent of our total claims in about fifty percent of our dollars many of those specialty drugs provide patient assistance and that that amounts to thousands of dollars per month a lot of these cases in so one numbered that that hasn't been included is that EVD is collecting up front fifteen million dollars a year off the top of many of the specialty drugs through the patient assistance program so we're taking that and applying that to the to the total price in but the other thing that we're doing is passing that savings along to the patient. There's a sense there's a lot of money involved there's been a lot of concern nationwide about how these programs work and so there was legislation introduced this this year representative Lundstrum and the plans we're going to have to to apply all that money back to a patient out of pocket deductibles and so forth and when she learned about how we operated the the program and provided the savings not only to the plan but to the patient we were written out of that but we were specifically reference so every quarter starting first quarter twenty twenty two I have to provide a report to some legislative subcommittee but the that the Arkansas department of insurance that documents how these how these transactions and how the funds are actually handled in so. Of so basically this philosophy is anchored in up front bedding of the drugs from a clinical perspective of rather than chasing the financial or the the rebates and spending more money just to get just to get rebates. Our next next slide is is you know we've looked at the the the recommendations and although many of the recommendations Siegel provided have been spot on and then you'll beneficial to will be beneficial to to eat a relative to the pharmacy program though The the entire or just it from an overall perspective of it the recommendations promote the introduction to you know to larger PBMs you have the statement was made the larger the PBM larger the rebate and stated before. Chasing rebates or doesn't line up with with the philosophy and we don't believe that that saves the state ultimately money impact I'll show you will get to that just a second of the projected or projection of significant rebate revenue in the absence of a valuation of our claims experience drug coverage policies and in the consideration of those seventy percent of the drugs that we excluded on the front end that we never really saw that that was being considered and and there were two questions last week that were that were just spot on representative Dotson ask a question last week the said you know let me get this straight so we can pay for the same drugs. Use the same coverage policies and don't change anything or don't spend any additional money and we can get thirty five million or whatever that amount was in the answer was yes the only person in this is in all due respect the only person that can answer that question would be a PBM who owns those actual rebate contracts that would actually do that evaluation they would look at our coverage policies and determine. What our policies are how restricted they are in that will definitely impact rebate revenue we since we do rebate contracting we work with manufacturers all the time and our coverage policies sometimes in certain situations or restrictive enough that rebates aren't available but the way we look at it from a risk management perspective is we don't want to go and just pay for more hundred thousand dollar per year therapies to collected twenty percent rebate and so that's but that's where the balance of this is but in terms of us not changing anything and collecting that massive amount of money I don't know what amount of money would be out there because I don't know I don't see someone else's contracts. But it's unrealistic to think that we wouldn't have to change our current drug coverage policies in order to to gain extra money there's also recommendation remove reference based pricing and again you know that's a that's a significant cost savings but the other thing was the reason for removing it was stated that to attract larger PBMs to be at. And you know it's it's it's but but there's also a statement that removing reference based pricing may and may increase plan cost which seems to be counterproductive to us also the next to last bullet exclusive or limited specialty network or pharmacy networks. The larger PBMs own their own specialty pharmacies and mail order pharmacies and even CVS has their own retail pharmacies We don't we don't believe that limiting of these pharmacy networks we're rural state we depend on these these these community pharmacies in all corners of the State they've been a great partner to the plan in limiting those in what they'll wind up doing we believe is shifting most of the specialty utilization out of Arkansas that's going to FOR Edie D. alone that's at least seventy million dollars in span that would be shifted outside of of Arkansas the other thing I want to bring up is that that fifteen million that I'd mentioned on the the copay accumulator program that that that we currently employee in the EBT planned. Is that one of the reasons that program's been so successful is a local specialty pharmacy we have about four specialty pharmacies here in Arkansas that we work closely with all care specifically. helped us design that because they knew how much patient assistance per drug was available and and helped us set that up we're we can maximize the amount of that of that program and so taking them out of the equation we don't really know what what that would do but it could it could diminish those savings quite a bit but they've been a great partner and exclusive networks would probably eliminate them the other thing is pharmacy reimbursement and rebate guarantees. what we've experienced personally anytime these rebate or pharmacy reimbursement guarantees are in place it sounds good intuitively that someone's guaranteeing the the savings or the revenue but really it's it's guaranteeing their ability to make the numbers and so we've seen situations where generics lower cost generics were excluded. And the brands were covered just because those generated rebates so as a way to pad the rebates and make the guarantee and that that's a of that that's a common practice the other thing is on pharmacy reimbursement guarantees we've encountered a lot of uh you know the the calls that we received from community pharmacies about being paid below cost or agree just reimbursement practices we'd go to bat for the pharmacies at the PBM and find out what we got we have guarantees that we need to make so things that the and and just a statement here that came from from Siegel's presentation you know potential plan concerns one pressure on retail pharmacy reimbursement into may lose some control on formula airy and utilization management decisions with rebate guarantees so the the entire infrastructure. That that we've you know that we discussed could be guided and costs could increase and and they've they've spent and but one of the primary concerns is that we rely on community pharmacies in all corners of the state and that that's that's concerning when you know when when reimbursement is already stretched and none of this legislative body has has taken a lot of steps to help maintain those net the integrity of the network so you have sent a lot of stuff and you know the question is how does that all play out and so this is a slide that Siegel showed comparing of performing of financial performance this is back in July but they they look at EVD verses their their clients or their government class I guess. And the per member per month cost previously was eighty three dollars and their benchmark was a hundred and four. and so. They pointed out and we all know that we're not collecting as much rebates as You know as as their class percentage wise but they netted those out in EQT's plan was seventy two dollars per member per month after the rebates in their benchmark was seventy eight which is a six dollar difference will be applied if you apply that six dollars per member per month E. B. D.'s plan that's an additional eleven million dollars and so that's exactly what our concern would be by changing the approach the one thing in in in just that very last slide presentation will go into it but from another independent I'll just flip to just so you can see it but from another independent sourcing Ahmed impact provides a quarterly benchmark report with their quarterly reviews and you can see in night and this is sorted in descending or in a standing order of of per member per month cost the same time period calendar year twenty twenty. EBD almost eighty three dollars the University of Arkansas System which has the same philosophy as EVD at eighty seven so these are Arkansas clients and then you see these other government entities are these government plans that may impact manages and so of day to provide the same you know relative information about the cost here in the state and these are all pre rebates of the just Just a you know I guess just ending on a couple of personal comments that I jotted down but. At the end of the day and and I know in the one thing Senator Ingram is here but you know he hit ask of questions all the questions have been great and in their intuitive and I understand the basis of trying to get your arms around what's happening is very complex confusing it doesn't make sense he escort you know who overlook who overlooked these additional rebate opportunities whose you know basically who's asleep at the wheel and I can tell you that we have a lot of people at UAMS that take this very seriously that that's what we get up every morning to do is to work on this plan and these other state plans we're all Arkansas taxpayers were all Arkansas licensed healthcare providers we have family members on these plans we we advise our own plan and so the same recommendations that were providing to our own plan we're providing to everybody else. Yeah we're not an out of state vendors so this has to work because it impacts all of us so we're we're committed to do that The it would be honestly it would be easier for us. To open up the restrictions and pay for more drugs and collect more rebates because that seems to be you know that that's that gets our attention you know more money. however in this is just from from the work we've done that we know that we can't we can't gamble with the state's money and hope that that we can get those additional rebates by paying for more drugs but it be much easier to do that but I would much rather be in a position of defending the philosophy that I've just laid out in our approach that we're using rather than if a consulting came in and told this body. Do you know that you guys are spending an additional fifty million dollars and you've got an entity over UAMS to chasing rebates. So we we don't believe we can rebate ourself into prosperity can we do a better job I don't I don't know this is elects that is a big deal to us in in full disclosure the the contract that we have we have EBD is just shy of two million dollars a year so I can't tell you all this and say will you be our X. doesn't have a dog in the fight because this is a this is a big contract for UAMS we hope that that we've earned that in provided way more value back to the plan then the then the the cost of the contract but that's really that's really all I had to to share and I'll do my best to address any questions that anyone would have. So before going to questions I just wanna ask one question. Is. Medha pack a PBM by definition. Mary impact yes yes yes Sir thank you. A Crawford you're recognized thank you hi. I may have gotten lost in what you said but you made a statement and I'm gonna ask you to clarify. you said. that people may have a drug that five hundred dollars. And they have a copay if maybe eighty they have a coupon so they walk out with no skin in the game. Help me understand how that's a problem. How that how that's a problem right yeah well it into the patient it's not well is not immediately and we understand why someone would use a coupon the coupons are designed because. Copays have increased over time drug costs have increased over time and so plans have been more restricted on coverage and so coupons or used to to eliminate the barriers for the patient to get the medication in and in many cases those five hundred dollar drugs. May have four dollar clinically equivalent alternatives or law a lot less expensive alternatives. The or generics available and generics are kind of out of sight out of mind the the brand name drugs those those five hundred dollar drugs for the most part sample their advertised and so that's what of it in the you know advertised in magazines on television the whole nine yards. So we understand why that's attracted to patients to. To use a coupon and and eliminate their out of pocket costs we get that completely what happens on the other side though is that in that scenario five hundred dollar drug in an eighty dollar copay so the plan would pick up four hundred and twenty dollars the balance of that. That eighty dollars. Gets counted towards the maximum out of pocket or purse perhaps the deductible if they paid a percentage and then they really didn't pay that so they may meet their deductible faster the plan picks up a hundred percent of the cost a lot faster but the other thing is that at the end of the day all if that happens a lot. All this increased cost. For those expensive drugs were lower cost. Therapeutically equivalent drugs could have been used will usually translate into higher premiums so they may not pay the amount today. But there may be increased cost down the road and higher premiums and so that we're trying to look at the entire picture and keep premiums under control and the overall health care costs under control and that's just an area that it looks it looks attractive to the patient but there's a. Is a trickle down effect that could that could be detrimental in their ultimate of health care costs did that did that answer the question. Representative right you're recognized. Yes thank you Mr Sir I don't know about this it is far as the impact with the big drug companies. Of pharmacies up against the neighborhood pharmacy. They each one of these which one leans more toward the local pharmacy and the health of that local pharmacies are you know we have a. A lot of situations that we're worried about the local pharmacy not being able to stay in business against the big pharmacies is any of this land in one way or the other toward. The big companies up against a small companies. Traditionally and I can just tell you what our personal experience is not a doctor John Benson I believe he was going to speak and he can speak directly to that because he's way more knowledgeable than I am As but but generally. The larger PBMs. The approach because a lot of them alone and and I'm painting with a broad brush but most own their own mail order pharmacies their own specialty pharmacies and so. I understand the business model is to drive people into your own pharmacy and so Senate rates of the big PBMs are just you know kind of a take it take it or leave it approach and that's where we've seen pharmacies close because and I would say in and John can can verify verify this he knows more about it than I do. But we've had more pharmacies to close because of contracts with the bigger PBM stand than ones that were. That that understood. The significance of keeping these pharmacies in business and and you'll meeting the needs of our rural patients and so I don't know the answer to that question but typically that's that's just a concern that we have because historically that's been the trend that re reimbursement rates have been driven down. and and that's that's usually. And what what the the big PBMs are known for. Senator Hammer you're recognized thank you are you regulated by the insurance department like to PBMs are regulated and have to come under the same laws that we've passed that they use to enforce PBMs that's a good question now we're since we're not classified as a as a PBM technically were not. We work very closely with both rand and. We provide any information that they've asked for but technically we're not regulated. Okay then. So the insurance kicks in the insurance department watches to PBMs to make sure that the laws we pass that they're compliant that. What we had however if you're not regulated then how are you watched in order to make sure that you're doing what you're supposed to be doing. Yeah that's good that's good question we would certainly welcome being regulated by the insurance department currently are better the way we built life especially the rebate program or everything that we do we're subject to legislative audit who's looked at that and so and in fact the there was a recent legislative audit report that looked at EVD in the plan there were no findings of note where there were on some of these other plans but but in terms of day to day regulation we would we would welcome. Playing by the same rules everyone else would to the to the part of the plans that we manage but it's just okay set up that way okay and and that's my that would be part of my point is that having been through a lake audit with no findings verses the insurance department that's having to constantly watched PBMs and also probably bring maybe some fines against him for having violated our laws I would think that your models a little bit more transparent than deal with PBMs or the insurance company so it always have what you is that a fair characterization or not I think you're spot on that's exactly why we've designed it the way we did we want to be transparent we wanted everything to be on the table and but yeah and we work with Alexei we work closely with with the insurance department when they were trying to sort out how to even in in for some of these laws or what to look for we we work with them to help guide them on how to how to spot. issues okay thank you Mr. The representative will. Thank you Mr chairman see if you agree with what I'm about to say and may put you on the spot by more you beforehand. Four years these P. bills have held hostage. Drugstores pharmacies local pharmacies and health hostage they've held hostage the individual's buying the drugs they they've either collaborated with the major pharmaceutical companies or they have got them hostage now the final statement is. You're saying that a question you're saying that we would save eleven million dollars a year by using your plan verses the PBL's. No Sir you're already and we're already involved in the management of this plan and we have been for for several years what I'm what my point was if we went with them well that there with aid and we don't and we don't know of date presented what they're benchmark was so a we don't know what's included in that benchmark we assumed that it was what plans that were structured lackey B. D. but we have no idea now the committee impact data those are other state plans that are similar to EVD and that in its tells the same story except the numbers are larger but the point I was making on this is that. If we currently have an eighty three dollar per member per month cost. Before rebates they're showing a hundred and four dollars per member per month which is a twenty percent higher cost. In yes we do collect less rebates by design because we use we specifically rebate this week we are such rebate strategy follows the formulary we're not chasing or paying for unnecessary drugs and chasing rebates there. They collect they stimulates that they collect twenty five percent of the total cost of rebates we only collect thirteen so when you back those rebates out our cost is seventy two dollars per member per month there's a seventy eight so it's another step that they're they're cost even backing out there greater rebate number. Is six dollars per member per month and all I was saying is that if you applied that six dollars per member per month to our current cost today it would be in a we would be spending on an additional eleven million dollars just to just to catch the to to change the rebates okay all the one the The other than the other factor in this is then the premiums are owned. If I'm correct some of the largest competitors at the small pharmacists have to deal with this and all right that's correct. That's amazing to me that we set back nationally at the federal level and and and let something like that happen I mean it's less that's pitiful. And and it's a it's a reflection on the our government is a reflection on us I know we made definitely efforts to try the correctness or deal with them or hold them down but that's so glaringly into trust and the competitiveness of its this bill thank you thank you Mr chairman thank you thank you. Senator Bledsoe you're recognized this year so just along those same lines though however I guess the question that we need to need to be asking our consultant is. If if they are if they are calculating that the eighty three dollars in paid claims per member per month if they're saying that we can hold that. And then we can get a twenty five percent all offset against that by using the the other PBMs than actually would almost be the reverse I figured six dollars and sixty four cents the other way which I thought the other day and I'm not looking at that I thought that they were saying it was about thirteen million dollars annually so that's is that not correct so is that I guess my thing is is is that correct or not correct in. Do you know if the do you believe in any way that we could get that twenty five percent on the. Eighty three dollars I can tell you that we're working our hardest to get to get more than what we what we have we continually repeated classes we continue to to look at this as not just a in and since we've been doing rebate contracting that number goes up every quarter But you know is it possible to move to to twenty five percent I don't know based on what of you could we get to something in between. They were the real answers I don't know of. We. Of. What we what we hesitated I mean we know that we can get twenty five but keeping it eighty three. Would be the challenge because we believe that that we based on our and all I can see is our contracts in in our situation so. for food our current contracts then we would have to loosen up some of our criteria so there will be some of those scenarios where you know you pay for a few more expensive therapies to get the to get the rebate but but your thank you cost goes north of eighty three dollars so the real answers I don't I don't know we will continue with we will continue to try. Mr I'd like photo have our consultants follow up on that to see if in their calculations if they're saying that they're thinking that eighty three dollars that we can maintain that in an update from thirteen to twenty five percent I've already asked them to review most of his accusations this morning and they plan on doing that in the morning when they're on our soon. Okay because he's made a lot of accusations about their numbers so I want the committee to hear the full explanation from consultants right and I'm just going to call in question thank you. Okay. Thank thank Mr. It would be the what would be the defining differences between the way you do business and the way a PBM what do business that would give a PBM a greater advantage that you in your model would not have. We'll So comparing the two models what would give the PBM an advantage. Over our our current another words if they were managing the us versus us yeah and that's one try to get down to is you've got one business model they've got one business model. They propose that they can offer a better cost under their business model that you can't they've accused of not being able to offer under years I'm just trying to I'm just trying to in simple forms what's the difference in the models. Where they think that they can do it better and deliver less cost than what you can do three years okay we'll all all ensure this way before I came to you M. S. thirteen years ago I was a in executive management of a publicly traded PP on that eventually became Optum. So I've seen that side of the fence spent a lot of time there and. Our model because I've seen both sides are model in from the publicly traded PBM is way different than what we're currently doing. I was almost quarterly Wall Street calls and so everything was about the the profits to the bottom line and so you know we really we never really focused on lowering anyone's prescription drug cost but we could go It was about driving people in our mail order facility are specially pharmacies processing claims And getting rebates and so we retained a lot of rebates we we split up rebates into admin fees and rebates and so we would share rebates with a client we kept the and and and all those kinds of things so there's an enormous amount of money that can be collected and. That money could be used as a guarantee. to. to pay to pay for you know promises made those kinds of things so I would say the big advantage they have over us is that they have all these abilities to generate way more money we're like I said of the contract that we have. We earn more rebates we don't get a penny I mean we're. We're we're not making more money by. Not paying for drugs for gaining more rebates or any of the actions that we do we're we're our incomes are income so I'd say the the advantages that the PBMs have as they were they have more levers to pull to to earn more to earn more money. Okay thank you. Representive Crawford you're recognized thank you Mr chair And this may go back to you questioning some of the things that have been said today my understanding is that going back to the coupons of the benefit is for the patient not the pharmacy nor the manufacture. And the legislation that we passed clarified of PBMs and pharmacies could not keep the value of the coupon but it must count toward the patients plans so I would like that to be clarified as well please. With that yeah I'm sorry that I know that what you stated is accurate. State that the benefit the pharmacies are keeping the coupons or the PBMs are keeping the value but they are intended and the legislation that that represented Lundstrum drafted the intent was for the patient to get the full benefit of that and and we and and that's what what's what we do we pass that on to the patient but the other pharmacies are retaining any of that. Okay I would just like more information on this if I could get a place okay thank you. President will. Thank you Mr chairman. I and truly the rebate program is an advertising gimmick is it not. I mean the tobacco companies for years have offered rebates on their product in order to raise their percentage of the market. So in reality. These rebates or cut off in the long run costing us money. Because of the fact that you get your use of fishing of expression you they get their hook and you and then they said it. And you may get a rebate on the first and only from them but on the back in over the long run once you we know well human nature is and once someone starts using of drugs they're very unlikely to ever change it so really in reality every time they send the rebate through into it it in in increases there are things if the if they stick with that drug even though there might be a less or is that true that would be true hi thank you Mr chairman. She no further questions thank you for presentation with that we'll call Mike Hernandez Dr Anand S. thank you Mr chairman. Hendren and his view was introduce yourself for the record you're recognized. Thank you Mr thank you members of the committee maybe speak a little bit at a turn today because I know public comments were originally on the agenda and it looks like it might be tomorrow so these are general comments related to the Sorry but it's my command as starter Macon and as executive director of a a bit in general to the report issued by the the single group and you know I think we can all agree that we would like to really see the insurance problem corrected you know back in twenty thirteen and special session the extraordinary session happened in twenty fourteen this hopefully something that was going to address some of that and then here we find ourselves few years down the road we still haven't got this this issue under control kind of the two primary areas or one about the governance structure and then what about the the funding secured by the district's all take the governance structure first and so just one of the things we just ask for consideration based on the recommendations that were put out there by AB de is that they were would be would there be some consideration had to looking at the public school employees and possibly state employees to have those positions elected as proposed appointed I think what we would like to see is to make sure that they're somebody qualified and an understanding of some of the dynamics and and able to make decisions I know that sometimes that would you know. Not have to be able to to answer to people especially if they're pointed but you know one of the things that in the last iteration of the board you know all the positions that were in there were appointed and so kind of what our request is just some consideration like a teacher retirement system where some of those members are elected by the members of that of that insurance program with the state insurance program or the public school employees the second topic is related to the the discussion it's not really in the recommendations it's more about the discussion that's been had by this committee related to funds pulled out by the district and and of on the number that's been floating around out there's been a hundred sixty one dollars per student out of the matrix and potentially put towards health insurance and so and and I'm I have wrong numbers but based on the single report that was given back in August it reference that there were funds historical funds are we two thousand twelve that district contributions were about ninety four million in two hundred to two thousand twenty is about hundred two million and so I understand it's probably mixed up of all funds as you know districts have employees that are of a may be paid in federal funds may be paid at a categorical as may be paid out of district operation funds and so in in my mind when I think about the hundred sixty one dollars one The genesis of that number obviously within the matrix it identifies school level staff to the tune of about thirty five point six nine F. T.'s based on a five hundred per typical school where it gets a little bit hazy is hidden in the disk in the in the matrix it really doesn't identify entities related to school bus drivers custodians and other classified top employees as well as district level staff in in some cases and district we have a lot of large security force that or FT's paid out of operating cost and so that that dollar amounts card to quantify because some districts you know we may have nine hundred twenty two square miles worth the bus driver and that has to happen and some we have twenty two square miles that have a certain my bus drivers so being able to quantify the FTE ease and that is hard where some districts may have a lot more employees paid out of operating where some might not have as many and so I'll be the first to tell you that there are some districts out there we've been doing a little bit of research is how many of a pay out of operating cost a hundred sixty one dollars or more versus how many of them pay less we seen some districts that might pay a hundred forty partner under forty nine dollars for example of her at student athletes per student towards health insurance and that's inclusive of Back in twenty fourteen the pocket savings as far some of the money that flows towards district. The and then we have some that pay two hundred fifty four dollars and operating and not always is that because they pay above and above and beyond what the insurance contribution is it's because they might have additional staff associated that they're paying for operating costs that are taking part of insurance and so the the bottom line I think is what we're at asking for is before that decision gets too far down the road of exactly how that that looks like you know we want to be part of that solution be like to be included at eight whether be with me sir sociais Haitian or other semesters from the state that they have a look at some of their districts specific context before it's just decided to go down that road and so with that just appreciate you guys work on on this very important thing and and be happy to take questions. Any questions from committee. C. N. nine thank you. Senator you on the fact savings could you give us a little more information on that is that is that already going straight the B. D. or how's how's that set up so it is if you go back to the I believe the. The code I'll actually go back to bill this act X. six of the second took extraordinary session and actually it was part of twenty thirteen session happened twenty fourteen what it talks about is that any savings that was generated through of the tax shelter situation we this call premium assistance and so that money is automatically calculate there's a spreadsheet actually on the and on the EDT website that shows schools how to calculate that and it sent through directly to and so it's called premium assistance as far as the county records. Okay. It was ACT six of what did you say that was ACT six of the second word extraordinary session And The New of the updated code with that references the fact savings is The finder policy as. Right it's in the it's in that is actually going to Senator hundreds bill that's fine having trouble finding the actual code but and that's good but and that is going to use Mr that is going straight to DVD is that the way that works goes to the districts and the districts already sent in that in the question sorry did find the code reference twenty one five four oh five and is the code but the way that that's supposed to be structured is anytime that a employee. Shelters their health insurance premiums and stuff like that reduces their Allen road ways talk about sketch plan type deal it has generate savings for the employee but also the employer so there's a calculation that basically that savings is almost on the district's person perspective is actually sent this call and it's called premium assistance. Okay I guess but the bureau of we can whatever looking into that maybe we can save some of our staff try to. It worked with them to try to factor this and see exactly what the numbers are. Thank you. And if I may well. Center for the questions thank you for testimony of. Russia Britain. If you would miss Britain introduce yourself for the record and you're recognized to speak. Right there okay yes thank you thank you please join my name is Rochelle Britain I make a. For the retired state employee retired on disability. We're twenty years the state government and rent including nine as an insurance rep. I'm all also now happen to be a licensed attorney hi I while I was on disability I end up going to law school. But I'm my concern and soon I really was properly but they've been more it aimed at the comments tomorrow the main reason I came here is because I had today is because I have specific questions of the B. R. X. people about. The. About about the proposal to shift retirees to the two and it may be the. A program. Of. You know I I figure ultimately that's what that at some point that is going to happen but. After two particular caught with the EBRD the E. B. R. X. people I'm I'm a bit concerned about it because. At the ill. It and after and after dealing with some people and AC is. Do we know is that anyone from SCA signed up I there wasn't any. Today there wasn't anybody. Here they're one anybody there when I signed up but I have been the only person there from me with Mister Hernandez. But. I know that. But. I mean I've been we're doing Facebook with some people who and and the concerns with the MA PD option is that's gonna end up looking a lot like a lot like a commercial in may be the plan. Where. You have where you have a restricted for military restrict restrict restrictive doctor network restrictive pharmacy network restrictive formula airy. Restrict and. And the. And run and run run by a big three PBM. Now. Bill I lucked out I happen to be one of the two and fourteen people who opted out of the drug benefit last year because of the. P. make because but that was because I did I actually shopped. Because I have expertise in that area. I actually shopped the proper shopping for repeat and found the PBM. Now the part D. plan that work better for me than the other plan but. I mean it's run by a big PBM run by a company a company that owns one of the big PBMs. Six sigma Jana signals express scripts now. And that's. Big time you know. In it that works well for me. But I tell you it's not all work well for the people who for a lot of people in a lot of our retirees. And I specifically remember senator Hammer I saw I've I've watched on Facebook live your radio show last year we were talking with in the health. The base the base with a PBM recently a part D. plan run by independent pharmacists. That runs that. Goes through that the whole point is to support the model their their whole system Boyne is to subvert the PBM model and I later found out that you didn't mention on your rate over it by later found out that there the PBM they operate through is meant impact the the same one we use. My concern is that. The the the more. The closer the plant you know is that the farther away. The M. A. P. D.. Looks from yeah. Thank out best way to say it. The more. The M. A. P. the looks like what we have now As retirees. The easier it's going to be the cell but I'm also concerned that may reduce the savings to the plan which is the whole point behind it. And. Yeah if we end up with the. Yeah if if we end up with something that looks like a commercial in may be the plan. You know. What's the point having a retiree plan to begin with. Because any I could get a. Retiree I could I could get a. Yeah I could have ended up going to a commercial to a commercial in maybe the plan last this is the first for this year. And. The co pays it out if if my health had stayed the same my copays would have been less than I had but it would have been. My copays I think would be less I pay now in premiums but. The M. APD is not but. A. In my health went worse it would cost more. The one I have now and I need reserve and and as I see it basically because the rules that you know once you leave you can never come back. It was important keep what I have now as far as drug as far as the. Medical side. The. You know as far and and then then. We were told then what's will help we'll see if it holds true that. That was said before the old the be the board that you know if you opted out of the drug benefit you could come back. In the future year if there's a there's issues and that's important because party plans can change every year the plant works well for me this year. Mike injured no a no longer work as well for me next year. And so. I'm concerned as as I'm told several people the devil's in the details as far as. Shifting to in M. ADD I think we have to have an inmate I think we have to. Have. You. We have to have a plan that seventy five percent of employees want to join. Or else we have a lot of problems. You know if if we end up going with this I know there's gonna be a lot is. One important thing is that everybody agrees on there some education but. An education component but. You know I'm afraid if we just blindly jump into an MA PD then. We might lose. What. EBR exes do any. For the retiree group. The retirement might not have might no longer have the that benefit that might not get the. The eighteenth yeah yeah just seven right here on the screen eighty three L. eighty three dollars roasts seventy two dollar net the. Permit yeah per member per month. That. You know that we that we get now because we have a but because instead of managing the port and serve the instead of having restrictive pharmacy network we aggressively manage the formula Terry but with the address but. You know we may not be able to my concern is that is that. Within maybe the that we may not be able to aggressively mask formula every. The way we do now. If it is. That could offset the extra money that we would effectively get them it's my understanding that. There's a lot of extra money involved in the part D. program. That. We don't have access to but by using up through the RDS model. Read the retiree drug subsidy. Now in a that's why most states have gone to a have gone to the inmate to a Medicare advantage MA PD type model. Because you can't S. because. You know the. The the plant because the blanket me happened it I'm hope Segal is right that they some of the stuff I've read that that that they're hoping they can set up a medic a PPO style plan. The group Medicare advantage plan that effect effectively. They're network with their network will be any doctor that takes Medicare. But even then there's there's gonna be a lot of questions about copays because in essence what we have now is. It's not it's not legally Medigap but is not but it was modeled on a Medigap plan F. which no but which. Thank you which you know by law they can even sell to new return to to a new Medicare enrollees anymore the you know people who are already in Medicare like myself can still buy a plan F.. If if you can get it but of course I had as I said I happen to be on this retired on disability under sixty five and because of that you get the weight Arkansas regulate the plans based basically you can't get a up you can't get an affordable. A Medigap plan until you turn sixty five. So. I thank you thank you all got to be careful. Whatever happens and make sure the plan is truly at that whatever happens for the retirees is truly advantageous. Two. Not just the be the **** to the retirees themselves. That that doesn't undermine. What has already been done with the plan especially AT B. R. acts. You know I mean there are some concerns that the plant that. That you know if we go doing that may be the that it with that EBR access actually could no longer manage that part of the plan there are people who believe that. a lot of people who believe that the what love love retired my fellow retirees believe that they're going to lose that that there will be drugs they're they're covered now agree needy that won't be covered if they go if they go to a party. If we go to a on an APD plant. Of not think a lot of that has to do with. Bill a lot of it has to do with. Not looking at the formulaire ease when when you when you go shopping for party but it also has a lot to do with what the plan is with. But it also has a lot to do with you know are we are we only end up with a different formula airy. Because we have a part because we have a party we have our own but because we have a separate party benefit for retirees. That's. That's my concern and we L. we have to move for isn't I was really expecting that banking this. If I was gonna say things they sent Morrow looks that looks like you are detectives are still take it's take some comments today. That's good thing I would I would expect you would take any comments from the public till tomorrow but. You know that's my concern. The. You all have any questions for me. She and no questions are committee thank you for your remarks thank you. Thank you Katie hill FOR heart hospital. doctor John Vincent from the pharmacy association. If you would introduce yourself for the record and you're recognized speak. Good morning. Members of the committee chairman roster Wardlaw thank you for having me here today Thanks for having the chance share my thoughts my name is John Vinson of practicing licensed pharmacists and CEO of the Arkansas pharmacists association course testified many times before but we represent about two thousand four hundred and pharmacists and student pharmacists around the state of Arkansas so it's not the companies themselves but the practitioners who are members that we represent. what's the presentations heard comments today I read the single groups overall reports and I've learned a lot and they've offered a lot of information have a lot of hi I respect for each of you and your leadership positions to digest this very complex information and to make recommendations and guidance for the plan to both Look at the financial side is also the impact directly to your patients and constituents in every single zip code in every single county in the state of Arkansas as you have members from this point these plans and every single one of those areas. There are several areas like previous speakers have said that are really good recommendations are. I'd like some the other comments that you've already heard today our pharmacists around Arkansas would have seriously serious concern and would passionately be concerned about an RFP process that opens back up the pharmacy program to the large the three large PBMs You know just let me be clear I would think that would be the wrong direction for our state our state and our patients that we serve in the pharmacies that provide services in those communities we know this because we've experienced it first hand and many of you have been here the last six years and know the history but I just want to go on record and remind you of the history. We know how they operate it's the reason by overwhelming margins most of you in the room have either been lead sponsors or co sponsors of that legislation over the last six years especially and This same group you know they offer empty promises and they don't deliver the reason Arkansas state university moved to this plan and they can testify there that you know I'd love for you to invite them to speak is because yes they had an RFP and yes they had promises and yes they had a PBM who just ignored it and they paid the pharmacies below cost the implemented copay claw backs that are illegal this that the legislature implemented and they'll continue to do that if they're able to. To have access to these patients like they did before so I would just encourage you to talk to them to talk to your local pharmacies to talk to Legislative audit I think it was mentioned earlier they have a ninety six page report that the insurance commissioner and legislative audit both did separate investigations and found spread pricing they found the PBMs were paying the chain pharmacies higher than local Arkansas based pharmacies and both need an adequate reimbursement to provide services in fact Senator Hickey who was here just a minute ago down in his area of the state that is one of the biggest pharmacy deserts in the state of Arkansas and the queen and Lafayette County in Miller county there's only a single independent pharmacy left in Miller county and all of Texarkana for the entire county there's none in little river and the reason those pharmacies oppose this because of the bad acts of the PBMs that the Siegel group is recommended that we now turn the state health plan back over to you know in a in a process where they tell us they will produce savings I know a representative Dotson is talk about a little bit earlier about asking about with the if you turn it over to them with they really generate thirty five million to fifty million in savings with the same exact drugs I don't know how you can know that if you don't actually look at the real claims and the real formular set up that used many of the plans that they represent I'm shouldn't say that I know that Seagal represents but other plans in the State of Arkansas that chase those rebate dollars they don't cover generic insulin products or insulin products that That are cheaper that are lower cost overall in the plan even after rebates you know so they're plan designs that are set up because of potential profit generation of those rebate models to drive that price of the drug higher that incentivize when you ask for a guarantee to cover something to guarantee a rebate that may not actually be best for the patient and and can actually lead to higher cost so I would encourage you to to look at that to remember. what we've been through before and to talk to the legislative audit insurance department and your local pharmacist before you make a decision on pharmacy program and I'd be happy to answer any questions. C.. President will your recognized thank you. CVS owns one of the PBMs or a yes Sir Walmart owns the other one. One Walmart would not it would be optimum our acts and express scripts with large mail order and specialty pharmacies okay. Well actually testified in December before this legislative body that they were having trouble with take it or leave it Hobson's choice contracts as the Attorney General of Arkansas argued in her make its brief before the Supreme Court were to die and if you do damned if you don't where it's an impossible situation so there there believe it or not Walmart's in similar situation with these contracts with PBMs follow up yes Sir so there are. All the retail stores of those that are owned by a known PBM and competing against our local pharmacists that's correct that is correct. Thank you thank you. Representative Dawson you're recognized thank you Mr chair Thanks for your testimony thanks I guess what I'm trying to. Go through what you know what I just heard you say and I just want to clarify I mean because we we've obviously done a lot of work over the last several years with this Are you saying that you don't think it's possible to have that additional savings or you're just opposed to open and up for a A. R. F. P. process that has strict. I'm not strict guidance and whatever there are if P. is and allowing competition amongst whoever's out there to fill in the requested RSP no I think it's a good idea to look at the claims themselves you know in the process that they're doing it's always a good idea to re evaluate what you're doing to see if you can do a better doctor Davis he was up there earlier who have we have the highest respect for their team and confidence in their team but I think it's always a good idea to look not just at a hypothetical what might happen in our national database from or the clients but to look at your real claims that and your real program design and see if there are additional savings that could be had you know one of the programs that was talked about in that legislative audit Arkansas Medicaid who had almost zero problems there were some of the passes but not in the fee for service Medicaid program and the and the like like audit findings there actually. Are able to get the highest rebates in America in terms of discounts back from the manufacturers but the reason they're able to do that is because it's legislated in federal law on how those rebates you know what the percentages are in return for coverage of drugs from six hundred plus manufacturers so it's also possible to Legislative you know that's been done federally in the Medicaid program it could potentially be done in a state program like this if if everybody in the room and your colleagues believe that rebates what president trump said in his boyfriend and his rule that didn't didn't happen before he left office to eliminate rebates altogether or to pass those directly to the patient as I think represent Crawford's talk about earlier the portents of coupons and those discounts going to the patient you know under his the reason they recognize that is because the system is broken it incentivizes at a higher price to offset the discount but if you had you know the consulting keeps talking about guarantees which guarantees thank you know on on pharmacy contracts mean call backs on You know below cost reimbursement clawbacks on claims which is legislature has made illegal in this state and have led to another concert one of the consultants is from Ohio and they have the highest rate of pharmacies going out of business in the country but my point is yes it should be looked at I'm just have concern because the part this particular consultant seems enamored with the big three and thanks the only why at least what I heard in their presentation was the biggest three PBMs which all have inherent conflicts of interest I mean just look at the report the. Violate network adequacy and send to a single out of state specialty pharmacy on the House constructs of just eliminate local access altogether was one of the recommendations rebate guarantees and pricing guarantees that's code word for let the PBM put their foot on the pharmacist neck and give them a take it or leave it contract and take back and lower reimbursement overnight it whatever they please under terms the pharmacy can't negotiate that's how you get guarantees so when I see those buzz words and I hear these big three or big and they can get these discounts that's been my experience that's been our experience in this state okay I know it's a long answer but have you had an opportunity I guess because I mean I I'm I'm not in this world like you are as far as on a daily basis but this consultant Segal has obviously worked in multiple other states and I guess is helped I don't know with the drafting of our of peas or with the the parameters in the formula areas and I mean you know the technical terms of a lot better and I do to make sure that they're they're putting they're making the right to ask so they get the response back in setting up the contracts in various states have you looked at some other states that they worked in and seen what those. I guess proposals that came back that the states went with I believe like I'd be happy to do that we reached out Nikki Hilliard on my team reached out to neck with Siegel you know through eighteen in and we've not been able to connect with Nick you know or to meet with them I'm not aware Siegel you know meeting with providers or patients in Arkansas be happy to discuss that if they're willing to sit down the table and happy to analyze it I just know the state of Ohio where Dick it's from you know is one of the states if you watch the national news has had the most problems with pharmacies closing and with the spread pricing being implemented by those in the teens of hundreds of millions of dollars at least in the managed care programs and and I just that model has not worked in Ohio and that's why the Attorney General has sued and you know has fired those PBMs and is reworking how they offer those programs now those are in publicly funded not in state employees but in managed care Medicaid but to your question no I have not been able to stay to work with C. from Siegel what specific plans they're talking about when they show up on the screen right I don't have any winds into that I just I just know that around the country no matter what state you're in pharmacies are struggling and it's not just the mom and pop it's the chain had when the last time you talked to a pharmacist working in Walmart or Walgreens or CVS and ask them if they feel safe and effective and that they feel like there's an adequate payment model to be able to provide patient care not just treat the drug like a commodity what where there's no patient care being delivered there they're struggling because of the the stranglehold the big three have on our market you know in on our our practitioners thank you thank you. Representative right you're recognized. Thank you Mr John. What is the direction what do you think. As far as having our local pharmacies. No one that they're gonna stay right but at the same time what is the the best situation as far as the cost for the overall situation for the state it can can you mix them both and give us an answer. I believe that the current philosophy of how the EBT plant currently operates where the PBM is are paid to process claims contracting network and have a call center and have the B. R. A. X. two oversee and make recommendations to the but you know the current model is a more transparent law abiding friendly to providers while maintaining that per member per month costs lower than that you saw that last lied lower than the other Siegel compared to states it's a win win win when you can keep the prescriptions filled in our state when you can have a payment model that is for is adequate to provide those services like the current plan is and you can keep your per member per month there your overall costs and lower than the other Siegel comply Examples that they have shared so I walked the we are comfortable with the program like it is but the representative Dotson's point I'm certain it could should be always looked at and could be potentially better what I don't like is the direction that Siegel says it needs to be R. if paid out to the big three PBMs because only they have the size to get the best deal and in the past the best deal has met pay the pharmacist below cost send letters to them to try to buy ignoring our state laws I mean that's just been our experience so I'd that's what I'm against is is that they are the answer. Facing NO other questions Mister convention we appreciate you being here project your testimony in your concerns and and with all been through some of this right the they are noted thank you chairman thank you. Next we have the duty Bates a yes you system. You'll come up and then if I yourself you're recognized the. Good morning. I'm Julie Bates executive vice president of the issue system office and I have to do sherry responsibility to take care of the issue system health plan so we have about. Four thousand something members on our plan we will be adding Henderson on to our plan January one so our plan will be roughly about five thousand members that I represent. I don't want to take a lot of time today because I know that you're running short on time. But I would like to say that. I have been about. Three every model you can imagine. When I started with the issue system ten years ago BlueCross BlueShield was my third party administrator in the handled my pharmacy as well. At year after year I saw my pharmacy costs increasing and I felt like I had no control over them. So I'm we went out for an RFP and we separated our pharmacy from our medical so at that time I went with a large. IBM. And my costs continue to grow under that model I had a lot of I'm happy members on my plan I had and hot and happy pharmacies on that plan my local pharmacies weren't happy so I had to regroup again and go to go back and do a rethink and that's when I have actually three B. D. Matt do what and so we contract with the white to help us manage our pharmacy so I went back out again and now I have a different PBM and all they do is pretty much process my claims. So I have a fully transparent system now for my rebates my costs are being controlled at I have happy pharmacies because our local pharmacist feel like they're being treated fairly so that I can. see a major difference in my plan since we've gone to this model of this model is working for us and I'm very happy with that I think are members are happy with it this year I'm going to we're proposing just a two percent increase on our healthcare premiums I don't receive state monies to pay for my healthcare premiums up so I have to watch very carefully our costs on our plan and we actively manage our plan and A. B. R. X. is been a great partner for us and I would just like to say if you ever need a perspective of a plan I'm glad to tell you my experiences in what has happened to our plan and that's all I have today unless you have any questions. Thank you senator Hammer you're recognized. Thank you Mr have you done any comparison as to the savings that the your system has experience being under this. As opposed to if you would have stayed under the PBM. Yes so we had. Actually we had and I could get that to you in greater detail but as you know pharmacy trans. A anyway you're after years so our primary expense of senator Hammer has been with our high cost drugs that was testified earlier we have I have some very high claims experience so I. To compare apples to apples it's kind of hard based upon the experience of the members in your plan at the time but I do know that I had a quarter last year where my Kostroun went down actually which was you know had never happened before are you are you talk about on the pharmacy side pharmacies that okay. Yes. I'd be. It be good to have a tangible number because yeah I think about the comparison of the EBT model versus the PBM model and consultants say in would be better off to switch when we're here testimonies of savings under the E. B. R. X. model and I'm just trying to. You know get get up get my mind around why why you experience the savings that you weren't experience under the PBM model if the PVM models both be the better model. It's because your formula re costs or controlled Prior to that when we have where where the larger PBM I had no control over what drugs were rolling on to that that formula's. And as represent Wooten said want somebody has a drug they don't want to go off that drug. They say the advertisement for that drug and they want that drug so you lose control of your farm formula airy and that's one of the main differences at is that you can have better control over your formula airy and I still have happy members on my plan. So I want to provide evidence based coverage. Ensure that everybody's being every patients being adequately treated but also control those new drugs and things coming on to that point. Okay even though it may offer greater rebates in the in the cost is not better. Thank you. President will your rate thank you. I commend you for your due diligence looking into not just being satisfied this is how we will be honest man like a Baptist Baptist we've always done it that way and so we're going to continue to do it that way. Equipment did did you did you indicate that you have a percentage of increase in each year. Well it typically. No like we did not have a increase last you will let me but let me rephrase that. Do you do you increase your overall health plan and the in the pharmacy plan each year or you just do that. Whenever you feel like you need to support the plan we do represent what and so we're self insured and I keep by a fund and then we evaluate our claims experience and then we look at do we need to based upon our health trends in our plan if we have some very high cost claims coming up I may have to increase those premiums a little bit to help offset that risk. Follow the do you do that each year yes budgeting in other words each year in other will and so so your membership nothing in a call with the ten or fifteen percent increase yes Sir and that's why we're doing the two percent this year is to we don't want to have to do a catch up your next year where we're doing. Seven to eight percent or something so so so you're you're doing it each year yes Sir. Okay thank you Mr chairman. Thank you and saying no more questions we appreciate your testimony today the the members it had stepped out for another meeting of course can watch the replay on this I do that a lot an off time to we do appreciate all testimony today and with that we are just we will meet tomorrow morning at nine o'clock.