ALC-Executive Subcommittee

I Mark right to rule. Yeah. Welcome to the A. L. C. executive committee of our first up is for the emergency rule consideration from for DHS to Mister mark white if you come up. Recognize yourself when you're recognized to present. I thank Mr more quite warm Human Services. Thank you. Yeah. Thank you Martinez met Department of Human Services. Thank you. Thank you Mr chairman of members we have for you a proposed emergency rule back in the session your past ACT seven fifteen which completely transformed how we measure in for staffing requirements for nursing facilities and before we had some numerical standards that impose different standards different times of day and looked at specific ships now what you put an act is a standard that looks of overall numbers across the month to ensure that patient needs are being met and so we have developed a new rule to implement what you passed in the Act we know that with nursing facility strictly with the pandemic for having the number struggles both financially and in in getting patients and in patients out I know we heard from lots of you who wanted us to get these pulled procedures in place as quickly as possible so the nursing facilities had guidance and knew what they needed to do to comply with the new standards in the act and so that's what we proper for you and all deferred miss Smith forced a few details on the act in the will be happy to answer any questions. Sure and I'll just add that the reason for the emergency will as well is because many of those rules were repealed during this session so right now we have no rules in place that we need to get rules in place as quickly as possible to carry out at seven fifteen some of the changes that we've made based on the rule in the manual for example like he stated the ratios so for example there was a ratio that said you have to have one direct care staff member to every six we've now change that based on ACT seven fifteen so that now you have the average three point three six per resident date we've also updated the rules for example previously you reported on the fifth of every month at seven fifteen says that now you report by the fifteenth day of every month so we've updated that in the rules as well. And then there were also some rules and except in fifteen oh around of staffing related to flex staffing rotating shifts things like that and I know this is especially important with the pandemic that facilities be able to do that without coming to DHS and so that has been updated in the rule as well and I'll take any questions. A question for members. Not saying any without objection this rule was approved and will be in effect on September eighteenth twenty twenty one thank you for presenting today thank members. Director Garrity has a report thank you Mr chair of these are just couple informational items and then one action item first of all we received direction during the last Senate budget hearings regarding special language and special language that has been enacted year after year special language we were asked to take it begin to take a look at the special language and determine what could be codified rather than appearing in the appropriation bills we're gonna be working on that beginning to work on that next month with the plans of implementing this for the budget hearings before the next regular session it's gonna be a long project we're gonna need to work with the F. an a on that but I think it will be a benefit to you all and to the legislation. Also working with our IT department we you know just like everybody else we have concerns about cyber security and the safety of our network your emails your documents so we are beginning to look at enhancing the security around our network it may require you know additional Loggins but we are beginning that process just want to give you an update on that and probably in the next couple months I'll be moving forward with some proposals for the General Assembly with regards to that. Third item is there's always a a lack of conference rooms or offices for members to meet behind big mac a I think having that bank of telephone rooms is a by gone era when there were no cell phones so we. I received a record from the executive subcommittee to look at creating a couple of conference rooms where that bank of telephone rooms is we're working with a BA they've given us a price tag of just a little over ten thousand dollars they would do the work to convert those into two smaller conference rooms so if that's something that the executive subcommittee would like for me to move forward on I would need a motion on that. Members are we clear what you got that in your packet The talks about the about the floor plan or any questions on that is that something committee will proceed with. it's not in your packet okay excuse I love the. Would you understand what we're talking about here secretary that is not utilized. we'll have a motion to have any other discussion. If not Senator Bledsoe your motion. A I move that we proceed with refurbishing and redesigning the area where the telephones are into two smaller conference rooms all right I have a motion and a second second present person all in favor aye. Opposed. That does pass thank you. And just the last informational item of the bureau a submit or released an RFP for a state budgeting and revenue forecasting consulting services the deadline for the the original deadline for the submission was August thirtieth due to a couple of technicalities we are extending that deadline through the end of September so we anticipate that in the by the end of September will have the all the our of peas and will be bringing forward proposals to executive subcommittee in October November for your consideration. With that I have no other business. Okay thank you. All right to single group will come up we're ready for you to present small. Senator Irvin you're recognized just a quick question for staff security and I'm at our last I have made a motion and a L. C. last month that there would be a recommendation brought before executive subcommittee instead of peer on the selection of the consultations for the broadband strategic plans statewide strategic plan do you have an update on that the executive subcommittee was supposed to have met to review that and. That do you have any not update I do of Senator Irvin I spoke with Leslie Fisk in yesterday from parks and tourism and she indicated that they still have not they're still in the RFP process in terms of selecting the consultant they hope to have the contract before executive subcommittee next Thursday. Twenty third. Thank you. And you're recognized to present. You will recognize yourself for the record thank you we know you are gone can verify the bill. And. Patrick claim a single. Kirsten Schatten with single. Nick Taylor a civil. My cursing Siegel. China Blake Reynolds single. Thank you for so we you know we thank you for the whole project has been a wonderful Engaging with the all and as we said from the get go in our our plan was not to even try to to cut any sort of benefits or increase contributions our goal is to make the best possible plan you could have other and most cost effective enhanced benefits as well as we can for all members you know synchronize between the two programs as much as we can the reason we have so many peoples because the stuff is very complicated so you know if we're doing pharmacy bid pharmacy recommendation it's not a simple thing so Neku has our pharmacy practice here same thing with the clinical side with Joanne and of course you know Kirsten with the Medicare advantage and you know after again and now with a you know various other aspects of the financials and other things I just wanna make it clear that you know really try are are trying to put the best plan forward so all recommendations are all and you know. Your best practice good faith really a reasonable estimates what we think will actually be able to achieve the goal process. So the way we've structured the presentation for a lot of the slide you'll see the for the various sections we have. Background slides and provide some context brief summary of the things we've worked on in the things we've looked at and then we have a recommendations. So the first section on a talk about is the plan designs. We did a full benchmark as your call and we looked at the actuarial value so that's the percent that the plan picks up in terms of claims and that's dictated on the plan design. And we compared you against other states nationwide trends we found that your actuarial values are in line with other groups we think they're competitive you've got a premium plan it's eighty five percent that's your richest plan the copay based plan and then you have to other high deduct qualified high deductible plans that allow members to contribute to an HSA we did notice that the plan designs are relatively similar between AS the MPSC but they do have differences. And we thank you know when you look at the incentives we think the plan structures are set up appropriately so you know you're and incentivizing people to get care at the right location. I mean in general look at the plan designs are trying to have a reasonable spread between not so it's really legitimate choices for people sometimes people put plans are so similar to the make any sense that both them we think you got a good spread in general. So there aren't. A lot of recommendations on on changes we do think for the premium plan the copay for urgent care is a hundred dollars it's a little bit high compared to what we see with other states in the benchmark groups if we lower that the seventy five we think they'll further incentivize people away from the ER lower that utilization. So I can say you know we what we like the plans we want to keep them intact we do think given how close the AC in the PSE plans are in terms of value that it does make sense to Have a uniform plan and if you move the PSE people or to the S. C. plans it will be a benefit enhancement to the members it's a slight cost of three to four million dollars and twenty twenty one if that was implemented we do realize that the biggest difference really is the the contribution to the HSA for the high deductible plans for the A. S. E. so there could be some administrative challenges I guess for the public schools but there's other work arounds and we see other states that do that why. So I think that's our overall for the the plan design perspective is to really immerse the two plan designs and there will be no doubt that we recommend really no difference between the yes seriously as far as plan designs go so it'll be easier administration simplicity image a lot of positives for and they're not far enough away we understand over time they deviated due to a planned change due to financial concerns their planting to so we're kind of given that back and put it back together so. And just one other point from a compliance standpoint the classic plan the family deductible is at the limit in terms of being qualified so there's a minimum deductible that needs to be in place and the government does index that from time to time so you just got to keep an eye on that the doctor will level and make sure that we keep up with the index amount so you don't lose qualified status. We looked at contribution so this is what comes out of the. Employee's paychecks you have a four tier contribution structured that's very similar to most the states that we work on through the benchmark it's the most common structure we did do the benchmarking based off of twenty twenty one contributions and Since then and twenty twenty two there was some significant cost shifting to the employees for twenty twenty two so while you were in line with benchmarks in twenty twenty one those increases put yet slightly above the benchmarks. And like many many groups you do have lower contributions in terms of percent of premium for your employee an employee plus child here so that's a common strategy we see and you know the enrollment patterns followed the strategy. And then the other point is that the the ANC in the PSC contributions. Quite a bit different approach so AC it's very defined we know what the contributions are PSE it varies by district so the the contribution to the employee can vary quite a bit. And then I recommendations thank you should maintain the same contribution structure that you have it's important to make systematic annual increases so we don't get far behind with the funding and this. Based off the increase in twenty twenty two in the benchmarking we do think that future increases. Should be outpaced by the state group versus the employee peace. And we think of Asians remain separate for a CNPC just due to the complexity of the group's. Okay what we're going to lose access to Mr Jake played with the meeting come up and if you will you see where the members would your dollar okay where you're at and missed please can see here I have my phone will. Recognized. The bill also can take questions. Leding you're recognized Jake lead director employee benefits division. So while we were provided this report and we were given the opportunity to review and provide a written commentary I think that commentaries been provided to the members so in response the plan design we've had some good conversations with Segal about this a we've also been looking a lot of the same date and I would imagine asking a lot of the same questions they are. There are some areas where we think some plans can be changed particularly on the public school side we've talked about a little bit about that and there are some strategies we can put in place to I think mitigates risk the plants face but going forward we don't necessarily disagree with any of these recommendations I think the lowering the urgent care copays spot on we do though think that if we wanted to make some changes to mirror PSE and G. S. C. A. S. E. we'd really like to see that as part of a broader restructuring than just a one time thing anytime we make changes to the plans it's a pretty sensitive subject so it's something we want to do very delivered directly and and and thoughtfully. Is there any questions for. Mr lead or for single. Not saying any your stay there Mr I believe will be good place for you and the signal group you. You're not okay. So the next section will cover deals with reserving and funding of the benefit program the recall we we went through a a detailed funding projection with some funding recommendations associated with the program you know a lot the last month that we're here one of the things that came about as we looked at this from a funding perspective is that many of the issues that are coming up as it relates to Not enough funding being in places due to short term planning associated with the program so we've looked at some mitigation strategies associated with taking a broader view of the program over a longer term perspective as you do your funding and projections for the program we do project assets to fall below zero for both programs starting in twenty twenty four we looked at some of the the benchmarking associated with other states and what they're doing and so that many have formalized programs in place associated with reserving for both I've been are and for claims fluctuation reserves and and those range. Their their their range quite a bit from state to state but we we their projection on fluctuation reserves and see in the neighborhood of three to ten percent for your program for many states what they're doing an eight percent reserve generally is is in line with what we would expect for an I. B. in our perspective so as we look at this from a a a recommendation perspective and what we would projected to do what some of the the constraints that we see as he sat is due to short term planning so in one of the things on the state side is is to remove the cap that five hundred dollar cap that you put in place and and take a broader review on that so as you do that it would take into account a multi year projection model that'll take into account what those indexes need to be on that five hundred dollars moving forward to keep in line with certain levels of projections of total assets that you need in place from a reserve perspective we took a look at this and would recommend a range of Rick reserves between twelve and sixteen percent are that's based on some of the benchmarking we saw in the states and what we would see for your program we think now is target of fourteen percent with a range of twelve to sixteen percent as a regional reasonable range to set up a a reserve target for both ANC and PAC. Sorry. So it as you as you think about this from a a longer term perspective what we we would projected to do or recommend you to do is is sort of city keep in lines to keep the funding projections in line from a state level to make sure that any any reserves that are put in place or assets that are put into the program keep you in line with that total reserve projection of fourteen percent and in line with that twelve to sixteen percent over the longer term period the the annual indexes that should be. I should be tied to something so this can be indexed with medical trend medical CPI some level of of projected increase over time what we saw for the A. S. E. program is is this we need a five eighths percent increase over twenty three to twenty five to get to that reserve target by twenty twenty five but that's something that can be legislated in a specific way with a specific target you can you can work towards and then readjust over time as you see those numbers fall outside of of any range that you might hit so if you fall below that twelve percent Reserve target on the lower and that could institute a trigger which would nest and substitute additional funding that can come into the program and that's something that you can work towards the bill back up to that range of of the target of fourteen percent bill back up to the twelve to sixteen percent target over the longer term period. So the. So the reason why we did arrange where we're targeting that midpoint of fourteen percent the twelve in the sixteen really active guard rails so if you know you have some adverse experience. Yes I'm adverse experience you know that would set off a trigger to make sure that the fund is always within that at least above twelve percent of the claims and then on the other hand you know we have recommendations for savings and if you're projecting amount over sixteen percent than that CPI increase eight four percent maybe that's two percent because you know you have savings that you can pass along. And then for the for the state side. The expenses and revenue pieces are are line pretty closely right now and a lot of the the findings all reoccurring for the public school site it's more of a challenge because the bulk almost half of the funding comes from one time well I guess it's consistent funding and some of it's one time money so there is a bigger gap that needs to be filled and we need to come up with a strategy to have more reoccurring revenue. And the real the real benefit of the the longer term approaches to to mitigate the short term reactionary measures we need to dump tons of dollars into the program to to satisfy any of the shortfalls that you might might have on a specific year I don't allow you to smooth out those those increases that you would need to see over a longer term period and and the period really talking about is going through your current biennium and the following biennium zero three two biennium cycles which typically would be three or four year projection. Senate members questions Mr blade or just minutes of representative Hickey you're recognized yes just a just one with that budget item but and and I agree with you one hundred percent do you all know what we need to factor in I mean is it sixty eighty million more dollars in our budget I mean so that that's recurring all the time as you said we're putting it in or putting it in the in increments were put in and out of our. What's called our reserve accounts or taking it out of the department of education if you all haven't done that that's just one number that would like to see because that is something that the with everything that we're about to do with budget everything we need to go and get that factored in and maybe Mr believe knows that number already but. The one thing yeah the the one time I think for admin depends on which which are you talking to if you're talking to twenty twenty five that number is a bit larger by twenty twenty three then somewhere neighborhood of forty to sixty million dollars that we need to be infused into the program to sort of satisfy the projected shortfall okay next year over year. Right. Okay thank you. Mr blue can you shed any light for Senator Hickey Leding your response. so what we agree entirely with these recommendations I think the single team did a great job of getting up to speed on what is a really complicated and difficult part of state government to learn I think they're absolutely spot on to say that longer term strategic approach that's planned that's thoughtful and that doesn't have the sort of surprises and pitfalls that are as traditionally has is really in the best interests of everybody there correct I think in saying that our approach to this so far has really been kind of ad hoc we've patched together holes when they've appeared and then moved on down the road when the end result is that you have some of the kind of spikes in rates and spikes and in prices that make it very difficult for families and for members to to to operate so we support this entirely we actually look forward to putting in the places a structure like they describe. Senator Hickey. Mr Billy do you do you can agree with the and I understand forty to sixty means kind of a a large gap but do you agree that that's something additional that we need to be the factored into the budget. We turned the. So if I'm understanding the the the answer correctly what we're looking at is counted twenty three so the twelve months beginning January one twenty twenty three in my understanding from the conversation we had is that number would act about forty million additional funding to count for growth and other issues within the Public School Fund yes that's correct thank you Sir. Centering in Ingram you're recognized yes of by removing the cap of it let's look at this on the employer side for a moment obviously want to take care of our employees what is going to protect the the taxpayer is that the structure of how the board is going to be set up that in some ways will be. Cashing a check that we don't really have any control over what is that going to be done through the the the structure of the board of how do we protect on the taxpayer's that I guess is my question. I mean protect taxpayer site is for everyone I mean you gonna set a increase that's going to be based on a medical CPI rates of the. The inflation index and all state so that'll be a three to four percent number correct so instead of dumping sixty million dollars in your account every year you can have a budgeted amount right so it's gonna be planned out and I think you you by doing that medical CPI number you're putting pressure on EBT to say you guys need to manage the medical inflation so you need to make not plan designed cuts and all of that we need to manage the plan appropriately to stay with medical place. So. In my opinion by doing this you're actually Studley planning you've budgeted you put up a bogey towards EBD to know how to manage the plan what they're targeting and for the better for the taxpayer's you're not having these large inflows of you know shortfalls you know every every three years in a we can say right now if you can do anything you get up to two thousand twenty four and got a dump whatever number a hundred million dollars to be short so we don't want that cycle because that's like. For the benefit taxpayer that's not a good cycle rating on a steady Budget bills like on that's what we're trying to get to I don't know if I directly answer your question I'm you did he is the CPI of by specialty is the C. B. I. an aggregate or is it broken out by docks of hospitals pharmaceuticals has that number have there are brick us like that we probably wouldn't recommend that because it's too complicated we promise an overall medical this overall medical CPI inflation number that that none that that does get broken out the pharmacy one there's a hospital one that there are all these break up I think that gets way too complicated you may decide the just one use the CPI overall instead of a medical specific one that's another option so we're still we're still talking about which exact method to do what we think probably the most appropriate would be the medical CPI number which is slower than medical flirtation I mean you'll see trends surveys that people publish that are in the six seven percent range for trans by medical CPI is only about three or four percent. So I mean you got your work cut out for you B. D. that to manage it because you know there's a lot going on in health care one last question if I might Mr is there or is there a tool that is available that you can hold your administrator of your policy to that you can make sure that your administrator is doing the job that they should do for the for the board. Four administrator do you mean like Blue Cross or yeah I mean yeah and I'm sure I'm you have performance guarantees in there the problem is I mean the you're a big organization so your bearing the risk right as as the organization as an entity so yeah Blue Cross you one half performance guarantees in there that make them do the job they're supposed to be doing but they're not at risk if you have a higher. It meant that is not a risk that the whole very ability and all this stuff and you could pay that if you want to pay a reinsurance company to. It would not be a good investment for your size because you'd be paying a huge amount to have the risk go to somebody else and with your size you can bear the risk and that's really why we have the fluctuation of the reserve in there to cover variation like the. Thank you Mr. Senator Hickey. Thank you in. Just just one more and I understand that we talk about the budget what we need to factor in for it but for calendar year twenty two and not a misleading buddy we've already kind of had these discussions we are going to it looks like I have to have an infusion of some additional moneys it appears like on this one time funding for twenty twenty two is that correct. For for twenty twenty two the way the plans are projected to. We're gonna be at the target we're gonna be above the target reserves for both AS in PSE okay so it's really twenty twenty three where the money needs to come in okay. Okay so the forty to sixty million that's going to encompass everything that we're going to need all the way out past to the end of twenty twenty three to the end twenty twenty second could I mean you can put it in now it doesn't matter when you put it and that that's that's the satisfy the reserve target for twenty twenty three okay thank you Sir. And that is a calendar year don't buy that is a calendar year thank you because we we we. I have both set minds at the moment a representative with you're recognized. Thank you Mr chairman I will pursue senator Hickey and angles of line of questioning. You know we fund these positions and. Categories of state employees versus public school employees. And we find that we fund positions that are not being utilized. And my question is we're not able to give the taxpayers of true reflection. Of the insurance cost per individual to come up with the Umezu number. And now we're being told that you know we're gonna lead increases forty to sixty million dollars and we're the we're using the same procedure that we've used for fifteen twenty years. And we're not getting anywhere we're not solving the problem. I don't understand as I stated yesterday can you tell me why why this continues to happen. What what who who's responsible after your review and your the consultants and you're looking at it who is responsible for giving us a number that we can rest assured is going to be able to provide adequate funding for our employees in order that we can be a good employer. And take care of our employees and at the same time satisfied our constituents my constituents or asking me wine or we continually having a shortfall in deficit. And then having to come back and increases now we're going to have to increase it again. So as of right now Yes fix the rate you're still doing the same thing you've been doing right that's why you have a you're gonna have a shortfall recommended that once it shored up which is I guess all the more we've been talking about right now we're changing all system we're talking about have an index you don't have shortfalls doing long term budgeting so if you get out of range you have a kicker adjustment to that so we're trying to move this thing out so that we don't have the jump around so that's what we're recommending you're not there yet because legislation has been passed to change that method so right now you're you're reactive to the the short term money that goes in that goes away it's not their next year I mean if you if you get a hundred million dollars that you owed this year and you throw a hundred million one time in when you get the next year you're still going to a hundred million as you can have that expense so we're trying to say need to have a definable budget bill number every year I mean the jumping around stuff this is for you guys and it's horrible right I mean you don't know and also jumping your shortfall your reactive so we're trying to get proactive ahead of it have you have you budget to an index which a small index so every year you have a budget bill number and you should have a shortfall if that ever again. Follow up if I may Mister chairman okay. So how do you view the fact that we're funding vacant positions. In in state government is not being filled I mean to me. That merges of bone the for all. Upon the people of Arkansas because those positions not funded but yeah we're paying money into all this being utilized for you know that that. It may not be stable we discuss that played it but that's not our consultants Position to the. Rippers NO yeah I know the one thing I'd say that. Regardless of the the the how you funded whether it's funded positions or fill positions the fact of the matter is there needs to be a level of funding that sufficient to cover the cost of the program whether it's based on actual positions filled we look at that the number of five hundred would need to increase to six eighty to get to a level that would fund the the the level of dollars that you need to support the program that you have a place so that's sort of outside of what we looked at but we did take a look at what the the level of funding would need to be if you did change the allocation of of the dollars by. allocated positions verses field position. Anything else representative was. What is a area of concern that you brought it we need to further discuss but it yeah what they're giving us is it what we've got I have and will have direct how we do that what we fix. thank you Senator Irvin you're recognized. A quick question just and being able to tie it to the medical CPI AT I think alike that recommendation and is very similar for the benefit of the legislature I think that what we did in Medicaid you know we were above our gross our growth rate was usually around seven seven and a half to eight percent where is the national average is around five and so we worked really hard just to curve that growth rate down to where an hour at like three point five I think. Below the national average so it took a lot of work you know to make that happen so it's very similar I think in what you're proposing with your recommendations my question though is with COVID you know this is I mean what we've experienced is is It's something that we've never experienced before so how how does how do you account for the increased utilization of a plan right now based on COVID with the you know there's no limit on testing and every time you go take a test they're charging your insurance right and also prescription drugs and treatments and then hospitalization how does that affect and how do you take that into consideration because surely that has increased our claims. And increase our utilization of our plans yeah so for for twenty twenty was actually suppression and claims associated with COVID generally overall for for the country due to sort of. Care that was avoided for the most part As hospitals were closed throughout the country we've seen an uptick in in some of that utilization and twenty twenty one and we did account for increases we did make adjustments to the claims and and utilization at a projected higher levels associated with that and the underwriting that we did. is there an ability to calculate what that would look like and have you worked with any other states that are using any of their federal funding to offset that for their plans. Yeah that's a a tricky. The tricky answer I guess you know the money comes into the state and the legacy of the power but the legislature and the governor they direct where the funds go right to date the vast majority of state health plans I don't think of an allocated any of that funding so the state is the father purposes in general you could allocated and yes we could calculate the exact amount Blue Cross to calculate the exact amount that's determined from code and you can get your carousel allocation when you get out allocated to the state health plan which would okay so you're funding as well you know right well I think that's something that we probably should be pursuing as well thank you. If I can just relate expand on that a little bit we've been watching the COVID costs because we'd like to see at some point some kind of reimbursement for them and I'm with all the federal funds that are out there we haven't really been able to find a way to make that work within the the program requirements but there correct one of the weird things that we've seen is that yeah we sent a bunch of money on COVID care. But all of the elective procedures that people would have normally gotten they're not getting so overall bottom line our growth is really on track to where it would have been if COVID hadn't happened. The problem we've got and the concern we've got and these are kind of built into some of our actuarial of of projections is that at some point all those folks are going to come back in fact the recommendations that they'll make later on dealing with oncology deal with getting back into the screening business and getting back into the business of catching things on the front because we didn't do that last year because everyone is closed the concern being will now we're gonna have later stages of conditions that are going to be more expensive to treat so we're anticipating that at some point over the next several years all those procedures that we would have otherwise taken care of are going to be trickling out if you look at the projections are built in there yeah no I absolutely agree with that I mean that's the trend plus people are afraid to go to the hospital because they think they're full of COVID which I mean they aren't a lot of cases and they don't want to catch conventions other Payton and often they're sitting on very complicated issues when they should be in the hospitals in the in the emergency rooms that messaging really needs to be clarified in my opinion. People need to go to the hospital emergency room if if they they need to immediately but the reason I ask the question really is to be able to calculate that figure Jake so that we could utilize any of those funds to offset what we've X. occurred is expenses because that should be coming that should absolutely be at a you know a qualified expense through either cares or at the Arkansans so that's the reason I ask that question. By code okay. Senator Hammer you're recognized. Thank you Mr on the on the CPI when you use that as the basis for what your recommendations which talking about for understand you correctly. What what have you done like for example you you gave a a cost analysis of bariatric surgeries and the cost savings or the unattended costs associated with them. We're going it's going in and just itemizing each one of the type procedures. And changes that we would make an policy how does that fit in this discussion instead of just budgeting to add more money changing the way we do business could create some that saving so we wouldn't have to budget more money that's a great question that's kind of why we have the quarters in place so If you put the CPI and you run a projection to show where you're going over the next four years as an assumption and then as you make plan changes if you know if your project to be a fourteen percent by the end of the four year projections now you make a plan change the but the Medicare advantage and save thirty million a year that will cause you to be able to lower year funding level so would give you the waiter would give you leeway to move off of the CPI number as a legislative branch right we've done the production we have available funds we could adjust by acts and that would be a process for you so everything you put in place and at the end of this we put all this together in a report we're going to do you know if you do a B. C. D. E. what that looks like and what that would do your funding levels I mean I mean it could very well or to three percentage points man without the run the numbers and and she the long term impact of that follows Mr. So what we're trying to grab a number are we grab a number prematurely until you've had a chance to do that so we can see that if changes that you're recommending produce savings because we change the business model or the policy that that has got to be a key component as far as what we're looking at in the way of a number or my looking at it wrong. Well that that's two things one is what is the number that you actually need in two thousand twenty four that are two thousand twenty three if you make the changes so that'll be a a number that will change the CPI is an index numbered so that's that's a legislative number you're going to have in there that provide stability over time so if you come out of the gate and you see that you know will be the projection with all the if you if you do this if you do A. B. standing that we recommended you save so much and you don't have to do that yeah that's fine that's your that's that'd be legislative you could do that I mean if the CPI is in place and we projected out and you're showing that we're going to have twenty six percent reserve you have you know from sixteen to twenty six U. at ten percent to play with and you can reduce your funding levels so that it could be a built in backdoor way to increase into the into the reserve if we use the CPI and then the changes that you recommend actually generate more savings that can be in addition to what CPI would be the basis for which we would make our decisions and hopefully these other things over time do we have the systems in place to track that or what we need to do is a state to make sure those systems are in place so we can identify that that number thank you Mr. That's a recommendation they put that in place that. Thank. After the. After the recommendations are put in place there's gonna be regular projections that are updated on a monthly quarterly C. you know that's our recognition as a bird on a five year projection model so you're constantly seeing how those savings have impacted the plan and how that changes where you're at relative to your target and what that means for your future funding. And you're recognized. You may go ahead and and I think back to the question some of the recommendations that were that were gonna make for savings have a timeline associated with them so we're gonna talk soon about the MA PD plan it could possibly be put in for January of twenty twenty three and we're talking about twenty twenty three numbers it does take time to put them in place because we have to go through a formal procurement. Process put it out into you know solicit bids from the market do an analysis have a campaign to communicate everything that would be going on it does take time to put them in but to answer your question there are savings that are not in the projections currently when we talk about the twenty twenty three numbers that could affect the numbers. Senator Bill. Thank you Mr chairman for allowing questions from non member of my question is two fold and Jake it might be for you Mr Billy but I want to verify that you stated because many of us of her organ after two budget Tory changes for twenty twenty two and we're pretty solid that that's not still on the table that we're gonna be able to survive budget wise told twenty th twenty three and Jake if you agree with that or if you've got comments on that I'd like to hear on second I'm not as sold on the CPI we just heard that the CPI is based on the health care system in our health care system in the last period of time is nothing but all over the page could you state for me one more time what other possible indicators might be used as indices. I didn't quite catch that I think you said earlier your presentation I'd like to hear those again and maybe be able to research on my own if there were some others you were suggesting. Actually you know that CPI CPI index free for your plan is fairly good I look back at year retrospective experience over the past ten years I mean from an expense side you have you know five four five percent trends which is not significantly different than a medical CPI number the other ones I mentioned would be like in all urban CPI I mean there's like all kinds of consumer price index indices that you can use you can use it you could use a published survey but that's gonna be a lot higher I think the CPI. CPI urban all under state I think the number that you need for your medical and in a in our opinion that doesn't mean you can't lack latch on to something else that doesn't mean either that I mean we think the having the CPI index and there's just. The legislature needs a number to have of the gate you know I mean I have had other states they'll say we're doing four percent and that's a target and they just locking four percent so I'd rather lock into an index but I meet your decision with which and they see what the main point for us is the one I was starting and the sea and the starting point that each year you you sequentially Senate you're gonna have that increased funding. And then the the whole QSO thing is to have a long term projection because if you're doing year to year to year what you've been doing right let's look at next year and throw some money in there and then you get the following year and you lose that money and getting more money it's just you have to have a long term planning and we recommend to biennium cycles because that gets you through to funding periods and we recognize the current banyan's usually the urgent one the trying to figure that one out but the plan for the second banyan's important so of answer your question well follow up because we're pretty close and I and I appreciate that the CPI is good for you. And the description you gave gives us something to land on that as I stated that. Mr bleed's comments about we haven't been doing selective procedures we've many gripes with hardly had any flu cases in the last year in the cost of the flu medical CPI versus what it might be next year I mean I just I feel like what we're going to a CPI normally because you're in you're out that is as you say a forty five percent that's very honest and true we are living in an honest and true health care society right now I guess I just wanna make sure there's a comfort level because I do agree indexing this is going to be critical to being able to keep it fun the and then I guess the last thing is the twenty twenty three is the first time we've got to have a budget item to we feel comfortable in that in our analysis as well. Yet we do so the the actions taken by the board of finance which were approved by the General Assembly should get the plans through December of twenty twenty two. and it's really beginning January twenty twenty three that I think we're going to begin running into issues again in a lot of ways though what we did to fix twenty two was continuing the same processes that we've always done which is patching holes so we have some work to do I think between now and then to really review structurally how we operate the program a lot of our recommendations that the Siegel group is made are spot on and things that we need to look at as far as the indexing goes you know one of the things that. The indexing I like the idea of that they're talking about is the idea that we make annual increases in funding. Part of the state budgeting process so that it goes up every year so those increases are going to become expected going to become routine they're not going to be a shock there's something we can all as not just the the state in a school district but also as employees and and parents there are things we can plan around. The other thing about was the kind of shocks to the system that occur codes a great example no one could have predicted that how would you project out four years down the line when some crazy pandemic is going to come out of China it blows up the whole the whole house system. One way to avoid that is to make sure that those increases are in place even in the good years so even when times are good we're still incrementally increasing those rates and I think that if you look back on the plan. If we had that process in place in fifteen or sixteen a one or two percent increase would have really helped us avoid of five or ten percent increase later on down the road. Thank you Kochhar Wardlaw. So all while we're on the CPI discussion I think we need to talk about the school funding and we look at the matrix which is I know that's Greek to you guys but the matrix we fund a hundred sixty one dollars and twenty twenty one. There's usually a one to two percent increase in that per year when you look at the medical CPI which is roughly around five percent there's a whole their automatic right off the beginning so we have to figure out a way to address that on the PCS on the PSE which is where we have the biggest gap in funding. Already M. R. in a right Patrick I see you shaking your head hundred percent agree yeah and the other pieces you know we're we're trying to get through this department about funding and it's our understanding that you know the the normal baseline for that is there's been one time money that's come in but a hundred ten millions kind of that future expected baseline it's supposed to be held constant rate so you have now you have one piece that's going up one or two percent yet another piece that's a huge part of it that staying constant for future years so that doesn't jive with CPI increases and so the only other levers for the employees and now. That's not really where we can we want to go based off the bench marking so it is so what you're saying is legislatures gotta figure out a way to address the medical increases on the two funding sources for that plan along with the state employees as well and and. The best way to do that in Jake. I've seen him agree the medical CPI is a good measure so somehow there has to be some kind of increase that's in the budget on the schools all the way across the board that make sure that five percent added or whatever that percent goes to in the future to ensure the funding stability of those programs. Yep. Thank you. You short. Just follow up along what representative or laws this gas thing also there's gotta be some level of consistency of so if you F. enrollment is that correct we need some consistency of numbers of what what we're looking at what's projected. and we have more of that on the state employee's side versus the public school employees side is that correct thank you discussing the importance about that. Right I mean stability is is certainly important in terms of the projections and having a good estimate in terms of the number of people that you'll be covering is is critical to protecting our future so if that's something they need to get built into to any projections that you're looking at it in in in terms of the funding the overall it you know there needs to just be. Increase the built in but but likely needs to be an infusion of additional funds for a long term perspective the program without needing to make further adjustments to the program I don't know if that. No I mean I I think it's just important that it's that it's discussed among this this body that we have to have some level of maturity and of numbers and so when there's inconsistencies about enrollment or inconsistencies about the projected growth of an enrollment of a plan it makes it more difficult for us to plan financially what that number is or needs to be or looks like and so I mean you've described the big gap based on the fact that we don't index to a medical CPI I completely agree with that but there's also the law the way it's funded and the numbers of who is going to be in the plan all of that is incredibly important to you rate adjustment rate setting and just making sure that we have more solid information at the time when those decisions are made and right now we have more of that on the state employee's side and not so much on the public school employees side is that correct degree okay thank you representative right you're recognized. Thank you thank you Mr chairman you know in past meetings waiting discussed this and it's something like twenty four percent increase of projection though twenty five. Which would be about six or maybe a little bit more percentage year and this year we're looking at five point four. Well what I'd like to know sure is how much that reserve that twelve to sixteen percent how much would that actually project out each year and how much would that cover an increase say if it went up seven percent you know from one year to the next how much could we actually use out of that reserve and how much would that covers or for that matter of increase based on five point four percent for this year how much. Email yes Sir so right now both programs are above the reserve levels the target reserve levels that we're projecting we're expect we're projecting expenses to be above the level of income that you'll be having into the program so you can be drawing down those results over time the five point four as for state employees in a projected increase from twenty three through twenty five two and in order to get to that level of funding that's needed to to hit that fourteen percent target for the state employees that number for twenty three is roughly fifty million dollars for the public school employees that number I believe is in the range of seventy million dollars for for their program at fourteen percent of those numbers would grow over time is expenses would grow and that's why there's a need for additional indexing to the funding that would come into the program to cover those expenses and keep those reserves adequate so even historically and if you go back and look your claims are pretty predictable I mean you're not all over the board it really hasn't been a claim issue I mean you've had a moder trend there's no big Johnson also in your when you put this hundred million infusion or whatever you do those numbers lack of the claims. It's because of the funding side it's just it's not funded appropriately so when you take the one time money are you gonna put it back in the fund at the claims. That the claims are fluctuating all over the place they're kind of stand steady and growing a little bit. But we funding going like this you know some that's the reason so the the reserve or put in and if you actually have some percent year I mean of mean some massive something would come in way worse than covid because like some presents a huge delta I mean even look at the cove impact on your numbers and. Blake said you're still on track with COVID so I think. I think the reserve levels appropriate and then Yeah I mean the only thing is. If we're projecting five percent and we end up having a year at seven percent because we have a long term approach able to spread like mitigate that that loss over several years so you're not. Super reactionary you're not trying to to solve the problem and then in the following year but you're spread that out over five years so maybe the next year you know that seven percent becomes three percent and our CPI was four so now you got a again that that offset that loss you're looking at a long term. We are we are looking at you know all the change that we're gonna get to actually with all the stuff recommend and that's a significant offset cash was so that increase number you're gonna need is less than all these initial projections are talking about so I think we need to eventually get to that point where you can lock into what's the dollar number if we do all the stuff even we do half of the stuff in a select which ones you think are feasible and you want to do and then what's the real number we're looking at and then that's the number you fund over time. What if this if this reserve of twelve to sixteen did exist and we put that in unless there was some kind of real major trash fee that came on should we be able to keep this at a minimum of five percent increase year. yeah once you want to take that one time funding and normalize it to a current level so that's the one exercise of trying to get through is let's take the one time funding out and get that to a certain level so it's certain ninety at your readers should be five percent render whatever the induction of such you're not jumping around on the last five years yeah I mean and then maybe you know you make changes where that five percent for a couple years you know and you're managing the plan you put in new things and Jake manage the down to two percent so you got a three percent cushion and then you can eventually risk reduce that number or you could enhance benefit in whatever you want to do I mean so I think it's all about. Being cost effective project the the best you can and being able to manage it you know not be reactive. Thank you and Committee. Recognize the secretary keep being here check to keep you will jump in any time you signal and we'll get you back in you're welcome at any time I'm really ready to go to the Medicaid advantage prescription drugs segment. Okay so we we're here. And talk about the Medicare is in second okay. So Committee on the school funding right now there's like five different appropriations that put money into PSE premium assistance swearing at the bureau to explain not and but if we work on some kind of CPI right now we have to do that in about five or six different places in the code so there needs to be some sort of effort to combine those to one fun so did you only would have to put that increase in one place instead of all those different places in code so we're going to go the next topic but will get bureau ready to explain that to the committee so that we can move forward. Thank you going pretty. Okay so we were here in July and talked about what a Medicare advantage plan is with the part D. for the warm for your back a little bit closer to you okay the better thank you we're here in July and we talked about a Medicare advantage plan and a and with the part D. which is the pharmacy side so in may as the medical side part D. is the pharmacy side Just to recap a little bit these are fully insured plans offered by private carriers which combines the traditional Medicare on the medical side and the rap that you're currently providing to your Medicare eligible retirees and and that private carriers receive capitated payment from CMS to subsidize the cost of coverage. Most states have put these in the place in most states that have put these into place use what's called a passive PPO which means the benefits whether you're in network or out of network would be the same and through this this is a waiver for group employer plans is very different from an individual Medicare advantage plan that you see on the market this allows members to see providers nationally anybody that accepts Medicare. on the pharmacy side. Currently you don't have coverage for PSE you do have coverage for ASC and not coverage if you are relying on retiree drug subsidy for monies that come in from CMS from the federal government. The RDS program and the monies that come back through already us did not keep up with the changes in the standard part D. plan over time and so if we moved that coverage and let me be clear we're not eliminating coverage removing that coverage on to apart the platform you'll receive more subsidies back from CMS so we definitely recommend taking advantage from of all subsidies that are out there we have implemented this for multiple states and it currently Arkansas's only one of two states still in the RDS planned so. That's the reason is they're taking advantage of all these additional subsidies the savings that would be achieved not only gives you cash savings on an annual basis it will affect your OPEB liability because gas be accounting doesn't allow you to take into account. RDS dollars that will be coming in besides the difference in cost so be huge effect on your OPEB liability. So after we came in July we went out to the market we put some of your data out we went to the two largest carriers and we ask them to give us rates and we came back with those in our at the August meetings and what we found was from those rates which we believe are conservative because it's not a procurement MA PD rate was roughly fifty percent of the current cost for the ASC program. This would be about forty five million reduction in total premium if you moved everyone and made that a mandatory program same benefits better benefits just on a different platform. for PSE because there is no drug coverage currently and that means these members are going out and they're purchasing coverage on the individual market you cannot have a group inmate you cannot have a person enrolled in a group product for just in may only and in an individual part the plan at the same time. the reason is the federal government doesn't want somebody enrolled into different programs it'll kick you out so we had the these vendors give us a price for medical and pharmacy coverage based on the AS the current product. We're going to. And that is a small increase costs to the state but it would bring pharmacy coverage back for the Medicare eligible retirees. So our recommendation is that you conduct a formal procurement as soon as possible. Recommend approval by year end so that we could get that into place get a procurement out there and have at one one twenty three effective date. In these R. F. peas you have you can have your same plan design have all kinds of flexibility and then you'd have rate guarantees your over year where you could still do renewals but you have a guaranteed increase and would also have medical loss ratio guarantees on on the fully insured product. Now you might not want to do it full replacement so what you could do we have a different side. Is do a side by side approach so you could have the same benefits that are out there currently and then put this along side so the retirees would have options to stay in the plan there in today or go to the new MA PD Plan. And you could set. The contributions in the new plan using the same distribution that use today which means it will be a lot cheaper for a retiree to go to the Medicare advantage plan but if they want to pay more in state in the current plan they could do so. So we estimated savings with this assuming. Especially if you did an auto enrolment into the MA PD planned and then allow people to opt out and go with the other plan with an estimate of seventy five percent enrollment that would save the state twenty point nine million dollars. And it would say the retirees twelve point six million dollars annually. The same approach. Number. The same approach that's for the state plan. On the PSC side again there's a some cost to the US but again we're giving back the pharmacy benefits which would cost the state two point one million and the retirees one point one one point eight million in additional premiums but these are premiums that they're paid for much richer coverage than they're receiving right now on an individual plan. So that's the recommendation. So in general you know. This is the option so recommend it as the option to the current plants so if somebody wants to stay in their exact plan saves pay what they're paying right now they can do that nothing changes but this program we're offering more recommending you offer is real enhancements retirees I mean there's a lot of stuff these these plans to which Kirsten talked about last time on the supplemental benefits and home visits the and various other incentives vision hearing like all kinds of things that are usually typically offering these programs that we will make sure they get you know into the final analysis on the PSE side they could stay the same whether doing as well I mean they go by either party in the market and stay in their Medicare supplement plan but for the same similar price a little bit more financial incentive they they don't have to buy the part the benefit anymore they don't the pay that premium will be part of the plan and that's you know the offering so in general bringing that benefit back you know is a tremendous value. And and and on the benefit that gets brought back as as persons that it's so much richer value than what's available in the individual market those plans at that are available in the individual space are are pretty lean generally with some restrictive formularies that that are in place should be a a broader base plan that you'd be able to offer to these retirees and and perhaps not it doesn't even need to be at the same level as as a as the retirees to provide significantly greater value to the retiree on the prescription drugs. And and one last thing again these numbers are based on a market check and we believe that if you go out with the actual procurement you're going to get better pricing so when we show this two point one million dollar cost of one point eight million dollar cost. We could easily see that go away and be cost neutral. In a room procurement. Director bleed and then we have a member. thank god turned member of really do a good job. I need terms of body also. so we agreed that the Medicare advantage plans and the savings they offer or something that we need to consider as a state the licensee doing this the federal government has put a lot of incentives around them a lot of subsidies around them and they're really the promise of savings and benefits for active and retirees members are just too big to ignore we did suggest moving active state employees off to Medicare part D. last year she recalled that one over that was that had some negative reaction there was a lot of push back on that we also offer that as an optional plan very few people to care took took up that option so certainly we would recommend that if we do want to go that direction obviously the devil's going to be in the details on on how we structure this but we really emphasize the need for communication for education and for making sure that everybody knows on the front and how they can benefit from this. Yes at and when we have done this with states the communication is a huge part of it and that would be on the vendor we would you. In the procurement process we would make sure that when we choose a vendor they're ready to go out on a campaign statewide and hold meetings so that all retirees have the ability to come to the meetings I understand the product ask all of their questions and get them all answered so they do understand the benefits. Cloture Wardlaw I will be very clear that and I I made this clear yesterday I will make it even clearer today since were in full public. There is no discussion of cutting part deep planned benefits for anybody over sixty five here am I clear. Correct there is no discussion of a mandatory move of anybody over sixty five here to a part D. program for Medicare correct thank you Allen to make this clear we're not doing what was suggested a year ago and and just to clarify. More on again on the part decide there's a difference between an individual product and agree product the group product will have the same copays per tier as they are today the member won't see a difference. Member will not see a difference and this whole thing it's an option so they can take the option and we've seen this in other states with the medical so plan next to it I have to stay at large they that gets eighty five percent of people roll their Medicare advantage plan and that's at the same contribution rate so we're talking about even in a less contribution rate here so I would be shocked if we don't get the seventy five percent number that we have in here I know people don't seem to believe that but with the a good communications campaign and a good explanation retirees on what they're option is it's a significant benefit for them. Senator Irvin. Yeah I think you answered my question was making sure that the communications is built into the R. S. P. on the vendor side not necessarily tasking EBT to do that we've got to make sure that that is a priority and that that marketing strategy is solid and very good that is absolutely and miss necessary for going for it so you answer my question about that but I think it just bears to be repeated that that's got to be a function of the R. F. P. in the vendor is to make sure that they're communicating clearly and holding meetings in person throughout the state of Arkansas those are going to be things that I think are necessary for that are if he or for that vendor and if we do not select anybody that will not do that then you know that's we are way off mark there but I think that's critical in explaining all of this to people individually I mean would help to give a brief explanation of what we normally see that happens after award me curses been through so many multiple. Requirements and how they handle it in the implementation and you know the going around the state have been road shows all over the place every County working with retiree groups you know having all kinds F. A. Q.'s videos when there's like a lot of informational is not for the retiree you know. Correct I mean they even in it even gets down to. The places that they're choosing to make sure they're easy to park and get into and and easy access and it's all around retiree specific so will. Yeah. So that's why I mean this discussion and with this legislature here listening to this it's so important critical that we coordinate because whatever committee meetings that we have or you know we have or we have we we've got to coordinate these efforts as best we can to and be the ones that help get that information out that too often sometimes I'll see through in our of P. that a vendor is going to do you know zoom calls or web conferencing. People on there not part you know you and I will participate in that but your average person out there is going to go what no I'm not doing that you know they'll come to a meeting if it's going to directly affect their benefits and so now it's it's just worth emphasizing that that's just note not going to be acceptable you know we're not going to be doing web conferencing and zooms and you know the information is there for you to find it if you go search for it we've got to make sure what you said is absolutely correct that it's all coordinated but we can also participate in that coordination effort with our committee meetings as well and as they relate through you know retirement committees or because because those have been well attended at I think we've had a good success at doing that a pre COVID so just foresight stating on our hands to thank you. Representive god for you're recognized. Thank you Mr chair and I couldn't agree more with Senate urban about that coordination piece I'm wondering if I know right the initial stages of this but I'm wondering if you've gotten any feedback from our state in place as the oceans and teacher associations and and just kind of the initial glance and look at this has already been sent some chatter about is their support as they're concerned what are we hearing on the front end. They said the level which put in numbers where we have we haven't had that yet we're planning to have meetings with them in the future near future and talk through all the. Thank you thank you Mr. Okay members will let staff presented here. Recognize the. Thank you Mr thank you Mr chairman Kevin Anderson bureau of legislative research we are passing out some materials that show all the different appropriations that are in the public school fund bill. Everybody's getting that now if you're going for C.. Yes Sir thank you Mr chairman. So these are these are all different appropriations and you can see the expenditure history from two thousand seventeen to two thousand twenty and the projections for twenty one and twenty two these are all for public school employees are all in the same bill payable out of the Public School Fund. These can be combined into one commitment item we will be in fiscal session looking at this and that'll be in December will this budget will go before us and that would be an opportunity if the committee so desires to combine this all into one for transparency in these. I think that was a question Mr. Any questions on that. Senator Irvin. I said this just really is a matter of budgeting and so that would just need to be done through December budget meeting correct yes ma'am okay so this is just a funny make okay. Region Wardlaw. I just want to make sure the members understood where the funding comes from and how many pots it's coming from and how we could consolidate these in and still draw the funding from the sources that is being drawn from now and if we look at some sort of CPI it's going to be a lot easier to apply that to one appropriation verses all these others and it's gonna be a lot less confusing so just want to bring that to your attention and that probably will be part of the recommendation on the final side. Thank you senator Hammer you're recognized. but I just want clarification either from Stafford just to have it out in the open and get me straight up something maybe to the consulting group this is all the money that we put in in the various areas. But is this not part of what we give the schools under the matrix and then they actually determine how it is distributed of which we lose control that is legislative grants once we do that or would you would you speak to that are. The staff for the consulting group thanksgiving can answer that I can't Mr chairman would you mind Katie Waltons are expert in rather than me just wish her whisper mayors sit down. But will let you take over. If you recognize yourself please. Thank you Mr chairman Katie Walden bureau of legislative research fiscal division Senator hammer and it's my understanding that the foundation funding line is what covers the funding given to schools to pay for whatever including teacher health insurance on the school side this finding is just funding directly going from the department of education to EBT. Q. U. B. D. for state employees not for the teachers well it's just a find EBT and also in the public school employees insurance at fifty seven million that line covers all the employees of the co ops the vocational centres the school for the blind a school for the deaf so there there are some employee insurance payments being made but most of it is just funding going straight to ET. Part B. is the only. So shall we talk about combining into one. I would that affect all these areas that it's distributed out to now is at par with the conversations going in the future. The latter Sir thank you would be to thank you should we should we add what's given through the. Foundation to this as well to complete the picture or my mission it. We can get that for you Sir. Okay I can like to have that if I mean that we're talking about six categories that money is going to. To help fund the health insurance that are there any other ones were missing or is this it no Sir and and the state foundation funding as you know is and the funding that each school district that Senate that funding is unrestricted so they decide on how to spend that and they will use that essentially on paying for their teacher health insurance for each teacher but we can't dictate how they spend the funding so we don't we don't consider that to be funding to EBT for health insurance because it's unrestricted right now one director's comment to the chair not to the staff to pull staff out of it but I think we've had that discussion before here that's got to be part of the overall discussion of the money we sent to the schools and not all the employees get coverage and then that money gets redirected to do other things if we're gonna have that painful conversation I think we're gonna to throw that the makes and get that dollar added to this and have that discussion as well just my opinion thank you your your correct and we we've had some discussion on that and that is something that K. thank you thank you for Senator Irvin you're recognized. So just as a follow up as to what senator Hammer was discussing that amount that's in the foundation funding is the six pot of money and so you know that it's important for us to have that discussion with the the department of education when with the bureau with the legislature because I think it's really critical if we're combining in work creating one fund that we have that discussion and that discussion will also have to be included in the adequacy studies that the education committees will also do and there's history to be able to do that and to remove that and put that into chemical funding so it just needs to be part of the discussion and just to the bureau if you can get that dollar amounts because this isn't the whole picture and that was the point I was going to make its right now hundred sixty one dollars per person is that correct. Yeah. One hundred sixty one per person is that correct. Per student is. Per student okay I thank you thank you. Okay and I think we are now ready to go to medical and pharmacy. Senator Hammer did you have something else. Chair of medical and pharmacy could could ask a quick question about the recommendation of the committee chair go ahead. So in the other states that have done this would have been the unintended consequences at the pharmacy level whether that be independent pharmacies where that the chain pharmacies as far as the repercussions as that's experienced by the pharmacies it is a savings to the state I get that supplemented by federal dollars I get that. What are the other impact factors that would maybe hinder availability to to get the message from the from the local level or can you speak to that are given have you can incorporate that into your thought process recommendation. Thank you Mr. I think we could walk through those pieces I mean typically at least specialty is probably coming from the specialty pharmacy of the inmate of the party vendor typically however on the retail side I have gone through procurements for an inmate PD where we have separated out the independence so that the governing the governance in the state could choose what the reimbursement rates would be for them. So so that is available to us and we could look at those details and write anything that we wanted you know into the R. F. P. so that when the carriers are looking at the art of peas and responding and putting a bid out they understand the components there. Okay ready for C.. All right so we'll talk about the medical program you're at self insured plans so you're relying on Blue Cross blue shield to administer the plan and one of the biggest things they do is they get you discounts on on the claims so what we looked at we did discount a reserve discount database to analyze them against the other major carriers and we use your census information to look at geographic footprint and apply those discounts percentages we did confirm the Blue Cross have of right now have the greatest discount we have to other vendors that are they're creeping up there close but you still are maximizing your discounts which is great. We also look at the S. O. fees so that the small piece of the pie on what you pay so twenty dollars and fifty five cents PM PM. Compared to other groups your size we think that that fees competitive so We really don't have a lot in terms recommendations except for your continued to when the time comes make sure you go through a full R. F. P. have the bidders reprice actual claims you can get a a greater look at what the discounts actually are and I think Joanne is gonna talk about some of the other pieces in terms of maybe carving out some of the fees. Yes so there are multiple options that you can do here if you go for a bed you can also on couple some of the medical management procedures and processes and go to a different company and so then you can kind of have control over what you want done with that there's also whenever you're evaluating what says total cost of care you do evaluation RP there's qualitative metrics that you should be looking at so one would be value based contracting you want to see what they're doing from an ACO perspective or any type of under payments because they can say that they're doing it but it all looks a little bit differently on paper when you start to evaluate it and then from a clinical standpoint those medical management and disease management components if you keep them Cardin they are different from vendor to vendor you want to make sure that you're not losing anything if you move it and if your evaluating at your evaluating exactly what they're going to do from engagement and management perspective. And then yeah last one is I if you can add some performance guarantees to around any the clinical metrics. Yeah. Maybe we should just pause even though we have medical and pharmacy loop together but. to believe. A and we we agree with that most of these we support the idea of making sure that we have regular open and competitive procurement for all our contracts certainly with the one we've got with health advantage Blue Cross is one that we look at pretty closely it's were twenty eighteen was the first year we were we started that contract the cost in that are very low we're very happy with that the date there are some aspects of that contract that we want to revisit there some things that Blue Cross is really good at there's some things that maybe we think that they could be better out of their or their competitors in the market might be able to give us a better a better options so we will actually be looking at putting that back out on our of peas basis here in the future. Senator Ingram you're recognized. question one of the recommendations that we had previously to save money was up reduction or elimination of the wellness program I see in your recommendation the wellness program evidently of can reduce cost of overall cost of me see a. Where is that that is yet in our clinical recommendation that will talk about later if you restructure it and will kind of show you what that is you can't achieve some savings but it has to be highly focused on certain disease states at with some figure aunties and and so you will will revise what the current recommendation is is what you're saying under this what we will discuss it and it would be a recommendation to revise our current wellness program okay are we are we to of a we had reach pharmacy rebate you. I'm not I've got a question. Let's the. Good tone questions we have right now personally. so when I was here in July we talked a little bit on the background that we had looked at gave a quick update some snapshots into some benchmarking those are really just snapshots as we continue to dig deeper into understanding your plan and and are you performing so I just want to kind of level set that and this is kind of little bit deeper dive into that as I previously said and as you all know there's kind of a two part component to how the plan is run today EVR axes there managing for Miller a clinical review and manufacturer rebates and then Matt impact is the claims processing PP doing customer service and managing some of the retail pharmacy network part of the claims processing is invoicing and and payment those types of things when we look at the plan you've done very well and achieving a high generic dispensing rate so ninety three percent maybe even ninety four percent of the claims volume as generics right so you're very focused on low net cost and getting people to take generic drugs the challenge however though is that only represents about fifteen percent of the total plan spend so you know almost all of your prescriptions are going out the door as generic and only representing about fifteen percent of the plans paid and then you look at specialty drugs which continue to grow we have a fifty three percent of the plant costs is on specialty drugs and probably represents maybe one percent maybe one and a half percent of the total population so very small group of people generating enormous amount of cost. when we just look broadly across the pharmacy market and other clients including state plans what's really driving the increase in pharmacy spend is the specially drugs yeah they're used to treat high you know complex and chronic conditions these are drugs that may require special oversight and distribution so they need to be shipped frozen on ice and different types of administration of these drugs there is a growing limitation on which pharmacies can actually dispense these medications so manufacturers you're talking about potentially maybe four or five thousand people in the whole country manufacture myself I'm only working with one pharmacy or to pharmacies to distribute those trucks these are not produced in mass quantity of the produce kind of on the on demand and need and and shipped out the pharmacy so you know just that's the nature of what's happening with the special drug market. and just across everyone specially is generally about fifty percent or more of the plant's band years is the fifty three but you're not any different than anyone else is really kind of struggling with this the utilization of drugs continues to rise and you know it's the high cost drugs that are driving that particular chronic disease and we talk a lot about COVID nineteen we didn't really see a lot of impact on prescription drugs with side impact a new starts but existing patients stayed on their drugs so generally the prescriptions remained relatively consistent even accounting for the code nineteen impact You know increased use especially drugs and chronic conditions like diabetes and obesity continue to drive you know those brand cost higher the other component that's really out there and and we should continue to think about is new drugs coming to market drugs come to market faster than ever before and you know we're typically seeing forty fifty sixty brand new drugs to market majority of those are specialty drugs and you know. Depending on how you look at the drugs the average cost is somewhere around seventy five thousand two hundred thousand dollars per year per patient for those drugs so that's where the market's moving it's all really kind of focused on these high cost and recommendations. It is clear if I what I. I thought I heard you say we're on a specially drugs Arkansas is not aligned with other states not on what you're spending you're not out of line you know your fifty three percent I mean you know there there are groups that are gonna forty five percent of their spend especially and it's just it just depends on your population you know some people have some really complex rare conditions in our population and other stuff so you know if you are feeling as a good example you know some plans struggle with him if you say that a whole lot of hemophiliac patients in the population so thank you. looking out across the you know what plan sponsors are generally doing to reduce costs and and risk mitigation strategies yeah there's for Miller management right and so you had before Miller is with the there's countless farmers that are on the market it's just a list of drugs and what struck you intend to cover at different tiers and not for military so you know there's broad open for Miller is what I don't even have listed here but you know really anything is covered under those from areas and then you get into more of the more intensive management were you on the cover generics or limited brands you exclude brands when there's competition in a category meaning that there's multiple drugs in a particular therapeutic category that all kind of do the same thing and have the same clinical out packed impact see you exclude certain brands to favor others and gain price concessions. And then you have close for Miller's. other techniques utilization management clinical roles so prior authorization step therapy limits on how much quantities dispensed you know everybody employs some type of mix of these program so they've been in the market for twenty years you know and and some flavor so but they continue to grow and utilization of these programs to help control costs and then you get unlimited networks limiting retail networks mail networks and you don't offer male and I'm you know that that's not a requirement it's is that some plans are forcing members to use mail whether forcing them into certain retail stores and then you get into specially pharmacies so um or they use an exclusive provider of specialty and then maybe one or two other specially pharmacies within the state. plan design you know just shooter incentivizing members to use lower cost drugs remember copays or coinsurance various mixes of that me about plans of one point zero dollar copays and to encourage use of drugs we don't know sorry advocate for that because that just increases your cost and so you know a lot of these drugs are very low cost and not generic space Manufacturer rebates really there is an opportunity to maximize the maximize those three or four merry selection it's really and it's those categories that have competition so I know we'll talk about insulin in a minute but you know insulin is a good category others multiple manufacturers they all produce insulin at all does the same thing so pick one and negotiate like crazy guns that manufactured in a larger size to get the best rebates that you can possibly get on those drugs but plans also have minimum guarantees in place so there are minimum guarantees that if the utilization doesn't hit that then the PBM will pay out you know on those rebates so those those are incorporated in almost every plan that we experience that I. and then last one especially coupon programs and you have one of those programs in place today but manufacturers make dollars available to offset member **** share it's a significant you know component of dollars it is sitting out there and you want to maximize those as much as possible. other items that are important to stay plans obviously promoting and protecting local community pharmacies some states have special pricing and reimbursement for those pharmacies other states don't allow mail order pharmacy right now it's a cop competition thing And so that allow mail order pharmacy it's really you know how you to want to operate or plan. transparency in it's a commonly used term in the industry and there's various definitions of what transparency as but you want transparency or states once transparency into what they're actually reimbursing pharmacies they want transparency into the manufacture rebate revenue how much have they are manufactures giving dollars back to PBMs and how much is that passing through to the plan sponsor and then transparency in the form of design you know what drugs on the form I wire the on the for Mary who made those decisions was it a PNC Committee was an independent you know those types of questions. The former flexibility and control in this important states you just the ability to customize that for Miller to meet their needs and the utilization management clinical roles you know they don't want anything forced upon them they want to be able to have flexibility in how they manage their plan and then the ability to manage individual trucks you know just we know that there's a lot of high cost low value drugs on the market there are some others the manager Eric options there's alternative brand options and so some plans will be able to manage those drugs off the for Miller and no no impact to their financial guarantees the last thing is just simply financial guarantees on discounts and rebates you give me some sense of where you expect your spend to be and you the others minimum guarantees and there's pay outs and performance guarantees around those. when we look at rebates specific for Arkansas you know it's the rebates are an important component of drug prices in the United States it's just on unfortunate situation it is what it is drug manufacturers use rebates to increase market share right so that's simply what it is they want their drug to be preferred in use by more people than any other competing drugs at all rebates are an important component of that the larger the PBM or the rebate aggregator the bigger the rebates you know and it's all about share in the market. when we look at Your data your out your data in detail compared to several twenty twenty one bids that we have done and state secretary the rebates are Arkansas are you know about eleven to twelve percent of gross discounted cost other plans that we have done and these beds you know there rebate level is about twenty five to thirty five percent of gross costs and that's dependent on utilization but you know we look at that you could almost double your rebate value you know in the market so that would be somewhere in the twenty five to fifty million dollars in additional revenue from rebates that would come in a. looking at your top drug categories FOR spends you spend forty million dollars in inflammatory category these are drugs to be used for like rheumatoid arthritis psoriasis in that category there's a lot of competition and those categories with manufacturers and we we believe the rebates in that market category approximately fifty percent of the spend so you can see that just the value of the rebates just in that category because of competition the cancer category cancer drugs there are not a lot of rebates there there's not a lot of competition but there's a lot of drugs in the category there is some and we expect the rebates to continue to grow in that category is more drugs to come out and create competitive environment but yeah we were we estimate there's about a five percent rebate opportunity there insulin you spend almost twelve million dollars a year on insulin and there is we know in the there was there's been federal government reports that you know in some manufacturer rebates about fifty percent of the price of the drug um and those should be passed through to you a hundred percent suit you know that creates you know additional money that is out there anti coagulant drugs the others to drugs the probably drive all that spending twenty million to drugs there's a significant amount of rebates available there and then non insulin diabetes drugs he spent about two point three million and again those are a very competitive category without fifty percent of the rebates all in just the news top five categories you know we would estimate your rebate potential to be somewhere around thirty five million annually and that's thirteen million more than what we've been able to estimate your rebates to be based on the reporting we've had of about twenty two million dollars a year. Yeah and those rebates are just those five it doesn't it doesn't impact the others more rebate that is on top of that. specialty pharmacy currently our understanding is that I should let me jump in just minutes the Senator Ingram it in a questionnaire centring recognized. Thank you Mr chair of I know Senator Hickey and I wish you had been here when we had days of debate in insurance and commerce back coupon rebates of let me ask you the the the rebates I mean we're looking at double to triple savings on on rebates recorded this port who sort of responsible for that would that be the administrator or would that be the board I mean where did we leave this on the table this time who should of which is that it just in the design structure of of of what what to our plan is but I mean who should have who should have been responsible for capturing these rebates that we sort of me yes so the the rebates that were quoting here based off of procurement so we've done was you know very large PBMs and rebate aggregators so um I'm not sure of the structure that you have today you know how those rebates or negotiated but if you're using re better or doing them and that you know direct and candidly just don't have the size to put the pressure on the manufactured gives you know significant price discounts and that's what With the ads you know DVR acts that is responsible for that but but you know it it's it's a size game right the better you are as I said the more rebate you're going to go all right what you have because I mean with Walmart had our tax of getting that worked at all right let me let me flip the question in. What are we going to be doing different under this new plan to recapture these rebates that we didn't do previously. It yeah I mean a our recommendation is that you put out a competitive bid in the market and you know with the restrictions are the things that you want the flexibility one your plan and competitively bid that the market to see what would come through that's the at the end of the day that's the recommendation is to. I believe you weigh in on the. Yes thank you so R. E. B. R. acts as the the company or the the vendor that we use for our for Miller management but they're really an entity created by the U. M. S. college of pharmacy they were created twenty eighteen or so we used to be on a very large one of the big PBMs. And we I think with the help of of the B. R. exchange some of kind of our approach and I'm not there here they're not of speaking at the table today so I don't want to necessarily wander into territory that I I don't know a whole lot about the my understanding is that philosophically day taking the approach of really focusing on the bottom line not necessarily chasing rebates and maximizing rebates because in order to get a rebate you have to spend money you have to buy the drug to get the rebate back on. If you look at the presentation that Siegel did back in July twenty second just as an example are paid claims of PMPML basis or twenty percent less than the rest of the clients that they had so our focus on the bottom line we're very happy with we feel like we have a good savings there at the end of the day rebates are not. Go ahead Senator in. So if this record this backing up the thirty five million or you don't think that that's or are you saying you don't think that's possible because we're we're already of we're already covered there I think that our current operations regarding the regulation of pharmaceutical costs of the best available option for both public employees the state taxpayers thank you. And and just for clarity the in the R. X. will be able to Testified during the public testimony we have next Wednesday and Thursday and we're if for any questions Aladdin and we do realizes that the term of chasing a rebates also another factor in is a transparency of. Qualifying knowing what re make sure you're getting is my understanding in the. The discussion so we need to have that to go ahead if you've get to response. It cannot open here so. The ex started saying that we brought some numbers at the beginning and some benchmarking overall and then we did a deeper dive into the numbers this pharmacy is changing so quickly and it's becoming more and more a larger part of total medical pharmacy spend The the data that he used and pull some benchmarks on is from our national database but most states don't allow us to put their numbers into our national database they want to protect that data and so we've compared we've done. Four PDMR fees just this year so we're seeing a lot of competition there and we're really looking at the numbers that we've seen in the last few months if we compare and that's where we're saying we're seeing twenty five to thirty five percent rebates What you can say well you don't have to we say chasing rebates you have to spend we're talking about somebody putting out a bid where they've done something very similar managed a similar program have been choosing the drugs that are on on their formularies and when we put the data out we put out those formula Aries so it's not that you have to pick up new drugs to get to these rebate numbers because we just prove that through some of the procurements that we've done and we were able to get you know close to the thirty five percent rebates so I think or even being conservative here on this twenty five to thirty five that you can put out is all in the way you write the R. F. P. you put out the plan as you want it you can say was struck we sent out drug exclusion list to the market and there's no utilization in the plan when they're giving us guarantees on those rebates therefore they would be assuming utilization of those trucks. If we look at cost from some of your neighboring states who we do consult for their lower than what we're on the bench marks from our national database and more in line and particularly with the state that was running a plan very similar to this that we just procured and we'll go live one one X. ten one ten one and in two weeks they're gonna drop their costs Lois net cost. Thirty three percent thirty three percent thirty three percent so. This is a very quickly moving market and I think there was a time when you know all the states had open formula Aries but as Nicks said when you have sixty drugs coming on the market and there's so much competition and you can choose one and get the rebates on that all the states have gone to close formula Aries to manage this cost and I just wanted to. To add that in let me add to that I mean you are doing those things today you have as Jay mentioned that you do have a different approach evidence based looking at the drugs the challenges is that where your costs are and in those competitive categories that I highlighted There's nowhere to go right there's no there's no generics and there there's it's all brands and it's a very competitive environment in those markets so you know you are paying for those drugs today so it's the idea that the pay and chase rebate you're not really doing that you're already paying for the drug you might as well get it back and that's kind of the position of the. The representative Dotson you're recognized. Thank. So if I understand you correctly in what you're saying. If we put this out for a bid. And it was structured to have that basically the exact same drugs that were currently buying going to this act same. recipients as far as the end user is concerned The rebates that we would get back if we put out for bid and and and all that. Would give us back. A larger percentage. Every year of what's the dollar amount. What's the what's the estimated you know you're saying percentages here. Yes it was somewhere PM twenty five to fifty million dollars in addition to what you're getting so twenty five is the server name dollar additional rebate bind it back same drugs going to exact same participants in the program so our our. Our state employees public that and that's your voice that they would not see any difference as far as the drugs that they receiving. And we wouldn't see any difference in the cost that we're paying in because we're paying the same cost that we would see a difference in the rebate that the plan is getting back of twenty five to fifty million dollars annually every year roughly speaking that's what you're saying. Yes thank you. Okay we're. Senator Hickey you're recognized if you don't mind through Jake something you said you said that was two U. M. S. who actually. or the principles we B. R. X. is that is that owned by the state. I don't guess I quite understand that structure much to. It. They're here I can't I can't explain or their corporation or not they they're going to public comment next week but we have a very good close working relationship with the college of pharmacy over there okay well then I guess next week's going to be good as long as we can just keep or keep that question in mind I just I would like to know that whatever they present and then. online's understand about didn't it out but if I wonder if we didn't get it out is there a way that they could actually manage manage that through them to to get those of lower cost or not so it's just I guess that's the questions that I wanna wanna answer whenever we get there will absolutely look at any proposals or ideas that are on the table and my guess is that the folks at IARC's level what to say next week about about all of that thank you. Senator Hammer you're recognized. Thank you Mr Joe Joe have access to the data that the B. R. X. has or you just know they exist out there but as far as looking at the. Information is contained in the B. R. X.. You have access that. now we just we just had summer reporting of what the rebate payments were and we and there was missing and that we the report that I saw there was some missing monthly figures nurse so we just made an estimate of you know if those were consistent for those couple months that okay we have claims data but we have claims data but we don't have you know the actual rebate. Payments that occur five yards has been available to meet and did meet with the all for I think twenty minutes was the length of the meeting that you have with them yeah we we met them and we didn't receive we don't have we just didn't have those those details of what those payments for. Okay and on the and what I want to know is based on recommendations are being made here today which I understand the recommendations. If you if you didn't have full access or if you had any lack of. Understanding or the full picture of the B. R. acts including the rebates that they handle. What's the basis for the recommendations you're making in the absence of a complete picture that I don't know maybe do maybe don't I'm I'm trying to understand. Okay So I mean the basis of the recommendation is is that we know that we have the claims and we have a total number of the value of the rebates so we know what you spent and so when we look at that compared to what similar groups as a Christmas saying we've procured you know it's just those groups have been able to. Procure batter and more value coming for a so we we have the formulary you know there's there's no question I'm not I'm not recommend anything about changing the formula very to the question earlier about you know we're not recommending changing the drugs Board is recommending to put a competitive bid out in the market it has nothing to do with how it's been managed it's just that the market has changed and there is a significant value out mark just to just to clarify we did receive rebate information in aggregate we do have information on drug spend by class and by utilization by drugs we just don't have the specific level of rebate by drugs from what Nick like that so he he was able to analyze the total spend my drug compared to what we see in the market relative to what our clients are getting for those specific rebate levels by drug and comparing it to what you're getting and total to it to make these recommendations so you had a hundred thousand foot view not a ten thousand foot view is that a is that a fair analogy or not no I mean we we have the claims we we we went through and looked at the claims so we know what you spend on those claims and we have the rebates is just an act. It just the reported number that was paid back into the plant all right and you feel that there's a better model out there other than the B. R. X. based on your assessment of what you've found from maybe our actions that I think there's opportunity on the rebate component okay thank you and can I just make some clarifications I mean Sir Nick put up what your spend is what your top five categories of spend are we pulled that out of your data and that's why we were trying to show you know what would we expect a rebate to be in that category and we just looking at the top five this thirty five million dollars compared to twenty two for all of your spin that's coming in currently the difference is and and you know you can have management and and maybe even E. R. X. continues to help the plan manage the formula erring look at new things coming on the market decide what's going to be on or off you know similar things to what they do today but currently our understanding is there You are contracting directly for rebates. And what we're saying is if you go through a PBM that has the size so you have however many people here but we're talking about PBMs they have thirty million people on a formula airy they're able to negotiate aye aye and it was saying earlier it's all about market share they're able to negotiate the highest rebates your any spending the money for those drugs we want those rebates we're saying if you went with someone that had those contracts with rebates you receive that as revenue. Mr if you're actual have a up to G. table used today or next week is that what I heard you say it'll be Wednesday or Thursday of next week and public comments are thank you thank Mr. Really we're ready for specialty pharmacy. so um. Especially drugs as I said are currently negotiate with local specially pharmacies and the towns of some other arraignments arrangements for limited distribution drugs just looking at the claims data and the discounts realize they're about thirty percent lower than other state minimum guarantees for specialty drugs when we look at other states compared to Arkansas they generally employ a exclusive specially pharmacy arrangement with one specially provider the yeah partner with larger specially pharmacies to maximize the volume and other components of that which is you know twenty four by twenty four hour seven day a week three and sixty five days a year access to pharmacists nurses and and different people that are trained in treating those patients yeah this is what the states are looking for they also have extensive service guarantees and pricing guarantees so drugs are delivered on time there the prices you know you know there's a guaranteed prices guaranteed rebate and also manufacture assistance programs of those coupon programs you know there are states that are maximizing that with a guarantee and what would be available You know plan concerns of when we think about potential plan concerns you lose the loss of the local specially pharmacy access we do have states and one of our beds we just procured hasn't opened specially network which includes a preferred larger national pharmacy and then a local independent pharmacy as well and so there are options and it's just again how you design your RFP and what you want for specialty pharmacy if you want a local provider but we think there's opportunity by partnering with a much larger national specially for. contractor entities Currently our understanding there's no minimum guarantees on discounts or rebates which means the plan is taking on a hundred percent of the risk with no ability to have the PVM take a portion of that risk so with minimum guarantees the PBM was saying you know we expect you to earn a hundred dollar rebate and if you dont we're gonna pay that hundred dollar rebate Other state local plans have minimum guarantees on the discounts and there's a hundred percent pass through the planned so we want everything being passed through to the plan and this is what we're negotiating today in the market Potential plan concerns pressure on the retail pharmacy reimbursement and you know you may lose some control on for Miller and utilization management decisions with some rebate guarantees so this is just the fact of you know how it manufactures negotiate but again some of those drugs are already paying for today and so you may lose some control on just the utilization criteria and those are some potential plan concerns are out there but at the end of the day we want to have full transparency into the cost and then the cost of your decision like if you make a decision to not cover drug report a prior off on it and it impacts the guarantee we want you to have full knowledge of that and we do have plans today that are getting about from there M. partners. optimizing the plan design you have what's called a reference based pricing program it sets the amount the plan will reimburse for a drug a category generally it's based on the cheapest truck in the category war some component of the cheapest drugs in the category and then if members choose something that's above that price point they pay the difference oftentimes we you know when we look at other plans they use generic tier strategies to have low costs and high cost center copays or that acts selectively excluded brands and generics you know to kind of drive to those are not cost potential concerns with the strategies are shifting costs members without their knowledge of alternatives and potentially creates confusion on drug coverage and cost The only other question we have is just how is the reference based price monitored and one is adjusted so members copays could be up and down or you know it's just it's potentially just disruptive to members and may impact our care. the potential plan concern of course of your move reference based pricing is that it may increase plant costs I think you can contract out with for Miller strategies around generics and brand drugs are covered or not covered and then potential plan barriers the current structure of the reference based pricing is just generally not used in the industry for large PBMs that are out there in the market and they would look at that and R. F. P. and say that they would choose not to bed because a reference based pricing a lot of cases so we do have other clients that have used or had reference based pricing and they didn't get you know the most competitive bidding environment because they were we are requiring that that are that reference base price. okay. So recommendations One is to release in our P. and allow plenty of time for analysis of potential transition obviously the importance of the R. fee is the you know to describe what you what it is that you need to flexibility is desired in the program you know custom for merry EVR axes role you know whoever the components are you want to include that in your for military so that the bettors know exactly what that the set up is if there's custom clinical rules provide the rules you know we've done that in a recent public procurement we actually provided a thousand pages of clinical rules to the PBMs to review and then you know highlighting this fine what the role of the independent pharmacies are and make sure that DO what they're reimbursement structures are as well anyway clarity and and pastor of that so have better provide proposals with minimum discount and rebate guarantees for each year of the contract another component we always put in market checks whether it's annual market checks so you can check to make sure your pricing is consistently at the market what do you do that every year you could do it in the middle of the contract rebuild and escalators and your contracts there's different ways to structure you know that those are peas in the the financial model. you wanna clearly the final terms that you receive hundred percent of the passer of all manufacturer rebates and that includes inflation protection and manufacture admin fees and any other kind of buckets of money that are being allocated to gain preference of select drugs on the for merry you want those pass through the plan Some PBMs offer training guarantees and certain therapeutic classes selecting a diabetes category they may say you're trying may not exceed you know two three four percent you know I cost and that's really to force them to you you know better manage those patients better manage those drugs to make sure that the cost isn't you know concerns the rise We have situations are better so proposed rates for independent pharmacies guaranteed separately and independently from the chain pharmacies are all other pharmacies that are in the network this gives you control over you know how you reimburse independence and that model and we do have a plan that is going live with that today And then you have the bidders propose an exclusive specially pharmacy network which may include state presence even though we've had some states it ask for a local hospital to be included as well and then the last thing is our recommendation is to remove that reference based pricing so you don't limit your potential bidders on the market so you want the most competitive bidding environment and I just I'm pretty confident that that would limit you know potential bidders that you know what to look at this and and make an opportunity to win your business so. Okay. And I'll just add you know similar to what we talked about on the Medicare advantage or part D. and and how important it is to write an RFP. For what you want in your plan would be the goal here to so just really allowing when we put on our of P. right in there exactly what you want give them the data and have them bid on what you want so you're not going to something that is their standard you're really customizing this thing in making sure when you get that information back that not only are we looking at it on an apples to apples basis but we know that is what you want and it's very important when we talk about clearly defining all the terms we typically will put out an RFP and have minimum qualifications minimum guarantees from them stating they agree to the terms as we write them right so that there are no games and you can't and then they're also there's also availability to audit that. one last thing we're at the common on is Act eleven oh four around the insulin pricing I think when we wrote the slide we weren't quite sure exactly what with the goal of that legislation was we understand now that is focused on cash paying customers and trying to lower their out of pocket costs and so you know I think there's the you know the recommendation is I don't know if the rates terms repeal or revise the language in the the arrangement are in the Act to allow plan sponsors that offer coverage of insulin at a low copay to their population allow them to aggressively negotiate anything they can get from manufacture to continue to offer to their members you know a low copay and you know maybe twenty five forty fifty dollars you know something that what brands for and so on but you know we can provide some guidance or some information a we think would make this act better or improve this act to really achieve the goal of lowering the cost of this casting customers. Yes but it's it basically on the repeal and replace to make sure there's no affect to the health plans and Nick and I've met. This morning and I met with the team yesterday and I've met with the sponsors and everybody seems to be okay with that movement. So thank you for that the. And then I'll just make one comment there have been states that have and introduce caps and member **** share and those caps or you know somewhere between twenty five and a hundred dollars on insulin just so that you know the member isn't burdened with this exorbitant cost on insulin particular and high deductible health and so you know just some to consider mine too is that this is what's out there in many states as they put in these caps on member out of pocket cost so okay. All right of Jake will go to you and then we'll go to members for questions. so just just to reiterate I'm sure that there's aspects out there that we could craft in our of P. that that will potentially help us will absolutely look at that but we do like our our current operation our current process and we would proposed measures would shift the drug pricing policies over to a large PBM we feel like we've been there before we would also support of repealing of ACT eleven oh four. Can you repeat that last statement again please hold on one second. We'll just we support the recommendation to repeal act eleven oh four. Senator Hickey you're recognized for a question. Senator senator Bledsoe I'm sorry. Senate senator here. Thank you I just have a question did I hear you say something about compromising the members care when you were speaking on I think it was something you were discussing Potential plan barriers or something like that I hear you say that on the reference based pricing the by the members oftentimes don't know that there's a cheaper alternative right and so would they avoid taking a drug because they could afford it and that's what I meant hi okay that's a compromise that leads me to a stepped therapy so did you consider stepped therapy when you were talking about the budgeted and and cost and all of that in verses of the patient's future and their work. If if they were allowed to do the stepped therapy yeah and so just all of those programs is kind of those utilization management programs are in addition to anything that we would look at when we do kind of a financial analysis of a pricing proposal because we don't know which from and we don't know which rules you wouldn't and Roland so if you don't want stepped therapy we don't and we don't factor that into our estimates of you know what the savings would be is in addition to a could be more if you incorporated a stepped therapy rule or prior authorization rule those types rules and so they're they're in addition to. I was just thinking of a Hey member that might have a diagnosis of a very painful form of arthritis and he can return to work with a different drug then maybe someone our group is wanting to pay and so without that then he would be on Medicaid he and his family so I'm just trying to you know adjust the costs for that one. Might be the insurance company the other one might be the state who would pick up which would pay the cost you have a comment on that again I mean the cost is always the state that pays that so whether it's a lower costs or higher trust and still pass through the state so you know again I think stepped therapy needs to be evaluated and in each of those categories is that the most appropriate thing to do we have states that don't do stepped therapy but they do all the other things and so you know it is definitely something to look at but again it's you know it's in addition to serving the needs is my question thank you. yes we've we assume no change yeah kind of in the clinic rules all that. So yesterday was brought up on the reference price base pricing and it was told from maybe the that those members were being discussed on those pricing differences in the pharmacy was actually informing the patient. Can you guys kind of talk about that J. can you elaborate on some of that. Sure so I I'll do my best let me put it that way I think you're recognized we can probably provide a lot more detail on this but we have a good relationship with local of pharmacies in the state and we're also aware that a lot of folks have a relationship with those pharmacists so we rely on those pharmacies in this pharmacist to help them make those decisions a lot of times as a patient when you're sitting in the doctor's office and the doctor writes a prescription for you you're not aware of which pharmacy offers you the best deal and the doctor doesn't either so we rely on the pharmacists to help make those decisions all add that we've had discussions internally and it kind of came up A. L. C. I think earlier this week about trying to arm consumers and trying to are more members with pricing information so they can be more informed on the front and were a public entity or government we don't have secrets so one of things we've talked about with Matt impact our our PBM manager with Blue Cross it's trying to find ways to really put that information out there so that when that prescriptions written and the doctor says where do I call in you can you can be more informed on where your best deals going to be. I think that to answer that right well concept that secret part of the but I'm okay. Just when it comes to money right. Only when US Sir yeah. Any further questions or committee. C. N. nine will move on to clinical thank you. Okay moving on the clinical recommendations I a couple things I just wanna say thank you for engaging us in this project this is very fun for me to take a look at all the staff and make recommendations what we usually do an engagement like this is you know I'm alongside saying strategic objectives goals and strategies so with this type of engagement we're telling you sort of what the world of possibilities are in making those recommendations but in a long term engagement we will be tracking and trending four you know future changes to the program to make sure it's still needing those key objectives that we identify. So looking at of each category will stop and kind of open up for questions but we want to start with the wellness program so just to recap how you're currently setting up your wellness program utilizing catapult to administer give your biometric nicotine screening health assessments and they receive that a fifty dollar monthly contribution whenever they complete it so one thing that I'll say is that you have great engagement and you did a really good job at the starting that wellness program in telling people what's going on with their health and then you have that data to track and trend but what we're not seeing is that sort of next step is what you do about your that information at your house if you are a diabetic how to better manage your disease if you are pre diabetic how do we have to try to help potentially reverse that if you are healthier health at risk are you seeing your PCP getting your age specific screenings your vaccinations. So what we would recommend is to not abolish the wellness program rather shifted and look at something that's called results focused on the population. So the broad population like I said you can incentivize age and gender specific health screenings to make sure people are getting up to date and we talked about with the pandemic had done to that so it's probably good timing Sturch incentivize people to get back into the doctor's and then if you look at results focus for a targeted population this is where we would look at for your highest cost spend categories and I highly recommend that you focus on your pre diabetic you're diabetic population you would want to either pilot and our partner with a vendor and negotiate clinical performance guarantees I'm gonna talk about the next like what that actually means but this is actually looking on an individual basis did they achieve an outcome so we're talking about losing weight improving your blood sugar which is called hemoglobin A. one C. metric reducing the amount of dependence on insulin so these are the type of things that we would recommend if you are going to put a program in you don't want to just pick anything from the market place you want to actually find something that is going to make an impact on your members help. And so we think about a comprehensive diabetes program a couple things about that too a lot of the carriers have a partnership in this space today so Blue Cross blue shield actually has on do you already as a partnership there are other players in the market place and if you were to go to bed the medical this is another component that you could put in your RFP process and bid out to see what the market place would bring from a vendor standpoint but with anything with a comprehensive debut strategy one and also focus on the pre diabetic so those are individuals that have a hemoglobin A. one C. that might be slightly out of range their BMI as an overweight category they may have one other chronic condition the CDC has an approved diabetes prevention program this is something that you know has been over ten years they worked on this it's been validated by multiple entities including Milliman there's multiple clinical trials that shows that this actually has an R. Y. and with the clinical outcomes now a lot of vendors have digitizes platform which is great because then you have you not to worry about people going into a facility rather they're getting something in their hands which is very strategic what I'm showing on that picture is they're actually able to do things like take pictures of their food and then get I'm very individualized specific feedback from the application and the coaching they usually get something in those packets as well which additionally connected scales and sometimes they'll get some other different kind of ins incentives to enroll in the program now these programs also are low risk from a few standpoint because you only pay on a per engage member and you pay based on their key milestones the member actually has to achieve weight loss for you to pay a fee for that another approach to this that we kind of talked about yesterday is there are I DPP programs that are more localized so YMCAs are really good example a lot of them have a type II diabetes prevention program you do have some gems and different nutrition facilities that offer this as well if you didn't want to go for. Roskill anyone's you more of a local community partnerships you can evaluate those options as well. Around diabetes management there's a couple different ways to tackle this. So what I kind of knew were in the market place are these digital management programs you receive a new glue commoner and I've talked about this multiple times how difficult on the older the commoners are the new digital management programs gives the member for the commoner almost all of them offer free diabetic supplies all the strips in lands that's come for free with that number doesn't have a cost share they have an incentive to maintain checking their blood sugar and it gets shipped directly to their house you based on how they order it additionally these are connected to an application on your phone so what's great about that for me prescriber standpoint when you go to see your physician you have a whole log on your phone that you can kind of share with them together in a dry your hemoglobin A. one C. but they can actually see day to day what you're doing how complaint you are with your treatment plan. Also these applications just like I talked about have artificial intelligence built into it so Mr check your blood sugar it'll ask you what did you do today did you work out what did you eat as you start to log that it gets smarter based on your individualized treatment plan and will make recommendations moving forward a lot of them also have stop gaps where if you have an out of reference range really really low really high they'll have a coach reach out to you you can also paying that device to a family member so if you're in an emergency situation your family member will get a text message and know that something's going on. there you can get more aggressive to in diabetes management so as you add on risk reducing programs this is where you'll stratify the diabetics by what they're taking so the high cost injectable insulin the look at a hemoglobin A. one C. at starts if you're up in the seven eight ranger more high risk and that's where the focus on lifestyle changes so we're looking at medical nutritional therapy we're looking at physical activity and at the same time you're putting your day biometrics into that application and that ugly commoner and there's a physician within these vendors there all along side of you they're really looking every day as you reduce your risk you bring down your hemoglobin A. one C. or your blood sugar be normalizes they're taking you off of that insulin that's very safe because then you don't have the spikes and and in blood sugar for individuals. Now with any of these programs. Thank you would put in place B. would suggest that you put quantifiable performance guarantees that is staying on an individual basis are you reducing that hemoglobin A. one C. by one point let's say or you reducing five percent weight loss that is clinically significant five percent weight loss can impact a blood pressure blood sugar cardiovascular read risk and reduce all of that. Now another option that we've done with other clients is where they decide to pilot again on all these programs member it's on an individual engaged member fee not across the whole population you just pay who engages we typically see twenty percent as best in class of engagement and then you get the feedback if that member does not achieve those clinical metrics that you put in place this is why we feel this is a relatively low rest with a solid return on investment and you could pilot it and like a county you could pick for example that has the highest cost His wrist ibex Senate and after years see how that's done and if you want to scale it up you can scale it up from there and Matt I don't know if you want to address the savings component needed. Sure we we've just a letter that said for your full population so based on the data that we looked at around nine percent of the total population is is diabetic the CDC estimates another thirty four thirty five percent of the population would be pre diabetic I so we just took a look at numbers based on the cost of those diabetics estimated cost for the pre diabetics within assume twenty percent engagement of those participants an estimated savings roughly between ten to twenty percent per participant that's engaged the savings could be in the neighborhood of one point three to one point nine percent of the overall plan spent that translates to around ten to fifteen million dollars in an overall savings for for the program so and this would be for the full population of a pilot program was introduced that the savings would be much smaller but it it may be a nice item to sort of test out first see if there is sort of engagement that you're getting for your population and expand that broader to see these broader savings overall for the for the program and the last thing I'll say before we have any questions is a plan like yours that you have people on for their entire career and into retirement this is an investment that will pay off over time. Where some of the other ones you know we might see a longer are where you're not gonna see real quick one this is quantifiable within your population especially think about retiring into retirement here this will also impact other categories like musculoskeletal if you think about weight on your joints how that wears over time it can reduce a certain amount of cancers are lifestyle related and are actually worse whenever you have a B. city tied into it so these are things that will trickle out in your plan long term and we really do see in our professional opinion that's a solid recommendation so I'd like to open up for comment. Jake you're recognized. So in in response to this and and a number of the medical recommendations we there's a lot of really good ideas in this report and there's also just a lot of generally innovation out there in the market place I think that alluded to how quickly medical the the medical industry's changing and we get calls every day from somebody who has a great idea in a wonderful product or a new procedure that on the front end sounds very promising we have no mechanism though within our plan to really rigorously tested and to make a smart informed decision all of these of course required the investment of funds which could otherwise be used to pay claims an offset rate increases this is still taxpayer dollars so what we really like is to create within whatever a new entity overview overseas this kind of a of the these decisions a rigorous process where we can make that kind of independent decisions and inform the decisions so we can really make best use the dollars and still take advantage of the most promising ideas that are out there a lot of this is built on the experience of the beauty of the last several years where you can see where we went into programs we put a lot of money up front we make decisions and then after a few years we had to and up backing out of the programs because they didn't work where they didn't reach the goals that we had in mind for them in a lot of times I don't know that we've ever even really had that discussion of what does success for these programs look like so I think these kinds of ideas are exactly the sort of thing that I'd like to feed into that kind of a program so that we can really Make the best use the best ideas that are out there. Yeah and I mean I just coming online historically some of the programs that were baked into the carriers there's not a lot of effort to drive engagement and the older programs are mostly telephonic your goal setting and focusing on medication adherence verses actually improving lifestyle these programs with digital components in individuals are incentivized just to get some of that stuff in their hands and they're easy to use and they can it's self paced so verses trying to schedule phone call whenever you're at work like a teacher it's not gonna really work that well so that's where you know we do partner with a lot of clients to find that right program for the goals that they set for themselves and we do record rigorous analysis to say it's not the sales side but clinically this is what makes sense for you. It was was there some discussion on the how that. Fits in with the rural population. You yes with the role population have to think you're taking away as long as they have a phone and or the internet then they can utilizing these programs if they don't have that the devices the glue commoners itself are still kind of intelligence so they can work on their own without the internet as well so this is something that close close that gap a little bit if you have an underserved population you're accessing a virtual physician you don't have to worry about do you have the right position neighborhood you have a national virtual positions working with you. Thank you. Thank ready proceed okay so the oncology we talked a lot about the pandemic and how reduced access to preventive care screenings many rural communities have less access to high quality care as well or they have they have to travel a pretty good distance to get to some of these facilities something very simply you can engage in a communications strategy that gets people back into the physician for age and gender specific cancer screenings we know we're gonna find some later stage cancer just based on the nature of what happened last year so we want to kind of get in front of that. This is something to like I said you can add to that one this program re incentivize people to do that if you drop some money into an HSA because they want to the OBGYN for their screening or to a primary care physician I'm so that would be a good an easy recommendation to kind of add some communications and potentially in that long term strategy incentivize something else to call out with a cancer care twenty percent of time individuals are misdiagnosed inter mistreated this is typically an issue with reading the path ology and the other issue is really standards of care for oncology there's multiple treatment plans for one individuals type of cancer and there's multiple different treatment options at different cost levels so what we see a lot of carriers and a lot of plans are partnering with a program that requires the use utilization of NCCN guidelines which is that national comprehensive cancer network this is widely recommended and most of the time what they do it virtually so it's not you're not putting the patient in between a second opinion with their doctors if you partner with the right program or build it correctly what you're actually doing is taking premier cancer care from across the country and virtually connecting it to any patient in any rural community or in the city or little rock doesn't matter you're really accessing the best physicians groups in the in the national networks. So that's something that you could build you a partner with thank you I am asked to do something locally as pilot to start that you could procure a vendor you work with Blue Cross blue shield or any for carriers to fill that out and then partnerships like that like I said if you want to look for something that is a virtual consultation there are vendors in the market place that will say we do a second opinion for on oncology care they typically charge on a PM PM basis it's up to the member to try to engage and then you don't end up getting the at large in the judgment so what you would want to kind of build this very strategically if you ever went down that route. Any questions on oncology. I don't see any go ahead. They label the next two is more long term recommendations because much like the last thing I talked on oncology it requires some strategic thinking planning and building and around musculoskeletal programs what we are seeing in the market place that is something that is a little bit easier and along the lines of a digital therapeutic like we talked about with diabetes care is looking at physical therapy and weight loss programs so we companies have digitized physical therapy if you think about the nature of going to physical therapy you have to possibly take off work you have to drive there or go after hours you're typically paying a copay that adds up and some individuals become non compliant over time and they actually don't reap the full benefits of what physical therapy can do for the injury or arthritis long term arthritis. We see programs that are now digitizing this for you actually wear sensors and devices you sit in front of like assume a type of application and you actually get examine and so what we seek to most physical therapists are not doing manual manipulation that often and if you would require they will tell you physically have to go see a physical therapist I'm seed you have doctors of physical therapy that do the evaluation and then your prescribe a treatment plan that you do on your own time so you can utilize that with an application you can do it while you're watching TV in the evening and we see individuals are much more comply with that. What's good about that is you are preventing you hopefully are preventing that progression of disease and need for things like opioid treatment and or surgical procedures so that is something to consider it doesn't have to be an early strategy I would much rather see focus on we in diabetes first but if you see good engagement in those digital therapeutics this could be an out on overtime. This is something that goes across the state it's all your counties all the rural areas that's accessible by everybody you. Another opportunity that we see so we looked at the analysis we did see a highland stay on your knee replacements almost close to four days which is pretty odd these days we usually see within twenty four hours or two days you're released unless you're high high risk there is an opportunity to go through a direct contracting process where you build out a bundle and when we see those being very successful at something within your state you partner with the health system that has high quality you build out that bundle process and you you make it less out of pocket for the member to travel that facilities you incentivize the member to save the money out of pocket you're you're funneling all of the that care to the highest quality providers and we would recommend if you did anything like that it would probably be a big process you'd want evaluate the quality of our time we are seeing that in some state plans are actually doing that and like we said that would be something that you would want to do vendor partnership or do a direct contract with a facility that's independent of your carrier in your network because you want to kind of overlay on top. So any questions related to musculoskeletal recommendations. Not saying any going personally. This is the last recommendation for clinical and and again labeled as long term recommendation and I have on site in quotations because brick and mortar on say clinics are still happening we still have a lot of groups that do this and it does require a pretty intense evaluation from and you access to kind of figure out where's the best place to put it you want to put it somewhere where you have enough volume coming into the clinic but also you're solving a problem so with the weather it's an access problem or quality of care issue so we you know have software we've developed that process where we can evaluate that The New as part of the clinics that are interesting is really it utilizing resources appropriately so they're adding things like digital satellite kiosks that you can do can put near a school district or in a school and people can access that care digitally from wherever they are so it might be something that's in four counties away is your clinic you can still reach out to those other communities they also are offering different nurse levels of nursing care as they make utilizing nurse practitioners locally and or sending nurses in the home to deliver some this care that's really it's some of them can start with brick and mortar but then kind of spider leg out we also I. see strategic partnerships with different different health systems that you can do sort of a VIP program where you do it you're not building the clinic they almost build you a clinic model within their health system we're also seeing different retail partnerships for onsite virtual an in home care we talked a little bit about Walmart purchasing the anti you have CVS that has their minute clinics they're adding behavioral health services and other types of care you the Amazon Care that's launching in key markets for they're actually sending nurses physically in the home and then getting them back into primary care I'm anything like this requires like I said a really deep analysis to strategically figure out where you would put that and then you would have to do a full procurement that for that. Any questions. And the red lead you away to finishes. There you go it. Hi I'm ready whenever it is convenient go ahead also like a lot of the recommendations I think this is a good one but you know. She mentioned that we need to have the ability to really do a deep kind of analysis right now I don't know who as state government can do that we don't have that structure in place so really setting up something that could rigorously evaluate the costs on the front and the return on the back into the planned the winners and the losers and make an informed decision I think would be helpful. Yet just the experience we typically see a return on investment within the first three years so does take a little bit time based on that initial investment. And it just it just to clarify what we're talking about here in this this took me a little while to figure out we talk about returning on investment we talk about making our money back and in some cases the returns that this is not something that the traditional old school insurance companies are necessarily thinking about but if if if the R. O. I. is there the opportunity particularly with really expensive chronic conditions like diabetes the opportunity is there to save money for the plan over the really long term one of the realities of being a selfinsured large government plan is that when people get on our insurance that only there on for the rest their lives there on it once once they retire we and so any costume you can save early in their life we're going to benefit from across the life of that person so I think there's a lot of promise there we have a lot of work to do to make sure on the front end that we're we're we're making smart decisions but if we make those decisions I think you can really benefit for us degree. Thank you. Senator Hammer you're recognized thank you a it's chair were allowed like to S. Jake LaMotta qual. Clarification on his comments. So we hire consultants come in make these recommendations. And are you saying that. If we did go forward with any of these recommendations you would still like an entity whether that be maybe state government or maybe we issue another contract to do a review and bring a recommendation just as an extra layer to make sure that what they're recommending actually produces the results. What what I would like to see is some kind of maybe even legislation which lays out clearly how we as a state to find success do we define it based on saving money for the planned we define it based on evidence we define it based on. Making people healthier. And then have a process in place so that constructed mentioned we get sales calls all the time and I know a lot of those products or services probably aren't very good but I know there's some good ones in there and the problem is right now we have no way of distinguishing between the two so a lot of times I think what ends up happening is we just say no to everything and potentially leave opportunities out so what I'd really like is some process in place where everything goes through that uniform rigorous ruthless process we have a pilot program we we we tend to throw out the term pilot program a lot of really laying down what does that mean what is success look like there's a beginning a middle and an end funding a pilot program on a limited budget making smart decisions about what we what we're going to put in that pilot program and then moving forward with the results and if it doesn't work it doesn't work but if it works then let's invest in it you know if you got an individual who's been paying twenty five thousand dollars a year the plan is paying twenty five thousand dollars a year for an individual's diabetes and then we're able to reduce that through twenty thousand dollar procedure. And that individuals in their forties so they're going to be on the plan for another twenty or thirty years that's a big savings for us I mean that to me is a no brainer. So really it it's it's trying to divide find a away or process to really hone in on those opportunities and at the same time not go chasing after every other bright shiny object that comes down the line. Inject just the kind of back up what you said about a pilot and capping you can pilot and captain Roman and say we want only a hundred twenty people enrolled in this first year and you can budget exactly how much those fees are going to be and that really does help mitigate that risk for any program when a pilot can it can follow this year. Okay Shoney's barometric surgery is example because we had a capped we've got a capped but yet you guys recommended removing the cap a couple weeks ago so I'm I'm just trying to have that what what then is the best procedure because you presented evidence that showed that removing the caps would actually save us money that should already be a proven process based on your position but but Jake would wanna run that through a clearinghouse for checks and balances but I just need a little clarification so bariatric as a clinical procedure these are other coaching programs so you have a medical necessity utilization management criteria and guard rails around this procedure. We'll have to meet certain criterias before they are actually have the procedure done you're you're not having inappropriate or wasteful utilization in this category you have a three million dollar cap we just typically don't see people cap it this type of medical procedure actually live caps on medical procedures have been listed lifted overtime you're not you're not even coming close to hitting that cap anyway so what we've shown is that the data suggests that you have a positive ROI on this. Evidence of proven that this is a procedure that you should cover and we just historically don't see cap so we do encourage you to keep this in place if you'd like to keep the cap in place I would encourage you to evaluate any time come close to hitting and making sure no one's being left behind. That would benefit from it. Sure sure that would be something that would be for further discussion by this committee as to what Jake is proposing and possibly put into a list of the recommendations of come out of this committee. And what that. What that would look like. Yes Is mean. We'll need further discussion on it at the. Reporter posed. You have to follow up on that no other than to say that this is hi it's new for me certainly not a medical guy though I don't know that it's something I think it's fairly new for Arkansas this idea of looking at a procedures for men are alive basis so the data is evolving and the analysis is involving when we asked Blue Cross to look specifically at the bariatrics they just they found a distinction in the return on one procedure versus another so there's there's some complexity in there and we're actually trying to really hone in on you know where does it work and what doesn't work what are best practices in and what what what should we incentivize and what should. Okay I think we do have follow up on the last slide on or after. I'm my last point of clarification on the other programs so like I said this is a medical procedure when you put these other diabetes programs and you're adding incentivizing in coaching individuals still have access to care right so they still can go to their primary care doctor they still have their glue commoners they had originally so when you're capping that program you're not taking anything away from anybody you're really just budgeting for a program to help people I'm so that's really the distinguishing difference here. And for the communication. I want a lot of time on this I know yesterday we had our communications expert walk through just your website high level and just talk about a look at the two different websites are basically similar look the city design it because if you other things walk through some recommendations this is just listing the various things I know that they walk through in this great detail during the meeting but you look at setting things up is H. two males instead of PDFS different kind of formats where the where the call on boxes should be a lot of things like that maybe revising the whole look of the website and I know that there is a fairly lengthy discussion the J. product they're looking at right now in the been redesigned in the. Website currently so I won't really. Go any further on this I mean I'm happy to take questions or. Yeah we agree I think anybody who's been on the state website probably thinks that it's maybe not the most user friendly and we've really we are at EBD traditionally have a lot of paper a lot of fax machines a lot of things that have a human being has to manually enter when they use the website for those functions we don't have to do that it's much more secure and it's just better for everyone so we're really trying to push the website. The after this one. Mr chairman if I may I'm sitting here thinking through all this and watching Joanna's on presentation and as Jake saying there is you know all of this is complicated that's why we say we we have six people up here today one thing just really comes to mind for me and I feel like I would be remiss if I didn't at least mention it yeah we talked a lot talked a lot about. Pharmacy in the outpatient setting and when Joanna's putting up that they have this network on oncology I just wanted to make the point that there's a huge spend an ever growing on the medical side in the pharmacy to the separate from what we were talking about on the outpatient side so these are infusions A lot for oncology and when she says there's twenty percent misdiagnosed and and you could have this network of of experts to talk to to make sure you have the right diagnosis and I believe you had on your slides and genetic testing there as well I just think it's really really important to think about. Some kind of program to make sure when you put someone on a hundred thousand dollar drug two hundred fifty thousand dollar drug is the right drug so I just kind of wanted to loop back back into the conversation. All right so we have one last recommendation. And it's really going back to the insulin bill that we talked about we just want to make sure that the the plan avoids any unintended costs when they passed bills so several states that we work with have us draft up actuarial notes that accompanies the bill so the voters you know they understand if there's a financial impact so we're recommending the put some like that in place and it's my understanding that there something similar for their retirement the state retirement system so we could put something in place that's been here is that we should be in good shape. I think a lot of the membership understands we will have to have but so projected recommendation. Blake. Yeah we we absolutely agree we think that be really helpful for everyone. Okay in that finish your presentation. The lady did you have something. On the government's gonna go over the letter. So We had put some thought into a governance structure of course the EDT board was abolished under Act one thousand four and as part of that process The responsibility was handed over to the state board of finance the state board of finances on a really good job I think they've got up to speed and made some really tough hard decisions very quickly but going forward on a more permanent basis I think we've got to have a board a specifically designated for making decisions on behalf of C. B. D. the board I hate drawing on some of the lessons that we've tried to learn from the experience on the old DVD board we feel like needs to be really integrated into the state budget system the old DVD board was just kind of out there so that the problems of the plan had a lot of us who are involved in budgeting a lot of us who are involved in spending work always aware of the of the needs of the plan. It's really making sure that the the budgeting process that those sort of mechanisms that we talked about the increased funding that they're really embedded into the process so there's no surprises really along the way. Also we want to make sure that there's some tough decision making that can be made one of the problems you'll DVD board had was it kind of got caught up on some of the horrible realities of healthcare namely the costs go up and of course we would support any kind of representation from state and public school active and retired members on the board so we've drafted a proposal that's really all this is but it's it's really intended to start a conversation about what an entity might look like. it's a nine member board it's got appointments by staff or excuse me by agencies appointments by the Senate and house leadership as well as stakeholders from active and retirees. we went ahead and fleshed out some subcommittees of finance subcommittee which would be responsible for coming up with of recommendations to keep the board actuarially sound this would be the committee it would make the tough decisions. The benefits review subcommittee which in my mind is kind of got that pilot program responsibility that we just talked about. And then we would propose keeping the drug utilization and evaluation committee which is what we have now to manage our formula are in place. we mentioned that we would propose keeping that the the. EVD within the state budget process. Recommend a fiscal impact analysis or actuarial analysis on bills. Look at instituting mandatory rate increase that would be statutory so the rates would never. B. zero they would always increase of between a range so potentially two and four percent could never be more than four but never less than two that would add some consistency and predictability and rates but it would also not hand over DVD the power to Jack up the budget too terribly much I think I still would like to see some pressure on the be the and on the the the administrators of the plan to contain costs. I'd like to see rate increases be imposed on employees within the context of salary increases we increase salaries for state employees annually so making sure that we're we're looking at those two things at the same time we're not giving someone a raise and then turned back around and taking it back out of the other pocket. One of the issues we've encountered we wanted to share with the committee for consideration is how an individual qualifies for retirement benefits right now under the law an individual qualifies for retiree health insurance if they are on insurance on the last day on the job and qualify for either a purse or a TRS what that means is that people can work at the state for out their career never pay into the plan and then jump on at the last minute and benefit from it all the way through my understanding is other states have found ways to really make those those benefits contingent on paying into the plan over a certain amount of time actuarially it kind of. Flip this over. And then lastly the the I'd like to have a conversation with leadership and of course of the members of this committee on where and how the legislature has input on the process what are the decisions that you all want to make one of the problems of the EVD board had was they were kind of out there on their own I don't think that there was enough oversight and referred as Legislative. review of some of the decision making I understand you all don't want to necessarily be involved in the nitty gritty all don't want to be involved in establishing rates but some process in place where we can check meticulously for budgeting and out to buy names in advance to make sure that we're all in agreement that we're headed in the right direction. Okay thank you for those recommendations we've taken in to consideration of I will remind Committee that next week on Wednesday and Thursday the twenty second and twenty third on a Wednesday we will have a public comment period will be some good information be time for some more questions as we. A brat but get serious own September twenty third the Thursday morning we are going have whatever follow up public comment but also will vote on the inclusion of recommendations in the final report can take up sponsoring of related draft legislation we appreciate everybody's presentation thank you to the signal group for being here and that to the Director bleed and all members we are Jr.