2017 S 2017 SPRING B BUDGET WORKSHOP ERNESTINE CHAVEZ RICHARD VALERIO SAMMY J. QUINTANA EXECUTIVE DIRECTOR DEPUTY DIRECTOR CHIEF FINANCIAL OFFICER
NMSA, , CHAPTER 22, ARTICLE 29 • 22-29-2. Purpose of act. • The purpose of the Public School Insurance Authority Act is to provide comprehensive core insurance programs, including reimbursement coverage for the costs of providing due process to students with disabilities, for all participating public schools, school board members, school board retirees and public school employees and retirees by expanding the pool of subscribers to maximize cost containment opportunities for required insurance coverage. • 22-29-4. Authority created. • There is created the "public school insurance authority", which is established to provide for group health insurance, other risk-related coverage and due process reimbursement with the exception of the mandatory coverage provided by the risk management division on the effective date of the Public School Insurance Authority Act. 2
NMPSIA T TODAY AY • Covered on Medical • Staff • 23,130 Employees • 11 FTE • 51,572 Total Lives • Board of Directors • 11 Board Members • 2 NEA-NM • School Districts • 1AFT-NM • 88 Mandatory (Excludes APS) • 3 Governor Appointees • 1 Superintendents’ Association • Charter Schools • 1 New Mexico Association of • 99 Mandatory School Business Officials • 25 Educational Entities • 1 Educational Entities at Large • 25 (Optional) • 1 School Boards Association • 1 Public Education Commission 3
FY18 APPR PPROVED BUDGET ET Fund FY17 Operating FY18 FY18 Budget Appropriation Appropriation Request through HB2 Benefits $320,859,700 $351,995,200 $325,783,600 Risk $78,352,978 $76,292,100 $70,799,100 Program Support $1,347,000 $1,389,400 $1,299,900 Agency Total $400,559,678 $429,676,700 $397,882,600 4
HISTORICAL LOOK OOK RATE I INCREASES A AND F D FUND B ND BALA LANC NCE BENEFITS F FUND Plan Year Fund Balance at Rate Increase Fund Balance at End of Start of Plan Year Plan Year 2010-2011 $6.1 million Medical 6.4% $23.9 million Dental 6.4% 2011-2012 $23.9 million Medical 0.0% $28.5 million Dental 0.0% 2012-2013 $28.5 million Medical 6.1% $31.6 million Dental 0.0% 2013-2014 $31.6 million Medical 6.6% $42.3 million Dental 3.0% 2014-2015 $42.3 million Medical 1.5% $41.4 million Dental 0.0% 2015-2016 $41.4 million Medical 4.0% $20.4 million Dental 0.0% 2016-2017 $20.9 million Medical High 8.30% $17.8 million Medical Low 7.15% (projected) Dental 0.0% 5
HISTORICAL LOOK OOK RATE I INCREASES A AND F D FUND B ND BALA LANC NCE RISK F FUND Plan Year Fund Balance at Rate Increase Fund Balance at End of Start of Plan Year Plan Year 2010-2011 $23.3 million No Increase $24.9 million 2011-2012 $24.9 million No Increase $19.8 million 2012-2013 $19.8 million -10.00% $12.3 million 2013-2014 $12.3 million 25.49% $5.4 million 2014-2015 $5.4 million 7.31% $4.0 million 2015-2016 $4.0 million 11.28% $-5.7 million 2016-2017 $-5.7 million 5.14% $-15.2 million (projected) $16.0 million in fund sweeps during FY17! 6
FY18 MONTHLY INCR CREASE F FOR EMPLOYEE EFF. 10/1/2017 Plan Salary Under $15,000 Salary $25,000 or Over (75%/25%) (60%/40%) Single: Rate Increase Blue Cross Blue Shield High Option $6.28 $10.04 High 3.98% Presbyterian High Option $5.08 $8.12 Options New Mexico Health Connections $5.66 9.04 Low 1.82% Options Family: HMO 3.98% Blue Cross Blue Shield High Option $15.94 $25.52 Presbyterian High Option $14.22 $22.74 New Mexico Health Connections $14.34 $22.96 7
FY18 M 18 MONTHLY PREMIU IUM C COST SHARIN ING Rates eff. 10/1/2017 8
FY17 P PLAN DESI SIGN C CHANGES S BENE NEFIT P PLAN R N REDU DUCTIONS NS Change FY17 Estimated Savings Medical Increased calendar year plan deductibles effective 1/1/17 $5.5 million High Option Plan - from $300 to $750 for in-network services Low Option Plan – from $1500 to $2000 for in-network services Increased calendar year out-of-pocket maximum effective 1/1/17 $5.0 million High Option Plan – from $2800 to $3750 for in-network services Low Option Plan – from $3500 to $3750 for in-network services Value of Medical Plan Design Changes (6 months) $10.5 million Change FY17 Estimated Savings Prescription Increased copayments on diabetic oral medications, retail generic, mail $4.5 million generic, retail preferred brand, mail preferred brand, and specialty medications effective 7/1/16 Eliminate coverage for over-the-counter (OTC) medications (Proton Pump $1.2 million Inhibitors, Antihistamines and Intranasal Steroids) effective 7/1/16 Value of Prescription Plan Design Changes (12 months) $15.7 million 9
FY17/FY18 U UPCOMING NG P PLAN D N DESIGN C N CHANG NGES 10
BENEFIT ITS F FUND C CLAIMS H HISTORY 11
MEDICAL C L COST D DRIVER ERS • Affordable Care Act Costs • $2.7 million in Reinsurance fees in FY15; $1.7 million FY16; $700K FY17 • Other mandates (including removing pre-ex; limiting premium increases to remain affordable; removing plan limitations; covering children up to age 26 – married/unmarried) Provider reimbursement fees (New contracts include value based purchasing initiatives) • Challenges with provider reimbursement negotiations, especially in rural communities; • Providers attempt to make up for the lower Medicare and Medicaid reimbursement rates • • Increased Cost of Catastrophic Claims • Primary diagnoses include neoplasms, musculoskeletal (muscle, bone, joint) , Genitourinary (renal failure and other kidney related issues caused by age, illness, injury) • FY14 - $46.1 million • FY15 - $68.3 million • FY16 - $78.5 million (Stop loss coverage purchased July, 2016; wellness, disease and care management programs with new medical contracts effective July 2016; increased deductibles and calendar year out-of-pocket maximums effective January 2017) • Top Medical Conditions • Inflammatory Conditions (Arthritis, Chron’s Disease, inflammatory bowel disease, psoriasis, fibromyalgia, Hep C , asthma, etc.) • Diabetes • Cancer, Leukemia, Hodgkin’s Disease, Coronary Artery Disease, Cardiovascular Disease, Stroke, Injury and Poisoning • Vaccine Program • $1.4 million FY16 (FY15 cost - $740k; FY14 cost; FY14 $696k) • Statute requires vaccines for privately insured children to be purchased at retail costs 12
PRE RESCRI RIPTION DRU RUG C COST DRI RIVERS • Increased prescription drug costs driven by increased utilization and inflation ( member education with new wellness/care management and disease management programs, Rx Programs and brand Rx inflation guarantee assist to mitigate costs, Express Scripts’ negotiation strategies) • Rx Plan drug cost increased 7.4% from $77.69 per member per month (PMPM) to $83.46 PMPM driven by Specialty Drugs • Non-specialty plan cost PMPM trend -0.6% - $51.80 PMPM • Specialty plan cost PMPM trend 23.8% - $31.66 PMPM (Rx Plan changes effective July 2016 and Rx programs, specialty drug fills required at Accredo, Viekira Pak for Hep C filled only at Accredo with cost guarantee of $100k) • Largest trend driver – diabetes at 23.9% (prior was Hep C) • Top Drugs • Oral Diabetic Drugs/Insulin • Humira & Enbrel (Rheumatoid Arthritis, Psoriasis, Chron’s Disease) • Viekira Pak (Hep C ) • Cancer Drugs • Top Conditions • Diabetes - $9.6 million • Inflammatory Conditions $6.4 million • Cancer - $3.0 million • Hep C - $2.8 million • MS - $2.5 million • Asthma $2.3 million • Hemophilia - $1.5 million (7 patients; previously 2 patients) 13
CLI LINICAL S L SAVINGS GS A AND R RX P PROGR GRAMS • Utilization Management (prior authorizations, drug quantity rules, step therapy) • For FY16, NMPSIA saved $4.0 million • SafeGuardRx • Hepatitis Cure Value Program (Lowered the cost of a cure - 100k cap) ; Cholesterol Care Value Program (Avoiding up to 90% of the plan cost increases in this therapy class) ; Oncology Care Value Program (Aligning cost with efficacy for selected oncology drugs) ; Inflation Protection Program for Brand Name Drugs (Inflation protection guarantee) • Fraud Waste and Abuse Program • Identifies outliers, flags suspicious activity, gather evidence, investigate, intervention by restricting certain members to one pharmacy for substance abuse medications (opioids, ADHD, sleep, anxiety, muscle relaxers, anticonvulsants) • Possible fraudulent claims - 2 out-of-state pharmacies filling unauthorized diabetic supplies • 1 member with 9 prescribers and 2 pharmacies • RationalMed Safety Protection Program • Identifies patients at risk – alerts physicians of health and safety issues • Mobile Adherence App - Pilot Program • Improve adherence for members with diabetes, hypertension, and blood cholesterol • Therapeutic Resource Centers • Member education UPCOMING - SaveonSP Program – July 1, 2017 • Financial Copayment Assistance for Certain Specialty Drugs – Potential Savings $2.4 million • Approximately 500 members affected • Members will receive written materials with a description of the program with instructions • SaveonSP will contact members directly by phone to discuss the program and process enrollment 14
410 OLD TAOS HIGHWAY SANTA FE, NEW MEXICO 87501 PHONE: 1.800.548.3724 FAX: 505.983.8670 WEBSITE: HTTPS://NMPSIA.COM QUESTIONS??? 15
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