2013 nmrhca day one board book

(PLEASE FIND THE AGENDA/TABLE OF CONTENTS ON PAGE 5.)

REGULAR MEETING

OF THE

BOARD OF DIRECTORS

July 9 & 10, 2013 Sagebrush Inn & Conference Center

1508 Paseo Del Pueblo Sur Taos, New Mexico

2012 January February March April 1

S M T W T F S S M T W T F S S M T W T F S S M T W T F S 1 2 3 4 5 6 7 1 2 3 4 1 2 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 5 6 7 8 9 10 11 4 5 6 7 8 9 10 8 9 10 11 12 13 14 15 16 17 18 19 20 21 12 13 14 15 16 17 18 11 12 13 14 15 16 17 15 16 17 18 19 20 21 22 23 24 25 26 27 28 19 20 21 22 23 24 25 18 19 20 21 22 23 24 22 23 24 25 26 27 28 29 30 31 26 27 28 29 25 26 27 28 29 30 31 29 30

May June July August

1 2 3 4 5 1 2 1 2 3 4 5 6 7 1 2 3 4 6 7 8 9 10 11 12 3 4 5 6 7 8 9 8 9 10 11 12 13 14 5 6 7 8 9 10 11 13 14 15 16 17 18 19 10 11 12 13 14 15 16 15 16 17 18 19 20 21 12 13 14 15 16 17 18 20 21 22 23 24 25 26 17 18 19 20 21 22 23 22 23 24 25 26 27 28 19 20 21 22 23 24 25 27 28 29 30 31 24 25 26 27 28 29 30 29 30 31 26 27 28 29 30 31

September 1 October November December 1

2 3 4 5 6 7 8 1 2 3 4 5 6 1 2 3 2 3 4 5 6 7 8 9 10 11 12 13 14 15 7 8 9 10 11 12 13 4 5 6 7 8 9 10 9 10 11 12 13 14 15 16 17 18 19 20 21 22 14 15 16 17 18 19 20 11 12 13 14 15 16 17 16 17 18 19 20 21 22 23 24 25 26 27 28 29 21 22 23 24 25 26 27 18 19 20 21 22 23 24 23 24 25 26 27 28 29 30 28 29 30 31 25 26 27 28 29 30 30 31

2013 January February March April

S M T W T F S S M T W T F S S M T W T F S S M T W T F S 1 2 3 4 5 1 2 1 2 1 2 3 4 5 6 6 7 8 9 10 11 12 3 4 5 6 7 8 9 3 4 5 6 7 8 9 7 8 9 10 11 12 13 13 14 15 16 17 18 19 10 11 12 13 14 15 16 10 11 12 13 14 15 16 13 14 15 16 17 18 19 20 21 22 23 24 25 26 17 18 19 20 21 22 23 17 18 19 20 21 22 23 21 22 23 24 25 26 27 27 28 29 30 31 24 25 26 27 28 24 25 26 27 28 29 30 28 29 30 31

May June July August 1 2 3 4 1 2 1 2 3 4 5 6 7 1 2 3 4 5 6 7 8 9 10 11 3 4 5 6 7 8 9 8 9 10 11 12 13 14 5 6 7 8 9 10 11 12 13 14 15 16 17 18 10 11 12 13 14 15 16 15 16 17 18 19 20 21 12 13 14 15 16 17 18 19 20 21 22 23 24 25 17 18 19 20 21 22 23 22 23 24 25 26 27 28 19 20 21 22 23 24 25 26 27 28 29 30 24 25 26 27 28 29 30 29 30 31 26 27 28 29 30 31

September OCTOBER November December 1 1 2 3 4 5 1 2 3 1 2 3 4 5 6 7 2 3 4 5 6 7 8 6 7 8 9 10 11 12 4 5 6 7 8 9 10 8 9 10 11 12 13 14 9 10 11 12 13 14 15 13 14 15 16 17 18 19 11 12 13 14 15 16 17 15 16 17 18 19 20 21

16 17 18 19 20 21 22 20 21 22 23 24 25 26 18 19 20 21 22 23 24 22 23 24 25 26 27 28 23 24 25 26 27 28 29 27 28 29 30 25 26 27 28 29 30 31 29 30 31 30 31

2014 JANUARY FEBRUARY MARCH APRIL

S M T W T F S S M T W T F S S M T W T F S S M T W T F S 1 2 3 4 1 1 1 2 3 4 5 5 6 7 8 9 10 11 2 3 4 5 6 7 8 2 3 4 5 6 7 8 6 7 8 9 10 11 12 12 13 14 15 16 17 18 9 10 11 12 13 14 15 9 10 11 12 13 14 15 13 14 15 16 17 18 19 19 20 21 22 23 24 25 16 17 18 19 20 21 22 16 17 18 19 20 21 22 20 21 22 23 24 25 26 26 27 28 29 30 31 23 24 25 26 27 28 23 24 25 26 27 28 29 27 28 29 30 30 31 S M T W T F S S M T W T F S S M T W T F S S M T W T F S

MAY JUNE JULY AUGUST S M T W T F S S M T W T F S S M T W T F S S M T W T F S 1 2 3 1 2 3 4 5 6 7 1 2 3 4 5 1 2 4 5 6 7 8 9 10 8 9 10 11 12 13 14 6 7 8 9 10 11 12 3 4 5 6 7 8 9 11 12 13 14 15 16 17 15 16 17 18 19 20 21 13 14 15 16 17 18 19 10 11 12 13 14 15 16 18 19 20 21 22 23 24 22 23 24 25 26 27 28 20 21 22 23 24 25 26 17 18 19 20 21 22 23 25 26 27 28 29 30 31 29 30 27 28 29 30 31 24 25 26 27 28 29 30 31 S M T W T F S S M T W T F S S M T W T F S S M T W T F S

SEPTEMBER OCTOBER NOVEMBER DECEMBER S M T W T F S S M T W T F S S M T W T F S S M T W T F S 1 2 3 4 5 6 1 2 3 4 1 1 2 3 4 5 6 7 8 9 10 11 12 13 5 6 7 8 9 10 11 2 3 4 5 6 7 8 7 8 9 10 11 12 13 14 15 16 17 18 19 20 12 13 14 15 16 17 18 9 10 11 12 13 14 15 14 15 16 17 18 19 20 21 22 23 24 25 26 27 19 20 21 22 23 24 25 16 17 18 19 20 21 22 21 22 23 24 25 26 27 28 29 30 31 26 27 28 29 30 31 23 24 25 26 27 28 29 28 29 30 31 30 S M T W T F S S M T W T F S S M T W T F S S M T W T F S

Board of Directors Annual Meeting July 9 & 10, 2013 2

July 2013

Mr. Julian Baca

Designee of PERA Executive Director

33 Plaza La Prensa

Santa Fe, NM 87507

PO Box 2123

Santa Fe, NM 87504-2123

[email protected]

Mr. Doug Crandall

Retired Public Employees of New Mexico

PO Box 20607

Albuquerque, NM 87154-0607

Ms. Jan Goodwin, Executive Director

Educational Retirement Board

PO Box 26129

Santa Fe, NM 87502-0129

[email protected]

(W) 505-476-7759

Ms. Elizabeth Jeffreys

Active State Employee

State Personnel Board

State Personnel Office

2600 Cerrillos Road

Santa Fe, NM 87505

[email protected];

(W) 505-827-7701

The Honorable Mr. Wayne Johnson

NM Association of Counties

Bernalillo County Commissioner

One Civic Plaza, NW

Albuquerque, NM 87102

Ms. Karen Brown

Deputy County Commissioner

Bernalillo County, District 5

[email protected]

505-468-7212 (office)

505-462-9821 (fax)

The Honorable Mr. James B Lewis

NM State Treasurer

2055 South Pacheco Street

Suite 100 & 200

Santa Fe, NM 87505-5135

[email protected]

(W) 505-955-1120

(Fax) 505-955-1195

Mr. Terry Linton

Governor’s Appointee

1204 Central Ave. SW


[email protected]

505-247-1530

Mr. Joe Montaño, Secretary

NM Assoc. of Educational Retirees

5304 Hattiesburg NW


[email protected]

(H) 897-9518

Ms. Olivia Padilla-Jackson

NM Municipal League

Director, Financial Services

City of Rio Rancho

[email protected]

W: 505-896-8761

Mr. Wayne Propst

Executive Director

Public Employees Retirement Association

PO Box 2123

Santa Fe, NM 87504-2123

[email protected]

W: (505) 476-9301

Mr. Alfredo Santistevan, President

Designee of NM State Treasurer

[email protected]

505-228-4487

Ms. Karen Sucher

NEA-NM, Classroom Teachers Assoc., & NM

Federation of Educational Employees

PO BOX 1983

Tijeras, NM 87059

[email protected]

Phone: 505-286-8702

Mr. Tom Sullivan, Vice President

Superintendents’ Association of NM

800 Kiva Dr. SE


[email protected]

505-330-2600


Regular Meeting

ROLL CALL

July 9, 2013

Member in Attendance

Mr. Santistevan, President

Mr. Sullivan, Vice-President

Mr. Montaño, Secretary

Mr. Baca

Mr. Crandall

Ms. Goodwin

Ms. Jeffreys

Mr. Johnson

Mr. Linton

Ms. Padilla-Jackson

Ms. Sucher


Annual Meeting of the

NEW MEXICO RETIREE HEALTH CARE AUTHORITY

10:00 AM

July 9, 2013

Sagebrush Inn & Conference Center

1508 Paseo Del Pueblo Sur

Taos, New Mexico

Call to Order Mr. Santistevan, President PAGE

Roll Call to Ascertain Quorum Ms. Beatty, Recorder 4

Pledge of Allegiance Mr. Santistevan, President

Approval of Agenda Mr. Santistevan, President 5

Approval of Regular Meeting Minutes Mr. Santistevan, President 7

June 4, 2013

Election of Board Officers Mr. Santistevan, President

Consent Agenda—Board Travel Mr. Santistevan, President

Any Board Member or Designate—IFEBP

59th Annual Employee Benefits Conference,

October 19—23, 2013, Las Vegas, NM,

Any Board Member or Designate—NASACT

Annual Conference, August 10—14, 2013, Boston, MA

Public Forum and Introductions Mr. Santistevan, President

Provider Presentations Mr. Tyndall, Executive Director

Express Scripts, Inc. 15

Presbyterian Health Plan 29

Blue Cross Blue Shield of New Mexico 58

(Recess for lunch at the pleasure of the Board)

Actuarial Presentations Mr. Tyndall, Executive Director 82

Solvency Mr. Petersen, Segal 104

Dr. Madalena, Data Warehouse

GASB Mr. Petersen 107

Review and Discussion of Naprapathic Services Mr. Santistevan, President 108

Review and Discussion of Life Insurance Mr. Santistevan, President 110

Wellness and Disease Management Update Mr. Tyndall, Executive Director 114

(Recess until 9:00 AM, July 10, 2013, in the same location)


RETIREE HEALTH CARE AUTHORITY/REGULAR BOARD MEETING REGULAR MEETING ACTION SUMMARY

June 4, 2013

Item Action Page #

APPROVAL OF AGENDA ..................................... Approved ..................................................... 8

APPROVAL OF MINUTES:

April 2, 2013 ...................................................... Approved ..................................................... 8

3RD QUARTER BUDGET UPDATE .................. Informational ................................................. 8

FIVE YEAR LOOK-BACK .................................. Informational ................................................. 9

HEALTH CARE REFORM ................................ Informational ................................................ 10

LEGISLATIVE ACTIVITY ................................... Informational ................................................ 10

PRELIMINARY DISCUSSION:

PLAN YEAR 2014 CONSIDERATIONS ........... Informational ................................................ 11

DATE AND LOCATION FOR NEXT

REGULAR MEETING ...................................... Informational ................................................ 14


MINUTES OF THE NM RETIREE HEALTH CARE AUTHORITY/BOARD OF DIRECTORS REGULAR MEETING

June 4, 2013

CALL TO ORDER

A Regular Meeting of the Board of Directors of the New Mexico Retiree Health Care Authority was called to order on this date at 9:30 a.m. in the NMRHCA Board Room, 4308 Carlisle Boulevard, N.E., Albuquerque, New Mexico.

ROLL CALL TO ASCERTAIN QUORUM

A quorum was present, as follows:

Members Present:

Mr. Alfredo Santistevan, President, [designee of the Honorable James B. Lewis, NM State Treasurer]

Mr. Tom Sullivan, Vice President Mr. Joe Montaño, Secretary Mr. Doug Crandall Ms. Jan Goodwin Ms. Elizabeth Jeffreys [by telephone] Mr. Wayne Johnson Mr. Terry Linton Ms. Olivia Padilla-Jackson Ms. Karen Sucher

Members Excused:

Mr. Julian Baca

Staff Present:

Mr. Mark Tyndall, Executive Director Mr. David Archuleta, Deputy Director Ms. Deb Vering, Chief Financial Officer Ms. Ramona Martinez, Director, Public Affairs Mr. Tomas Rodriguez, IT Director Ms. Judith S. Beatty, Recorder

Others Present:

[See sign-in sheet.]

PLEDGE OF ALLEGIANCE

Mr. Crandall led the pledge.

PUBLIC FORUM AND INTRODUCTIONS

Mr. Tyndall introduced Ms. Debbie Vering, Chief Financial Officer. Ms. Vering comes to the NMRHCA from the Department of Health, where she was finance director of the Developmental Disabilities Support Division.


Mr. Crandall introduced Mr. Gerald Chavez, president of the Retired Public Employees of New Mexico.

APPROVAL OF AGENDA

Mr. Crandall moved approval of the Agenda, as published. Ms. Goodwin seconded the motion, which passed unanimously by voice vote.

APPROVAL OF REGULAR MEETING MINUTES: APRIL 2, 2013

Ms. Goodwin moved for approval of the Minutes of the April 2, 2013, meeting, as submitted. Ms. Padilla-Jackson seconded the motion, which passed unanimously by voice vote.

3RD QUARTER BUDGET UPDATE

Mr. Archuleta presented the Q3 review, with the following highlights:

Health Care Benefit Fund

— As of March 31, 2013, there is a surplus of $28.9 million. — Management projects an annual solvency fund contribution of $39.7 million in

FY13. — In FY13, there has been a 5% growth in participation combined with a 5.5%

increase in claim costs through Q2. However, claims costs appear to be slightly down through Q3 as the plan design changes appear to be placing downward pressure on claim costs.

— Current projections assume sufficient budget balances exist to cover claim costs through the remainder of FY13.

— Revenues have increased by 10.8% through Q3, including a 13.6% increase in ER-EE revenue.

Program Support Fund

— Management is projecting a reserve of $186,000 resulting from staff vacancies and close monitoring of expenditures.

— Since July 2012, NMRHCA has transferred $15 million to the SIC. In July 2013, an estimated $6.5 million will be transferred to the SIC.

Ms. Padilla-Jackson asked that future reports compare the approved budget versus Management’s projections as well as how the projected budget is tracking with actual expenditures.

Mr. Tyndall noted that NMRHCA now has 23 FTEs and two vacant positions.

FIVE-YEAR LOOK BACK

Mr. Tyndall reviewed highlights:

— Since March 2009, when the fund balance dropped to its lowest point of $122.8 million, it has risen (at April 30) to $273 million.

— This steady increase is the result of better market conditions, better returns from its investment account, premiums being set at the appropriate amounts,


better management of the plan designs, and an increase in EE-ER contributions. This has allowed the agency to contribute a total of $60 million to the fund since FY11.

— In 2009, actual expenditures were $209 million, and this has risen to $258 million in FY14. In 2009, the agency spent $200 million on its 40,000 members, or about $417 per member per month. In FY14, the cost for each member will be exactly the same, but with 51,000 members.

— In 2008, solvency projections showed the agency would be running a $30 million deficit in 2013. In 2013, this has been turned around to a $33 million surplus, but the agency will start deficit spending in 2018-2019 with no changes.

— Since 2006, the NMRHCA has been charged an average of 18 basis points per year, a highly competitive rate for active management and four times less than an LFC estimate of 75 basis points to outsource such management services.

— Looking at medical premium costs to members on an average basis (recognizing that not all plans were/are the same), in 2008—2009 the average deductible was $190. Now, it is about $600. People are paying more out of pocket when they access care, but premiums have been kept level.

— Since 2008, the Medicare Supplement Plan went up from $115 to $150, or a 6% annual increase. The agency is discussing a product or plan design that would fit in the middle of that rate.

— Based on the most recent quarterly report from the SIC, the 1-year return to the NMRHCA is 8.74%; for the 10-year period, returns are at 8.76%.

Mr. Tyndall said he would look into the benchmark the SIC is using.

Chairman Santistevan commented that it is important for the agency to be able to illustrate graphically how cost-cutting measures and changes implemented by the Board and staff have prevented costs from being passed on to the membership.

Responding to the Chair about the effects of the sequester (federal budget cuts), Mr. Tyndall said a 2% reduction in the subsidy received by NMRHCA through Express Scripts amounts to about $17,000 to $18,000 monthly, which is relatively minor. He said the main concern is how the sequester may be affecting the providers in terms of their ability to provide care to members, but the agency has not heard anything from members about not receiving care, etc.

Mr. Montaño said he would be interested to know whether the SIC has looked into when the NMRHCA can begin investing in alternative investment vehicles, and suggested that the SIC provide an update at the July annual retreat.

Mr. Tyndall agreed to talk with SIC staff, but said it will be important to look at investment vehicles that still provide enough liquidity to the portfolio to allow the agency to draw on the fund when necessary.


HEALTH CARE REFORM

Mr. Tyndall reviewed an updated timeline on the Impact of Federal Health Care Reform on the NMRHCA, with the following highlights:

— Closing of the donut hole, which started in January 2012, has worked out better than originally thought, and the NMRHCA will receive about $6.7 million in extra reimbursements through CMS.

— In January 2013, NMRHCA began paying Patient-Centered Outcomes Research Institute Fee of $2 per pre-Medicare member per year through 2019. Cost: $250,000 over 7-year period.

— January 2014: Medicare Advantage plans will be required to have a loss ratio of no less than 85%. They are fairly close to that.

— January 2014: Initial recommendations from Medicare Independent Payment Advisory Board (IPAB), will be implemented absent congressional action.

— January 2014: Coverage to be available for all individuals and small businesses (even those with pre-existing conditions) through NM-based Health Benefits Exchange.

— January 2014: Medicaid Expansion to adults with incomes up to, possibly, 133% of the federal poverty level.

— January 2018: High Cost Health Insurance Tax (‘Cadillac Tax’) to be implemented. Actuarial value of plans at this point is still to be determined, but likely to include some current NMRHCA options. Excise tax of 40% of value above this point to be imposed if changes are not made.

Mr. Tyndall said he would request Board action (an attestation of intent) in July on the Cadillac Tax, which is an excise tax for any health plan that offers a program with an actuarial value above a set level, i.e., ‘how rich it is’. At the current time, if a retiree plan has a value above $11,800, there is an excise tax of 40% for anything above that. He said Premier Plus, for example, has an actuarial value of about $9,000, but it is likely that NMRHCA will bump up against the excise tax at some point if adjustments aren’t made to the plan.

Ms. Goodwin asked what it would do to the NMRHCA’s unfunded liability were the Board to make changes to avoid the 40% excise tax.

Mr. Tyndall responded that it would lower it. The last official GASB valuation shows an unfunded liability of $3.6 billion; and if changes were not made, it would rise to $3.8 billion; and with plan design changes, the $3.6 billion would drop to $3.4 billion.

In closing, Mr. Tyndall commented that the Affordable Care Act has both positive and negative aspects to it, but if the NMRHCA were to add up the revenue that it has provided to the agency, and then subtract out the fees paid as a result of it, it has been a very positive thing financially. He added that it would continue to be positive unless the Board decides to keep the plan so rich that it pays the Cadillac Tax, because that would cost a lot of money over time.


LEGISLATIVE ACTIVITY

Mr. Tyndall reported that the NMRHCA had an entry conference with staff at the Legislative Finance Committee, which has on its work plan a program evaluation of the cost effectiveness of plans comprising the IBAC: Risk Management Division, NM Public School Insurance Authority, Albuquerque Public Schools, and NMRHCA. He said the initial conversation went well, and the program is tentatively set for completion in October 2013.

Mr. Tyndall said NMRHCA has a presentation scheduled before the Investments & Pensions Oversight Committee later this week.

Mr. Tyndall said an LFC presentation originally set for July has been postponed to later in the year.

[Break]

PRELIMINARY DISCUSSION OF PLAN YEAR 2014 CONSIDERATIONS

Mr. Tyndall reviewed preliminary staff recommendations for plan year 2014.

Options extending solvency to 2030:

Adjust all self-insured medical rates by X% in accordance with current loss ratio.

Projected savings: N/A

Total members affected 40,261S

Average impact per retiree: Varies according to plan (avg. $15/month)

Impact on solvency: Already part of valuation

Mr. Tyndall said the adjustment amount could not yet be determined because not all the data is in from the most recent plan design changes that went into effect this year.

Continue to phase out “Family Coverage” subsidies for retirees with multiple dependent children (from 50% to 25%)

Projected savings: $304,000

Total members affected 536 retirees/670 members

Average impact per retiree: $69/month

Impact on solvency: Already part of valuation

Possible alternative: Reduce subsidy from 50% to 37.5% to allow additional time for retirees/dependents to accommodate changes. Savings would be reduced by half, but total subsidy removal would phase in from 2 years (as originally proposed) to 5 years. This extension would not have a material effect on solvency.

Implement graduated minimum age requirement (to receive subsidies)

Scenario: minimum retirement age of 55 required to receive subsidy with 10-year grandfather period


Projected savings: $7.8 million

Total affected members: N/A

Average impact per retiree: N/A

Impact on solvency: Gain 1 year

Ms. Padilla-Jackson said this is a move in the right direction, and asked Mr. Tyndall to create a 5-year phase-in model.

Reduce copayments for insulin back to 2013 levels

Scenario: Plan design changes in 2013 added coinsurance to mail order, which increased most members’ share to $100 for a 90-day supply (up to a flat $50 copayment). The change was intended to incent use of lower priced medications (including generics) where possible. There is no generic insulin (it is a biologic) and setting the copayment back provides a better opportunity for higher member compliance.

Projected savings: ($540,000)

Total members affected 2,700

Average impact per retiree: Up to $200/year savings per member

Impact on solvency: No material impact

Ms. Goodwin asked if there are possibilities of expanding this into other medications and treatments, and Mr. Tyndall responded that there are, and this can be considered where it makes financial sense. He added that NMRHCA wants to make sure that when it increases copays, etc., it does not end up creating more medical costs because somebody does not get their medication. He said there has not been much indication that is happening yet, but there has been enough feedback from retirees to indicate that this is a possibility.

Mr. Tyndall said he would like the Board to begin discussions on the following options, as well.

Ms. Goodwin stressed that the Board should start looking at ways of being fully funded at some point. GASB is going this is the way, and once the different municipal members and school district members learn more about it, pressure from them will be increasing. She said, “I think it behooves us to get out in front of that so we can be masters of our destiny.” Otherwise, changes may be legislated because the Board was not proactive.

Mr. Tyndall said another $200 million per year would put the NMRHCA on the road to being fully funded.

Ms. Padilla-Jackson said the Board should be looking at this annually. The Board needs to know where it is today and where it will be in 5 years, 10 years, and 30 years. In addition to looking at just cash solvency, she would like to see a goal to increase that to at least 20 years. In addition, she would like to see what the status is on the ARC and where that would put the agency in year 5. She agreed with Ms. Goodwin that it is self-defeating simply to not look at this because it looks unattainable.

Mr. Tyndall agreed to provide more details for the July meeting.


In terms of moving to 100% funding, Mr. Tyndall said the agency was created in 1990 and existed in a particular accounting model for 16 years before GASB introduced these requirements, and it will take a while to catch up. He commented that to get out of a $3.6 billion unfunded liability is daunting, and there is no moderate path to that goal.

Chairman Santistevan said the July discussion about GASB should include the recommendations expected from the rating agencies.

Ms. Goodwin asked that the July agenda include discussions on: reductions in health care cost trends; ways of working with the state and cities to create healthier employees and retirees; and the life insurance benefit, which contributes to unfunded liability. She said the agency should be as aggressive as possible.

Board members discussed possibilities for increasing Employee/Employer contribution levels, which would require legislative approval.

Mr. Tyndall said a possible alternative that would still keep the solvency period along with the other elements of the 5-year plan up to 2040 would increasing the employee percentage by .75%, which is what the NMRHCA asked for in the last session, and only increasing the employer contribution by .5%. The Board would have to decide whether it would be willing to proceed with this if the employer piece were removed.

Chairman Santistevan suggested the July meeting include major discussion on whether or the NMRHCA should proceed with a request at the next session, which is 30 days, or wait until the following year for the 60-day session.

Ms. Padilla-Jackson said she thought the NMRHCA should propose something to the Legislature in the next session; even if there is no appetite for it, perhaps an implementation schedule could be considered. She said the point is to be proactive and “keep beating the drum.”

Mr. Sullivan asked Mr. Tyndall to develop solvency scenarios based on each .25% drop in contributions on both sides.

Ms. Padilla-Jackson noted another issue local government and municipal employees will be struggling with is the 5-year phase-out of the hold harmless distributions, which will have a strong impact in 2017. Ms. Padilla-Jackson also noted, with any increase in employer contributions, there are fewer dollars to allocate to raises, which is a top priority for legislators.

Options extending solvency to 2034:

Increase years of service required to receive maximum subsidy

Scenario: Require 25 years of service to receive maximum subsidy (rather than 20) with proportional reduction of subsidy levels for all years worked below the maximum with 5-year grandfather period.

Projected savings: $4 million

Total affected members: N/A

Average impact per retiree: N/A



Reduce pre-Medicare retiree subsidies

Scenario: Reduce maximum subsidy level for pre-Medicare retirees from 65% to 60%.


Total affected members: 11,200

Average impact per retiree: $25.20/month


Reduce pre-Medicare spousal subsidies

Scenario: Reduce maximum subsidy level for pre-Medicare spouses from 40% to 25%.





Implement enhanced wellness program

Scenario: Create premium differential/incentives for health status and/or participation in wellness or disease management programs

Projected savings: $3 million




DATE AND LOCATION FOR THE NEXT REGULAR BOARD MEETING:

JULY 9 & 10, 2013, TAOS SAGEBRUSH INN, 1508 PASEO DEL PUEBLO SUR, TAOS, NM

OTHER BUSINESS

None.

ADJOURNMENT

Its business completed, the NMRHCA Board adjourned the meeting at 12:55 a.m.

Alfredo Santistevan, Chair Joe Montaño, Secretary


1PROPRIETARY AND CONFIDENTIAL © 2013 Express Scripts Holding Company. All Rights Reserved.

Your Collaborative Planning Guide

New Mexico Retiree Health Care Authority

07/9/2013



Top Line Performance Metrics - Comparison Plan Cost PMPM is $161.69, a 2.3% trend over the previous period

Generic Fill Rate (GFR) increased 4.1 percentage points to 81.4%

Member Cost Share increased slightly; driven by 1/1/13 copay changes

Description 7-12 - 5-13 7-11 - 5-12 Change 7-12 - 5-13 7-11 - 5-12 Change 7-12 - 5-13 7-11 - 5-12 Change

Avg Members per Month 40,160 39,255 2.3% 18,095 17,846 1.4% 22,065 21,409 3.1%

Number of Unique Patients 37,720 36,629 3.0% 16,693 16,349 2.1% 21,959 21,224 3.5%

Pct Members Utilizing Benefit 93.9% 93.3% 0.6 92.2% 91.6% 0.6 99.5% 99.1% 0.4

Total Plan Cost $71,430,361 $68,218,686 4.7% $21,644,159 $20,649,100 4.8% $49,786,202 $47,569,586 4.7%

Total Adjusted Rxs 1,415,484 1,377,815 2.7% 414,451 409,434 1.2% 1,001,033 968,381 3.4%

Average Member Age 64.7 64.6 0.2% 53.0 53.1 -0.1% 74.2 74.1 0.1%

Plan Cost PMPM $161.69 $157.99 2.3% $108.74 $105.19 3.4% $205.12 $202.00 1.5%

Plan Cost per Adjusted Rx $50.46 $49.51 1.9% $52.22 $50.43 3.6% $49.73 $49.12 1.2%

Nbr Adjusted Rxs PMPM 3.20 3.19 0.4% 2.08 2.09 -0.2% 4.12 4.11 0.3%

Generic Fill Rate 81.4% 77.4% 4.1 80.5% 76.9% 3.5 81.8% 77.5% 4.3

Home Delivery Utilization 48.4% 50.2% -1.8 48.1% 50.4% -2.3 48.6% 50.1% -1.5

Member Cost % 16.0% 15.5% 0.4 15.9% 16.3% -0.3 16.0% 15.2% 0.8

Specialty Percent of Plan Cost 23.2% 20.6% 2.6 26.3% 25.0% 1.3 21.8% 18.7% 3.1

Specialty Plan Cost PMPM $37.51 $32.53 15.3% $28.65 $26.30 8.9% $44.77 $37.73 18.6%

Formulary Compliance Rate 97.4% 97.0% 0.4 96.7% 96.4% 0.3 97.7% 97.2% 0.4

New Mexico Retiree Health Care Authority - Combined

New Mexico Retiree Health Care Authority - Commercial

New Mexico Retiree Health Care Authority - EGWP



Top Line Performance Metrics – by Population Generic, home delivery and formulary compliance rates for both the Commercial and

EGWP RHCA populations remain well above respective peer groups

Utilization (rxs PMPM) and specialty plan cost PMPM remain higher for both populations compared to peer groups

Member cost share remains lower for both populations compared to peer groups

Description 7-12 - 5-13 7-12 - 5-13 1-13 - 5-13 7-12 - 5-13 7-12 - 5-13

Average Member Age 64.7 53.0 44.2 74.2 75.6

Plan Cost PMPM $161.69 $108.74 $109.52 $205.12 $162.31

Plan Cost per Adjusted Rx $50.46 $52.22 $60.94 $49.73 $48.32

Nbr Adjusted Rxs PMPM 3.20 2.08 1.80 4.12 3.36

Generic Fill Rate 81.4% 80.5% 77.5% 81.8% 76.4%

Home Delivery Utilization 48.4% 48.1% 28.4% 48.6% 33.1%

Member Cost % 16.0% 15.9% 16.1% 16.0% 19.6%

Specialty Percent of Plan Cost 23.2% 26.3% 21.6% 21.8% 16.6%

Specialty Plan Cost PMPM $37.51 $28.65 $23.63 $44.77 $26.98

Formulary Compliance Rate 97.4% 96.7% 95.8% 97.7% 95.8%

Government - Over 65

Population

Government Advisory

Panel (GAP)

RHCA - Combined

RHCA - Commercial

RHCA - EGWP



Historical Performance

Increase

To Drive Down

GFR & Home Delivery

Utilization

Plan Cost PMPM $

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

$140

$145

$150

$155

$160

$165

$170

Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

Pla

n C

ost P

MP

M $

Key Metrics by Quarter

Plan Cost PMPM $ Generic Fill Rate % Member Cost % Home Delivery Utilization %

*

* Includes data through May 2013



Top 10 Indications

The largest trend is in Cancer, at 25.6%

The largest negative trend is in High Blood Cholesterol, at -9.4%

2 % Change

1 1 DIABETES 110,224 7,242 $7,922,970 58.3% $17.93 1 109,235 7,038 54.4% $16.86 6.4%

2 2 HIGH BLOOD CHOLESTEROL 149,324 15,617 $5,975,368 74.0% $13.53 2 147,992 15,360 67.7% $14.93 -9.4%

3 6 CANCER 8,700 1,176 $4,978,627 91.7% $11.27 4 8,193 1,121 91.9% $8.97 25.6%

4 4 HIGH BLOOD PRESS/HEART DISEASE 273,895 20,152 $4,952,001 92.2% $11.21 3 264,649 19,494 89.5% $11.20 0.1%

5 3 INFLAMMATORY CONDITIONS 4,395 535 $4,411,890 33.2% $9.99 5 4,259 524 32.4% $8.61 16.0%

6 8 ASTHMA 32,017 5,355 $3,564,253 28.3% $8.07 6 32,082 5,017 5.0% $8.59 -6.0%

7 7 ULCER DISEASE 72,530 9,356 $3,416,748 84.1% $7.73 7 68,950 9,101 82.2% $7.45 3.9%

8 12 MENTAL/NEURO DISORDERS 17,508 1,941 $2,929,744 65.3% $6.63 8 16,874 1,871 53.7% $7.01 -5.3%

9 5 MULTIPLE SCLEROSIS 701 79 $2,754,584 0.0% $6.24 9 811 83 0.0% $6.46 -3.5%

10 9 DEPRESSION 62,575 7,300 $2,751,725 88.4% $6.23 10 59,853 7,003 83.9% $6.01 3.6%

Total Top 10: 731,869 $43,657,908 78.4% $98.83 712,898 73.4% $96.08 2.9%

Differences Between Periods: 18,971 $2,171,362 5.0% $2.75

Peer = Express Scripts Peer 'Government' market segment

Plan Cost PMPM

Plan Cost PMPM Rank

Adjusted Rxs Patients

Generic Fill Rate

Plan Cost PMPM

Top Indications by Plan Cost

7-12 - 5-13 7-11 - 5-12

RankPeer Rank Indication

Adjusted Rxs Patients Plan Cost

Generic Fill Rate

Represent 61.1% of your

total Plan Cost



1/1/2013 Home Delivery Copay Changes

Overall Member Cost is 16.0%, up from 15.5% in the previous period

Copay changes made to home delivery on 1/1/2013 have saved an estimated

$844,807 through May YTD ($641,767 for EGWP and $203,040 for Commercial)

Member Cost Share

Plan Cost vs. Member Cost

Previous Member Cost %

Current Member Cost %

19.9%

26.3%

16.9%

22.7%

20.9%

27.0%

17.6%

24.6%

12.6%

17.3%

9.9%

18.8%

11.2%

14.5%

8.0%

20.7%

16.0%

21.4%

12.7%

21.1%

15.5%

20.2%

11.7%

23.0%Generic

Preferred Brand

Non-Preferred

Brand

Overall

Retail Home Delivery

Total

16.0% 15.3% 15.6% 15.5% 14.9% 14.5% 16.6% 17.7%

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

Plan Cost Member Cost Member Cost %



RHCA Clinical Program

ProgramRHCA Plan Cost Savings

Commercial EGWP

Time Period 07.11--05.12 07.12--05.13 07.11--05.12 07.12--05.13

Preferred Drug Education Programs $12,641 --$3,162 $27,491 $1,142

Coverage Management Programs• Prior Authorization• Smart Prior Authorization (step therapy)• Quantity Duration

$897,753 $1,299,738 $3,250,826 $3,660,369

Preferred Drug Step Therapy Program $349,956 $265,483

Total Savings $1,260,350 $1,562,059 $3,278,317 $3,661,511



Top Line Performance Metrics: Specialty Specialty PMPM trend at 15.3% for

RHCA compared to 9.7% for GAP

Variance in trend between RHCA and GAP based on higher utilization and lower member cost share for RHCA

Description RHCAGAP (Jan-May

2013)Pct Members Utilizing Specialty 4.5% 1.4%

Plan Cost PMPM $37.51 $23.63

Plan Cost per Adjusted Rx $1,394.58 $2,133.12

Adjusted Rxs PMPM 0.03 0.01

PMPM Trend 15.3% 9.7%

Member Cost % 1.5% 2.2%

Specialty Key Statistics

0

1 1 31.6% $2.45 28.8% $1.19

2 2 18.3% $1.39 14.5% $0.77

3 4 25.5% $0.72 4.5% $0.04

4 6 18.1% $0.20 -1.4% -$0.01

5 16 153.9% $0.19 43.1% $0.10

6 10 51.1% $0.19 10.7% $0.04

7 11 49.3% $0.18 -1.5% $0.00

8 15 71.1% $0.15 -24.5% -$0.05

9 7 20.9% $0.12 30.3% $0.05

10 8 17.2% $0.09 89.5% $0.23

CNS/AUTONOMIC DISORDERS

IMMUNE SERUMS

VIRAL INFECTIONS

INFLAMMATORY CONDITIONS

PULMONARY HYPERTENSION

BONE CONDITIONS

ENDOCRINE DISORDERS

IRON TOXICITY

Government Advisory Panel Trend

(Jan-May 2013)

Indication

Current Plan Cost

Rank

Plan Cost PMPM % Change

Plan Cost PMPM $ Change

Total Trend

Plan Cost PMPM % Change

Plan Cost PMPM $ Change

SKIN CONDITIONS

Top Specialty Trend Drivers

RankCANCER

Cancer and Inflammatory conditions are the top trend

drivers for both RHCA and GAP, and increasing at a faster rate for RHCA



Projected Biosimilar Savings

$0

$20

$40

$60

$80

$100

$120

$140

2012 2014 2016 2018 2020 2022

Millions

Projected Sales: No Biosimilars Projected Sales: With Biosimilars

$250 Billion Through 2024



*Includes all drugs with patent expirations through 2013Source: U.S. Drug spend estimates are based on IMS Health data for 2011 (if available), manufacturer reported U.S. sales or a percent of manufacturer

reported worldwide annual sales of the drug. The patent expiration dates of the biologic products is current as of November 2012. The availability of biosimilars is highly variable due to litigation, patent challenges, FDA’s establishment of a aBLA pathway, or other factors.

$6.7

$2.3

$10.9

$3.7

$1.2

$4

$6.7

$2.7

Overall U.S. Market Opportunity (in $ Billions)

$38.2 Billion Biosimilar Opportunity81 biotech products with patent expirations through 2020

2013* 2014 2015 2016 2017 2018 2019 2020Benefix®

Cerezyme®

Erbitux®

Humulin RLeukine®

Neulasta®

Neupogen®

Humatrope®

Humalog®

Novolog®

Campath®

Epogen®

Lantus®

Procrit®

Pulmozyme®

Rituxan®

Synagis®

Berinert®

Elitek®

Humira®

Reopro®

Tysabri® Apidra®

Pegasys®

Remicade®

Xolair®

Actemra®

Avastin®

Herceptin®

Levemir®

Orencia®

Intron A®

Lucentis®

PegIntron®

Simulect®

Vectibix®



Appendix



Top Line Performance Metrics - Combined Plan Cost PMPM is $161.69, a 2.3% trend over the previous period

Generic Fill Rate (GFR) increased 4.1 percentage points to 81.4%, well ahead of the Government Advisory Panel

Member Cost Share increased slightly; driven by EGWP copay changes

Description 7-12 - 5-13 7-11 - 5-12 Change

Avg Subscribers per Month 40,160 39,255 2.3%

Avg Members per Month 40,160 39,255 2.3%

Number of Unique Patients 37,720 36,629 3.0%

Pct Members Utilizing Benefit 93.9% 93.3% 0.6

Total Plan Cost $71,430,361 $68,218,686 4.7%

Total Adjusted Rxs 1,415,484 1,377,815 2.7% 7-12 - 5-13 1-13 - 5-13

Average Member Age 64.7 64.6 0.2% 75.6 44.2

Plan Cost PMPM $161.69 $157.99 2.3% $162.31 $109.52

Plan Cost per Adjusted Rx $50.46 $49.51 1.9% $48.32 $60.94

Nbr Adjusted Rxs PMPM 3.20 3.19 0.4% 3.36 1.80

Generic Fill Rate 81.4% 77.4% 4.1 76.4% 77.5%

Home Delivery Utilization 48.4% 50.2% -1.8 33.1% 28.4%

Member Cost % 16.0% 15.5% 0.4 19.6% 16.1%

Specialty Percent of Plan Cost 23.2% 20.6% 2.6 16.6% 21.6%

Specialty Plan Cost PMPM $37.51 $32.53 15.3% $26.98 $23.63

Formulary Compliance Rate 97.4% 97.0% 0.4 95.8% 95.8%



Population

Government Advisory

Panel (GAP)



Top Line Performance Metrics - Commercial Plan Cost PMPM is $108.74, a 3.4% trend over the previous period


Specialty Plan Cost PMPM is $28.65, an 8.9% trend over the previous period






Total Plan Cost $21,644,159 $20,649,100 4.8%

Total Adjusted Rxs 414,451 409,434 1.2% 1-13 - 5-13 7-12 - 5-13

Average Member Age 53.0 53.1 -0.1% 44.2 41.4

Plan Cost PMPM $108.74 $105.19 3.4% $109.52 $97.40


Nbr Adjusted Rxs PMPM 2.08 2.09 -0.2% 1.80 1.67



Member Cost % 15.9% 16.3% -0.3 16.1% 18.5%




New Mexico Retiree Health Care Authority - Commercial

Government Advisory

Panel (GAP)

Government - State



Top Line Performance Metrics - EGWP Plan Cost PMPM is $205.12, a 1.5% trend over the previous period


Specialty Plan Cost PMPM is $44.77, a 18.6% trend over the previous period






Total Plan Cost $49,786,202 $47,569,586 4.7%

Total Adjusted Rxs 1,001,033 968,381 3.4% 7-12 - 5-13 7-12 - 5-13

Average Member Age 74.2 74.1 0.1% 75.6 77.4

Plan Cost PMPM $205.12 $202.00 1.5% $162.31 $255.07


Nbr Adjusted Rxs PMPM 4.12 4.11 0.3% 3.36 4.39



Member Cost % 16.0% 15.2% 0.8 19.6% 14.2%




New Mexico Retiree Health Care Authority - EGWP


Population

Medicare - EGWP



Presbyterian Health Plan July 2013

1


2

Our Purpose

Presbyterian serves

to improve the health

of the patients,

members, and

communities we

serve.

2


Introductions

Katherine SilvaAccount Manager(505) [email protected]

Amy Olcott, RNPopulation Health Project Manager(505) [email protected]

Tim RiveraDirector, Account Service and

Retention(505) 923-8230

[email protected]

3


About us…

• Founded in 1908, Presbyterian Healthcare Services has served New Mexicans for more than 100 years.

• Presbyterian Health Plan was established in 1986 and has grown to become the largest health plan in New Mexico with more than 400,000 members.

• New Mexicans serving New Mexicans: Presbyterian is the only locally owned and operated integrated health care delivery system.

• Modern Healthcare ranks Presbyterian #16 in the U.S. for the top 100 Most Integrated Healthcare Networks.

4


What does Presbyterian do for the NMRHCA• Customer Service• Claims• Appeals• Network • Meetings and collateral• Wellness • Value of Integration • Care Management • Innovations in Healthcare

5


Presbyterian Health Plan Enrollment

• PPO Non – Medicare– Premier Plus – 2,453– Premier – 4,903– 41% of Pre-Medicare Membership

• Medicare Presbyterian Senior Care (HMO)– Plan 1 – 2,128– Plan 2 –1,038– 10% of Medicare Membership

– 22% of Total Membership

*6


Presbyterian Customer Service Center (PCSC) ResultsOne Call

– Pay bill– Check claims– Request ID Card– Schedule apt with PMG primary or specialist

– Took over 3,500 calls in 2012

Service Levels – Consistently answering 80% of all calls within 30 seconds or less (Average Speed

of Answer – 9 seconds for 2013)

Abandoned Calls – Less than < 4%

Patient and Member Satisfaction– Customer satisfaction over 92%!

7


Claims

• Non Medicare NMRHCA July 2012 - YTD Claims Count – 97,733

• Non Medicare NMRHCA July 2011- June 2012 Claims Count – 94,848

8


Appeals

• Non-Medicare NMRHCA July 2012 - YTD • 64 Level 1 (internal) appeal reviews – all

processed timely• 23 Level 2 (Maximus) appeal reviews – all sent to

Maximus timely • 6 decisions overturned by Maximus

9


Network – 46% Overall Discount • Eight hospitals in seven

communities

• Nineteen Primary Care Clinics– Over 1,600 PCPs

• Seven Urgent Care Clinics

• Clinics in over twenty five specialties– Over 7,000 Specialists

• Employ 600+ physicians

10


Meetings and Collateral

• Attend all regular and special Board meetings

• Attend state-wide enrollment meetings

• Produce member collateral

• Provide Quarterly reports and monthly data transfer to NMRHCA Data Warehouse

11


12

Integrated Healthcare Delivery System


13

Our Integrated System• Presbyterian Heart Group

– Nationally Recognized Physicians– Among the most advanced cardiac care units and

rehabilitation programs in New Mexico– Only pediatric heart surgery services in the state

• Presbyterian Women’s Center– Dedicated to improving the health of women of all ages and their families– Nearly 7,000 babies born each year– State of the art Neonatal Intensive Care Unit (NICU)

• Presbyterian Children’s Medical Center– Rachel’s Courtyard– Team of more than 300 pediatric care providers

• Presbyterian Kaseman Hospital– Partnership with MD Anderson (one of three locations outside of Texas)

Access to the most advanced radiation treatments in Albuquerque


14

Care Management and Disease Management• Transition of Care (switching medical carriers)

– Scheduled upcoming surgical procedure– 2nd or 3rd trimester of pregnancy– Serious medical condition that requires ongoing care

• Case Management for Acute Conditions– Transplant Services– High-Risk Pregnancy– Coordination of complex care

• Disease Management– Diabetes– Coronary Artery Disease (CAD)– Asthma– Congestive Heart Failure (CHF)– Chronic Obstructive Pulmonary Disease (COPD)


Resources and Tools

Staff of 4 Medical Directors• Meets with clients to review utilization and medical

initiative.

Predictive Modeling• Risk stratifies members who are the highest risk

for a catastrophic event• Assigned a level of care based on their needs

15


16

MyPresOnline

• Look up your benefit information• Check the status of your membership• Change your PCP (optional)• View the status of your claims• Request replacement ID cards• Send Customer Service a question online

[email protected]

www.phs.org/aps


Treatment Cost Calculator Well Child visit new (5-11)

17


Wellness

The program includes:

• Dedicated RN • Flu shots• Access to Personal Health Assessment• Screenings• Clinical reports & medical director analysis• Customized health fairs• Educational materials• My CD Program

18


WebMD for members

• Online personal health management site

• Personal Health Assessment (PHA) to •Identify personal health risks; •Provides recommendations for improving those risks;•Easy-to-use tools to help make healthy lifestyle changes;•Confidential personalized report instantly.

• Includes a Health Record tool that allows members to securely compile and store immunization records, medical history, allergies, and more to create a health record summary for their physicians.

19


Staying healthy

• Screening RemindersEncourages members to get preventive screenings such as mammograms and pap smears.

• Smoking Cessation Program

• Value Added Benefits – Valuable discounts for:– Acupuncture– Massage Therapy – Chiropractic– Vision

20


Nurse Advice Line

• 24/7 telephone triage of symptoms, medical advice/information, and medical/ behavioral health referrals

• Services are provided by NurseAdvice™ New Mexico– Links to 911– Able to receive questions via email– Staffed by registered nurses living in New Mexico

21


Discharge Planning & Management

• Discharge planning via a personal visit:– follow-up care; review discharge instructions & medications

• RNs call all patients who have been discharged to home within 72 hours– Check on medical status, medication, mental and physical state– Follow up appointments where applicable

• Results include:– Reduction in readmissions and urgent care/emergency room visits– Increase in patient satisfaction– Top 10 Ranking for Lowest Readmission Rate.

22


Diagnostic Imaging Management• Administered through HealthHelp

– Provides physicians with current ordering guidelines and best practices for radiology utilization

– Eliminates unnecessary and improper testing and treatment– Establishes quality standards for imaging and radiology services

• Medical cost savings to date:– CAT - $285,000– PET - $38,000– MRI - $2,000,000 over two years

23


Behavior Health Care Management

• Coordinates medication, follow-up visits, and connecting with providers

• Monitors inpatient admissions for level and appropriateness of care; instrumental in lowering readmission rates to 6%

• Crisis line available 24/7

24


Rio Rancho’s First Hospital• $165 Million investment

• More than 90 patient beds

• New Mexico’s First 21st Century Hospital

• 66 acres – east of Unser Blvd and north of Black Arroyo Blvd

• Largest project in our 100+ year history

25


Hospital at Home Care Model

• An alternative to traditional hospital admission for uncomplicated cases of heart disease, pneumonia, dehydration, and other conditions.

• Helps patients in need receive hospital-level care in the comfort of their home.

• Once or twice daily doctor, nurse, or aide visits - supplemented by TeleHealth video monitoring

• Physician and nursing coverage 24 hours/7 days a week

• More than 50% savings compared to traditional inpatient care

• Available only to Presbyterian Health Plan Members

26


Patient Centered Medical Home• Alternative model in delivering care

– Proactive team approach to health care led by a Primary Care Physician and includes team members from behavioral health, pharmacy, care management and diabetes educators

– Makes office visits more efficient– Empowers patients to be more

involved in their health

• Clinical Outcomes– BP improvement in 73% of patients– HgbA1c improvement in 58% of patients– LDL improvement in 73% of patients

27


Closing: Our ValueInnovation and evolving processes to lower healthcare costs,

without sacrificing quality and satisfaction:

– Only integrated health care system in New Mexico– Average discounts: 40-46%– Unique discharge planning management– Access to MD Anderson Radiation Treatment Center– Future cost savings initiatives

28


People helping People. It’s our tradition.

29


Presented by:

Blue Cross and Blue Shield of New Mexico (BCBSNM)


What does BCBSNM do for the NMRHCA?

• Customer service• Claims• Appeals• Network• Meetings and collateral• Wellness tools including Health Assessments (HA) for the

non-Medicare members• Care management (all members)

2Board of Directors Annual Meeting July 9 & 10, 2013 59

BCBSNM Enrollment by Plan• PPO Non-Medicare

o Premier Plus – 4,618 o Premier – 5,923 o TOTAL: 10,541* (out of total non-Medicare membership of

17,885 – 59%)

• Medicareo BCBSNM Medicare Supplement – 22,303* (out of total Medicare

membership of 30,371 – 73%)

• Of BCBSNM’s 48,256 total members, 68 percent (32,844 members) are NMRHCA members

*Reported by NMRHCA


Customer Service

• NMRHCA January – June 2013o Calls Received and Answered – 10,405o Average Speed of Answer (ASA) – 25 secondso First Contact Closure – 91.35 percent

• NMRHCA 2012o Calls Received and Answered – 22,023o Average Speed of Answer (ASA) – 25 secondso First Contact Closure – 92.68 percent


Claims

• NMRHCA 2013 YTD (May) claims count – 190,155o 49,497 Non-Medicareo 140,658 Medicare

• NMRHCA 2012 claims count – 692,149o 167,157 Non-Medicare

o 524,992 Medicare


Appeals

• September 26, 2012 – May 1, 2013o 154 cases received

• September 26, 2012 – May 1,2013o 135 cases closed within allowed timeframe per Department of

Insurance (DOI) regulations

Note: Five appeals did not meet the DOI timeframe and that appeal cases were deemed approved per the regulation. Four of those claims were from a Doctor of Oriental Medicine (DOM) that sent 30+ appeal requests in one letter.


Networks

• 21,619 contracted PPO providers within New Mexico• National coverage

o 96 percent of U.S. hospitalso 91 percent of U.S. providers

• Worldwide coverage (contracted with PPO providers in 195 countries)

• Average discounto Professional, outpatient, and inpatient YTD for NMRHCA through

May 2013 – 46.6 percent


Meetings and Collateral

• Attend all regular and special board meetings

• Attend state-wide enrollment meetings

• Produce member collateral

• Monthly reports/claims extract to Segal


Performance Guarantees• PPO Non-Medicare and Medicare

July 1, 2012 – Current = $34,844.78o Medical claims processing accuracyo Financial payment accuracyo Medical claims turnaround timeo Customer service (ID card turnaround and accuracy, average speed of answer,

abandonment rate)o Account management – team performance appraisalo Report deliveryo Network discount savings

• PPO Non-Medicare and MedicareJuly 1, 2011 – June 30, 2012 = $0.00Note: Based on BCBS Association Member Touchpoint Measures


• Total current, active open cases – 16

• Total Targeted – 190 (includes 25 carryover)

• Refused or could not contact - 76

• Total cases closed at reporting period – 114 (Cases were managed and met goal; no further progress)

Case Management (April 1, 2012 – March 31, 2013)


Disease Management (April 1, 2012 – March 31, 2013)

• 10,731 nonMedicare membership• 3,389 members touched• 857 mailings unique members – Condition

management communication (Does not include any preventive mailings which is 2,055 more)

• 1,467 members Targeted• 477 successful engagements (unique participants

verbally consenting to participate)• 39 physician collaboration


American Imaging Management (AIM)

• Effect of reduced utilization trend created $5.9 million in annual value for BCBSNM

• Experts estimate that 30-40 percent of all outpatient imaging is unnecessary

• Radiology Quality Initiative (RQI) programs improve health by:

o Eliminating unnecessary radiation exposure to patientso Promoting the most appropriate, efficient, and cost-effective diagnostic

imaging serviceso Encouraging standardization of medical practice patterns


Self Service: Blue Access for MembersSM

Members can:• Check status of claims• View Explanations of Benefits• Communicate with Customer

Advocates through email• View provider selections• Order new ID cards or print a

temporary copy• Link to Wellness site (Well

onTargetSM)

Claims and Customer Service


1-800-973-6329

Advice anytime –Around-the-clock health and wellness advice from licensed professionals

24/7 Nurseline

Our 24/7 Nurseline is here

to help• Nurses provide health

advice and information

• AudioHealth Library®

includes topics such as kicking the smoking habit

• Program usage reports are available to employer groups

Available in English and Spanish

14

• 746 calls YTD, of which 422 required the attention of a clinician; 70 percent were redirected to a more appropriate level of care


Blue365® Member Discount Program

Weight Management –Discounts at Jenny Craig®´

on membership and food

Vision Care & Eyewear –Discounts on eyewear, contact lenses, and laser vision correction surgery

Dental Products – Discounts on Procter & Gamble oral care bundles

Hearing Aids – Discounts on hearing aids for members, parents, and grandparents

Under the My Health tab


The NEW Integrated Provider Finder®

• Combines real member cost, quality, patient experience, and advanced demographics information in one easy, intuitive site to drivereal change in member behavior

• BlueCard® PPO cost & quality data integrates with real-time benefit information to deliver an accuratepicture of member share

• Retail experience with responsive, easy-to-navigate web design with multiple access points

• Available to members and non-members*

Online provider search engine and care decision support tool

*Cost information only available to PPO / CDHP members


Integrated Approach


Member Liability Estimator Features

• Cost for specific procedures based on benefits and accumulations

• Displays deductible, copayment, and coinsurance

• Quality measurement information

• “Learn More about this Treatment” (alternatives to surgery)

• Alternative options:o Lower costo Closer locationso Alternative to hospitals


Portal Highlights• Health Assessment• Member dashboard• Self-directed courses• Trackers and tools• Health & wellness content• Food and exercise diary• Social networking• Text messaging • Life Points rewards• Fitness program


Questions?


Copyright © 2013 by The Segal Group, Inc., parent of The Segal Company. All rights reserved.

New Mexico Retiree Health Care AuthorityActuarial, Claims, and Demographics StudyJuly 9, 2013



Objective & Primary Actuarial Tasks CY2014 Expenditure Estimate Review of CY2012 Incurred Claims

• Cost and Utilization Trends by Type of Service• Claims Distribution• Comparison to Facility and Professional

Benchmarks

Demographic Analysis & Risk Scores• Understanding Enrollment Risk• Age Distribution & Age Risk Factor by Carrier• Non-Medicare Health Status by Plan, Carrier, and

County


2

Objective & Primary Actuarial Tasks

Goal: Improve understanding of RHCA benefit structure and dynamics and how they relate to the sustainability of affordable benefit options

Primary Actuarial Tasks for NMRHCA GASB Valuation Develop funding projections (both short-term and long-term)

– Retiree Contributions + Other Revenue = Benefits Costs + Operating Expenses + Surplus Contribution (or Loss)

Develop Calendar Year Target Rates as basis for Retiree Contributions– For fully insured benefits, typically equals negotiated premium or estimated

renewal premium– For self-funded benefits, project claim payments and administration expenses

for calendar year


3

CY2014 Expenditure Estimate

Review recent claims experience May 2012 through April 2013

Underwriting adjustments to claims experience Provider contract changes (BCBS Lovelace Hospital discounts) Plan changes effective January 1, 2013 Convert to per member per month Adjust from paid basis to incurred basis

Project claims forward at assumed trend from midpoint of experience period to midpoint of projection period (November 1, 2012 to July 1, 2014) 8% per annum for 20 months = 13.7% increase

PDP Revenue and Rx Rebates are estimated separately under different assumptions

Authority to set final rates resides with Board based on staff recommendationBoard of Directors Annual Meeting July 9 & 10, 2013 85




Benchmarks


County


5

2012 Non-Medicare Claims

Type of Service 2012

Encounters% of 2012

Encounters 2012 Paid

% of 2012 Paid

Inpatient Hospital Facility 1,257 0.3% $14,303,304 18.7%Outpatient Hospital Facility 8,076 2.1% $4,310,269 5.6%Emergency Room Facility 1,206 0.3% $1,137,493 1.5%Anesthesia 1,777 0.5% $920,545 1.2%Surgery 26,195 6.9% $7,123,420 9.3%Lab / Path 53,345 14.0% $11,200,481 14.6%Evaluation and Management 48,742 12.8% $3,639,111 4.7%Well Visits 3,961 1.0% $529,269 0.7%Emergency Room Professional 2,598 0.7% $1,214,753 1.6%Chiropractic 10,262 2.7% $161,656 0.2%Medicine 53,499 14.1% $7,323,941 9.6%Injections 9,492 2.5% $4,817,701 6.3%DME 6,707 1.8% $1,541,903 2.0%Retail Pharmacy 107,220 28.2% $6,061,944 7.9%Mail Order Pharmacy 33,565 8.8% $9,875,006 12.9%Other 12,699 3.3% $2,527,262 3.3%Total 380,601 100.0% $76,688,058 100.0%

Blue Cross Blue Shield of New Mexico Non-Medicare

Type of Service 2012

Encounters% of 2012

Encounters 2012 Paid

% of 2012 Paid

Inpatient Hospital Facility 644 0.3% $7,679,424 19.2%Outpatient Hospital Facility 5,481 2.5% $1,992,993 5.0%Emergency Room Facility 1,228 0.6% $354,752 0.9%Anesthesia 1,113 0.5% $639,480 1.6%Surgery 16,637 7.6% $5,240,557 13.1%Lab / Path 32,126 14.7% $5,538,294 13.9%Evaluation and Management 29,703 13.5% $2,165,887 5.4%Well Visits 3,016 1.4% $384,351 1.0%Emergency Room Professional 1,275 0.6% $656,390 1.6%Chiropractic 3,530 1.6% $59,071 0.1%Medicine 26,451 12.1% $3,032,009 7.6%Injections 4,577 2.1% $2,241,853 5.6%DME 4,114 1.9% $481,606 1.2%Retail Pharmacy 65,948 30.1% $3,190,552 8.0%Mail Order Pharmacy 17,703 8.1% $5,013,123 12.6%Other 5,728 2.6% $1,243,623 3.1%Total 219,274 100.0% $39,913,965 100.0%

Presbyterian Healthcare Services Non-Medicare

Inpatient facility charges continue to be the highest cost service

Surgery made up a higher percentage of Presbyterian claims than BCBS claims (13.1% > 9.3%) Surgery has consistently comprised a higher percentage of Presbyterian claims

than BCBS claims since 2008, with the spread increasing since 2010


6

2012 vs 2011 BCBS Non-Medicare Claims Experience

Type of Service

2012 Encounters per 1,000 Members


% Change

2012 Paid per

Encounter

2011 Paid per

Encounter%

Change2012 Paid

PMPY

2011 Paid

PMPY%

ChangeInpatient Hospital Facility 121 102 18.5% $11,379 $12,198 -6.7% $1,376 $1,245 10.5%Outpatient Hospital Facility 777 735 5.7% $534 $537 -0.6% $415 $395 5.0%Emergency Room Facility 116 110 5.7% $943 $922 2.4% $109 $101 8.1%Anesthesia 171 155 10.6% $518 $531 -2.4% $89 $82 7.9%Surgery 2,520 2,465 2.2% $272 $260 4.7% $685 $640 7.0%Lab / Path 5,133 4,856 5.7% $210 $200 4.9% $1,078 $971 10.9%Evaluation and Management 4,690 4,375 7.2% $75 $72 3.1% $350 $317 10.5%Well Visits 381 369 3.3% $134 $131 1.9% $51 $48 5.2%Emergency Room Professional 250 222 12.5% $468 $481 -2.8% $117 $107 9.3%Chiropractic 987 971 1.7% $16 $16 -2.5% $16 $16 -0.8%Medicine 5,148 4,879 5.5% $137 $123 11.1% $705 $601 17.2%Injections 913 692 31.9% $508 $499 1.8% $464 $345 34.3%DME 645 581 11.1% $230 $217 5.9% $148 $126 17.7%Retail Pharmacy 10,317 9,165 12.6% $57 $51 9.9% $583 $472 23.7%Mail Order Pharmacy 3,230 2,878 12.2% $294 $280 5.3% $950 $804 18.1%Other 1,222 1,055 15.8% $199 $195 2.0% $243 $206 18.1%Total 36,621 33,610 9.0% $201 $193 4.5% $7,379 $6,478 13.9%

Blue Cross Blue Shield of New Mexico Non-Medicare

Increased utilization was a trend driver for the BCBS population BCBS encounters PMPM increased to 3.05 in 2012 from 2.80 in 2011


7

2012 vs 2011 Presbyterian Non-Medicare Claims Experience

Type of Service



% Change

2012 Paid per

Encounter

2011 Paid per

Encounter%

Change2012 Paid

PMPY

2011 Paid

PMPY%

ChangeInpatient Hospital Facility 89 121 -26.9% $11,925 $7,150 66.8% $1,057 $867 21.9%Outpatient Hospital Facility 754 672 12.3% $364 $349 4.0% $274 $235 16.8%Emergency Room Facility 169 156 8.5% $289 $275 5.2% $49 $43 14.1%Anesthesia 153 136 12.6% $575 $553 4.0% $88 $75 17.1%Surgery 2,289 2,230 2.6% $315 $283 11.3% $721 $631 14.2%Lab / Path 4,420 4,299 2.8% $172 $167 3.5% $762 $716 6.4%Evaluation and Management 4,087 3,884 5.2% $73 $70 4.9% $298 $270 10.3%Well Visits 415 423 -1.8% $127 $120 6.5% $53 $51 4.6%Emergency Room Professional 175 157 11.5% $515 $503 2.3% $90 $79 14.1%Chiropractic 486 480 1.1% $17 $17 -3.5% $8 $8 -2.4%Medicine 3,639 3,492 4.2% $115 $102 12.2% $417 $357 16.9%Injections 630 710 -11.3% $490 $491 -0.2% $308 $349 -11.5%DME 566 534 5.9% $117 $113 3.6% $66 $60 9.7%Retail Pharmacy 9,074 8,433 7.6% $48 $44 11.2% $439 $367 19.6%Mail Order Pharmacy 2,436 2,269 7.4% $283 $262 8.0% $690 $595 16.0%Other 788 762 3.4% $217 $340 -36.2% $171 $259 -34.0%Total 30,170 28,758 4.9% $182 $173 5.5% $5,492 $4,962 10.7%

Presbyterian Healthcare Services Non-Medicare

Presbyterian members utilized the plan less than BCBS members Presbyterian encounters PMPM increased to 2.51 in 2012 from 2.40 in 2011


8

Claims Distribution – Non-Medicare Medical only

In 2012 11.0% of non-Medicare members incurred annual Medical claims in excess of $10,000, up from 10.1% of members in 2011

In 2012, 75.4% of non-Medicare Medical claims were incurred by the 11.0% of members with annual claims in excess of $10,000

Annual Claims2012 % of Members

2012 Cumulative % of Members

2011 % of Members

2011 Cumulative % of Members

2012 Medical Paid

% of 2012 Medical Paid

Cumulative % of 2012 Medical

Paid

2011 Medical

Paid% of 2011

Medical Paid

Cumulative % of 2011

Medical Paid$0 15.5% 15.5% 15.7% 15.7% $0 0.0% 0.0% $0 0.0% 0.0%$1-$100 2.5% 18.0% 2.7% 18.4% $22,392 0.0% 0.0% $23,484 0.0% 0.0%$100-$300 9.7% 27.7% 9.8% 28.3% $292,334 0.3% 0.3% $288,535 0.3% 0.4%$301-$800 16.7% 44.4% 17.0% 45.3% $1,406,324 1.5% 1.8% $1,386,426 1.6% 2.0%$801-$5,000 36.3% 80.8% 36.3% 81.6% $12,234,301 13.1% 14.9% $12,011,509 14.1% 16.1%$5,001-$10,000 8.3% 89.0% 8.3% 89.9% $9,118,636 9.7% 24.6% $8,940,387 10.5% 26.5%$10,001-$15,000 3.4% 92.4% 3.3% 93.3% $6,500,769 6.9% 31.6% $6,194,903 7.3% 33.8%$15,001-$20,000 1.9% 94.3% 1.7% 94.9% $5,133,728 5.5% 37.0% $4,380,220 5.1% 38.9%$20,001+ 5.7% 100.0% 5.1% 100.0% $58,972,902 63.0% 100.0% $52,166,358 61.1% 100.0%Medical Total 100.0% 100.0% $93,681,386 100.0% $85,391,822 100.0%


9

Facility Benchmarks

Combines Non-Medicare and Medicare experience

Measure

NMRHCA CY2012 Result

CY2012 Benchmark

Result*

Ratio of NMRHCA to Benchmark

Inpatient admissions per 1,000 members 93.45 91.12 1.0256Inpatient days per 1,000 members 381.16 370.11 1.0298Outpatient hospital encounters per 1,000 members 502.44 496.45 1.0121Emergency room encounters per 1,000 members 348.45 352.45 0.9887

* Benchmark result has been adjusted based upon age and gender


10

Professional Benchmarks

Combines Non-Medicare and Medicare experience

Measure*NMRHCA

ResultBenchmark

Result**

Ratio of NMRHCA to Benchmark

Evaluation and Management 4.35 4.78 0.9106Well Visits 0.39 0.29 1.3440Anesthesia 0.47 0.44 1.0621Surgeries 0.86 0.88 0.9821Radiology 2.37 2.09 1.1318Pathology 3.65 3.55 1.0268Medicine 4.22 4.00 1.0549Injectables 0.81 0.77 1.0521Total 17.13 16.82 1.0187

* Measures are on a per member per year basis** Benchmark result has been adjusted based upon age and gender





Benchmarks


County


12

Understanding Enrollment Risk

Enrollment risk exists in many forms. With two plans and carriers being offered, specific risks include: Risk that competing plans do not get enrollees with similar age/gender profiles Risk that competing plans do not get enrollees with similar average health status Risk that competing plans do not have equivalent cost impact on RHCA due to

benefit level

Unmanaged, enrollment risk drives up overall plan cost. Members are not incented to elect the plan which would be in the best financial interest of RHCA.

Plan designs that do not adjust for enrollment risk frequently result in adverse selection against the plan Adverse selection is the process whereby the plan participant has enough

information to determine that one course of action presents a financial advantage to them, and also to the detriment of RHCA– For example, you are offered a new Honda or BMW and the BMW costs you

only $1,000 more


13

NMRHCA Members Age 40+ & Claims PMPY

234

834

2,323

4,297

8,578

9,687

7,616

5,365

3,714

2,628

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

‐

2,000

4,000

6,000

8,000

10,000

12,000

40 to 44 45 to 49 50 to 54 55 to 59 60 to 64 65 to 69 70 to 74 75 to 79 80 to 84 85+

Med

ical + Rx Pa

id per M

embe

r CY2

012

Mem

ber C

ount

Age Range


14

Non-Medicare Members by Age and Carrier

Age Group2012

Members% of 2012 Members

2011 Members

% of 2011 Members Difference

BCBSNM 40 to 44 115 1% 100 1% 0.2%Non-Medicare 45 to 49 378 4% 374 4% 0.1%

50 to 54 1,134 13% 1,127 13% 0.3%55 to 59 2,341 27% 2,369 27% 0.0%60 to 64 4,848 55% 4,967 56% -0.6%

BCBSNM Average Age 8,816 53.3 years 8,937 53.7 years -0.4 yearsPresbyterian 40 to 44 106 2% 81 1% 0.3%Non-Medicare 45 to 49 398 7% 352 6% 0.2%

50 to 54 1,041 17% 876 16% 1.3%55 to 59 1,596 26% 1,501 27% -0.8%60 to 64 2,919 48% 2,714 49% -1.0%

Presbyterian Average Age 6,060 51.6 years 5,524 52.2 years -0.5 yearsTotal 40 to 44 221 1% 181 1% 0.2%Non-Medicare 45 to 49 776 5% 726 5% 0.2%

50 to 54 2,175 15% 2,003 14% 0.8%55 to 59 3,937 26% 3,870 27% -0.3%60 to 64 7,767 52% 7,681 53% -0.9%

Non-Medicare Average Age 14,876 52.6 years 14,461 53.1 years -0.5 years

Excludes members under age 40, over age 64, and those for whom age is not available

In 2012, 59% of non-Medicare members enrolled in BCBS, down from 62% in 2011

Decimal places beyond 0.1 years are not displayed, but are incorporated in Difference calculation


15

Age Group2012


2011 Members


Presbyterian less than 55 32 1% 24 1% -0.1%Medicare 55 to 59 44 1% 29 1% 0.1%Advantage 60 to 64 120 4% 77 3% 0.4%

65 to 69 1,562 50% 1,172 52% -2.6%70 to 74 919 29% 660 30% -0.2%75 to 79 298 10% 185 8% 1.2%80 to 84 103 3% 52 2% 1.0%

85+ 57 2% 36 2% 0.2%Presbyterian Average Age 3,135 69.5 years 2,235 69.3 years 0.2 yearsMedicare less than 55 240 1% 239 1% -0.1%Total 55 to 59 360 1% 325 1% 0.0%

60 to 64 812 3% 683 2% 0.2%65 to 69 9,650 32% 8,352 30% 2.1%70 to 74 7,594 25% 7,158 26% -0.4%75 to 79 5,340 18% 5,171 18% -0.8%80 to 84 3,692 12% 3,647 13% -0.8%

85+ 2,612 9% 2,489 9% -0.2%Medicare Average Age 30,300 73.2 years 28,064 73.5 years -0.3 years

Medicare Members by Age and Carrier

Age Group2012


2011 Members


BCBSNM less than 55 151 1% 167 1% -0.1%Medicare 55 to 59 255 1% 247 1% 0.0%Supplement 60 to 64 548 2% 497 2% 0.1%

65 to 69 6,442 29% 5,948 28% 1.2%70 to 74 5,471 24% 5,416 25% -0.6%75 to 79 4,186 19% 4,151 19% -0.5%80 to 84 3,117 14% 3,085 14% -0.4%

85+ 2,172 10% 2,037 9% 0.3%BCBSNM Average Age 22,342 73.8 years 21,548 74.0 years -0.1 yearsLovelace less than 55 57 1% 48 1% 0.1%Medicare 55 to 59 61 1% 49 1% 0.1%Advantage 60 to 64 144 3% 109 3% 0.4%

65 to 69 1,646 34% 1,232 29% 5.3%70 to 74 1,204 25% 1,082 25% -0.3%75 to 79 856 18% 835 20% -1.8%80 to 84 472 10% 510 12% -2.1%

85+ 383 8% 416 10% -1.8%Lovelace Average Age 4,823 72.6 years 4,281 73.5 years -0.9 years

The Presbyterian Medicare Advantage plans continue to have a higher proportion of Medicare beneficiaries under age 70 enrolled

Decimal places beyond 0.1 years are not displayed, but are incorporated in Difference calculation


16

Age Risk Factor by Carrier

Assumes retiree age 40-44 has a risk factor of 1.0 and shows expected cost as a multiple of retiree age 40-44.

Non-Medicare members in Presbyterian are expected to be 2.7% less costly than BCBSNM non-Medicare members based on age

Presbyterian Medicare members are expected to be 4.2% less costly than BCBSNM Medicare members and 2.8% less costly than Lovelace Medicare members based on age

Non-Medicare2012 Age Risk

FactorBCBSNM 1.83Presbyterian 1.78

2012 Age Risk Factor

BCBS Medicare Supplement 2.80Lovelace Medicare Advantage 2.76Presbyterian Medicare Advantage 2.68

Medicare


17

Non-Medicare Health Status Risk Index by Carrier

Carrier Plan2012 Risk

IndexBCBSNM Premier Plus 1.0376BCBSNM Premier 0.7337

Presbyterian Premier Plus 0.9217Presbyterian Premier 0.6598

Premier Plus 0.9970Premier 0.7016

Total Non-Medicare

Based on 2012 membership:

Premier Plus participants are anticipated to be 42.1% less health than Premier participants

BCBS participants are anticipated to be 15.3% less healthy than Presbyterian participants


18

Continuing Non-Medicare Members’ Health Status Risk Index by Plan

The high Risk Index of members switching from Premier to Premier Plus illustrates adverse selection

2011 Plan 2012 Plan Members

% of ContinuingNon-Medicare Membership

2012 Risk Index

Premier Plus Premier Plus 6,568 48.9% 0.9897Premier Premier 6,514 48.5% 0.7145Premier Premier Plus 77 0.6% 1.1779

Premier Plus Premier 271 2.0% 0.722013,430 100.0% 0.8519


19

Non-Medicare Health Status Risk Index versus Medical + Rx Claims PMPY

A relativity factor of 1.00 represents the RHCA average of the entire non-Medicare population Counties are displayed in order of descending membership, with the greatest number of

members residing in Bernalillo County Counties with a gap between the line and the bar deliver care more cost effectively at their risk

level than all New Mexico counties on average

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00

Relativ

ity to

NMRH

CA Average

Cost Relativity to RHCA Average Risk Relativity to RHCA Average


20

Non-Medicare Risk Score-Normalized Medical + Rx Claims PMPY by County

All claim amounts have been normalized to reflect the average health status of the entire NMRHCA non-Medicare population residing in New Mexico

Counties are displayed in order of descending membership, with the greatest number of members residing in Bernalillo County

Red bars indicate Counties with a higher than average cost of care


2121

Questions?


Assumption Prior Assumption -- July 2010 Prior Assumption -- July 2011 Prior Assumption -- July 2012 Current Assumption -- July 2013

Asset BalanceUse February 28, 2010 fund balance of

$160,952,669 as an estimate for 7/1/2010 balance

Use May 31, 2011 fund balance of $216,000,000 as an estimate for

7/1/2011 fund balance

Use April 30, 2012 fund balance of $232,787,612 as an estimate for

7/1/2012 fund balance

Use May 31, 2013 fund balance of $279,487,430 as an estimate for

7/1/2013 fund balanceInvestment Return 7.75% No Change No Change No Change

Annual Growth in PayrollFY10 payroll estimated to be

$4,025,201,436, increasing 0% through 6/30/12 and 4% thereafter

FY11 payroll estimated to be $4,170,000,932, increasing 0% through

6/30/13 and 4% thereafter





9.14% No Change No Change No Change

Contribution Rates (Employer/Employee)Public Safety, et al 2.292%/1.146% in 2011-2012 No Change No Change: 2.50%/1.25% No Change

2.500%/1.250% beginning 7/1/2012Other Occupations 1.834%/0.917% in 2011-2012 No Change No Change: 2.00%/1.00% No Change

2.000%/1.000% beginning 7/1/2012Annual Growth in Retirees

Non-Medicare1.75% annually through 6/30/2015,

then based on FY2009 open valuation output table until 2022, 0.5% thereafter

No Change1.75% annually through 6/30/2015,

then based on FY2009 open valuation output table

No Change

Medicare 5.8% through 6/30/2019, then based on FY2009 open valuation output table No Change 5.8% through 6/30/2015, then based on

FY2009 open valuation output table No Change

Retiree Ancillary Costs Assumed to equal premium expenses and is paid fully by retirees No Change No Change No Change

Pension Tax Revenue $13,302,240 for FY10,increasing 12% thereafter

$14,898,485 for FY11,increasing 12% thereafter



HB 728/573 Revenue $3 million annually, no sunset No Change No Change No Change

Annual Growth in PDP Revenue (PMPM)

0% growth in CY11, one half Medicare Trend growth thereafter: Increased for

donut hole closure 4% CY11, 1% CY12 through CY20.

No Change: half of Medicare Rx trend, plus 1% for donut hole closure CY12

through CY20No Change No Change

Rx Rebates

Rebates of $6,632,592 received in FY10, increasing at retiree growth rate less 3% annually through FY13, and at

retiree growth rate thereafter

Rebates of $5,736,750 estimated for FY11, increased at retiree growth rate less 3% annually through FY13, and at


Rebates of $6,424,123 estimated for FY12, increased at retiree growth rate less 3% annually through FY13, and at


Rebates of $5,798,571 estimated for FY13, increased at annual retiree

growth rate

Rx Manufacturers Discounts NA NA

Based on Medco's estimated CY12 PMPM revenue from manufacturers

and Federal Reinsurance, increased at retiree growth rate

Based on ESI's estimated CY13 & CY14 PMPM revenue from manufacturers and Federal

Reinsurance, increased at retiree growth rate

Percentage of Covered Payrollfor Public Safety, et al

New Mexico Retiree Health Care AuthorityBaseline Assumptions for Long-Term Solvency Projections


Short Term Interest $104,000 projected by Sara for FY10, increasing 0.0% annually

$34,752 projected by Sara for FY11, increasing 0.0% annually

$14,099 projected by Sara for FY12, increasing 0.0% annually

$54,802 projected for FY13, increasing 0.0% annually

Subrogation $317,655 received in FY10, increased at retiree growth rate plus 0%

$313,328 estimated for FY11, increased at retiree growth rate



TrendMedical

Medicare Advantage Varies by each of three vendors based on leveraged trend

Varies by vendor through CY2013, 8.00% thereafter 8.00% No Change

Medicare Supplement 8.00% No Change No Change No ChangeMedicare Rx 8.00% No Change No Change No ChangeNon-Medicare Medical 8.00% No Change No Change No ChangeMental Health Included in Medical Trend No Change No Change No ChangeNon-Medicare Rx 8.00% No Change No Change No Change

Medical RatesAssumed to increase at Trend

AssumptionAssumed to increase at Trend

AssumptionAssumed to increase at Trend

Assumption

Annual Non-Medicare rate increases of 8% in 2014-2016, 3% Non-Medicare thereafter, 6% Medicare Supplement

rate increases in 2014+

Life Insurance 0.00% No Change Assumes level total premium on Basic Life for duration of projection

Assumes level total premium on Basic Life for duration of projection

Dental

Weighted average of 7% increase in United Concordia premiums and 9%

increase in Delta Dental premiums for FY11, 6% thereafter

No Change: 6% annually No Change No Change

Vision 5.00% No Change No Change No Change

Program SupportPer Wayne, $2,756,500 for FY11-FY13, increasing 2.5% annually

thereafterNo Change Per Sara, $2,684,000 for FY13,

increasing 2.5% annually thereafter$2,651,000 budgeted for FY2014,

increasing 2.5% annually thereafter

Administrative Services FeeBaseline determined based on

information from Mark/Sara for 2011, increasing 2.00% annually thereafter

no increase to ASO fees for FY12, increasing 2.00% annually thereafter; ASO column includes Comparative

Effectiveness Research fees of $1.00 PMPY in CY2012 and $2.00 PMPY in

CY2013-CY2019

Baseline determined based on information from Mark/Sara for 2013-

2016, increasing 2.00% annually thereafter

Medical based on information from Mark for 2013-2016, increasing 2.00%

annually thereafter; Rx based on existing contract terms in place through

6/30/2014

Plan Design ChangesMedical No changes for 1/1/2011

Medicare No changes for 1/1/2013 No changes for 1/1/2014 or beyond

Non-Medicare

Premier Plan coinsurance maximum increased from $3,000 to $4,000 effective 1/1/2011; No changes

assumed for 1/1/2012

Increase specialist copay by $15

Consolidation of Non-Medicare plans in CY17, annual plan changes

thereafter to keep projected claims beneath Cadillac Tax threshold

RxChange mail order cost-sharing from copay to coinsurance; increase non-

preferred brand cost-sharingNo changes for 1/1/2014 or beyond

MedicareNon-Medicare

Basic Life and AD&D No new entrants No new entrantsAnnual Index in Cadillac Tax Thresholds N/A N/A N/A 3%Annual Increase in PCORI Fee N/A N/A 0% 3%Board of Directors Annual Meeting July 9 & 10, 2013 105

Member Cost Share*Retiree

Medicare 50% No Change No Change No ChangeNon-Medicare 35% No Change No Change No Change

SpouseMedicare 75% No Change No Change No ChangeNon-Medicare 60% No Change No Change No Change

Child(ren)Medicare 100% No Change No Change No ChangeNon-Medicare 100% No Change No Change No Change

5259249_v.

Yellow highlighting indicates assumptions that are varied between the Baseline Scenario and Alternate Scenarios(s).


Fiscal YearBeginning

BOY InvestedAssets

EmployerContribution

EmployeeContribution

RetireeMedical

RetireeAncillary

Tax & HB 351 Revenue

Medicare PDP & Manufacturers

Discount MiscellaneousTotal

RevenueInvestment

Income Medical/Rx Basic LifeAncillaryPremiums ASO Fees

Program Support

TotalExpenditures

Rev. - Exp. Excluding Inv.

IncomeFiscal Year

EndEOY Invested

Assets07/01/2013 $279,487,430 $83,129,299 $41,564,649 $100,759,068 $23,306,901 $23,931,297 $25,923,798 $6,667,543 $305,282,555 $22,903,211 $231,944,639 $4,409,647 $23,306,901 $10,894,627 $2,651,000 $273,206,813 $32,075,742 06/30/2014 $334,466,38307/01/2014 $334,466,383 $86,454,471 $43,227,235 $111,972,550 $25,398,260 $26,443,053 $28,540,647 $6,927,311 $328,963,529 $26,921,006 $259,244,909 $4,409,647 $25,398,260 $11,390,568 $2,717,275 $303,160,660 $25,802,869 06/30/2015 $387,190,25807/01/2015 $387,190,258 $89,912,650 $44,956,325 $124,654,385 $27,932,099 $29,256,219 $31,013,889 $7,254,898 $354,980,465 $30,686,902 $290,246,283 $4,409,647 $27,932,099 $12,067,703 $2,785,207 $337,440,939 $17,539,526 06/30/2016 $435,416,68507/01/2016 $435,416,685 $93,509,156 $46,754,578 $137,777,276 $30,647,284 $32,406,966 $33,856,793 $7,579,320 $382,531,372 $34,060,514 $323,536,029 $4,409,647 $30,647,284 $12,935,948 $2,854,837 $374,383,745 $8,147,627 06/30/2017 $477,624,82607/01/2017 $477,624,826 $97,249,522 $48,624,761 $150,395,042 $33,558,701 $35,935,802 $36,839,208 $7,870,723 $410,473,758 $37,055,655 $354,723,707 $4,409,647 $33,558,701 $13,830,186 $2,926,208 $409,448,448 $1,025,310 06/30/2018 $515,705,79107/01/2018 $515,705,791 $101,139,503 $50,569,751 $163,953,721 $36,653,683 $39,888,098 $39,892,084 $8,183,857 $440,280,698 $39,465,098 $394,439,398 $4,409,647 $36,653,683 $14,736,034 $2,999,363 $453,238,125 ($12,957,428) 06/30/2019 $542,213,46207/01/2019 $542,213,462 $105,185,083 $52,592,541 $178,552,019 $39,992,352 $44,314,669 $43,037,495 $8,351,008 $472,025,168 $41,190,099 $430,409,227 $4,409,647 $39,992,352 $15,596,210 $3,074,347 $493,481,784 ($21,456,617) 06/30/2020 $561,946,94407/01/2020 $561,946,944 $109,392,486 $54,696,243 $194,296,405 $43,544,127 $49,272,430 $46,207,593 $8,657,038 $506,066,323 $42,306,179 $470,618,485 $4,409,647 $43,544,127 $16,464,391 $3,151,206 $538,187,856 ($32,121,534) 06/30/2021 $572,131,59007/01/2021 $572,131,590 $113,768,186 $56,884,093 $211,156,296 $47,353,639 $54,825,121 $49,347,443 $8,960,449 $542,295,228 $42,603,297 $514,692,484 $4,409,647 $47,353,639 $17,432,720 $3,229,986 $587,118,477 ($44,823,249) 06/30/2022 $569,911,63807/01/2022 $569,911,638 $118,318,913 $59,159,457 $229,294,769 $51,415,271 $61,044,136 $52,589,142 $9,257,080 $581,078,767 $41,883,358 $562,484,537 $4,409,647 $51,415,271 $18,421,004 $3,310,736 $640,041,195 ($58,962,428) 06/30/2023 $552,832,56807/01/2023 $552,832,568 $123,051,670 $61,525,835 $248,715,753 $55,763,963 $68,009,432 $55,863,938 $9,549,977 $622,480,567 $39,944,482 $614,324,333 $4,409,647 $55,763,963 $19,428,905 $3,393,504 $697,320,352 ($74,839,785) 06/30/2024 $517,937,26507/01/2024 $517,937,265 $127,973,736 $63,986,868 $269,634,498 $60,417,865 $75,810,564 $59,256,350 $9,838,850 $666,918,731 $36,543,694 $670,958,989 $4,409,647 $60,417,865 $20,465,361 $3,478,342 $759,730,204 ($92,811,473) 06/30/2025 $461,669,48607/01/2025 $461,669,486 $133,092,686 $66,546,343 $291,943,931 $65,337,803 $84,547,832 $62,785,696 $10,114,792 $714,369,082 $31,409,719 $732,314,009 $4,409,647 $65,337,803 $21,507,906 $3,565,300 $827,134,666 ($112,765,583) 06/30/2026 $380,313,62207/01/2026 $380,313,622 $138,416,393 $69,208,197 $315,677,438 $70,609,851 $94,333,572 $66,425,274 $10,388,073 $765,058,799 $24,225,391 $799,262,635 $4,409,647 $70,609,851 $22,578,096 $3,654,433 $900,514,662 ($135,455,863) 06/30/2027 $269,083,15007/01/2027 $269,083,150 $143,953,049 $71,976,525 $341,277,531 $76,307,969 $105,293,600 $70,111,565 $10,665,293 $819,585,532 $14,624,525 $872,196,237 $4,409,647 $76,307,969 $23,685,089 $3,745,794 $980,344,736 ($160,759,204) 06/30/2028 $122,948,47107/01/2028 $122,948,471 $149,711,171 $74,855,586 $369,106,932 $82,473,361 $117,568,832 $73,819,742 $10,947,369 $878,482,993 $2,159,116 $953,104,931 $4,409,647 $82,473,361 $24,833,432 $3,839,438 $1,068,660,810 ($190,177,816) 06/30/2029 ($65,070,229)07/01/2029 ($65,070,229) $155,699,618 $77,849,809 $399,410,813 $89,230,730 $131,317,092 $77,600,442 $11,244,828 $942,353,332 $0 $1,043,500,896 $4,409,647 $89,230,730 $26,049,019 $3,935,424 $1,167,125,716 ($224,772,384) 06/30/2030 ($289,842,614)07/01/2030 ($289,842,614) $161,927,603 $80,963,801 $432,778,172 $96,733,266 $146,715,143 $81,406,413 $11,569,029 $1,012,093,427 $0 $1,144,916,952 $4,409,647 $96,733,266 $27,355,572 $4,033,810 $1,277,449,247 ($265,355,820) 06/30/2031 ($555,198,434)07/01/2031 ($555,198,434) $168,404,707 $84,202,353 $469,674,184 $104,963,358 $163,960,960 $85,214,767 $11,909,869 $1,088,330,198 $0 $1,259,139,384 $4,409,647 $104,963,358 $28,735,697 $4,134,655 $1,401,382,742 ($313,052,544) 06/30/2032 ($868,250,977)07/01/2032 ($868,250,977) $175,140,895 $87,570,447 $509,953,657 $113,946,571 $183,276,276 $89,251,541 $12,263,028 $1,171,402,415 $0 $1,386,071,848 $4,409,647 $113,946,571 $30,194,639 $4,238,022 $1,538,860,726 ($367,458,311) 06/30/2033 ($1,235,709,289)07/01/2033 ($1,235,709,289) $182,146,531 $91,073,265 $553,595,644 $123,627,469 $204,909,429 $93,510,264 $12,616,503 $1,261,479,105 $0 $1,525,972,053 $4,409,647 $123,627,469 $31,700,563 $4,343,972 $1,690,053,703 ($428,574,599) 06/30/2034 ($1,664,283,888)07/01/2034 ($1,664,283,888) $189,432,392 $94,716,196 $600,543,083 $134,119,891 $229,138,560 $98,171,112 $12,976,025 $1,359,097,259 $0 $1,679,286,787 $4,409,647 $134,119,891 $33,280,961 $4,452,571 $1,855,549,857 ($496,452,599) 06/30/2035 ($2,160,736,486)07/01/2035 ($2,160,736,486) $197,009,688 $98,504,844 $651,305,248 $145,392,177 $256,275,187 $103,443,640 $13,332,919 $1,465,263,703 $0 $1,847,909,958 $4,409,647 $145,392,177 $34,921,404 $4,563,886 $2,037,197,073 ($571,933,370) 06/30/2036 ($2,732,669,856)07/01/2036 ($2,732,669,856) $204,890,075 $102,445,038 $706,014,370 $157,495,014 $286,668,210 $109,247,417 $13,686,779 $1,580,446,903 $0 $2,032,949,170 $4,409,647 $157,495,014 $36,614,919 $4,677,983 $2,236,146,734 ($655,699,831) 06/30/2037 ($3,388,369,687)07/01/2037 ($3,388,369,687) $213,085,678 $106,542,839 $764,955,748 $170,541,714 $320,708,395 $115,217,006 $14,041,978 $1,705,093,359 $0 $2,236,230,583 $4,409,647 $170,541,714 $38,357,124 $4,794,932 $2,454,334,001 ($749,240,642) 06/30/2038 ($4,137,610,329)

Assumptions with Fiscal Year Basis: FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029+2.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%2.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50%1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25%2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%7.75% 7.75% 7.75% 7.75% 7.75% 7.75% 7.75% 7.75% 7.75% 7.75% 7.75% 7.75% 7.75% 7.75% 7.75% 7.75%1.75% 1.75% 1.53% 1.27% 1.02% 1.30% 1.21% 1.09% 1.23% 0.89% 1.46% 0.87% 0.59% 0.54% 1.30% varies5.80% 5.80% 7.28% 6.83% 6.46% 5.75% 5.49% 5.10% 4.75% 4.56% 4.07% 4.07% 3.82% 3.66% 3.31% varies0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Assumptions with Calendar Year Basis: CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 CY2020 CY2021 CY2022 CY2023 CY2024 CY2025 CY2026 CY2027 CY2028 CY2029+8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%

0.00% 0.00% 0.00% -6.98% 0.00% -6.39% -5.93% -5.68% -6.03% -6.18% -6.42% -6.62% -6.25% -6.70% -6.91% -6.61%0.00% 0.00% 0.00% -6.98% 0.00% -6.39% -5.93% -5.68% -6.03% -6.18% -6.42% -6.62% -6.25% -6.70% -6.91% -6.61%0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Medicare Advantage Plans 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Basic Life and AD&D -- cover new Retirees (Y/N) N N N N N N N N N N N N N N N N

Premium Rates for Self-funded Plans effective 1/1:35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00%60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00%50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00%75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00%8.00% 8.00% 8.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%8.00% 8.00% 8.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%8.00% 8.00% 8.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00%

5259249_v.

Medicare Supplement % IncreaseNon-Medicare Child % Increase

Annual Growth in Retirees age 65+Rx Rebate Trend

Annual Growth in Retirees under age 65Annual Investment Return

Medicare Supplement

Non-Medicare Medical Claims Trend

Benefit Modifications effective 1/1:

Non-Medicare Retiree % IncreaseNon-Medicare Spouse % Increase

Medicare Medical Claims Trend

Lovelace Medicare Advantage Premium Increase

Medicare Spouse Rate Share (20+ years of service)Medicare Retiree Rate Share (20+ years of service)

New Mexico Retiree Health Care Authority Long-Tem Solvency ModelingProjected Year of Insolvency: FY2029

Baseline Scenario: 2% Payroll Growth in FY2014; Consolidation of Non-Medicare Plans in 2017; Annual Non-Medicare Medical Plan Changes in 2019+; Annual Non-Medicare Rate Increases 8% in 2014-2016, 3% Non-Medicare thereafter, 6% Medicare Supplement Rate Increases in 2014+

Non-Medicare Spouse Rate Share (20+ years of service)

Non-Medicare Premier Plus

Non-Medicare Retiree Rate Share (20+ years of service)

Medicare Prescription Drug

Non-Medicare Prescription Drug

Non-Medicare Prescription Drug Claims TrendMedicare Prescription Drug Claims TrendAnnual Growth in PDP Revenue

Non-Medicare Premier

REVENUE EXPENDITURES

Presbyterian Medicare Advantage Premium Increase

Public Safety, et al Annual Payroll Growth

Public Safety, et al Employer RatePublic Safety, et al Employee RateOther Occupations Employer RateOther Occupations Employee Rate

Other Occupations Annual Payroll Growth


Review and Discussion of Naprapathic Services

Background Information

Effective July 1, 2013 the State of New Mexico, Risk Management Division modified its FY13 plan design

to provide the following cost sharing arraignment when receiving Chiropractic, Acupuncture and

Naprapathic Services:

Based upon an extrapolation of the State of New Mexico’s membership – including average per member

costs and utilization patters (see appendix A), the following cost projections apply to NMRHCA’s

membership:

Options for incorporating Naprapathic Services as part of NMRHCA’s benefit offering from a cost neutral

perspective include:

1. Increasing pre-Medicare specialist visit copays from $35 and $45 under the Premier

Plus/Premier Plans

2. Reducing the annual benefit maximums for the Chiropractic, Acupuncture and Naprapathic

services (combined) to $1,000

3. Decreasing the Medicare Supplemental benefit maximum for Acupuncture Services from $1,500

to $1,000 combined with Naprapathic Services.

FY13

Pres HMO Lovelace HMO BCBS PPO BCBS PPO

Preferred Non-Preferred

Chiropractic/Acupuncture

$30 (up to $1500

combined plan year)

$30 (up to $1500

combined plan year)

$40 (up to $1500

combined plan year)40%

Naprapathic

$30 (up to $1500 per plan

year)


year)


year)40%

FY14

Pres HMO Lovelace HMO BCBS PPO BCBS PPO

Preferred Non-Preferred

Chiropractic/Acupuncture

$40 (up to $1500

combined plan year)

$40 (up to $1500

combined plan year)

$50 (up to $1500

combined plan year)

(up to $1500 combined

plan year)

Naprapathic


year)


year)


year)

50% (up to $500 per plan

year)

A B C D E F G H

Current

Membership

% of Service

Users

Projected #

of Users

Demographic

Multiplier D x E

Avg Per

Member Cost

Per Member

Costs X

Members

NMRHCA

Premier 10,847 5.86% 636 1.33 845 $169.14 $142,989.85

Premier Plus 6,956 5.86% 408 1.33 542 $169.14 $91,697.01

Medicare Supplement 22,543 5.86% 1,321 1.33 1,757 $169.14 $297,171.59

Total 40,346 5.86% 2,364 1.33 3,144 $169.14 $531,858.45


Appendix A

SONM 2012 Costs - Presbyterian Health Plan Only

Members Visits Total Paid

Chiropractic Services 5,832 10,798 $ 234,987.94

Acupuncture 3,271 6,113 $ 374,508.95

Naprapathy 2,462 4,235 $ 416,417.11

Per Member


Chiropractic Services 5,832 10,798 $ 40.29

Acupuncture 3,271 6,113 $ 114.49

Naprapathy 2,462 4,235 $ 169.14

Per Visit


Chiropractic Services 5,832 10,798 $ 21.76

Acupuncture 3,271 6,113 $ 61.26

Naprapathy 2,462 4,235 $ 98.33


Wellness and Disease Management Program UpdateMark Tyndall, Executive DirectorJuly 9, 2013

P: 505.222.64204308 Carlisle Blvd. NE Suite 104Albuquerque, NM 87107

www.nmrhca.org


Our Mission is to Improve Members’ HealthI. Population-Based Wellness Program

II. Enhanced identification of Members with Diabetes and Coronary Artery Disease for participation in Disease Management (DM) Programs

III. Identify and quantify measurable results of the DM programs


I. Population-Based Wellness Program Medical Plan Designs (100% coverage for CDC and

Preventive Services Task Force-recommended care)

On-Site Biometric Screenings and Immunizations at all enrollment meetings and educational events

Personal Health Assessments with direction to appropriate life-style management services

24-Hour Nurse Advice Lines

Educational Materials Reminder mailings (i.e. “Time for your mammogram”) Health and wellness manual

3


I. Population-Based Wellness ProgramPlan Design effectiveness in driving preventive care

Preventive Care Visits – 39% up from 34% (Benchmark 29%)

Cholesterol Screening Rate – 60% same as 2012 (Benchmark 46%)

Colon Cancer Screening Rate – 20% up from 19% (Benchmark 20%)

Mammogram Screening Rate – 56% up from 53% (Benchmark 47%)

Cervical Cancer Screening Rate – 34% up from 31% (Benchmark 37%)

0%

10%

20%

30%

40%

50%

60%

70%

NMRHCA %


I. Population-Based Wellness ProgramExecution of population-based screenings and immunizations

Screenings Available Since 2010 (3 years)

Over 1,700 screenings have been performed

Body Mass Index Body Fat % Waist Circumference Blood Pressure Cholesterol Glucose A1C Kits

1,738 flu shots administered

232 pneumococcal vaccines administered

Education information provided to members by a Healthier at Home book, Eat Right for Life cookbook and brochures.


I. Population-Based Wellness ProgramScreening Results BMI About 66% of NMRHCA members screened were either

overweight or obese National Average: 63%

Blood Pressure About 37% of NMRHCA members screened had high

blood pressure National Average: 33%

A smaller subset of individuals has been tracked through all three years of screenings

6


2010 to 2012 BMI Comparison at Enrollment Meetings

20101

201027

201031

201021

20100

20121

201234

201225

201219

20121

0

5

10

15

20

25

30

35

40

BMI <19 underweight BMI >=19 and <25Normal

BMI >=25 and < 30Overweight

BMI >=30 and <40Obese

BMI >=40 ExtremeObesity

Num

ber o

f Par

ticip

ants

Body Mass Index (BMI) Criteria

Body Mass Index (BMI) Data


I. Population-Based Wellness Program Ongoing Efforts

Wellness-focused newsletters (January’s edition was dedicated to wellness) and emphasis in all agency communication

Screenings and Immunizations will continue to be offered at all enrollment meetings in the fall

24 Hour Nurse Hotline will continue to be offered –Over 1,200 calls taken in 2012 with some care redirection provider (decrease unnecessary ER utilization)

Continued age and gender appropriate educational material sent to members (i.e. mammogram reminders, etc.)

8


II. Enhanced Methods of Identifying Members with Chronic Disease Medical & Prescription Claims

Results of screening events

Personal Health Assessment (PHA) 260 members have completed the PHA

Utilization Management

NurseAdvice New Mexico Line

Physician Referrals

Member or Family Referrals

Behavior Health Referrals

Vendors


II. Enhanced Methods of Identifying Members With Chronic Diseases Results

Diabetes Data has identified 2,421 members as being diabetic Approximately 13% of overall membership 420 members are currently actively engaged in the

Disease Management program (up from 232)

Coronary Artery Disease (CAD) Data has identified 547 members with CAD Approximately 3% of overall membership 68 members are currently actively engaged in the

Disease management program (up from 45)

10


II. Enhanced Methods of Identifying Members With Chronic Disease Disease Management Program

Disease Management Programs

Presbyterian – Healthy Solutions BCBS – Blue Care Connect

Both Programs provide phone support, educational services and clinical support services (navigating the system) for their chronically ill participants

Programs also provide access to Case Management for acute care episodes


III. Identify and Measure Quantifiable Results of DM Programs Diabetes DM Program Goals 80% of members with A1C greater than 9 will decrease

their A1C by 1 point 80% of members with LDL greater than 100 will decrease

LDL to 100 or less Reduction of weight by 10% 80% of members will have blood pressure at or below

standards

CAD DM Program Goals 80% of members with LDL greater than 100 will decrease

LDL to 100 or less Reduction of weight by 10% 80% of members will have blood pressure at or below

value

12


III. Identify and Measure Quantifiable Results of DM Programs - Presbyterian Diabetes 71% of members with A1C > 9 decreased their A1C by 1

point in 2012 (Goal 80%) 34% of participants decreased their LDL below 100

(Goal 80%) 17% of participants have decreased their BMI by at

least 1 level

Coronary Artery Disease (CAD) 38% of participants have decreased their LDL below 100

(Goal 80%) 100% of participants have improved their blood

pressure to meet national clinical guidelines (Goal 80%)

13


Quality Measures for Diabetic Care - Presbyterian


The Manage Your Chronic Disease (MyCD) Program

What is the My CD Program? A six week self management Workshop

Facilitated by trained and certified individual – 2 leaders per workshop

Developed by Dr. Kate Lorig at Stanford University

For Adults of all ages with chronic health conditions such as: diabetes, arthritis, asthma, heart disease, depression, hypertension


Building Self Management SkillsHelps people gain the self

confidence to take part in maintaining and managing their chronic health conditions

Develops problem solving and decisions making skills

Participants utilize the buddy system to help with motivational skills


2012 Workshop Schedule

Location # of Workshops # of ParticipantsAlbuquerque 2 28Las Cruces 1 12Santa Fe 1 8

SPRING 2012

Location # of Workshops # of ParticipantsAlbuquerque 3 66Roswell 1 12Santa Fe 3 35

FALL 2012

113 TOTAL PARTICIPANTS


III. Identify and Measure Quantifiable Results of DM Programs - BCBS Over 3,300 members “touched”

Identified Gaps In Care were reduced from 40% to 25%

Diabetic Retinal Screenings increased from 80% to 98%

Nephropathy Screening increased from 54% to 92%

43% of participants completed the Weight Management program

61% of participants showed BMI improvement

18


4.38% (1.67%)

BOBBOB

19% (8.5)27.85% (14.85%)31.34% (15.95)

3.36% (2%)14.4% (9%)28.82% (14.5%)31% (15%)-188

Q’1 2012

Q’1 2013

48%

52%

76%

24%

59%

41%

82%

18%


Program Check UpI. Population-Based Wellness Program

- Medical Plan Designs (100% coverage for CDC and Preventive Services Task Force-recommended care) –Wellness utilization at or above benchmarks for most services

On-Site Biometric Screenings and Immunizations at all enrollment meetings and educational events – Approximately 2,000 screened and immunized

Personal Health Assessments with direction to appropriate life-style management services – Only 260 completed to date (after two years)

24-Hour Nurse Advice Lines - Over 1,200 calls with some redirection from ER (ER utilization decreased in 2012)

Educational Materials Reminder mailings (i.e. “Time for your mammogram”) Health and wellness manual

20


Program Check Up (continued)II. Enhanced Methods of Identifying Members

With Chronic Disease

488 (up from 277 a year ago) chronically ill members are actively engaged in DM programs.

Still a large percentage of potential participants are yet to participate

Increased utilization of personal health assessment would provide greater access to either DM or lifestyle management/coaching

21


Program Check Up (continued)III. Identify and Measure Quantifiable Results of DM Programs

Progress made toward collection of clinical data. Emphasis will continue to be placed on provider-based data/interactions

Encouraging signs of improved clinical outcomes for actively engaged program participants

Increased utilization of personal health assessment would provide greater access to either DM or lifestyle management/coaching

22


Overall Assessment

Grade: B

Wellness and DM programs are demonstrably producing positive results with members that engage them

Improvements can be made in identifying and routing members into the programs

Elements of clinical data remain difficult to measure in some provider settings


2013 nmrhca day one board book

Documents

t w t f s s

pueblo sur taos

board of directors

new mexico

regular meeting

agendatable of contents