There have been many calls in the recent past for a review of the BOE’s healthcare plan structure.

Well, it just so happens that I am an expert in self-funded healthcare arrangements and there are questions that need to be answered. Through FOI a few months ago, some claim data was obtained that of course was incomprehensible. The other information that was obtained was a listing of the cash transfers to the Third Party Administrator (TPA), although there was no line item accounting for these transfers, it struck me as strange that many of these transfers were flat dollar amounts in the tens of thousands of dollars.

In reading BOE minutes, every time questions are asked regarding the healthcare "insurance", the answers point to the stop-loss policy and the conversation seems to end. The stop-loss policy is only one component of these types of structures and frankly, not the most important. The other components are as follows: Medical & Hospital PPO’s (Preferred Provider Organizations- i.e. Leased Networks), Labs, Prescription Benefit Management (PBM), Dental PPO, and of course the relationship with the TPA, who really acts as the hub in all of this and processes the various paperwork for a fee. Included in processing the paperwork is re-pricing of claims. In simple terms, if the claim comes in at Usual & Customary (U&C) rates, it is the responsibility of the TPA to ‘re-price’ them to the contracted rates agreed to by contract with the various service providers (PPO’s, etc). The PBM provides all of their services in real time from the Point of Sale (POS) transaction at the pharmacy- then you get into complicated discounts and splits of rebates, etc. provided by the drug manufacturers which belong to the client, in our case the BOE. Are we getting them and if so how are they accounted for?

It appears to some that the healthcare fund has been utilized over the years as a parking place for money to be drawn on at will. As these plans are a bit complicated without knowledge of how they work, this could be achieved rather easily.

The other issue which I found particularly alarming is that the contract has been with the same TPA for somewhere in the neighborhood of 20 years or more. This is UNHEARD OF in the industry. To date I have seen no evidence that this contract has ever come up for bid- alarming.

As part of the call for transparency, I think it’s time that this one be put to rest. Let’s have an explanation as to how, when and if the BOE competitively bids these contracts, including that of the TPA, and share with us the basis of the provider contracts along with analysis of the performance of the plan- which any TPA will have at their fingertips.  In addition, this plan structure should be held up against bids by the full-service carriers on a regular basis as a matter of course. It’s our money and we have the right to know.  Will it take a complicated FOI request and resulting smokescreen? Time to find out.