9/15/1998 - Laserfiche WebLink

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L71 pre -negotiated fee arrangement, the county can calculate an unknown cost exposure to a known risk. _Currently, the county's mental health benefits are administered through a self-insured, self-funded plan and the county is assuming all the risk. In addition, this arrangement not only assures current benefit levels, but adds some enhancements (Exhibit III). If a physician indicates "Dispense as Written" (DAN), and asks for the brand name instead of the generic equivalent on a prescription, the employee receives the brand name prescription drug at the generic equivalent co -pay of $8.00 instead of the brand name co -pay of $16.00. This provision encourages high utilization of brand name drugs and is extremely costly to the plan, since the average cost of brand name drug is $40.86 vs the average cost of generic drug is $10.61 (Exhibit II). If approved to remove DAW from the plan, the county has been assured that participating pharmacies carry only Grade A/B generic drugs which provide the same results as a brand name drug and have been tested and approved by the Federal Drug Administration (FDA). See attached BOBS letter dated Sept 2, 1998 (Exhibit IV). If both the Mental Health carve out and Dispense as Written changes are approved, the overall increase will be reduced to $359,409.60 a savings of $401,385.60 (Exhibit V). Recommendation Staff recommends carving out the Mental & Nervous benefits from the group health plan and removing Dispense as Written (D.A.W.). If approved, allow staff to negotiate a contract with Unipsych Corporation which is sponsored by the Florida Health Purchasing Cooperative, Inc and return with all contracts relating to health insurance for the Board to approve and execute. County Administrator James Chandler explained the 2 changes being recommended by staff. These changes would reduce the County's cost from $760,000 to $359,000. The first change involves placing the County's coverage for mental health and nervous disorders with Unipsych Corporation who currently handles the County's Employee Assistance Plan. The second change would remove the "Dispense as Written" provision from the prescription coverage which would lower the County's cost from $40 per brand name prescription to $10 per generic prescription. Should the employee request the brand name prescription, the employee would then pay the higher coverage of $16, rather than $8 for the generic. These changes have been presented to the International Firefighters and the Teamsters and no objections were noted. If the Board approves these changes, specific terms will be brought back for consideration and approval. In response to questions from Commissioner Adams, Budget Director Joe Baird noted that last year the County had expected claims of about $700,000 more than they actually were. That surplus was taken into consideration this year so that, although claims have increased considerably, the surplus from 1996-97 is being used. September 15, 1998 -29- -07, wa r