JBC – Employee Benefits Division Oversight Subcommittee

February 15, 2023

Sen Hickey: Come to order. If you don’t mind taking your seat, welcome you to our first meeting of the EBD Joint Budget Committee. Representative Milligan, do you have any comments?

Rep Milligan: No, sir. 

Sen Hickey: All right, the first thing we’ll do, we’ll have EBD to come to the table. And if you don’t mind, after you all have the seats, if you’d just introduce yourself and then you’ll be recognized to proceed.

Ballard (Transformation): Lauren Ballard, I’m the former Chief Counsel for the Department of Transformation and Shared Services and former staff attorney for the Employee Benefits Division. I’ve brought with me today so that you guys can meet her– I’ll let her introduce herself. 

Halijan (Transformation): Hello, I’m Shannon Halijan, I am the new Chief Counsel for Transformation. And today is day 3. So Lauren is here to testify. 

Sen Hickey: Good. Congratulations. You can proceed with the presentation of the contract. 

Ballard (Transformation): Yes, sir. Thank you. So you have before you today, this is the pharmacy benefit manager contract extension. So I’d like to give a little history to let you know why we’re here and renewing this contract. As you all know, Segal was engaged by the legislature to do some studies of the Employee Benefit Division plan, and one of the suggestions that they brought forth was for us to pursue a new pharmacy benefit manager contract and include certain things in that contract. So that is an ongoing procurement and that should be awarded and hopefully – well not hopefully, it will have an implementation day of 7/1/2023. 

So what we need in the meantime, MedImpact, our former pharmacy benefit manager – well, our current pharmacy benefit manager, I apologize. That contract expires 2/18/2023, so we just need a Band-Aid extension from that 2/18 date until 6/30 of 2023 to allow for implementation if there is an implementation, would allow for that to happen in that time. 

Sen Hickey: Okay. 

Ballard (Transformation): I’d be happy to answer any specific questions.

Sen Hickey: Do any of the members have any questions on this? Seeing none but just to kind of get this on record for everybody, the cost of the contract is $500,000, that’s going to extend that through June 30th? 

Ballard (Transformation): Yes, sir. That’s my understanding. 

Sen Hickey: And there was a little per payment on something else but that’s really just for a day or two or something like that and it’s not going to be a significant amount at all is my understanding. 

Ballard (Transformation): Yes, sir. I think when–so Segal took a look at the existing contract and suggested some really helpful language to help us, they call it run out claims. But yes, we don’t anticipate those to be voluminous since pharmacy is a point of sale solution for the most part. 

Sen Hickey: Okay. Anything else, members? Senator Chesterfield, you’re recognized, ma’am. 

Sen Chesterfield: [inaudible].

Sen Hickey: Yes. Well, and then you should have the contract itself, I’m sorry. Okay.

Sen Chesterfield: [inaudible]. 

Sen Hickey: Yes, ma’am that is correct. That very top one.

Sen Chesterfield: [inaudible]. 

Sen Hickey: No, ma’am. Is your mic on? Boy that works good. I wish I could do that at all the time. Now my apologies for that, Senator.

Sen Chesterfield: Yes, sir. Thank you so much for your apology which I’m worried about now. So we’re just dealing with the $500,000 but the rest is to give us information about what, what are all the others that I’m seeing on this piece of paper, it’s saying the $500,000 to extend until June 30, 2023, and then I’m looking at the $2.5 million terms of contract for all payer claims database reporting, is any of this significant for us today or is this just for information that’s what I’m trying to find out, Mr. Chair. 

Sen Hickey: Senator, it is just the one that we’re talking about, the $500,000. The other ones are actually already done. If you look out there, they’ll have the new expiration dates. It’s for informational purposes so that we’ll know what is all tied together out there. 

Sen Chesterfield: Okay, well, if we have an ending date on AMD4 of June 30, 2022, that’s upon us, is that contract going to have to be renewed at some point? And then also AMD3, whereas the pharmacy benefits management are meant to extend for pharmacy benefits management, it expires I assume these are the expiration – yeah these are the expiration dates, it’s 6/30/2021 and then the AMD1 is 6/30/2020. Could you help me with those? Are they already expired, those? 

Sen Hickey: Well, there would be some there that were already expired but what we’re in the process of doing right now – and I know that you remember this, whenever we went into special session, of course, we totally reworked our entire EBD subdivision, put in a bunch of other contracts. And one of the things that we had was that consultant where we spent a year with, we’ve been actually putting out for procurement all the stuff. And the latest one is for a new PBM manager. And again that is a procurement that is in process, it’s our understanding that it’s getting close, I’d hate to say within a week or 2 or 3 but I believe it’s probably– it is actually that close. 

So whenever all of that transpires we’re going to have them in place but they’re not going to take over until July 1st of this year. So the thing is, is our current contract with our current– and I’m going to call them a PBM with MedImpact, that current contract, it expired now. So we have to have someone that’s going to take it from now until the start of the fiscal year. And that’s what they’ve agreed to do. And the other ones are nothing that we need to deal with today. 

Sen Chesterfield: Okay. 

Ballard (Transformation): And I was just going to briefly add, we don’t have any gaps in the extensions we just could only extend it out to 2/18 because that was the end of the contract under law. So that’s why that looks like that. 

Sen Chesterfield: All right, thank you. Thank you, Mr. Chair. 

Sen Hickey: Yes, Ma’am. Thank you. Senator Hammer, you should be on. 

Sen Hammer: Thank you, sir. First of all, who is it that’s getting the $500,000 extension, which company, who is it that’s getting it? 

Ballard (Transformation): That would be MedImpact, our current vendor.

Sen Hammer: Okay, and are they subject to rebid for it?

Ballard (Transformation): They’re eligible to rebid in this current procurement, yes sir, if they chose to do so. 

Sen Hammer: All right, and then if you’re able to answer this, how many are bidding on it now, are you able to answer that question?

Ballard (Transformation): I’m not, only because I don’t know the exact answer and I wouldn’t want to give you the wrong one but that’s probably information we can get for you. 

Sen Hammer: But there are companies that are bidding for this PBM contract, correct?

Ballard (Transformation): Yes, sir. 

Sen Hammer: Okay because I’d heard the rumor that nobody wanted to do business with us because of our PBM laws. So what you’re telling me today is that there are PBMs that are out there competitively bidding for this in spite of the laws that we have on the books now.

Ballard (Transformation): That’s my understanding, sir. 

Sen Hammer: That’s good information to know because the rumor mill was telling something different out there. So I appreciate you clearing that rumor up from misinformation that’s being put out there. I appreciate that very much. Mr. Chairman, I’m not sure if this would be directed to you or be directed to them but down there on amendment number 2, that amendment was allowed, was given in order to allow EBD to recoup approximately $12 million per year from the specialty Rx program. Do either of you at the table or maybe the Chair could enlighten, do we know if we actually recovered that and was it as much as was stated or originally anticipated to recover? 

Sen Hickey: That’s something we’d have to research or have staff to do which we’ll be happy to do for you. I cannot answer that question.

Sen Hammer: Do you think we could find out because that amendment was given with the expectation that we would recoup that and I’d kind of like to know historically if we got it or not. 

Sen Hickey: Yes, sir. We will and we’ll have staff to send that to all members if that’s okay. So we’ll work on that so everyone will have the same information. 

Sen Hammer: Okay, thank you. Thank you, sir

Sen Hickey: Thank you, Senator Hammer. Anyone else? Do I have a motion to review? Oh, hold on. Representative Wardlaw, you’re recognized. 

Rep Wardlaw: Thank you, Mr. Chair. Senator Hammer, when you look down through those amendments, the amendment 5 I think was the one you were referenced, am I correct you want to give me a head nod. 

Sen Hickey: 2, he said Amendment 2.

Rep Wardlaw: Amendment 2? Amendment 2 was approved a long time ago. Each one of these amendments were approved by counsel as they were done. Amendment 5 was approved in 7/1/2022, that was the extension for us to go through the process to get a new PBM manager for the system. So my point is, the amendment that’s up today is amendment 6. 

Sen Hickey: And that is correct. Representative Wardlaw is correct on that. I think his thing was is that we actually whenever we did it, that the statement I think was made and it’s in here too that we would recoup approximately $12 million. He’s wanting to see if we can research to see exactly how much we did recoup, if it did meet that number. 

Rep Wardlaw: Okay, I can relate to that. 

Sen Hickey: Okay, thanks for that question. All right, do we have a motion to review? We have a motion, do we have a second? All in favor say aye. Any opposed? It is passed. 

Ballard (Transformation): Thank you. 

Sen Hickey: Thank you. Okay, members is there any other business to come before the Committee? Seeing none, we’re adjourned.