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County Administrator's Report 9. 8.
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| BCC Regular Meeting |
Budget & Finance Consent |
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| RECOMMENDATION: |
Recommendation Concerning a Change Order to Purchase Order 200784 to Florida Blue - Jana Still, Human Resources Department Director
That the Board approve and authorize the County Administrator to execute the following Change Order, in excess of $25,000, adding funds to pay the health claims through the end of the fiscal year:
| Department: |
Human Resources |
| Division |
Benefits |
| Type |
Addition |
| Amount |
$3,100,000 |
| Vendor |
Florida Blue |
| Purchase Order |
200784 |
| Change Order |
1 |
| Original Award Amount |
$22,700,000 |
| Cumulative Amount of Change Orders Through This Change Order: |
$3,100,000 |
| New Purchase Order Total |
$25,800,000 |
Funding Source: Fund 501, Internal Service Fund, Cost Center 150108, Object Code 53401
An increase to the purchase order of $3.1 million is needed to fund remaining anticipated insurance expenses for the fiscal year. There is a budget balance of $700,000 remaining in the account leaving a budget shortfall of $2.4 million which has been requested on the subsequent SBA agenda item.
The County has incurred unprecedented claims costs for the year 2020. In addition to the unanticipated COVID related costs, for March through June there were eighteen claimants that accounted for $1,1839,206 in claims which is 22.1% of the total claims cost. A number of these claims are acute one-time claimants and several of them have predictive costs. There has been a significant increase in drug utilization since last year, with Cancer and Diabetes being the primary conditions driving the pharmacy costs. During the first four months of the fiscal year, the number of specialty drug claims increased 42%, from 81 claims to 115 claims. As a result, specialty drug costs increased 66% from $441,000 to $735,000. Additionally, the claims for the month of July were high due to the resumption of elective surgeries. The amount requested for this change order is to cover the 2020 projected costs.
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| BACKGROUND: |
| The cost of the County’s health claims is trending at $25,300,000. The budget rates for this fiscal year remained flat due to improvements in drug discounts, rebate sharing, and a customized contract. The bulk of the contractual enhancement was a significant improvement in pharmacy rebate sharing. Rebates for first quarter claims experience should be disbursed by quarter four of this calendar year. Pharmacy cost is paid from the purchase order; however, when the rebates or any other reimbursements are received, those funds are placed in general revenue and do not reimburse the existing purchase order. For March through June there were eighteen claimants that have accounted for $1,1839,206 in claims (22.1% of the claims). USI’s Medical Director has reviewed the recent high cost claimants and used this data to estimate next year’s costs. This clinical insight and predictive costs have been brought into the 2020 projection and the 2021 renewal projection. The amount requested for this change order is to cover the 2020 projected costs. |
| BUDGETARY IMPACT: |
| Funding for the above Purchase Order is through Fund 501, Health Plan. |
| LEGAL CONSIDERATIONS/SIGN-OFF: |
| This is in accordance with Florida Statutes 112.09 and 112.0801. |
| PERSONNEL: |
| N/A |
| POLICY/REQUIREMENT FOR BOARD ACTION: |
Board approval needed for contracts $25,000 or greater.
County Ordinance, Chapter 46, Article II, Section 46-64 providing for Board approval of Contracts of $50,000 or greater. |
| IMPLEMENTATION/COORDINATION: |
| Upon Board approval, the Human Resources Department will generate a Change Order to increase the Purchase Order accordingly. The Human Resources Department will coordinate with the Office of Purchasing. |
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