Washington State Health Insurance Pool

Washington State Health Insurance Pool

Board Meeting Minutes/Approved 5-8-03

Thursday, March 6, 2003

Westin Hotel, Seattle – Vashon II Room

Board Members Present: Michael Arnis, Patti L. Carter, Sean Corry, Robert Crittenden, M.D., Bernie Dochnahl, Rob Kuecker, Peter McGough, M.D., Bob Moore, Beth Pitt, and David Toomey.

Board Member Absent: Pat Maddock.

Also Present: Brad Berg, Foster Pepper & Shefelman, Legal Counsel; Kären Larson, WSHIP Executive Director; Anne Mackie, WSHIP Executive Assistant; Ann Bingman, CPA, OASYS; Beth Kranda, WSHIP Privacy Officer; Sharron McGuire, OASYS; and by telephone: Ron Friedan and John Leemhuis, Ernst & Young; Jeff Graham, M.D., Jeff Graham Consulting; and Les Meyer, on behalf of CMS Health Integrated.

Guests: Ross Baker, Lifelong AIDS Alliance; Mary Childers, OIC;Karen Clay, Washington Health Foundation; Rick Henshaw, Regence BlueShield; Kate Jackson, Sprague, Israel Giles; Sharon Moore, Northwest Kidney Centers; Laura Treadway, Evergreen Health Insurance Program; and Vanessa Wilson, KPS Health Plans.

Mr. Moore called the meeting to order at 8:30 a.m. Guests were introduced. He announced that the March meeting is the Annual Meeting of the WSHIP Board of Directors. Mr. Moore added “Open Mic” as an agenda item, following #16.

ACTION: It was moved and seconded to approve the minutes of the January 9, 2002, meeting. The motion passed unanimously.

Executive Director’s Report

Medicare eligibility: Ms. Larson reported that an evaluation of Medicare eligibility is under discussion at the Executive Committee level. This issue will be brought to the board in the future for review and decision.

Standard Risk Rates (SRR): James Reed is reviewing the methodology for development of the standard risk rates for Plans 1 & 3. If changes in the methodology are warranted, this item will be brought to the board as a part of the 2004 rate renewal process. At issue is whether the legislature intended WSHIP to use one SRR for both Plans 1 and 3, given that Plan 3 has lower benefits for out of network services. A different SRR is used for Plan 2. The methodology for its development will also be reviewed.

Drug Rebates: 2002 third quarter check has been received from Systemed. The fourth quarter rebate check is expected soon.

The OIC Market Conduct Examination: An exit interview with OIC examiners is scheduled for March 18. Ms. Dochnahl volunteered to attend, representing the board.

The report will be reviewed at the May board meeting.

Revised applications: All three plans have revised Revised applications for all three WSHIP plans are to be filed with the OIC by March 15. The new HIPAA Privacy Statement is included and goes into effect April 14. A new section encouraging applicants to use the services of a licensed agent has been added. Agent training on WSHIP application procedures and plan benefits was held in conjunction with the Washington Association of Health Underwriters (WAHU) seminars in Spokane and Seattle this month. Ms. Larson thanks thanked board members Pat Maddock and Sean Corry and Sprague Israel Giles agent Jan Dawson for their work on the training. Copies of the training packet are available to board members by contacting Sean Corry.

House Bill 2018: The bill passed the House Health Committee. Sean Corry testified as a consumer representative before the committee in favor of its passage; Kären Larson provided background information to the committee and attended to answer questions.

TREASURER’S REPORT

Ms. Dochnahl reported that WSHIP’s financial position is good, and its cash position is solid and strong. Assessment needs look similar to last year; a full report on assessments will be provided at the May board meeting. The administrative budget was only one percent over the year’s projection. Membership has leveled off in the last few months. Molina’s assessment had not been received; Ms. Larson will follow up on this.

Review of 2002 Audited Financial Statements

Mr. John Leemhuis from E&Y presented the WSHIP audited financial statements for the years ended 2002 and 2001 and reported that WSHIP received an unqualified opinion. He discussed the audit process and responded to questions regarding various accounts included in the financial statements. He also noted that the accounting principles employed by the pool were in accordance with GAAP and the OIC. WSHIP received an unqualified opinion.

Mr. Ron Friedan from E&Y presented the “Summary of Required Communications.” Topics covered include, but are not limited to, accounting policies, accounting estimates, adjustments, fraud, and internal control. No weaknesses or significant changes were reported. Over the past year, E&Y observed a considerable strengthening of internal controls.

ADMINISTRATIVE PERFORMANCE REPORT

HIPAA Implementation

Ms. Beth Kranda, WSHIP Privacy Officer, explained her involvement with Community Health Information Technology Alliance (CHITA) and the Washington State workgroup, which focuses on high level issues related to HIPAA requirements and transaction automation. In preparation for the April 14 date on which HIPAA privacy standards go into effect, board members will participate in HIPAA training. A new Privacy Statement has been mailed to WSHIP enrollees; and the new statement is included as part of the newly revised plan applications.

Ms. Kranda will visit the WSHIP office March 7 to review privacy standards with employees and assess office security measures.

WSHIP will be in full compliance of with the law by April 14, 2003.

Event Summary 2001-2003

Ms. Sharron McGuire presented the “Event Summary for 2001-2003,” included in board packets. She reviewed problems and solutions related to customer service, application processing time, billing timeliness and accuracy, and complaints and grievances. ACS has implemented a billing and enrollment task force to correct problems; and as part of the quality improvement effort, a new billing exception report will be generated. Additional audits have been implemented, and staffing levels have increased.

ACS Internal Audit Process

Ms. Ann Bingman gave a presentation on the ACS Internal Audit Process. She prepared gave an overview of the internal audit function and how it has evolved over time. Operational areas subject to audit were also covered in the discussion. New areas being audited for 2003 are billing, grievances, OIC complaints, and provider files. The last topic covered was the recent change regarding the Trainer position. This employee originally reported to operations management and now reports to Ms. Bingman in Compliance which Ms. Bingman expects will result in better oversight and training for quality improvement.

Quality improvements were also noted by Ms. Bingman. Additionally, billing exception reports are being generated and reviewed. Training will include exit exams to determine an employee’s knowledge prior to actual work and tenured employees will have reviews aligned with contract standards. Staffing dedicated to WSHIP has also been increased.

Ms. McGuire reported that the January contractual level of service was below standard, and new processes are now in place to turn that around. A billing and enrollment task force has been formed to resolve problems.

Mr. Arnis said that the two biggest issues that come to the OIC as complaints are application delays and premium billing. He said iIt would help to see some numbersstatistics, next time. He said the OIC wants to see complaints reduced and an improvement in timeliness of handling complaints.

Ms. Childers, OIC, said she is aware of grievances where the enrollee has been back-billed for several years. Ms. McGuire said the retroactive effective date problems are being resolved, and new application and enrollment procedures should alleviate this.

Ms. Larson said she is working with legal counsel to define a policy for back billing unpaid premium. Ms. Dochnahl recommended we look at what other health plans or utility companies do in similar situations; she volunteered to contact a utility call center director for information. Mr. Arnis said Labor & Industries could also be asked. Ms. McGuire said we could also check with major carriers for their policies.

CMS Implementation

Mr. Les Meyer, CMS Health Integrated, reviewed the implementation timeline for the voluntary health management services. A kick-off meeting was held with ACS’ implementation team in Indiana; Ms. Larson also attended. Mr. Meyer reported that data is moving smoothly between ACS and CMS, and candidates for services have been identified by diagnosis codes or extended lengths of stay. The goal is to have make optimal use of resources of the health management program. An article will appear in the April issue of the First Choice Network newsletter, and all WSHIP enrollees will receive an introductory letter about the health management services prior to the start date in mid-April.

Dr. Graham (Jeff Graham Consulting) said the program intentions are to provide cost-effective care while making sure the way benefits are interpreted is in a manner advantageous to the patient.

Dr. McGough asked that at the May board meeting CMS address screening methods on high risk enrollees and identify what makes our population unique. Mr. Toomey asked how are patients are channeled to the right provider: for example, renal failure is our biggest dollar claim – how will patients be directed to the most cost-effective treatment center?

Mr. Meyer explained that protocols are in place to turn patient care over to the appropriate providers within the existing network, including centers of excellence.

Mr. Moore asked board members to provide additional follow up questions for CMS Health Integrated to Ms. Larson prior to the May board meeting, at which Mr. Meyers will be in attendance.

Mr. Toomey excused himself from the meeting.

PUBLIC COMMENTS

Mr. Henshaw (Regence BlueShield) asked what the relationship is between OASYS and ACS? . Ms. Larson explained that OASYS was purchased by ACS and is now a subsidiary, doing business as ACS. WSHIP’s contract is with OASYS.

Ms. Moore (Northwest Kidney Centers) said she is working with OASYS to make reconciliation processes easier for WSHIP enrollees, but she is still concerned that enrollees don’t know how to approach that process. Ms. Larson said that is part of the reason for the 100 percent audit of billing at this time – to make sure there has been no oversight. Performance measures that address enrollment and billing accuracy and timeliness are being added to the levels of service report.

Ms. Carter said OASYS’ reports are an indication that they are aware of their short- comings and that they are stepping up to fix the problems.

PLAN OF OPERATIONS

Mr. Arnis reported that today the Insurance Commissioner signed the WSHIP Articles of Organization. Next, the Articles go to the code reviser’s office; and within a few days, they should be in place. He said the entire WAC should be seen as the Plan of Operation for WSHIP.

Mr. Arnis said one change from the Insurance Commissioner was to delete the section “Limitation of Director Liability” because it is not clear this is allowed by the statute. This can be revisited once we get the Attorney General’s opinion. Depending upon that opinion this may become a legislative issue.

Brad Berg said the provision removed by the Insurance Commissioner is very common in for-profit and non-profit organizations. It is an election that the corporation has to make, and which is typically found in Articles of Organization. He said, however, that exposure is relatively low because it protects board members from suit by WSHIP, which would be an unlikely occurrence.

COMMITTEE REPORTS

Executive Committee

The Executive Committee will be reassessing whether to conduct a second survey of carrier- rejected enrollees.

The annual performance and salary evaluation of the Executive Director is proceeding, with oversight of the process by Ms. Dochnahl.

The Executive Committee presents its committee charter to the board for approval today.

Marketing & Planning Committee

The committee has not been able to schedule a meeting, but hopes to convene one in March. Mr. Kuecker has volunteered to serve as Vice Chair in the event Mr. Toomey is not available to attend the meeting. The committee will begin to investigate possible new plan designs for 2004, as well as ones which will require changes of the statute at the legislative level prior to implementation. The committee charter is ready for board approval today.

Tool Committee

Mr. Corry reported that the committee met in February with representatives from the carriers in attendance. A request for an online, interactive Standard Health Questionnaire (SHQ) is being investigated; additional information from the carriers will be presented at a future Tool Committee meeting. Issues to be answered: how will the work get done, who will own the online version when it is completed, and can we guarantee that the outcomes will be the same whether a questionnaire response is done on paper or electronically? Ms. Dochnahl said that if the SHQ becomes an online tool, we must assure that HIPAA privacy standards are maintained.

The recertification process for the SHQ is underway; and to that end, carriers have been asked to submit data back through 2001 detailing individual plan applicants, accepted applicants, rejects, and claims information of those who were enrolled with the carriers.

The Tool Committee charter was presented for approval.

ACTION: A motion was made and seconded to amend the Tool Committee charter to remove the word “set” and substitute “implement and recommend” in the first sentence. The motion passed unanimously.

Appeal & Grievance Committee

Ms. Pitt reported the committee has met three times since the January board meeting. The committee upheld two appeal denials: one related to an enrollee who had reached their maximum mental health benefit allowance and one related to a pre-existing condition in which the enrollee had been informed of the plan’s pre-existing condition policy.

The original decision on three grievances was overturned, with rulings in favor of the enrollees. These cases each related to OASYS billing problems.

The committee charter was presented to the board for its approval.

Governance Committee

Ms. Carter, as chair of the Governance Committee, oversaw the nomination process for the Executive Committee; and she reported that the current Executive Committee members have agreed to serve a second term: Mr. Moore, Chair; Mr. Corry, Vice Chair; and Ms. Dochnahl, Secretary-Treasurer. Ms. Carter asked for additional nominations, and hearing none, closed the nominations. No election was required because there was were no contention to the competing nominations.

The committee charter was submitted to the board for its approval.

APPROVE COMMITTEE CHARTERS

Action: It was moved and seconded to approve the committee charters, with one amendment to the Tool Committee Charter. The motion passed unanimously.

REVIEW 2003 BOARD SCHEDULE and WORK PLAN

Tasks and due dates in May include:

• Evaluate provider network (first discuss in Marketing and Planning Committee with recommendation back to the board).

Evaluate the pharmacy benefit management company (first discuss in Marketing and Planning Committee with recommendation back to the board).

• Approve/send out first assessment.

• Board appointments and election of plan members. One board member will be up for reelection by member plans before May 31; and Ms. Dochnahl’s and Mr. Corry’s appointments are scheduled to terminate at the end of May. They have both agreed to accept a reappointment by the Governor, and that process is underway.
• Complete the Executive Director performance and salary review. Ms. Dochnahl will be sending out a performance evaluation form to all board members.
• Evaluate the need for a board retreat.

OPEN MICROPHONE

Dr. Crittenden requested that at the May meeting, the board look at the issue of the forfeiture of money that is available due to the plan having too low of a loss ratio; he distributed a handout. The Executive Committee will discuss this issue and report back to the board in May.

Dr. McGough said he likes the “open mic” agenda item and would also like to suggest “emerging issues and trends” as something for regular board discussion.

Mr. Corry would like the board to reconsider its position to not to take positions, as in the recent example of the bill before the Legislature regarding HIPAA eligibles being able to apply for WSHIP coverage. He testified, as an individual, but he is concerned that the board cannot participate in decisions on matters such as this.

(Dr. McGough and Beth Pitt excused themselves from the meeting.)

Mr. Arnis said there are two kinds of policy issues for the board: : there’s weighing intaking a position on someone’s health care reform idea, such as Dr. McGough suggests; and there are policy issues related to RCW 48.41, about which there would be expectation that the board would suggest changes. How much will incorporation have to do with that?

Ms. Dochnahl said there are examples of how we exist because of the law, and we should incorporate it as part of the discussion. Mr. Moore said the Executive Committee will pursue a discussion on this.

The meeting was adjourned at 12:30 p.m.

NEXT MEETING: Thursday, May 8, 2003, at the Westin Hotel, Seattle

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