REQUEST FOR PROPOSAL
STATE OF WISCONSIN
DEPARTMENT OF HEALTH AND FAMILY SERVICES
DIVISION OF HEALTH CARE FINANCING
THE HEALTH INSURANCE RISK SHARING PLAN (HIRSP)
Administrative Services
RFP # 0428-DHCF-SM
LATE PROPOSALS WILL BE REJECTED
THE STATE RESERVES THE RIGHT TO REJECT ANY OR ALL PROPOSALS
RFP – Wisconsin Health Insurance Risk Sharing Plan
Page No.
TABLE OF CONTENTS
Page No.
1.0General Information......
1.1Introduction and Background......
1.2Overview of HIRSP Eligibility Requirements......
1.3Overview of HIRSP Plans......
1.4Premium, Deductible and Drug Coinsurance Subsidy Program......
1.5Covered and Non-Covered Services......
1.6HIRSP Budget and Financing......
1.7Current Plan Administrator......
1.8Scope of the Project......
1.9Definitions and Acronyms......
1.10Access to Program Information for Proposers......
1.11Overview of Demographics, Statistics and Operations......
2.0STATEMENT OF OBJECTIVES......
3.0PROCUREMENT AND CONTRACTING INFORMATION......
3.1Procuring and Contracting Agency......
3.2Clarification or Revisions to Specifications and Requirements......
3.3Vendor Conference......
3.4Reasonable Accommodations......
3.5Calendar of Events......
3.6Contract Term......
3.7Vendornet Registration......
3.8Letter of Intent to Submit Proposal......
4.0PREPARING AND SUBMITTING A PROPOSAL......
4.1General Instructions......
4.2Incurring Costs......
4.3Submitting the Proposal......
4.4Use of Subcontractors......
4.5Proposal Organization and Format......
4.6Multiple Proposals......
4.7Oral Presentations......
4.8Site Visits......
4.9Withdrawal of Proposals......
5.0PROPOSAL SELECTION AND AWARD PROCESS......
5.1Preliminary Evaluation......
5.2Proposal Scoring......
5.3Right to Reject Proposals and Negotiate Contract Terms......
5.4Evaluation Criteria......
5.5Award and Final Offers......
5.6Notification of Intent to Award......
5.7Appeals Process......
6.0GENERAL PROPOSAL REQUIREMENTS......
6.1Organization Capabilities......
6.2Financial Statements......
6.3Staff Qualifications......
6.4Proposer Client List and References......
6.5Oral Presentation and Materials......
7.0MANDATORY PROPOSAL REQUIREMENTS......
7.1Transmittal Letter......
7.2Designation of Primary Contact Person......
7.3Location and Staff......
7.4Disaster Recovery Plan......
7.5Legal Representation......
7.6HIPAA Compliance......
8.0TECHNICAL REQUIREMENTS......
8.1Policyholder and Provider Services......
Eligibility Determination and Applications Processing......
Customer Service......
Communications and Publications......
Appeal and Grievance Processes......
8.2Financial Management......
Premium Administration......
Accounting and Financial Services......
Actuarial Services......
Auditing Procedures......
8.3Claims and Systems Administration......
Claims Processing......
Pharmacy Benefit Management......
Provider Network Maintenance......
8.4Medical Management......
Medical and Other Clinical Consulting Services......
Cost Containment......
Disease Management......
8.5Detailed Transition Plan......
8.6Data Collection and Reporting......
9.0COST PROPOSAL......
9.1General Instructions and Information on Preparing Cost Proposals......
9.2Method of Invoicing and Payment......
9.3Formula for Payment......
9.4Allocation of Administrative Fees......
9.5Format for Submitting Cost Proposals......
9.6Fixed Price Period......
9.7Inflationary Adjustment......
10.0SPECIAL CONTRACT TERMS AND CONDITIONS......
10.1Payment Requirements......
10.2Independence of Proposer......
10.3Performance Review, Liquidated Damages and Other Remedies......
10.4Executed Contract to Constitute Entire Agreement......
10.5News Releases......
10.6Right to Publish......
10.7Agreement Revisions and/or Termination......
11.0STANDARD/SUPPLEMENTAL STANDARDS TERMS AND CONDITIONS.....
12.0REQUIRED FORMS......
ATTACHMENTS......
A.HIRSP Vendor Information......
B.Designation of Confidential and Proprietary Information......
C.Affidavit......
D.Vendor Information......
E.Vendor Reference......
F.Cost Proposal Form......
G.Business Associate Agreement......
MC10068.MK/PERM-1-
RFP – Wisconsin Health Insurance Risk Sharing Plan
1.0General Information
1.1Introduction and Background
The purpose of this document is to provide interested parties with information to enable them to prepare and submit a proposal for a Plan Administrator to provide administrative services for the Wisconsin Health Insurance Risk Sharing Plan (HIRSP). The State of Wisconsin, as represented by the Department of Health and Family Services (DHFS) or herein referred to as the “Department” intends to use the results of this solicitation to award a contract for the administrative services.
Established in 1980 and administered pursuant to Chapter 149, Wisconsin Statutes, HIRSP provides health insurance coverage to Wisconsin residents who are unable to find adequate health insurance coverage in the private market due to their medical conditions. In addition, since 1997, HIRSP has been Wisconsin’s “state acceptable alternative mechanism” under the Health Insurance Portability and Accountability Act (HIPAA) assuring portability in the individual market. Individuals who lose their employer-sponsored group health insurance coverage and meet certain criteria may enroll in HIRSP without serving a pre-existing condition waiting period.
HIRSP has no marketing staff and incurs no sales commissions. Policy acquisition costs are minimal and expensed as incurred through the payment of one-time referral fees, in the amount of $35 for each policy issued, to insurance agents who assist individuals with the HIRSP application process. All health insurance agents licensed in Wisconsin are required by law to refer individuals to HIRSP if the insurer refuses coverage. Individuals may also apply directly to HIRSP.
As of January 1, 2004, there were 17,447 enrollees in HIRSP residing in nearly every county in Wisconsin.
The Department is responsible for the administration of HIRSP under the oversight of a Board of Governors, herein referred to as the “Board.” The Board consists of (13) representatives with various statutorily mandated affiliations.
The Board is responsible for establishing oversight committees to monitor all aspects of HIRSP operations, including HIRSP financial matters, approving contracts with the Plan Administrator, establishing contractor performance standards, processing grievance requests, and developing public awareness and education materials.
The Department and Board are responsible for overseeing all financial matters related to the plan including; establishing the annual budget, plan operation, annual premium rates, deductible and coinsurance amounts, setting and collecting insurers’ assessments, and adjusting provider payment rates as necessary to meet program funding requirements.
Daily program operations are performed by the Plan Administrator and include eligibility determination, claims evaluation for eligibility and payment, premium billing and collection, accounting, cost and utilization and other statistical reporting, customer service and communications functions.
The Plan Administrator must also provide actuarial, legal and pharmacy benefit management services as specified in this RFP.
HIRSP functions as an insurer with the Plan Administrator maintaining all records necessary to effectively administer the program and prepare annual and semiannual financial statements and HIRSP Monthly Reports.
HIRSP must be administered in conformance with applicable state and federal laws and regulations as well as Department polices and procedures.
HIRSP premium revenue is collected through a bank lockbox operation, contracted by the State of Wisconsin Treasurer. All HIRSP revenue is deposited into a State of Wisconsin account. Records of all revenue transactions must be submitted by the Plan Administrator to the Department. The transactions are reported to the State Treasury and recorded in the Wisconsin Management Accounting and Reporting Tool (WiSMART).
The Plan Administrator submits a weekly accounting of claim expenditures with a request for disbursement of funds to the Department. Upon approval by the Department, funds in the amount of the disbursement request are authorized for transfer to facilitate provider payment for services rendered.
The Plan Administrator submits invoices for its services to the Department on a monthly basis according to the cost and payment structure established in the final contract.
The State of Wisconsin Investment Board (SWIB) manages the investment strategies of all funds in the accounts that are under Treasurer oversight, including HIRSP funds.
1.2Overview of HIRSP Eligibility Requirements
Eligibility requirements for HIRSP are specified in state law. In general, in order to be eligible for HIRSP, an individual must be a resident of Wisconsin, must not be eligible for employer-sponsored group health insurance or for Wisconsin Medicaid (including BadgerCare) and must meet the requirements described under A or B below:
A.Eligibility Based on Medical Condition: In addition to meeting the general requirements outlined above, an individual must be less than 65 years of age and must either be eligible for Medicare because of a disability, have tested positive for the Human Immunodeficiency Virus (HIV), or in the past nine months, received from an insurer a notice of rejection or cancellation, a substantial limitation in coverage or a premium greater than 50 percent higher than the individual had been paying or that is charged to persons at standard risk, based wholly or in part on medical underwriting.
B.Eligibility for Applicants Who Lost Employer-Sponsored Group Health Insurance (“eligible individual”): In addition to being a resident of Wisconsin, and not eligible for employer-sponsored group health insurance or for Wisconsin Medicaid (including BadgerCare), the individual must:
- Have lost employer-sponsored group health insurance and applied to HIRSP within 63 days of losing employer-sponsored group health insurance.
- Did not voluntarily cancel coverage.
- Exhausted continuation coverage [state continuation coverage or Consolidated Omnibus Budget Reconciliation Act (COBRA)].
- Had continuous insurance coverage for at least 18 months with no gap in coverage greater than 63 days.
- Not eligible for Medicare.
Eligibility for HIRSP is not dependent upon income or assets. However, there are provisions for reduced premium, deductible and prescription drug coinsurance amounts for lower income policyholders. Refer to Section 1.4 for additional information of HIRSP’s premium and deductible subsidy program.
1.3Overview of HIRSP Plans
Benefits and plans are defined by statute. All HIRSP plans provide coverage for major medical and prescription drug expenses. Policyholders are responsible for paying premiums, annual deductibles, and medical and prescription drug coinsurance amounts.
The successful bidder must be able to effectively administer the HIRSP benefits, which are subject to change. The successful bidder must be able to implement all benefits changes within effective dates established as a result of legislation or as otherwise directed by the Department.
The HIRSP plans, options and cost-sharing requirements are described below. A table summarizing the cost-sharing requirements by plan has also been included.
Plan 1, Options A and B
- For policyholders who are not eligible for Medicare.
- Provide identical coverage. (Option A has a lower deductible and lower drug coinsurance out-of-pocket maximum and premiums that are higher than Option B. Option B has lower premiums and a higher deductible and drug coinsurance out-of pocket maximum.)
Plan 2
- For policyholders under age 65 who qualify for Medicare due to a disability. Policyholders who reach age 65 while enrolled in HIRSP may retain their HIRSP coverage. (Note that individuals age 65 and older are eligible for HIRSP only if they meet the eligibility requirements for an “eligible individual” as defined in HIRSP statutes).
- Provides identical coverage to Plan 1, but coordinates benefits with Medicare.
Summary of HIRSP Cost-Sharing Requirements by Plan
Plan 1, Option A / Plan 1, Option B / Plan 2Premiums / Based on rate tables developed by actuaries and approved by Board.
Premium reductions available? / Yes / No / Yes
Medical deductible / $1,000 per year / $2,500 per year / $500 per year
Medical deductible reductions available? / Yes / No / No
Medical coinsurance / 20% of allowed amount up to $1,000 total per year / 20% of allowed amount up to $1,000 total per year / No
Individual medical out-of-pocket maximum
(Total medical deductible and medical coinsurance, after which HIRSP will pay 100%.) / $2,000 per year. / $3,500 per year. / $500 per year.
Drug coinsurance / 20% up to $25 per prescription. / 20% up to $25 per prescription. / 20% up to $25 per prescription.
Drug coinsurance out-of-pocket maximum
(Total drug coinsurance, after which HIRSP will pay at 100%.) / $750 per year. This is in addition to medical coinsurance. / $1,000 per year. This is in addition to medical coinsurance. / $125 per year. This is in addition to medical coinsurance.
Drug coinsurance out-of-pocket maximum reductions available? / Yes / No / No
Maximum lifetime benefit / $1,000,000 / $1,000,000 / $1,000,000
1.4Premium, Deductible and Drug Coinsurance Subsidy Program
Qualifying, low-income policyholders may apply for reduced premiums, medical deductible and drug coinsurance. The criteria for and amount of these reductions, which are set in state law, are specific to the plan, option and income level of the policyholder. Approximately 25 percent of HIRSP policyholders receive subsidies.
Premium reductions are available to Plan 1A and Plan 2 policyholders with annual household incomes less than $25,000. Reduced medical deductibles and drug coinsurance amounts are available to Plan 1A policyholders with annual household incomes less than $20,000. Plan 1B policyholders are not eligible for any reductions in premiums, medical deductibles or drug coinsurance amounts. Plan 2 policyholders are eligible for premium reductions but are not eligible for reductions in medical deductibles or drug coinsurance amounts.
Reduced premium and medical deductible amounts for Plan 1A are as follows:
Annual Household Income / Premium as % of Standard Rates /Deductible / Drug Coinsurance
at Least / but Less Than
$0 / $10,000 / 100.0% / $500 / $375
$10,000 / $14,000 / 106.5% / $600 / $450
$14,000 / $17,000 / 115.5% / $700 / $525
$17,000 / $20,000 / 124.5% / $800 / $600
$20,000 / $25,000 / 130.0% / $1,000 / $750
1.5Covered and Non-Covered Services
HIRSP law specifies the services HIRSP covers as well as services that HIRSP does not cover. HIRSP is permitted by law to reimburse only those medical services that policyholders obtain through Wisconsin Medicaid-certified providers. Reimbursement is reduced by applicable cost sharing requirements (deductible or coinsurance) that are the responsibility of the policyholder.
HIRSP requires a six-month waiting period for coverage of pre-existing conditions. This pre-existing condition-waiting period does not apply for HIRSP policyholders that meet the requirements of an “eligible individual.”
Covered services are medically necessary and appropriate covered services received from Wisconsin Medicaid-certified providers, including:
- Basic medical-surgical and hospital services, including AODA and mental health.
- Prescription drugs, insulin, and services and supplies for treatment of diabetes.
- Home care, durable medical equipment and disposable medical supplies.
- Diagnostic X-rays and laboratory tests.
- Physical therapy services.
- Skilled nursing facility services.
- Hospice care.
- Chiropractic services.
- Maternity and newborn services.
Non-covered services include:
- Routine exams and related services.
- Cosmetic treatments.
- Eyeglasses.
- Hearing aids.
- Routine dental care.
- Custodial care.
- Infertility, impotence, and sterility services or drugs.
- Experimental or investigative services or procedures, (except drugs for the treatment of HIV infection).
1.6HIRSP Budget and Financing
HIRSP’s operating budget for the SFY 2004 is approximately $170 million. Policyholder premiums fund 60 percent of HIRSP costs. The remaining 40 percent of HIRSP costs are shared equally between health care providers and private health insurance companies. Health care providers pay their 20 percent through reductions in reimbursement for HIRSP claims. Insurers pay their 20 percent through assessments.
The Plan Administrator and actuary assist the Department and Board with establishing annual operating budgets and a mandatory annual reconciliation of plan costs to be completed by April 30th of each year to ensure that policyholders, providers and insurers each contribute their required level of plan funding.
1.7Current Plan Administrator
Electronic Data Systems (EDS) is the incumbent Plan Administrator for HIRSP and has served in this capacity since July 1, 1998. Prior to EDS, Blue Cross Blue Shield United of Wisconsin was the Plan Administrator.
1.8Scope of the Project
The Contractor will perform administrative services for HIRSP as described in this RFP including, but not limited to, the enrollment of policyholders in the HIRSP program, administering HIRSP subsidies, collecting policyholder premiums, collecting the HIRSP assessment from insurers, administering cost containment strategies, the customer service process, publications functions, claims processing, computing provider contribution to HIRSP expenses in the form of reduced provider reimbursement amounts, financial processes and the appeal and grievance process.
The Contractor must have the flexibility to meet and respond to the changing requirements of HIRSP, including; increasing enrollment, new initiatives or policy changes requiring additions or changes to benefit designs or discounting arrangements, or other related responsibilities for HIRSP.
If significant changes in the Contractor’s responsibilities are required, the Department will attempt to provide the Contractor with as much lead time as possible.
1.9Definitions and Acronyms
The following definitions and acronyms are used throughout the RFP:
- Board means HIRSP Board of Governors.
- Contract means the agreement to be executed between the selected proposer and the Department to accomplish the purposes specified in this RFP.
- Contractor(s) means proposer(s) awarded the contract resulting from this RFP to provide HIRSP administrative services.
- DHFS or Department means the Wisconsin Department of Health and Family Services.
- GPR means State General Purpose Revenue (i.e., state tax collections).
- HIPAA means Health Insurance Portability and Accountability Act.
- HIRSP means the Health Insurance Risk Sharing Plan.
- OCI means Office of the Commissioner of Insurance.
- Proposer or Vendor means a firm submitting a Proposal in response to the RFP.
- Provider means Wisconsin Medicaid Certified Provider.
- Policyholder means an individual who has been enrolled as a member, has paid premiums and is eligible to receive benefits under HIRSP.
- RFP means Request for Proposal.
- State means State of Wisconsin.
- Wisconsin Health Insurance Risk Sharing Plan(HIRSP) means the program operated by the Department under Ch. 149, Wis. Stats. and related State and Federal rules and regulations.
- Wisconsin Medicaid Program (MA)means the program operated by the Department under Title XIX of the Federal Social Security Act, Ch. 49, Wis. Stats. and related State and Federal rules and regulations.
1.10Access to Program Information for Proposers
Proposers are encouraged to view information regarding HIRSP on the Department’s website at This information will assist proposers in the preparation of proposals. Available information includes the most recent HIRSP Annual Report, the HIRSP Outline of Coverage, the HIRSP Policy, Premium Tables, application materials, HIRSP newsletter, etc. While a reasonable attempt is made to maintain accurate and up-to-date information on the Department’s website, the Department makes no assurances or guarantees that all information and data displayed are accurate or complete. The State of Wisconsin and the Department disclaim responsibility for the accuracy or completeness of the information displayed on the Department website. If any materials, documentation, information, or data displayed on the website are discovered to be inaccurate and/or incomplete, such inaccuracy or incompleteness shall not constitute a basis for challenging the contract award or contract rejection, nor shall it provide a basis to renegotiate a payment amount or rate after contract award.