McAllen ISD Special Board Meeting (August 21, 2025)

001[Music] Good afternoon everybody. Thank you for joining us here at the Mall ISD administration building for the special board meeting August 21st, 2025 at 5:31. We have called the meeting to order. Um item number two, public comments. We don't have any public comments, so we're going to move on to item number three. Uh request for proposal number 2026-10005 pharmacy benefits management services. Dr. Vitz Mr. President would you also like to also combine also number three so that I mean three and four if you can read number four as well. >> Number four will be request for proposal number 2025 1038 medical plan administration and related services. Um okay I'll turn it over. >> All right. Thank you. Um Mr. President Board of Trustees administration has completed the evaluation process for request for proposal number 2026-105

002pharmacy benefits management services. This evening the district will conduct interviews with the firms and rank the proposals based on qualifications, experience, proposed services and cost. We also have the other item number four says administration has completed the evaluation process for request for proposal number 2025-1038 medical plan administration and related services. This evening the district will conduct interviews with the firms and rank the proposals based on qualifications, experience, proposed services and cost. Mr. Dr. Andy Silva, director of employee benefits and risk management will present the insurance companies and the pharmacy companies as well. And um if there's a possibility then the administration will recommend uh action on this item based on the presentations. But I'm also I also have Miss Williams who will open up this meeting with before the interviews. Go ahead Miss Williams. >>

003Thank you Dr. Gutierz. >> Thank you Dr. Gutierrez and Mr. President. board of trustees. Just to quickly give you a rundown on tonight's interview process, we will be interviewing two separate RFPs. The first one will be the medical administration and related plans and then the second one will be the pharmacy benefits management services. Both of those will be ranked separately. So, we're going to start off with the medical. You have two uh age for potential vendors that we will be interviewing. In your binder, each one of you has a binder. On the left hand side, you will see the two ranking forms. We will rank each one of these vendors, potential vendors, uh one and two or one through four, one being the highest. Uh two for obviously the medical would be the lowest and

004then for the pharmacy, one through four. You also have the itinerary for each one of the selected interviewees. Then you have the medical administration related services presentation task. What was asked of each each uh potential vendor and then also the pharmacy benefits management service pres presentation task. Behind that is each one of their presentations that they were asked to submit to us by 3 PM yesterday. Uh one of the very first vendor UHC you will see uh their draft contract that we did ask for them to submit. Uh the next vendor Blue Cross Blue Shield did not submit their uh draft contract. So you will not see that behind there. Then at the very end of your binder you will see the two matrices. one for the medical plan. This is the criteria that the

005evaluation committee went through ranked each one of um the respected vendors on. We have calculated each one of the point values. You will see that you will also see the uh comparative summary reports for each one. The first one being the medical and then the second set of or second matrices and comparative summary cost summary is for the pharmacy benefits. Um the presentation each interviewe tonight will have 15 minutes to conduct their presentation, five minutes for Q&A from anybody on the board and five minute transition. Uh we did we've got everybody housed and stacked um for the interviews tonight and at the end we will have 30 minutes from 8 to 8:30 approximately for post wrap-up. Are there any questions on the binder or on the matrices before we begin? >> No. No. But thank

006you all for preparing all this for us and we're ready to get started. >> Okay. Thank you. We will get our first Okay, our first group for the night is United Healthcare and I will let each one of the um representatives introduce themselves to you. >> Good afternoon. Thank you for having us. I'm Trent Bruce, vice president of public sector for >> Good afternoon. Thank you for having us. I'm Trent Bruce. I'm vice president of public sector for United Healthcare here in Texas. >> My name is Jose Gonzalez. I'm the strategic account executive for public sector groups with United Healthcare. I'm the local field manager from >> Welcome. Thank you guys for joining us today. Okay, thank you. Okay, sorry about that. Um, good afternoon. So, um, we know we have 15 minutes tonight. We

007put together a brief agenda that hit on the four different prompts we were given as part of this presentation. Um, so we thought it'd be good to spend a little bit of time talking about who is United Healthcare and maybe why we're a little bit different. Um, and then we'll move into the ways that we'll work with the district to maintain affordable health plans. while maximizing the health care of your employees and their families. Um then Connie will spend a little bit of time talking about wellness resources and then we'll wrap up with Jose to talk about account management and the board. So why United Healthcare and and how we're maybe a little bit different? Um yes, we're a benefits organization. Um but I think historically United Healthcare has seen it more as a healthcare

008organization. Um And over the years, that's truly played out. We're now the number one healthcare company in the United States. Um, we have about 400,000 employees and their sole focus every day is on our mission. And that's two different things. One, it's how do we help people live healthier lives? And then two, how do we make the health care system work better for everyone? Um, so we work for the United Healthcare side. Um we administer roughly 48 million uh members their benefits um through United Healthcare. But then we also have our sister company which is Optum and that's our our healthcare organization. Um Optum Health Services employs or is affiliated with roughly 70,000 physicians. Uh those physicians take care of over 100 million unique members uh every year. So you know why does that matter?

009I think it puts us in a position where because you know healthare system has become pretty complicated. Um we have a different perspective because we're kind of present in all facets of the system. Um it also gives us a significant amount of data to help drive insights and strategies uh for for our existing customers and prospective customers. So, how is United Healthcare going to leverage those resources to work with the district to again maintain, you know, an affordable health care program while maximizing the well-being of your employees and their members. You know, I mentioned the health care system is pretty complicated, right? And it's gotten even more so complicated over the years. Um, and and with that uh complex complexities, healthcare costs have gone up. And so, you know, while traditionally you focus on network

010discounts um and and that to maintain the plan's cost, you really have to have strategies beyond that that help uh impact your year-over-year cost increases. Um and so, you know, we have a number of different say levers that we pull to help maintain affordability while maximizing your employees health and well-being. Um but I I'll focus on three given our time. You know the the first one that I would point out is our payment is excuse me is uh what we call site of care redirection. In simple terms what that means is when an employee or their family needs to seek health care services how do we help them identify who the most highquality highv value providers what are the appropriate sites of care because we know if we can get them there um healthcare outcomes

011improve and overall costs come down. Um so it's a win for the district. Um, so we have a number of different programs that help both identify uh and steer your members and their families to those those providers. Uh, we have one called premium designation. So, it takes our our vast network of roughly one 1.8 8 million providers and it kind of looks across those specialties who practices evidence-based medicine the greater portion of time and then it gives them a two star rating so that when members seek out care they can identify hey this this is probably in my best interest to go to this particular provider. Um the next thing that I'll point out is what we call our payment integrity programs. Excuse me. This is kind of your basic blocking and tackling. Um so

012when I talk about payment integrity, think about things like subregation, coordination of benefits, prior authorization. Um the the goal of these programs is three-fold. First, it's to make sure that we're administering the benefit program the way the district intended for it to be administered. Second, it looks to see, okay, for this particular claim, should the district be responsible or is there health insurance vehicle or another insurance vehicle that should pick up the cost of that claim. And then the final thing that that payment integrity does is looks for fraud, waste and abuse. Okay. So when a claim comes in even before it is uh adjudicated, we leverage that data I was talking about to uh kind of predict is there any fraud, waste and abuse within that claim, intentional or unintentional. Um and if we

013identify that miscoded. Um we reach out to our provider partners um and we have that claim corrected. Um so and then the final thing is we have what's called our Texas ASUS program that we are offering to the district. Um think about when either yourself or a loved one has ever been diagnosed with a complex condition. It can be very scary. There can be a great deal of uncertainty. So what Texas is is it's a designated model very high touch for care management. Um so when compared to your standard care management model that staff at roughly one nurse to every 100,000 members, this one staffs at one nurse to every 17,000 members. So it allows us to give a broader reach into the district's population and support those members. It's overseen by a medical director

014up in Richardson. Um, and it really becomes kind of an extension of the account management team. So, doing all of this, we feel confident that we can help the district maintain an affordable program year-over-year. Um, and as part of our initial offer, we put out a trend guarantee as to what your year-over-year cost would be with significant fees at risk by hitting that. Um, so with that, I'm going to turn it over to Connie to talk a little bit about wellness. Well, my role is, you know, to educate and communicate all of United Healthc Care's tools, resources, programs. We want to ensure all the members are use utilizing all their benefits correctly and that they're accessing everything that is available to them. Um, I also help with wellness initiatives. I send out calendar well wellness

015calendars and we could strategize and promote what topics what wellness uh topics do we want to promote to the employees. I also send out monthly newsletters and those have videos, flyers, uh resources and that could be shared with the employees whether it's uh via email or your internet. Um, I also, um, I'm sorry. I also help, uh, with health fairs. I also attend biometric screening events. If that's something the district would be interested in having, I'll organize that as well. Um, we can pull reports whether to see our members utilizing all their benefits, whether it's the myuhc.com or the UHC app. And uh are they utilizing virtual visit which is a consultation virtually with a medical doctor available 247 and or are they use those wellness programs are they utilizing that? So looking at those

016reports we can address where we need to promote and educate. Okay. So just to talk about a little bit of our wellness programs, we have our uh our nurses, our advocates close those gap in care and with our disease management programs. We have programs for diabetes, hypertension, COPD, heart failure, asthma, cancer transplants. We also have a special needs initiative. So the nurse would engage with that family and uh just be that support and provide those resources. Okay. We also have a one pass select that is a voluntary subscriptionbased gym fitness membership and members would have access to a large network of gyms nationwide. They would also have a grocery delivery service and they would also have digital classes as well. Grab some water. Also, the members could would have that or contract with one pass

017select versus their local gym. Okay. And uh they could switch their tiers on a monthly basis. They can add their family to the plan for a discount. Thank you. And uh they could cancel at any time if it's something not they're not interested in or utilizing. and we just need 30-day advanced notice as well. We have the comm app which is a digital self-help tool and uh that provides the program provides tips, videos, uh music, sound for meditation and it just helps the member engage and just reach their goal to calm and stress. We also have a The next is UHC rewards. It's a reward program that rewards you for activities you're already doing like sleeping, walking, doing those annual physicals, the flu shots. The member and spouse if on the plan can earn up

018to $300 each and they would log on to the app, United Healthcare app, see those activities, uh complete those activities and then start earning and they can redeem and once they see that $300, redeem it or if not you know less amount and they can elect get a Visa electrical electronic Visa gift card or they could also have the option of buying a tracker if they didn't have and the rewards will go towards that as well. >> And just a quick clarification on the rewards, um, you know, what Connie covered was kind of our base wellness package. This will be an option for the district. There is an additional administrative fee that was quoted. Um, but we also have provided a discretionary credit that the district could use to offset that. So, I just wanted

019to make sure that was that was clarified. >> Thank you. >> Great. Great. And again, I'm going to start off my name again. Jose Gonzalez. Um we're going to talk about account management. And this is truly where our partnership comes to life with um um with you all. And so what I want to talk about is what is our goal with account management, right? Our goal is to truly be an extension of your team to make sure that we have your and all of your employees, members, family members needs in place to make sure that we provide the right resources at the right time to everyone. So my role as the strategic account executive is making sure that I am strategically planning with you all to make sure that we have the right plans, the

020right benefits, the right care in place for your for your members and then making sure that we're proactively bringing you stuff and information that we see is going on in the healthcare industry, right? Not waiting for those questions. Making sure that if we see something's coming down the line or pipeline, making sure that you're aware of, right? So, that is truly what we're going to be bringing you. Making sure that again, like I said, the right resources are in place that we have the right clinical programs. Connie made sure bring up some of those things. Making sure that we turn on the things that we need to be turned on for your population when it needs to be turned on. And making sure that we have the ability to address all needs, not just certain

021needs, but all needs as much as possible. On the next couple of on the next slide, we're going to actually talk about what really is the account management team and what exactly um our roles are, right? So, we will have a dedicated um we call them DCSMs. We use a lot of acronyms at United Healthcare, but in this case, it's the dedicated client service account manager. That person is going to be um helping you with your day-to-day service claim benefit questions that you might have. This is your go-to person that can assist you with any of those items that um you might come across. Um we have the field account manager that uh Connie it will be assigned to you and then myself which is the strategic account executive. Um we will have a lot

022more teams in play or a lot of more individuals that will be part of your um account that we will bring in. Think about it as I'm the head coach. We have different players that are going to be coming in at different times, different plays, and we'll make sure that those that are on the bench, we bring them in at the right time to address your needs and make sure that they're working on your account specific to you um and your needs. Last couple things is we really do believe that having a very structured and consistent engagement is what's really going to drive the success of your plan. that may be with monthly reporting, whether it be with monthly meetings or more cadence, weekly, bi-weekly, um quarterly reporting, semianual reporting as well as annually reporting.

023So we can really start seeing in advance what are the trends? What are we seeing that's happening based off of your claim experience? What are your patterns of your memberships? What are they doing when they're engaging with the member tools, whether it be the website or the app? Because we can actually get down to where are they spending the most time on our tools and seeing why are they there, what are they doing, and how can we strategically plan on communication out to them. The next item is regarding the actual reporting capabilities that we have. We have a tool called employer eervices that allow the employer to create custom reporting based on financial medical membership directly for you. We also do have analytic reporting that's going to be able to provide you with ad hoc

024analysis of how your plan is performing. clinical reporting as well as um banking and billing that you will have access to um yourself that you can pull and access this information quickly. And as a summary, we don't just provide benefits, we do build relationships with our clients and that is ultimately our goal in partnering with you. >> Thank you. >> Okay. Uh I'm going to open it up to the board here uh for any questions. I do have a question. Um I think it might be for Miss Arnandez and Mr. Bruce maybe or both of you when you were explaining the different um I guess additional benefits like when we're talking about uh one pass and calm health. I'm familiar with calm health um but are these I think both of you talked about part

025of them but are they baseline or I think Mr. Bruce you mentioned that one of them is maybe an add-on. Can you kind of clarify those? >> That's okay. >> Yeah. So the apps that she mentioned in those products, those are all part of our standard offering. Okay. >> The only thing that would be a a buy up would be the um UHC rewards program. The administration of that there's an administrative cost which we provided um and then any the rewards that are actually funded out of that how the district sets would come out of your claims account. >> Okay. Do you all have um the ability to design, you know, custom authorization, custom authorization edits for the health plan? >> Do you mean as far as prior off? >> Prior off. Yeah. >> Yeah.

026For certain clinical reasons, those are all standardized across United Healthcare. Would would ID be able to customize those to our local needs if we see higher cost in one area to um you know enact additional authorizations or restrictions? >> Yes, with self-funded you you have the option of since it is your plan you can put those barriers on your authorization if you needed to. Um, I want to confirm something and go a little bit deeper on something. Uh, Mr. Gonzalez and Mr. Ernnandez, my understanding or check this for me please, is you all would own the account with Macallen ISD. So, you all would be the folks that would be working directly with our staff and our team in the district. >> Yes. >> Great. Confirmed. Um, how many different accounts do you all hold

027>> individually? >> I can answer my question first. Right. So my my level of expertise I've been with United Healthcare for 20 years and it's all public sector, right? So I do have state, city, county accounts and I only have six at this time. >> Six. Thank you. >> I have about maybe 50 60 accounts. Here in the valley it's a little smaller because I do service Corpus and Houston, but here in the valley it's a little smaller. So I, you know, I'm just a right down the street. So >> thank you. >> And I am locally as well. So I'm in the Converse area right out of San Antonio. Just moved down from Austin. I appreciate you. >> In terms of network locally, who's in the United Health Network? Do you have like a

028percentage of our physicians uh health systems and would they automatically be included or does MISD need to do direct contracting? >> So what we do when it comes to network, we do run an analysis of where you're currently at with your current carrier versus us. we were in the high 90s part. So there wouldn't be anything necessarily that we would have to kind of like renegotiate on providers specifically. We would leverage that what we call the choice network or choice plus network that would be available to you already. >> Choice plus >> y >> did that answer your question? I'm sorry. >> Did you said 90s meaning I'm going to make up a percent 97% of our current network would be in your network. >> That would be correct. Yeah. Um >> and I think

029we put that in the response right how much percentage it would be. >> Yeah. >> Y >> usually it's you know about 98%. >> So minimal disruption if employees their preferred physicians not in network. >> Yes sir. >> Okay. You have any doctor? >> Yes. Um, do you offer any any discounts when there's claims? You know, like and if so, what percentage of discounts do we get? Because I'm trying to see how we can uh cut back on on the excessive cost of u of claims that we have. But are there any u discounts that uh United Health provides that we pay less than what the actual charge is going to be? >> Oh, absolutely. Yes, sir. So, I don't have the analysis at my at my hands, but as part of this, we did

030provide uh discount information. Um, and so you wouldn't have to do anything additional. That's part of our standard United Healthcare Choice Plus. >> But do you know like a percentage amount like 50% 30 or u >> if possible I would like to clarify as a followup. I want to say >> I I don't I don't want to quote I know we might be right there, but yeah, we can get that back for you and give you the exact number if you'd like based on what we saw. I just want to get an accurate figure. I don't want to mislead. >> But you do have discounts, right? >> Yes, absolutely. 100%. Yes, sir. >> And and um are those discounts um you know for doctor visits and specialized exams and surgeries and all of those kinds

031of things that or is it just on on regular doctor visits? >> So it would be in everything including your hospital services, right? Your ER services, your ambulance services and things like that that would be part of our network, right? So you're right. So in the sense of do we have when we're dealing with our network or when we're pricing claims do we use a network or excuse me a discount to not pay build charges the answer to that would be yes >> we when I mentioned the 1.8 8 million providers. All of those within our network we have negotiated network discounts with. >> Okay. And and uh if there's an overpric you you challenge those prices too and and you negotiate those prices. >> So where that plays out I was talking about fraud,

032waste and abuse. So we have systems in place that look for things like um sometimes a common one is up coding right in a hospital coding for more than what you delivered. Um that's what those platforms do is they look for situations where you're being charged more than you should have based on our network discount arrangement. >> So would there's possibilities and that you would be looking at in our best interest to not pay some claims if they're not if they weren't necessary or they were too high >> if they're not valid. So if there's any cases where they're fraudulent claims or they've been miscoded, things like that that would cost the plan more, we go back and we have those corrected. Yep. And I assume in this, did you all look at our health

033plan, our stats or claims? And if you did, what are the greatest opportunities that we have in the next coming year if we go with United to save on cost while continuing to provide our employees with the level of healthcare they need? >> I think a lot around diabetes programs and diabetes management um is is one that we saw in there. Um I think that's a big one. I think also I talked about getting members high quality, high value providers. You know, we do have our premium designation program within our broader network. So, it doesn't change the network at all. We automatically communicate those to employees. Um, but we do have uh groups that we work with that actually create benefit differentials. We're seeing those those better performing physicians and sites of care. >> So,

034what you're talking about like a tiered plan, right? Like if you go with Dr. a it's a $5 co-pay, but any other doctor's $12 copay, whatever it might be. >> Yeah. And you don't have to do that to get value out of the premium program because whether the member goes online and looks up, find a provider, those providers automatically come to the top. If they call one of our health advocates, they're automatically promoting those providers. So, you get benefit from that network. even if you don't have a benefit structure like a co-ay differential around it that just will increase the value of the program if you were to implement that this year or in future years. >> So there's still a lot of flexibility in within the plan design. >> Absolutely. >> Yes, sir. >>

035Thank you. Yes sir. >> Uh good evening. I didn't want to uh interrupt the discussion, but uh I was going to cover this toward the end, but in the evaluation matrix documents, rationale number three speaks to Dr. Utetta's question. We did ask all the vendors about their discounts. So, they're listed there. And we did uh try and quantify them and score them based on their responses in the categories of inpatient discount, outpatient discount, and professional service discount. So, I just wanted to bring bring that to your attention. Our next presenter will be Blue Cross Blue Shield Texas. >> Hello. How are you? Good afternoon. >> Good afternoon. >> Good evening. >> Okay. Thank you. >> Okay. >> All right. >> Well, thank you all for having us this evening. Um, my name is Evan Sherbine

036and I'm our director of sales and account management for the Southwest market. I'm out of Austin and appreciate your time. We're looking forward to going over a couple of slides here um about your upcoming renewal. For the agenda today, uh we're going to go over our proven results related to network. We're going to touch on our medical management and wellness programs. We're going to also talk about our claim cost reduction and savings and how that relates specifically to your plan. We're also going to talk about some new solutions for the district and our support for the district and the district members over the years. And then last, we'll wrap it up with our financial commitments. >> Thank you. >> So, why blue? Why have you all chosen blue over the last few years? Yes, medical

037costs have been going up. We know that. Uh but we still maintain a unit cost advantage over our over our competitors. Here in the state of Texas, uh we have 54% market share. Why that market share is important to you all, we're able to leverage that significant amount of membership that we have over our nearest competitors in the form of aggressive discounts when it comes comes to negotiating on your behalf at the hospitals, at the physicians, um around around the state. >> What's your market share here? >> Market share in in in the valley specifically. I I I don't know. Um off offhand I say from from the public sector side though uh we have well over 65% of the market share down here in the valley. From a from a growth perspective we've had

038more growth over the last eight years in our company uh than our our 95 years of existence. We've grown by just over 3.5 million members. And and I think you know while that's an impressive stat, what's more impressive is our ability to be able to renew clients like yourself. So, not only are we going out with aggressive offers on the front end, but we're able to back it up with with strong commitments and and deliver on those financials year-over-year for large ASO employers like yourself. So, what is our total cost of care and kind of what does that mean for you all? On the far left, you would see that we have discounts and network solutions. The discounts is something that we've always talked about and while discounts are important, there is much more uh

039across the entire continuum than just the network discount discussion. If you look at the network solutions, that's the next bucket. Yes, our PO it is the largest network in the state. Very important obviously for a member experience. More claims flowing in network along with a slight advantage on the discount means lower total costs for you all. But on top of that, we have levers to pull. It's not just about the PO. We can we can drive additional savings through our Blue Essentials platform. Our Blue Essentials is a providerdirected care model and it's actually the second largest network in the state. Not just the second blue largest Blue Cross network, but the second largest network in the state compared to all of our competition. Another area where we're able to to um increase savings for you

040all is through our clinical programs and care navigation. Uh we have a member portal. what's called BAM, blue access for members. And through our our member portal, we're able to identify the best quality of care for for our physicians uh or sorry for for the members off of a star rating. And so it's very transparent for the member to see, okay, which doctor is actually the the best one to go for within the PO network vertical integration. I know we have the opportunity later on to to to discuss about pharmacy and so we do have our our representative from prime but we do see a savings when when our pharmacy prime is carved in through medical we actually see a reduction on the medical spend the reason being for the vertical integration why why it

041makes sense for you all is it's better line of sight it's it's quicker interaction with that member uh it's ability to to uh steer the member quicker versus having two programs completely separate, one for the medical and one for the pharmacy. And then the last bucket that I'll touch on before I hand things off to TA is our out of network and payment integrity. Both of those have become really important over the years. While your claims might be 98 to 99% in network through Blue Cross, that 1% is becoming more and more of a pain point for insurers across across the country. That out of network value with Blue is different. We have a PAR network which helps uh your members not be balanced build for those surprise bills and out of network uh usage

042and then on top of that there are a lot of freestanding clinics and some of those freestanding clinics maybe a an e an emergency room freestanding clinic might not be in network right what are we able to do to help uh manage those claims we have both prepaid and postpay audits uh for those out of network claims to try and make sure that the the bill is coming across the right time or excuse me coming across correctly the first time uh to catch some of that fraud, waste and abuse that does occur in our system. >> U in here we have a competitive overview of our networks and this is in the valley here. Okay, so we're we're counting in here only our providers. Right now you're currently under the blue card PO and that's

043a preferred provider organization and you will see that we also have a large network on the blue choice which is uh our on the blue essentials I'm sorry which is our HMO if you will ever go that direction to elect an HMO for your employees. The disruption will be minimal and you have only 35 uh providers that they're not on our HMO. Uh next we have as to how we can help you you know with the claims you know how can we help improve that high cost claimments and control the chronic conditions. We do have under our well-being management which is a case management and utilization. We have the programs currently we have one since we're the current the incumbent we do have the diabetic uh program here that has been working well. It's not

044an additional fee than what you have an administrative fee. What it is, it's a claim because these are providers that they're contracted. They're blue cross in the network and we provide this ones. Libongo, it's a by tea dot health. They provide uh diabetic and hypertension management. OMA provides the same programs but that is a prevention. We do have the hinge health which is for chronic pain. Uh they can help with elbow, back, uh knee programs. Wonder is uh not a uh what do I want to call it? It's it's a a program that helps you how to eat, when to eat, and how much to eat. It's not a diet. It's not a a care uh surgeries or anything like that. It will not be covering that. It's just teaching us how to do that.

045And the obia health is something that is to for fertility uh pregnancies high cost um risk and parenting the well on target it's on blue access for the members and they can act or participate on activities and they can record that on blue access for members. Um, next we have just to give you an >> Are these all included in the plan? So, every one of our employees would have access to these. >> You will have to let us know which programs you want that we do have the well on target, >> but they come with extra costs or they're included. >> There's no extra cost, let's say, an administrative fee, but it is a claim that goes in because these are the providers. >> Okay. So, it's it's not a claim, but it it

046helps and it prevents and you can catch those. Another one that I didn't mention is Catapult. That is a preventive provider. This provider is a one that we can bring into the school district. We know that a lot of employees that work at the school districts, they don't have the time or they don't want to use half a day or whole full day to go for lab work. We can bring that lab and physician. >> Can we use any of this currently? >> Uh not catapult. >> No, I mean any of that wheel? Yes, you have Libango is diabetic and we have the well on target. >> And how's it working? >> It's working well. >> Well, I mean is it are we seeing the return on? What are we seeing with it? >> We

047have seen uh your employees are participating >> and are we seeing reduced costs or better A1C? How do we measure this? >> Uh that is I will bring you that and Mr. Silva can can give you more information that he has, but we do have meetings, annual meetings with the on the return on investment on that. Okay. Uh for the group, we have the blue insight and this is a reporting. It's a secure site where you're the employer has access to it and we provide most of the reports on a monthly basis to the school district. And this is so the school district can track to how they're doing you know high cost claimments how can we prevent you know what can we do you know reach out outreach to the employees and this is

048like I said it's a monthly that we provide on the 12 or after of the month okay go ahead on this one is just a snapshot of the um discounts that we are averaging here in the valley and also the utilization So 99.9% almost 100% of the population here in the valley uh six treats mean treatment from providers that they're in our network and they're averaging about 71.3%. So what that means is the amount of money that you'll pay is like 24 cents or 28 cents to the dollar and it's it's just an example. It's the build amount. They have bill 115 million and the 70% of the discount of the 70 million on the discount. It's of the allowed amount not of the bill amount and then what it's paid on those 115 millions

049that were built. Uh the cost savings drivers and I believe that is the advanced payment review. Evan already went over that one. the auto network pricing and what it's averaging 22.16 per employee per month. Uh the current plans, this is something that I just want to discuss with you all. What we currently have in here is we have the provider network. We have three plans. Uh and an alternate plan that is not a medical plan is for those employees that have coverage elsewhere and it's a reimbursement. We have the well-being management who we went over that will and the diabetic live ongo by tea do health. What we're proposing and this is something that you just can think about it. It's not something that you need to make a decision but what options do we

050have you know delete that top u bo plan the state plan implement a blue essentials which is an HMO the on-site on-site screening by catapult. Those are proposed solutions that you can start little by little, you know, one step at a time that you can take. I said it's not something that you need to do now, but it's something that it's on the table that we can offer. >> Can you elaborate on So, I see that your proposal is to get rid of Levongo, >> but what is on-site screenings? How does that what does that entail? That is the catapult that they come in and your employees, the employees will get their lab work within 30 to 45 minutes from that time. They get the results and they get a consultation either with a a

051physician assistant or with a nurse or they can do it virtually. if they don't have the time to stay in line, they can do it virtually and they get the results and they get the recommendations from those uh >> like a monthly clinic or how does how does it practically work >> on a yearly basis? It's it's recommended once a year. It's it's just like if they were doing their preventive care that physical >> okay >> and catapult and it's the same. It's not going to be an extra fee, but it is a claim that goes in. And we did try once here at U Macallenis our support. And just to introduce myself, I'm Tita Reyes and I'm the lead account executive and I'm the one that makes recommendations, work the the renewals and uh

052provide the results. We have Hobie >> Hovie and and she is the service rep and she's we're here in the valley. the member tools. We have that blue access for members that uh Evan discussed and we also have where they can have the information on their fingertip because you can get that app on the phone and they can get access to the um ID cards and everything else. Our commitment. >> So in summary, uh first of all again thank you for allowing us to to share some of our story here today. Um, our financial commit commitments for the next three years. First off, three-year guarantee on the admin fee for the next three years. The discount guarantee 73.1%. If we miss that mark, we'll pay a percentage of our admin fee back. The in-et network

053utilization guarantee of 98.9% of your total claims flowing through the in network bucket. uh a difference between us and some of our competitors that 98.9% of utilization in network utilization that's all proprietary network there's no wrap networks there's no additional fees 98.9% would flow through that proprietary network hitting 73.1% >> that's on the HMO >> discount this would this would be for the for the PO >> oh for the PO >> correct >> and so when you say there's no wrap network what happens if one of our employees needs to go to Houston >> still in network as long as it's a participating provider with Blue Cross, right? So, you do have to check first, but yes, statewide network, all 254 counties. >> Gotcha. There's also service performance guarantees where we would place up to

05418% of our our uh service fees at risk. The total admin fee that we would uh pay back should we not hit these marks would be $3063 pm. So, we're putting some money out there. And then the last thing uh to to back up our commitments is we are offering a $750,000 communication credit spread out over the the three-year period. And I would say in summary, the biggest thing about Blue Cross is that unit cost position, that that advantage that we have over over our competitors. >> Thank you all. I'm going to open it up for a few questions from the board if there are any. So, I would like some insights since you currently manage our health plan. Um, you know, we in our last budget adopted, we had to put some money from

055the the fund balance into the plan. Why did we have cost overruns? What are opportunities to decrease costs uh while maintaining benefits for employees? One one of the things that I'll address is, you know, I think one the main reason that we've recommended Blue Essentials this year is it'll give an opportunity for you all to have a quick decrease in the actual claims projections without eroding your employees benefits. Our Blue Essentials platform is savings that you all can take to the bank. It's not projected savings. It's literally realized savings in our in our in our claims projection. The reason being is it's a separate it's a separate contract with the hospitals with the physicians. It's a proven plan. It's been in place for many years. We actually have have over a million members on just

056the Blue Essentials platform. So, it's widely accepted, but we want to pivot to Blue Essentials because we know the costs are going up without having to shift costs back to your employees. So you keep deductibles the same if you want, you keep out of pockets the same and you're going to see a significant drop in claims for all those members that enroll in blue essentials >> on your commitment. The guarantees you said that was on the PO though with the how does that apply the if we switch to the HMO >> it's the same >> it would be the same >> the same offer >> and the HMO our employees would have to go through >> the in network primary care to access anything else unless it's emergent. >> Correct. That is correct. They must

057select for them and every member that is covered under the plan, they will have to select a primary care physician and every time and any time that they require medical services, they will need to go to that primary care physician online. >> Just one question because I'm still going back to pricing. Um you said the blue essentials would be the recommended if if the board likes to go with blue cross blue shields. So the blue essentials would be since you have our data, what what are we looking at savings from what we currently have? >> Two to four. >> Yeah. So it's about a 4% savings over over your PO. >> Depending if we have a a high you members that move to that HMO, the savings will be higher. >> But you're you're recommending

058to delete the state plan. >> Delete the state plan. Okay. >> And and keep the two PPOs that you have three, remember? So you we remove one and we can keep two of the PPOs and add an HMO >> Which is the blue essentials. Yes, sir. >> And so 4% uh per month. >> No, it's a f 4% of the overall claim cost. >> Okay. So if in a month, what's our average? Because you have our data >> in a month about >> of all the claims. >> It varies. Let's just say an average of 1.5 >> million. So >> that month it could be more >> of savings. >> No, the the total costal Yeah. monthly claims. >> So we'll take 4% of 1.5 million more or less. >> Yeah. >> And that would

059be the savings per month. >> Yeah. Now that is predicated on how many people enroll in the Blue Essentials plan, right? Because you have you're going to have still have three plans in place. Two of the three would still be PO. And so it really depends on how much migration we get into that HMO that that that blue essentials based plan. Um obviously the more that we enroll in that plan the greater the savings. >> Okay. >> Thank you guys very much. >> Thank you. And that concludes our medical plan administration related services interviews. Now we will begin with our pharmacy benefits management services interviews. And our first interviewees is Blue Cross Blue Shield of Texas. All right. Well, welcome back. And we have one new member. So, welcome. and I'm going to turn it

060over to you guys and we will let you all give your pres presentation and then follow up with some questions. >> Thank you. >> All right. Um, thank you for having us today. My name is Leah Tapias. I am with Prime Therapeutics which is the PBF Blue Cross Blue Shield and of course I have my Blue Cross partners here that you have already met with. This is the agenda. I will go through it. I know that we are limited on time so I really want to hit the high points. Thank you. um of our presentation. So I'll go ahead and start with uh who Prime is. Want to give you an idea, you know, a flavor of who we are, how we operate and how we uh interact with Blue Cross. So Prime Therapeutics started

061out by one blue plan about almost 25 years ago. And over the past two decades, we have now become the PBM for 23 blue plans. 19 of those blue plans are our owners and HCSC being our largest owner. So we've been integrated with medical pharmacy benefits since day one like to say the integration is is in our DNA. It's pretty much that all we know. Um, one of the things that makes us different in the marketplace is that we are privately owned. We are not publicly traded, meaning we don't have to answer to Wall Street. We're not chasing revenue. We're not chasing p uh profit. It allows us to really focus on what mo what what matters most to us, which is our clients, right? And our members. Um, we feel that that's the most

062important in really those lowest cost um options for our clients. Um when you have the medical and pharmacy integrated, it really allows you to see the picture from a holistic picture, right? We have both clear clear lines of sight into the medical and the pharmacy u benefit. So because of our integration, we're able to support members across the care continuum. You know, at every touch point, we have access to the members from the medical to the pharmacy. And when we design our clinical programs on the pharmacy side, we have the medical benefit in mind. You know, we have the same our organizations have the same goals, our uh our uh incentives are aligned and that again really is bringing lowerc cost options to our clients. Um so we are very deliberate when we are um

063managing our our channels. Meaning when we decide to put a drug from the medical benefit to the pharmacy benefit, we know how that's going to impact the medical spend and vice versa. U we're going to make those decisions that are going to be from the the most cost effective perspective and also the ones that make the most sense from a clinical perspective. So really being integrated gives you that clear picture for the member whether it be from the medical all the way through the pharmacy. Um one of the other things that makes us different in the marketplace is our cash flow advantage. We pay rebates differently than what you typically see in the PBM industry. What standard PBM would pay them in a rears, right? 120 days after the quarter end. Um they'll just see

064what what the client has earned and then they pay that. We do it differently. We take a different approach. We pay them perspectively. So we take on that risk. So we looked at the district's utilization. We estimated that Mallen ISD was going to make X amount of of rebates. So we're going to pay it up front. We're taking on that risk which is completely different from our competitors. Again, this is allowing a cash flow advantage, makes budgeting easier. And the benefit of this is that we do a true up. So, at the end of the year, we go back and we look at um rebates. If we determine that we didn't pay you enough on a monthly basis, we will true up to what is what is owed to the district. And if we decide

065that or we determine that we um overpaid you, that's on us. We're not going to collect that back. So, it's a win-win. You get that money up front, you don't have to wait 120 days after each quarter ends. So, again, that's another benefit. And then lastly, another benefit in the market is because the way we're structured, we don't own our ownies, our own male specialty pharmacy. This allows us to really be committed to find partnerships that can bring lower cost options to our clients. I'll flip the slide here. I'm not going to go through all of these. There's a lot of detail behind here, but this should give you a picture of the different partnerships that we have. U specifically in the network space, we have the advocate plus free market health. I'll talk about

066that in a few minutes. That's our specialty um network solution. And then we also have the Amazon Pharmacy, which is a new mail vendor that we've added to our network. Again, different products. I think the the point here is that because we don't own our ownies, it allows us to find solutions that are um bene beneficial to our clients. You know, because if you think about it, traditional PBMs, they own their own specialy, right, in maleies. So, they're incentivized to force members to go through their pharmacy because it's going to impact their bottom line. Because we're not structured that way, it allows us that freedom to find lower cost options. And then I want to talk to you about our drug list and how we manage this. We do it differently than the P other

067PBMs. Um, we design our formularies based on the lowest net ingredient cost. We're not rebate chasers. Are rebates bad? No. We, you know, we do pay rebates, but that's not our whole focus of our uh clinical formulary programs. We look at our uh drug list and we like to remove drugs that are high cost that bring minimal value to our clients. It's wasteful, right? We also will remove drugs that if there's an OTC equivalent that's available, we will remove those drugs. We really push towards generics and towards our preferred brands. So again, it's about bringing the lowest net option to our clients. We again, we're not designed to chase rebates. Um there are other PBMs that their focus. They want to bring higher rebates. Well, you have to remember that only brand drugs earn rebates.

068So when you have a lot of rebates means you have a lot of brand utilization. A lot of brands are more expensive. So just keep that in mind as well. And one of the advantages that we have is should you select prime therapeutics as your PBM um we want to make sure that the transition to our formulary is smooth and seamless for your members. And we understand that the pharmacy benefit is really a highly touched benefit. Right? Members use that on a weekly, daily, monthly basis. And so it could be disruptive. So what we want to do should we be selected is we really want to get a file from the incumbents. We want to identify those members that would be disrupted. We want to mail them letters, you know, December before we go live.

069And as we all know, and I'm guilty of this too, when you get a letter in the mail, you tend to just throw it away, right? You don't pay attention to it. And then fast forward to one one a member goes to the pharmacy and they get rejected at the pharmacy. they don't have coverage for that drug, whether it be it's excluded or they have to go through a PA. We have created a program called the RX Runway transition program. This allows an extra layer of time, you know, kind of bridging that gap for members when they transition over to primer and blue cross. So what we'll do is that when that member goes to the pharmacy, let's say they don't they don't take action from that letter that we that we mail to them,

070come one, they'll get rejected at the pharmacy for taking excluded drug, the pharmacist will get a message alerting them to inform the member that they need to take action to work with a provider to find an alternative medication. Um at that point in time, they'll get that gracefilled, that one time gracefill um for any non-spe medication. So they're on five different medications. They grace for each one. At that time, when they get rejected at the pharmacy, it'll automatically generate a letter to be mailed to the member within two to three days, giving them another notification they need to take action. So, one of the things about this program is there's no cost to it. We highly highly recommend it. Um 99% of our new clients that come on board um put this in place. So,

071it's just going to give it added assurance when the uh member goes to the pharmacy. Okay, I wanted to talk to you about Advocate Plus Pharmacy Match. This is a new uh specialty network that we have we're bringing to our clients. Traditionally speaking, the way specialty network works today is a member gets their specialy medication through one exclusive specialty pharmacy because it drives, you know, higher discounts. Um again, going back to my statement that because we don't own our ownies, it allows us to find other vendors to partner with. So, we've partnered with Free Market Health. They're a well-known vendor in the specialty space and we are bringing this uh product to the market called advocate plus pharmacy match. It's different from the traditional setup. So we have contracted with 20 to 30 different specialty

072pharmacies in the network and think of it as a bidding system or like an eBay. When a member goes to get that specialty fill at the pharmacy, it goes through the pharmacy match platform. It automatically goes to those 20 to 30 networkies that we have and they get to bid on that on that prescription. Whoever has the best price, they're the best fit for that particular medication, meaning they can fill the drug. They have care management programs, that's the pharmacy that wins the prescription, I guess you will, if you will, to fill it. And again, it's going to be a lower cost savings for the group as well as for the members. So again, this is going back to my point. We're really looking for innovative solutions um for our clients. So this is a

073um product that we're bringing to the market. We've already rolled this out for the past several years with other blue plans, but it's something that's um different in the marketplace where we want to find uh innovative uh programs for our clients. [Music] And then here I have a slide on the different recommendations for Macallen ISD. I did already talk about the drug list, the performance select by a similar drug list. Um that comes with a bunch of our uh utilization management programs that your prior authorization, your therapy. Those are really focused on those high cost drugs, mostly specialty. We want to ensure that they're taking the right medication from, you know, both a cost-effective perspective and also a clinical perspective. We also um are offering our meds your way. That's an embedded discount program. Uh

074think of um Good RX, right? You go to the pharmacy, you present the Good RX card, it automatically looks for the lowest cost. the member pays out of pocket um and it doesn't go towards their cubes, their deductibles or out of pocket max. With Meds your way, it's embedded in our system. It happens the background. The member doesn't have to take an extra card. They just show their blue cross ID card. The system automatically looks for the lowest uh cost within our discount card vendors and the member pays that and that goes towards the accum deductible. So that's going to be savings for both the client as well as for the member. Another program that we have as a recommendation is our flex access copay solution program. This is our specialty coupon program. A lot

075of uh pharmaceutical manufacturers offer assistance for the high high cost specialty medications. So with this program um we identify members that would be eligible to receive um assistance from these pharmaceutical companies. We have a flex access team that reaches out to the members. It's kind of a handholding throughout the entire process. Um they get them enrolled. they ensure they get the medication that they need, their savings to both the plan as well as to the member. I'm also recommending I already talked about advocate plus pharmacy match um our guided health adherence programs that looks at both medical and pharmacy claims. It helps us identify any gaps in care. For uh example, if there's a member with a diagnosis of diabetes, we can look at their pharmacy claims to I to determine if they're taking medication.

076If they're not, we make that outreach. So again, it's really having that holistic view of a member from both a medical and a pharmacy perspective. From the network um perspective, we have quoted our advantage choice pharmacy network. That's a a one of our broadest networks. It does exclude um Walgreens today. Um it brings deeper savings and then also of course our home delivery um mail vendor partnership and then of course the exclusive specialy pharmacy program, the advocate plus pharmacy match. So we feel that these are the programs that are going to be best fit for the district based on the claims that we saw um utilization. Um we have seen many savings with these same programs across our different clients which I will show you here. Wanted to share with you I put up here

077four examples of current clients. Three of them being here in the real Grand Valley. Uh one of them being in Houston. These are just a handful of examples. um these are savings that we've provided them uh or helped them you know obtain in 2024. So you'll see there's considerable amount of savings for our clients and if you ask well how how did you get these savings for them? This is going to be based again against based on our drug list because again we are really focused on making sure that we don't have wasteful uh drugs on the drug list. our UN programs. I talked about the pri authorization, your step therapy programs, or rebates, our specialty management, that's done by our split fill program, our flex access coupon program that I just spoke of, and

078of course, >> okay. And then, of course, uh your uh Med Your Way program, the discount drug card program. So, those are the uh the key drivers into the savings for our current clients. Um, one of the things that we've been able to do is um retain these clients because they actually see the value of having an integrated model. It's not only is it from a cost perspective, but it's easier for the members. They have one blue ID card. They don't have a separate medical or pharmacy. There's one customer service. They call in, they have a question about medical. Let's say they're like, "Oh, I have a question on pharmacy." There's no you have to call another number. They can solve that right then and there. And it's also easier for the for our clients

079from a administrative perspective, right? There's consolidated building billing. there's a single eligibility file fee. Uh makes it easier. You have one account team here led by DA. She has uh the support of the pharmacy account team. When we meet with the ISD on annual review for annual review, you'll have both pharmacy and medical at the table. So you can see the whole picture, right? You're not just focused on medical or focused on pharmacy. You see the full picture of how each of the cost um impact each other and where the trends are. So again, it's that Having the the medical and the pharmacy integrated really brings value to both um our clients and the members. >> I have a couple questions. >> Um you focus a lot on the integration at the end. If we

080do not choose Blue Cross Blue Shield, does that negate the benefits that this PBM offers? >> Does it is it a standalone project? I guess is my question. No, we are we are with blue so it's not a standalone carve out option. >> Gotcha. >> And then what is uh based on your knowledge of our claims over the last year, what is what is our number one or not number one, what is the top few I guess drivers of our cost and how can we save? I >> I think it would be just around their specialty utilization. um that of course we see that across all of our clients and we really for that piece we really encourage the flex access coupon program. We see a lot of savings of our clients are using that

081program and I will be transparent. We're not the only PBM that has a copay solution program. There are other PBMs but that's one that we would highly recommend um for the district to help save. >> And can you give us an example of like how that works with you know what is our what is the one of the highest cost drugs that MISD currently pays for employees? Well, we do see a lot of humira and stellar um claims that's for your rheumatoid arthritis, your autoimmune um medications. Um that has gone there are now bio similars that are available and that's how we've designed our drug list for 2026 is to exclude Humira and Stellara. Um even though there are still rebates on them, they are higher cost drugs. So we are excluding those drugs and

082we are only offering the biosimilars. And just to point out um other PBMs have biosimilars as well, but what we're seeing with our competitors is they're offering the highest uh cost bioimilars. We offer the low whack, what we call the low wholesale acquisition cost. So right there, you're going to see immediate savings from moving to the lowest uh wholesale acquisition cost by similars. It's a mouthful there. >> And then your network locally, you said Walgreens is excluded. What otheries are included? Do you know? pretty much all of them except for that major chain Walgreens. >> Gotcha. So HB. >> Oh yeah, they're all in there. >> Okay. Um, thank you guys so much. Any questions? >> Thank you guys. >> Thank you for your time. >> Thank you. Are y'all going to need a little

083break before we go on or to you guys >> or do we want to just keep keep going? >> Keep going. Okay, >> keep it moving. We're on a roll. Our next interviewee will be Aria for the PBM, the pharmacy benefits management. It's I have water >> cuz I got hungry to We're ready to go. >> Yes, sir. >> Thank you. My name is Patrick Mclofflin. I'm the president and one of the owners of uh Aria. Thank you for having me tonight. For those of you who are not familiar with our organization, we've been around for a few years. Um, we're owned and managed by pharmacists. Three of the four owners are pharmacists by myself included. The managing partners, we've been all been doing this for about 30 years. We have a ton of experience

084that we bring to our groups helping them manage their prescription drug benefit. We work in the self-insured uh payer space. We work with municipalities, school districts like yours, private private employer groups, and TPAs. We have groups as small as 15 and as big as 8,000. Specifically for Texas, we have about 5,000ies in Texas, about 200 in the Mallen service area. RGV clients, I'm sure a lot of these names you you recognize it well. A number of school districts right here in your backyard. We have some principles that we do business by. We want to be conflict free and have aligned incentives. We have a commitment to our clients. We don't have any outside investors. We have no ownership of the distribution distribution channel. We don't own anyarmacies. We don't make any money off the product.

085What the pharmacy is paid is what the district is paid. Rebates that we collect are all passed back to the the client as well. We want to be a TPA of prescription drug claims for the for our clients. We collect a lot of data through that process. We want to leverage that data to improve the health status of your population, help lower your overall cost. One of those results because we have no outside investors. We have no artificial ROI goals in us. There's no private equity or VC or stockholder saying you should run your business this way. We make decisions based on what's best for our clients and for their members. We have no one set to choose one drug over the other. Uh we make the same amount of money on a $10 prescription

086or a $10,000 prescription. We don't own the pharmacy. So we can send a prescription to where we get the best possible price from. So it could be community pharmacy, especially pharmacy, an international pharmacy. It doesn't matter to us. We can send it anywhere. because of our business model, we can be more flexible than PBMs that don't follow this and we can tailor programs to fit our our clients needs the best. So, excuse my amodesty. I think over the past six years we managing this plan, things have gone very well. If you look at this chart here, it shows what your per member per month costs were over the last um six years. We know what the benchmark was before us. The the 2019 before came on in beginning of 2020, your PMPM costs were about

087$91. You can see over the last six years we dipped down quite a bit and now after six years we're finally getting back to about where you were six years ago. So you've been actually flat for over six years. I think you'd be hardressed to find another district in the area that's had that kind of results over the last six years. Now we didn't do that in a bubble. It's actually a pretty unique situation here. We've had a board and administration and consultants have been very receptive ideas that we've had. They've embraced those ideas and helped us implement them. So it's been a very much a collaborative effort as we've done this. But what did that actually mean for you in terms of cost savings to the group? If you take those same numbers I

088had, you can find national averages for inflation for prescription drug programs and commercial health plans. I use Marsh Mlen to come up with these. You look at what that national increase was over those years. You see 476. Those are numbers that we see of what the national average is for increases. I think we can agree healthcare is probably a little bit more expensive down here in the valley than nationally. So those numbers I think are conservative. If you increase the $91 you started out with 2019, inflate that every single year, multiply those PMPs times your membership, you can see what your what if you use those national averages, what it would have cost you about 35 or $32 million and the national average. We brought that into $25 million, a $7 million difference just by

089the programs we put in place. But how do we get you to that? The first year you saw a big drop from 90 down to 80. That mostly came from the benefits of the contract you have with us. This full pass through transparent model where you got better pricing at theies and better rebates immediately saved you a lot of money. Other programs that we brought on over the last four or five years, the importation pharmacy program, you can see that starting out in 2021, that program growing over the years and what the resulting savings was in those programs. You can see for the through 2025 about $2.3 million in savings. I think by the end of 2025 be about $3 million of savings. And it's not just the plan. The members saved as well. About

090$56,000 over that same time period. A hugely success successful program. Again, the board embraced this. The administration embraced this. It was a collaborative effort. But it's not just the unit cost we're looking at. We need to look at utilization as well. Our members taking medications, the best medication for their condition. We looked at 2024 data in this this chart right here. We have a bunch of programs that manage utilization. They all fall under that umbrella of prior authorization. So what we do is look at the high-cost medications. You filled about 46,000 prescriptions in 2024. Um we looked at 296 of those prescriptions, a tiny fraction of those, about6%. About half of those we actually made changes on aboutund and um 59 there. They were the most expensive prescriptions out there. If you look at those

091medications, they're all about $2,000 on average. Multiply those times every single month for 12 months, it would have been another $3.89 million. So if you look at this chart here, the blue is what you actually spent. The green is what you avoided by putting the programs we have in place. Again, u really um uh effective programs we put in place to help the district hold down the overall cost. I want to speak about that same in a very specific area, the GLP1s. These are the drugs that you see every day on TV. The ozepics and moneros are used for for diabetes and for weight loss. Macallen and most other schools don't cover weight loss. So you have to be very diligent to make sure people getting prescribed these medications are actually using them for diabetes.

092And we have some basic criteria nally accepted standards. The patient has to have a diagnosis of diabetes have to have an HBA1C their blood sugar level greater than six and a half and need to have tried and failed on firstline therapy before we allow that to be filled. If you look at these these are four districts ISD the first one you can see what their PMP PM costs are. I broke this up for a reason. in the first and second half of 2024. Mallalen ISD and the second one TISD number one there. They were with us for a number of years. They've been following our programs all along. You can see their PMP costs are below what the other two are there. They fluctuate a little bit in the second half of 2024, but again

093still below. TD number two and three, those are groups that started with us in 2024. We had data on those groups before. We knew there were several hundred members on those medications before they started. We recommended we should look at those patients and make sure they meet this criteria. The group said, "Nope, the previous PBM had already done that. We want to grandfather them and cover those medications." So, we did. After the first quarter, they said, "Our costs are still going up." We said, "Well, we should take a look at those patients." The TSD number two, they said, "Please go ahead and look at those." We did. 25% of the patients were approved previously were did not have did not meet the criteria. They're using those drugs for weight loss. They don't care. They didn't

094cover weight loss as well. We stopped those therapies. You can see the the resulting drop in PMP. The other uh group here did not want to go through disruption. they left the people in place. You see their costs continue to go up. It's very important that you manage this particular therapeutic class very closely if you're not covering weight loss. It's important you have a PBM who's not making more money as more drugs get used as well because they have an essential to keep these things happening. So we think our programs are why we we've achieved the cost savings we have with you. But that's not all we're doing. We continue to bring new ideas back to the group. A 340B program is is another pricing methodology we that we found. Many hospitals across the country

095can buy drugs at greatly discounted prices if they qualify for this program. Normally it's reserved for just patients and employees of that of that hospital. We found a way we can make your members prescriptions eligible for that 340B pricing. If we can move your patients that we found on these drugs, they're not available through international. We can put the patient to this pharmacy. We can save the members about 14 grand a year and the plan another $100,000 a year. Another uh plan we're working on right now with our CL with Clara, our mobile app. Clara has a good RX type uh tool in it where we can actually see the different prices fromarmacies because the contracts have in place with us. You see what the prices are. Somearmacies are a lot more expensive than others.

096CVS in particular for regular maintenance drugs. People pay a lot more for their drugs at CVS than at otheries. With CL, we could target those members. We're in process of creating a list of those members. We'll push notifications to them if we can. We'll email them. will send them a letter saying you're getting your a tova stat and filled the CVS. It's costing you this. You could be getting it here at a local pharmacy or at HB and save yourself and the plan money. In this one, we found a $26,000 for members and about $37,000 for the plan. We're going to continue to keep bringing you new ideas and new ways where we can lower that unit cost, keep utilization down, and help you um meet your budget constraints that you're constantly put under. I

097went fast. I know we all had a short period of time. Fast. >> Fast is good. Yeah, fast is good. I'm going to open it up to our board here with any questions that they may have. >> Hi, thank you for the presentation. I got a question on your slide number six. Sorry, wrong five. >> I see our in 2023 to 24 and then 25, we saw a big jump from 84 per member per month to 93 and then slightly down again 25. What caused that big jump from 23? The big jump is a lot of the um of the the GLP1s continue to be used more and more and more. There's actually a couple of high price members that that have popped up. Um those go up and down. It's probably why you're seeing

098that decrease. Again, we've had different therapies. We get these high cost members. Um either the therapy gets discontinued or the member drops out of the plan. But but those two things are what's really causing that that little fluctuation you're seeing there. But the GLP ones is driving your group and every other one as well. >> What about Humayra? Is that a >> um so the two biggest uh areas are going to be your anti-inflammatory drugs and your diabetes drugs. And what we're doing with humira is there's actually a biosimilar forum. There's another one other we want to be very successful at taking people um off of humra putting it to a drug called eucy. We've gone from about $8,000 um per therapy down to about $800 per therapy. Again, there's a big rebate on Humera.

099You actually moved it to international. We saved some money there. uh we don't we're not making money the rebates so we didn't mind we moved over and the group saved money now it's available inter uh through as a biosimilar domestically we stopped filling it internationally moved it to to you actually mark Cuban cost plus is the cheapest place to get that particular med so we're constantly looking at opportunities of of how we can get once the member's on that right med where's the the lowest possible unit cost for that med and so >> when we talk about biosimilars is it like the generic drugs that the only thing that really changes is the Yes. >> Yes. And actually so uh to get into the into the details um bioimilars are much bigger molecules than say

100you know um a regular generic like a hydrochlorazide. They're small molecules. Biosimilars are much bigger. So you can't actually look at the product at the molecule and say it's the exact same thing. Biosimilars these big are these big um molecules. So actually what they do is they look at the process by which the drug is made. And so the manufacturers done a good job at convincing prescribers and the FDA. Well, these really aren't the same thing. But in truth, there's as much variability in lot to lot of of hum as there is in lot of Humumera to a lot of us. So I'm a pharmacist. In my opinion, yes, they're the exact same thing that's going on. It's very similar to generic. It's a little bit different. >> My concern was only making sure that

101we're not forcing employees to get a drug that's not as effective. >> No, no. there. We uh we we uh we're very kind. Again, Chris and I are both pharmacists as we're building these programs. We're not making people switch therapies like that. We we wouldn't do it if we wouldn't do it, you know, to ourselves or our families, things like that. So, no, it's that's not the that's not the uh the way we would go about doing it. >> And on the Clara, is that is that a consumer product or y'all see that and then y'all reach out to the consumer >> because it looks like an app on the phone. It's a mobile app that we make available to members. They can download it. They can see what their prescription drug history is. They

102can see what pharmacy. They can see what the status of the formulary is. And they can also do things like switching medications. So what's they can go in and they can say I'm taking a Torvvisatin and they can see I'm paying $30 for this. Oh, at HB it would only be $6. They can actually in in Clara with a couple of clicks they could push off a message to the pharmacy they want to go to and it'll say I'd like to get my prescription transferred to you. move out. Now, the pharmacist reaches out. Depending on if there's refills or not, most of the time they can actually take those refills from the uh current pharmacy and switch to their pharmacy and move the prescription over. Transfer prescriptions happens all the time. We're actually doing some

103very specific things to say, here's ones where you could save money and the plan could save money. They can also do the same kind of thing with international. We tell them, uh, you got this drug filled domestically, it could be filled internationally. They could push off a message to the international pharmacy and start that process as well through CLA. Yeah, on the same topic, um the savings that you note here is that for all members in a given time period, like a year. >> Yeah, they're all annualized. Yes. >> Got it. Uh and what is our adoption or usage rate for this Clara app? >> It's about four or 5% right now. >> So only four or five% of our members are using >> if you look at medical apps, um that's about what happens.

104And we try to do is focus that about, you know, 10% of your population uses, you know, 80% of your dollars as well, right? 20 2080. Uh, so we try to get those people using it. Um, and we're constantly trying to find ways to get to get more uptake on that app. This is we think this is a great one because it's it's not the expensive meds. It's it's ones that are more, you know, pedestrian. You know, the tobra statins, hydrocorides, think that people take every single day. low price drugs for the plan but maybe high price for the for the member you know you know their what their copay is we could give them a drug where they could save you know 10 or 15 bucks some members are saving $100 if if they

105could switch from the CVS pharmacy to another one so there's big opportunities for members with that >> what do you think is there any way to project I mean can I can you extrapolate if they saved $26,000 last year and that only being 4% I can't do the math in my head but would that be the savings >> well for the members I off top my had I I don't know. Um they're they're low price drugs. It's a big percentage for the particular member. That's for sure. You know, most of these cases the members going from paying let's say like $30 down to $10. So they they could be cutting their their cost by 60 or 70%. There's there's big variations of generic drugs at communityarmacies. Um you can um Good RX is a great

106resource. You go you look up and look up some inexpensive drugs like traden. You'll see it shows up. CVS and Walgreens are way above where you guys don't use Walgreens, but um the the big chainies are a lot more expensive on those drugs. We get much better pricing at the communityies, the independentarmacies, at the um at the um uh chain drug store, excuse me, the the supermarkets like HB and things like that. So, there's what we want to do with Clara is tell the member here's a big opportunity for you specifically where you can save some money. You know, we think we say the plan money, we want to make it more affordable for the member as well. Is there a way to uh I guess whenever you guys if if this is something that

107uh we continue with um to inform our our employees and everybody that's using it about CLA because >> we we send out a lot of um a lot of emails and a lot of letters on on Clara. Um and still the the adoption is is lower than than we'd like. Uh but yeah, but we are we we do um monthly uh letters out to members. Um the district pushes out notifications as well. Yeah, it's um people have a lot of apps on their phone, right? >> Yeah. So, it's >> I'm just saying because I don't know how or what, but every time I get a prescription that I have, maybe it's something I do with my pharmacy or I don't know, but um I'll get a text message. >> Well, yeah, that's that's the that's

108the pharmacy telling you that you're getting one right now. And so it'll take me to a link and it'll show me a rebate that I'm able to get on that medication and it's pretty cool. I mean sometimes you're saving up to hundred bucks and those those copay assistance programs are there's there's a lot of opportunity there. Um again you have a pretty high generic utilization rate. People are using generics where they should. A lot of the brand name drugs we we've pushed over to international as the big expensive ones. Um we think there's some more opportunities in that at 340B. Um the biosimilar is a big area where we could do it. There's only a few biosimilars that are available right now. Stella and Humera. Um it'll be four or five years before the next

109ones are available. And it probably you know probably 10 years where we see a lot of them out there. But these are two big opportunities. Stella was you for Phil 27 $28,000. We can get that for like $1,100 now is 90% decrease. So it's it's again >> we make the same amount of money if it's $1,100 or $26,000. We're trying to push those people over there as quickly as we can. >> Gotcha. Thank you. Okay. Any follow-up questions from the board? >> All right. Thank you all. >> Thank you so much for your time. Appreciate it. >> Thank you. Our next interviewee will be Proact. be a great way to start slip and fall. >> Well, welcome. >> Thank you. Let me find the mouse real quick. I'll mess that up. >> Thank you. >>

110Mr. President and uh board of trustees in McAllen School District, thank you so much for allowing us the opportunity to come here and to present to you. I'm Susie Huffman. with Proact and I am a Texas resident. I've lived here for the last 20 years and I'm also a 30-year military veteran. Very proud to be here in Texas. And I'm with And I am the Southwest Regional Sales Director. And I'm with Sarah Krell. >> Yeah, I'm Sarah Krell. I'm the director of account management. I live in Texas as well. Um, born and raised Texans, so up in North Texas. And everybody's like, "Oh, it's just a short drive down where y'all are going." I'm like, "No, no." >> So, thank you guys so much for us today. We really appreciate it. Thank you. >> So,

111our goal in this short 10 15 minutes is to give you a brief introduction of who we are as Proact and KPH Healthcare. Talk to you about the savings analysis that we've provided, look at different programs and savings that are available, talk about our customer service, and hopefully get to our case study that we prepared. So, who we are? So Proact is a 26y old PBM that is specializes in the midsize market and so that's who you all are. Our clients range from we have as many as five members on our plans and up to 20,000 members and we service clients from coast to coast. We have about 50 clients here in Texas that we've serviced for many many years. We have consultants, TPAs, brokers and clients here in Texas. I think one of the

112things that makes ProAx so different to than every other PBM is is that we are one of two employeeowned PBMs. That means that we're 100% employee owned. We don't answer to Wall Street. We answer to each other. And I think that part of that accountability makes us very customer service focused. It's all about it's about the client and ultimately about that member that is at the pharmacy filling a prescription and and that's sick or needs care. So, when we get into the fun stuff, the money, we found that looking at your 2024 claims analysis that the ingredient costs were just at $5.7 million. When we dove into it, we found availability of close to $2 million in rebates. And listening to your June meeting, I know that you all had a projection of $1.4 million

113for 2526. So, that exceeds it a little bit. And then we have a lot of special programs that we can bolt on top of uh the rebates that are 100% passed through to you. We're 100% pass through transparent PBM. There's $550,000 of opportunities of savings in programs of which is the patient assistance program, $200,000 savings, specialty co-pay assistance programs, n specialy co-ay assistance programs, international savings. I I think that you guys already lean into that a little bit and our international savings partner is CARX and that is a tier one uh savings out of Canada. And if you have your p your members do a mandatory mail program for all of their 90-day scripts, you can realize about $170,000 in savings. And that's pretty significant when you're you're looking a group of 30,000 members. Proact

114Plus is one of the programs that comprise of some of that savings. And so it's a four tier program. It's specialty carveout. And the specialty carveout um those those prescriptions are processed at Noble, which is owned by KPH Healthcare. KPH healthcare owns nine different pharmacy verticals and it's not a requirement that you use our specialty pharmacy but we feel like being vertically integrated to all the different pharmacy uh components such as mail order specialty and of course we have our own pharmacy um KPH started with Kenny Drug in 1903 in upstate New York and that we've been in business that long So, specialty pharmacy is one component. Copay assistance. And when you think about copay assistance, it's not just those copay cards or good RX cards that you see. This is something that's done behind

115the scenes with no member engagement. When they go to the pharmacy and they fill a script, it all the magic happens behind the scenes and you save money as the group and they save money as when they pay their co-ay. Also, the international mail order, which is the KRX and there's medical code carve out for those really high cost drugs, but that works in coordination with the medical policy. So, we get the medical planes and we're able to to coordinate that. On top of that, we have 15 other clinical solutions programs that we can offer to you all and happy to go into deeper dive into that once we're able to get you on boarded. Another way that we noticed a little bit of savings is the biosimilar strategy program. There are some of your

116members that are still on Humra and back in July we did a mandatory uh switch over to the bioimilars and you still have seven members on bioimilars and I know that $19,000 doesn't look like a lot of money but that's just seven people and and I feel like that's significant dollars in savings. And that is a part of our closed formulary if you were to switch over. I'm sure you guys are seeing a lot in the news about biosimilars and all that kind of stuff. So um so the next p page we're going to get into is the GLP1 clinical criteria. So this is obviously a hot topic right now. GLP1s are high spend. Um I don't believe you guys cover weight loss but u which is good. That would add more to your plan

117spend. But um we just wanted to go over what our criteria is. I think it's pretty common in the industry. But just to go over it again with you um you know we're going to have the prior authorization process that is all manual. We do not have any prior authorizations that are automated. These are all reviewed by pharmacists in house and they check through to make sure that there's trial and failure of metformin. There's documented elevator elevated A1C levels of greater than 6.5 and then the document documentation of random plasma glucose greater than 200. >> And I think that's important to talk about the prior authorizations just real quick. >> Um, you currently have people that have prior authorizations on file. You can do a 90-day grandfathering so that they don't have to go through

118a new prior authorization, but it'll start as soon as we start the implementation. We'll start sending mailers to your members. will start sending notifications to let them know that we have to contact your pharmacies and get and their doctors to get a new prior authorization >> and this is just a quick snapshot of what the implementation looks like. So um you know we can implement with any time frame that you that works for you guys. 60 to 90 days obviously is the best time frame so nothing gets hurried and rushed and set up incorrectly. But the phase one will definitely pull in together an implementation designated person. Uh someone from my account team would be on the calls. You guys would be on the calls and we go through the documentation, how everything would be

119set up and then set the cadence for how frequently which would probably be at least once a week to meet with you all and let you know what progresses that we're making on getting the plan set up all the clinical programs. There's an indepth uh clinical excuse me client information form. I want to say it's about um eight pages and it is detailed but we definitely want to make sure it's detailed so that we're setting you up for success and not failure and not coding things properly from up front. And so once you guys go through the implementation process obviously we would work with you on any member communications. You would have final say so and approval on any member communications. We can co-brand. We can customize anything that you want. We do not have

120any standard letters that you have to use. Anything is customizable. Your benefits are customizable. Your programs are customizable. I have worked for two of the big three PBMs before and that's one thing I love about being here is the customization and the way that we can turn things around quickly for you guys. >> You build your own plan. >> And then uh real quick, sorry. No, that's right. So when you uh no you can go on to the next one. Um when you get go live you're going to have a account management team and my team is formed in pods where they have a senior account executive account managers account coordinators and the account coordinators are really there for your member on the spot issues. Somebody's at the pharmacy and something's not working. We're going

121to get on the call with that pharmacy or help the member. We'll walk the member through it whatever is necessary. Um but that team will support you and we'll have postgo live calls um to make sure that we're running through reject reports. We're going to have a checklist of everything that we you know want to make sure is covered and taken care of for the implementation and then you guys you know can determine the cadence and how frequently you want the account team to meet with you. Um we'll have quarterly reviews that could be on site virtually. We can have monthly reviews however whatever works best for you. We do have automated reporting. Any of your reporting can be customizable at no charge whatsoever. Um, and like I said, we do have the automated reporting.

122That's a set reporting package that we can certainly share with you guys, but you can customize or request, you know, reporting however best fits your needs. Um, I think that let me go back real quick. Let me just make sure. And then, um, one of the things I do love about our organization is we do have direct access to leadership. So, report to our chief operating officer who reports up to our president. They're there at a snap of a finger if we need to talk to them, we need to make changes, you know, we just need their buy in or suggestions. Um, my boss is a clinical pharmacist. She runs the company. Um, she'll be happy to attend calls and meetings. She's very engaged. So, that is one of the things I love about her

123leadership. One of the many things that we pride ourselves on on top of the account management team is our member services. We have a 247 uh round the clock call service team and they're all in the US. So all the employees for ProAT are all in the US and we don't offshore or outsource anything. And and we feel that that's really important. You know, it's kind of like the Texas way of keeping the money in house, you know. But the thing about our customer services is that our team answers on the weekends, on the holidays. And it's really important when we're talking about that implementation. That's when we find out that if something goes ary on that holiday weekend, it's going to happen. It's going to happen on Labor Day weekend. It's going to be

124somebody really important or it could be someone. No matter who it is, everybody's important. But we have a call tree of who can override things within your organization. You can make the call. It doesn't have to go to the broker. It can go directly to you. It can be to a secretary or someone in the HR department. Can override fill the script now. We'll take care of it later. It's all about taking care of the members. We also have translation services available because I know that that could be something that comes up and has before when we're working here in the the valley. Our all of our member materials are in Spanish and English. And we also have people around the clock at any given time that can take those calls. So this is our

125case study. We looked at a school district of about 1,400 members. Um their their goal was to really drive down the specialty cost. They moved from one of the big three PBMs in 2023 and they were able to save 36% through going through PROAP plus. And that's the program that I talked to you about, the four tier program, and they achieved an $800,000 savings in one year. So, I'm not a mathematician, but we could extrapolate and and come to your number very quickly. So, that's who we are. We're 100% employee owned. We're very, very proud of that. We're very committed to keeping our clients. We have a 95% commitment rate, and we have a great referral rate from our clients that are here. Happy referrals if you're interested >> and our goal is to build

126customers for life. This isn't just um a one and done for us. >> Thank you. Thank you all so much for the presentation. I'm going to open it up for any questions we may have from our trustees. >> I apologize if that's covered in here. It's a lot of information. Do you all do a lot of rebates and go down? >> We do a lot of rebates. Um and those rebates are 100% passed through like we talked about for the rebates that we saw the data you all shared. It was close to $2 million. >> Okay. >> And that's what we saw in the first year. And your rebates will only get better as the years go. >> And how do you all make your uh your fee? >> We make an admin fee. >>

127Okay. But there's no tack on to the the drug cost. >> So if you do the special programs like Pro Proact Plus, when we quoted these prices down there, the fee is in there. It's a 25% of savings fee >> of savings. >> Uhhuh. Okay. Of savings. Yes, sir. >> Thank you. >> So there's no hidden cost. Everything is clearly articulated in your contract. We also have performance guarantees. So, if we don't hit our mark in savings, if we don't hit our mark in customer service, then you get 25% of a of a $5 a fee back. >> My account managers are required to turn things around within 24 hours, but typically my team does it within two or three hours. And so, those can be included as part of your PGs as well. >>

128Thank you. >> Any further questions from the board? Well, thank you both. >> Thank you. Appreciate it. If any additional questions come up, feel free to email us, call us, text us. We do answer our phones. We're real. >> Thank you for the opportunity. >> Thank you all. Hello. And our last interviewee for the evening is Serve URX. >> Welcome. We are going to give you guys the floor and then we'll follow up with any questions we may have. >> Awesome. >> Wonderful. Uh gosh. All right. Can you hear? >> I feel like I can talk in the room. Just pick up on >> Got it. >> Okay. Perfect. Well, we can get started and thank you guys for having us this evening. Um, we appreciate the opportunity to meet with you all. My name

129is Chelsea Spece. I'm a sales executive with Serv. Um, with me today is Ted Boland. He's the president of Serv RX. Um, and so we'll just jump right in and uh kind of on the agenda tonight. Um, we'll go through kind of the company overview. We'll share a little bit about Serve URX, how we're positioned in the marketplace, um, and then we'll talk through some client success stories, um, and share with you all some successes that we've had with, um, even some local Texas employer groups as well. Um, and then we'll talk through kind of the road map and the strategy that we see seen fit, you know, for uh, McAllen ISD, and we'll open it up for questions. Does that sound good? All right, perfect. So to kind of set the stage um you

130know Servx we're a full-ervice PBM we're we're in the market um to solve industry challenges around pharmacy benefit management and so some of these industry challenges are probably challenges that some of you all are experiencing um andor some that you've heard of um and that other employer groups are facing. And so, um, just to kind of set the stage, uh, the three main industry challenges are transparency, think of alignment, and that's typical PBM contracts are, you know, boilerplate. They're confusing, they offer little, uh, flexibility, um, and and not a lot of transparency. And that's, you know, less than 25% of employer groups in the marketplace today find satisfaction with the level of transparency that's offered in their PDM contract today. The next industry challenge is drug spend and that's employer groups feel it in their

131bottom line. Um it's on the national news. Um and so drug spend is on the rise and uh it's going to continue to rise with you know no line of sight as to when that's going to stop. And so uh we're here to come up with creative solutions um to combat drug spend. Uh and the last industry challenge is satisfaction. And that's, you know, most employer groups just like McAllen ISD um are not satisfied with the level of service um andor the the programs that are being offered to employer groups today to combat drug spend. And so uh here at Servix, we think that these industry challenges can be solved um by these three pillars of excellence. And that's uh flexibility, quality, and eccentricity or client centricity. And so Servx, we are the longest standing

132privately held full-ervice PDM. Um, and we're we're one of the only ones left in the nation that hasn't been swallowed up by the big three or private equity. And so uh our main uh pillar of flexibility um more so you know just stands for uh the fact that we have the autonomy as a privately held uh organization to you know say yes in a selfish world of nos and offer a level of flexibility that you won't get with any other PDM. Um and then quality kind of speaks for itself. Um but you know we come to the table with customized tailored solutions for McAllen ISD that make sense um for your population. Uh and then you centricity you know service uh is in our founding name. It's at the forefront of everything that we do

133here at Servx. Uh and so you know we're not coming to the table asking you guys to make a sacrifice of savings for service or service for savings. actually with Serve URX. The two come hand in hand. Um and so without further ado, I'll I'll kick it over to Ted um so he can share with us some of the recent wins and client success stories that we have. >> Thanks, Chelsea. Uh good evening. Uh and thank you again for your time tonight. Uh central to our mission is the design and delivery of cost management and other solutions really aimed at ensuring that the drug dollars brought forth uh earmarked by uh the district the prescription drug benefit are spent in the most cost effective and clinically appropriate man manner possible but also consistent with the

134goals and objectives of the district. What does that mean? That means that we begin every conversation not by force feeding a boilerplate standardized solution but rather by asking questions. What are the goals? What are the current pain points? Um is the name of the game replicating what uh what is in place today? uh because it's working well uh with just a more service focus or do we need to save money? We got to open this thing up and and put in some programs that might cause a little bit of disruption. Uh and let's talk about that and and formulate a plan of action um and a roadmap. Uh with the limited time we have tonight, I'm going to run through three client success stories. um three kind of just snippets that I I think signify

135um this in a practical way uh with like uh entities um I will describe success with a city and two school districts first the city uh this is a municipality in Kansas uh it is 1,200 lives they came to us uh because they were not getting the service they wanted from a big three PBM. Um, and so like we do, we started by asking a bunch of questions. Um, and we implemented a benefit that went from um, kind of an open plan design, something a little bit more managed with a closed formulary with the copay assistance program um, and tuning up their preventive drug list. So in addition to providing excellent service in the first year they experienced 25% overall savings including a 13% reduction in specialty spend their rebates went up by 41%. And

136it was all done exceeding expectations of the membership remembering that these are patients getting drugs. The pharmacy benefit is the most utilized of the health benefits. Uh and we we remember that uh with everything that we do. The second example, uh this is a a school district based in Wisconsin, a little bit less than a thousand lives. Uh the school district was in um a a kind of a a precarious financial place when they came to us. Uh they had already installed um more managed plan design elements, but their specialty uh costs were runaway. Um so what we did for them was implement our specialty assist program which looks to get patient assistance uh wherever possible as well as overlaying an international sourcing option. The results were transformative. uh they went from specialty being a

137hardship, possibly looking at a fully insured scenario to having their total plan PMP uh drop to be um 94% of what our book of business average uh is. Um at at the end of the day we were a generic dispense rate of upwards of 96%. Um and have done a great job for them. But it we we didn't implement this lightly. We sent multiple pharmacists uh to the district for enrollment. They had to meet one-on-one with the patients that we were going to be subject to try to get patient assistance program coverage for and walk them through one- on-one in person um through uh getting and setting up the international sourcing, answering any questions or concerns they have about that. I'm a pharmacist by background. It's only been uh fairly recently that I myself been

138comfortable with the uh international sourcing, but I believe that it can be done safely. uh and the partners that we have aligned with uh we have actually gone and inspected uh up in Canada and uh think they do a good job. The third example is another school district. Uh this is based in Illinois uh 1100 lives. Uh they came to us you know under the cover of gosh why are rebates paid so late for a claim in January? Why am I first seeing those rebate dollars in August? Well, the truth of the matter is that's that's a bit how the game works. Uh we submit experience to the pharmaceutical manufacturer. They take their time looking at it, scrubbing it, and then we get monies back and we pass them through back to the the client.

139Um but um if there's a cash flow kind of concern or challenge and um this school district uh expressed that um owing to our pillar of flexibility and eccentricity uh we constructed an alternative rebate payment um framework where on a monthly basis we would pay them a per member uh amount. um those rebates would be fronted, those would be paid every month and then we would true them up periodically. We would true them up quarterly and then we would true them up at the end of the year. So it's still a 100% pass through but they're just getting a portion, you could say the bulk of the monies much much more quickly than they would otherwise under a traditional uh payment structure. So with the available documents that were provided to us uh pursuant to

140both your plan design today as well as some signals about what you might want to do. Um these are kind of the the five takeaways you know that uh we've uh concluded first. It seems that international sourcing is working well for you. what you're doing in specialty is working uh in the sense that um your specialty spend is below what we see as the average pretty far below. So uh we would recommend continuing what you're doing uh in the realm of specialty management. We are completely point solution agnostic. So if you're using a particular partner that you really like for international sourcing, we're happy to work with them. Uh it could be uh working with them otherwise we bring solutions to bear or we could create create a scenario where we keep everybody competitive uh

141and we look at prices across multiple different international sourcing providers uh to make sure that you're getting the very best price because that's that's how the game has evolved now. It's it's every claim, every patient, every claim that we've got to be looking because the stakes are higher than ever. Um there was some reference to uh a possibility of um I think evolving the GLP1 coverage strategy um if that is in the realm of weight loss. Uh boy, that is very of the moment. And uh 411 of 26, we will have an offering that is kind of a carve out of the uh traditional employee employer funded prescription drug benefit. It's still partially funded by the employer, but it lives outside of their plan. Um and it leverages uh direct deals with the manufacturers. Um,

142so you you may have seen in the news uh commercials for4 $499 Ompic and things of that nature. Uh, it seizes on that, but it's it but not in a direct consumer sense. It will allow the employer to provide a limited benefit. Uh, it doesn't have to have uh it doesn't have to have deductibles or accumulators. Uh, they can live separately. Uh, and so uh would love to talk more in detail about that if uh that is what you're thinking for. um changes moving forward. Um we would recommend implementing our highly managed close formulary. The good news is very little disruption. So we look we looked at it across the entire claim file we were provided and saw only 1.6% uh of claims uh disrupt disrupted very low. That's across 12 months. If we look

143across the past quarter I'm guessing it would be you know 1% or lower. And we would uh ensure member satisfaction with 90day grandfather. We would accelerate um we would accelerate uh the the velocity to which you are receiving rebates with monthly rebate credits and uh true-up payments. And uh we would have uh dedicated personnel here, Texas-based uh who would be assigned to you uh a farm D um who uh would come on site, you know, as often as quarterly if you wanted her uh for lunch and learns, for education, uh to uh meet with uh employees and uh make sure that uh there isn't anything lost and that we're exceeding the expectations of Uh gosh, when you're when you're when you were reading the the pre-eread on this, you probably were like, "Who serve you

144are a hex?" Uh I I just we we sincerely hope that uh that does not dissuade you from considering us. Uh we have been in business since 1987, as Chelsea mentioned. It's only been in the past 10 years ago that we ventured out beyond the confines of the upper Midwest. We're seeing the fruit of that labor and today uh we've got uh 16 uh cherished clients in Texas. We're committed to Texas. Uh I've listed uh them on the slide there. Um most or all of them are referenceable and so we'd love if if you wanted to talk to them uh and and get get uh get their experience with us. The last thing I would say is transparency. The word transparency gets baded about a lot. uh means different things we feel like to different

145people. Um to to really kind of emphasize to our our audience that we mean uh what we say with transparency, we sought and secured outside validation from the validation institute. They looked at our contract and they said uh these guys uh are doing it in a transparent way. What does that uh mean? Um we disclose all revenue sources. There's no spread pricing. There's precise Our only remuneration is on our administrative fee which is fully disclosed. This is backed actually by a $100,000 credibility guarantee which means if one of our clients feels like we are not being transparent, there is redress. Um they can uh seek redress uh to the tune of $100,000. Uh and we recently won uh a health a health value award uh related to all of this. So we really feel like

146trying to go about it differently and uh I'm timed out. >> No worries. Thank you for your presentation. I'm going to go ahead and open it up to our board here with any questions they may have. >> I have a couple. One on the international um savings through the RX programs. How's that been affected by federal policy, tariffs, all the the flux going on right now? >> Yeah. So this is extremely of the moment and uh August 29th we understand is the date in which uh a switch might be flipped where pharmaceuticals coming in from tier one countries so Canada, New Zealand, the UK and Australia uh might incur a tariff. Um we are in constant communication with the entirety of our um international sourcing partners. Um what we're hearing is that that tariff is

147going to be levied at the pharmacy level, not on the member level at least to start. So we don't expect on the the 29th or 30th of this month for members to have to fork out additional monies related to tariff. Will that change? I don't know. But we're following it very very closely. >> But then the the at the pharmacy level, the cost would be passed on to the plant. correct >> or how would that work? >> Well, it it's a good it's a good question. Um, two of our partners have already said that to start they will not be passing that on. Um, which you know can they do that indefinitely? I don't know. Um, we'll be watching it very closely. >> And if we're banking on savings through an international, you know, drug

148importation, how easy is the switch to domestic supply? How does that work? >> Um, well, we know the folks that are getting it internationally. Um, and we know the drugs and so it would be a campaign to bring them back. Um, but it it it is what we do. We interact with patients. Um, we have, you know, patient communication mechanisms fully built out to execute on those things. >> Yeah. And one of our partners has a domestic pharmacy, too. So, it kind of depends on, you know, where the site of service is today. um and how we would kind of strategize to bring that back in domestically. Um so hopefully that helps kind of you know address the question. >> The the the international pharmacies are getting creative themselves. Um so you know we've heard

149rumblings um not necessarily from those that we work with that both Israel and Sweden are also uh considered to be tier one countries. Uh and people are talking about the potential for expanding the net. We have not done that. Um but we hear it being discussed. >> And what's your network like here in the valley in terms of our missies? >> Yes. So we did a network disruption analysis I believe with uh the data provided and there would be nobody disrupted meaning that uh 100% of theies that are being visited today are in our network. >> Thank you. Okay. Well, thank you all very much for the presentation. >> Thank you guys for having us. >> We appreciate your time. >> Thank you guys. >> All right. Would you like to take a break before

150we debrief answer any questions that you may have before? Yeah, >> I'll move to take a 10-minute recess. >> 10 minutes. >> Second. >> Okay. Uh, got a motion for 10-minute recess and a second. All in favor? >> I Okay, we'll be back in 10 minutes. It is 7:39. Thank you. It is 7:47 and we are back from our recess. >> Miss Williams. >> Thank you, Mr. President. Just before you rank for the medical and then for the PBM, I do want you to know that what whoever comes out on top, we will be able to go back even though we've already have already done our best and final, also known as a baffo, we will go back with the top ranked and then also try to negotiate even more than what we have already

151at this point. So, I just want to throw that out out to y'all so that you know that. And I will invite Mr. Silva up to the podium in case you have any um specific questions for him >> regarding tonight's before if I may before you uh ask me any questions I wanted to go over the evaluation matrix and the documents you have that we have some idea of what information was used to evaluate them and then if you have some questions I I'll be glad to answer them. So, if I could direct your attention to I think they're in the back of your packet. Uh the evaluation matrix and the comparative summary. So, as I mentioned earlier, there's an evaluation matrix for each of the two RFPs, the medical administrative services and one for

152the pharmacy. So, I'm going to use the medical uh as the example. The pharmacy if we need to, we'll go over it as well, but they follow the same basic uh structure. So if you understand the first one, I think you can understand the second one. So if I can direct you to the rational number one there at the the top that is a component of cost. So in the comparative summary, you'll actually see the itemized costs that were then annualized and then carried forward to that evaluation. So there's a comparative summary for both Blue Cross and United Healthcare of the fees uh they presented to us and again as we mentioned they we did go through a process for best and final so they did have an opportunity to give us their their best

153rates but that doesn't mean we can't do that again with either one of them as as we go to the next step. Uh the fees you see there listed are not necessarily allincclusive to all their programs. uh you heard from both of them. They have different services. Some of them come with different fees. Some of them may not be a fee. It's a claim cost. What we listed here is to the extent we could apples to apples of the fees or services I should say that we know we will expect to utilize. So, uh with one exception, they're identical. They might be called differently. For example, a wellness program on the Blue Cross side might be different from the wellness program on the United Healthcare side, but uh they're aligned so that the services are

154comparable with the one exception being on the United Healthcare side, you're going to see a line item cost uh called runout administration. So, that's actually a a fee that we would pay if we were to transition away from Blue Cross. uh if we move away from our current administrator, there will be some claims that would have to be paid after the end of the contract. Those don't go over to a new administrator. So, they stay behind. So, there's some fees incurred to do that. And so, the fee that's represented under the United represent what we would be paying Blue Cross if we were to move. Now, why is it on United side? Because it's the cost of changing companies. So, we have to reflect it on that side. Okay? So, that's rationale number one. Rational

155number two takes into consideration the the size of the accounts current or past that they're comparable to uh Mac ISD. Uh rational number three I alluded to earlier it it tries to quantify the level of discounts uh they presented to us outpatient, impatient and professional. So that that would be what they say we should expect in terms of our savings. So uh that it's quantified there by the three different categories. Uh the next one there there's it's it's four parts to that rationale. Uh those particular items there are are of particular interest to us either based on past history or current programs. We wanted to make sure to ask those questions and to be able to to score them, rank them based on, uh, the responses to those particular questions. Just to give you one

156example there on one of those, uh, it was mentioned, I think, by both groups. Uh, we want to make sure that whoever we have, uh, they're not presenting a completely different benefit plan design. That's not what we ask for. We ask for a continuation of administering what we currently have. Now, if we were decide to change it, we'd obviously expect them to to administer it. But that was one of the questions. Was your proposal based on administration of the district district's current uh benefit plan design? So, that's just one example of of some of the questions that were asked in that in that particular rationale. Uh moving to the next one, pretty standard about past relationship and their historically under utilized business uh status. Uh the next one number seven that's the other component of

157cost. So uh rationale one has the first year cost. Uh rational 7 has uh cost for year two and year three. And you can also find those in the cost comparative summary uh that goes along with it. Also in that cost comparative summary uh and I think only one of one of the groups highlighted this but both of them are offering credits as incentives and those are reflected in that cost summary. So, their admin fees are being reduced by whatever they're proposing as credits and that's reflected in in that cost. The last two are standard uh places of business and there was no uh nothing being used on that last rationale. So, that's what we used to evaluate them. and I'll be glad to answer any specific questions you you have about evaluation or how

158we went through that process or anything else that you might want to ask. >> Okay. Well, uh board, if you have any questions for Mr. Silva, now would be the time to ask. >> Um Andy on the rationale to administer employee specific direct contracts. I see both have zero. That's because we currently don't have any door contracts or that they won't. So, >> so they answered that they won't. We currently have two, but that just means that uh Blue Cross has decided based on this response that they will no longer do that. Um so, we're going to have to decide what to do with those. Uh the timing is not necessarily bad. We were looking into moving away from not necessarily direct contracts, but direct contracts that are being administered by the third party. Uh

159we're going to see if we can go direct to the a provider and have a direct contract with them and we we negotiate. We we pay the claims directly, not have to feed information or claims through the TPA. But that was one of the questions we wanted to see because if they're agreeing to it gives us an opportunity to do that. Is that does that impose any burden on our members if we're administering like a direct contract? So they have do they still use their insurance card? How does that work? >> So it it it shouldn't cause any kind of disruption to the employees. Uh it's education from from my office to let them know that a particular provider has a different cost uh whether a different co-pay advantageous to both the plan and to

160the employee. and then they would they would pay whatever that arrangement is and instead of that provider sending a claim through the TPA, they'd be sending us a bill. It's not unlike what we do now with our international pharmacy program that's direct with that vendor. So we we get build from that vendor and we pay that vendor directly. It doesn't go through current our current just as an FYI, our current PBM is Aria. You heard them second. That claim doesn't go through Aria. we get a bill direct >> and then the two who who gives the greatest discount because to me that's really the >> they're based on their responses they're fractions apart with the competitive advantage based on our analysis slight advantage to United Healthcare. >> What's a slight advantage? >> Well based on

161the scoring so uh 14.66 66 of the 15 points versus 1476 of the points uh of the 15 that were available. >> So they're almost the same with the discounts. >> Yeah. So that's a big one. >> I I extrapolated what those discounts could mean in terms of of cost. It's about $200,000 a year based on last year's claims applying these discounts. about a $200,000 lower cost with United based on this response a year >> based on today's data >> based on a prior year's data prior year's data using this discounts that they reported to us. >> Gotcha. And what would uh what's your recommendation on this Mr. Silva? >> So it wouldn't be necessarily my recommendation. Sure. It's the committee's recommendation based on uh this particular valuation matrix and a recommendation would be United

162Healthcare >> the committee. Okay, I got you. Any more questions >> on grading on the audit? They're both ones. What are audit rates? >> So that's another question that we asked. Uh basically trying to understand how flexible they would be. Uh historically TPA's have very strict guidelines on conducting audits. So if if we wanted to examine how well they're paying our claims, we have the right to audit them. U typically they have guidelines of once a year x number of claims. In certain cases they say we're going to pick those claims and we're going to allow your auditor or whomever examine them. So we we wanted to gauge what flexibility they had to do that and as as expected they weren't that flexible but that's not unusual >> but United has zero points so has

163it does not allow us to audit any claims. Well, so so their answer, one of them had restrictions. The that was a flat no. So they weren't they weren't even as flexible to tell us that here are the restrictions we would they basically put a comment that we would love to talk to you about. >> How how concerning or how important is that to you to be able to audit our claims? >> So because because there's obviously audit provisions, we're comfortable in the extent that to the extent that we can audit uh Are we comfortable that we can do whatever we want number of claims for us to pick them? No. But I think that's the case for EA. So I'll give you one example. We've done an audit before and it was with Blue

164Cross. We had to limit our claims to I believe it was we got them to increase it from 300 to like 450 claims. As it turns out, our third party auditor didn't think it was necessary to go that many. So it actually scaled it down. They they have their own rubric. Uh but that's just an example of how they limit the number of claims and the frequency. >> So on United when they say no, it means that you have to abide by the audit um I guess provision in the contract that they have that they don't allow additional flexibility. Is that what the no means? >> But it doesn't mean that we can't audit. >> Correct. Correct. No, I fully expect that there's audit language in their contract, but based on this, they're probably not

165that flexible. At least they weren't willing to even respond that they were flexible. They said we would talk about it. Uh while the others said yes to the extent that we can do this or do that, uh they they qualified their statement. It wasn't a flat out you can do whatever you want, which was probably not not going to happen anymore. >> That's something we could bring up. >> Absolutely. >> In future. >> Absolutely. that could be part of a a negotiation step >> given um Mr. Silva given the I guess closeness in the rankings. I'm interested to know if the committee also disc if they just went straight by the rankings and that's the recommendation or if they considered um you know any disruption or how inconvenienced our members might be um in making

166a change if we decide to do that. >> So disruption is always a consideration. Uh I think as was mentioned by at least one of those groups, their networks are pretty comparable. Uh they wouldn't necessarily always line up 100%. Uh we did our own analysis and uh there there are some potential uh providers that may not be available. Uh but just to give you some example in the impatient category, we sent them a list of the top providers. It was our top utilized providers. They were all in network just like Blue Cross uh in the outpatient out of the list and there were 38. Again, these are top providers. The majority of our utilization was the in these 38 two are not in the network. Uh where there was a little more that were not

167in the network was in professional providers, primary care, um uh therapy, those kinds of things. out of the 292 that we sent them to acknowledge that were in or out, they listed 38 that would not be. But that in itself doesn't mean there's a disruption because Blue Cross also has and that same list we sent also has some that are out of network. There's just some providers that are not in the network. >> Thank you. >> On the on the Blue Cross one, if that one was selected because they had three plans on that one, right? So now that they we're going to go with the essentials one, is that something that the employees since we current we currently have Blue Cross at the moment? So since we currently have them and we're dropping one

168plan, they're recommending adding another one. Is that something that the employees is just going to automatically renew with them if if we stick with them or is they'll still have the option to to get out of that? I just don't want that aspect of it. >> Yeah. So, so what they proposed was basically a benefit design option for us to consider. >> Okay? >> They're letting us know they have an option that we we can take advantage of and they're recommending in order to to use that option that we do remove one of our plans and we had talked about doing that anyway. Uh but adding one being the HMO plan. >> Uh it would be voluntary. That's how we we've always uh talked about that if we were to implement something like that, it

169would be a plan that would be more advantageous in terms of cost to the employee and more advantageous to the plan because it'd be uh higher discounts or or lower costs. But as was mentioned, that is all really based on whether our employees naturally navigate toward those plans. If they elect to stay on the standard, then we're not going to see the types of savings that we could potentially see. Um, for those plans sometimes to work, you have to have incentives. So, that'd be something that the district would have to decide, you know, what's the incentive to drive somebody to change to that plan. You know, it's a win-win perhaps type scenario. Uh, but to answer your question, uh, it would be optional. Uh, they wouldn't have to join that plan. It would be an

170open enrollment type scenario where we introduce a plan open enrollment you can enroll at next open enrollment you didn't like it you can dis >> I understand okay thank you >> and whoever gets elected whoever it still could be negotiable like William said right >> that that would be our our I guess our strategy that whatever is decided uh that we would still go back to them and and see what else we can negotiate >> and right now we're just picking TPA, right? We're not picking, we're not doing plan design decisions. >> Correct. >> That's correct. >> And so is on Blue Cross Blue Shield the HMO option is that assumed in these cost savings >> when you compare to United? >> No. No. Not not in in these discounts. That that that would be

171a a separate analysis and and they kind of mentioned it. It was a 4% of the annual of our annual spend they would project would be our savings if we were to implement that plan. >> But four would that 4% apply to just the spend on the employees that move into that plan? >> No. So so the example they gave and it's in their in their proposal is last year's annual spend was about 22 million. So 4% of that we would say if we implement uh this this plan and the utilization the enrollment gets up to a certain level. They didn't have the numbers on what that level would be but they did caveat that statement that you know it'd be based on uh enrollment and participation. >> And if we don't choose Blue Cross

172Blue Shield, do we still have a potential HMO option? >> So my answer to that would be yes. something that we're we have as one of our potential strategies. Uh we did leave it open for this process to see if anybody was going to propose any to see what that proposal was, but absolutely we we can we can do an HMO on our own uh separately. Okay. Um, no further questions from the board. And this is item number four, by the way. So, we are being that we interviewed that we are taking item number four up first. >> So, do we have to rank or do we what's the process? Do we make a motion of which one? So it'll be just you you would make a motion um based on >> you would first

173you would first rank on the sheet that you were given uh number one for your highest ranked firm and number two for the second highest and then we would take those ballots, tally up the votes and then let you know which company came up on top was number one and number two and then the motion would read that would recommend that the super that uh that uh this authorize the superintendent to negotiate negotiate a contract with the highest ranked firm. >> I see. >> I got you. >> So the board is doing their own rankings on that for >> Yes. >> Okay. I assume we will wait for them to be. >> Yes, we will. Okay. For the medical administration related services, the top ranked firm would be United Healthcare based upon the rankings. So

174the motion is in the recommended board action on the agenda item. >> Okay. Um do I have a motion? Well, I make a motion to uh give the superintendent authority to adopt the highest ranking health plan. is that >> and negotiate an agreement with the highest ranked firm and if negotiations are unsuccessful staff would proceed with the next highest ranked firm until an agreement is finished >> and negotiate. I apologize I don't have the text here. >> Yeah. So I move to to provide the superintendent with authority to so sorry to authorize superintendent to negotiate an agreement with the highest ranked firm. If negotiations are unsuccessful, staff will proceed with the next highest ranked firm until an agreement is reached. Second. I have a motion by trustee Hadad and a second by trustee. All those

175in favor? >> I. >> All opposed. Uh motion passes. 4 Z. And now we are going on to item number three, which is the uh pharmacy benefit management service. Same thing. This one has double the amount though, so please take your time. Would you like me to go over that schedule as well or >> Yes. >> Okay. So, if I could direct your attention to that matrix. Uh rationale number one again is is a component of price. Uh year one, year two and year three are all in that one rationale. And uh the actual itemized cost based on our past utilization is the comparative cost uh summary that was also included for each one of those groups. Uh so you can see how those numbers uh in the annual totals were then carried forward to

176the pricing you see there. Uh the list of the fees there are basically the number of prescriptions we expect to fill. The admin fee uh any prior authorization cost uh clinical reviews uh that was mentioned about mobile app if there was a fee that's included in there. So, it's an all-inclusive uh price for year one and year three, year one through year three. Uh in rationale number two, there's two components uh like the medical uh there's one related to their accounts uh and and the size of their accounts in in K through 12. Uh and then uh the year found it. Uh a little background on that. uh few years back we started seeing some brand new PBMs come to market uh didn't have necessarily the experience or the accounts. So we wanted to make

177sure we had a rationale that uh scores them based on uh when they're founded so we can have some comfort level that uh they can manage and handle our account. Uh number three uh again has several components. Very similarly the these are items of particular interest to us. Uh fidiciary being obviously uh something we we'd be looking for that there be doing the PBM management in our best interest. Uh formulary discretion that was a big one and was mentioned that >> I'm sorry >> on the fiduciary. Yes. Can you explain um how that works in terms of the PVM? >> Sure. So, there's a lot that goes into uh paying a claim, making sure it's appropriate as mentioned about clinical reviews and all those kinds of things. We delegate that to the PBM. uh but

178ultimate authority is with the board but on a day-to-day basis we we delegate that to them and we expect them to manage it based on our plan. Uh that removes us administration from having to make day-to-day decisions on whether to pay a particular claim or not. Uh there's appeal processes. We expect them to go through the appeal processes on our behalf and then rule based on what the plan calls for. So, uh, it it puts them in a position to manage our plan. It puts us in a in the position where we don't have to micromanage it. Uh, and we're always looking for them to do it in the best interest of our plan. >> And so, there was only one of these companies that >> that answered yes that that they would. >> So,

179what's the distinction there? Like, for, you know, well, I won't say names, but if one of the plans is no, they're not a fiduciary, what does that mean? So, what it could mean, and and I say what it could mean, uh, that they may not make those final decisions and they leave it up to us. Uh, we'd have to have a whole lot more input. Uh, that's potentially one of the the drawbacks of them not having fidiciary. The other one is because since we are self-funded, they might take the position that they can't be fidiciaries. that ultimately it is your plan and you decide what needs to be done. So that also comes into play. >> Gotcha. So it's really just of who's making the decision >> at at the end of the day. Who

180has ultimate authority to make it? And again, we reserve the right to to do that. If ever there was a scenario where they go through an appeal process and somebody's not happy with the decision that then we can intervene and and that' be something there's actually steps to bring that to the board. The board can decide those kind of things. And so what would that mean for u for you and your team if we select one that's not willing to be the fidiciary? Is it just we have to add FTEEs? Is it just a lot of man power? it would be more more day-to-day involvement. Uh because claims a lot of claims go through the system. U so if that would be the expectation of a PBM then we have to be involved in all

181those steps. Uh obviously we'd have to do timely decisions you know that kinds of things they can wait. So if they had a question on whether we want to approve a prior authorization for an exception for example we have to be ready to act on it so that they can approve it and the pharmacy then can can run it through. Uh it would just add layers of administrative duties uh to the district. But that's just I don't want to give the impression that it's all administrative. That's just one example uh of a fidiciary role. The formulary discretion that uh that was mentioned also by the presenters. This is another area where uh potentially there could be no no discretion. A PBM says this is what we think your drug list should be and if you

182do this drug list this is what we expect your claims to be and this is how we manage them. That's great but we also want to have some discretion to say you know this particular drug is a painoint for us. We've seen it. It's costing us money. Is there other options? and we would like a partner that say yes let's look into it versus it being a hard no that is not allowed and so we're looking for that flexibility. Uh the next item there the personal importation pharmacy coordination uh that's important to us because we have a separate contract on that program but the PBM is involved uh ve very very very intricately. uh they have all the data. They send out communications on our behalf. They notify our employees when they're eligible for those

183medications. Uh so we need somebody that will help us that partner with us to keep that program going. Uh if if they elect not to then all that falls on back on the administration and we have to make sure that we implement that program on our own. So we're looking for somebody to say absolutely we we can help you with coordination efforts. Uh the next one uh spread differential between amounts paid to pharmacies and amount built to this district. This is a basically the uh a question trying to gauge whether there's any spread. So I think they all confirm they're transparent and they're pass through and that's what we're looking for. uh if they had answered here that there was a spread then that means that we are not necessarily paying what they've paid that

184pharmacy they pay a certain amount and the bill is something different >> so we want to make sure that's not the case uh the next rationale there there's another component of cost so we took some some drugs and asked them to repric them uh and then ranked them or scored them based on that small sampling of drugs the small sampling of drugs was 50 drugs but in the different dosages uh it's like 82% of our drug spend. So we thought it was a good representative uh uh uh number to use and what you have there is what came back as what would have been our cost for those 50 drugs. Uh and then we we went ahead and scored those therapeutic interchange services. You heard a lot about that. Those are just cost containment services.

185Uh mail order opt out. That's based on historical experience. There's been some PBMs that want to promote a specific mail order program and it you have to comply. Uh district doesn't have options to say, you know, we want to opt out. Uh we just wanted to make sure that that wasn't the case here. So, we asked that question. Uh the next question there, agree to the lesser guaranteed language. That's just an assurance that uh they're willing to put language in their contracts that says if the AWP they guarantee changes tomorrow, well, they're going to give us that lower cost. It's the lesser up. If if there's another source for the lower cost, that's what they're going to give us. They're they're not necessarily going to stick to what it says in that contract. It's the

186lesser up. So again, it gives us some some assurances uh that we're getting the the best cost available. Uh last one there also uh is speaks to whether or not they are providing the services strictly based on their administrative costs. So there's other potential sources of revenue. Uh this is trying to to see if specifically uh aggregator fees or manufacturers administrative fees that are potential rebates CPVM if they exist. Sometimes they may not be depending on the drugs, depending on the contracts, they may not be eligible, but if they are, are they keeping them or they're passing it back to us? They're transparent pass through. So, we wanted to ask that question. Uh, administration fee is on a per net paid plane basis. What that means is, let's say I go to the pharmacy and

187I'm sorry, let's say my my doctor calls in a prescription. The pharmacy gets it, they run it, it's ready for me to go pick up. Well, it already generated a claim in the system. So, we're already going to pay for that prescription. But let's say I don't pick it up. Eventually, the pharmacy reverses that and it's no longer available for me. But then I remember I have to go pick it up. So I show up, they run it again, but that prescription is now run twice. So potentially we can get bill twice for that fee from the pharmacy. There there's some pharmacy vendors that have that business model. We were trying to make sure that the ones we were looking at didn't. So those were the questions we asked and uh none of them had

188that. So we're in good shape there. It's all based on if it's reversed, we only pay once. Uh number five again five and six standard uh relationship and hub status. Number seven uh was talked about by several of them and that's drug rebates. So this is another component of cost uh it's it's looked at separately because if we were to put it up against the admin fees it would show that we'd be making money and that's not really the case. the claims cost, but this gives us an indication of what we would expect estimated on rebates from each of these groups. And these numbers come from the cost uh comparative summary from each group. They listed what those rebates were. Then we applied what our utilization had been in that particular drug type, annualized it,

189and that's what you see here. Uh and then we scored those. Were all the four vendors 100% rebate pass through? >> Pass through. Correct. >> And then the last two are similar like the others uh standard uh parent company in Texas and the number nine we didn't utilize. >> They do the renting. >> Yes, we have uh our forms here. So, please mark them down and pass them around. do not. >> Thank you, sir. Do you have the language? So, we can read the same language. Sorry. >> Okay. And for the pharmacy benefits management services, the top ranked firm is ORIA. Mr. President, I move that we authorize that the board authorize a superintendent to negotiate an agreement with the highest ranked firm, Aria. If negotiations are unsuccessful that staff proceed with the next highest

190ranked firm until an agreement is reached. >> I second. I have a motion by trustee and a second by trustee ad. All in favor? >> I I >> oppose. Motion passes 40. Thank you to the committee um and to everybody that's here tonight and to everyone that interviewed. We appreciate it. >> May I make a motion to adjurnn? >> I have a motion and a second. All in favor? >> I oppose. Motion passes 4 zero. We are out. 823