Private companies must submit proposals by Monday for the work of managing state employee health plans.
In an effort to save money, the Jindal administration wants to lay off nearly 200 state workers and hire an outside administrator to handle much of the work done by the Office of Group Benefits.
“We’re doing a request for proposals ... and we’ll evaluate those proposals based on an opportunity to make government more efficient,” Commissioner of Administration Paul Rainwater said Thursday.
Rainwater said health-care premiums for thousands of state government plan members are scheduled to drop in July, six months ahead of a private contractor coming on board to manage the plans.
The request for proposals — the state government term for seeking a private company to handle the state’s business — states that authority to raise premium rates will rest with the state’s Office of Group Benefits, not the private company that is hired to manage the plans.
The Office of Group Benefits provides health and life insurance to about a quarter-million current and retired state employees and their dependents.
The Division of Administration issued a 147-page solicitation in April for proposals to provide administrative services for the office’s Health Maintenance Organization, Preferred Provider Organization, High Deductible Health Plan, Mental Health and Substance Abuse Services, Disease Management Services and LaChip Affordable Health Plan.
The contract will be for a year, with the opportunity to renew for two additional one-year terms. It would start Jan. 1,. Responses are due Monday, launching weeks of interviews and site visits before a selection is made.
Frank L. Jobert Jr., executive director of the Retired State Employees’ Association of Louisiana, said Thursday that he wants assurances premiums and other costs will not increase after an initial “lowball” period.
“At this point, I just want to see the numbers,” Jobert said. “It’s supposed to save (money for) state employees and/or the taxpayers.”
Much of the Office of Group Benefits’ work already is handled by the private sector.
Blue Cross Blue Shield of Louisiana administers the HMO, which places patients under the care of a primary care physician. The HMO covers 165,000 insured lives.
UnitedHealthcare, ValueOptions and Nurtur Health handle other health services for state workers, retirees and dependents.
State workers at the Office of Group Benefits manage the PPO, which is a group of doctors, hospitals and others providing health care at reduced rates. The PPO covers 56,000 insured lives.
The Office of Group Benefits also administers LaChip, which is a children’s health insurance program for uninsured children up to age 19 who come from low-income families. The program covers 4,000 insured lives.
The Jindal administration contends hiring a single contractor to handle state health plans could save the state $29.4 million a year.
, mostly by shedding half of the Office of Group Benefits’ workforce.
Among the questions the administration is posing to possible administrators:
- Whether wellness services will be offered.
- What the company’s current monthly claims volume is.
- How many prescription drug services plans the companies have with more than 3,000 members.
The companies also must be able to provide inpatient hospital services, outpatient hospital services, ambulatory surgical services, physician services, including chiropractic, customer services and support, mental health and substance abuse treatment, and disease management.