From
Lisa Norris, Human Resources Director
Title
Contract with Employer Direct Healthcare, LLC ("EDH") for administrative service fees to access their network of surgeons and facilities offering bundled pricing beginning in August 2017 for an annual cost not to exceed $100,000, through a Master Interlocal Agreement with the City of Fort Worth for one year with the option to renew for four additional one year periods totaling $500,000 if all extensions are exercised; and authorize the City Manager to execute the renewal options with aggregate price fluctuations of the lesser of up to $50,000 or 25% of the original maximum price so long as sufficient funding is appropriated by the City Council to satisfy the City’s obligation during the renewal terms
Presenter
Lisa Norris, Human Resources Director
Recommended Action
Approve
Analysis
This contract allows the City of Grand Prairie to utilize EDH (also commonly referred to as "SurgeryPlus") for bundled pricing on many surgical procedures at certain authorized facilities within their network. We pay administrative fees to access their network and bundled pricing contracts. This bundled pricing is through high quality and care providers/surgeons at substantially reduced bundled rates for our employees, retirees and their covered family members on our plan. The administrative fees paid includes the production of marketing materials, meetings onsite to advertise the product, summary analytics/reporting on a regular basis to the city regarding utilization and marketing material effectiveness, etc. This contract through Fort Worth was generated from the North Texas Coalition efforts in which Grand Prairie sits on the Executive Committee for that group, along with Plano, Fort Worth, and Dallas. While the cost is projected to be $100,000 per year for services, we fully expect that over the course of that year, the savings from procedures completed will far the annual fees (similar to our Compass arrangement) and pay for itself.
State purchasing laws, Local Government Code, Chapter 271, authorize local governments to enter into joint contacts and cooperative agreements for the performance of governmental functions normally associated with the operation of government such as purchasing necessary materials and supplies. The City approved a Master Interlocal agreement with City of Fort Worth whereby the City could make use of all of that entity’s agreements. This communication is to notify the Council that staff would like to make use of this particular agreement and enter into an annual contract with Employer Direct Healthcare ("EDH" or commonly referred to as SurgeryPlus).
Additional costs will be paid by the city for postage and actual claims that occurs in routine business operations to effectively promote this new offering, but is guaranteed to be less than carrier costs. The attached information (Attachment 1) provides some basic information about Surgery Plus and Attachment 2 demonstrates the first 5 months of a metroplex city's experience with SurgeryPlus in their first five months.
This item was presented to the Finance and Government Committee on July 18, 2017.
Financial Consideration
No fees will be assessed for August and September while we focus on full promotion of the program so no modification to the FY 2016/2017 Employee Insurance Fund is required. Fees will be allocated in the FY 2017/2018 Employee Insurance Fund 213010 budget, but offset by claims savings so no additional funding is required for this additional program.