InterOffice Memo



InterOffice Memo RFP #071I9200154

|To: |Sergio Paneque, Director |

| |Purchasing Operations |

| | |

|From: |Jim Wilson, Buyer |

| |Purchasing Operations |

| | |

|Date: |March 5, 2010 |

|Subject: |Award of RFP - #071I9200154 - Obtain Proposals for Dental Plan Administration for State Employees/Retires under the charge of the Civil |

| |Service Commission. |

GENERAL:

The purpose of this Request for Proposal (RFP) was to solicit responses for selection of a contractor to provide Dental Plan Administration Services under the charge of the Civil Service Commission. The term of this contract is to cover five (5) years, with up to two (2) one-year renewal options.

JOINT EVALUATION COMMITTEE:

The Joint Evaluation Committee (JEC) for this RFP consisted of the following individuals:

| | |

|Jill Nowicki |Jim Wilson, Buyer |

|Office of State Employer |Department of Management & Budget |

| |Purchasing Operations |

| | |

|Deborah Fogg |Robert Kopasz |

|Civil Service Commission |State Retiree Representative |

| | |

|Cheryl Streberger | |

|UAW Representative | |

BIDDERS:

Proposals were solicited from prospective bidders, and the RFP was posted on the Web-site 3/26/2009. The following three (3) organizations submitted responses to this RFP by the published due date of 4/30/2009:

Bidder Name Michigan Cert. SDV

|1.       Humana Dental- DePere, WI |Yes |  |No |

|2.       Blue Cross Blue Shield- Detroit, MI |Yes |  |No |

|3.       Delta Dental Plan- Okemos, MI |Yes |  |No |

Note: The following information and evaluation criteria were taken directly from the RFP.

SELECTION CRITERIA:

3.020 Award Process

3.021 Method of Evaluation

In awarding the Contract, proposals will be evaluated by a Joint Evaluation Committee (chaired by DMB Purchasing Operations).

3.022 Technical Proposal Evaluation Criteria

The following chart represents the scoring of the particular factors:

| |Weight |

|Work and Deliverable (Section 1.022, excluding 1.022K) |35 |

|Network Match (1.022K) |15 |

|Implementation Plan (1.041) |5 |

|Reports (1.042) |5 |

|SLAs (1.071) |10 |

|Bidder Information (4.011) |10 |

|Prior Experience ( 4.012, 4.014, & 4.015) |10 |

|Staffing (1.031 & 4.013) |10 |

|Total |100 |

Oral Presentation

Bidders who submit proposals may be required to make oral presentations of their proposals to the State. These presentations provide an opportunity for the Bidders to clarify the proposals through mutual understanding. Purchasing Operations will schedule these presentations, if required.

Site Visit

The State may conduct a site visit to tour and inspect the Bidder’s facilities. Purchasing Operations will schedule these visits if required.

3.023 Price Evaluation

(a) All sealed price proposals will be opened. However, only those proposals receiving a score of 80 points or more in the technical proposal evaluation will be considered for award.

(b) Evaluation of price proposals includes consideration for a Qualified Disabled Veteran Preference. 1984 PA 431, as amended, establishes a preference of up to 10% for businesses owned by qualified disabled veterans meeting the minimum point threshold for passing.

(c) The State reserves the right to consider economic impact on the State when evaluating proposal pricing. This includes, but is not limited to: job creation, job retention, tax revenue implications, and other economic considerations.

3.024 Award Recommendation

The award recommendation will be made to the responsive and responsible Bidder who offers the best value to the State of Michigan. Best value will be determined by the Bidder meeting the minimum point threshold and offering the best combination of the factors stated in Section 3.022, and price, as demonstrated by its proposal.

3.025 Reservations

(a) The State reserves the right to consider total cost of ownership factors in the final award recommendation (i.e. transition costs, training costs, etc.).

(b) The State reserves the right to award by item, part or portion of an item, group of items or total proposal, to reject any and all proposals in whole or in part, if, in the Director of Purchasing Operations’ judgment, the best interest of the State will be so served.

(c) The State reserves the right to award multiple, optional use contracts. In addition to the other factors listed, offers will be evaluated on the basis of advantages and disadvantages to the State that may result from making more than one award.

3.026 Award Decision

Award recommendation will be made to the Director of Purchasing Operations.

3.027 Protests

If a Bidder wishes to initiate a protest of the award recommendation, the Bidder must submit a protest, in writing, by 5:00 p.m. on the date stated on the notice of recommendation to award. Bidder must include the RFP number and clearly state the facts believed to constitute error in the award recommendation along with the desired remedy. More information about the Bidder protest process is available at buymichiganfirst; click on the “Vendor Information” link.

3.028 State Administrative Board

The State Administrative Board (SAB) must approve all contracts/purchase orders in excess of $25,000. The decision of this Board regarding the recommendation is final; however, SAB approval does not constitute a Contract. The award process is not completed until the Bidder receives a properly executed Contract or Purchase Order from DMB Purchasing Operations.

3.030 Laws Applicable to Award

3.031 Reciprocal Preference

1984 PA 431 allows that if the low bid for a state procurement exceeds $100,000.00 and is from a business located in a state which applies a preference law against out-of-state businesses, the department shall prefer a bid from a Michigan business in the same manner in which the out-of-state bidder would be preferred in its home state.

3.032 Qualified Disabled Veteran Preference

1984 PA 431 establishes an up to 10% price preference for businesses owned by qualified disabled veterans. The Act includes a stated goal of making awards amounting to 5% of total state expenditures for goods, services, and construction to qualified disabled veteran-owned companies.

3.033 Independent Price Determination

(a) By submission of a proposal, the Bidder certifies, and in the case of a joint proposal, each party certifies as to its own organization, that in connection with this proposal:

(i) The prices in the proposal have been arrived at independently, without consultation, communication, or agreement, for the purpose of restricting competition as to any matter relating to the prices with any other bidder or with any competitor; and

(ii) Unless otherwise required by law, the prices which have been quoted in the proposal have not been knowingly disclosed by the Bidder and will not knowingly be disclosed by the Bidder before award directly or indirectly to any other bidder or to any competitor; and

(iii) No attempt has been made or will be made by the Bidder to induce any other person or firm to submit or not submit a proposal for the purpose of restricting competition.

(b) Each person signing the proposal certifies that the person:

(i) Is responsible for the prices offered in the proposal and has not participated (and will not participate) in any action contrary to (a), (i), (ii), and (iii) above; or

(ii) Is not the person in the Bidder’s organization responsible within that organization for the decision as to the prices being offered in the proposal but has been authorized, in writing, to act as agent for the persons responsible for the decision in certifying that the persons have not participated (and will not participate) in any action contrary to (a), (i), (ii), and (iii) above.

3.034 Taxes

The State may refuse to award a contract to any Bidder who has failed to pay any applicable State taxes. The State may refuse to accept Bidder’s bid, if Bidder has any outstanding debt with the State.

3.040 Possible Additional Considerations/Processes

3.041 Clarifications

The State may request clarifications from one or all Bidders. The State will document, in writing, clarifications being requested and forward to the Bidders affected. This process does not allow for changes. Instead, it provides an opportunity to clarify the proposal submitted.

If it is determined that a Bidder purposely or willfully submitted false information, the Bidder will not be considered for award, the State will pursue debarment of the Bidder, and any resulting Contract that may have been established will be terminated.

3.042 Past Performance

The State may evaluate the Bidder’s prior performance with the State, and the prior performance information may be a factor in the award decision.

3.043 Financial Stability

In making an award decision, the State may evaluate the financial stability of any Bidder. The State may seek financial information from the Bidder and from third parties. If the State determines in its sole discretion that contracting with a Bidder presents an unacceptable risk to the State, the State reserves the right to not award a contract to that Bidder.

3.044 Samples/Models – Deleted – N/A

3.045 Energy Efficiency/Environmental Purchasing Policy

The State seeks wherever possible to purchase energy efficient products. This may include giving preference to U.S. Environmental Protection Agency (EPA) certified ‘Energy Star’ products for any category of products for which EPA has established Energy Star certification. For other purchases, the State will include energy efficiency as one of the priority factors to consider when choosing among comparable bids.

The State of Michigan is committed to encouraging the use of products and services that impact the environment less than competing products. This can be best accomplished by including environmental considerations in purchasing decisions, while remaining fiscally responsible, to promote practices that improve worker health, conserve natural resources, and prevent pollution. Environmental components that may be considered in Best Value Purchasing evaluation include: recycled content and recyclability; energy efficiency; and the presence of undesirable materials in the products, especially those toxic chemicals which are persistent and bioaccumulative. Bidders able to supply products containing recycled and environmentally preferable materials that meet performance requirements are encouraged to offer them in bids and proposals. Information on any relevant third party certification (such as Green Seal, Energy Star, etc.) should also be provided.

3.046 Pricing Negotiations

At any time during the evaluation process, the State may enter into price negotiations with Bidders determined to be in the competitive range.

3.047 Deficiency Report and Clarification Request (DR/CR)

If the selection process described in the RFP does not lead to a viable award recommendation, significant deficiencies are identified, or changes in the technical requirements or specifications are needed, the Buyer/JEC, at its discretion, may prepare a Deficiency Report and Clarification Request (DR/CR) for each proposal determined to be in the competitive range. The DR/CR may include any changes to the original proposal to address the listed deficiencies, including alterations to the original cost proposal to address correction of the deficiencies. Bidders will be allowed to respond in writing to the DR/CR with a revised proposal. The DR/CR response must be submitted by the deadline established by Purchasing Operations.

After reviewing the DR/CR, the Buyer or the JEC will re-evaluate the proposals using the original evaluation method. If an alteration to the originally published evaluation criteria is to be made, the changes in the criteria will be published to all Bidders as part of the issuance of the DR/CR.

3.048 Best and Final Offer (BAFO)

At any time during the evaluation process, the Buyer/JEC may request a Best and Final Offer (BAFO) from any Bidder. This will be the final opportunity for a Bidder to provide a revised proposal. The scope of the changes allowed in the BAFO will be published as part of the issuance of the BAFO request.

Bidders are cautioned to propose the best possible offer at the outset of the process, as there is no guarantee that any Bidder will be allowed an opportunity to engage in Pricing Negotiations (3.046) or requested to submit a Best and Final Offer (3.048).

3.050 Proposal Details

3.051 Complete Proposal

To be considered, each Bidder must submit a COMPLETE proposal in response to this RFP, using the format specified. No other distribution of proposals is to be made by the Bidder. The proposal must state how long it remains valid. This period must be at least 120 days from the due date for responses to this RFP.

3.052 Efficient Proposal

Each proposal should be prepared simply and economically, providing a straightforward, concise description of the Bidder’s ability to meet the requirements of the RFP. Fancy bindings, colored displays, promotional material, etc., will receive no evaluation credit. Emphasis should be on completeness and clarity of content in the format specified.

3.053 Price and Notations

Prices and notations must be typed or in ink. Prices must be for new items only unless specified otherwise in the RFP. The person signing the proposal should initial any form of pricing corrections made to the proposal by the bidder before submission in ink. In the event of un-initialed pricing corrections, the Buyer, with management approval, may require an affidavit from the Bidder confirming the price correction was made before the bid submission.

3.054 Double Sided on Recycled Paper

Bidders, when possible, should use recycled paper for all printed and photocopied documents related to the submission of their bid and fulfillment of any resulting contract and must, whenever practicable, use both sides of the paper and ensure that the cover page of each document bears an imprint identifying it as recycled paper.

3.055 Proposal Format

The following information must be included in all proposals. Bidders must respond to all sections of the RFP. Failure to respond to every section in each Article could result in disqualification from the bidding process. Proposals should be formatted to include each of the following sections, which should be clearly identified using the same format as the RFP is written in and with the appropriate headings:

Article 1 – Statement of Work – Bidder must respond to each section. Proposal must include detailed responses to all tasks as requested in Article 1. Bidders must copy these sections, and provide Bidder’s response in the area specified for “Bidder Response to Task”. This area has been designed to expand as necessary

Article 2 – Terms and Conditions – Bidder must include a statement agreeing to the Terms and Conditions contained in this Article

Article 4 – Evaluation Information – Bidder must respond to each section

Attachment A-1, A-2, & A-3 – Pricing – Bidder must respond to each section

Appendix D – GeoAccess File – Bidder must respond to each section

3.060 Submitting Bids and Proposals

3.061 Sealed Bid Receipt

SEALED BIDS (PROPOSALS) MUST BE RECEIVED AND TIME-STAMPED IN PURCHASING OPERATIONS ON OR BEFORE 3PM ON THE DUE DATE SPECIFIED ON THE COVER PAGE OF THIS RFP. BIDDERS are responsible for SUBMITTING THEIR PROPOSALS TO PURCHASING OPERATIONS ON TIME. PROPOSALS THAT ARE RECEIVED AFTER THE SPECIFIED DUE DATE AND TIME CANNOT BE CONSIDERED UNLESS (a) ALL OTHER BIDS RECEIVED ON TIME DO NOT MEET SPECIFICATIONS, OR (B) NO OTHER BIDS ARE RECEIVED.

3.062 Proposal Submission

Submit eight written copies of technical proposal (including one clearly marked original) and eight copies of your separately sealed Price Proposal according to the following instructions, which will ensure that the integrity of the sealed bid process is protected:

Bidder’s proposal should also be submitted in electronic format on a 3 1/2” floppy disk or CD-ROM. All documents and data must be created using tools that are compatible with the Microsoft Office standard desktop tools, without need for conversion. The electronic format may be saved in a compressed format. Bidders should submit in electronic format along with the number of paper copies being requested. Any items contained in the Proposal that cannot be saved in the aforementioned format should be clearly identified by the Bidder as the items that are excluded from the electronic submission. NOTE: The electronic version of the price proposal MUST also be sealed separately from the electronic technical proposal and clearly labeled as such. PRICE PROPOSAL MUST BE SEALED SEPARATE FROM TECHNICAL PROPOSAL.

3.063 Responses

(a) Each envelope/container submitted must contain the response to only one RFP. Do not submit responses to more than one RFP in one envelope/container. Also, faxed bids will not be accepted unless specifically requested in writing by Purchasing Operations.

(b) BIDDERS ARE RESPONSIBLE FOR ASSURING THAT THE FOLLOWING IDENTIFYING INFORMATION APPEARS ON THE OUTSIDE ENVELOPE: The RFP Number; the Date Due; Bidder Name and the Bidder Identification Number (FEIN – do not write on outside of envelope if FEIN is social security number). If a delivery service is used which prohibits the markings on their envelope or package, this information must be placed on the outside of an interior envelope or package.

(c) The bid may be submitted utilizing one of the methods below:

1. Bids may be delivered to the receptionist desk of DMB, Purchasing Operations on the 2nd Floor of the Mason Building. Bidders must allow adequate time to check in at the security desk on the 1st Floor of the Mason Building before bid submission deadline.

2. Purchasing Operations address for proposals submitted by CONTRACT CARRIER, COURIER DELIVERY, or PERSONAL DELIVERY, is:

State of Michigan

Department of Management and Budget

Purchasing Operations

2nd Floor, Mason Building

530 West Allegan Street

Lansing, Michigan 48933

3. Proposals submitted through the US. POSTAL SERVICE should be addressed as follows:

State of Michigan

Department of Management and Budget

Purchasing Operations

Post Office Box #30026

Lansing, Michigan 48909

Background

The Civil Service Commission (CSC) currently contracts to assist in providing dental benefits to it’s’ employees, COBRA participants and retirees through a choice of dental plans: a State Dental Plan and a Preventive Dental Plan. These dental benefit contracts are negotiated through the various collective bargaining agreements with unions and employee groups.

(a) State Dental Plan. The State Dental Plan provides comprehensive coverage and is administered by a third party contractor. The State Dental Plan includes enhanced benefits to members if they obtain service from a Dental Point-of-Service PPO provider. Benefit designs may vary slightly among different enrollee groups. Summaries of benefits for the current plan designs appear in Appendix A. The Contractor must be able to administer benefit plans reflecting this structure and to adapt to any future changes.

|Summary for State Dental Plan |

|Fiscal Year |Average Number of Employees and Their |Average Number of |Employee, Retiree, and all Dependents Claims |

| |Dependents |Retirees * |Paid |

|07-08 |124,977 |47,728 |$81,042,278 |

|06-07 |128,617 |45,862 |$80,256,134 |

|05-06 |131,338 |44,541 |$77,907,166 |

* Retiree dependents are also covered, but not included, in the average retiree counts above

|Enrollment Class Summary for State Dental Plan |

|as of 3/9/09* |

| |Actives |Retirees |

|Employee only |12,877 |23,780 |

|Employee and spouse |10,563 |19,449 |

|Employee and children |6,214 |734 |

|Full Family |18,971 |2,126 |

|Total |48,625 |46,089 |

* Dependents are covered, but not included, in the class summary above

(b) Preventive Dental Plan. The Preventive Dental Plan covers 100% of diagnostic and preventive services (exams, x-rays and cleanings). The Preventive Dental Plan currently covers approximately 140 state employees plus their dependents. Benefits designs may vary slightly among different enrollee groups. Plan designs for the current variations of the Preventive Dental Plan appear in Appendix B. The Contractor must be able to administer benefit plans reflecting this structure and to adapt to any future changes.

|Preventive Plan |

|Fiscal Year |Average Number of Employees and Dependents |Claims Paid |

|07-08 |332 |$18,620 |

|06-07 |371 |$32,234 |

|05-06 |352 |$26,205 |

|Enrollment Class Summary for Preventive Dental Plan |

|As of 3/9/09 |

|Employee only |47 |

|Employee and spouse |36 |

|Employee and children |5 |

|Full Family |53 |

|Total |141 |

Network Analysis

• State of Michigan provided census data for the covered population.

• Vendors were provided with a standardized mapping of zip codes to urban, suburban and rural categories.

• Completed GeoAccess templates captured results as follows:

o Employees/Retirees meeting the access standards.

o Employees/Retirees not meeting the access standards.

o Average distance to providers meeting and not the access standards

Market Basket Analysis

• Based on top ten 3-digit zip codes from State of Michigan’s census data used for GeoAcces analysis

• Based on top American Dental Association (ADA) codes from State of Michigan’s claim experience excluding orthodontic codes. These codes represent 57% of the State’s claims experience.

• Vendors provided generalist and specialist fee schedules by ADA procedure code within each 3-digit zip code for each network offered to the State of Michigan.

• Vendors also provided reasonable and customary (R&C) amounts for out-of-network reimbursement.

Claims Re-Pricing Analysis

• Actual State of Michigan claims were listed by dentist license number and ADA code excluding orthodontic claims. The claims used represented 48% of the State’s FY2008 claims experience.

• Vendors provided the allowed amount for each ADA code by licensed dentist.

• Using incumbent Delta’s submitted amount, a discount factor was estimated for each vendor based on the re-priced claims.

The above information was analyzed by an independent third party expert who specializes in health care. The information provided by the bidders during the RFP process was supplied on templates developed by the third party. These templates were supplied as part of the posting of the RFP.

EVALUATION RESULTS:

A. Humana Dental Insurance

The Joint Evaluation Committee (JEC) determined Humana, based on a score of 46, could not meet all the terms of the RFP. This determination was accomplished by evaluating their responses to specifications, work plan/project management, bidder information, prior experience, staffing and other considerations.

Humana proposes a fully contracted network in Humana Preferred Provider Organization (PPO). Humana’s PPO accounted for 43% of the claims while 57% was out-of-network based on the analysis of their claims re-pricing.

1. Responses to Specifications, Work and Deliverable (Section 1.022, excluding 1.022K)- 35 PTS Possible

The following deficiencies were noted in this section:

• The bidder was asked to confirm that the proposal strictly adheres to all components of the current plan. The bidder stated that their proposed plans are comparable to the State’s current plans.

• The bidder only releases payments on Wednesday and Saturday, the State wanted payment released on approval day.

• The bidder does not track Coordination of Benefits for external reporting.

• The bidder stated they were willing to discuss Explanation of Benefit messages being customized. They did not address if the messages could be changed.

• The bidder did not state any back up coverage that they would guarantee in the event of absences.

• The bidder’s description of the transition process was lacking detail.

• The bidder does not limit fees for non-covered services to protect members from excessive charges.

• The bidder did not provide two examples of problems that were identified, corrected and improved through follow up action.

• The member survey is not state specific and the bidder proposed an 80% satisfaction rate instead of the State’s requirement of 90%.

• The bidder did not address member inquires regarding voice messages and emergencies.

• The bidder did not address account administration.

• The bidder did not address provider inquiries

• The bidder did not discuss an anticipated staffing plan for initial enrollment or ongoing support.

• Special customer services for seniors or the visually impaired were not discussed as requested.

• The bidder did not state who is responsible for the overall quality of the customer service unit.

• The bidder did not describe quality assurance or audit and the grievance system that will be in place for participants.

• The bidder did not address the assigned account representative.

• The bidder stated that they do sub some additional services, such as credentialing and network development, but did not specifically identify arrangements and details.

• The bidder did not describe the Audit section in detail as requested in the RFP.

Score: 15

2. Responses to Specifications, Work and Deliverable (Section 1.022K) 15 PTS Possible

The following deficiencies were noted in this section:

• The bidder did not answer the percentage of current services provided in network, both nationally, and in Michigan.

• The bidder did not address provider communication and service programs.

• The bidder did not describe ongoing provider monitoring programs, including policy quality compliance, utilization profiling, and dispute resolution.

• The bidder did not provide de-participation rates as requested.

• The bidder’s network access was low for various categories as supplied in the Network Access Analysis.

Score: 5

3. Responses to Implementation Plan (Section 1.041) 5 PTS Possible

The bidder supplied information as requested in this section.

• The bidder agreed to the implementation SLA.

• The bidder confirmed that all requirements will be met and provided detail.

• The bidder included a draft implementation plan as requested.

Score: 5

4. Responses to Reports (Section 1.042) 5 PTS Possible

• The bidder did provide a sample of their standard reporting package; however they did not discuss availability of reports on CD-ROM, Internet, or on-line transmittal.

• The bidder did not provide a description of additional reporting capabilities.

• The bidder described their on-line reporting capabilities and they are acceptable.

• The bidder described their approach to including/excluding claims that require additional data in the calculation of claim turnaround time and it was acceptable.

Score: 3

5. Service Level Agreements (SLA’s) (Sections 1.071) 10 PTS Possible

The bidder proposed exceptions to the following SLA’s:

• SLA#1-Eligibility- The bidder proposed all files be processed within 48 hours instead of the required 12 hours.

• SLA#2-Claim Turnaround Time- The bidder proposed 90% in 10 days and 99% in 30 days for claim turnaround. The State required 90% in five days and 99% in 10 days.

• SLA#3-Claims Accuracy (Financial Payments) - The bidder proposed a 99.2% accuracy rate for year two and after instead of the 99.3% the State required.

• SLA#4-Claims Accuracy (Payment Incidence) - The bidder proposed the ability to rebut and validate any errors instead of using third party audit results.

• SLA#5-Claims Accuracy (Claims Processing) - The bidder proposed the ability to rebut and validate any errors instead of using third party audit results.

• SLA#6-Inquiry Handling- The bidder did not address that 100% of telephone inquiries would be returned within 24 hours. The bidder did also not agree that no more than 5% of inquiry calls be on hold in excess of 30 seconds.

• SLA#7-Customer Service Calls (Average Speed of Answer) - The bidder proposed that 80% of calls would be answered in 20 seconds. The State required 95% of calls would be answered in 20 seconds.

• SLA#10-Grievance Reporting – The bidder proposed resolving non-complex grievances within 10 days and complex grievances within 14 days. The State required resolving non-complex grievances within two days and complex grievances within 10 days.

• SLA#11-Member Satisfaction Surveys – The bidder proposed a member satisfaction rate of 80% overall. The State required a member satisfaction rate of 90% or higher.

Score: 4

6. Bidder Information (Sections 4.011) 10 PTS Possible

The JEC noted the following items with regard to Bidder Information:

• The bidder supplied Bidder Information however, dental sales volume for overall business as requested was relatively low. The sale volume ranged from $261,000 to $419,000 over the four years that were supplied.

• The bidder supplied the location that will service each of the requested account services.

• The bidder supplied the table for its current book of business. The bidder only offers its current plan within 35 States, not all 50 States as needed.

• The bidder answered whether it was privately or publicly held.

• The bidder answered whether there were mergers planned within the next 24 months.

• The bidder described their continuous quality improvement and it was acceptable.

• The bidder did not answer if any regulatory audits had happened within the last two years.

• The bidder supplied their RFP contact person as requested.

Score: 6

7. Prior Experience (Sections 4.012, 4.014, & 4.015) 10 PTS Possible

The JEC noted the following items with regard to this section:

• The bidder supplied three descriptions of experiences, but the following was noted:

o Contract/Client descriptions were not included on all three references.

o Total contract value was not included on all three references.

o Dates were not provided on two of the three references.

o Most of the book of business is much smaller in size, as compared to the State’s plan.

• The bidder did not supply information as requested in Past Performance and Contract Performance.

Score: 5

8. Staffing (Sections 1.031 & 4.013) 10 PTS Possible

The JEC noted the following items with regard to this section:

• The bidder listed only two people in its proposal as the personnel assigned and no resumes were provided. This made it difficult to determine their level of experience and how the bidder would fulfill the necessary roles.

• The bidder did not answer any or the requested information regarding subcontractors, although they stated they use them in various functions.

Score: 3

Total: 46

B. Blue Cross Blue Shield of Michigan

The JEC determined Blue Cross, based on a score of 75, could not meet all the terms of the RFP. This determination was accomplished by evaluating their responses to specifications, work plan/project management, bidder information, prior experience, staffing and other considerations.

Blue Cross proposes using two of their offerings: Blue Par Select and Blue Dental’s PPO. Blue Par Select consists of an informal contracting agreement with dentists that occurs at the time of service. Dentists have the ability to choose their participation status on a per-claim basis. Blue Par Select accounts for 72% of claims based on the analysis of their claims re-pricing. Blue Dental’s PPO is a fully contracted network and accounts for 25% of claims based on the analysis of their claims re-pricing. Out-of-network accounted for the remaining 3% of claims in the analysis.

1. Responses to Specifications, Work and Deliverable (Section 1.022, excluding 1.022K)- 35 PTS Possible

The following deficiencies were noted in this section:

• The bidder states that payment is released to employees and providers the Friday following approval day, instead of on approval day.

• The bidder stated that members would call the Lansing Service Center, but calls that could not be answered there will be routed to a dental expert in Belleville, Illinois.

• The bidder did not include utilization management sample reports.

• The bidder’s total servicing factor was 85% in 30 seconds, the RFP requirement is 95% in 20 seconds or less.

• The bidder’s last member satisfaction survey score was 86%, the State’s desired result is 90%.

• The member survey is not state specific and the bidder proposed an 80% satisfaction rate instead of the State’s requirement of 90%.

• The bidder said they are willing to work with the State to develop a process that meets the State’s requirements, but responded with their standard audit guidelines rather than agreeing to the requirements.

Score: 28

2. Responses to Specifications, Work and Deliverable (Section 1.022K) 15 PTS Possible

The following deficiencies were noted in this section:

• The bidder did not supply the numbers of contracted providers for Blue Par Select. They simply stated that members can choose to see any licensed dentist or specialist in the country and any licensed provider can choose to participate on a per claim basis.

• The bidder stated that current services provided in network are 97%. The RFP asked for national and Michigan percentages.

• The bidder did not give a discount offered for Blue Par Select. Instead they stated Blue Par Select arrangement reimburses on a per claim basis.

• The bidder did not provide a process for selecting and credentialing contracted providers under Blue Par Select.

• The bidder discusses termination of providers for failure to meet participation requirements, but makes no mention of Blue Par Select providers.

• The requirement for network match is to provide information regarding the number of providers who have an executed contract with the Contractor to provide full services in accordance with plan design. Blue Cross does not have an executed contract with providers under Blue Par Select. This portion of business is 72% of the claims, which means this large number of claims do not fall under a provider who has an executed contract to provide full services. Blue Dental’s PPO has 25% of the claims, and these providers are contracted, while 3% of the claims were out of network.

• The bidder did not discuss ongoing education and service programs.

Score: 5

3. Responses to Implementation Plan (Section 1.041) 5 PTS Possible

Blue Cross supplied information as requested in this section.

• The bidder agreed to the implementation SLA.

• The bidder confirmed that all requirements will be met and provided detail.

• The bidder included a draft implementation plan as requested.

Score: 5

4. Responses to Reports (Section 1.042) 5 PTS Possible

Blue Cross supplied information as requested.

• The bidder provided a sample of their standard report package and discussed report availability.

• The bidder provided a description of additional reporting capabilities and it was acceptable.

• The bidder described their on-line reporting capabilities and they were acceptable.

• The bidder described their approach to including/excluding claims that require additional data in the calculation of claim turnaround time and it was acceptable.

Score: 5

5. Service Level Agreements (SLA’s) (Sections 1.071) 10 PTS Possible

The bidder proposed exceptions to the following SLA’s:

• SLA#2-Claim Turnaround Time - The bidder proposed 95% in 14 days and 99% in 30 days for claim turnaround. The State required 90% in five days and 99% in 10 days.

• SLA#7-Customer Service Calls (Average Speed of Answer) - The bidder proposed that 90% of calls would be answered in 30 seconds. The State required 95% of calls would be answered in 20 seconds.

Score: 9

6. Bidder Information (Sections 4.011) 10 PTS Possible

The JEC noted the following items with regard to Bidder Information:

• The bidder did not supply sales volume as requested in Bidder Information.

• The locations servicing the contract raised some concern as multiple tasks are handled in two separate locations in two different cities.

• The bidder was asked to give the estimated size of networks nationally as part of the table for its current dental book of business. The Indemnity (Blue Par Select) plan number was simply the number of licensed dentist in the United States with an average participation of 94%. The PPO size of network was given as 90,766 nationally.

• The bidder answered whether it was privately or publicly held.

• The bidder answered whether there were mergers planned in the next 24 months.

• The bidder described their continuous quality improvement and it was acceptable.

• The bidder answered the question regarding State regulatory audits in the past two years.

• The bidder supplied their RFP contact person as requested.

Score: 6

7. Prior Experience (Sections 4.012, 4.014, & 4.015) 10 PTS Possible

The JEC noted the following items with regard to this section:

• The bidder supplied three prior experiences, but the following was noted:

o Only two of the references supplied were of similar size to the State’s business.

o Total contract value was not included on all three references.

• The bidder supplied the requested information on Past Performance and Contract Performance.

Score: 8

8. Staffing (Sections 1.031 & 4.013) 10 PTS Possible

The JEC noted the following items with regard to this section:

• The bidder supplied personnel as requested with resumes and proposed roles for staff.

• The bidder supplied subcontractor information, but the following was noted.

o The arrangement with Dental Network of America as a subcontractor has only been in place for a short period of time and is not clear on how all steps and roles will be fulfilled.

o The bidder did not discuss Dental Network of America’s management structure as requested in the subcontractor section.

Score: 9

Total: 75

C. Delta Dental

The JEC determined Delta Dental, based on a score of 93, could meet all the terms of the RFP. This determination was accomplished by evaluating their responses to specifications, work plan/project management, bidder information, prior experience, staffing and other considerations.

Delta proposes fully contracted networks with Delta Dental Premier and Delta Dental PPO. Delta Dental Premier is Delta’s managed fee-for service plan. Enrollees can go to any licensed dentist anywhere, but they’ll save the most money by choosing Delta Dental Premier Dentist. More than 125,000 dentists practicing at more than 186,000 locations/access points throughout the United State participate in Delta Dental Premier. The PPO network provides deeper discounts. Delta’s PPO dentists agree to accept lower fees for most services than Delta Dental Premier Dentists. Based on the claims analysis 80% of the book of business would be part of Delta Dental Premier and 13% would be serviced through Delta Dental PPO. Out-of-network accounted for the remaining 7% of claims in the analysis.

1. Responses to Specifications, Work and Deliverable (Section 1.022, excluding 1.022K)- 35 PTS

The following deficiencies were noted in this section:

• The bidder did not include utilization management sample reports.

Score: 34

2. Responses to Specifications, Work and Deliverable (Section 1.022K) 15 PTS

The bidder supplied the information as requested.

• The bidder supplied numbers and types of providers as requested.

• The bidder supplied discount information as requested.

• The bidder described a process for selecting and credentialing providers.

• The bidder indicated dental office quality evaluation methods.

• The bidder described a process for dealing with providers who are not meeting quality standards.

• The bidder described ongoing provider communication, education, and service programs.

• The bidder described ongoing provider monitoring programs

• The bidder supplied de-participation rates for the last three years

• The bidder supplied a network Geo-analysis for the proposed network.

• The bidder described a process for recommending contracted providers for addition to the network.

• The bidder provided a copy of the network directory.

Score: 15

3. Responses to Implementation Plan (Section 1.041) 5 PTS

The bidder supplied the information as requested.

• The bidder agreed to the implementation SLA.

• The bidder confirmed that all requirements will be met and provided detail.

• The bidder included a draft implementation plan as requested.

Score: 5

4. Responses to Reports (Section 1.042) 5 PTS

The bidder supplied information as requested.

• The bidder provided a sample of their standard report package and discussed report availability.

• The bidder provided a description of additional reporting capabilities and it was acceptable.

• The bidder described their on-line reporting capabilities and they were acceptable.

• The bidder described their approach to including/excluding claims that require additional data in the calculation of claim turnaround time and it was acceptable.

Score: 5

5. Service Level Agreements (SLA’s) (Sections 1.071) 10 PTS

The bidder proposed exceptions to the following SLA’s:

• SLA#1-Eligibility - The bidder proposed all files be processed within 2 days instead of the required 12 hours.

• SLA#2-Claim Turnaround Time - The bidder proposed 90% in 10 days and 99% in 20 days for claim turnaround. The State required 90% in five days and 99% in 10 days.

• SLA#3-Claims Accuracy (Financial Payments) - The bidder proposed a 99% accuracy rate for year two and after instead of the 99.3% the State required.

• SLA#4-Claims Accuracy (Payment Incidence) – The bidder proposed a 97.5% accuracy rate for year two and after instead of the 98% the State required.

• SLA#6-Inquiry Handling – The bidder proposed that 95% of inquiries will be answered within 10 days. The State had proposed 98% within 5 days and 100% within 10 days.

• SLA#7-Customer Service Calls (Average Speed of Answer) – The bidder proposed that 85% of calls will be answered in 30 seconds or less. The State required 95% of calls answered within 20 seconds or less.

• SLA#8-Customer Service Calls (Abandonment Rate) – The bidder proposed that the call abandonment rate will not exceed 4%. The State required that the call abandonment rate will not exceed 3%.

• SLA#11-Member Satisfaction Surveys – The bidder proposed that one member survey will be completed on a book of business basis. The State required that one member survey be completed on a Plan Sponsor specific basis.

• SLA#12-Reporting – The bidder proposed that 100% of quarterly reports must be delivered by no later than 45 days following the close of the quarter. The State required that 100% of quarterly reports must be delivered by no later than 30 days following the close of the quarter.

Score: 4

6. Bidder Information (Sections 4.011) 10 PTS

The bidder supplied all information as requested.

• The bidder supplied the company’s full name, address, and sales volume as requested in Bidder Information.

• The bidder supplied the location that will service each of the requested account services.

• The bidder completed the supplied table for its current dental book of business.

• The bidder answered whether it was privately or publicly held.

• The bidder answered whether there were mergers planned in the next 24 months.

• The bidder described their continuous quality improvement and it was acceptable.

• The bidder answered the question regarding State regulatory audits in the past two years.

• The bidder supplied their RFP contact person as requested.

Score: 10

7. Prior Experience (Sections 4.012, 4.014, & 4.015) 10 PTS

The bidder supplied all information as requested.

• The bidder supplied three relevant prior experiences with the following information as requested:

o Contract/client descriptions.

o Total contract value.

o Starting and completion dates (if applicable) of contracts.

• The bidder supplied the requested information on Past Performance and Contract Performance.

Score: 10

8. Staffing (Sections 1.031 & 4.013) 10 PTS

The bidder supplied all information as requested.

• The bidder supplied personnel as requested with resumes and proposed roles for staff.

• The bidder stated that no subcontractors would be used for the work as part of this proposed contract.

Score: 10

Total: 93

D. Evaluation Summary

| |Selection Criteria |Points |Humana |BCBS |Delta |

|1. |Work and Deliverable |35 |15 |28 |34 |

|2. |Network Match |15 |5 |5 |15 |

|3. |Implementation Plan |5 |5 |5 |5 |

|4. |Reports |5 |3 |5 |5 |

|5. |SLA’s |10 |4 |9 |4 |

|6. |Bidder Information |10 |6 |6 |10 |

|7. |Prior Experience |10 |5 |8 |10 |

|8. |Staffing | 10 |3 |9 |10 |

| |TOTAL |100 |46 |75 |93 |

E. Price Analysis

Award Recommendation is made for Delta Dental for $474,000,000.00 to provide Delta Plan Administration services based on their responses to specifications, vendor information, prior experience, staffing, and other considerations. Delta provided the best value to the State, based on the factors in Section 3.022, and price, as demonstrated by its proposal. The award amount includes $457,500,000.00 in pass-through claims, and $16,500,000.00 for administrative fees and services.

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