ITB 071I7000400
M E M O R A N D U M
TO: Kevin Dunn, Services Division Director
DTMB - Procurement
FROM: Lance Kingsbury, Buyer Specialist
DTMB - Procurement, Services Division
DATE: August 7, 2012
SUBJECT: Award Summary for RFP 071I12200153 – Pharmacy Benefits Management
Background Information/General:
This request is for the administration of prescription benefit management Services for the Plan as listed below:
• Eligible Members of the Plans administered by the Employee Benefits Division (EBD) of the Michigan Civil Service Commission (CSC).
The CSC provides health benefits to active State and retired State employees and their eligible Dependents through the State Health Plan Preferred Provider Organization (PPO) administered by the EBD. Prescription drug benefits are carved-out of the medical plans and are provided by a separate stand-alone plan. The prescription drug plan covers active employees, COBRA participants, Medicare and non-Medicare eligible retirees and their eligible Dependents for a total covered membership of approximately 141,000 covered lives. The Plan does not include participants in the following:
• State enrollees in Health Maintenance Organizations (HMOs).
• State enrollees in the catastrophic medical plan.
Joint Evaluation Committee (JEC):
The JEC for this RFP consisted of the following individuals:
|Lance Kingsbury (Voting) |Ken Swisher (Voting) |
|Department of Technology, Management and Budget |Office of the State Employer |
|Synnomon Harrell (Voting) |Danielle Leutz (Voting) |
|United Auto Workers (Union) |Civil Service Commission – Employee Benefits Division |
|Bob Kopasz (Voting) |Mark Howard (Voting) |
|State Employee Retirees Association |Department of Technology, Management and Budget |
Bidders:
The RFP was posted on the internet April 20, 2012 and was available for 21 days with a published due date of May 11, 2012. The following Bidders submitted proposals in response to this RFP:
|Bidder |City, State |Michigan Business |CRO |SDVOB |
|Blue Cross Blue Shield of Michigan |Detroit, MI |Yes |No |No |
|Catalyst Rx |Rockville, MD |Yes |No |No |
|MedImpact Healthcare Systems, Inc. |San Diego, CA |Yes |No |No |
|Meridian Rx |Detroit, MI |Yes |No |No |
Selection Criteria and Evaluation:
The following chart represents the scoring of the particular factors:
| | |Weight |
|Claims Processing & Eligibility (1.022B & 1.022G) |4 |
|Provider Network & Geo Access (1.022C & Attachment D) |10 |
|Customer Support & ID Cards (1.022D & 1.022H) |4 |
|Utilization, Clinical Management Programs & Disease Management Programs (1.022E & 1.022P) |4 |
|Formulary & Rebates (1.022F) |10 |
|Specialty Pharmacy (1.022I) |10 |
|Mail Order Services (1.022L) |10 |
|Performance Guarantees/Service Level Agreement (SLAs) (1.022M) |10 |
|SSAE-16, Audits, and Medicare Part D (1.022J, 1.022K, & 1.022N) |2 |
|Contract Implementation Management and Implementation SLA (1.041) |4 |
|Reports (1.042) |2 |
|Prior Experience (4.012) |10 |
|Staffing (4.013 and 1.031) |10 |
|Employer Group Waiver Plan (EGWP) Capabilities (1.022O) |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.
Price Evaluation
(a) Only those proposals receiving a score of 80 points or more in the technical proposal evaluation will have their pricing evaluated to 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.
Evaluation Results (100 points possible):
Blue Cross Blue Shield of Michigan
The JEC determined that Blue Cross Blue Shield of Michigan (BCBS), based on a score of 91, could meet the requirements of the RFP. This determination was accomplished by evaluating their responses to the selection criteria noted in the table above.
1. Claims Processing & Eligibility (1.022B & 1.022G) Score: 3 / 4
The JEC noted the following deficiency:
• BCBS did not meet the 12 hour file processing time (1.022 B, 5).
2. Provider Network & Geo Access (1.022C & Attachment D) Score: 9 / 10
The JEC noted the following deficiencies:
• BCBS did not provide pricing for a Narrow Network (1.022 C, 5).
• BCBS returns audit recoveries annually as opposed to 90 days (1.022 C, 8).
3. Customer Support & ID Cards (1.022D & 1.022H) Score: 4 / 4
The JEC did not find any deficiencies.
4. Utilization, Clinical Management & Disease Management Programs ( 1.022E/1.022P) Score: 4 / 4
The JEC did not find any deficiencies.
5. Formulary & Rebates (1.022F) Score: 8 / 10
The JEC noted the following deficiencies:
• BCBS source of rebate is unavailable (1.022 F, 5).
• BCBS did not meet the requirement of submitting rebates on a monthly basis (1.022 F, 6).
6. Specialty Pharmacy (1.022I) Score: 10 / 10
The JEC did not find any deficiencies.
7. Mail Order Services (1.022L) Score: 9 / 10
The JEC noted the following deficiency:
• BCBS did not meet the requirement of shipping routine prescriptions within two business days (1.022 L, 3).
8. Performance Guarantees/Service level Agreement (SLAs) (1.022M) Score: 8 / 10
The JEC noted the following deficiencies:
• BCBS did not meet the 15 day quarterly assessment for SLA (1.022 M).
• BCBS will not offer Medication Possession Ratio or Clinical Programs (1.022 M).
9. SSAE-16, Audits and Medicare Part D (1.022J, 1.022K, & 1.022N) Score: 2 / 2
The JEC did not find any deficiencies.
10. Contract Implementation Management and Implementation SLA (1.041) Score: 3 / 4
The JEC noted the following deficiencies:
• BCBS did not meet the requirement on providing monthly and quarterly reports within the required time frame (1.041, A).
• BCBS stated they will not provide NDC level information (1.041, C).
11. Reports (1.042) Score: 2 / 2
The JEC did not find any deficiencies.
12. Prior Experience (4.012) Score: 9 / 10
The JEC noted the following deficiency:
• BCBS did not provide any costing information.
13. Staffing (4.013 and 1.031) Score: 10 / 10
The JEC did not find any deficiencies.
14. Employer Group Waiver Plan (EGWP) Capabilities (1.022O) Score: 10 / 10
The JEC did not find any deficiencies.
Catalyst Rx
The JEC determined that Catalyst Rx (CATRx), based on a score of 85, could meet the requirements of the RFP. This determination was accomplished by evaluating their responses to the selection criteria noted in the table above.
1. Claims Processing & Eligibility (1.022B & 1.022G) Score: 3/ 4
The JEC noted the following deficiencies:
• CATRx did not meet the 12 hour file processing time (1.022 B, 5).
2. Provider Network & Geo Access (1.022C & Attachment D) Score: 10 / 10
The JEC did not find any deficiencies.
3. Customer Support & ID Cards (1.022D & 1.022H) Score: 2 / 4
The JEC noted the following deficiencies:
• CATRx will not provide separate toll-free numbers for Members, physicians, and pharmacies (1.022 D, 2).
• The JEC could not find where CATRx will have staff dedicated to supporting the Plan Sponsor’s Members (1.022 D).
• CATRx did not meet the requirement of covering the cost of communication material (1.022 D, 3).
4. Utilization, Clinical Management & Disease Management Programs ( 1.022E/1.022P) Score: 4 / 4
The JEC did not find any deficiencies.
5. Formulary & Rebates (1.022F) Score: 8 / 10
The JEC noted the following deficiencies:
• CATRx did not agree to rebate payments until after 90 days after the receipt of the first rebate payment (1.022F, 6).
6. Specialty Pharmacy (1.022I) Score: 9 / 10
The JEC noted the following deficiencies:
• The JEC was not clear on the “needs by” date (1.022 I, 2).
• The JEC was not clear on the “needs by” date and they could not meet the 100% of dispensing or shipping of all prescriptions within five business days of receipt of the order (1.022 I, 3).
7. Mail Order Services (1.022L) Score: 7 / 10
The JEC noted the following deficiencies:
• CATRx did not meet the dispense and ship days’ timeframe (1.022 L, 3 and 4).
• CATRx did not meet the requirement of not performing any therapeutic interchange program (1.022 L, 5).
• The JEC could not find where CATRx allows for a payment plan on mail order (1.022 L, 7).
8. Performance Guarantees/Service level Agreement (SLAs) (1.022M) Score: 7 / 10
The JEC noted the following deficiencies:
• CATRx did not meet the requirement of not using their book of business to ensure the SLA’s are measurable (1.022 M).
• CATRx did not meet the 15 day quarterly assessment for SLA (1.022 M).
• CATRx does not provide dollar for dollar for Medication Possession Ratio (1.022 M).
9. SSAE-16, Audits and Medicare Part D (1.022J, 1.022K, & 1.022N) Score: 2 / 2
The JEC did not find any deficiencies.
10. Contract Implementation Management and Implementation SLA (1.041) Score: 4 / 4
The JEC did not find any deficiencies.
11. Reports (1.042) Score: 2 / 2
The JEC did not find any deficiencies.
12. Prior Experience (4.012) Score: 7 / 10
The JEC noted the following deficiencies:
• CATRx did not provide any costing information.
• CATRx did not provide any EGWP internal experience (currently using a subcontractor).
13. Staffing (4.013 and 1.031) Score: 10 / 10
The JEC did not find any deficiencies.
14. Employer Group Waiver Plan (EGWP) Capabilities (1.022O) Score: 10 / 10
The JEC did not find any deficiencies.
MedImpact Healthcare Systems, Inc.
The JEC determined that MedImpact Healthcare Systems, Inc. (MIH), based on a score of 88, could meet the requirements of the RFP. This determination was accomplished by evaluating their responses to the selection criteria noted in the table above.
1. Claims Processing & Eligibility (1.022B & 1.022G) Score: 4 / 4
The JEC did not find any deficiencies.
2. Provider Network & Geo Access (1.022C & Attachment D) Score: 9 / 10
The JEC noted the following deficiency:
• MIH did not meet the Participating Pharmacy locations (mile distance) requirement (1.022 C, 7).
3. Customer Support & ID Cards (1.022D & 1.022H) Score: 3 / 4
The JEC noted the following deficiencies:
• MIH will not provide separate toll-free numbers for Members, physicians, and pharmacies (1.022 D, 2).
4. Utilization, Clinical Management & Disease Management Programs ( 1.022E/1.022P) Score: 4 / 4
The JEC did not find any deficiencies.
5. Formulary & Rebates (1.022F) Score: 10 / 10
The JEC did not find any deficiencies.
6. Specialty Pharmacy (1.022I) Score: 10 / 10
The JEC did not find any deficiencies.
7. Mail Order Services (1.022L) Score: 10 / 10
The JEC did not find any deficiencies.
8. Performance Guarantees/Service level Agreement (SLAs) (1.022M) Score: 9 / 10
The JEC noted the following deficiency:
• MIH did not meet the 15 day quarterly assessment for SLA (1.022 M).
9. SSAE-16, Audits and Medicare Part D (1.022J, 1.022K, & 1.022N) Score: 2 / 2
The JEC did not find any deficiencies.
10. Contract Implementation Management and Implementation SLA (1.041) Score: 3 / 4
The JEC noted the following deficiency:
• MIH did not meet the requirement on providing monthly and quarterly reports within the required time frame (1.041 A).
11. Reports (1.042) Score: 1 / 2
The JEC noted the following deficiency:
• MIH did not agree to provide quarterly reports (1.042 D).
12. Prior Experience (4.012) Score: 8 / 10
The JEC noted the following deficiencies:
• MIH did not provide any costing information.
• MIH did not provide length of relationship with their subcontractors.
13. Staffing (4.013 and 1.031) Score: 8 / 10
The JEC noted the following deficiencies:
• The JEC did not find where the Senior Account Manager will have the authority to make decisions (1.031 C).
• MIH did not meet the requirement of using all Contractors’ resources (1.031 D).
• MIH did not confirm they will work with the Plan Sponsor to develop an annual survey (1.031 F).
14. Employer Group Waiver Plan (EGWP) Capabilities (1.022O) Score: 7 / 10
The JEC noted the following deficiencies:
• The JEC could not find where MIH filed, or will file, plan designs with CMS or agrees there will not be a charge to file plan designs (1.022 O, D).
• It was unclear to the JEC where MIH’s Implementation Manager will not manage more than one additional EGWP project (1.022 O, M).
• It was unclear to the JEC on MIH’s escalation of EGWP member issues (1.022 O, N).
• MIH did not note how they were going to collect HICNs (1.022 O, R).
Meridian Rx
The JEC determined that Meridian Rx (MERx) did not meet point number one in Attachment C, Mandatory Minimum Requirements, which states: “Bidder is a licensed PBM with a minimum of two years’ experience providing the type of services requested in this Request for Proposal (RFP) or the Bidder has a minimum of two years’ experience as a licensed TPA in the State of Michigan or qualifies in any other capacity as an entity that is properly licensed by statute to provide administrative services only and cost-plus arrangements, or to act as a TPA. Bidder must attach details regarding any statutory cites that that permit the Bidder to meet this requirement.” Although MERx was formed on November 10, 2009, under prior experience MERx states: “MeridianRx began as a full services pharmacy benefit manager on January 1, 2011.” In addition, MERx did not provide and details regarding any statutory cites that permit them to meet this requirement.
JEC Scoring Summary for Technical Proposal:
| | |BCBS |CATRx |MIH |MERx |
|Provider Network & Geo Access (1.022C & Attachment D) |10 |9 |10 |9 |N/A |
|Customer Support & ID Cards (1.022D & 1.022H) |4 |4 |2 |3 |N/A |
|Utilization, Clinical Management Programs & Disease Management Programs (1.022E|4 |4 |4 |4 |N/A |
|& 1.022P) | | | | | |
|Formulary & Rebates (1.022F) |10 |8 |8 |10 |N/A |
|Specialty Pharmacy (1.022I) |10 |10 |9 |10 |N/A |
|Mail Order Services (1.022L) |10 |9 |7 |10 |N/A |
|Performance Guarantees/Service Level Agreement (SLAs) (1.022M) |10 |8 |7 |9 |N/A |
|SSAE-16, Audits, and Medicare Part D (1.022J, 1.022K, & 1.022N) |2 |2 |2 |2 |N/A |
|Contract Implementation Management and Implementation SLA (1.041) |4 |3 |4 |3 |N/A |
|Reports (1.042) |2 |2 |2 |1 |N/A |
|Prior Experience (4.012) |10 |9 |7 |8 |N/A |
|Staffing (4.013 and 1.031) |10 |10 |10 |8 |N/A |
|Employer Group Waiver Plan (EGWP) Capabilities (1.022O) |10 |10 |10 |7 |N/A |
|Total |100 |91 |85 |88 |N/A |
Pricing Summary:
Please see the details of original and second round pricing below. For additional information regarding pricing please refer to the Pharmacy Benefit Management Procurement Financial Analysis document posted on the website.
Original Pricing:
|Bidder: |Three Year Active and Pre-65 |Three Year |Three Year Total Cost |
| |Membership Cost |EGWP Cost | |
|Blue Cross Blue Shield of Michigan |$384,319,000.00 |$358,531,000.00 |$742,850,000.00 |
|Catalyst Rx |$366,258,000.00 |$337,617,000.00 |$703,875,000.00 |
|MedImpact Healthcare Systems, Inc. |$357,839,000.00 |$337,988,000.00 |$695,827,000.00 |
Second Round:
|Bidder: |Three Year Active and Pre-65 |Three Year |Three Year Total Cost |
| |Membership Cost |EGWP Cost | |
|Blue Cross Blue Shield of Michigan |$362,900,000.00 |$358,531,000.00 |$721,431,000.00 |
|Catalyst Rx |$356,336,000.00 |$342,330,000.00 |$698,666,000.00 |
|MedImpact Healthcare Systems, Inc. |$352,627,000.00 |$338,468,000.00 |$691,095,000.00 |
Note: All prices are factored without member paid costs using 2011 data of $19,000,000.00/year for Active/Pre-65 membership and $20,500,000.00/year for EGWP.
Award Recommendation:
The award recommendation was made to the responsive and responsible Bidder who met Attachment C – Minimum Mandatory Requirements, passed Technical Evaluation, and offered the Best Value to the State of Michigan.
The JEC recommends that MedImpact Healthcare Systems, Inc. be awarded the contract for Pharmacy Benefits Management for the Michigan Civil Service Commission (CSC).
Cost Savings/Avoidance:
Total savings after second round pricing is: $125,735,000.00 (for three years and based on current contract prices and terms). This is in the form of discounts (drugs), administration fees, dispensing fees, and rebates (drugs).
Signatures:
Signature
Lance Kingsbury ________________________
Ken Swisher ________________________
Synnomon Harrell ________________________
Danielle Leutz ________________________
Bob Kopasz ________________________
Mark Howard ________________________
Signature Date
Reviewed and approved by: ________________________ __________
Reviewed and approved by: ________________________ __________
Reviewed and approved by: ________________________ __________
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