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Sparks City Council Meeting 11/26/2018

General Business: 9.3

Title: Consideration, discussion and possible approval to participate in an agreement (AC-5534) negotiated by Nevada Health Partners (NHP) with Northern Nevada Medical Center (NNMC) to provide hospital services to members covered by the City's Group Health Plan for the period of January 1, 2019 through December 31, 2021 and authorization for the City Manager to execute the Agreement for these services. Based on paid prior claims, the anticipated costs for the first-year of the Agreement is $95,193
Petitioner/Presenter: Neil Krutz, ICMA-CM, Assistant City Manager/Mindy Falk, Human Resources Manager
Recommendation: To approve an Agreement negotiated by NHP with NNMC to provide hospital services to members covered by the City’s Group Health Plan for the period of January 1, 2019 through December 31, 2021, and authorization for the City Manager to execute the Agreement for these services.
Financial Impact: The City's Group Health plan uses NNMC for in-patient hospitalization, emergency room visits and related medical expenses such as radiology and laboratory services. In 2017, utilization of NNMC for these services resulted in paid claims in the amount of $65,406.Estimates for paid claims in 2018 is $95,193. NHP negotiated a competitive three-year renewal rate. In 2019, rates will remain flat with no increase over rates negotiated in January 2018. In 2020, assuming similar plan usage and 3.5% increase the approximate cost is $98,524. In 2021carrying forward the same assumptions and a 4% increase the approximate costis $102,464. This results in a three-year total of $296,181. Estimates are based on prior paid claims at NNMC in 2017 and 2018.
Business Impact (Per NRS 237):
    
A Business Impact Statement is not required because this is not a rule.
Agenda Item Brief:

This agenda item is a request for approval to participate in a new Agreement with NNMC to provide hospital services, emergency services and related radiology and labs to employees, dependents and retirees covered by the City's Group Health Plan.

This is a three-year agreement, beginning January 1, 2019 and ending December 31, 2021.



Background:

The current one-year Agreement with NNMC will expire on December 31, 2018. NHP began negotiating a renewal of the current Agreement with NNMC in early summer, 2018. NHP, the contracting arm of the Nevada Business Group on Health (NVBGH), is an organization of Nevada employers committed to containing health care costs. NHP provides access to high-quality health care benefits at a sustainable cost. Members of NHP, including the City of Sparks, are public and private sector self-insured employers who actively participate in medical and health care services contracts.

This new Agreement will allow the City's Group Health Plan to continue to utilize NNMC as an in-network provider hospital, providing hospital services to employees, dependents and retirees on the City’s Group Health Plan.

It should be noted that while this Agreement is with NNMC, both Renown and Carson-TahoeHospital will continue to be considered participating in-network provider hospitals.



Analysis:

As a self-insured group health plan, city staff, with the assistance of NHP and NVBGH, continues to look for competitive vendor relationships to address challenges with the rising cost of medical care. A new participation agreement with NNMC will allow the City to continue the current relationship with the only hospital in Sparks, providing not only hospital services but also emergency services to members on the City's Group Health Plan; Additionally, by keeping NNMC on the City's Group Health Plan, members will continue to have another in-network hospital option.

This Participation Agreement with NNMC is for three-years and provides a competitive renewal rate for hospital services.



Alternatives:

1. The Council may choose to participate in an Agreement negotiated by NHP with NNMC for hospital services for employees, dependents and retirees covered by the City's Group Health Plan for the period January 1, 2019 through December 31, 2021; and authorize the City Manager to execute the Agreement for these services.

2. The Council may choose not to participate in an Agreement negotiated by NHP with NNMC for hospital services for employees, dependents and retirees covered by the City's Group Health Plan for the period of January 1, 2019 through December 31, 2021.

3. The Council may choose not to participate in an Agreement negotiated by NHP with NNMC for hospital services for employees, dependents and retirees covered by the City’s Group Health Plan for the period January 1, 2019 through December 31, 2021 and direct the City Manager to provide alternatives to staff.



Recommended Motion:

I move to approve participation in an agreement negotiated by NHP with NNMC for hospital services for employees, dependents and retirees covered by the City's Group Health Plan for the period of January 1, 2019 through December 31, 2021; and authorize the City Manager to execute the Agreement for these services.



Attached Files:
     NNMC Participation Agreement 2019-2021.pdf

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