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Sparks City Council Meeting 11/26/2018

General Business: 9.4

Title: Consideration, discussion and possible approval to participate in an agreement (AC-5535) negotiated by Nevada Health Partners (NHP) with Renown Regional Medical Center, Renown South Meadows Regional Medical Center and Renown Skilled Nursing Facility (collectively Renown) to provide medical 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 service. Based on paid prior claims in 2017 and 2018 and no year one increase, the anticipated cost for 2019 is $2,169,526.
Petitioner/Presenter: Neil Krutz, ICMA-CM, Assistant City Manager/Mindy Falk, Human Resources Manager
Recommendation: To approve an Agreement negotiated by NHP with Renown to provide medical 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: In 2017, utilization of Renown medical services resulted in paid claims in the amount of $2,138,099. The estimate for Renown medical services in 2018, is $2,169,526. Under the new Agreement, rates, which include the City’s utilization of Hometown Health as our third-party administrator, will remain flat in 2019. Commencing on January 1, 2020 and January 1, 2021 and based on the Medical Care Consumer Price Index (CPI) – the amount of each annual increase for Renown medical services shall not be less than 2% nor higher than 5% for each calendar year. It is therefore estimated, assuming similar plan usage and a 5% increase that the approximate cost in 2020 will be $2,278,002. Carrying forward the same assumptions into the following year provides an approximate cost of $2,391,910. This results in an approximation of $6,839,438 for the term of the agreement. This is an estimate base on past utilization of medical services. The Medical Care Consumer Price Index is one of eight major groups in the CPI. The Medical Care CPI measures inflation by tracking retail prices for hospital and related medical goods and services. The Medical Care CPI will be evaluated in September of each calendar year, with an effective date of January 1st.
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 to participate in a new Agreement with Renown providing hospital and medical services including but not limited in-patient hospitalization, out-patient hospitalization, emergency room services, urgent care facilities, laboratories, radiology centers, skilled nursing and rehabilitation centers to employees, dependents and retirees on the City's Group Health Plan.

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



Background:

The City's Group Health fund pays claims to Renown for medical services.   Paid claims for medical services at Renown, include but are not limited to in-patient hospitalization, out-patient hospitalization, emergency room services, urgent care facilities, laboratories, radiology centers, skilled nursing and rehabilitation centers.

The current three-year Agreement with Renown will expire on December 31, 2018. NHP began negotiating a renewal of the current Agreement with Renown in early 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.



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 Renown will allow the City to continue the current relationship, providing hospital and related services to members on the City’s Group Health Plan. Additionally, by keeping Renown on the City's Group Health Plan, members will experience no disruption to current treatment and maintain Renown as an in-network hospital.

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



Alternatives:

1. The Council may choose to participate in an Agreement with Renown for medical 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 Participation Agreement for these services.

2. The Council may choose not to participate in an Agreement negotiated by NHP with Renown for medical 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 an Agreement negotiated by NHP with Renown for medical 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 Renown for medical 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.



Attached Files:
     AC5535 Renown.pdf

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