The City of Sparks utilizes NHP contracts to provide healthcare vendors for the City’s self-insured group health plan.  NHP is the contracting division of the Nevada Business Group on Health (NVBGH), an organization of Nevada public and private employers committed to containing health care costs. Members of NHP, including the City of Sparks, are public and private sector self-insured employers who actively participate in medical and health care service contracts.   Other government members include Washoe County, City of Reno and Douglas County School District.

NHP contracts for pharmacy services with three providers. Currently, WellDyneRX is used for administrative claims management which includes paying of prescription claims, providing customer service and support to employees and retirees, managing the network of pharmacies and establishing the drug formulary.  Gateway is used for rebate aggregation and formulary advisement and True Choice is used for the pharmacy network.  Both Gateway and TrueChoice have been performing at or above expectations and will not change January 1, 2020, however several NHP clients have experienced customer service issues with Welldyne, therefore the decision was made to change this provider.

In the spring of 2019, a request for proposal was developed by NHP with input and oversight from the NHP Contracting Committee in which the City of Sparks, Human Resource Director was a committee member.

From the eight initial reponses to the RFP, four PBA’s, WellDyne, Maxor, Magellan Rx and Hometown Health proved the most competitive and were invited to make presentations to the NHP members in June 2019.

Following the presentations, both Maxor and Magellan were asked to provide additional follow up to review their electronic and ad hoc reporting capabilities.

From this process, the Contracting Committee directed NHP staff to pursue a contract with Maxor.  This decision was made on the cumulative data received including cost, references, reporting, and customer service.

Maxor represented the greatest potential savings from the pool of finalists.  Maxor will save NHP employers an estimated average of twenty percent (20%) of current pharmacy expenditures.  The City of Sparks’ savings is projected to be twenty-three percent (23%) based on extrapolated data.

The prescription pharmacy benefit cost depends on claims utilization.  Utilization is comprised of two factors. The of number of claims filed and the cost per claim.  If the group health plan experiences more claims or the plan pays for more expensive medications, the overall cost increases.  A financial analysis completed for the new pharmacy benefit administrator based on twelve weeks of data results in a projected saving due to improved pharmacy rates.  Since it is unlikely, that the group health plan will experience the exact claims utilization, the actual results will vary.  The improved rates include continuing to utilize True Choice (network) and Gateway (rebate aggregator).

In addition to the better pricing, Maxor provides enhanced technology including a smart phone app, and a user-friendly member portal.  Maxor also provides enhanced reporting for the Human Resources Staff.

The duration of the NHP contract with Maxor is for a three-year period, from January 1, 2020 through December 31, 2022.

Beginning January 1, 2020, Maxor will provide payment of pharmacy and specialty drug claims. They will also provide 24/7 customer service and support to employees and retirees.

The transition plan between Maxor and the Human Resources staff includes working closely to ensure minimum disruption to the members on the City’s group health plan.  The City's network of pharmacies will remain unchanged. For those who are affected by the change, Maxor will reach out to employees and work with them directly on the transition.

1.  City Council may choose to approve the proposed participation agreement with Maxor as outlined by staff and approve the City Manager to execute the agreement;

2.  City Council may direct the City Manager to provide alternatives to staff.

I move to approve the participation agreement (AC-5618) with MaxorPlus Ltd. and authorize the City Manager to execute the participation agreement for this service.