Title:
Consider and take action on a resolution authorizing a First Amendment to the Administrative Services Agreement with the Texas Health Benefits Pool to enable the City’s participation in the Blue Cross Blue Shield Advanced Payment Review Program (Director of Human Resources)
Background:
Approval of this item will authorize the City to enroll in the Blue Cross Blue Shield (BCBS) Advanced Payment Review (APR) Program, which is offered through the City’s participation in the Texas Health Benefits Pool (TXHB).
The APR Program is designed to improve the accuracy of healthcare claim payments by identifying and correcting billing errors before claims are paid. BCBS administers the program, which integrates automated claim editing with forensic medical billing reviews and data analytics to detect coding errors, duplicate charges, and unbundled billing.
Participation in the program offers the following advantages:
• No enrollment or administrative fees.
• $1.20 reduction per employee per month (PEPM) in the City’s BCBS administrative fee.
• 25% contingency fee applied only to verified savings.
• Monthly reports identifying audited claims and related savings.
• Implementation time of approximately 45 days, effective on the first of the following month.
Based on performance data provided by TXHB and BCBS for similar municipal plans, the City’s estimated annual gross savings are projected between $200,000 and $250,000, with a contingency fee of approximately $50,000 to $62,500 per year. These figures are estimates only and will vary based on actual claim activity and findings.
Because the potential contingency fee exceeds the City’s $50,000 contract authority threshold, this item requires City Council approval prior to execution.
The APR Program aligns with the City’s goals of fiscal responsibility and operational efficiency by ensuring claims are paid accurately and by preventing overpayments before they occur.
The City will look to add this service in to future health insurance RFPs and agreements so as not to rely on contingency funding.
CONTRACT ORIGINATION:
Agreement has been reviewed by the City Attorney’s Office.
Attachments:
1. Proposed Resolution
2. Exhibit A - Amendment to Administrative Services Agreement
3. APR PreSale Presentation
FUNDING
{x} Funds are available from Employee Benefit Fund Health Insurance Claims account 40301650-54650.
STRATEGIC PLANNING
{x} Addresses Strategic Planning Critical Success Factor - Fiscal Sustainability