Resolution, file 18-0558: pharmacy benefit management services with CaremarkPCS Health

What this document is

This is the City of Corpus Christi council resolution filed as 18-0558, which the council took up on May 15, 2018. It authorizes the city manager "to negotiate and execute" four three year service agreements for third party administration of the city's self funded employee benefits, one of them with CaremarkPCS Health, L.L.C., which the resolution refers to as "CVS" (page 1). It runs three pages. Page 3 is a vote sheet with the names of the mayor and council members and a blank line beside each. The city posted it as a Word file; we converted it to PDF without changing the content. No agreement is attached.

What it does tell us

The resolution says the awards came out of Request for Proposal No. 1484, issued January 15, 2018, and that the city found CaremarkPCS "will provide the best value to the City for the administration of the City's pharmacy plans" (page 1). Section 3 authorizes a three year agreement with CVS, "with two one-year extensions," at "an estimated cost of $26,800,000 during the three-year term" (page 2). The pharmacy award sat alongside three others in the same resolution: Blue Cross and Blue Shield of Texas for medical, dental and COBRA administration at an estimated $97,860,000 over three years; Dearborn National Life Insurance Company for life insurance at an estimated $2,060,000 over the same term; and Ochs, Inc. for long term disability at an estimated $680,000 over the same term. The four awards together carry a total estimated cost of $127,400,000 (pages 1 and 2). Section 6 lets the city manager go to another proposer from the same RFP if an awardee fails to sign, so long as the cost is "no more than 10% greater" than the estimate (page 2).

That is the useful part. The estimated cost is the city's projection of what it expects to spend on the pharmacy plans over three years. The resolution does not say how the number was built, what share of it is administrative fees and what share is drug claims, or when the agreement was expected to start.

Why it cannot be scored

Our scoring checklist reads contract language: who keeps manufacturer rebates, whether the city pays what the pharmacy is paid, audit rights, termination terms, data ownership and the like. A resolution authorizing someone to negotiate a contract contains none of that. The executed pharmacy benefit management agreement with CaremarkPCS is not posted, nor are its pricing exhibits, performance guarantees or rebate terms. We also cannot tell from this document when the agreement was signed, what its actual term dates are, or whether either one year extension was used.

A Corpus Christi resident can ask the city secretary under the Texas Public Information Act for the executed service agreement with CaremarkPCS Health, L.L.C. awarded under RFP No. 1484 and resolution 18-0558, including all exhibits, fee schedules, rebate and pricing terms, performance guarantees, and any amendments or extension letters. With those in hand the contract can be scored against the checklist like any other.