Request for Council Action: administrative services agreement with Cigna Health and Life Insurance Company for pharmacy benefit management services

What this document is

This is the Request for Council Action cover sheet for Houston City Council agenda item 25 at the February 26, 2019 meeting, recorded by the city's agenda system as item 16311 and by procurement as T26618. It summarizes an ordinance "approving and authorizing an Administrative Services Agreement for Third-Party Administrator for Self-funded Pharmacy Benefits Management Services, effective May 1, 2019, between the City of Houston and CIGNA HEALTH AND LIFE INSURANCE COMPANY" (page 1). It is four pages: two of narrative, a list of attachments spanning pages 2 and 3, and a blank page 4. The attachments listed, including the agreement itself, are not in the posted file.

What it does tell us

The cover sheet recommends "a five (5) year contract with two (2) one-year options" (page 1), which puts the initial term at May 1, 2019 through April 30, 2024. Two sentences stand out. First, Human Resources "elected to proceed with the traditional rebate option for the pharmacy benefits management needs, which imposes no monthly administrative fee per member for the duration of the contract" (page 1). In plain terms, the city chose a pricing model in which it pays no per member administrative fee, and the rebate terms in the agreement are what determine what the city gives up in exchange. Those terms are not here. Second, the city may "terminate the contract at any time upon one-hundred and eighty (180) days written notice" (page 1).

The scope covers "claims processing, administrative services, formulary reporting, rebate management, management of specialty drugs, network management and reporting" (page 1). Seven firms responded to the July 2018 request for proposals: Cigna, United Healthcare, CVS Healthcare, Envision Rx, Blue Cross Blue Shield of Texas, Script Care and Express Scripts. Cigna scored highest on responsiveness, technical competence and price (page 1). The city had four self funded plan designs at the time, one of which was to be discontinued on May 1, 2019 (page 1).

The attachment list is a map of what exists. It names the Administrative Services Agreement, plan document exhibits, "Exhibit E - Service Performance Standards," "Exhibit E-1 - PBM Service Guarantees," "Exhibit F - Pharmacy Management Reports," "Exhibit G - Fees, Rates and guarantees," "Exhibit G-1 - Cigna Home Delivery Pharmacy Specialty Drug List," and a HIPAA business associate agreement (pages 2 and 3).

Why it cannot be scored

Every item the checklist grades sits in documents this cover sheet lists but does not include. Exhibit G holds the fees, rates and guarantees; Exhibit E-1 the service guarantees; the base agreement the rebate definition, audit rights and data terms. Choosing the "traditional rebate option" is a strong signal about how the money flows, but a signal is not a clause, and we do not score signals.

A Houston resident can ask the city secretary under the Texas Public Information Act for the executed Administrative Services Agreement with Cigna Health and Life Insurance Company under solicitation T26618, with every exhibit listed on the cover sheet, especially Exhibit G, Fees, Rates and guarantees, and Exhibit E-1, PBM Service Guarantees, together with any amendments and any exercise of the one year options after April 30, 2024. The city's own attachment list makes the request easy to write, since the exhibit names are already public.