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Commission approves 10-year Cigna contract for county health plan despite PBM concerns; board asks administrator to report back on Rx alternatives
Summary
County commissioners approved a 10-year contract with Cigna Health and Life Insurance Company to administer the self-funded employee health plan, 6–1. Several commissioners and the county consultant flagged pharmacy benefits manager (PBM) pricing and asked staff to analyze alternatives and report within a year.
The Hillsborough County Board of County Commissioners on Feb. 19 voted 6–1 to approve a 10-year agreement with Cigna Health and Life Insurance Company to administer the county’s self-funded group health plan, estimated at $26,401,000, while authorizing annual Cigna-funded wellness programming and an additional $150,000 per year for group-health-related services if the administrator deems them beneficial.
The vote followed a lengthy discussion about prescription-drug pricing and pharmacy benefits manager (PBM) practices. Commissioner Joshua Wostel (recorded in the transcript as an outspoken critic) presented specific examples from county claims data and urged the board to direct staff to analyze alternative PBM models that could reduce pharmacy spend for employees and the self-funded plan.
Why it matters: County health-care benefits are a major recurring expense for the county and its employees. Commissioners said the contract with Cigna provides continuity for benefits administration, but several raised concerns that PBM arrangements can create large hidden charges on the plan. Commissioner Wostel asked for a formal review of pharmacy options to seek potential savings to employees and the fund.
What staff and consultants said: Scott Stromer, procurement services, summarized the recommended award and noted procurement’s recommendation. Jane Kelly of The Baldwin Group, the county’s benefits consultant, said the pharmacy market is complex and that she had not seen the specific data presented that morning; she deferred detailed comment to Cigna. John Hathall, director with Cigna Healthcare, said the market has recently migrated from a “margin revenue model” to a “transparent” or “pass-through” model that separates administrative and dispensing fees and, he said, reduces the particular pricing situations described by the commissioner going forward.
Board action and follow-up: The board approved the Cigna contract, 6–1 (Commissioner Donna Cameron Cepeda voted no). After the contract vote, commissioners approved a separate, unanimous motion directing the county administrator to return within one year with an analysis of pharmacy (Rx) options and alternatives and to use available analytics (Artemis) and consultants as needed to monitor pharmacy spend in the interim.
Quantities and authorities: The contract award was presented with a $26,401,000 estimate for administration of the self-funded plan and an authorized annual discretionary approval up to $150,000 for additional programs. Commissioners and the benefits consultant noted rebate and administrative-fee structures in PBM contracts and asked staff to track pharmacy spend quarterly while alternatives are evaluated.
What to watch: Staff will bring back an analysis of PBM alternatives and Rx-pricing models within a year and provide interim monitoring reports; commissioners said they expect staff to assess whether alternative PBM or purchasing models could save employee and county dollars without reducing covered services.
