~~~803 ~. i ~ v COMMISSIONERS' COURT AGENDA REQUEST PLEASE FURNISH ONE ORIGINAL AND NINE COPIES OF THIS REQUEST AND DOCUMENTS TO BE REVIEWED BY THE COURT. MADE BY: Pat Tinley OFFICE: Coun Jud - MEETING DATE: Apri128, 2003 TIME PREFERRED: SUBJECT: (PLEASE BE SPECIFIC) Discuss and consider review and report from Third Party Administrator and Insurance Representatives on pending reimbursement for claim paid by Kerr County on behalf of employee. EXECUTIVE SESSION REQUESTED: (PLEASE STATE REASON) NAME OF PERSON ADDRESSING THE COURT ESTIMATED LENGTH OF PRESENTATION: IF PERSONNEL MATTER -NAME OF EMPLOYEE: Countx Judg_eRay RothwelUFinley Insurance) Time for submitting this request for Court to assure that the matter is posted in accordance with Title 5, Chapter 551 and 552, Government Code, is as follows: Meeting scheduled for Mondays: THIS REQUEST RECEIVED BY: THIS REQUEST RECEIVED ON: All Agenda Requests will be screened by the County Judge's Office to determine if adequate information has been prepared for the Court's formal consideration and action at time of Court Meetings. Your cooperation will be appreciated and contribute towards you request being addressed at the earliest opportunity. See Agenda Request Rules Adopted by Commissioners' Court. 5:00 P.M. previous Tuesday. 19 MR. TOMLINSON: That's correct. The -- the 20 request is to declare an emergency, to increase the budget 21 by approximately $900,000 for -- for payment of a claim 22 relative to our health insurance to Methodist Hospital. I 23 provided the Court with the details of -- of this situation. 24 Ray Rothwell's in the audience as we speak for any questions 25 as far as the details that, you know, the Court might have 12-9-02 13 1 other than what I've explained in my memo. Essentially, 2 we -- we had a sizable claim that has been partially 3 satisfied by our stop-loss carrier, our reinsures, in the 4 amount of $250,000. That -- that satisfies the claim, 5 except for the amount unpaid, which is -- which I explained 6 is -- is the $400,000. We -- we anticipate -- our plan 7 administrators anticipate that -- that this will ultimately 8 cost us $40,000. 9 COMMISSIONER WILLIAMS: How much? 10 MR. TOMLINSON: Forty. But we have -- since 11 our plan ends December the 31st, we -- we have to pay this 12 claim before that date in order for it to have any chance 13 whatsoever that our reinsures will reimburse us for -- for 14 their part. And the reason -- one of the reasons that we 15 have an obligation to pay this is that -- that, in our 16 estimation, a majority of the costs associated with this -- 17 with the $400,000 is outside of the -- the medical procedure 18 that was performed. The medical procedure that was 19 performed, our stop-loss carrier had a $250,000 ceiling on, 20 and that -- that ceiling was expressed in our plan. So -- 21 but there are -- there were costs involved that weren't 22 directly related to that procedure. So, if our -- our 23 stop-loss carrier is obligated to reimburse us for any costs 24 that -- that's not directly associated with the procedure. 25 COMMISSIONER BALDWIN: My question would 12-9-02 14 1 be -- the only question I have is the -- the legal end of 2 it. I mean, are we liable for costs that are not directly 3 related to the procedure? 4 MR. TOMLINSON; I think we are. I visited 5 prior to the meeting with -- I had that question also, and 6 the opinion of our plan administrator is that, yes, we do 7 have an obligation. 8 COMMISSIONER BALDWIN: We11, he's not a 9 lawyer, though. But, of course, if we asked our County 10 Attorney, it would be way into next year, and we'd blow the 11 other coverage before we got an answer to it. So -- 12 JUDGE HENNEKE: Any other questions or 13 comments? 14 COMMISSIONER LETZ: But the -- I mean, the -- 15 it's thought that we will be reimbursed $360,000 out of the 16 $400,000? 17 MR. TOMLINSON: That's our estimate. 18 COMMISSIONER LETZ: How certain is that 19 estimate? 20 MR. TOMLINSON: That's a question for Ray, I 21 think, to explain. 22 MR. ROTHWELL: Sure. To give you a little 23 bit more of the -- of the sequence for y'all's information, 24 the claim was about a million dollars, approximately, give 25 or -- plus or minus a few dollars. We had that -- that 12-9-02 15 1 claim negotiated down to about $650,000. It was a 2 transplant benefit, and the plan document has a $250,000 3 limitation on transplants. So, that 250 -- first off, the 4 County has a $40,000 stop-loss self-funded plan, and the 5 County has prefunded that $40,000 already. That's -- that 6 40 is paid. So, I've talked to the stop-loss carrier. They 7 agreed to prefund the $250,000 transplant benefit to get 8 some money to the hospital in a timely basis, to where we 9 wouldn't get into a conversation about losing that $400,000 10 discount. So -- so, we've done that. We've paid 250. 11 The sequence of events really play the 12 important part here. The -- the person went into the 13 hospital about the 1st of September here in Kerrville; was 14 immediately transferred to San Antonio Methodist, and 15 immediately transferred into their transplant -- into their 16 transplant unit. The costs between the 3rd of September and 17 the 11th of September, we believe, are not related to the 18 transplant, and I think the early review by the stop-loss 19 carrier agrees with that. We believe there's some costs 20 after the transplant for a couple of days before the person 21 died. So, we believe that we will get the majority of that 22 $400,000 back, if not all of it. Our track record says 23 we'll get it all back, and we believe we will. 24 The kind of contract we're on is a 12/12 25 contract, and that's been the most cost-effective stop-lass 12-9-02 16 1 contract for us to be on, and it continues to be. If the 2 County elected not to prefund that $400,000 per this 3 request, we would need to buy a 15/12 contract, which would 4 cost us about $270,000 more over the next 12 months. And 5 what that 15/12 contract would do, it would pay claims 6 incurred three months prior to the end of this contract, 7 going into the 12 months. Part of those claims fall within 8 that three-month period; some of them don't. So, it's in 9 the County's best interest to prefund the $400,000, let us 10 attempt to get it back, and we will make every attempt to do 11 that. fur track record says we're 99.9 percent effective at 12 doing that. We -- we believe we'll get it all back, and we 13 think it will take 45 to 60 days to do that on -- on this 14 type of contract. 15 It's a spec contract, and we have a contract 16 in our stop-loss plan of a -- of a spec program of $40,000, 17 an aggregate program at some dollar figure. And we're not 18 going to have an aggregate claim; we're under that total 19 umbrella. But we have this one claim that's -- we've 20 actually -- actually had two, but we've had just one that's 21 in question that we need to prefund sometime in the next 22 week or 10 days. And I think the request is a budget 23 transfer to do that, and then we will pay it and immediately 24 file for reimbursement; expecting to get that back probably 25 in February, would be my best guess. 12-9-02 17 1 JUDGE HENNEKE: Anyone have questions for 2 Mr. Rothwell? 3 COMMISSIONER BALDWIN: I have a question. Do 4 we -- do we approve $400,000? Do we approve "about 5 $400,000"? Or do we -- is the court order going to read, 6 "up to $400,000"? I mean, I think something needs to be 7 specific, doesn't it? We don't say -- in the court order, 8 we don't say "about $400,000." 9 JUDGE HENNEKE: Tommy what -- 10 MR. TOMLINSON: I would say up to the amount, 11 but I don't know the exact number. 12 MR. ROTHWELL: And we don't know that exact 13 number. 14 COMMISSIONER BALDWIN: I understand you 15 don't. 16 MR. ROTHWELL: But I think "up to" would be 17 safe, or "approximately" would be safe. 18 JUDGE HENNEKE: Not to exceed $400,000? 19 COMMISSIONER BALDWIN: Not to exceed. 20 JUDGE HENNEKE: Barbara, you had a question? 21 MS. NEMEC: I just wanted to kind of answer 22 Commissioner Baldwin's question about the legality of us 23 having to pay for it. If -- the reason that we're having to 24 pay this amount over and above the 250, it's because it's 25 not a trans -- the procedures that were done is not for the 12-9-02 18 1 transplant. We've paid the maximum that the transplant 2 benefit offered, so, you know, these other charges just go 3 into the regular benefits that we allow. That's the reason 4 that we're having to pay for it. If it was just all 5 transplant, then we would have paid the maximum; we wouldn't 6 be here today_ But that's the reason, if that explains that 7 a little bit better. $ COMMISSIONER BALDWIN: It does. Thank you. 9 COMMISSIONER LETZ: On the -- the question I 10 have for Tommy is, to declare an emergency for the full 11 $400,000, and then we get a refund, it seems like we're 12 going to be inflating the budget in future years to look 13 like we have a lot larger budget. I mean, the money's going 14 to go back into reserves, but still, it will increase the 15 budget. Is there a way that we can find the money in the 16 budget, you know, for, like, four or five months, and then 17 do the budget amendment to take the actual amount that's, 18 you know, not anticipated, and increase the budget by that 19 amount in the future, rather than do it a lot more than we 20 think we're going to end up needing? 21 MR. TOMLINSON: I hadn't thought of it that 22 way, but there's -- I think there's funds in -- well, 23 there's 500 -- like, $530,000 budgeted in -- in our Indigent 24 Health Care Fund. I don't know -- the only thing, I guess, 25 if we had to have the funds in there between now and the 12-9-02 19 1 time we're reimbursed, then we could transfer cash into that 2 -- into that fund. I don't know of anything large enough in 3 the General Fund budget to handle that. 4 COMMISSIONER LETZ: I don't know how the rest 5 of the Court feels. It just seems that it's -- it's -- when 6 we look back at our budget, it's a better way to do it this 7 way. g COMMISSIONER GRIFFIN: In other words, take 9 the hit when you know you got a hit that you got to take. 10 COMMISSIONER WILLIAMS: I kind of like that 11 approach. We got 530 in the Indigent Health Care? 12 MR. TOMLINSON: That's close. 13 COMMISSIONER WILLIAMS: Roughly? 14 MR. TOMLINSON: I don't know exactly. 15 JUDGE HENNEKE: That's what we started out 16 the year with. I don't know what we have now. 1~ MR. TOMLINSON: I don't know exactly what we 18 have right now. 19 COMMISSIONER WILLIAMS: And then, when this 20 comes back, we'd reimburse the Indigent Health Care line 21 item? 22 MR. TOMLINSON: Yes. 23 JUDGE HENNEKE: Good idea. And then 24 reimbursement would go in the General Fund. Then it would 25 have to be a budget amendment to take it -- 12-9-02 20 1 MR. TOMLINSON: To transfer it. 2 JUDGE HENNEKE: General Fund, not Indigent 3 Health Care. 4 COMMISSIONER LETZ: Right. 5 MR. TOMLINSON: We could -- I mean, we could 6 increase the revenue budget part of it so we have an equal 7 amount of change in -- in the revenues as well as 8 expenditures. 9 COMMISSIONER LETZ: Right, but there's still 10 that -- 11 MR. TOMLINSON: I mean, still -- it still -- 12 COMMISSIONER LETZ: Increases the budget. 13 MR. TOMLINSON: Yes, it does. 14 COMMISSIONER LETZ: That's the -- you know, 15 and we're really not increasing the budget, we don't think. 16 I mean, we have may have to do -- you know -- 17 COMMISSIONER GRIFFIN: We can still do that 18 later. I mean, if you had to. 19 COMMISSIONER LETZ: I think we -- in any 20 event, we have to do the -- well, it depends. If we didn't, 21 I would rather take it out of Indigent Health Care or some 22 other fund right now, until we have -- 23 MR. TOMLINSON: I think there's probably 24 enough there. 25 JUDGE HENNEKE: Okay. I think that's a good 12-9-02 21 1 idea. Do we have a motion to that effect? 2 COMMISSIONER LETZ: So moved. 3 COMMISSIONER BALDWIN: Second. 4 JUDGE HENNEKE: Motion by Commissioner Letz, 5 second by Commissioner Baldwin, that the Commissioners Court 6 transfer not to exceed $400,000 from the Indigent Health 7 Care budget for purposes of paying the medical reimbursement 8 claim that's been presented for the health care of the 9 person -- whatever. Any other questions or comments? If 10 not, all in favor, raise your right hand. 11 (The motion carried by unanimous vote.) 12 JUDGE HENNEKE: Opposed, same sign. 13 (No response.) 14 JUDGE HENNEKE: Motion carries. Do we have 15 any late bills?