RD447 - Department of Human Resource Management Review of Shared Savings Incentive Programs – November 1, 2017
The Department of Human Resource Management (DHRM) was directed to evaluate the merits of implementing a shared-savings incentive program for state and local government employees and retirees and present its findings in a report to the Chairmen of the House Appropriations and Senate Finance Committees by November 1, 2017, in response to Chapter 836, Item 85.J, which states:
“The Department of Human Resource Management shall identify the requirements, costs, and benefits of implementing a shared-savings incentive program for state-employed, public sector or retired enrollees who elect to shop and receive health care services at a lower cost than the average price paid by their carrier for a comparable health care service. Under such a program, the Department shall develop a plan to reimburse the insured for using a lower cost site of service. The cash payment incentive could be calculated as a percentage or as a flat dollar amount, or by some reasonable methodology determined by the Department. The Department shall determine whether to administer the program itself or through a third-party, or to require carriers to offer access to such a program for health care services eligible for shared incentives and estimate the projected fiscal impact of the program. No later than November 1, 2017 the Department shall report to the Chairmen of the House Appropriations and Senate Finance Committees.”
This report document is responsive to this requirement.
During the process, DHRM was assisted by the Acting Director of State Payroll Operations with the Department of Accounts (DOA) and Aon, the State Employee Health Benefits Program’s actuary and consultant. The following steps were taken to identify marketplace capabilities and related challenges to requirements contained in the budget item, in addition to familiarity with similar shared savings incentive programs implemented by other large public sector entities.