You have to love the Division of Administration (DOA) and the Office of Group Benefits (OGB). Their concern for the 230,000 state employees, retirees and dependents is surpassed only by their arrogance.
Saying “We heard the financial concerns of our members and Legislators,” Commissioner of Administration Kristy Nichols made the self-serving announcement that OGB has decided to delay the effective date of changes arbitrarily (and illegally) implemented to medical and pharmacy plans from Aug. 1 to Sept. 30. OGB RELEASE
Here is the information provided on the OGB web site: https://www.groupbenefits.org/portal/pls/portal30/ogbweb.get_latest_news_file?p_doc_name=4D7A4D344D6A45794E533551524559334E6A4D32
Never mind that State Rep. John Bel Edwards (D-Amite) told Nichols and OGB CEO Susan West back on Sept. 25 that they were flirting with major litigation and the threat of having to refund millions of dollars to OGB members who were hit with benefits changes which were illegal until such time as a rule could be adopted. Here is the link to video clips of that hearing: http://youtu.be/ct652tBa8Mc.
Except for Edwards who said the move was illegal. He requested and obtained an Attorney General’s opinion that agreed with him.
Nichols, as is her custom, was not going to promulgate rules at all in implementing the new rates members would have to pay for prescriptions even though the law requires advertisement and public hearings on such changes. Instead, the administration, facing a shrinking OGB reserve fund because of its repeated premium cuts, plunged ahead, the law and state employees be damned.
The premiums were reduced so that the state would enjoy a similar reduction in the 75 percent of premiums it is required to pay for health coverage of OGB members. Gov. Bobby Jindal and Nichols cut the rates by nearly 9 percent despite a report from Buck Consultants which stated flatly that it never made such actuarial advice.
Pursuant to testimony given in the Sept. 25 hearing by the Joint Legislative Committee on the Budget (JLCB) in which Kristy said Buck Consultants had recommended a premium reduction, Edwards requested a copy of the actuarial recommendations.
“I still have not received any actuarial recommendations for the 2013 and 2014 premium reductions at OGB,” Edwards said Tuesday. “Nor have they told me that such recommendations do not exist. Clearly, they do not.”
The OGB web site does contain a request for proposals (RFP) for an actuarial that is dated Sept. 26: https://www.groupbenefits.org/portal/pls/portal30/ogbweb.get_latest_news_file?p_doc_name=4D7A4D774E4445794D793551524559334E444531
The Baton Rouge Advocate said the refunds the state must now make to OGB members who were overcharged in the form of out-of-pocket expenses will come to nearly $4.5 million and is expected to be refunded within 60 days.
Getting the refunds for the overcharges won’t be a walk in the park if past experience with the OGB pharmaceutical benefits administrator is any indication. “Members who incurred increased pharmacy costs between Aug. 1 and Sept. 29 based on exclusions must submit an appeals form to MedImpact,” said the news release from OGB, adding that Blue Cross and Blue Shield of Louisiana (BCBS) will reprocess claims for members who incurred increased medical costs through their providers during that time period. There is an appeals form for MedImpact on the OGB web page, but it appears to apply only to prescriptions that were rejected or denied by pharmacies in August and September: https://www.groupbenefits.org/portal/pls/portal30/ogbweb.get_latest_news_file?p_doc_name=4D7A4D344D6A45794E693551524559334E6A4D33
“If members incurred costs that were not submitted through a provider, they must submit an appeal request form to Blue Cross and Blue Shield,” the release said. “The forms can be found on the OGB website at www.groupbenefits.org.”
Edwards said the burden should not be placed on state employees and retirees to file appeals on overpayments. “Group Benefits has the claims information and they should be required to make the determination of who is owed what and it should be Group Benefits that takes the initiative on this,” he said.
Of course, by placing the onus on employees and retirees, DOA is counting on members being unfamiliar with the process or uninformed about the refund program altogether. If they do not file appeals for refunds, no refund will be made and the state will not have to repay victims of the overcharges. “That’s why Group Benefits should be the one responsible for seeing to it that everyone who was overcharged because of its illegal actions in implementing the changes in the first place should get those overcharges refunded,” Edwards said. “The members should not be held responsible for the illegal actions of Group Benefits and DOA.”
Here are links to the after-the-fact DOA Emergency Rule declaration: http://www.doa.louisiana.gov/doa/Presentations/Emergency_Rules_-_Office_of_Group_Benefits_9-30-2014.pdf and DOA’s Notice of Intent: http://www.doa.louisiana.gov/doa/Presentations/Ordinary_Rule_-_Office_of_Group_Benefits_10-01-2014.pdf
The clumsy attempt at circumventing the law is just another in a long line of embarrassing episodes perpetrated by the Jindal administration as the governor pays less and less attention to the home front in his quest for the Republican presidential nomination, leaving the job of running the state to appointees equally unqualified as he to run so much as a snow cone stand.
Nichols typically ignored the threat of litigation in making the announcement just as the administration ignored the law in implementing the changes, even disagreeing in that Sept. 25 hearing on the necessity of publishing the proposed changes and conducting public hearings.
And West even attempted to justify the changes by pointing out to retirees and active members that she must pay the same premiums as they. She apparently failed to consider the fact that most state employees and certainly most retirees do not make her $170,000 per year salary.
The Retired State Employees Association (RSEA) threatened a lawsuit, challenging the administration’s contention that it could use the emergency rule (employed repeatedly by the administration during Jindal’s nearly seven years in office) to make changes in the medical and pharmacy plans.
Nichols was not even around for the conclusion of that Sept. 25 JLCB meeting, having stepped out of the committee room ostensibly to take an “important” phone call. In reality, it turned out she stepped out permanently to take her daughter to a boy band concert in New Orleans where she watched from the comfort of the governor’s luxury box at the Smoothie King Arena (see the snow cone stand reference above).
“Let’s hope that the legislature will continue to exercise oversight on this issue to drive more changes in the plans whereby the out-of-pocket cost increases of OGB members are reduced and (so that) the state will share in the cost of restoring the system’s soundness,” Edwards said in a prepared statement.