REPORT TO SHASTA COUNTY BOARD OF SUPERVISORS

BOARD MEETING DATE:  March  21, 2017
CATEGORY:  Consent - General Government-2.

SUBJECT:

Mitchell International, Inc. Agreement for Workers' Compensation Pharmacy Management Services

Supervisorial District No. :  All

DEPARTMENT CONTACT:  Angela Davis, Director of Support Services, (530) 225-5515

STAFF REPORT APPROVED BY:  Angela Davis, Director of Support Services, (530) 225-5515

RECOMMENDATION

Approve and authorize the Chairman to sign an agreement with Mitchell International, Inc. to provide pharmacy management services for the Workers’ Compensation Unit within Risk Management in an amount not to exceed $1,500,000 for the entire term which consists of three years commencing on the date when claims will first be processed under the agreement and two additional one-year automatic renewals.

SUMMARY

N/A

DISCUSSION

Shasta County Risk Management contracts with a third party vendor to coordinate prescriptions submitted for workers’ compensation claims.  Mitchell International, Inc. will coordinate with network pharmacies to provide authorization and billing for medications prescribed on these claims.  The County is anticipating savings on prescribed medications through the contracted prescription rates Mitchell International, Inc. has established with its network pharmacies.  Payment for medications is billed at the time the medications are authorized per industry standards.

Pharmacy management services play a critical role in the Worker’s Compensation Unit, as it provides a streamlined process for injured County employees in obtaining appropriate medications related to their claims.  Therefore, staff conducted a phone canvas of vendors who provide such service and Mitchell International, Inc. was selected and staff then negotiated the recommended Agreement to ensure efficient means to provide medication services at the greatest value to the County.

The County pays an annual average for said pharmacy management services in the amount of $250,000.  Mitchell International, Inc. proposed a 2% savings below the California Fee Schedule.  This equates to an approximate annual savings to the County in the amount of $5,000 or more.  The projected savings to the County is estimated for the entire term of the agreement  to equate to $25,000 or more.

ALTERNATIVES

Should the Board choose to not approve the Agreement, Risk Management would have to pay prescription bills at a higher rate and would not get discounts on those prices by utilizing a Pharmacy Benefit Management company with lower contracted rates.  In addition, Risk Management would have to spend additional funds to have prescription bills reviewed by its contracted bill review vendor to price the bills at official medical fee schedule.

OTHER AGENCY INVOLVEMENT

The County Administrative Office has reviewed the recommendation.  County Counsel has approved the agreement as to form. Risk Management has approved the Agreement.

FINANCING

Costs associated with this Agreement are included in the department’s FY 2016-2017 Adjusted Budget.