Health Choices Software Purchase AmendmentTO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Medical Plan Administration -New Editing Software
DATE: June 11, 2008
Personnel Manager Randy Peck is recommending approval of an Amendment to the
Administrative Services Agreement with Health Choices, Inc. for purchase of editing
software.
concur with the recommendation and respectfully request Mayor and City Council
approval.
~r"~
Michael C. Van Milligen
MCVM/jh
Attachment .
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Randy Peck, Personnel Manager
THE CITY OF Dubuque
T T
D V B E Ai-hmericaCAy
Masterpiece on the Mississippi
2007
TO: Michael C. Van Milligen, City Manager
FROM: Randy Peck, Personnel Manager
SUBJECT: Medical Plan Administration -New Editing Software
DATE: June 3, 2008
Health Choices has announced an optional enhancement to the administration of the
City's medical plan. They have recently invested in a new technology that expands the
"edits" of our existing claims adjudication system by reviewing claims history, as well as
utilizing Medicare and Correct Coding Initiative coding guidelines. Their current editing
process is manual and is performed during routinely conducted quality control audits.
The new software application will review all physician claims for proper coding. Based
on their trials, they estimate a savings to the physician claims portion of our medical
claims cost to be between 1 % and 2%. The estimated annual savings would be
between $13,400 to $26,800.
The cost of the software enhancement is $1 per month per employee. The estimated
annual additional cost is $6,400. The manual claims audit will continue regardless of
whether we use the new editing software. The software automatically documents the
savings achieved so we will be able to see the return on our investment. If we do not
experience a return on our investment, we can terminate the new application at any
time. The Health Care Committee would like to purchase the new editing software for
up to six months. The Committee will make a determination after six months as to
whether they wish to continue using the software.
The requested action is for the City Council to approve a motion authorizing you to sign
the attached Amendment to the Administrative Services Agreement with Health
Choices, Inc. for the purchase of editing software.
If you have any questions, please feel free to call.
RP:tlb
Amendment II
Administrative Services Agreement
WHEREAS the City of Dubuque, hereinafter Purchaser and Preferred Health Choices,
hereinafter Health Choices have agreed to an Administrative Service Agreement dated July 1,
1999.
WHEREAS, Purchaser and Health Choices desire to amend said Agreement pursuant to Section
3.2 as follows:
Effective July 1, 2008 through December 31, 2008 said agreement is hereby amended as follows:
1. Attachment D is amended to add " 2".
" 2. Code Review Services to include claims review software utilized by Health
Choices: $1.00 per employee per month."
2. At Purchaser's option, said service may continue for agreed upon price listed herein.
Accepted on behalf of the City of Dubuque
Signed:
Michael C. Van Milligan
City Manager
Date: 6/22/08
Accepted on behalf of Preferred Health Choices, LLC.
Signed:
John Tallent, President
Date: