Agenda 10/26/2010 Item #16E 6Agenda Item No. 16E6
October 26, 2010
Page 1 of 3
EXECUTIVE SUMMARY
Recommendation to approve a one year extension of contract 06 -3983, Group Health
Third Party Administration Services to Meritain Health, Inc. in the anticipated annual
amount of $392,875.
OBJECTIVE: To administer the employee health insurance program in a responsive,
efficient and effective manner.
CONSIDERATIONS: The Board of Commissioners awarded contract 06 -3983 on
September 26, 2006 under agenda item 16E1. The BCC subsequently approved the
reassignment of the contract to Meritain Health on October 23, 2007 agenda item 16E12
when Meritain acquired the previous awardee. Under the agreement, the vendor processes
more than 300,000 employee claims annually including interpreting and managing the
terms and conditions of the County's health plan, remitting payment to medical providers
and providing information to staff regarding the performance of the plan.
The Request for Proposals (RFP) solicitation specified that the contract would initially be for
two years with two one year renewal options to be considered annually thereafter. When
the contract was processed for signature at inception, it included similar language to that of
the RFP but with the following inadvertent contradictory language regarding the initial
contract period: "The contract shall be for a two year period commencing on January 1,
2007 and terminating on December 31, 2009." The clause should have cited the ending
date as December 31, 2008.
As a result of this error, the contract was not scheduled for renewal in accordance with the
intent of the RFP and the purchasing policy. The Risk Management Department, which
manages the contract was led to believe that the contract would be renewed through
December, 2011 and planned accordingly.
Under Section XV.D of the Board's Purchasing Policy, the Purchasing Director has the
authority to extend Board approved contracts for up to six months beyond their scheduled
expiration. Extensions that exceed six months require prior Board approval.
Staff considered issuing a six month extension which would provide sufficient time to re-
compete the contract. However, that would require the County to potentially change third
party providers in the middle of the program and calendar year, which would create
administrative difficulties and would likely compromise the overall productivity and accuracy
of the health claims administration program.
The services provided by Meritain have been both timely and accurate. Significant service
issues have not arisen and Meritain has been responsive to issues brought to their
attention. Further, staff has reviewed the rates of similar vendors and the rates charged by
Meritain remain competitive.
Agenda Item No. 16E6
October 26, 2010
Page 2 of 3
Given all of these considerations, staff recommends the Board authorize the extension of
this contract through the 2011 calendar year. The contract will be publicly let for
competition during 2011 with the new contract becoming effective at the beginning of 2012.
FISCAL IMPACT: The anticipated cost of the extension is $392,875. Meritain has agreed
to maintain their current rates for the one year extension period. Funds for this contract
have been budgeted in the Group health and Life, Fund 517.
GROWTH MANAGEMENT IMPACT: There is no growth management impact associated
with this Executive Summary.
LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney's Office
and is legally sufficient for Board action —CMG.
RECOMMENDATION: That the Board of County Commissioners approves the extension
of contract 06 -3983 for Group Health Third Party Administration Services to Meritain Health
Inc. for one year through December 31, 2011.
Prepared by: Steve Carnell, Purchasing /General Services Director
Jeff Walker, Risk Management Director
Agenda Item No. 16E6
October 26, 2010
Page 3 of 3
COLLIER COUNTY
BOARD OF COUNTY COMMISSIONERS
Item Number: 16E6
Item Summary: Recommendation to approve a one year extension of contract 06 -3983, Group Health Third
Party Administration Services to Meritain Health, Inc. in the anticipated annual amount of
$392,875.
Meeting Date: 10/26/2010 9:00:00 AM
Approved By
Steve Carnell Director - Purchasing /General Services Date
Administrative Services
Division
Purchasing & General Services 10/11/2010 2:23 PM
Approved By
Colleen Greene Assistant County Attorney Date
County Attorney County Attorney 10/11/2010 4:24 PM
Approved By
Jeffrey A. Walker, CPCU,
ARM Director - Risk Management Date
Administrative Services
Division Risk Management 10/13/2010 10:25 AM
Approved By
Len Golden Price Administrator - Administrative Services Date
Administrative Services
Division Administrative Services Division 10/13/2010 10:15 PM
Approved By
OMB Coordinator
County Manager's Office
Office of Management & Budget
Date
1011412010 12:24 PM
Approved By
Therese Stanley
Manager - Operations Support - Trans
Date
Office of Management &
Budget
Office of Management & Budget
10/15/2010 2:49 PM
Approved By
Leo E. Ochs, Jr.
County Manager
Date
County Managers Office
County Managers Office
10/16/2010 3:14 PM