March 19, 2013
External Affairs Branch
Robert Udall Glazier, Deputy Executive Officer
Brad Pacheco, Chief, Office of Public Affairs
Contact: Bill Madison, Information Officer
CalPERS Committee Recommends Anthem for Health PPO Contract
SACRAMENTO, CA – The California Public Employees' Retirement System (CalPERS) today announced that it selected Anthem Blue Cross to continue administering its Preferred Provider Organization (PPO) health benefit plans.
The Pension & Health Benefits Committee (PHBC) chose Anthem to receive a new five-year contract as the administrator for CalPERS self-funded PPO program after a competitive bid process in which the other finalist was Blue Shield of California. The PPO program includes the PERS Select, PERS Choice and PERSCare health plans with more than 357,000 members. The Committee's recommendation goes to the full Board of Administration Wednesday for approval. The contract begins January 1, 2014 and runs through December 31, 2018.
The PHBC made its decision after reviewing the final staff evaluations of the responses to the Request for Proposals (RFP) for health plan administrators that CalPERS issued last October. The agency is still reviewing proposals for its Health Maintenance Organization (HMO) business and will deliberate the selection for the HMO contract award(s) at its April 2013 Board meeting.
CalPERS challenged bidders to offer innovative approaches for its health program and fully explore all options to provide high-quality, affordable care. Anthem and Blue Shield's technical and financial responses had to meet stringent requirements, and both provided strong proposals.
"It was a tough decision because both Anthem and Blue Shield's responses were very good in terms of meeting our requirements," said PHBC Chairperson Priya Mathur. "After a very competitive process, however, the Board decided Anthem was the health plan that best met our requirements of providing the care we want for our PPO members and their families."
CalPERS asked the bidders to share risk by aligning incentives with CalPERS health initiatives, and offer options to address CalPERS purchasing needs. CalPERS developed its health initiatives during a lengthy health benefits purchasing review process, which resulted in strategies aimed at reducing health care costs and improving outcomes. The RFP also required bidders to indicate how they would meet requirements for transparency in their operations, pricing and performance guarantees, health and disease management and implement integrated health care models.
"We believe the requirements Anthem successfully met will further the strategies we've developed, will lead to health care market reform and help us achieve the long-term changes that have helped CalPERS save hundreds of millions of dollars in the past few years," said Ann Boynton, CalPERS Deputy Executive Officer for Benefit Programs Policy and Planning. "We look forward to them using innovative and cost-efficient solutions to provide the high-quality health care our members deserve."
CalPERS is the nation's largest public pension fund with approximately $256 billion in assets, administering retirement benefits for more than 1.6 million members, and spending over $7 billion annually to provide health benefits for more than 1.3 million State, public school, and local public agency employees, retirees, and their families. The average CalPERS pension is $2,420 per month. The average benefit for those who retired in the most recent fiscal year that ended June 30, 2012, is $3,025 per month. For more information about CalPERS, visit www.calpers.ca.gov.