To: Board of Supervisors
From: Anna Roth, Health Services Director
Report Title: Contract #27-633-24 with PerformRX, LLC
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
APPROVE and AUTHORIZE the Health Services Director, or designee, to execute on behalf of the County Contract #27-633-24, containing mutual indemnification, with PerformRx, LLC, a limited liability company, in an amount not to exceed $50,000,000, to provide pharmacy program administration services for Contra Costa Health Plan (CCHP), for the period January 1, 2024 through December 31, 2025.
FISCAL IMPACT:
Approval of this contract will result in contractual service expenditures of up to $50,000,000 over a two-year period and will be funded 100% by CCHP Enterprise Fund II revenues. (No rate increase)
BACKGROUND:
Both the State Department of Health Services and the Federal Centers for Medicare and Medicaid Services (CMS) require a Pharmacy Benefits Manager that can develop, maintain, and manage a large pharmacy network and monitor the correct dispensing of drug benefits, co-pays under multiple group product lines adhering to the required Health Plan Formulary and Health Plan Prior authorization protocol. This contractor has been providing these services and fostering a deep understanding of the CCHP organizations mission, values, and long-term objectives since May 1, 2006.
This contract is entered into under and subject to the following legal authorities: California Government Code §§ 26227 and 31000; Health and Safety Code § 1451. Health Services Personnel approved this contract to ensure no conflicts with labor relations. This contractor was selected to provide pharmacy program administration services to CCHP’s Pharmacy and Utilization units to help establish and maintain a utilization management program that promotes appropriate utilization for CCHP’s pharmacy benefits program, and continually reviews updated utilization management procedures to control costs for members. The nature of the pharmacy program administration services needed is complex and requires seamless coordination, integration and collaboration with existing programs and systems. There are a total of 3 pharmacy program administration service providers in CCHP’s service area. CCHP is currently contracted with 2 of the agencies. This contract renewal will maintain comprehensive area coverage for the entire CCHP membership and meet the Knox-Keene Act, time and distance mandate required by the State of California Department of Managed Health Care (DMHC) services. This contractor has been approved by the Public Works Department’s Purchasing Division on October 30, 2023.
On January 10, 2023, the Board of Supervisors approved Contract #27-633-22 with PerformRx, LLC, in an amount not to exceed $25,000,000, for the provision of Pharmacy Benefits Management (PMB), to develop, maintain, and manage CCHP’s large pharmacy network, monitor dispensing of drug benefits, and co-payments under multiple group product lines, for the period from January 1, 2023 through December 31, 2023. This contract included mutual indemnification to hold harmless both parties for any for any claims arising out of the performance of this contract.
On June 13, 2023, the Board of Supervisors approved Amendment Contract #27-633-23 with PerformRx, LLC, effective July 1, 2023, to amend Contract #27-633-22, to modify the commercial rate schedule to include “Real Time Benefit Check” as required by DMCH All Plan Letter 22-031, with no change in the payment limit of $25,000,000 or term of January 1, 2023 through December 31, 2023.
Approval of Contract #27-633-24 will allow the contractor to continue providing pharmacy program administration services for CCHP through December 31, 2025. This contract includes mutual indemnification to hold harmless both parties for any for any claims arising out of the performance of this contract.
CONSEQUENCE OF NEGATIVE ACTION:
If this contract is not approved, contractor will not provide pharmacy program administration services to Contra Costa Health Plan and Contra Costa Health Plan will not have the ability to staff the required personnel for the required services.