Travis County Commissioners Court
November 10, 2009,
Item 13
>> number 13 is to receive briefing and take appropriate action on health and human services recommendations to implement a pharmaceutical savings program for county residents and, mr.
norton and roger, we could reach executive session this afternoon -- I mean this morning.
if so, we'll call up that one item, okay?
and maybe try to free up mr.
norton.
>> good morning, judge, Commissioners, chevy fleming, executive manager for health and human services and veterans service.
several weeks ago staff presented to you a comparison of issuance prescription drug programs we have been looking into and with a recommendation to enter an agreement with coast to coast.
with our research and at the question of Commissioner Huber, we looked into some legislation that is effective September 1st, house bill 4341, which basically shifts the responsibility of regulating this program to the Texas department of licensing and regulation to the Texas department of insurance.
and that legislation then includes authority for the Texas department of insurance to set some administrative procedures that basically require registration of discount health programs, it requires regulations governing unfair or deceptive trade practices, standards for conducting investigation, authority to issue cease and desist orders, establishment of administrative penalties and injunctive relief, and provisions for the assurance of voluntary compliance much and basically what we found is is that the Texas department of insurance plans to use the remainder of this year and next year to draft those regulations and then anticipate those regulations being available in approximately April of next year.
in the meantime, we have been in touch with the company that we are -- the coast to coast company.
they are indicating their intent not only to comply but they have been in touch with the Texas department of insurance to familiarize them with their program and make sure that -- that, you know, their intent to comply with the state law is -- is on record.
in the meantime, however, I understand that the county attorney's office would like to give the court some legal advice on this issue, and so while the department continues to recommend approval for this program, we support the county attorney's recommendation that you receive legal advice.
>> always go along with your lawyer, ms.
fleming.
>> [laughter] yes.
>> I was not present when this was before the court last time for discussion.
i did pull up the dialogue that took place and read through that, and I have some additional questions I would like to throw out there.
i guess we don't have a coast to coast rep here today.
>> they were not available.
>> so perhaps some of these questions may need to be researched and brought back.
but one of the questions I have is what are the comparison savings to, for example, well, the other free cards that are out there in the market like wal-mart?
i have heard a lot of things about the discount that they give.
what kind of percentages on primary prescription medications is the savings with wal-mart as opposed to coast to coast?
>> the distinguishing difference, I apologize for interrupting, is the discount would be comparable.
the form you larry is much, much greater.
so coast to coast has an f ormulary, it's 60,000 versus wal-mart, h.e.b., c.v.s., target has it also.
their ormulary is 10 to one between two or four or five thousand drugs.
so it's a volume issue.
>> do we have information knowing obviously there's a small amount of drugs that are high volume use.
do those fall within the two to five thousand of the free cards out there?
i would be interested in seeing that.
i would like to see a list of the local independent pharmacies that subscribe to coast to coast.
i saw the list that was out there last week.
there were about half a dozen that I couldn't identify as a major pharmacy.
perhaps even one or two of those are.
i would really like to see what independent pharmacies are subscribed to this and I would like to know what the requirements for their subscription are.
i think we need to be sure that we protect our local independent businesses when we go into something like this.
>> may I respond to that briefly?
>> sure.
>> in the memo for last week, and I believe in this week's memo as well, the prior memo, we -- I asked the marketing company for coast to coast how pharmacies could participate, and basically was contacting them -- contacting financial marketing concepts, which is a representative of coast to coast.
and I can provide that information.
as well when we were given the presentation by coast to coast, the independents that were brought to my attention was terry town, people's, there's an oncology pharmacy, so it's quite broad and continues to expand, but we will get the most definitive list.
they have a search engine in their website which allows you to by zip code see all of the participating pharmacies, even to a radius of 30, 35 miles.
>> okay.
>> but we'll get --
>> seemed like a very extensive list and I was anxious -- I would like to know what the costs are for the independents.
is there a cost associated why participating for the independents or do they get a benefit?
>> we do believe there is a cost.
the benefit the businesses derive is the additional foot traffic.
because I think probably the head to head competition that -- that exists with these card programs is many of the insurance providers provide mail-in service, and so with the on set of mail-in pharmaceutical programs, you reduce traffic to pharmacies.
so the discount card programs, and I think which is the reason why many of the private companies have initiated the discount programs, is to enhance the foot traffic, which, you know, they hope to increase other purchases as people visit their pharmacies.
>> right.
>> the discounts for lab and diagnostic services, those weren't elaborated on as to who and how those are accessed and how the arrangements are made locally for that.
>> I believe there's a similar listing on the website or will be.
those are far more limited, I believe, than the pharmaceutical discount, but they are available.
>> the -- the way this came out was dallas county, who has already contracted now for several months with coast to coast, asked specifically for discounts for lab and imaging.
and the whole rationale behind this is there are people paying 100% of cost.
not that you would get a discount better than others, but there are people much more than people insured are paid because we get a volume discount whereas they are not.
and so they contacted some companies to get this, but it's outside also of the agreement of coast to coast as far as 75 cents per prescription given.
it's basically a discounted rate for the individual that would have to pay full price.
but we'll get information who that would be and what the details are.
>> it wasn't clear to me in looking at the background information whether or not coast to coast or fmc, which I have another question about, but whether or not they make followup marketing contacts to the individuals who use these cards.
in other words, do they end up using the resources they gather from people who use these cards to follow up and market them?
>> they have to respect the hipaa and so does the pharmacy, so the pharmacy cannot themselves provide that information back to coast to coast.
all they can do is aggregate the date is a so they can look at usage by certain characteristics like zip code.
any information that would be impacting someone's pry significant driver, the pharmacy has to adhere to those regulations.
>> we can't ask the company specifically that we.
>> everyone doing those programs is collecting information in the sense that as we all when we fill a prescription, you have to provide your address and zip code and everything.
>> what is -- I'm unclear on the relationship between financial marketing concepts and coast to coast.
>> we can have the vendor clarify the relationship.
>> okay, but we are actually writing the -- we would be looking at writing a contract with financial marketing concepts.
is that correct?
>> I believe that is who the contract is with, yes.
>> I did go on their website.
i'm curious when they have no principals and board of directors listed on the website.
i would like to know who we're dealing with.
i'd like to know if they sell information to insurance companies and pharmacy companies.
i'd also like to know who tracks the royalties.
the fmc website said they had an employee base of four.
on exclusive active, are there any other nonprofits or entities in this area who currently have a coast to coast, and I think I saw that we had a nonexclusive arrangement with them so would they perhaps in the future be allowed to have our contractual arrangements for coast to coast within the Travis County area.
>> yes.
>> yes.
>> okay.
those on my questions.
i will say that I know that we get some payment for the use of the cards, Travis County.
it looks to me like it's fairly minimal, but I believe that in looking at relationships like this whether it's coast to coast or one of the others, I'm not necessarily singling out coast to coast, but I think that there is obviously money to be made by these companies out there in the open marketplace, and I feel uncomfortable as a public sector entity striking a relationship with a company in the private sector that's going to be making money off the use of our name without having some kind of public bidding process or open process that puts the different ones together out there.
i am concerned about medical privacy.
i understand hipaa, but I know there are holes in hipaa and that we need to be very, very careful when we look at these kinds of relationships as it relates to medical privacy.
that's it.
>> I think you've hit on -- nor was I here last week Commissioner, and I think those questions that you brought up, some of those were what I had in mind, but there is also a couple others, but I won't bring those up at this point because the person that needs to be here is not here.
but I was wondering as far as the 75 cents per prescription as far as royalty is concerned, is that relationship with dallas county presently with coast to coast?
>> yes, it is, but actually their relationship with dallas county is 25 cents.
>> 25 cents per prescription?
>> yes.
>> okay.
have they been able to track the revenue stream from such transactions to the point that they are able to forecast -- dallas county is able to forecast how much will end up in their general fund after transactions have been all accumulated?
>> I believe dallas county has only been doing the program a couple months, so I'm -- I feel pretty safe in saying that they can't really forecast the revenue generated.
i think staff tried to use a rudimentary means to estimate the amount of money we anticipated receiving from our usage.
we did a comparison of populations and potential use and I think we made a conservative estimate of about 55,000, assuming that I think --
>> 40%.
>> -- 40% of our population would actually use the card.
i think it's an exponential thing and if we move forward with this after a few month, we may be able to extrapolate out based on the a uses, but right now it's very rudimentary estimate.
>> the coast to coast representatives aren't here today.
were they notified that this item was on the agenda?
>> yes.
>> yes, sir.
they are in florida today traveling to harris county tomorrow.
we have not formally incited them to be here.
they wanted to, in a sense, stay out of -- they are happy to come down any time we invite them to come to court.
>> okie-doke.
thank you.
>> we'll chat with our attorney in executive session when we go in there.
okay?
>> thank you.
>> thank you.
The Closed Caption log for this Commissioners Court agenda item is provided by Travis County Internet Services. Since this file is derived from the Closed Captions created during live cablecasts, there are occasional spelling and grammatical errors. This Closed Caption log is not an official record the Commissioners Court Meeting and cannot be relied on for official purposes. For official records please contact the County Clerk at (512) 854-4722.
Last Modified:
Tuesday, November 10, 2009 1:40 PM
