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									                                    ADDENDUM ONE

DATE:         April 10, 2006

TO:           All Vendors

FROM:         Ruth Gray, Buyer
              State Purchasing Bureau

RE:           Questions and Answers for RFP Number 1270Z1
              to be opened May 24, 2006

Following are the questions submitted and answers provided for the above mentioned
Request For Proposal. The questions and answers are to be considered as part of the
Request For Proposal.

                 QUESTIONS                                         ANSWERS

 1.   Need new census, in excel or text format,   The RFP has been amended to include a
      with DOB, Gender, Zip Codes, Coverage       revised Attachment 13.
      Tier, Health Plan breakout (if more than
      one plan)

 2.   Can we get a large claims file? Or are      These are the large claims files the State has
      the 3 claims files (1 from Mutual of        received from BCBSNE and Mutual of Omaha.
      Omaha and 2 from BCBS) all we‟re going       No other files are available.
      to get?

 3.   Section M, page 30 of the RFP says we       Bidder may either save the RFP document in
      need to photocopy the question, not         Word and type the response underneath the
      retype it. We‟re not sure what that         question or may photocopy the questions and
      means. Can we simply type our               type or handwrite the responses underneath
      response in Word format underneath the      the questions.

 4.   If you have a Table of Contents for how     Proposal response structure should mirror that
      you‟d like your binders to be set up        of the RFP.
      please share it with us.
                  QUESTIONS                                             ANSWERS

5.   Please describe the process to fund the          As indicated on page 40, Section C, Item 2;
     initial claims. Is Contractor expected to        “…The State shall have a minimum of three (3)
     pay the claims initially and submit a            business days to pay contractor after receipt
     report of claims for reimbursement?              and approval of the invoice…”, therefore the
                                                      contractor will initially be expected to fund the
6.   Please confirm that proposals should be          Please reference Section II. Procurement
     sent to State of Nebraska Purchasing             Procedures, G. Submission of Proposals for
     Bureau, Attn: Ruth Gray, 301 Centennial          instructions on submitting a proposal
     Mall South, Mall Level, Lincoln, NE              response.

7.   Are the State of Nebraska‟s health plans         Since the State‟s health plans are self-insured,
     considered ERISA plans or exempt from            the State is subject to ERISA, but also follow
     State laws?                                      State statutes regarding health insurance.

8.   Employee Census: Is a complete census            See answer to question #1.
     available listing Date of Birth, Gender,
     Zip code, and dependent enrollment
     status (i.e. Employee, Employee + 1,
     Employee + Children, Family, etc.) by
     vendor (BCBS or Mutual of Omaha) and
     plan type (PPO, POS, and HMO)?

9.   Large Claim Information: The Large               Blue Select = HMO product.
     Claim information from BCBS appears to
                                                      Blue Choice = POS product.
     be for two separate plans/groups. What
     is the difference between these

10. Employee/Employer Contributions: What             By statute the employee pays 21% of the
    are the current employee contribution             premium and the State pays 79%.
    amounts, by vendor (BCBS or Mutual of
                                                      The RFP has been amended to include
    Omaha/plan (PPO, POS, HMO)? How
                                                      Attachment 27 for current health plan
    will the State determine the "premium
    equivalent" for vendors plans in order to
    set the employer/employee contribution            The State‟s contracted actuarial consultant will
    levels in a self-funded environment?              assist in determining the “premium equivalent”
                                                      for vendor plans self-funded by the State.
11. Blue Select Guide to Health Benefits              Provider.
    (Attachment 6): Page 15- Notification
    and certification Requirements section
    states, “If you fail to provide notification of
    the admission, allowable charges for all
    covered services associated with that
    stay may be reduced by 25%.Benefits for
    all services which are determined to be
    not medically necessary will be denied. If
    this is an HMO who will be responsible
    for the penalty? Provider or Member?
                                                 Page 2
                 QUESTIONS                                          ANSWERS

12. PPO Booklet (Attachment 8): Page 31-           The State will cover childhood immunizations
    Deductible section under Exceptions            through age six.
    States Waiver of the Deductible: The
    Deductible is waived for Covered
    Services in connection with: services for
    Childhood Immunization for eligible
    dependent children through age six. On
    the Schedule of benefits it states Child
    immunizations (under age 6). Please
    confirm if it is under or through age six.

13. Glossary of Terms: Primary Care                No.
    Physician (PCP): Regarding the
    following sentence: “in a managed care
    organization, a primary care physician is
    accountable for the health services of
    enrollees including referrals, procedures
    and hospitalization?” Can this be
    changed from “is accountable” to “may be
    accountable” since many carriers no
    longer have gatekeeper requirements?

14. Glossary of Terms: Primary Care                No.
    Physician (PCP): Can the term
    “generalist” be defined by specific
    specialties to ensure that all responders
    are including the same practice types in
    response calculations?

15. Glossary of Terms: Specialist:                 No.
    Regarding the following sentence: “Most
    managed care plans require members to
    get a referral from their primary care
    physician before seeing a specialist.”
    Can this be changed to “many managed
    care plans require…” since many carriers
    no longer have gatekeeper

16. Glossary of Terms: Specialist: Can the         No.
    definition for the term “specialist” be
    defined by specific practice types to
    ensure that all responders are including
    the same practice types in response

17. Mandatory Contract Provisions: Item L.         The State will not evaluate deviations from the
    State of Nebraska Personnel Recruitment        RFP specifications during the Question and
    Prohibition: Is it possible to limit this by   Answer period.
    time? Example, within 10 years, „at any
    time‟ seems really broad.

                                             Page 3
                 QUESTIONS                                           ANSWERS

18. Mandatory Contract Provisions: Item           Unit price shall mean the per employee per
    MM: Changes in Scope/Change Orders:           month ASO fee bid by the bidder.
    Please define “unit price.”

19. Mandatory Contract Provisions: Item           The State intends that there will be no
    OO. Limitation of Liability. Please           limitation.
    elaborate on the intention of this clause.

20. Project Description and Scope of Work:        The State does not fully understand the
    Item E. Subrogation: Please clarify that      question and therefore can not provide an
    the State of Nebraska doesn‟t intend          answer.
    Contractors to be filing suit.

21. Project Description and Scope of Work:        Yes.
    Item I. Administration Transition.
    Number 2: Can the word “returned” be
    changed to “provided?” Carriers will be
    required to maintain records sufficient to
    satisfy Department of Insurance auditors
    and other legal responsibilities.

22. Project Description and Scope of Work:        The RFP is amended to include Attachment
    Item K. Administration Provider Network:      28. Bidder must complete this attachment and
     Number 2.a. For purposes of this             return with response for each proposed
    question, can the question list specific      network.
    provider types to be included in the ratio?
23. Provider Network: Item K 2 a. - Please        Definition of a Primary Care Physician is
    define Primary Care physicians- What          provided on page ix of the “Glossary of
    specialties are included?                     Terms”.

24. Provider Network: Item K 3 d. - Please        Medical facilities are to include, but not limited
    define other medical facilities, other than   to hospitals, surgical, specialty, rehabilitation
    acute care?                                   hospitals as well as skilled nursing facilities.

25. Reimbursement: What time-frame                24 months.
    should be used for the claim detail for the
    discount and reimbursement data?

26. Reimbursement: Should carriers report         Contracted amount.
    "net" or "contracted rate" discounts and
    rates? An example would be if the
    provider's charge is $1000 and the
    contracted rate is $600 and member
    coinsurance is $100. Do carriers report
    the $600 contracted rate which equates
    to a 40% discount, or do carriers report
    $500 ($600-$100) or a 50% discount,
    which is "net" of member liability?

                                             Page 4
                QUESTIONS                                           ANSWERS

27. We are requesting a complete census.          See answer to question #1.
    The census should include the
    following employee specific items: (1)
    year of birth or age, (2) 5-digit zip code,
    (3) coverage (tier) election, (4) plan
    election, (5) gender, and (6)
    active/cobra/retiree status and eligible
    status. Census should be provided in an
    Excel format.

28. We are requesting experience                  The State is not able to obtain this information
    information including a minimum of two        at this time.
    years of monthly enrollment and claims,
    on a paid basis, by plan and total.

29. In addition to the experience information,    See answer to questions # 28.
    is information available on draft or check
    counts, or if unavailable, number of
    transactions or claim handlings (please
    included definition of transactions or
    claim handlings)?

                                             Page 5
                QUESTIONS                                          ANSWERS

30. On page 10 of the RFP, Section F.             The State will not enter into a contract which
    Contingent Fees, we would like to clarify     requires payment of a contingent fee, or is
    this requirement to make sure we have a       reasonably anticipated to result in the payment
    clear understanding of the State's            of a contingent fee of any kind whatsoever.
    requirements. It would appear the State       The State expects any administrative fees for
    is requiring all administrative fees to be    this service to be included in the bidder‟s per
    charged on a per employee per month           employee per month ASO fee. The State is
    basis? Does that preclude a carrier from      unable to respond to any hypothetical
    offering programs that may provide            situations. The State will not evaluate
    savings where fees could be charged on        deviations from the RFP specifications during
    a percent of claims savings basis or on a     the Question and Answer period.
    per claim basis based on number of
    claims that benefited from the program?
    Two examples follow: A. If a covered
    person under the state's plan were to
    utilize a provider that is outside of the
    carrier's PPO network, however, where
    the carrier had an arrangement whereby
    the state plan could still take advantage
    of discounts subject to a fee that could be
    charged on a percent of savings basis, or
    on a per claim basis, would this be
    considered a contingent fee? B. If a
    covered person incurred a claim with a
    non-participating provider, and a program
    was used where a professional
    negotiation service negotiated a claims
    savings with charges based on a percent
    of savings, would this be considered a
    contingent fee? In either example, the
    state would only incur a charge if a
    discount of savings were achieved? If
    these are considered contingent fees by
    the state, would the state then require
    that any projected costs related to these
    types of network access or programs be
    incorporated into the per employee per
    month administrative fee?

31. Is the State of Nebraska using a              The State does not currently have a contract
    consultant for this procurement?              with an Actuarial Consultant, but a contract is
                                                  in the process of being awarded. The
                                                  language in the RFP states that the consultant
                                                  may “assist the State of Nebraska with the
                                                  RFP selection process… The assistance will
                                                  include analysis of the ASO fee, provider
                                                  discounts and saturation of provider networks

                                            Page 6
                QUESTIONS                                          ANSWERS

32. The State's RFP has allowed bidders to       The State has an existing contract with a
    quote on alternate plans in addition to      Pharmacy Benefit Manager through 12/31/07.
    current plans. One of the options of         The current PBM has the ability to administer
    interest by the State is a High Deductible   a HDHP.
    Health Plan (HDHP) with an HSA. Under
    an HDHP plan, regulations require that
    medical and prescription drug claims
    both be subjected to the deductible under
    the HDHP plan before any benefits are
    payable. This requires both the health
    plan carrier and PBM to accrue medical
    and prescription drug claims toward the
    combined HDHP plan deductibles and
    out-of-pocket maximums. If a carrier has
    already developed an interface with a
    PBM to support this requirement, can a
    carrier bid the HDHP plan option with a
    packaged medical and prescription drug
    plan that utilizes the carrier's PBM for
    those employees who would select the
    HDHP plan option?

33. The RFP describes 17,000 benefit-            The previous census included temporary,
    eligible, 15,000 subscribed to the State‟s   State College, State Patrol employees as well
    health plans, but the census file contains   as employees not enrolled for benefits. The
    approximately 23,000 listed. How many        new census being provided in accordance with
    subscribers are in each of the State of      question #1 will not include these individuals.
    Nebraska‟s health plans?

34. How many covered lives are in each of        See answer to question #1.
    the State of Nebraska‟s health plans?

35. What are the current incumbent‟s ASO         BCBSNE = $34.18 PEPM.
                                                 Mutual of Omaha HMO = $27.13 PEPM.
                                                 Mutual of Omaha POS = $27.22 PEPM.
                                                 Mutual of Omaha PPO = $28.07 PEPM.
                                                 Mutual of Omaha Outstate HMO and POS =
                                                 $29.57 PEPM.

36. Call volume. How many calls are              The State is not able to obtain this information
    received by each of the health plans?        at this time.

37. Claims volume. How many claims are           The State is not able to obtain this information
    received by each of the health plans?        at this time.

38. How many open enrollment meetings are        Please reference page 27, Section IV, G. Item
    held each year and during what time of       #7 for information regarding open enrollment
    year?                                        meetings.

                                            Page 7
                 QUESTIONS                                              ANSWERS

39. Please describe the level of disease              The State does not currently have disease
    management provided by each of the                management in place.

40. Please identify where the Mandatory               Proposal response structure should mirror that
    Contract provisions should be placed in           of the RFP.
    responding to the RFP? In the Technical
    Proposal under Technical Approach?

41. Please confirm the State will handle              The State is responsible for collecting all
    billing for the health plans.                     premiums.

42. Page 40. D. Please identify what section          Proposal response structure should mirror that
    the alternative terms and conditions are          of the RFP.
    to be found in a response – under
    Technical Approach?

43. The RFP states the proposed network               Yes.
    must be accepted by an organization
    such as NCQA, JCAHO, etc. Is URAC
    accreditation acceptable?

44. Pertaining to the Request for CPT Code            The State does not fully understand the
    Allowances, should allowances be                  question and therefore can not provide an
    separated by professional and technical           answer.

45. Since there is currently more than one            Although the State will not accept tiered ASO
    vendor being offered to the state                 fees based on enrollment, the State would
    employees, will you reconsider allowing           allow for tiered ASO fees based on the plan
    tiered pricing on the ASO fees?                   design. For example, a different ASO fee
                                                      would be allowed for an HMO plan than for a
                                                      PPO plan.
46. Please verify if the State will allow us to       See answer to question #45.
    offer tiered ASO fees or not based on
    enrolled membership.

47. Please provide the current carriers ASO           See answer to question 35. The State does
    and stop loss fees.                               not currently have stop loss coverage.

48. Please confirm that all fees should be            Yes, Per Employee Per Month.
    submitted as a Per Employee Per Month
    fee, not a percent of savings or a
    contingency fee basis. Also, if there are         Yes.
    additional fees, for example reporting,
    this should be listed in the "other"
    category at the bottom of attachments 23,
    24, 25, and 26 with the PEPM fee listed
    out as well for 2007, 2008, and 2009.

                                                  Page 8
                 QUESTIONS                                           ANSWERS

49. What are the current administrative fees        Please see answer to question #35
    being charged to the State to administer
    their health plan?

50. The State indicated in the RFP that             The State did revisit this subject and the
    bidders could not impose, and the State         language will remain as written in the RFP
    would not accept, enrollment guarantees         document.
    (minimum or maximum) or fees based on
    the number of enrollees in a plan(s).
    Inclusion of this type of caveat would be
    cause for rejection of all or that portion of
    the bid. However, during the pre-
    proposal meeting attended last week, the
    State did mention during the meeting that
    this question could be submitted again to
    revisit this issue. So will the State accept
    enrollment guarantees (minimum or
    maximum) or fees based on the number
    of enrollees in a plan(s)?

51. Employee Census: A complete census is           Please see answer to question #1.
    requested to include date of birth,
    gender, dependent status, and location
    (zip code) for each individual. Many
    carriers use this demographic information
    and geographic information to develop
    specific stop loss rates.

52. Current Vendor Enrollment: Can you              Please see answer to question #34.
    please provide us the current year and
    prior year monthly enrollment broken out
    by each vendor and plan?

53. Employer Contributions: What are the            Please see answer to question #10.
    current employer premium amounts for
    BCBS and Mutual of Omaha by plan,
    PPO, POS, HMO?

54. Employee Contributions: What are the            Please see answer to question #10.
    current employee premium amounts for
    BCBS and Mutual of Omaha by plan,
    PPO, POS, HMO?

55. Funding Mechanism: What is the current          The State does not fully understand the
    funding mechanism (insured, ASO, etc.)          question and therefore can not provide an
    for the current coverage‟s? What are the        answer.
    current rates/fees applicable to the
    current coverage‟s? Are any other fees
    applicable (vendor, report, % of savings,
    network access, etc.)?

                                               Page 9
                 QUESTIONS                                          ANSWERS

56. Contract Award: Item A5 (last paragraph)      Yes.
    on page 23 indicates the State may
    award the contract to multiple bidders.
    Clarification is requested regarding
    multiple awards by coverage (PPO, POS,
    HMO, etc.) may be made or whether
    there could be for example, multiple
    awards within each coverage such that
    multiple bidders would be awarded
    administration of PPO coverage, POS
    coverage, HMO coverage, etc.

57. Networks: We need clarification on the        See answer to question #33.
    census. Census (attachment 13) has a
    total of 23,109 lives. RFP says there are
    17,000 eligible employees.

58. Networks: RFP states that proposed            Yes.
    network must be accredited by an
    organization such as NCQA, JCAHO, etc.
     Will a network without accreditation be

59. Utilization Review: Questionnaire - Can       See answer to question #3.
    we type the questions into the document
    in Word format?

60. Stop Loss: Can a census with coverage         See answer to question #1.
    tiers be provided? (EO, ES, EC, and EF)

61. Stop Loss: Are large claim reports            The State is not able to obtain this information
    available for 2003, 2004, and 2006 (to        at this time.

62. Stop Loss: Monthly Enrollments by Plan        The State is not able to obtain this information
    for 2003-2005?                                at this time.

63. Pricing: Will the State accept tier pricing   No.
    by lives?

                                             Page 10

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