August 21, 2009
Joyce Wilson Harley, Esq., Administrator
County of Essex
Hall of Records
465 Martin Luther King, Jr. Blvd, Rm. 510
Newark, NJ, 07102
Re: Resolution #6
Audit Corrective Action Plan
Dear Ms. Wilson Harley:
CWA Local 1081 respectfully submits this query concerning Resolution #6 of the agenda of the August 19, 2009 public meeting of the Essex County Board of Chosen Freeholders, submitted to the Board by the Administration as the recommended Corrective Action Plan for the County’s 2008 auditor’s findings:
In accordance with regulation promulgated by the Single Audit Act and the Division of
Local Government Services, all Counties are required to prepare and submit to the
Division of Local Government Services a Corrective Action Plan with regards to the
County audit findings. This plan must be approved by formal resolution of the Board of
Chosen Freeholders.
The Management Letter included within the audit by the firm Samuel Klein and Company cited, on page 168, deficiencies regarding the County’s Employee Health Benefit Trust Fund. Specifically, the audit stated the following:
- Effective July 1, 1995, the County remits health benefits “claims paid” amounts per weekly billings which are deposited to a commingled checking account maintained by the fund administrator. The County does not receive cash reconciliations of this account (emphasis added). This “account” has a working capital balance in the sum of $150,000. We could not determine if voided checks were credited to the County (emphasis added).
- It is recommended that the Health Benefits Claims bank account maintained by the Fund Administrator be reconciled to the County records on a monthly basis (emphasis added)..
- Collections for direct premium billings received by the Fund Administrator, which approximated $158,000 per month, are held and remitted to the County in the subsequent month. The County is losing an undetermined amount of interest income under the above procedure. The prior Plan Administrator was required to pay interest on funds held for significant periods prior to transfer to the County (emphasis added).
- It is recommended that the provisions of N.J.S.A. 40A:5-14 and N.J.S.A. 40A:5-15 be adhered to regarding the receipt and deposit of funds (emphasis added).
- It is further recommended that controls be established to ensure prompt remittance of funds collected by the Fund Administrator on behalf of the County (emphasis added).
In response, the Administration of the County of Essex stated the following within its audit Essex County Corrective Action Plan for 2008:
- The account in question is a consolidation of all claim checks issued by Horizon not just that of the County of Essex.
- Horizon Blue Cross Blue Shield of NJ supplies the County with expenditure runs which reflect the payments made on behalf of the County.
- These reports are reviewed and monitored by the Division of Human Resources.
- The division will continue to monitor all payments made by Horizon Blue Cross Blue Shield of NJ on behalf of the County.
In other words, the Administration’s response to its auditing firm’s recommendations consisted of the following:
- The Administration will continue to accept “expenditure runs which reflect the payments made on behalf of the County” from Horizon Blue Cross Blue Shield of NJ instead of insisting upon the receipt of cash reconciliations.
- The Administration will continue to refuse to reconcile on a monthly basis the Health Benefits Claims bank account maintained by the Fund Administrator.
- The Administration will continue to accept remissions from the Fund Administrator in the subsequent month and therefore continue to keep losing an undetermined amount of interest income under the above procedure.
As you are aware, it was CWA Local 1081 that successfully convinced the County to have an audit performed of Horizon Blue Cross Blue Shield of New Jersey’s prescription plan administration due to our Union concerns that a number of our members were not receiving adequate benefits and that the County could credibly save significant sums of money based upon the audit’s findings. Performed by the Mercer firm, the results, we have been told, should be released within early September 2009.
In addition, our Union has been informed by the Administration that the County’s prescription plan is renewed annually and that the RFP’s (Request for Proposals) are out and the Administration awaits the responses.
Below, please find an article of August 11, 2009 published by The Record recounting the fact that “State officials expect to save $108 million a year from a new prescription drug contract for 800,000 active and retired government employees and others who receive pharmacy benefits through New Jersey” and that “The prescription drug plan will change to Medco Health Solutions in 2010”. While our Union is aware the County of Essex is self-insured for the costs of its employees’ health benefits and is therefore not affected by the State’s change of Fund Administrator for its prescription costs, CWA Local 1081 nevertheless respectfully requests the Administration of the County of Essex and the Essex County Board of Freeholders earnestly consider our Union’s following suggestions:
1. The County shall abide by all of the above cited recommendations of its auditing firm in order to foster greater accountability and to realize interest income.
2. The County shall contemplate the possible advantages of contracting with a company other than its current prescription plan Fund Administrator.
Our Union thanks you, in advance, for your anticipated expeditious cooperation with this sincere supplication.
Yours truly,
David H. Weiner, President
CWA Local 1081
State hopes to save $108M from new prescription program
Tuesday, August 11, 2009
BY JOHN REITMEYER
The Record
STAFF WRITER
State officials expect to save $108 million a year from a new prescription drug contract for 800,000 active and retired government employees and others who receive pharmacy benefits through New Jersey.
The prescription drug plan will change to Medco Health Solutions in 2010 now that the state has signed a letter of intent with the Franklin Lakes-based company to handle pharmacy benefits for the government employees, retirees and their dependents for five years beginning Jan. 1. The contract’s total cost is $5.82 billion.
“Over the last three years my administration has worked hard to contain the cost of providing public employees and retirees with health care coverage by enacting major plan design changes, asking public employees to contribute more toward their coverage and giving local governments more tools to manage their costs,” Governor Corzine said. “The pharmacy benefits management contract builds off these other reforms and delivers major savings to state taxpayers.”
The expected savings comes from changing the way the benefits plan is administered, such as eliminating a third-party contractor, and switching to a more transparent pricing system, state officials said. It would cost $6.36 billion if the current pharmacy benefits program was extended another five years, they said.
The current plan is administered by Horizon Blue Cross Blue Shield of New Jersey and covers state employees and their dependents, retirees and school employees who choose to participate in the state plan.
Medco Health Solutions was one of eight companies that submitted proposals for the state contract when bids were solicited earlier this year. The company received the highest technical score and also submitted the lowest bid.
"We are pleased that this competitive contract process resulted in an award that will deliver the highest rated quality of service to the state and the most economical to the taxpayers," said state Treasurer David Rousseau.
The switch to a more transparent pricing system was applauded by state Assemblywoman Linda Greenstein, D-Mercer, who is sponsoring legislation that would give state insurance officials the authority to regulate of the pharmacy benefits management industry.
"Saving all New Jersey consumers money on essential and potentially life-saving drugs should be our aim, but until that day, it is at least refreshing to see the state doing business with a company that puts the needs of its customers first,” Greenstein said.
E-mail: reitmeyer@northjersey.com
State officials expect to save $108 million a year from a new prescription drug contract for 800,000 active and retired government employees and others who receive pharmacy benefits through New Jersey.
The prescription drug plan will change to Medco Health Solutions in 2010 now that the state has signed a letter of intent with the Franklin Lakes-based company to handle pharmacy benefits for the government employees, retirees and their dependents for five years beginning Jan. 1. The contract’s total cost is $5.82 billion.
“Over the last three years my administration has worked hard to contain the cost of providing public employees and retirees with health care coverage by enacting major plan design changes, asking public employees to contribute more toward their coverage and giving local governments more tools to manage their costs,” Governor Corzine said. “The pharmacy benefits management contract builds off these other reforms and delivers major savings to state taxpayers.”
The expected savings comes from changing the way the benefits plan is administered, such as eliminating a third-party contractor, and switching to a more transparent pricing system, state officials said. It would cost $6.36 billion if the current pharmacy benefits program was extended another five years, they said.
The current plan is administered by Horizon Blue Cross Blue Shield of New Jersey and covers state employees and their dependents, retirees and school employees who choose to participate in the state plan.
Medco Health Solutions was one of eight companies that submitted proposals for the state contract when bids were solicited earlier this year. The company received the highest technical score and also submitted the lowest bid.
"We are pleased that this competitive contract process resulted in an award that will deliver the highest rated quality of service to the state and the most economical to the taxpayers," said state Treasurer David Rousseau.
The switch to a more transparent pricing system was applauded by state Assemblywoman Linda Greenstein, D-Mercer, who is sponsoring legislation that would give state insurance officials the authority to regulate of the pharmacy benefits management industry.
"Saving all New Jersey consumers money on essential and potentially life-saving drugs should be our aim, but until that day, it is at least refreshing to see the state doing business with a company that puts the needs of its customers first,” Greenstein said.
E-mail: reitmeyer@northjersey.com