Title
Continuation of Blue Cross and Blue Shield Administrative Services Contract (B)
This item involves a request for the City Commission to approve the continuance of Blue Cross and Blue Shield of Florida Inc. as the third party administrator and network provider for the City of Gainesville's Self -funded Health Plan.
Explanation
Blue Cross and Blue Shield of Florida, Inc. has been the Administrator of the City's self-funded Group Health Plan since January 1, 1993. The City's contract with Blue Cross and Blue Shield of Florida, Inc. allows for annual renewals upon mutually agreeable rates. The current year renewal negotiations with Blue Cross Blue Shield will result in 7.25% increase administrative fees for our Group Health Plan. The increase is consistent with medical insurance trends and it should be noted that this increase follows a year in which Blue Cross Blue Shield did not increase its administrative fees.
Blue Cross and Blue Shield continues to have one of the largest networks in our area, and coupled with its nationwide affiliates, provides network coverage throughout the United States and many other countries worldwide. Currently, Blue Cross and Blue Shield is the provider to many large employers in our area including the State of Florida, Shands, the School Board of Alachua County, Alachua County Board of County Commissioners, and HCA. Blue Cross and Blue Shield's market presence in Alachua County allows it to negotiate favorable cost of service contracts with the local medical community. These provider contracts result in substantial savings to the City's health plan and our employees. For the twelve months ended September 30, 2006, the savings realized based on billed versus the Blue Cross and Blue Shield allowance amounted to almost thirteen million dollars. This discount rate was approximately sixty-three percent of the billed amount for services.
In addition to the favorable provider contracts, Blue Cross and Blue Shiel...
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