The University of Oklahoma (Norman campus)
Regular session - February 12, 2001 - 3:30 p.m. - Jacobson Faculty Hall 102
office: Jacobson Faculty Hall 206 phone: 325-6789 FAX: 325-6782
e-mail: facsen@ou.edu web site: http://www.ou.edu/admin/facsen/

The Faculty Senate was called to order by Professor Ruth Okediji, Chair.

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TABLE OF CONTENTS

Senate Chair's Report:

Proposed changes in health benefits

Voting status of Senate Secretary

Revisions in Student Code

Revisions in discrimination/harassment grievance policy

Faculty Senate apportionment

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The Senate Journal for the regular session of January 22, 2001, was approved.

Two months ago, Prof. Hofford polled the faculty with regard to concerns about physical fitness facilities for faculty and staff (see 1/01 Senate Journal). President Boren said he would be willing to tour the field house and consider things that might be done to provide some sort of a fitness facility for the faculty. Prof. Magid reported that "President Boren, as he promised the Senate, made a site visit to the current main campus (field house/stadium) faculty-staff locker room and exercise facilities on Thursday, February 8. Accompanying President Boren were Vice Presidents Maddy and Hathaway, Architectural Services architect Mike Tower, and Senators Hofford, Magid, and Wedel. President Boren shares with the Senators concern for availability to faculty and staff, both men and women, wellness and exercise facilities in a convenient main campus area. As a regular exerciser himself, President Boren agrees with the Senators that such facilities improve faculty-staff quality of life in two important ways: (1) building community through informal contacts, and (2) promoting wellness by including exercise in a healthy life style. Upon review of the current field house and stadium facilities and various options in the planned renovations of those buildings, the President's initial assessment was that a central campus faculty-staff exercise facility could be part of the stadium renovation, and asked the administrators present to draft plans for consideration. While many commitments and details remain to be clarified, the Senators felt that the President had been responsive to their concerns and are hopeful that the University will soon officially formulate plans for a faculty-staff exercise and wellness facility." Prof. Okediji said the Senate Executive Committee would follow up on any recommendations and report back to the Senate.

The regularly scheduled meeting of the Senate Executive Committee and President Boren was held last week. The President has been receptive to concerns of faculty on a number of issues, including the benefits package, fitness facility, faculty governance issues, and vice presidential appointments. The Executive Committee outlined some suggestions and thought the President was responsive to the concerns. Prof. Okediji asked the Senators to express appreciation to the President when they had the opportunity.

Prof. Okediji noted that this was the first time the Senate had seen the proposed changes in the benefits package (see http://www.ou.edu/admin/facsen/BENSUM.htm and the Human Resources web site at http://www.ou.edu/ohr). When she received reports that there were proposed changes, she emphasized to the President’s office that faculty should have the opportunity to participate. The President gave his assurance that nothing would be approved without the Senate's input. The new Vice President for Administrative Affairs Brian Maddy met with Prof. Okediji and later with the Executive Committee and former Senate chairs to provide an overview of the proposed changes. Health care costs have been rising. The University is trying to take some preemptive steps to address that situation in a way that would be beneficial for faculty, staff, and the University. The Employment Benefits Committee (EBC) has been discussing the proposals. The primary concern was a sense of being rushed. The proposed package originally was slated to be on the February Regents' agenda for action of some sort. Vice President Maddy agreed to remove the item from the agenda to give faculty more time to look at the proposals and make recommendations. The large Executive Committee, which includes chairs of University councils, decided to set up an ad hoc committee to make recommendations to the Senate Executive Committee, which will then make a recommendation to the EBC. Prof. Okediji introduced the individuals present at the meeting who were involved with the benefits proposals: Vice President for Administrative Affairs Brian Maddy; Associate Vice President for Administrative Affairs and interim Director of Human Resources Bill Henwood; Theta Dempsey, Chair of the EBC; Benefits Manager Nick Kelly; and David Carnevale, one of the faculty members on the EBC.

Mr. Nick Kelly, Benefits Manager, introduced from Corporate Health Plans of America, the University's benefits consulting company, Mike Wilson, President and CPO, and Anna Holt, University account representative. Mr. Kelly said he wanted to be sure to communicate why these changes were happening, how they were made, and who was involved in them.

Medical costs are rising anywhere from 12 to 15 percent. For the past three years, pharmacy costs have increased over 30 percent. Each year, the University is adding 60-70 retirees to the plan, and they tend to use health care a lot more. Also, the University has grown over the past several years. Mr. Kelly explained that the Blue Cross plan is self-insured. The University is the insurance company and pays the premiums. Blue Cross writes the checks. For the past three years, expenditures have outstripped premiums by a total of about $1.5 million, which has eroded the University's reserves. With all of those factors, the University was facing a potential 23 percent increase in health care costs. The first thing the University did was to try to contain costs by contracting directly as an employer with hospitals. Second, the University went to self-insurance on the plan that was Prudential. Prudential was bought by Aetna, so Prudential as it is known today will not exist next year. The bid Aetna offered was not competitive, and many doctors have dropped out of the network. Prudential made $500,000-600,000 a year on the University in profit. By going to self-insurance, the University eliminates the profit margin and is able to reduce rates. The third major thing that happened was to contract with companies that could help manage costs, give us some reporting data, and provide some kinds of managed care.

In making recommendations, the Benefits Office, Administrative Affairs, and EBC followed the Guiding Principles for Proposed Plan Changes developed by the EBC: a choice of two plans, both self-funded; simplicity and ease of understanding; multi-year planning for gradual changes; affordable preventive treatments; protection of those with catastrophic illnesses through out-of-pocket maximums and lifetime maximums; reduction in differences in networks so choice is made on care and cost, not availability of doctors; and requiring all users to pay slightly more for services, but not so much as to cause delay or avoidance of care. Mr. Kelly pointed out that the lifetime maximum of $2 million combined for the OU plans is twice as high as the state plan.

Discussing the issue of vendors, Mr. Kelly said the University sent out a Request for Proposal for a third party administrator and received 11 responses. The University selected Blue Cross to administer one PPO (Preferred Provider Organization) and Schaller Anderson for the second plan. Schaller Anderson specializes in third party administration; it is not an insurance carrier. The company has done work at the HSC as a Medicaid administrator. The University also hired CatalystRx, a pharmacy benefit management company, to administer the prescription drug plan on the Schaller plan. Both Schaller and CatalystRx offered flexibility and reporting capabilities. The Prudential plan will be replaced by our own self-insured plan administered by Schaller Anderson. The OU/Schaller plan will use the PPO Oklahoma network, which has about 96 percent of the Prudential doctors plus another 100 doctors in Norman. CatalystRx also has an extensive state and nationwide network that includes Wal-Mart, Walgreens, Eckerd, and a lot of other pharmacies. The plan is for the Norman, HSC, and Tulsa campuses.

In terms of actual changes in the plans, there are very few. For the OU/Schaller plan, prescription drug co-pays will go up slightly, there still will be no deductible, the $1000 individual out of pocket maximum remains the same, and for hospitalization, the co-pay will be a flat $200. He pointed out that pharmacy co-pays do not apply to the out-of-pocket maximum. Premiums increased about 13 percent. If an individual is working overseas, claims are processed as if in network. If someone is traveling oversees, s/he will have to pay out-of-network costs, but they will apply toward the in-network out-of-pocket maximum. The Blue Cross plan works the same way. Prof. Murphy asked about the out-of-state coverage. Mr. Kelly answered that Schaller has one of the two largest national networks, so employees should be able to find a network doctor if they are traveling out of state, and they will be able to cover children going to school out of state. The list of doctors will be available online, or the company has a toll-fee number to call to find out where coverage is available.

For the OU/Blue Cross plan, the deductible currently is $100, which is probably the lowest deductible of all the local employers and Big 12 schools. One of the proposed changes is to increase the deductible to $150 for the individual and $375 for the family. Prescription drug co-insurance currently is 85 percent. Under the proposed plan, the cost will be $10 for a generic drug, $20 for a preferred brand, and $30 for a drug that is not on the list. The employee will not pay more than what the drug costs. If there is no generic equivalent, the cost will be $10, the generic price. Prof. Greene asked whether an individual would end up paying more under the new pharmacy plan. Mr. Kelly said it would depend on the cost of the drug and how many drugs are prescribed. He added that someone might need different drugs next year than s/he had this year, and the price of drugs could vary. In general, most people will not see much difference.

Prof. Hutchison commented that he had heard several complaints from faculty recently concerning payments from Blue Cross. In his case, Blue Cross refused the lab work ordered by his physician for a chronic disease. He asked who would determine what is payable and whether Schaller Anderson would be better at making these decisions. Mr. Kelly replied that the determination is based on the plan description. An individual who is having problems may call the benefits office. Vice President Maddy pointed out that Blue Cross has a medical management method to deal with the prescription program. One of the things OU wanted to do by going with Schaller Anderson was to have the ability to design the packages and how they are administered. Prof. Schwarzkopf asked for information about the appeals process. Mr. Kelly said the process would be identical to what is in place now. If someone has a problem, the benefits office will work with the company on the employee’s behalf. If the third party administrator determines that the claim is not covered by the plan, the employee can file a formal appeal, which is reviewed by medical people. The final appeal is to the benefits office, where the appeal is heard by a committee composed of medical professionals from the HSC, a representative from Human Resources, and a representative from the Employment Benefits Committee. Under both plans, the final decision is made by OU. The overwhelming majority of disputes are resolved at an informal level. Prof. Russell asked whether OU could tailor the specific care that is received through the Blue Cross plan or whether we are governed by one of their standard contracts. Mr. Kelly said the University has a separate plan document that Blue Cross administers for us, but sometimes their response is based on the Blue Cross plan. Schaller Anderson is not an insurance carrier, so they do not have their own set of rules. Prof. Russell pointed out that St. Francis hospital in Tulsa is not part of the Blue Cross plan. Mr. Wilson said that was one of the reasons OU was building its own plan. OU does not want to be in a turf war between providers and carriers.

Prof. Harrison asked why there was no out-of-network coverage for prescription drugs. Mr. Kelly said they were discussing the possibility of providing 50 percent coverage out of network. Vice President Maddy noted that major pharmacies would be in the network. Mr. Kelly said that even if a doctor was out of network, the individual still could use a pharmacy in network and get a benefit. Prof. Kenderdine asked who would make the decision as to which drug could be prescribed for a patient. He said he had encountered a situation where Blue Cross refused to pay for a particular drug prescribed by a physician. He asked whether the appeals process would deal with things like that. Mr. Kelly said the appeals process covered that kind of situation. For the Schaller plan, the University will work with the OU pharmacy school to decide which drugs should be on the preferred list. Even if a drug is not on the preferred list, the individual could still get it, but s/he would pay $28. It is the doctor's decision as to the drug prescribed. OU will develop the list of preferred drugs, and there will be an appeals process. Mr. Wilson added that CatalystRx and the medical management team at Schaller Anderson would work with the patient to determine the appropriate care. He commented that Vice President Maddy would meet with all of the Norman physicians and hospitals to make sure that medical management would be delivered in a way they want it to be. If a problem is not resolved in a positive and proactive way, it will come to the EBC. Prof. Carnevale said if the company disagrees with a legitimate physician’s prescription, the burden should be on the company to go through the appeals process.

Prof. Watts wanted to know the hospitals in the Schaller plan. Vice President Maddy said the hospitals would be Norman, Integris, Baptist, South Community, University Hospital, Children’s, Presbyterian, and Mercy. In Tulsa, St. Francis is included, and negotiations are taking place with St. John’s. Prof. Greene said it seemed like the University was pushing the OU/Schaller plan over the OU/Blue Cross plan. She asked whether one plan was better than another. Mr. Kelly said the networks were comparable, and the customer service with Schaller should be just as good. It will be up to employees to look at cost and benefits and determine which one meets their needs. Vice President Maddy noted that from an actuarial perspective, the Schaller Anderson plan has a richer set of benefits by about 3-5 percent. Individuals need to look at health needs for the next year and decide whether they want to have deductibles and co-pays and consider what their pharmacy costs might be. The Schaller Anderson plan was designed so that employees would know up front what the costs would be and could choose based on what they would need next year. Mr. Kelly said the benefits office could help people choose what is right for them. Vice President Maddy said that one of the objectives was to eliminate the size of the network as a reason for choosing between the two plans. Under both plans, the patient can see a specialist without a referral from a primary care physician. When asked about the doctors in the OU/Schaller plan, Mr. Kelly said the state network is PPO Oklahoma, and the list of doctors is online at ppooklahoma.com. An employee can nominate his/her doctor for membership in the network. Also, an individual can request that a pharmacy be contacted about a contract. It is not as easy to make such a request of Blue Cross. Prof. Hutchison pointed out that when an individual waives premiums altogether, the person gets 50 percent back. He asked whether that applied to retirees. Mr. Kelly said it did not. Prof. Hutchison commented that retirees who are retired military could elect to use the military plan and save the University money. Vice President Maddy explained that the people who opt out are the ones who do not need as much care, so the ones left in the plan are more expensive. Prof. Hart asked whether vision care would be added to the plan. Mr. Kelly said the administration was looking into it, but that provision might not take shape by the time of enrollment.

Prof. Okediji explained that Mr. Kelly and Vice President Maddy wanted the opportunity to present the plans to some degree of detail so senators could educate themselves and their constituents. An ad hoc committee has been formed to make recommendations concerning the changes. The members are David Carnevale, chair, Al Schwarzkopf, Sheena Murphy, Roger Harrison, Fran Ayres, Bruce Russell, and a staff member nominated by Staff Senate. She encouraged the senators to contact any member of the committee if they had any questions or concerns.

In closing, Mr. Kelly noted that the "Frequently Asked Questions" document addressed many of the questions. For example, it answers the question of why Schaller's rates are lower and why the dependent rates did not change in the same manner as everything else. He thanked the Senate for the opportunity to explain the proposed changes. Vice President Maddy added that the Regents had approved some changes in ancillary benefits--life, disability, accidental death--to achieve some substantial savings, mostly for employees. Prof. Okediji announced that the President of Schaller Anderson, Dr. Art Pelburg, would be at the Faculty Senate office 9:30-11 a.m. February 14 to meet with faculty who would like to know more about the company. [Note: an e-mail announcing the meeting was sent to the faculty at large.] She remarked that President Boren had gone out of his way to make sure the faculty was not distressed about the proposed changes in benefits.

Prof. Okediji asked for a motion to table this item until the next meeting. The motion was approved on a voice vote. (See 1/01 Senate Journal.)

These three items will be voted on at the next meeting. (See http://www.ou.edu/admin/facsen/stucode.htm, http://www.ou.edu/admin/facsen/grievcom.htm, and http://www.ou.edu/admin/facsen/appor.htm.)

Prof. Okediji reminded the group that Jerry Jensen, Acting Equal Employment Opportunity/Affirmative Action Officer, would like input and comments on the proposed changes in the discrimination/harassment grievance policy. She encouraged the senators to have their constituents review the revisions and send feedback to the Faculty Senate office.

The meeting adjourned at 4:52 p.m. The next regular session of the Senate will be held at 3:30 p.m. on Monday, March 12, 2001, in Jacobson Faculty Hall 102.

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Sonya Fallgatter, Administrative Coordinator

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Valerie Watts, Secretary