Breaking 2-month hiatus, PEIA Task Force discusses costs

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By: Phil Kabler, WV Gazette-Mail

Meeting for the first time since August, members of Gov. Jim Justice’s PEIA Task Force on Monday discussed issues with costs for out-of-state providers and with rising prescription drug costs.

Afterward, Mike Hall, the Task Force chairman and Justice’s chief of staff, blamed the long hiatus on scheduling conflicts of committee members.

“It’s difficult to get this group of people together on the same day,” Hall said of the 10-member subcommittee, which last met on Aug. 24. “There’s been an attempt for a while to do so.”


The Task Force’s Cost and Revenue Subcommittee last met on Aug. 23, and had no scheduled meetings as of Monday. A third Task Force subcommittee, on public outreach, completed its work on Aug. 16, submitting a 22-page report summarizing comments from 21 public hearings statewide and the results of more than 3,000 surveys.

Nonetheless, Hall said Monday that the Task Force, created by executive order at the height of the statewide teacher strike, is on pace to meet a Dec. 11 deadline to submit final recommendations to the Legislature.

“The intention is to have full committee recommendations done by sometime in November,” he said.

On Monday, subcommittee members discussed two key concerns raised during the public hearings: costs for insurees living in border counties to go to out-of-state providers and soaring prescription drug costs.

Like many health insurance plans, PEIA charges higher co-pays and deductibles for using out-of-network health care providers. In border counties, the closest doctors and hospitals might be across state lines and out-of-network.

PEIA Executive Director Ted Cheatham told subcommittee members that it would cost the plan $10 million to $12 million a year to charge in-network rates for providers in counties bordering West Virginia.

He cited an example of an MRI scan, which in-state hospitals have contracted with PEIA to provide for $1,000. He said PEIA has contracts with some out-of-state hospitals to charge $2,000 for the scan, while that same MRI at UPMC in Pittsburgh, or Winchester Medical Center in Virginia, might run as much as $3,000.

PEIA insurees who use the out-of-state providers have to pay the difference out of their pockets, he said.

“We want people to stay in-state. We want them to use West Virginia facilities,” Cheatham said. “Do they have to drive an extra 20 minutes? Potentially, yes. Is it worth $1,000 to the plan, and to them? That’s up to them.

“They drive into the state every day to go to work. Why can’t they drive into the state for health care?” he asked.

He said the border counties issue is particularly sensitive in the Eastern Panhandle, where Winchester Medical Center offers services not available locally.

On Monday, the subcommittee adopted its first recommendation for the final report, calling for PEIA to negotiate in-state rates for doctors who have offices in West Virginia and in out-of-state border counties.

Meanwhile, Cheatham said, prescription drug costs have increased from 5 percent to 6 percent of PEIA’s total annual expenditures 10 years ago to about 30 percent today.

He said the biggest complaint about prescription drugs is with tier-3 drugs, which are higher-priced brand-name medications, as opposed to lower-cost generics or preferred-brand (tier-2) drugs.

Cheatham said those drugs can cost several hundred dollars per refill, with a 75 percent copay and a $1,750 annual out-of-pocket maximum.

Other than working with their doctors to find lower-cost alternatives, he said the best advice for insurees taking tier-3 drugs is to budget $1,750 a year for their cost.

“That’s the only answer I have, as the fiduciary of the plan,” Cheatham said.

He noted that Medicare provides an appeals process for insurees to request lower rates for tier-3 drugs, if deemed medically necessary, and said about 30 percent of the appeals are approved. If PEIA adopted a similar appeals process, it would add to overall program costs, he said.

“The obvious reality is, the cost of prescription drugs is crazy,” said Task Force member Amy Loring, human resources coordinator for Berkeley County Schools.

Rob Alsop, a West Virginia University vice president and chairman of the subcommittee, said the group will meet again within two weeks, but did not set a date.

“We’ve got an election in eight days,” he said, “so next Monday probably wouldn’t be the best day.”

PEIA provides health insurance for about 230,000 West Virginians, covering state employees, teachers, school service personnel and certain county, municipal and nonprofit agency employees.