Delay in Suffolk plan to cut drug costs
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A company hired by Suffolk County to wring $17 million in annual savings in employee prescription drug costs has postponed the start of the program.
The delay could cost $1.4 million a month, and it was unclear who will pay.
An email issued Saturday by Chief Deputy County Executive Dennis Cohen said the new administrator, OptumRx, would not begin April 1 as planned. Current coverage for county employees will remain in effect "until further notice," Cohen said.
Deputy County Executive Jon Schneider said he expects no fiscal impact on the county because the contractor will be required to achieve savings retroactively as of April 1. "We expected the full savings that were guaranteed to the county. We need to produce the savings as of April 1, regardless of when they begin to deliver the service."
David Himmel, a spokesman for the Irvine, Calif.-based company, had no immediate comment. OptumRx is a part of United Health Group and manages $23 billion in drug spending for clients including 270 state and federal agencies.
The biggest impending change for Suffolk's 21,300 workers and retirees is mandatory use of a mail order program for long-term prescriptions.
The $17 million savings initiative was approved in a deal with all county unions last fall. The agreement continued the employee health care plan through 2020 with no cost sharing from current county workers, but a 15 percent contribution from new hires.
Noel DiGerolamo, president of the Suffolk Police Benevolent Association and co-chairman of the county-union board that oversees the health plan, said it became apparent Friday there "were some pending issues preventing them from going live" by April 1. DiGerolamo declined to explain, but said he hoped OptumRx could be up and running by May 1. He said he expected the county to achieve the necessary savings by year's end.
County Executive Steve Bellone's 2013 budget projected the entire $17 million cost savings starting Jan. 1. However, the county-union board did not select the new prescription administrator until the end of January.
County officials said OptumRx agreed to implement the new program by April 1, even though the companies that sought the contract initially indicated a three-month transition was needed. Last month, legislative budget analysts included a two-month delay in the new prescription program in their projections that the county is facing a $250 million budget hole this year and next. The county has not signed a contract with OptumRx, but has a general agreement and is working out details, said Bellone spokeswoman Vanessa Baird-Streeter.