07/27/2007

CONTRACT '07 NEGOTIATIONS UPDATE
TABLE TALK
PEF's PS&T contract team continues to meet with a team of negotiators from the Executive Branch headed by representatives of the Governor's Office of Employee Relations (GOER).

The chief medical officer of UHC met with PEF negotiators this week and led a very interesting discussion on the costs to the Empire Plan associated with radiology expenses (MRI, CT, Nuclear medicine, cath, x-rays). Expenses to the Plan are an important issue to both the employer and the employees because both pay significant portions of the premium and as such expenses are directly transferred to them.  The art of negotiating in this area is to gain control of expenses while maintaining benefits. A successful example of this was the introduction of a managed care component as it related to MRIs in past negotiations.

The parties also discussed durable medical equipment and the plan's past practices involving them. 

No agreement was reached on either subject.

FAQ
The term of our last contract ended April 1, 2007. How long will it take to negotiate a successor contract?
 
ANSWER
The last two contract negotiations were concluded with membership ratification 16 months after each contract initially 'expired'. With a new Governor, a governor who did not run on an anti-state worker platform, came hope that the historic processes would be significantly improved. This perspective was actually given credence by reports that he wanted contracts negotiated in 60-90 days.
 
We are at a stage in bargaining where all issues have been discussed except for one significant one. The State's Empire Plan Prescription Drug Program has been given to a new vendor who must now be brought under contract (see following article for details). The impact of this uncertainty on our negotiations is real. It is real for both negotiations teams. Neither the State or the Union know what the terms of the new drug contract will ultimately contain and thus neither can intelligently negotiate this critically important part of our collective bargaining agreement. We will continue at the table and keenly await developments on this other front. 

EMPIRE PLAN PRESCRIPTION DRUG VENDOR AWARD
The state has announced the contract for the Empire Plan Prescription Drug Program is being awarded to United Health Care/Medco. The 4-year contract will become effective January 1, 2008. The Program is currently insured by Empire Blue Cross Blue Shield with Caremark serving as Pharmacy Benefit Manager. United Health Care (UHC) is the insurer for the medical portion of the Empire Plan.

As with other contract awards, very little information has been released this early in the process. Civil Service is organizing a briefing for the unions to explain how United Health Care/Medco was selected, but the date has not been announced yet.  It is important to remember that while the state has made their selection, they now must sign a contract with UHC/Medco before they can become the new vendor.  We mention this because of the past difficulties in bringing the selected vendor to contract.  (Past experience has also been that the selection was challenged by one or more of the vendors not selected.)  We have no other information.  Once the Department of Civil Service has signed the contract, it then must be reviewed and approved by the Attorney General and the State Comptroller.  We expect that this process will take several months.

Members should remember that PEF and the state negotiate benefits. Vendors do not have the authority to change benefits. Therefore, a change in vendors does not mean that copays will change. However, a change in vendor can mean a change in the Preferred Drug List (including tier placement), the list of drugs requiring Prior Authorization, and the network of participating pharmacies. We do know that Medco has mail service pharmacies located in Willingboro, New Jersey and Las Vegas, Nevada.

Obviously, many questions need to be answered and we will provide updates as more information becomes available.

UPCOMING WEEK
Negotiators are scheduled to meet on Tuesday July 31 and will discuss the parties attendance and leave related proposals.

For up-to-date information on negotiations, visit the PEF Web site. You can read past updates and sign-up for AIM (Active Informed Member) e-mail bulletins by visiting us at  http://www.unionvoice.org/pef/home.html