50-44000-24-CP464_25-00039 IBIS Sole Source Justification_11.14.2024.pdf.PDF

2021 Sole Source Form

STATE OF NEW MEXICO

SOLE SOURCE REQUEST AND DETERMINATION FORM

A sole source determination is not effective until the sole source request for determination has been posted for thirty (30) calendar days without challenge, and subsequently approved in writing by the State Purchasing Agent or, for Professional Services Agreements, the Secretary of the General Services Department. The foregoing requirement is regardless of whether the sole source request for determination has been signed by the Agency and/or the Contractor.

I. Name of Agency: Office of the Superintendent of Insurance

Agency Chief Procurement Officer: Michelle Montoya

Telephone Number: 505-695-8158 Agency Contact for this request: Michelle Montoya Telephone Number & Email Address: michelle.montoya@osi.nm.gov

II. Name of prospective Contractor: IBIS Actuarial Consulting, LLC

SHARE Vendor Number (must be active): 176673 Address of prospective Contractor: 355 Renaissance Court, Reno, NV 89523

Contact Name, Telephone Number and Email Address:

Annette James, (775)343-2322, annette@ibisactuarial.com

Amount of prospective contract before tax: $710,000 Estimated tax amount (tax is subject to change): N/A

Term of prospective contract: 1 year effective (12/31/2024 – 12/30/2025)

Note: For terms longer than one year, Request for Policy Exemption from DFA MUST be included.

III. Agency is required to state purpose/need of purchase and thoroughly list the services (scope of work), construction or items of tangible personal property of the prospective contract (if this is an amendment request to an existing contract, include current contract number issued by SPD):

Contractor is required to continue to perform rate review for all health product lines and continue provide actuarial and consulting services to the Agency including but not limited to:

1. Provide actuarial consulting to OSI staff related to all health and life lines of

Docusign Envelope ID: 63779F06-6AD9-48D1-854A-F431AD16D278 mailto:annette@ibisactuarial.com business upon request and as directed.

2. Provide rate review training to OSI staff related to all health lines of business, upon request and as directed.

3. Prepare training materials for rate review for health products.

4. Prepare rate review manuals and guidance for insurance companies.

5. Provide consulting services and assist in drafting rules.

6. Provide consulting services on legislative matters.

7. Provide consulting services on mergers, acquisitions, consolidations, financial and market conduct examinations.

8. Analyze industry data call reporting related to rate review and plan designs.

9. Collaborate with internal and external stakeholders upon request and as directed.

10. Consult with the Department on all life and health insurance regulatory matters.

11. Provide Policy Advice on all life and health related matters on state and national level.

12. Study the impact of prescription drug product prices in New Mexico, including the overall impact of prescription drug product costs on health care premiums.

13. Complete other projects as assigned and agreed upon as it pertains to this project.

IV. Provide a detailed explanation of the criteria developed and specified by the agency as necessary to perform and/or fulfill the contract and upon which the state agency reviewed available sources. (Do not use “technical jargon;” use plain English. Do not tailor the criteria simply to exclude other contractors if it is not rationally related to the purpose of the contract.)

The work affiliated with this contract requires deep understanding of New Mexico laws and statutory obligations from actuarial and regulatory perspective in order to be able to provide technical expertise in rulemaking and areas such as evaluating and monitoring the financial health of insurance risk-bearing entities, statutory and target financial examinations, estimating the impact of health policy options on the insurance market, performing the review of ACA and non-ACA rates, implementing affordability initiative programs, assessing the financial viability of insurance companies applying for state licensure, as well as reviewing merger, consolidation and acquisition activity of insurance companies from the state perspective. The contractor must meet the following criteria:

• Health actuary, current member of American Academy of Actuaries (MAAA) http://www.actuary.org/, and a Fellow of the Society of Actuaries (FSA) https://www.soa.org, fully compliant with all eligibility and continuing education requirements;

• Possess at least twenty-five (25) years of experience as a credentialed actuary;

• Possess at least twelve (12) years of health regulatory experience as credentialed actuary;

• Possess the ability, credentials and expertise necessary to review rates for all health insurance products, including but not limited to, major medical, excepted benefits, Medicare Supplement, Long Term Care;

• Have the ability, credentials and expertise necessary to review rates for Qualified

Docusign Envelope ID: 63779F06-6AD9-48D1-854A-F431AD16D278 http://www.actuary.org/ https://www.soa.org/

Health Plans certified to be sold on the New Mexico’s Health Insurance Exchange;

• Have in-depth knowledge of the New Mexico Insurance Code and New Mexico

Administrative Code, as well National Association of Insurance Model Laws and the Affordable Care Act;

• Have in-depth knowledge and understanding of the New Mexico Health Care Affordability initiatives including but not limited to state out-of-pocket “SOPA” assistance and small business premium reduction programs;

• Have experience with New Mexico SOPA reconciliation; and

• Have experience with New Mexico small group plan reduction

V. Provide a detailed, sufficient explanation of the reasons, qualifications, proprietary rights or unique capabilities of the prospective contractor that makes the prospective contractor the one source capable of providing the required professional service, service, construction or item(s) of tangible personal property. (Please do not state the source is the “best” source or the “least costly” source. Those factors do not justify a “sole source.”)

Annette has more than 25 years of senior-level actuarial experience, which includes 14 years as a regulatory health actuary with the Nevada Division of Insurance. Her current consulting activities focus on supporting state and federal insurance regulators. This includes analyzing the impact of implementing health policies options, reviewing the solvency of risk bearing entities, including multiple employer welfare arrangements (MEWAs), participating in financial examinations, reviewing health insurance rates and providing consulting services to health plans and healthcare provider groups.

As a regulator (2006-2020), she led market studies, analyzed the impact of various health policy options, reviewed ACA and non-ACA health insurance rates, monitored the solvency of domestic health carriers, reviewed merger and acquisition activity of insurance companies from the state perspective and drafted state insurance laws and regulations.

Her other professional experience includes the following:

• Prepare reports on the impact of mandated benefits for states and consumers

• Review carrier business affiliation changes, including mergers, consolidations and acquisitions

• Evaluate the implications of 1332 reinsurance programs

• Provide statements of actuarial opinions for annual NAIC financial statements

• Review the COVID Excel model developed by the Society of Actuaries to estimate the future impact of COVID on health care costs, developed the user manual, aimed at helping regulators to use the model effectively

PROFESSIONAL ACTIVITIES

Vice President, Health, American Academy of Actuaries (2024 - 2026 Board member, American Academy of Actuaries (2021-2024) Chair of the Health Equity Committee of the American Academy of Actuaries (2020-2024) Chair of the Health Committee of the Actuarial Standards Board (ASB) (2022-2024) Member, Health Practice Council, American Academy of Actuaries, October 2020-present Member of the Health Committee of the ASB (2015-2020, 2022-2024) Chair of the task force to revise ASOP No. 28 Statements of Actuarial Opinion Regarding

Health Insurance Assets and Liabilities, effective July 1, 2022

Participated in the 2022 revision of ASOP No. 11 Treatment of Reinsurance or Similar Risk Transfer Programs Involving Life Insurance, Annuities, or Health Benefit Plans in Financial Reports, effective December 1, 2022

Participated in the 2018 revision of ASOP No. 42 Health and Disability Actuarial Assets and Liabilities Other Than Liabilities for Incurred Claims

Participated in the 2017 revision of ASOP No. 5 Incurred Health and Disability Claims Member, Health Actuarial Task Force, National Association of Insurance Commissioners, 2017 – 2020 Member, Health Risk Based Capital Task Force, National Association of Insurance

Commissioners, 2015 – 2020 Member, Health Test Ad Hoc Group, National Association of Insurance Commissioners, 2019 – 2023 Member, Health Risk Based Capital Excessive Growth Charge Ad Hoc Group, National

Association of Insurance Commissioners, 2019 – present PUBLICATIONS (Sample)

• Year-End 2020 Statements of Actuarial Opinion: Considerations for Health Carriers and State Regulators, December 2020

• The future of Insurance is a Shared Responsibility, The Actuary, December 2019

• How to Prepare a Health Actuarial Memorandum That Makes Your Regulator Smile, HealthWatch, October 2018

• Market Options Discussion Paper: Weighing Alternatives for Stabilizing the Nevada

Individual Health Insurance Market, January 2018

• A Regulatory Perspective on Rate Review Before and After the Affordable Care Act, HealthWatch, August 2015

PROFESSIONAL PRESENTATIONS (Sample) 2024 American Academy of Actuaries Annual Meeting:

• Shaping the Future: Changing Longevity from a Risk to an Opportunity: A fireside chat with Dr. Debra Whitman, Executive Vice President, AARP 2024 ISPOR Conference:

• Skin in the Game or Financial Overdose? Navigating the Future of Patient Cost-

Sharing on Prescription Drugs 2023 American Academy of Actuaries Health Equity Symposium:

• Opening remarks, fireside chat 2023 Society of Actuaries Annual Meeting:

• Health Equity: What it means for Actuaries 2023 VBID Conference:

• Equity Implications in Health Plan Benefit Design https://vbidcenter.org/2023-v-bid-summit/ 2021 Conference of Consulting Actuaries webinar:

• Financial Reporting in Healthcare 2021 Society of Actuaries Annual Meeting:

• ASOP 11: Are Life, Annuity and Health Actuaries Ready?

2020 Society of Actuaries Webinar:

• Best Practices for ACA Rate Filings

• Premium Deficiency Reserves – A Refresher

• Demystifying the Orange Blank for Actuaries 2019 Annual Conference of Consulting Actuaries Meeting:

Docusign Envelope ID: 63779F06-6AD9-48D1-854A-F431AD16D278 https://vbidcenter.org/2023-v-bid-summit/ https://vbidcenter.org/2023-v-bid-summit/

• Risks and Opportunities Under an Association Health Plan (AHP) 2019 Society of Actuaries Valuation Actuary Symposium:

• Ask the Regulator: Professionalism for Health Actuaries Through the Eyes of

Regulators

• You Have to document that? Health Actuarial Opinion Reporting and Documentation 2019 Society of Actuaries Webinar:

• Preparing Actuarial Memos in Support of Actuarial Opinions (Orange Blank) 2018 Society of Actuaries Valuation Actuary Symposium:

• Claims Reserves: Basics to Nuances

• I’m the Appointed Actuary for the Orange Blank –Now What?

2017 Society of Actuaries Health Meeting:

• Whispers from the Annual Statement

• Risks, Losses and Insolvencies, Oh My!!

2016 Society of Actuaries Valuation Bootcamp for Health Actuaries:

• ACA Assets and Liabilities

• Premium Deficiency Reserves 2015 Caribbean Actuarial Association Annual Meeting:

• Healthcare Reform in the US –Lessons for the Region 2015 Society of Actuaries Webinar:

• Health Statement Actuarial Opinions and Actuarial Memoranda 2015 Society of Actuaries Annual Meeting:

• Best Practices under ASOP 23 & ASOP 41 2014 Society of Actuaries Annual Health Meeting:

• ACA Rate Review; Professionalism Considerations for Pricing Actuaries 2013 Society of Actuaries Annual Health Meeting:

• Individual Major Medical Pricing: Swimming in ACA Alphabet Soup

EXPERT TESTIMONY

As the Lead Actuary of the Nevada Division of Insurance, Annette provided expert oral and written testimony on many occasions, examples are:

• Nevada Division of Insurance rate filing hearings

• Silver State Health Insurance Exchange hearings

• Nevada State Legislature committee hearings

• Nevada state regulatory hearings

• Nevada Division of Insurance hearings related to the merger and acquisition activities of domestic health insurance companies

• Financial solvency hearings related to the receivership of health insurance companies

VI. Provide a detailed, sufficient explanation of how the professional service, service, construction or item(s) of tangible personal property is/are unique and how this uniqueness is substantially related to the intended purpose of the contract.

Annette James assisted the Office of Superintendent of Insurance Life and Health Division for 3 years through another firm’s contract. During this time, she consulted to the Officer of Superintendent of Insurance on various regulatory matters, performed rate review, drafted industry and staff training materials, assisted in rulemaking, streamlined and deepened the rate review process and the implementation of new affordability initiatives mandated by state law. Since then, Annette has started her own firm applying her consulting and industry experience as a health actuary and has continued to work with

OSI.

What makes Annette unique and different from other actuaries is her vast regulatory experience, knowledge and understanding of the New Mexico health insurance market and carriers, as well as in-depth knowledge of the New Mexico insurance market as well Insurance and Administrative Codes. She has assisted in drafting New Mexico regulations and has provided guidance and assistance with setting up the New Mexico State Out-of- Pocket Assistance program as well as the Small Group Premium Relief program reducing health insurance costs for New Mexicans. Annette is the only actuary who helped complete the setup and effectuation of the affordability initiatives programs. This understanding of the programs is crucial in understanding Qualified Health Plans and ensuring adequate rate review and plan analysis.

Annette possesses an exceptional set of skills as an actuary and a state insurance regulator.

She was the Chief Actuary for the Nevada Insurance Department overseeing rate and form review and financial examinations, which brings deep knowledge and understanding of health systems and insurance regulation. The various parts of an insurance department are usually siloed. Having the experience in each department helps connect the dots and identify issues that others may not see. She knows the insurance industry tactics, regulatory requirements and challenges as well as how to resolve them. She also advised the state on the implementation on the ACA and the federal government on the financial health of the COOP and transition with its dissolution.

Due to her unique and extensive experience with insurance companies rate review and regulation, as well as her prior work for New Mexico, she is the only one who can assist us in meeting our statutory obligations. She has experience with actuarial consulting, implementing legislation and rulemaking, participating in statutory and target financial examinations, estimating the impact of health policy options on the insurance market, performing the review of ACA and non-ACA rates, assessing the financial viability of insurance companies applying for state licensure, reviewing merger and acquisition activity of insurance companies from the state perspective, as well as evaluating and monitoring the financial health of insurance risk-bearing entities.

VII. Explain why other similar professional services, services, construction or item(s) of tangible personal property cannot meet the intended purpose of the contract.

Other actuaries do not have the in-depth knowledge of New Mexico’s statutes, regulations and unique requirements, which are needed during rate review, rulemaking and policy decision advice as well as the review of QHPs and plans subject to the various affordability initiatives implemented in our state. Due to Annette’s unique regulatory and industry experience, she is the only one who can ensure the stability of the New Mexico health insurance market. Annette has been crucial to the State Out-of-Pocket Assistance program and carrier reporting on reconciliation. The affordability fund has been moved to the

Health Care Authority, “HCA”. However, OSI continues to oversee the market, and the Health Care Authority provides subsidies for a large portion of the plans that are offered in the market. It is essential that the actuary working at OSI has an in-depth knowledge and understanding of the Affordability programs and their impacts to ensure that the New Mexico health insurance market is not thrown into a disarray. Due to the intricate nature of the affordability initiatives, another actuary would not be able to assist because of the intricate nature of the program.

VIII. Provide a narrative description of the agency’s due diligence in determining the basis for the procurement, including procedures used by the agency to conduct a review of available sources such as researching trade publications, industry newsletters and the internet;

contacting similar service providers; and reviewing the State Purchasing Divisions’ Statewide Price Agreements. Include a list of businesses contacted (do not state that no other businesses were contacted), date of contact, method of contact (telephone, mail, e-mail, other), and documentation demonstrating an explanation of why those businesses could not or would not, under any circumstances, perform the contract; or an explanation of why the agency has determined that no businesses other than the prospective contractor can perform the contract.

The Office of Superintendent of Insurance has contracted with actuarial and regulatory advisory firms which were not able to provide actuarial consulting services tailored to New Mexico from a holistic regulatory approach and ensure the successful implementation of New Mexico’s affordability initiatives and appropriate market regulation.

Certified by: Date:____________________

Agency Chief Procurement Officer

Agency Approval by: Date: ____________________

Cabinet Secretary/Agency or Entity Head or Designee

APPROVED: Date:____________________

State Purchasing Agent

11-13-2024

11/14/2024

If this sole source is being submitted by a governmental agency or governmental entity not under the final authority of the State Purchasing Agent, the State Purchasing Agent’s signature is not required. The signature line may be removed from this form or marked as N/A. Hard Copy Documentation for Courtesy Postings do not need to be submitted to SPD for approval.

I. Name of Agency: Office of the Superintendent of Insurance