RFP 200000001290 Award Letter and Synopsis.pdf

Recommendation of Award

The Department of Technology, Management, & Budget’s Procurement office has completed the evaluation of Request for Proposal No. 200000001290 for the Administration of the Michigan Public School Employees’ Retirement System (MPSERS) Dental Benefit Plan and has recommended an award to Delta Dental of Michigan in the amount of $400,000,000.00 to include administrative fees and payment of claims, pending State Administrative Board approval. More information on the State Administrative Board can be found at:

State Administrative Board.

Bidders who were not recommended for the award are encouraged to schedule a debriefing session with the Solicitation Manager. The debriefing session will provide the bidder with the State’s rationale on why the bidder was not recommended for the award. The Solicitation Manager may be contacted as follows:

Mary Ostrowski, Solicitation Manager ostrowskim@michigan.gov

(517) 249-0438

Background Information:

This is a Request for Proposal (RFP) for the Administration of MPSERS Dental Benefit Plan. This is a four-year and 5-month (approximate) Contract with four, one-year renewal option years.

Bidders:

The RFP was posted on SIGMA VSS on March 5, 2020 for 4 weeks and 4 days. The following 3 bidders submitted proposals by the published due date of April 6, 2020.

Bidder Address City, State Zip

SDVOB*

Blue Cross Blue Shield of Michigan (BCBSM) 600 E Lafayette, Detroit, MI 48226 N Delta Dental of Michigan (Delta Dental) 4100 Okemos Rd. Okemos, MI 48864 N Metropolitan Life Insurance Company (MetLife) 200 Park Avenue, New York, NY 10166-0005 N

*SDVOB: Service-Disabled Veteran Owned Business

STATE OF MICHIGAN

ENTERPRISE PROCUREMENT

Department of Technology, Management, and Budget

525 W. Allegan St., Lansing, Michigan 48933 P.O. Box 30026 Lansing, Michigan 48909 http://www.michigan.gov/micontractconnect/0,4541,7-225-48756---,00.html

Evaluation Synopsis

I. Evaluation Process

A Responsible Vendor is a vendor that demonstrates it has the ability to successfully perform the duties identified by the solicitation. A Responsive proposal is one that is submitted in accordance with the solicitation instructions and meets all mandatory requirements identified in the solicitation.

Solicitation Instructions, Section 7, Mandatory Minimum Requirements and Section 8, Evaluation Process:

7. MANDATORY MINIMUM REQUIREMENTS. To avoid disqualification, the bidder must:

1. The Contractor must duplicate the current Plan Design for the Plan Sponsor. See Schedule A Section

1.1.A.2.

2. The Contractor must be a licensed Third-Party Administrator (TPA) in the State of Michigan or insurance company licensed to do business in Michigan, or must qualify in any other capacity as an entity that is properly licensed by statute to provide administrative services only and cost-plus arrangements, or to act as a TPA. The Contractor must attach details regarding any statutory cites that permit the Contractor to meet this requirement. See Schedule A Section 1.H.

8. EVALUATION PROCESS. If all mandatory minimum requirements are met the State will evaluate each proposal based on the following factors:

Technical Evaluation Criteria Weight

1. Schedule A, excluding Sections: 3. Staffing, 4. Project

Management, 7. Invoice and Payment, and Section 8 Transition.

2. Schedule A, Section 3. Staffing 20

3. Schedule A, Section 4. Project Management and

Schedule A, Section 7. Invoice and Payment, Section 8 Transition

4. Vendor Questions, Section 2 Company Background and Vendor Questions, Section 5 Experience

Total 200

Proposals receiving 160 or more technical evaluation points will have pricing evaluated and considered for award.

The full evaluation process is stated in the RFP Proposal Instructions.

II. Evaluation Method Responses to this solicitation were reviewed by a Joint Evaluation Committee, which consisted of the following individuals:

Voting Advisory Mary Ostrowski Central Procurement

DTMB

Danyelle Stoddard Office of Retirement Services

DTMB

Sarah Humphreys Office of Retirement Services

Erik Poppe Office of Retirement Services Contractor

DTMB Willis Towers Watson Elizabeth Harrison Office of Retirement Services

DTMB

Sean Douglass Office of Retirement Services Contractor Willis Towers Watson

Bethany Rigg Office of Retirement Services

DTMB

Ben Louagie Office of Retirement Services Contractor Willis Towers Watson

Barb Murphy Office of Retirement Services Contractor Willis Towers Watson

Virginia Gibson Office of Retirement Services Contractor Willis Towers Watson

Kemal Tekinel Agency Services

DTMB

Senthil Kuppuswamy Agency Services

DTMB

James Hogan Agency Services

DTMB

Smruti Shah CyberSecurity & Infrastructure Protection

DTMB

Mike Bartkowiak CyberSecurity & Infrastructure Protection

DTMB

III. Mandatory Minimum Requirement Results

A. BCBSM

The Evaluation Team determined that BCBSM met the two mandatory minimum requirements and will be considered for evaluation.

B. Delta Dental The Evaluation Team determined that Delta Dental met the two mandatory minimum requirements and will be considered for evaluation.

C. MetLife The Evaluation Team determined that MetLife met the two mandatory minimum requirements and will be considered for evaluation.

IV. Mandatory Minimum Summary

Requirements Met? BCBSM Delta Dental MetLIfe

Yes X X X

No

V. Technical Evaluation

A. BCBSM

The Evaluation Team determined that BCBSM, based on a score of 153, did not meet the requirements of this RFP. This determination was accomplished by evaluating their responses to the Technical Evaluation Criteria.

1. Schedule A – excluding Section 3. Staffing, 4. Project Management, 7. Invoice and Payment, and Section 8 Transition Score: 88 / 120

- JEC had concern with the lack in clarity throughout this Schedule A, pertaining to the work performed and the distinction of roles and coordination between BCBSM and their subcontractors, in initial response.

- Section 1.1.A.6: Bidder did not provide sufficient detail of their ability to provide comparative analysis to other like groups across the Contractor’s book of business, in initial response.

- Section 1.1.B.3.b.v: Bidder provided limited detail on their quality assurance methods by only indicating they use their SMART BOT tool to record all messages, in initial response.

- Section 1.1.C.1.d: Bidder did not provide “due date to the Plan Sponsor for prior approval” on their sample communication plan. After clarification, Bidder still did not provide all due dates, only partially addressed.

- Section 1.1.D.1: Bidder's initial response indicated that retroactive adjustments would be made "within the group's retro processing guidelines". Clarification #1 revealed that these guidelines are a limitation imposed by BCBSM and that retroactive adjustments greater than two years old would require Underwriting approval.

- Section 1.1.D.4: Bidder submitted redlines to the HIPAA BAA.

- Section 1.1.D.8: Bidder indicated a limitation to the requirement in that Bidder will not accept files more frequently than weekly, in initial response.

- Section 1.1.D.14: Bidder indicated exception by stating that all communications between

BCBSM and the Plan Sponsor would be sent via ZixSelect encryption, which is not in compliance with “secure channel defined by the Plan Sponsor”, in initial response.

- Section 1.1.D.15: Bidder’s response indicated providing read-write access, in initial response.

- Section 1.1.E.3: Bidder did not disclose minimum browser requirements for all systems that will be utilized under this Contract: Bidder did not address in regard to provider portal and only provided the requested detail regarding the member portal. After Clarification #1 request, Bidder addressed the provider portal but still did not include sufficient detail about current minimum browser requirements.

- Section 1.1.E.5.a: Bidder provided 1 month’s data in the Service Availability Report; in clarification, the JEC requested 1 year’s data from 1/1/19 to 12/31/19. In response to Clarification #1, Bidder did not provide data for their provider portal from January to October 2019. JEC was unable to determine availability for those months, which was cause for JEC concern. No points deducted for this section.

- Section 1.1.E.9: Bidder submitted exceptions to Schedule E Data Security Requirements.

- Section 1.1.E.10: In initial response, Bidder did not provide a Disaster Recovery Plan that accounted for and encompassed all of the work being performed under this Contract, given the major role of their subcontractor DentaQuest. In Clarifications #1, JEC had concern with Bidder’s response after inquiring how Bidder and subcontractor would work together, which was not sufficiently explained by just saying they have processes in place between BCBSM and DentaQuest (no points deducted).

- Section 1.1.F.4: Bidder indicated exception by stating that Blue Cross will follow corporate policy when providing additional documentation related to internal controls.

- Section 1.1.H.5: Bidder’s response indicated that an audit agreement must be signed by the auditor and Plan Sponsor.

- Section 1.1.J.1: Bidder provided exceptions to Schedule H, Service Level Agreements.

- Section 1.1.K.2: Bidder indicated exception by providing a cap of $50,000.00, in initial response.

- Section 1.1.M.4: Bidder broadly addressed their plan and did not provide sufficient detail on which areas’ access standards are not met and how it plans to improve access in these areas, in initial response. JEC had concern with Bidder’s Clarification #1 response, in that the Bidder did not disclose upfront in proposal, the work being performed by subcontractor United Concordia, their network administrator, who appears to be covering the PPO portion only, of their arrangement, not Blue Par Select (BPS). It is also still unclear who would be responsible for the Blue Par Select Network (no points deducted).

- Section 1.1.M.10: Significant disruption could result, as Bidder's BPS participant arrangement may be a point of confusion for members in that BPS network providers can participate on a claim by claim basis. JEC had concern that the BPS confusion could result (for example) in members going in for one claim Monday and having it covered in-network, and then for a different claim Thursday to the same provider and have it covered as out-of-network. This confusion and unpredictability could be a substantially different experience than our members have experienced.

2. Schedule A – Section 3. Staffing

Score: 16 / 20

- Section 3.6: The Organizational Chart provided in Bidder’s proposal was not an overall organizational chart, in initial response.

- Section 3.7.F: Bidder did not provide sufficient detail of the previous relationship with subcontractor DentaQuest, in initial response. Bidder also did not identify all subcontractors upfront in their proposal, in initial response.

3. Schedule A – Section 4. Project Management, Schedule A, Section 7. Invoice and

Payment, Section 8 Transition Score: 24 / 30

- Section 4.1.C.1: Eligibility file testing was not identified in Bidder’s Implementation Plan without assumptions being made, given other steps, in initial response. In addition, Bidder's implementation plan did not start until the end of August (August 24) with no explanation/indication of what would be done for the first month and a half of the Contract (no activities from July 8 to August 24), in initial response.

- Section 4.1.C.5: In initial response, Bidder’s escalation document provided was primarily a list of people and their departments / responsibilities, which provides added complexity for the State having multiple people to work through to escalate above the Senior Account Manager (SAM) based on subject.

4. Vendor Questions, Section 2 Company Background and Vendor Questions, Section 5

Experience Score: 25 / 30

- Experience 1:

- Bidder did not identify contact’s role at time of project.

- Bidder provided limited detail when describing the scope of the project.

- Based on the limited detail given, this experience had partial relevance in that it was only relevant regarding implementation and not the entire scope of the contract resulting from this RFP.

- JEC had concern with the Reference Check for this experience in the following areas (no points deducted):

• Timely and accurate member communications development

• Integration of enrollment file

- Experience 2:

- Bidder provided limited detail when describing the scope of the project.

- Based on the limited detail given, this experience had partial relevance in that it was for children only, which is the opposite side of the spectrum from retirees that would be serviced under the contract resulting from this RFP.

- JEC had concern with the Reference Check for this experience in the following areas (no points deducted):

• Accurate out-of-network claims processing

- Experience 3:

- Experience had limited relevance based on dental size, given covered lives of 64,000.

Total Score: 153 / 200

B. Delta Dental The Evaluation Team determined that Delta Dental, based on a score of 187, met the requirements of this RFP. This determination was accomplished by evaluating their responses to the Technical

Score: 111 / 120

- Section 1.1.B.3.a.iv: Bidder did not agree to this requirement, in initial response.

- Section 1.1.B.3.b.v: Bidder did not provide sufficient detail on their quality assurance methods, in initial response.

- Section 1.1.C.1.d: Bidder did not provide a sample communication plan with proposal, in initial response.

- Section 1.1.H.5: Bidder indicated exception to this requirement by indicating that appropriate confidentiality agreements will need to be in place at the time of the audit, in initial response.

- Section 1.1.H.8: Bidder did not agree to this requirement, in initial response.

- Section 1.1.H.9: In initial response, Bidder did not agree to this requirement, and only indicated determining a mutually agreeable remedy.

- Section 1.1.H.10: In initial response, Bidder indicated exception to this requirement by stating that if information is deemed proprietary by Delta Dental, then it will not be auditable.

- Section 1.1.H.15: In initial response, Bidder did not agree to the requirement without exception in that only notes of the call, purpose, and resolution can be provided.

- Section 1.1.I.2: Bidder indicated exception to this requirement by imposing additional confidentiality agreement(s) in order to provide data feeds to any of Plan Sponsor’s additional vendors, in initial response.

- Section 1.1.J.1: Bidder provided exceptions to Schedule H, Service Level Agreements, in initial response.

Score: 18 / 20

- Section 3.5.D: In clarification, JEC had concern with Bidder’s indication that the SAM would be responsible for many accounts (11 including this one); no points deducted.

- Section 3.7: Bidder did not identify all subcontractors upfront in their proposal, in initial response.

Score: 30 / 30 The Evaluation Team determined that this Section was adequately addressed, and Bidder met the requirements of this Section without exception.

Score: 28 / 30

- Experience 1:

- Bidder provided limited detail on the relevance of the experience.

- Experience 2:

- Bidder provided limited detail on the relevance of the experience.

- Experience 3:

- Bidder provided limited detail on the relevance of the experience.

Total Score: 187 / 200

C. MetLife The Evaluation Team determined that MetLife, based on a score of 123, did not meet the requirements of this RFP. This determination was accomplished by evaluating their responses to the Technical

Score: 59 / 120

- Section 1.1.I: Bidder’s brief response left JEC unsure whether Bidder was agreeing to both parts of the requirement. No points deducted.

- Section 1.1.A.7: Bidder indicated exception to this requirement by imposing a timeframe limitation, stating they would request 30 days’ notice to implement a change to the Plan Design.

- Section 1.1.B.f: Bidder did not agree to this requirement of contacting members within 24 hours of receipt of Member contact and instead stated they “target to call the participant back within two business days”.

- Section 1.1.B.3.b.iii: JEC unsure whether Bidder’s response pertained only to provider communications or to member communications as well. No points deducted.

- Section 1.1.B.3.b.v: Bidder’s response lacked sufficient detail of quality assurance methods.

- Section 1.1.B.4.a: Bidder imposed a 5-year limitation for accessing documents.

- Section 1.1.C.1.b: Bidder indicated exception to this requirement by stating that only “most” request for customization would be accommodated.

- Section 1.1.C.1.d: Bidder’s sample communications plan was not inclusive of any dates, such as the required due date to Plan Sponsor or final targeted publication date.

- Section 1.1.C.1.e.ii: JEC unsure if a summary of benefits is included as part of the welcome kit, due to them agreeing to the requirement, but not including a summary of benefits with the sample submitted. No points deducted.

- Section 1.1.C.1.e.iv: Bidder’s note regarding copays and coinsurance resulted in uncertainty that if the Plan Sponsor were to implement a copay-based plan design structure Bidder would be able to accommodate displaying copays on the EOB. No points deducted.

- Section 1.1.D.12: Bidder confirmed agreement to the requirement, but the additional note generated question of whether the report would truly be in a format defined by the Plan Sponsor. No points deducted.

- Section 1.1.D.15: Bidder’s response indicated providing read-write access.

- Section 1.1.E.1: Bidder did not provide full agreement to requirement in that they did not fully commit to complying with all applicable State IT policies and standards, but they will align with their own.

- Section 1.1.E.2: JEC was unclear if Bidder’s response was accurate in stating that there is no limit to the number of individuals they can provide access, with “concurrent” meaning intent being “at the same time”. No points deducted.

- Section 1.1.E.3: Bidder did not provide sufficient detail regarding minimum browser requirements.

- Section 1.1.E.5.a: Bidder interpreted this Schedule as being not applicable due to the word “Hosted” being stated. No points deducted.

- Section 1.1.E.6: Bidder did not provide city and state as required, only indicated the state.

- Section 1.1.E.7: Bidder confirmed agreement to the requirement, although JEC had concern in not being able to validate the backup location is 500 miles from the primary data repository location, since Bidder only provided the state in Section 1.1.E.6. No points deducted.

- Section 1.1.E.8: Bidder did not agree to this requirement and stated they would need more than 24 hours to prepare for an audit. Bidder requested 60 days.

- Section 1.1.E.9: Bidder submitted exceptions to Schedule E Data Security Requirements.

- Section 1.1.F.2: Bidder confirmed agreement to the requirement but did not provide detail regarding any current exceptions.

- Section 1.1.F.3: Bidder confirmed agreement to the requirement but then added “provided the report is available” which provided uncertainty to JEC as to whether the report would be provided within 45 days of completion as required. No points deducted.

- Section 1.1.G.5: Bidder did not agree to this requirement and instead marked it Not Applicable by stating there are no State and Federal forms that apply to the banking process.

- Section 1.1.G.7: Bidder did not agree to the requirement and indicated that they cannot guarantee a timeline.

- Section 1.1.H.2: Bidder indicated limitation in allowing audits up to 2 years after the contract ends which conflicts with Standard Contract Terms document that states 4 years.

- Section 1.1.H.2: Bidder’s lack of detail regarding the “overpayment process” made it unclear who funds would be recovered from. No points deducted.

- Section 1.1.H.5: JEC had additional questions regarding whether an audit agreement would be imposed. No points deducted.

- Section 1.1.H.8: Bidder did not agree with the portion of the requirement that stated the “remaining amount will be due as a payment refund within 45 days of the last quarterly invoice…” by stating they will reimburse MPSERS bank account as overpayments are recouped.

- Section 1.1.H.8: Similar to 1.1.H.2, JEC had concerns regarding from whom the overpayments would be recouped. No points deducted.

- Section 1.1.H.9: Bidder did not agree to the requirement, stating “Not confirmed”.

- Section 1.1.H.11: Similar to 1.1.H.2 and 1.1.H.8 this response lacked clarity as to who funds would be recovered from. No points deducted.

- Section 1.1.H.15: Bidder did not agree to this requirement without exception in that only a call summary would be provided.

- Section 1.1.H.16: Bidder did not confirm agreement to the requirement for a self-funded arrangement and instead stated “The overpayment recovery process for any errors identified by the auditor and agreed to by MetLife will be discussed during the audit closing call and overpayment recovery will be determined at that time”.

- Section 1.1.H.16: As stated in 1.1.H.2, 1.1.H.8, and 1.1.H.11 it was again unclear who funds would be recovered from. No points deducted.

- Section 1.1.I.b: Bidder did not confirm agreement to this requirement.

- Section 1.1.I.1.c: Bidder indicated exception to this requirement (pertaining to the Contractor being responsible for the cost of any subcontractors who may be needed to produce data and provide it to the data contractor), by imposing the limitation that fees may be charged if Plan Sponsor did not use one of Bidder’s standard vendors.

- Section 1.1.I.2: Bidder indicated exception to the requirement (pertaining to the Contractor providing data feeds to additional vendors added by the Plan Sponsor without additional costs), by imposing the limitation that fees may be charged if Plan Sponsor did not use one of Bidder’s standard vendors.

- Section 1.1.J.1: Bidder provided significant exceptions to Schedule H, Service Level Agreements, proposing changes to every SLA and multiple penalties.

- Section 1.1.K.2: Bidder indicated exception to this requirement by providing a cap of $50,000.

In addition, Bidder stated that the credit is payable to a “producer” and further defined producer as anyone influencing the sale and appropriately licensed and appointed by MetLife. This contradicts the requirement that the review be completed by a firm selected by the Plan Sponsor.

- Section 1.1.L.1: Bidder did not detail how they will comply with plan design changes.

- Section 1.1.L.6: Bidder agreed to the requirement but only provided limited detail about their claims department experience and capabilities.

- Section 1.1.L.9: Bidder’s response was confusing to JEC in that the requirement was confirmed, but only for data elements captured and stored in Bidder’s system, which made it unclear whether additional Claim data elements could truly be captured and if Contractor would have State data that is not stored in their system. No points deducted.

- Section 1.1.L.18: Bidder’s commitment to this requirement is unclear based on the statement that Bidder “will attempt” to provide the required notice. No points deducted.

- Section 1.1.L.19: Bidder did not agree to the requirement for a self-funded arrangement.

- Section 1.1.M.1: Bidder did not provide the name and description of all networks. Bidder did not address the PDP network referenced in the PDP Plus Disclosure in their response and only addressed the PDP Plus Network.

- Section 1.1.M.8 and 1.1.M.9: Bidder’s agreement to this requirement contradicted with the information provided in the PDP Plus Disclosure document, which detailed a shared savings program. While the PDP Plus Disclosure document states that Plan Sponsor could elect not to participate, Bidder’s proposal appears to be based on this arrangement and distinction between the two programs was not provided throughout the proposal. Insufficient information regarding the PDP network was provided in proposal documents and Plan Sponsor was unable to validate the calculation of items such as provider disruption and GeoAccess results if Plan Sponsor were to select this network.

- Section 1.1.M.10: Bidder’s disruption analysis results indicated significant disruption. 33% of providers currently in-network would be out-of-network under Bidder’s proposed plan.

- Section 1.1.M.11: Bidder agreed to this requirement but provided only limited detail regarding Bidder’s provider auditing processes.

Score: 15 / 20

- Section 3.1.B: Bidder did not fully agree to the requirement by stating they would “attempt” to provide 30 days’ notice.

- Section 3.5.C.1.b: Bidder provided exception to the requirement by stating that the SAM is subject to change based upon the requested location.

- Section 3.5.D: Bidder’s response to the table in 3.5.D contained information that seemed to contradict information included in the resumes provided in response to 3.5.E pertaining to years of experience. No points deducted.

- Section 3.5.D:JEC was unclear on how many accounts the SAM would be responsible for, given the response in table for % of Work Time with Bidder stating: “We are dedicated to delivering exceptional service and do not place time limitations on our staff.” No points deducted.

- Section 3.5.E: Information submitted resembled a biography more than a chronological resume, and education was not listed for Lakisha Forte, SAM, and Janet Hunt Back-up SAM.

- Section 3.5.E: JEC was confused by the additional resumes provided for individuals who were not identified as Key Personnel in the table in Section 3.5.D. No points deducted.

- Section 3.6: The organizational chart provided is not an overall organizational chart; it only details the Client Service and Implementation Teams for this project.

- Section 3.7: JEC was unclear if there were other subcontractors/book of business subcontractors that may not have been considered and addressed in Bidder’s response. No points deducted.

- Section 3.8: Bidder did not explain how it intends to ensure the security of State facilities and did not identify the company that will perform background checks.

Score: 25 / 30

- Section 4.1.C.1: Bidder’s implementation plan timeline indicates eligibility file setup starting in

August, with most major milestones commencing in December (Ex. Eligibility file testing was listed to start December 1). This is a concern to the JEC due to the close proximity to the go-live date. Additionally, Bidder’s response imposed upon the Plan Sponsor an administrative review agreement.

- Section 4.1.C.5: Bidder did not sufficiently address the escalation process. No details were provided in respect to items that need to be escalated above the Senior Account Manager.

- Section 4.1.C.6: Bidder’s response of only “confirmed” was unclear to the JEC and to what it meant, given that it was required for Bidder to “provide any additional information or considerations for Services to begin on January 1, 2021…”. No points deducted.

Score: 24 / 30

- Section 2: Company Background: Bidder did not address whether growth has been organic, through mergers and acquisitions, or both.

- Section 2: Company Background: Bidder did not provide the full 5 years of gross annual sales data as required.

- Section 2: Company Background: Bidder indicated they have previous State of Michigan experience, but did not provide a list of contracts and contract numbers for the last 10 years.

- Experience 1:

- Section 2: In describing Bidder’s role in the project, Bidder simply stated “MetLife provides to customer”. This response does not provide sufficient detail of Bidder’s role.

- Section 3: Bidder did not sufficiently describe the relevance of this experience to the RFP requirements by only stating that this experience is the same benefit requested in RFP.

- Section 4: Bidder did not provide the approximate number of covered lives, stating they would only provide if they were a finalist.

- Dollar Value: Bidder did not provide the dollar value associated with this experience, stating they would only provide if they were a finalist.

- Experience 2:

- Section 2: In describing Bidder’s role in the project, Bidder simply stated “MetLife provides to customer”. This response does not provide sufficient detail of Bidder’s role.

- Section 3: Based on the information provided, this experience appears to have limited relevance to this RFP in regard to the number of covered lives and dollar value. Bidder did not sufficiently describe the relevance of this experience to the RFP requirements by stating only that this experience is the same benefit requested in RFP.

- Experience 3:

- Section 2: In describing Bidder’s role in the project, Bidder simply stated “MetLife provides to customer”. This response does not provide sufficient detail of Bidder’s role.

- Section 3: Bidder did not sufficiently describe the relevance of this experience to the RFP requirements by stating only that this experience is the same benefit requested in RFP.

Total Score: 123 / 200

VI. Technical Evaluation Summary

Selection Criteria BCBSM Delta Dental MetLife

Schedule A – excluding Section 3. Staffing, 4.

Project Management, 7.

Invoice and Payment, and Section 8 Transition

120 POINTS

88 111 59

Schedule A – Section 3.

Staffing

20 POINTS

16 18 15

Schedule A – Section 4.

Project Management, Schedule A, Section 7.

Invoice and Payment, Section 8 Transition

30 POINTS

24 30 25

Vendor Questions, Section 2 Company Background and Vendor Questions, Section 5 Experience

30 POINTS

25 28 24

6 Total – 200 Available 153 187 123

VII. Pricing Summary Pricing was evaluated for the Bidder who passed mandatory minimum requirements and the technical evaluation. The following is a summary of their price proposal:

Year Estimated Contract

Count

Rate (Per Contract Per Month

Administration Fee) Annual Total

Rate (Per Contract Per Month

Administration Fee) Annual Total Year

Estimated Contract

Count

Rate (Per Contract Per Month

Administration Fee) Annual Total

2021 167,447 $ 2.63 $ 5,284,627.32 $ 2.58 $ 5,184,159.12 2021 167,447 $ 46.50 $ 93,435,426.00 2022 170,796 $ 2.70 $ 5,533,790.40 $ 2.66 $ 5,451,808.32 2022 170,796 $ 47.66 $ 97,681,648.32 2023 174,212 $ 2.78 $ 5,811,712.32 $ 2.74 $ 5,728,090.56 2023 174,212 $ 48.96 $ 102,353,034.24 2024 177,696 $ 2.86 $ 6,098,526.72 $ 2.83 $ 6,034,556.16 2024 177,696 $ 50.40 $ 107,470,540.80

$ 22,728,656.76 $ 22,398,614.16 $ 400,940,649.36

$ 70,357,152.10 $ 70,357,152.10

$ 289,984,600.95 $ 289,984,600.95

$ 312,713,257.71 $ 312,383,215.11 $ 400,940,649.36

$ 604,161,282.32 $ 603,831,239.72 $ 692,388,673.97

$ 70,712,213.44 $ 70,712,213.44 $ 70,712,213.44

$ 291,448,024.61 $ 291,448,024.61 $ 291,448,024.61

Year Estimated Member

Count

Rate (Per Member Per Month

Administration Fee) Annual Total

Rate (Per Member Per Month

Administration Fee) Annual Total Year

Estimated Member

Count

Rate (Per Member Per Month

Administration Fee) Annual Total

2021 260,696 $ 1.69 $ 5,286,914.88 $ 1.66 $ 5,193,064.32 2021 260,696 $ 29.87 $ 93,443,874.24 2022 265,910 $ 1.73 $ 5,520,291.60 $ 1.71 $ 5,456,473.20 2022 265,910 $ 30.61 $ 97,674,061.20 2023 271,228 $ 1.79 $ 5,825,977.44 $ 1.76 $ 5,728,335.36 2023 271,228 $ 31.45 $ 102,361,447.20 2024 276,653 $ 1.84 $ 6,108,498.24 $ 1.82 $ 6,042,101.52 2024 276,653 $ 32.37 $ 107,463,091.32

$ 22,741,682.16 $ 22,419,974.40 $ 400,942,473.96

$ 70,357,152.10 $ 70,357,152.10

$ 289,984,600.95 $ 289,984,600.95

$ 312,726,283.11 $ 312,404,575.35 $ 400,942,473.96

$ 604,174,307.72 $ 603,852,599.96 $ 692,390,498.57

$ 70,712,213.44 $ 70,712,213.44 $ 70,712,213.44

$ 291,448,024.61 $ 291,448,024.61 $ 291,448,024.61

Term Estimated Contract

Count

Rate (Per Contract Per Month

Administration Fee) Annual Total

Rate (Per Contract Per Month

Administration Fee) Annual Total Term

Estimated Contract

Count

Rate (Per Contract Per Month

Administration Fee) Annual Total

2021-2024 172538 $ 2.74 $ 5,673,041.22 $ 2.70 $ 5,590,223.10 2021-2024 172538 $ 48.38 $ 100,168,516.14 $ 22,692,164.88 $ 22,360,892.40 $ 400,674,064.56

$ 70,357,152.10 $ 70,357,152.10

$ 289,984,600.95 $ 289,984,600.95

$ 312,676,765.83 $ 312,345,493.35 $ 400,674,064.56

$ 604,124,790.44 $ 603,793,517.96 $ 692,122,089.17

$ 70,712,213.44 $ 70,712,213.44 $ 70,712,213.44

$ 291,448,024.61 $ 291,448,024.61 $ 291,448,024.61

Term Estimated Member

Count

Rate (Per Member Per Month

Administration Fee) Annual Total

Rate (Per Member Per Month

Administration Fee) Annual Total Term

Estimated Member

Count

Rate (Per Member Per Month

Administration Fee) Annual Total

2021-2024 268622 $ 1.76 $ 2,673,291.36 $ 1.73 $ 5,576,588.53 2021-2024 268622 $ 31.07 $ 100,152,933.27 $ 22,693,165.44 $ 22,306,350.12 $ 400,611,733.08

$ 70,357,152.10 $ 70,357,152.10

$ 289,984,600.95 $ 289,984,600.95

$ 312,677,766.39 $ 312,290,951.07 $ 400,611,733.08

$ 604,125,791.00 $ 603,738,975.68 $ 692,059,757.69

$ 70,712,213.44 $ 70,712,213.44 $ 70,712,213.44

$ 291,448,024.61 $ 291,448,024.61 $ 291,448,024.61

Estimated 4-Year Admin. Fee Total Estimated 4-Year Total

Self-Insured Fully-Insured Delta Dental Delta Dental

Original Pricing Final Pricing Original & Final Pricing Contract Rate- Variable Annual Rate Contract Rate- Variable Annual Rate

Estimated 4-Year Member OOP Claims Cost Estimated 4-Year Member OOP Claims Cost

Estimated 1-Year Claims Cost (From Claims Repricing) Estimated 4-Year Claims Cost Estimated 4-Year Total Cost (Admin. Fee + Claims)

Estimated 4-Year Total Cost (Admin. Fee + Claims)

Estimated Total Cost including Member Out-of-Pocket (OOP) Claims Cost Projection

Estimated Total Cost including Member OOP Claims Cost Projection

Estimated 1-Year Member OOP Claims Cost (From Claims Repricing)

Estimated 1-Year Member OOP Claims Cost (From Claims Repricing)

Estimated Total Cost including Member OOP Claims Cost Projection

Estimated Total Cost including Member OOP Claims Cost Projection

Member Rate - Variable Annual Rate Member Rate - Variable Annual Rate

Estimated 4-Year Admin. Fee Total Estimated 4-Year Total Estimated 1-Year Claims Cost (From Claims Repricing) Estimated 4-Year Claims Cost Estimated 4-Year Total Cost (Admin. Fee + Claims)

Estimated 4-Year Total Cost (Admin. Fee + Claims)

Estimated 1-Year Member OOP Claims Cost (From Claims Repricing)

Estimated 1-Year Member OOP Claims Cost (From Claims Repricing)

Estimated 4-Year Member OOP Claims Cost Estimated 4-Year Member OOP Claims Cost Contract Rate-Fixed Term Rate Contract Rate-Fixed Term Rate

Estimated 4-Year Admin. Fee Total Estimated 4-Year Total Estimated 1-Year Claims Cost (From Claims Repricing) Estimated 4-Year Claims Cost Estimated 4-Year Total Cost (Admin. Fee + Claims)

Estimated 4-Year Total Cost (Admin. Fee + Claims)

Estimated 4-Year Claims Cost

Estimated Total Cost including Member OOP Claims Cost Projection

Estimated Total Cost including Member OOP Claims Cost Projection

Estimated 1-Year Member OOP Claims Cost (From Claims Repricing)

Estimated 1-Year Member OOP Claims Cost (From Claims Repricing)

Estimated 4-Year Member OOP Claims Cost Estimated 4-Year Member OOP Claims Cost Member Rate -Fixed Term Rate Member Rate -Fixed Term Rate

Estimated 4-Year Admin. Fee Total Estimated 4-Year Total Estimated 1-Year Claims Cost (From Claims Repricing)

Estimated 4-Year Member OOP Claims Cost Estimated 4-Year Member OOP Claims Cost Notes:

(1) The State of Michigan does not guarantee a minimum or maximum volume of services, claims and conversions.

(2) For purposes of proposal comparison, estimates in the tables above and Schedule C Claims Re-Pricing were utilized. Also see above Note 1.

Estimated 4-Year Total Cost (Admin. Fee + Claims)

Estimated 4-Year Total Cost (Admin. Fee + Claims)

Estimated Total Cost including Member OOP Claims Cost Projection

Estimated Total Cost including Member OOP Claims Cost Projection

Estimated 1-Year Member OOP Claims Cost (From Claims Repricing)

Estimated 1-Year Member OOP Claims Cost (From Claims Repricing)

VIII. Negotiations: Clarifications and reductions were requested and negotiated with the Bidder who passed the technical evaluation.* This also included four “Notice of Deficiency” where the language was corrected or removed and not applicable to the Contract. They included:

• Removal of Contractor Hosted Software and Terms, which was determined to be not applicable under the type of service under this Contract.

• Removal of language under Financial Administration which required the Contractor to electronically transmit a signed written statement certifying that a wire request correctly and completely reflects Plan Sponsor’s financial obligation for a period of time, was determined to be not applicable.

• Adjustment of language under Claims Processing pertaining to a class action lawsuit and the Contractor requirement incorrectly required the Contractor to file on the State’s behalf.

• Adjustment of language in Schedule E, Data Security requirements to better align with the type of service under this Contract.

Delta Dental’s original and final pricing is reflected in the table above. The RFP contained 8 price structures, 4 self-insured and 4 fully-insured. Clarifications were requested to confirm and understand the accuracy of the numbers submitted in the proposal by Delta Dental. This included several clarifications to better understand the value of claims dollars included in Schedule C Claims Repricing submitted by the Bidder, and certain claims categories that were omitted from the design of Schedule C in order to ensure accuracy in the data for Schedule C that the State required all Bidders to complete. These categories included claim lines such as orthodontia, alternate treatment claims, and claims where the plan was not the primary payor. While these claims dollars are not reflected in Schedule B or Schedule C, the JEC has accounted for the additional estimated value of these items in the overall award recommendation value.

In negotiation, Delta Dental was able to reduce their Administrative Fee pricing an average of 1-2% for each of the 4 self-insured pricing structures and did not provide a reduction on the 4 fully-insured pricing structures.

Delta Dental, also as incumbent, additionally offered to revert the current administrative fee for calendar year 2020 back to the rate it was in 2019 (also the proposed rate for 2021), resulting in additional savings. Using the projections in Schedule B Pricing, this provides an estimated savings of $330,042.60 over the 4-year Contract term on the Administrative Fee and an estimated savings of $92,000 on 2020 calendar year, specifically for the Contract Rate-Variable Annual Rate price structure, which has an estimated total cost of $312,383,215.11.

When pricing structures were compared, this structure, having a contract-based design, protects the State from the risk of additional costs that may be incurred in a per member per month rate if the average size of contracts within the Plan increases more than expected over time. Additionally, utilizing the variable rate structure may prove to be a better negotiation tool in future negotiations. The rate adjustment on 2020 also may not have been achievable in a fixed term rate structure.

*Note: BCBSM received one round of clarifications, which was necessary to determine their initial technical scoring and resolve JEC confusion on the submitted proposal.

VIII. Award Recommendation:

Award recommendation is made to the responsive and responsible Bidder who offers the best value to the State of Michigan. Best value is based on the Bidder passing mandatory minimum requirements, meeting the minimum point threshold, and offering the best combination of factors as stated in Technical Evaluation Criteria, Section 8 Evaluation Process, and pricing. Delta Dental met the minimum point threshold and offered the best combination of factors, along with a robust network of providers, low network provider disruption of 13.7% for plan members who have used services, strong GeoAccess results, and competitive Administrative Fees due to competitively bidding and negotiation which provided an estimated combined hard and soft savings of approximately $512,074.80. Award Recommendation is made to Delta Dental in the amount of $400,000,000.00 with a Self-Insured Plan.