Moore County is headed in the direction of a new group health insurance administrator, First-CarolinaCare (FCC).

After discussions lasting more than an hour Monday during a special meeting, the Board of Commissioners agreed to enter negotiations with the Pinehurst-based insurance company for what would be a $5 million contract.

Final approval will come at a future board meeting and will be dependent upon such factors as review by the county attorney and agreement for review at the end of the first year.

"This is a contract that I don't want to rush through," said Commissioner Tim Lea, who made the motion to authorize County Manager Cary McSwain to begin negotiations with FirstCarolina Care. "I would rather do it right and have to extend existing insurance another month."

Lea said the change to FirstCarolina would represent a new relationship for county employees, a change that makes employees nervous. He added that everyone is concerned about health-care issues today. Lea said his motion would be in the best interests of both county employees and FirstCarolina.

The change from FISERV to FirstCarolina is expected to result in a saving of $200,000 to the county, according to information provided by McSwain and by the Government Efficiency Advisory Board recently appointed by the commissioners to study county financial issues.

The insurance subject was discussed at a budget work session in May, when an employee committee recommended that the county remain with FISERV, the administrator that has provided the county's third-party service in recent years.

The committee noted that service from the current provider "has been outstanding" and employees are satisfied with the claims process through FISERV. The committee report reflected some employee concerns in such areas as FCC's managed-care approach and its lack of experience with self-insured public sector clients.

However, McSwain recommended FCC on the basis of potential saving as well as the local firm's expressed willingness to work with the county in ironing out differences between the two plans.

Efficiency Review

At the last regular meeting, board Chairman Colin McKenzie asked that the matter be continued to give the Government Efficiency panel an opportunity to study the proposals and to make a recommendation. He said the study board was appointed to assist the county on fiscal matters, and it made no sense to make a decision without consulting the members before taking a vote.

At the Monday meeting, Jim Westbrook, chairman of the Government Efficiency Advisory Board, said he agreed with McSwain's findings.

Westbrook said both FISERV and FirstCarolina would provide good service for Moore County. He noted that in the past year the county had a price increase of 3.5 percent, whereas the national average was in the 10-12 percent range. He said that "speaks well for the plan."

"We believe $200,000 is a real good number," Westbrook said in recommending that the county go along with the FCC proposal.

Westbrook noted that FCC is offering the county the same discount offered to FirstHealth employees. Although some employees would be paying a higher co-pay, about 190 would be "grandfathered in" if FirstCarolina is chosen, he reported. Another 30 to 50 employees would be paying lower co-pays, he said.

In studying the insurance proposals, the advisory panel looked at the plans in place with several counties in the area, and Westbrook said Moore County's situation appears to be in the middle. One difference found was Moore County's provision of a higher subsidy for family coverage than in most counties, he said.

"Do we have a Cadillac plan here? The answer is no," Westbrook said of the FCC proposal.

Westbrook said that the real difference between the two plans lies in administration. Moore County is self-insured, which means that the contract goes to a firm providing third party administration.

Lea asked if the proposed contract would allow the county to withdraw at the end of the year if the county is not satisfied.

McSwain said that although the contract is for three years, First Carolina cannot legally guarantee rates for more than one year, something that places the county in a negotiating position at the end of the year.

Worried About Change

Mark Brower, the county's independent insurance consultant, said he had reviewed his concerns with the FCC offer and had resolved all of his questions. One major concern centered on interruption of service, but Brower said he had worked out that issue.

"There are employees who still have concerns and feel uneasy," Brower said. He said that some of these concerns are network-connected.

Lea recalled that employees had expressed concern that FirstCarolina would offer a "Mother, may I?" type of service, a term for an HMO-like program.

Brower called this a typical concern and said everyone will just have to work together to get a better understanding of the new plan. He said that the county would have "complete control over access."

"People are always nervous when we talk about change," Brower said.

Commissioner Larry Caddell said he has personal experience with FCC, which provides coverage at his firm. He cited such advantages as the availability of a local person to address insurance issues and the firm's willingness to work with insured personnel on special needs and requests.

"Any time you make a change, employees are going to be nervous," Caddell said. "I think they (FCC) deserve a chance. We have a recommendation by the manager and we have a recommendation by the committee."

Caddell then made a motion to adopt FCC as the third party administrator and to authorize the manager to begin work on the contract, with service to begin July 1.

But Lea had a fresh round of questions, and Caddell's motion died for lack of a second.

More Questions

Lea had a series of concerns, starting with the over-ruling of the employee committee's recommendations. He asked Human Resources Director Teri Alesch about the committee makeup, but she said the committee was already formed when she assumed her duties last year.

McSwain said the committee was his idea and that he appointed the members as representative of employee makeup.

McSwain said he believes the $200,000 saving estimate with FCC is conservative and that the county will be well served by the change. He reminded the commissioners that FCC has agreed to "grandfather" 190 employees, which means that they will face no increases in their fees.

When committee members were asked why they preferred to stick with FISERV, McSwain said their replies largely centered on the disruption caused by change but all were "personal or emotional and not objective." He said the $200,000 saving is important.

"I'm looking for money here and money there," McSwain said, in reference to his budget work.

Lea said his concern is not entirely financial, although that is an important factor. He said he was basing his questions on comments made by employees who have called him about their insurance concerns. He said employees also mentioned concern that two members of the efficiency panel have FCC connections, and two commissioners, Caddell and Jimmy Melton, have FCC as their company insurers.

Caddell asked Randall if his was a conflict of interest situation because he works for a company insured by First Carolina. She said it did not represent a conflict of interest.

Lea said his major concern is the fact that the board was preparing to vote on a contract that has not been reviewed by the county attorney.

"This is a $5 million contract, and our attorney hasn't even looked at it," Lea said.

Both Alesch and McSwain suggested that the board authorize the county to negotiate with FCC and to bring the contract back to the board for final approval after County Attorney Misty Randall had given her approval. McSwain said the county attorney approves every contract before it is signed and that approval of the concept Monday night would enable him to get started on negotiations.

Lea remained reluctant to approve "something without seeing the contract" but he did make a motion to authorize the manager to begin negotiations with FCC contingent upon agreement of annual review, review by the county attorney and final action by the Board of Commissioners. Caddell made the second.

The vote was unanimous by the four commissioners present. Melton, the fifth member, was out of state and did not make it back to Moore County in time for the special called meeting.

Contact Florence Gilkeson at 947-4962 or by e-mail at florence@thepilot.com.