1993-215E:\NPDOCS\ORD\HMHP.O
NO. 93
AN ORDINANCE APPROVING A LETTER OF UNDERSTANDING BETWEEN THE CITY
OF DENTON AND HARRIS METHODIST HEALTH PLAN RELATING TO THE AWARD OF
BID NO. 1523; AUTHORIZING THE CITY MANAGER TO EXECUTE THE LETTER;
AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, Harris Methodist Health Plan (HMHP) bid on behalf of
Harris Health Plan, Inc. and Harris Methodist Health Insurance
Company to provide group health insurance to City employees; and
WHEREAS, HMHP is desirous of accepting certain portions of the
scope of specifications for Request for Bid No. 1523, but may be
unable to do so without approval of the State Board of Insurance;
and
WHEREAS, HMHP has presented a "Letter of Understanding" to the
City which sets forth issues mutually agreeable to the City and
HMHP and which the parties will pursue if such issues are not
rejected by the State Board of Insurance; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION I. That the City Council hereby approves the "Letter
of Understanding" attached hereto, between the City of Denton and
Harris Methodist Health Plan, and authorizes the City Manager to
execute said letter.
SECTION II. That this ordinance shall become effective
immediately upon its passage and approval.
PASSED AND APPROVED this the ail day of ~ 1993.
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APP D A 0 LEGAL FORM:
DEB A. DRAYOVITCH, CITY ATTORNEY
BY: ~G/(G~ x':.Y.
Harris Methodist
Health Plan
0
LETTER OF UNDERSTANDING
November 23, 1993
Mr. Thomas Klinck
Director of Human Resources
City of Denton
215 E. McKinney
Denton, TX 76201
RE: Request for Bid #1523
Dear Mr. Klinck:
It is our understanding that Harris Methodist Health Plan (HMHP)
and the City of Denton (City) agree to the following:
1. The City of Denton Request for Bid #1523 page two (2)
paragraph two (2) reading: "The City of Denton is seeking
an insurance policy/ agreement to become effective January
1, 1994, for a minimum of one (1) year. The policy shall
provide, if not canceled prior to December 31, 1993, in
accordance with the terms of the policy/agreement, bid
submission form, and/or request for bidders, for the
renewal of this policy for two (2) successive twelve (12)
month periods, thereafter subject to renegotiation of the
terms of this policy, if the City Manager and insurance
company agree, without the necessity of rebidding this
insurance proposal as long as the cost of insurance
during either the first or second twelve (12) month
successive period does not increase more than 30% and the
plan design benefits do not decrease more than 30%.
However, this proposal may be terminated if insurance
company and City are unable to agree in writing to a
mutually agreeable plan design and insurance cost no
later than seventy-five (75) days prior to the end of the
preceding period." (This paragraph applicable to HMHP's
Preferred Plus Plan.)
A member of
Harris Methodist Health System
1300 Summit Avenue I Suite 300 / P.O. Box 901054 / Fort Worth, Texas 76101-2054 / 817-878-58001 Customer Service Telephone Number 817-878-5826
HMHP agrees to provide a rate guarantee through the
second and third plan year for the Preferred HMO Plan
only. HMHP's condition for the 1995 and 1996 rate
guarantee is that HMHP will be the only carrier offered
by the City. The Preferred HMO Plan guarantee will be as
follows: "The years 1995 and 1996 combined maximum rate
guarantee will not exceed a total of 15%. The year 1995
will not exceed 9.9% of HMHP's 1994 rate." (This
paragraph applicable to HMHP's Preferred Plan.)
As City employees' needs for additional health care
services in the Denton area expand, the HMHP is committed
to ongoing assessment of these needs and expansion of
HMHP's current network through the recruitment of
appropriately qualified providers to serve these needs.
The (10) additional Denton providers have been approved
recently, and will be added to the network as soon as
contacts are executed. City's request for additional
hospital service through Denton Regional Medical Center
will be given consideration for future needs. This
ongoing effort will continue as a part of HMHP's
partnership with employer groups that HMHP serves in the
Denton area.
4. This letter of understanding shall become an attachment
to the agreement of the parties authorized rAy City
pursuanto the ordinance approved on the o73ti•!/ day of
''~~1993, relating to the award of Bid No.
1523, except for such portions of this letter that are
specifically rejected by the State Board of Insurance
prior to September 1, 1994.
Please indicate City's acceptance of the above conditions by
signing below where indicated, and returning this letter to my
attention.
Kindest re ards,
hael D. Clark
Senior Vice President
Managed Care Marketing
CITY OF DENTON
By:
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