President’s Response: Recommendations for Third Party Administrator (TPA) Choice for Penn State Medical and Prescription Drug Coverage

DATE:    March 31, 2017

FROM:    Eric J. Barron

TO:          James A. Strauss

Thank you for the Advisory and Consultative report, Recommendations for Third Party Administrator (TPA) Choice for Penn State Medical and Prescription Drug Coverage, which was passed by the University Faculty Senate on January 24, 2017. I have reviewed the document, and discussed its recommendations with Susan Basso, Vice President of Human Resources.

I approve the recommendations and have instructed Ms. Basso to ensure that the steering committee created to review and make recommendations regarding new contractual agreements for TPAs to be effective January 1, 2018, as well as senior administration to:

  1. Consider new and innovative opportunities for the pricing and delivery of health care;
  2. Insist upon a TP A that is able to provide quality health care coverage to all Penn State employees across the Commonwealth, with broad, in-network access to physicians and facilities;
  3. Remain committed to the guiding principles outlined in the Principles for the Design of Penn State Health Care Plans Advisory and Consultative report that was endorsed by the Senate and accepted by the President in spring of 2016; and,
  4.  Seek contractual agreements with TPAs to specify terms of commitment of no longer than 5 years in order to retain flexibility in administrative options in the context of a rapidly changing health care

I appreciate the Senate’s alignment with senior administration’s interest in ensuring the best possible and most efficient health care outcomes for employees, their dependents, and the University.

cc:        Susan M. Basso
Blannie E. Bowen
Daniel R. Hagen
Nicholas P. Jones