PROVIDENCE – In one of his final actions as chief justice of the R.I. Supreme Court, Frank J. Williams today ordered the City of Providence and its labor unions into binding arbitration.
The parties – at odds over Providence’s decision to switch benefits administrators for its municipal health care and prescription plans – have been in talks since Friday morning, city officials said last week. (READ MORE)
Although the city is self-insured, it hires an outside agency to administer its health and prescription plans and give it access to lower reimbursement rates. Until now, both functions have been handled by the nonprofit Blue Cross & Blue Shield of Rhode Island.
But in October, the city signed three-year deals with two new administrators: UnitedHealthcare of New England, the local unit of the Minnesota-based UnitedHealth Group (NYSE: UNH), to handle health-care benefits; and Caremark Pharmacy Services, the pharmacy-benefits management (PBM) division of Woonsocket-based CVS Caremark Corp. (NYSE: CVS), to handle the city’s prescription-drug plans.
Providence contends that the switch is allowed under its contracts with municipal and school unions so long as the city continues to offer “equivalent services.” But city labor unions, charging that the benefits offered by Caremark and UnitedHealthcare wouldn’t be “equivalent,” asked the courts to intercede.
Williams – who had guided the parties into the preceding talks and mediated their agreement to enter binding arbitration – “met with lawyers for all sides for about two hours this afternoon,” according to the R.I. Administrative Office of State Courts. “He hopes to pick an arbitrator by the end of this week,” the office said, and “he will remain available to mediate any disputes that may continue to arise in the matter.”
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The dispute affects benefit plans for about 5,000 Providence school and municipal employees, 4,500 retirees and their covered family members.
It also affects city finances: Mayor David N. Cicilline has said the new contracts would save Providence $58,000 per week. Those agreements both were slated to take effect Jan. 1.
The seven-page court order the chief justice signed today allows the city to proceed with its Caremark pharmacy-benefits agreement but places on hold the health-benefits switch from BCBSRI to UnitedHealthcare.
Williams expressed gratitude to all parties for agreeing to the arbitration schedule, because it “protects everyone’s interests” and the issues are too important, the state courts’ office said.
He retires from the Supreme Court today, after nearly eight years as chief justice. But he will remain active in his retirement, “in whatever capacity is requested of him,” the state courts’ office has said. (READ MORE) Maureen McKenna Goldberg, the high court’s senior associate justice, will lead the state judiciary on an interim basis until a successor is chosen.
UPDATE: The mayor also expressed pleasure at the outcome of the session. “I am pleased that the decision issued by Chief Justice Williams will allow the City to realize a substantial portion of the anticipated $11 million in savings over three years for taxpayers through the implementation of CVS Caremark as the City’s prescription drug provider,” Cicilline said in a Dec. 31 statement.
“We will continue to pursue implementation of the new health care administrator in order to realize millions more in savings for taxpayers through the agreed upon fast-track arbitration process,” he added.
News and information from the City of Providence are available at www.ProvidenceRI.com. Information about the R.I. Supreme Court, the R.I. Superior Courts and their actions is available from the R.I. Administrative Office of State Courts at www.courts.ri.gov.
