AGENDA CAPTION:
Title
Consider approval of Resolution 2025-182R, approving a contract with Frontier Direct Care, LLC, to provide a healthcare clinic for City employees and their dependents in the amount of $1.5 million per year providing substantial savings to the City’s health insurance plan expenditures; authorizing the City Manager, or her designee, to execute the contract on behalf of the City; and declaring for an effective date.
Body
Meeting date: September 16, 2025
Department: Human Resources Department – Lindsey Cox, Director
Amount & Source of Funding
Funds Required: $1,500,000 annually
Account Number: 300 - Internal Service Fund - Health Insurance
Funds Available: Yes
Account Name: Health Plan Claims Account
Fiscal Note:
Prior Council Action: N/A
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Background Information:
Frontier Direct Care, LLC, currently contracts with other government and private entities to provide direct, high-quality primary care to employees, retirees, and their dependents who are covered under the City’s existing healthcare insurance. Frontier Direct Primary Care improves access and satisfaction for healthcare services and proactively addresses health concerns at a cost savings.
Frontier Direct Care was founded in 2018; has over 125 clients; is Texas based; and has over 140 employees. The company has primary care locations, through contracts with local governments, in Brownsville, Edinburgh, Harlingen, McAllen, McAllen, Pharr, Raymondville, and Weslaco. Other primary care locations include Leander and Dallas.
For specialist and facility referrals, Frontier Direct Care, LLC, guarantees transparent, pre-negotiated cash prices, delivering substantial savings and eliminating many traditional claims entirely. By reducing both the frequency and cost of claims, Frontier Direct Care lowers the City’s healthcare plan expenditures while better supporting health outcomes for City employees and their dependents.
The City of San Marcos contracts with Holmes Murphy to provide consultation, advice and guidance for structuring the City’s healthcare plan in a way that provides quality benefits for a reasonable expenditure. Holmes Murphy works directly for the City of San Marcos. This Summer, Preston Pomykal, who is our long-standing representative and Vice President at Holmes Murphy, connected our City Team with Frontier Direct as a recommendation to maintain and enhance healthcare benefits and reduce expenditures. The ensuing conversations and analysis resulted in a conclusion that Frontier Direct will bring value and savings to the City’s healthcare plan. Part of the City team’s due diligence included a conversation with the City of McAllen’s Director of Employee Benefits who affirmed that the City of McAllen achieved healthcare plan savings through implementing a Frontier Direct clinic in McAllen. The McAllen Case Study is attached.
For the City of San Marcos, Frontier is computing a savings analysis of 19% or $14.9 million over a five-year agreement. The City Team negotiated a guaranteed savings clause for payment not to exceed current claim cost of a defined lookback period. The savings clause will remain in effect for three years. This contract will be funded through the City’s self-insurance fund.
The contract with Frontier Direct is recommended based on the value and expenditure savings to be achieved.
Pursuant to Texas Government Code, Section 2254.008, this contract is not subject to competitive advertising and proposal evaluation requirements. The City is authorized to select Frontier Direct Care, LLC, based on negotiation of fees and verification of required occupational licenses and experience of the firm.
Council Committee, Board/Commission Action:
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Alternatives:
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Recommendation:
Approve the contract