HomeMy WebLinkAboutFollow-up Health Benefits TrustReport# 05/06 - 1 (Dated September 9, 2005)
Follow-up on
Health Benefit Trust
- Performance Review
(Internal audit report #03/04-6 issued August 6, 2004)
Presented to the
Deschutes County Audit Committee
by the
Internal Audit Program
David Givans, CPA – County Internal Auditor
Report# 05/06 - 1 Dated September 9, 2005
Deschutes Count y,
Oregon
Report# 05/06 - 1 (Dated September 9, 2005)
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Report# 05/06 - 1 (Dated September 9, 2005)
To: Audit Co mmittee
CC: Mike Daly, Tom DeWolf
From: David Givans, Count y Internal Auditor
Subject: Fo llow-up on audit of Health Benefit Trust (Report #03/04-6)
Date: September 9, 2005
This fo llow-up report covers the performance review of the Health Benefit Trust as covered
in Internal Audit Report #03/04-6. The original audit report was issued August 6, 2004.
Informat ion contained in this report is fro m interviews with Healt h Benefit Coordinator and
Administrator’s West (the Third Party Administrator).
Deschutes Count y,
Oregon
Internal Audit Program
David Givans, CPA
County Internal Auditor
Deschutes County- Administrative Services
1300 NW Wall Street, Suite 200
Bend, OR 97701
Phone: 541-330-4674
Fax: 541-385-3202
davidg@co.deschutes.or.us
Report# 05/06 - 1 (Dated September 9, 2005)
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Report# 05/06 - 1 (Dated September 9, 2005)
Follow -up on Health Benefit Trust Recommendations
TABLE OF CONTENTS:
1. INTRODUCTION
1.1. Background ……………………………………………………………………….... 1
1.2. Object ives & Scope ……………………………………………………………...… 1
1.3. Methodology ……………………………………………………………………….. 1
2. OVERVIEW of FOLLOW-UP RESULTS …………………………………….. 1-2
3. Highlighted recommendations – Third Party Administrator
3.1. Reco mmendat ions – not implemented …………………………………………... 2-3
3.2. Reco mmendat ions – partially implemented ………………………………..….… 3-4
4. Highlighted recommendations - Plan
4.1. Reco mmendat ions – not implemented …………………………………………... 5-6
4.2. Reco mmendat ions – partially implemented …………………………………....... 6-7
5. Appendices
5.1. Appendix I –Implemented recommendat ions and comments fro m discussio n
with Ronda Connor, Benefits Coordinator and oral and written comments
received fro m Lee McReyno lds, Administrators West
(Third Party Administrator) ………………………...………………………...... 8-14
5.2. Appendix II – Actuarial Analysis presentation by Sarah Plotkin on 2-15-05 ... 15-26
5.3. Appendix III – Actuarial Analysis Report by Sarah Plotkin on 2-18-05 …..… 27-41
Report# 05/06 - 1 (Dated September 9, 2005)
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Report# 05/06 - 1 (Dated September 9, 2005) 1
1. INTRODUCTION
1.1 BACKGROUND
Audit Authorit y:
The Deschutes County Audit Committee has suggested that follow-ups occur within nine
mo nths of the reports. The Audit Co mmittee’s would like to make sure depart ments
satisfactorily address recommendat ions.
1.2 OBJECTIVES and SCOPE
Object ives:
The object ive was to follow-up on recommendat ions ident ified in the audit report performed
for the Health Benefit Trust.
Scope:
The fo llow-up included all pert inent recommendat ions made in the original internal audit
report (#03/04-6 issued August 6, 2004).
1.3 METHODOLOGY
The fo llow-up included interviews with Ronda Connor, Health Benefits Coordinator (HBC)
and Lee McReyno lds, President of Administrators West (AW) the Third Party Administrator
(TPA) for the Plan. In cases where the recommendations had not been implemented, these
were noted and the explanat ion. The fo llow-up is, by nature, subject ive.
In determining the status of recommendat ions that were fo llowed up, we relied on assertions
provided by those involved and did not attempt to independently verify those assertions. A
limited analysis was performed of refund checks through review of records maintained by
the healt h benefits coordinator of refund checks received and deposited. If a response or
lack of a response merited a reply by the auditor those have been added.
Since no substant ive audit work was performed, Government Auditing Standards issued by
the Comptroller General o f the United States were not fo llowed.
2. Overview of Results
We fo llowed up on 44 recommendations made in the report. The fo llowing informat ion is
fro m discussio ns wit h Ronda Connor, Benefits Coordinator and Lee McReyno lds (President
of Administrators West), the County’s Third Party Administrator. Figures I & II provide a
breakdown of the status for recommendations included in the report by responsible part y.
Report# 05/06 - 1 (Dated September 9, 2005) 2
Figure I/II – How were recommendations implemented (TPA/Plan)
Figure I -
Administrators West (TPA)
Not
implemented
10%
Partially
implemented
10%
Implemented
80%
Figure II -
PLAN
Pending
implementation
21%
Not implemented
13%
Implemented
41%
Partially
implemented
21%
Reco mmendat ions are for the most being implemented. A majorit y o f the recommendat ions
have been implemented and many are in varying stages of fo llow-up and implementation.
Of the 44 recommendat ions, 20 of those related to Administrators West (TPA) and 24 to the
Plan.
Administrators West has addressed many o f the recommendat ions but their recovery effort
on behalf o f the Plan has been poor partly because of the age of some of the claims. In the
case of the partially implemented recommendat ions, the issue of the late processing of
refund checks continues to be an issue.
The Plan had so me thirteen percent (13%) of recommendat ions not implemented. Twenty-
one percent (21 %) are partially implemented and about twenty-one percent (21%) are in the
process of being implemented. One recommendat ion was not implemented because of a
policy decisio n by the Emplo yee Benefits Advisory Co mmittee (EBAC) committee and the
Board of County Co mmissio ners. The cause of most of the other non-implemented
recommendat ions (that could be addressed) appear to be due to lack of specific decisio n
making by EBAC.
The fo llowing informat ion highlights those recommendat ions that were not fully
implemented. Items considered implemented were included at the end of the report in
Appendix I.
3. RESULTS – Third Party Administrator
3.1 RECOMMENDATIONS - NOT IMPLEMENTED
1. It is reco mmended that Administrators West upgrade their software to handle mult iple
procedure discounts.
Report# 05/06 - 1 (Dated September 9, 2005) 3
Administrators West comments:
We have not yet been able to implement CheckClaims module. We are discussing the
matter with our software vendor and may mo ve to their Windows plat form rather than
the interim step of CheckClaims.
2. Administrators West should determine if the pharmacy benefits manager has reports
available for monitoring the changes to participant enro llment.
Auditor Comment:
Administrators West did not address this question in their responses. The Plan should
address this with new pharmacy benefits manager.
3.2 RECOMMENDATIONS - PARTIALLY IMPLEMENTED
1. It is recommended Administrators West establish procedures to assure claim refund checks will
be processed and mailed to the County in a timely manner. It is recommended that a clear
expectation be developed for the processing time between receipt and delivery to the County (i.e.
two business weeks).
Administrators West comments:
As I’ve discussed with Ronda Connor, I found that the individual assigned to refund
processing had reached a point that she could not keep up with all o f the tasks assigned
to her. Instead of asking for help she set the refunds aside thinking that she could get
back to them and did not. When I learned of the problem I assigned the function to a
new person, Heidi Richards. The first task was to contact the providers of the older
checks to see if they would clear the bank, and if not ask for them to be reissued. The
problem was reso lved largely in June with so me of the refunds rolling over into early
July and everything is now current.
We have been forwarding the checks on a monthly cycle primarily to make the
reconciliat ion that Ronda does after monthend easier. That is, she would have all checks
together with the monthend report of refunds processed. If the County wants more
frequent forwarding of checks, please let us know.
Auditor comment:
AW was successful in creating a report that identified refund claims processed and other
monies received as requested in the report. However, in reviewing the refunds submitted
it was clear that there were a number of older checks in each submission. Many of
these should have been identified and deposited during the time when the audit
responses were provided.
The following analysis indicates the problem continued during the time between the
audit (which identified numerous missing processed checks) and the original response
by AW. The extent of the un-deposited refund checks during this time was around
$40,000 in checks on hand (thru July 2004). These checks had not been entered into
AW’s system and were not part of the audit but should have been addressed by AW.
Report# 05/06 - 1 (Dated September 9, 2005) 4
Many of the checks with greatest value were not processed until July 2005. The
previous checks identified during the audit (some $49,536) were checks that had been
entered into AW’s system and had not been sent. In this case, these checks were not
entered and could have been lost without any oversight. This further supports the
recommendation for a log to track disposition of refund claims made (when requested by
AW staff) through to receipt of check and entering of refund checks. AW has indicated a
willingness to maintain the described log and has provided an initial log as of 9/8/05.
Summary Table of selected deposits (for refund checks) received from AW
(Excludes deposits which included missing checks identified in audit)
AW
Processing
Date
Date range
for underlying
refund checks Dollar value
Average
Age
(days)
Max
Age
(days)
5/1/2004 1/26/04 - 4/30/04 8,043.13$ 69 96
7/1/2004 3/23/04 - 5/21/04 2,024.61$ 73 100
9/9/2004 3/17/04 - 5/12/04 2,002.77$ 141 176
1/18/2005 6/30/04 -1/18/05 13,664.50$ 137 202
6/15/2005 9/24/04 - 6/15/05 5,959.14$ 199 264
7/11/2005 4/23/04 - 6/23/05 48,661.96$ 200 444
80,356.11$ 161 444
Source: AW support provided for refunds including copies of checks received
On subsequent discussions with Administrators West on this issue, they indicated they
were not aware of why or where many of these older checks came from. Some checks
had some explanation, but Administrators West could not explain the obvious
persistence and age of the older checks. The prior employee responsible for handling
refund checks has since been replaced. They believe the new employee assigned to this
will keep them current.
It would be prudent (and is recommended) for the HBC to monitor the age of checks
received with submitted refund checks for reasonableness and follow-up on the
reasons for any older checks. It is also recommended the HBC work with AW to
monitor the log and underlying refund claims.
2. It is reco mmended that Administrators West work towards document ing their policies
and procedures. These should be available to all emplo yees and should detail the
responsibilit ies of each emplo yee. These policies should also indicate the coordinated
controls between the Coordinator and the TPA. A copy of these written policies should
be provided to the Coordinator so that the Plan can be assured that appropriate controls
and procedures are in place.
Administrators West comments:
I responded to this reco mmendat ion last year and have been working to make
documentation more thorough as needed and as t ime allows.
Report# 05/06 - 1 (Dated September 9, 2005) 5
4. RESULTS – the Plan
4.1 RECOMMENDATIONS - NOT IMPLEMENTED
1. It is recommended the Plan consider using a consistent tiered rate structure for health insurance
premiums and assess charges based on actual participation to all Plan participants. The Plan
should consider using an actuary to consult on the rate structure.
Benefit s Coordinator comment:
EBAC has decided, at this time, not to implement this recommendation.
Auditor comment:
The actuarial report (a copy is included with this report – Appendix II/III) indicated
that a tiered rate could provide a lower rate to those without families. It also
indicated that retirees under the current tiered rates were probably being subsidized.
2. The Plan should continue to monitor the effectiveness of its PPO network to make sure
the benefit s are maximized. It is not clear that better information on cost for service will
be available in the near term. The Plan should gather systemat ic data that could assist
the Plan and its participants in select ing low cost providers and achieve better value for
their healt h care dollars. This might be useful in determining whether the Plan’s higher
benefit coverage of PPO claims is effect ive and achieving the desired results.
Benefit s Coordinator comment:
There is insufficient informat ion to address this at this t ime.
Auditor comment:
The Coordinator participates in various associations and is generally keeping aware
of developments in this area. No further action is required at this time.
3. The Plan should consider changing its year-end (currently July 31) to coincide wit h the
County’s fiscal year end of June 30. The reinsurance quotes, which are crit ical to
development of the Plan budget, should be easier to coordinate if the Plan’s year-end
was earlier and coincided wit h the County’s budget process. In addition reporting of the
Plan act ivit y would be consistent between Plan records provided by the TPA and Count y
records.
Benefit s Coordinator comment:
The timing for this is being considered by EBAC.
4. It is also recommended, during these annual representations, the Plan routinely request
updated coordination o f benefit information fro m spouses.
Benefit s Coordinator comment:
The Plan is not currently do ing this since there has been no decision to do annual
representations by EBAC.
Report# 05/06 - 1 (Dated September 9, 2005) 6
Auditor comments:
It is recommended for the EBAC committee to make a decision on this matter. In
the absence of current information, the Plan ends up paying prescription, health and
dental coverage for those who already have other insurance. This will allow the
Plan to cover only its responsibility.
4.2 RECOMMENDATIONS - PARTIALLY IMPLEMENTED
1. It is reco mmended the Personnel Depart ment staff should be responsible for collect ing
and receipt ing the healt h insurance premium checks.
Benefit s Coordinator comment:
A receipt book will be purchased. Currently this task is being performed by the
Health Benefits Coordinator. Staff in the Personnel department have been identified
for taking on this role. These responsibilit ies should be shifted by November 2005.
2. The Health Benefit s Coordinator who bills ret irees and accounts for the premiums
should not be responsible for receipt of the premiums.
Benefit s Coordinator comment:
This task is current ly performed by the Coordinator. Staff in the Personnel
department have been ident ified for taking on this role. These responsibilit ies should
be shifted by November 2005.
3. The Personnel Department staff should complete the log.
Benefit s Coordinator comment:
This task is current ly performed by the Coordinator. Staff in the Personnel
department have been ident ified for taking on this role. These responsibilit ies should
be shifted by November 2005.
4. The Coordinator should reconcile check and cash receipts to deposits to monthly fees
and so meone other than the Coordinator (such as the Personnel Department Director)
should review it.
Benefit s Coordinator comment:
This task is current ly performed by the Coordinator. Staff in the Personnel
department have been ident ified for taking on this role. These responsibilit ies should
be shifted by November 2005.
5. The Plan should update its emplo yer participat ion agreements with participat ing Count y
Service Districts and COIC.
Benefit s Coordinator comment:
This process is current ly underway for implementation in the 05/06 contracts.
Report# 05/06 - 1 (Dated September 9, 2005) 7
6. It is reco mmended that the Plan consider updating its contract with Administrators West
to include appropriate performance measures. These measures should at least include a
claim turnaround time, financial accuracy and payment accuracy. The TPA should
provide informat ion on its turnaround time throughout the year as well as its backlog of
claims.
Benefit s Coordinator comment:
The Plan is adding this requirement to future RFP for these services. This is not in
the current contract.
7. Performance audits should be considered every three years to assess financial and
payment accuracy.
Benefit s Coordinator comment:
The timeframe has not been reached. The abilit y to have another performance audit
would depend on availabilit y o f internal auditor or decisio n to contract for these
services.
8. The Plan should require copies of marriage cert ificates, birth certificates, divorce
decrees, social securit y cards, and tax records to support eligibilit y status.
Benefit s Coordinator comment:
To some extent, we are doing, but generally, the Plan, does not require birth
certificates unless there is an adoption. This is not being done annually in all cases.
This will need to be decided by EBAC.
9. It is reco mmended the Plan routinely address potent ial eligibilit y issues for dependents.
The Plan should request participants make annual representations as to the status of their
dependents.
Benefit s Coordinator comment:
EBAC will address in the future whether addit ional representations should be
obtained. Personnel on a monthly basis requests updates in family status or
dependents.
10. It is reco mmended that a clear expectation be developed for the processing time between
receipt of claim refund checks and delivery to the County.
Benefit s Coordinator comment:
Not included in current contract but general understanding of monthly processing.
Will be reviewing claim refund checks for checks older than one month. Addit io nal
contract language will be considered in the new TPA contract.
Report# 05/06 - 1 (Dated September 9, 2005) 8
5. Appendices
Appendix I - Implemented recommendations and comments from discussion with
Ronda Connor, Benefits Coordinator and written comments provided by Lee
McReynolds (Third Party Administrator )
# Recommendation/Comments
1 It is reco mmended the Plan contract with an outside and independent health benefits
actuary to calculate the mandated level o f reserves in accordance wit h state statute. The
Plan should consider utilizing the actuary to consult on means to stabilize and calculate
rates.
Benefit s Coordinator Comments
EBAC supported hiring an actuary who would advise on the reserve and rate structure
(See report and presentation in Appendices II/III)
2 Administrators West should provide a detailed reconciliat ion between check registers
issued and their benefit s reports on an ongoing basis. This would include providing
a report detailing the claim refund checks (and other received checks) processed each
mo nth and remitted to the Plan.
Benefit s Coordinator Comments
As of May 2004, this report is being provided for processed claim refund checks.
3 The Coordinator should agree the checks received to this report.
Benefit s Coordinator Comments
This is being done.
4 It is reco mmended Administrators West, on receipt of claim refund checks,
restrict ively endorse them on behalf of Deschutes County (for the Plan). If the check
covers more than one Plan, Administrators West should provide a clear trail o f the
mo ney as it passes through its clearing account.
Administrators West comments:
AW was provided an endorsement stamp.
5 It is reco mmended that the County consider reversing the transfer from Risk
Management at a time when the Plan has stabilized its reserve levels.
Benefit s Coordinator Comments
Report# 05/06 - 1 (Dated September 9, 2005) 9
It was subsequently discovered that COIC did fund some monies to the reserve in the
amount of $33,541.34. These monies plus the risk management’s $400,000 was repaid
with interest in March/April 2005.
The funding from the general fund of $112 thousand was not returned.
6 The Coordinator should develop a log for any checks received in advance.
Benefit s Coordinator Comments
A log of checks received has been implemented.
7 All advance checks received should be endorsed immediately and recorded on the
log.
Benefit s Coordinator Comments
This is being performed by the Coordinator.
8 The Health Benefit s Coordinator should be the primary person responsible for the
administration of the Plan, which would include developing assumpt ions (under the
oversight of EBAC and the Board) for the preparatio n of the Plan budget. Finance
should work with the Coordinator in preparing the budget.
Benefit s Coordinator Comments
This Coordinator was involved in the preparation of the budget for 05/06.
9 It is reco mmended that Administrators West develop appropriate claim entry
procedures to enter re-invo iced claims to properly calculate benefits and deduct ible
limits.
Administrators West comments:
As of the date of this report, Administrators West had provided detailed written
procedures on how they were going to enter these types of claims.
10 Administrators West (and periodically the Plan) should review the handling o f these
types of claims to assure benefit calculat ions are properly handled.
Administrators West comments:
Our review indicated that there were 14 DISP claims in 2003, with 3 result ing in
overpayments and 1 was underpaid. During 2004, there were 51 DISP claims wit h 9
result ing in overpayments and 1 underpayment. Both of the underpayments were
issued supplemental payments. The 2003 overpayments, which totaled $1,828.43,
resulted in no recoveries as due to the age of the claims. The 2004 overpayments,
which totaled $1,798.26, were handled by adjusting the accumulators in our system to
recover on subsequent claims.
Report# 05/06 - 1 (Dated September 9, 2005) 10
Auditor comments:
It is not clear whether the actions taken by AW did effectively result in these monies
being recovered. AW has been requested to research this. No additional information
was received by the issuance of this report.
11 Administrators West should also review all re-invo iced claims in 2004 for this issue.
Copies of their analyses should be given to the Coordinator so follow-up on the claim
refunds can occur.
Administrators West comments:
Same co mment as above in 10.
12 Administrators West should add addit ional controls if they have emplo yees who are
related to participants in the Plan.
Administrators West comments:
Should have claims processed by another processor.
13 They should specifically inquire of claim operators of any relat ionships or family t ies
to participants of the Plan. The Plan should be made aware of any relat ionships or
family t ies to an emplo yee of the TPA.
Administrators West comments:
This recommendation was addressed last year. None of the AW staff has any
relat ionship to emplo yees of Deschutes Count y. Should that situation exist in the
future, such claims will be assigned to another processor.
14 Another claim operator should enter all related party claims.
Administrators West comments:
Same co mment as above in 13.
15 It is reco mmended the Plan continue to encourage use of generic drugs. This might
include providing informat ion to participants of other types of drugs they can use at a
lower cost, having emplo yees request samples from their doctors when possible, and
educating participants as to the impact their decisions have on Plan costs.
Benefit s Coordinator Comments
On a case-by-case basis, participants are provided informat ion on where to
purchase appropriate medications for a lower cost.
16 The TPA should provide the Plan with copies of documents to support eligibilit y and
address changes so the Plan’s eligibilit y files are complete.
Report# 05/06 - 1 (Dated September 9, 2005) 11
Administrators West comments:
Will be faxing return envelopes for address changes. Update County records if
ineligible dependents are discovered. I’ve talked to the eligibilit y staff who feel that
they have been coordinat ing eligibilit y issues well with the County staff. I’ve asked
that they make sure that they document by fax or email any changes that we receive
direct ly.
17 It is reco mmended that the Plan (in coordinat ion wit h Administrators West) consider
another pharmacy benefits manager who will work to coordinate benefit s for
prescript ions. It is also possible that the prescription benefit s can be obtained for a
lower cost.
Benefit s Coordinator Comments
As of the date of this report, the Plan has selected North West Pharmacy Services to be
the pharmacy benefits manager (effect ive August 1, 2004).
18 Administrators West should pursue coordinat ion of benefits for the ident ified
prescript ion claims and pursue recovery through Express Scripts. As indicated earlier,
it is important that the TPA have current informat ion on possible sources of
coordinated benefit s.
Administrators West comments:
Express Scripts indicated that they were looking into the potential o f COB recoveries,
but after the notice of terminat ion was issued they ignored the subject. We then
contacted the primary carriers (Regence, Lifewise, Pacific Source and others) regarding
these claims. After talking to many different representative of each company, they all
indicated that they could not handle COB at a summary level. They all indicated the
only way that it could possibly work is to have the retail pharmacies rerun the claims
through their PBM’s (if the timely filing limit s had not been exceeded) and then pursue
recoveries through Express Scripts. The pharmacies were not interested and Express
Scripts would not respond to the matter.
No recoveries were made.
Northwest Pharmacy Services has the COB information loaded in their system and it is
funct ioning. Any individual who is flagged wit h other primary coverage will have the
claim rejected. The pharmacist is advised to processed the script under the primary
coverage and
19 It is reco mmended the TPA, immediately after notificat ion of terminat ion, run an
analysis on post termination claims paid so timely requests for refund can be made.
Administrators West comments:
We routinely check for claims paid past terminat ion date when we receive a retroactive
termination notice, and pursue recovery. If there were unrecovered balances it is likely
Report# 05/06 - 1 (Dated September 9, 2005) 12
that our efforts were not successful. I was not able to ident ify the $4,700 you referred
to. If you can send me the detail I will check further.
Auditor comments:
A list was provided of the Plan payments made on behalf of these terminated
participants. AW had not provided an explanation of what they had done in response
to these by the issuance of this report.
20 In addit ion, the Coordinator and Personnel Department staff should work towards
making more timely notification o f changes. This also requires educat ing participants
as to their responsibilit y to timely notify the Plan of any changes.
Benefit s Coordinator Comments:
On receipt of changes, notificat ion is done same or next day and the notification is
stamped with the date received. A copy of the fax receipt is being kept to monitor
when change requests are faxed to AW.
21 Administrators West should perform a periodic review of the participants on the
pharmacy benefit s manager system as co mpared to the Plan. The system might have a
change report available to show any changes in participants for a specific period.
Auditor Comments:
No response was provided by AW. At the end of the audit, the TPA had reviewed
the list and assured us they would be periodically reviewing it.
22 Administrators West should request payment from the other Plans for claim payments
made for their participants.
Administrators West comments:
The amounts charged to the County that belonged to other groups was adjusted through
Express Scripts. The amounts paid post terminat ion were not recovered. There were
two types of situat ions: ESI was provided retroactive terminat ions and ESI failed to
enter the termination on a timely basis. Their contract says they aren't responsible for
the first type and they ignored our inquiries on the second.
Auditor comments:
Given that there was a change in the pharmacy benefits manager during this time, it
would be difficult to get support form Express Scripts. A large sum of money was lost
by the lack of follow-up and support by Express Scripts. Express Scripts informed AW
that the adjustment was made, but it is unclear whether AW had reviewed submitted
invoices for the correction.
It would be recommended that the HBC watch for these issues as we work with the
new pharmacy benefits manager.
Report# 05/06 - 1 (Dated September 9, 2005) 13
23 Administrators West should review for prescript ions filled after termination when late
notification occurs. Reasonable efforts should be made to collect on excess benefit s.
Administrators West comments:
Same co mment as above in 22.
24 It is reco mmended the participant enrollment forms be date stamped on receipt. It
should also be signed and dated by the Coordinator. Enrollment change forms should
be co mpleted on termination by the Coordinator and forwarded to the TPA as soon as
practicable.
Benefit s Coordinator Comments
The notificat ions are being done the same or next day and are notificat ions are
stamped with the date received.
25 It is reco mmended the TPA perform post terminat ion procedures to make sure the
participant has been properly terminated in their system and in the pharmacy benefit
managers system. They should also determine if any post terminat ion claims were
processed. Excess benefits should be recovered.
Administrators West comments:
When we receive a terminat ion notice we record the date and time we record the
change in our system and the PBM’s. We also pursue recoveries if there were claims
processed prior to the entry of the terminat ion.
26 Administrator’s West should (either in their exist ing system or in Excel) develop a
list of all claim refunds requested and their status. This log should track the
disposit ion o f all claim refund requests, the associated claim#, the operator, and the
explanat ion for why the refund is occurring. On receipt of the refund, they should
indicate the date received and associated claim number issued, and the date mailed
to the County. Any disposit ion other than receipt should be explained. This log
should be shared with the Count y on a monthly basis.
Administrators West comments:
We have been forwarding the checks on a monthly cycle primarily to make the
reconciliat ion that Ronda does after month end easier. That is, she would have all
checks together with the month end report of refunds processed. If the County
wants more frequent forwarding of checks, please let us know.
I have verified wit h Heidi that the log is being maintained and is available for
Ronda’s review.
Auditor comment:
On discussion with AW staff, it was clear the log being implemented by AW was
more like the current report being provided with refund checks. This did not
Report# 05/06 - 1 (Dated September 9, 2005) 14
address the substance of the recommendation. AW has indicated a willingness to
work at pulling together a log of current submissions of claims and monitor them
though to the receipt of refund checks. AW provided an initial log as of 9/8/05 that
complies with this recommendation. It will be important for the health benefits
coordinator to receive a copy of this log on a monthly basis to follow-up on open
claims.
Report# 05/06 - 1 (Dated September 9, 2005) 15
5.2 Appendix II – Actuarial Anal ysis presentation by Sarah
Plotkin on 2-15-05
Report# 05/06 - 1 (Dated September 9, 2005) 16
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5.3 Appendix III – Deschutes County Employee Benefits Plan
Actuarial Anal ysis report by Sarah Plotkin, FSA, MAAA
(dated 2-18-05)
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