Amendment_1_-_Response_to_Questions_.doc

AMENDMENT

Amendment Date:

July 7, 2026 Amendment Number:

Bid Event ID:

EVT0010856

Closing Date:

July 22, 2026, 2:00 PM

Procurement Officer:

Bonnie Edwards

Telephone:

785-296-3125

E-Mail Address:

bonnie.edwards@ks.gov

Web Address:

http://admin.ks.gov/offices/procurement-and-contracts/ Agency:

Kansas Department of Administration, State Employee Health Benefit Plan

Item:

Audit Services

Conditions: Please see the response to questions below:

I (We) have read and understand this amendment and agree it is a part of my (our) bid response.

NAME OF COMPANY OR FIRM:

SIGNED BY:

TITLE:

DATE:

Amendment Number 1 EVT0010856 was recently posted to the Division of Purchases Internet website.

Sheet1

Audit Services - Courtesy Bid

EVT0010856 - Vendor Questions

Question # Section of the RFP Question RFP Page Response

1 Exhibit 1 - Technical Proposal Section 1: Bid Instructions and Section 2: Proposal Response both are missing from the State-provided Exhibit 1: Technical Proposal. Please provide an amended Technical Proposal document with these important sections included. N/A These instructions are provided in the master bid document and shall remain there. They shall not be included in Exhibit 1.

2 Exhibit 1 - Technical Proposal, Section 3 Will the State of Kansas allow the final awarded contract resulting from Bid Event # EVT0010856 to be utilized as a Cooperative Purchasing contract? If mutually agreed upon by the vendor and the purchasing entity, can the pricing, terms, and conditions of this contract be extended to Kansas political subdivisions (including local municipalities, counties, unified school districts, and state educational institutions)? p. 1 No, the State will not allow the final awarded contract resulting from this solicitation to be utilized as a Cooperative Purchasing Contract.

3 SOKID_RFX0002907_0.00.pdf Will SEHP be providing additional information regarding the intent behind this RFP? 1 This is a standard procurement at the end of the contract period for the SEHP. Requested services and needs have been identified in the Scope of Work of this RFP.

4 SOKID_RFX0002907_0.00.pdf Please confirm the PBM that will be in place for the proposed audit years. If a PBM transition is anticipated, please indicate the expected timing of the change. 1 The current PBM is CVS/Caremark. Contracts are routinely bid on 3 year contract cycles and vendors may change during the contract period based on HCC decisions.

5 SOKID_RFX0002907_0.00.pdf Please confirm the TPA that will be in place for the proposed audited periods. If a transition is anticipated, please indicate the expected timing of the change. 1 Contracts are routinely bid on 3 year contract cycles and vendors may change during the contract period based on HCC decisions.

6 SOKID_RFX0002907_0.00.pdf Page 3 of the SOKID_RFX0002907_0.00.pdf shows that Exhibit 1 should include additional information for Section 1-Bid Instructions and Section 2-Proposal Response. However, the file begins with Section 3-Terms and Conditions. Please confirm, and provide additional files if needed. 3 Exhibit 1 includes sections 1-6. All files are included in the bid package.

8 Exhibit_1-_Audit_Services_Technical_Proposal.docx When was the last audit completed? 7 These audits are conducted annually.

9 Exhibit_1-_Audit_Services_Technical_Proposal.docx What is the total spend for the State Employee Health Plan (SEHP) for the reporting period? 7 Refer to Exhibit 4 for total spend and total claims information.

10 Exhibit_1-_Audit_Services_Technical_Proposal.docx What is the total number of claims submitted and the total claims paid for the reporting period? 7 Refer to Exhibit 4 for total spend and total claims information.

11 Exhibit 1 Should the proposer sign the contract on page 24 in the proposal submission? p. 24 The SEHP is providing its standard Contract for review. Refer to the Acknowledge and Accept section for instructions.

12 Exhibit 1 - BAA Should the proposer sign the BAA on page 28 in the proposal submission? p. 28 The SEHP is providing its standard Business Associate Agreement for review. Refer to the Acknowledgment and Accept section for instructions.

13 Exhibit_1-_Audit_Services_Technical_Proposal.docx Please clarify whether the draft or final audit reports are considered confidential or subject to public disclosure under the Kansas Open Records Act, and any applicable requirements or limitations related to their distribution. 30 The final audit reports are published on the SEHP website.

14 Exhibit_1-_Audit_Services_Technical_Proposal.docx Can you provide your vendor agreements and/or audit provisions of the contracts for medical, dental, and pharmacy? 31 The vendor shall work with each vendor audited to facilitate non-disclosure agreements as appropriate for the work performed.

15 Exhibit 1 - Technical Proposal, Section 4 If the TPAs' standard contracts enforce a cap on sampled claims (e.g., 150 or 200 claims maximum), will the State guarantee data-pull variances or coordinate with the administrators to ensure the auditor can pull the true calculated sample size required to mathematically hit the 95% confidence target? 31 The State, audit firm and vendor will have an initial meeting to discuss the audits and make sure everyone is on the same page. We may not be able to change the previously agree upon sample size but we can work cooperatively with the auditor and the vendors to meet our goals.

16 Exhibit 1, Section 4 Scope of Work What processes are in place between SEHP and their benefit administrators to support a timely audit, including system access, document access, role clarity, privacy and security safeguards and expectations of responsiveness with the contractor? 31 The SEHP works in tandem with the auditor and the vendor to ensure timelines are being met. All vendors have Performance Guarantees and expectations in their contracts to ensure timely data responses for auditors.

17 Exhibit 1, Section 4 Scope of Work What are the names of all entities (Administrators, vendors, PBM) for which these audits are required? 31 In addition to the answer to question 5, information will come from the State's payroll system and the State's eligiblity & billing system.

18 Exhibit 1, Section 4 Scope of Work What is the boundary between the annual statistically valid claims audit, the 50-claim targeted medical audit, eligiblity testing and recoupment/refud-credit review. 31 The statistical sample is a random sampling of claims. The 50 targeted are claims that from a specific type of service or treatment the SEHP is monitoring. This area of interest may change with each audit. Eligiblity testing is to make sure that the membership files are being processed correctly and we are paying for claims for members that are eligible for coverage. Finally we want to make sure that moneys owed to the SEHP are credited to us correctly.

19 Exhibit 1, Section 4 Scope of Work Please clarify the role split for recoupments, refunds, and credits. Is the contractor expected to identify and validate overpayments/credits only, or also to directly pursue recoveries, reconcile credits to remittances, or manage disputes with administrators? 31,32,33 The expectation is that if there is some finding or issue that you identify, you will follow up with the vendor. We don’t want reports with open issues left dangling. If it's an overpayment, you let the vendor and the SEHP know that a payment is due. SEHP can handle the checks. We don't do credits on audit findings. If it is an issue with claims processing, you follow up to see the vendor makes the corrections. By the final report, open issues should be addressed or the SEHP has taken the ball and will handle. This is a discussion item with SEHP staff.

20 Exhibit 1, Section 4 Scope of Work Please confirm the required baseline annual scope by plan year and by vendor/administrator. Specifically, which components are always included versus separately authorized: targeted medical claims audit, medical/dental eligibility reviews, medical/dental recoupment reviews, PBM transparency audit, PBM rebate audit, PBM recoupment audit, PBM retail-vs-mail pricing audit, PBM eligibility review, DEVA, and premium payroll deduction reconciliation audit? 31 The required scope of work for the annual audits is presented in section 4 of the RFP. If the vendor has optional or alternate audit designs to propose they may attach those separately.

21 Exhibit 1, Section 4 Scope of Work The RFP states annual audits may include the listed audits as well as “any other audits” SEHP deems necessary. Please clarify whether new audit types or materially expanded scope may be added during the term only through a mutually executed written amendment/change order, and how pricing would be established in that circumstance. 31 If there are additional audits needed during the term of the contract the SEHP will work with the auditor to reach an agreement on the scope and number of hours necessary for completing the addition of audits. The Cost Proposal includes the option for vendors to submit bids for other audits and an hourly rate which would be utilized for additional audit work.

22 Exhibit 1, Section 4 Scope of Work Please provide the expected standard timeline assumptions for each audit type (kickoff, data receipt, sample selection, draft/preliminary findings review, vendor response period, final report issuance, and HCC/SEHP acceptance), and clarify whether the 12/31 timing standard applies to each report individually or to the annual audit package collectively. 31 The expectation is to have all the annual audits completed and accepted by 12/31 each year.

23 Exhibit_1-_Audit_Services_Technical_Proposal.docx How many formularies are utilized? Please provide the formulary names if available. 32 One formulary is utilized. Information can be found at https://sehp.healthbenefitsprogram.ks.gov/benefits/medical/cvs-caremark

24 Exhibit_1-_Audit_Services_Technical_Proposal.docx How many days after the end of the contract year is the PBM required to provide the Pricing Reconciliation results? Rebate Reconciliation/True up reports? 32 Reconciliation 90 days after year end in the aggregate.

25 Exhibit_1-_Audit_Services_Technical_Proposal.docx Please confirm whether the PBM contract includes any rebate credit or rebate adjustment provisions. If such provisions exist, should the audit scope include a detailed review and validation of rebate credits and/or adjustments? 32 Rebate adjustments/settlements are a part of the PBM contract. The information and supporting reports regarding the rebate adjustment/settlement for each year is provided to the auditor for them to review and include in their audit.

26 Exhibit_1-_Audit_Services_Technical_Proposal.docx Please confirm whether the sample of retail pharmacies contacted to validate PBM payments is included within the 300-claim sample, or if it is expected to be a separate sample. 32 These are separate audits.

27 Exhibit 1 - Technical Proposal, Section 4 Please confirm the PBM vendor or vendors included in the audit scope. p. 32 Yes, only 1 vendor

28 Exhibit 1 - Technical Proposal, Section 4 Please provide the approximate annual pharmacy claim volume, total pharmacy spend, and member count. p. 32 Refer to Exhibit 4 for total spend and total claims information.

29 Exhibit 1 - Technical Proposal, Section 4 For the PBM Transparency Audit, please clarify the expected sample size for contacting Kansas retail pharmacies to validate actual pharmacy reimbursement. p. 32 15

30 Exhibit 1 - Technical Proposal, Section 4 Does SEHP have contractual authority for the audit firm to contact retail pharmacies directly and request reimbursement/payment validation information? p. 32 The vendor shall work with each vendor audited to facilitate non-disclosure agreements as appropriate for the work performed.

31 Exhibit 1 - Technical Proposal, Section 4 Please clarify how the manufacturer contracts will be selectedfor the rebate audit, specifically the "up to 12 contracts or contracts representing 70% of total rebate payments." p. 32 The auditor must review either the 12 largest/selected pharmaceutical manufacturer rebate agreements OR as many rebate agreements to cover 70% of the total rebate money involved.

32 Exhibit 1 - Technical Proposal, Section 4 Should the rebate audit include validation of point-of-sales rebates, retained rebate amounts, exclusions, reconciliation timing, and rebate guarantees? p. 32 Yes, as exact POS rebate amounts may not be available. Vendor should be able to do the review and estimate the impact as needed.

33 Exhibit 1 - Audit Services Technical Proposal How many retail pharmacies is the SEHP expecting to review for the transparent pass-through pricing review? What are the audit protocols in the PBM contract regarding price transparency reviews? p. 32 - Pharmacy Benefit Manager Audit A minimum of 15 pharmacies and the expectation that it will be a different group from across the state.

34 Exhibit 1 - Audit Services Technical Proposal The audit reviews 100% of claims for financial and benefits administration assessments. What is SEHP’s intent in reviewing an additional random sample of 250-300 claims? p. 32 - Pharmacy Benefit Manager Audit The random sample is a deeper dive review of the claims handling than the reprocessing exercise.

35 Exhibit 1, Section 4 Scope of Work Please define “acceptance” of a final audit report and the end point of included follow-up32- work. Does included post-report support extend only to answering questions/clarifying issued findings, or also to remediation validation, recalculation of recoveries, repeated vendor review cycles, updated reports, or committee/legislative presentations? 32- Acceptence is when the SEHP staff has reviewed the report and finds that all issues have been addressed in a manner acceptable to the State. Please revew the reports posted on our website for examples of acceptable reporting.

36 Exhibit_1-_Audit_Services_Technical_Proposal.docx Is SEHP interested in pre-implementation or post-implemenation pharmacy benefits audits in the future? 33 We have included this as an option in the RFP. We are not doing them at this time with established vendors.

37 Exhibit 1 - Audit Services Technical Proposal Are you open to a more comprehensive apprach beyond annually sampling 250 dependents and spouses? p. 33 - Dependent Eligibility Verification Audit The vendor must bid on the provided scope of work in the RFP. If the vendor has an optional audit design they may propose that as an option and price it in the optional section of the RFP. SEHP reserves the right to choose whichever option is most beneficial for SEHP operations.

38 Exhibit 1 - Audit Services Technical Proposal How many State Agencies and Non State groups are included in the premium payroll deduction reconciliation audit? p. 33 - Premium Payroll Dedcution Reconciliation Audit 98 State Agencies and 116 Non State groups

39 Exhibit 1 - Technical Proposal, Section 4 Section 4.3.01 requires a statistically valid claim sample providing a 95% confidence level. To accurately establish the implementation timeline required as our first deliverable under Section 6.1.04, may the State clarify the typical historical turnaround time for third-party claims administrators (Aetna and Blue Cross and Blue Shield of Kansas) to deliver complete annual electronic data extraction files to the selected auditor? p. 34 The auditor provides a timeline for data collection to the SEHP and then submits it to the third-party administrator. It is expected that the third-party administrator will meet the outlined deadlines listed by the auditor. The turnaround time in the past has shown the administrators meet the timeline requested by the auditor. The SEHP staff will coordinate with both vendors to address any issues that may arrise.

40 Exhibit 1 - Technical Proposal, Section 4 Section 4.3.01 indicates that a targeted medical claim sample of fifty (50) claims will be requested in a targeted area of the plan benefit. Will the State determine this targeted area during annual audit planning, or should the vendor assume a specific focus area (e.g., high-dollar inpatient, specialized surgeries) for pricing purposes? p. 34 Yes. The SEHP will select the target area for each audit.

41 Exhibit 1, Section 4 Scope of Work If work continues after contract expiration or termination, how will compensation be handled? The RFP says in-process audits must continue until completed and accepted; please confirm whether that work is compensated under the original fee, at negotiated rates, or under another mechanism. 34 Fees should include all the work needed to complete the audit. Typically the total audit fee bid is broken down into montlhy payments and paid over the course of the work period for that audit, The expectation is that work is completed during the contract period.

42 Exhibit 1 - Technical Proposal, Section 4 Section 4.3.01 dictates that the auditor will select a 'statistically valid claims sample that provides 95% confidence in the audit findings'. Have the current Medical TPAs (Aetna and Blue Cross and Blue Shield of Kansas) and the Dental TPA (Delta Dental of Kansas) indicated in their respective contracts with the State a specific maximum threshold or a predetermined number of claims they consider statistically valid for an outside audit? p. 35 The SEHP contract in this RFP looks like the ones used with other vendors. The SEHP has audit language in all of the plan Requests for Proposals (RFP). During negotiations with those vendors, the number of claims to be audited is stated in the RFP. The vendors in their responses to the RFP may submit alternatives which are negotiated during the process. We will need to adhere to the sample sizes agreed to during the negotiations as they are incorporated into the final contract by reference.

43 Exhibit 1 - 4.3 Is there a preferred sample size for the statistical medical audit? p. 35-36

44 Exhibit 1 - 4.3 Is there a preferred sample size for the statistical dental audit? p. 35-36

45 Exhibit 1 - Technical Proposal, Section 4 and Section 5 As mentioned in Section 4.1.09 and Section 5.5.02, does the State permit claims data containing PHI to be processed within a U.S.-based, HIPAA-eligible cloud/AI environment, or does the State require that all processing occur entirely within the Respondent's own on-premises systems? pp.35-36; 40 Any use of AI for analysis or processing must comply with the Generative AI Policy (8200), which can be found here: https://www.ebit.ks.gov/about/policies. If the vendor has a subcontracted cloud system, the vendor will be held responsible for ensuring thier subcontractor meets the terms, e.g. HIPAA, offshore/onshore work, & AI usage, of the vendor's contract with SEHP.

46 Exhibit 1 - Technical Proposal, Section 4 and Section 5 Will the State accept AI-assisted, 100% electronic (full-population) analysis of claims as a supplement to the required statistical sample in Sections 4.3, 4.4, and 5.1.02? pp. 35-37; 43 Any use of AI for analysis must comply with the Generative AI Policy (8200), which can be found here: https://www.ebit.ks.gov/about/policies. The percentage of claims audited for each carrier is goverened by those individual contracts.

47 Exhibit 1 - Technical Proposal, Section 4 and Section 5 Will the use of AI/automated analytics for performing the audit, required in Sections 4.3, 4.4, and 5.1.02, be considered responsive, provided that all findings are reviewed and validated by qualified auditors? pp. 35-37; 43 Please see the response to question 46.

48 Exhibit 1 - Technical Proposal, Section 4 Section 4.4 specifies that the PBM audit must include a statistical sample consisting of a 'stratified random sample of 250–300 claims'. Does the SEHP or the contracted PBM administrator require a specific type of stratification methodology for this sample (such as stratification by drug channel, formulary tier, therapeutic drug class, or ingredient cost thresholds), or is the choice of statistically valid stratification design left entirely to the discretion of the auditor?" pp. 36-37 This has typically been a random sample.

49 Exhibit 1 - 4.4.03 Is CVS using rebate credits in 2026? In what years going forward will the rebate credits be used for determining satisfaction of rebate guarantees? p. 37 Rebate adjustments/settlements are a part of the PBM contract. The information and supporting reports regarding the rebate adjustment/settlement for each year is provided to the auditor for them to review and include in their audit.

50 Exhibit 1 - Technical Proposal; Section 5 Are Respondents allowed to include graphics in the State-provided Technical response template? pp. 40-45 Respondents may include graphics and attach them as exhibits, and then reference the exhibit # in your response in the Technical Proposal.

51 Exhibit 1 - Audit Services Technical Proposal Confirm that Exhibit 6 – Performance Guarantees applies to the bidding auditors, not the benefits administrators. pp. 47-49 Yes, these performance Guarantees are part of this RFP applying to the auditor who is selected. All other vendors have their own Performance Guarantees (Exhibit 6).

52 Exhibit 2 - Cost Proposal The Cost Proposal instructions request flat-fee pricing for the core statistical sampling audits, while providing a 'Miscellaneous Costs & Optional Services' section for ancillary programs. Section 4.3.01 outlines a traditional statistical sample for medical/dental claims. Would the State be open to evaluating an upgraded, optional variant on the Miscellaneous Costs tab that features a 100% electronic medical/dental claims analysis priced entirely on a contingency fee (gain-share) basis based on validated recoupments? If yes, will the State modify Exhibit 2 to allow contingency percentage entries, or should vendors outline those fee percentages within the 'Details' section of the Optional Services tab? Instructions Tab & Misc Costs & Optional Services tab Bidders are required to price their bids according to the defined scope of work as presented in the RFP. Any alternative cost proposals may be submitted in the optional tab. SEHP reserves the right to use the most advantageous cost proposal submitted.

53 Exhibit 4 - Medical Claims Report The medical portion is noting Caremark as the medical vendor; Please confirm this is the pharmacy vendor and not medical vendor, (e.g., Aetna Caremark). Tab 1- Exhibit 4 Medical Claims Report Confirmed, CVS/Caremark is the PBM. There are 2 medical vendors, Aetna and BCBSKS

54 Exhibit 4 - Medical Claims Report Are the plans that are being audited self insured or fully insured? Tab 1- Exhibit 4 Medical Claims Report/ Tab 2 Dental The audited plans are self funded plans

55 Exhibit 4 - Medical Claims Report Will the Medical/Dental audits include plans that have active, retiree- pre-Medicare, and Medicare eligible members? Tab 1- Exhibit 4 Medical Claims Report/ Tab 2 Dental The audited plans include active employees and dependents, pre-Medicare retirees and dependents.

56 Exhibit 4 - Medical Claims Report Are there any audit provisions that exist within any of the current vendor contracts? (e.g., scope, sampling methodology, sample amount, etc.) Tab 1- Exhibit 4 Medical Claims Report/ Tab 2 Dental There are audit requirements in every vendor contract.

57 General Will the State be willing to provide a copy of the TPA ASO Agreement(s) or excerpts of those provisions relating to audit rights and SLAs? N/A The SEHP will share the necessary information from vendor contracts related to audit services with the successful bidder.

58 General Please describe your level of satisfaction with your current or recent Contractor for the same purchasing activity, if applicable. N/A This is a standard procurement at the end of the contract period for the SEHP. Requested services and needs have been identified in the scope of work of this RFP.

59 General If there was a previous solicitation for these serices, what was its title, number, release date, and due date? N/A The auditor services are open to an RFP every 3 years. The last RFP was in 2023.

60 General Has the current contract gone full term? N/A Yes

61 General Have all options to extend the current contract been exercised? N/A N/A

62 General Who is the incumbent, and how long has the incumbent been providing the requested services? N/A The incumbent is Sagebrush Analytics.