GICPND1601 Bidders Questions for posting 9-28-15.docx

Procuring Auditing Services for Health Care Claims Processing and Related Activities for the Group Insurance Commission– GICPND1601

Bidders’ Questions & Answers

1) Is this a request for an audit of provider bills to detect irregularities to achieve savings, or is it a request for services to audit?

The GIC is procuring an auditor to examine its health plans’ claims processing and related services. It is not a procurement for a firm to audit health care providers’ bills.

2) Can you please inform if the bidder can bid as a Health Care Management Consultant or independent contractor?

The GIC’s goal is to procure audit services, not to procure the services of a health care management consultant. If an independent contractor possesses the requisite health care claims auditing expertise and experience, and the capacity to conduct four health plan audits on a very compressed schedule, he or she may submit a bid for the GIC’s consideration.

3) Where can I locate the attachments and exhibits referenced in this RFR, and are they all available on COMMBUYS?

The attachments and exhibits, including the Commonwealth’s Forms listed on page 15 of this RFR and the attachments and exhibits referenced in the RFR’s table of contents (page 2) have been uploaded and are all available on the COMMBUYS website. Please contact Catherine Moore at Catherine.Moore@state.ma.us or call (617) 727-2310 x7033 if you are unable to locate the documents.

4) Is there a specific cost/price proposal form to use in our response?

You should base your cost proposal on the Sample Cost Proposal Layout provided in Exhibit #1. There may be some variation in what each firm proposes, whether a firm partners with a subcontractor(s), what role the subcontractor fills, etc., and therefore there is not a one-size fits all form.

PLEASE NOTE that cost information MUST be provided separately from all other portions of the response, and MUST NOT be incorporated in any of the other portions of the response to this RFR.

5) Who is the current claim audit vendor?

The GIC’s most recent claim auditor was Claim Technologies Incorporated (CTI), of Des Moines, Iowa. Their contract was through June 2015.

6) What is the current annual cost for these specific [audit] services or maximum amount over X years?

The maximum cost of these services is $2,000,000 over four years (the first two years of the contract will be awarded this fall; the final two years are renewal options that the GIC may choose to exercise at a later date).

Bidders’ Questions & Answers (cont.)

7) Will a separate audit of the mental health carve out vendor (Beacon Health Options) also be required?

Yes.

8) For the prescription drug audit, can you confirm that only 12 months of claims data will be audited?

In the RFR the GIC asks for each firm’s recommendation on how to best conduct the audit to achieve the GIC’s objectives and why you recommend the approach you describe in your proposal (in Essay Question #3a through #3d). Your firm may recommend an approach that involves 12 months of claims, 24 months of claims, or a hybrid of the two (e.g. certain elements of the audit might involve the last 24 months of claims data, while other elements might draw only from the most recent 12 months).

9) Appendix 3 provided July 2015 enrollment data for each plan. Could you also provide paid claims volume for each plan for the most recent 12 month period?

The claims volume of the self-insured plans and the total paid premium of the fully-insured plans for the 12 months ending June 30, 2015 are included at the end of this document.

10) RFR Section B references the Supplier Diversity Program (SDP). Specifically, it indicates that it will be evaluated at 10% or more. What weight will M/WBE participation be given in the proposal evaluation?

While the GIC’s scoring criteria for this Bid will become public once the contract has been awarded, as a matter of policy, the GIC does not release information about how the Bids will be scored in advance. This includes both the relative weights of each of the sections of the RFP and the criteria upon which each of the answers will be evaluated.

11) a. What is the member count included within the PBM audit of CVS/caremark?

CVS/caremark is the GIC’s prescription drug carve-out for the UniCare Indemnity Plans. Its enrollment (number of contracts, provided in the RFR appendix) and member (lives) counts are the same as the UniCare counts (118,088 enrollees, 172,260 members).

b. What is the total number of paid claims and the total dollars of paid claims to be audited within the PBM audit of CVS/Caremark (provide an estimate or provide the paid claim count and paid claims dollars for the previous plan year)?

UniCare Indemnity Plan members incurred approximately 3.0 million claims that were paid in FY2015. The claims dollars associated with those claims are provided at the end of this document (see the answer to question 9).

c. How many unique drug plans/plan designs are included in the PBM audit of CVS/caremark?

For the FY2016 audit of CVS/caremark (of FY2015 claims) one drug plan will be audited. For FY2018, the GIC may ask the winning bidder to perform an audit of two drug plans (one commercial, the second an employer group waiver program plan (EGWP)). In your cost proposal, for FY2018 (the third year of the audit), please provide a cost breakdown for (1) the cost of auditing only the commercial plan or for (2) the cost of auditing both the commercial plan and the EGWP plan.

d. Is the prescription benefit rebate arrangement under the contract with CVS/Caremark a “pass-through” rebate arrangement or are rebates paid on a guaranteed amount per paid claim type? If neither, please provide a brief explanation of the drug rebate arrangement.

The rebate arrangement under the GIC’s contracts with CVS/caremark was and continues to be 100 percent of rebates, with a fixed dollar minimum rebate guarantee in each category (mail, retail, and specialty).

12) GIC Plans

a. Who is the GIC’s current Audit vendor?

See the answer to question 5.

b. How long has the GIC worked with the current Audit vendor?

The GIC worked with CTI for four years.

c. Did the GIC exercise the renewal option for contract year three with the current Audit vendor?

The GIC exercised the renewal option for contract years three and four with CTI.

d. What are the current Audit vendor’s invoiced amounts by year for contract years 1, 2 and 3 (if applicable)?

The prior auditing firm charged the GIC $365,000, $179,000, $392,000, and $265,000 for the four years of its contract (the dollar amounts are for years 1 through 4, in that order).

e. Is there any dissatisfaction with the current Audit vendors performance?

The fact that the GIC is out to bid for the audit contract is neither an indication of satisfaction or dissatisfaction with CTI, rather, as a matter of policy, the GIC goes out to bid at a minimum every five years for all of its contracts (health plans, consultants, auditors, etc.).

f. We measure Financial Accuracy by taking the total benefit dollars paid in a population, minus the sum of the weighted absolute value of overpayments and underpayments identified from the sample, divided by the total dollars paid in the population. When the Commonwealth mentions “amount paid to amount invoiced” for Financial Accuracy, is the expectation that the audit vendor will verify the benefit payments made on claims to the accounting information shared with or maintained by the Commonwealth?

Through the audit, the GIC wants to learn about its plans’ Financial Accuracy as you defined it above. We are not asking auditors to validate the amounts the plans invoiced to the GIC. Rather, we were describing a necessary, but not sufficient, component of accurately paying a claim, namely whether, for the claims paid by a plan on our behalf, the plan paid according to the terms of its contracts with the providers (for contracted providers), the GIC and our members (e.g. did it properly determine the allowed amount on out-of-network claims). In other words, the amounts providers invoiced (billed) the plans are the “amounts invoiced” referred to in the RFR.

g. What does the Commonwealth mean by “including coding accuracy” as it relates to Payment Accuracy? Is the expectation that nonfinancial errors be included in the Payment Accuracy results?

The GIC is open to bidders’ suggestions about how we should address non-financial errors in the audit, and how to define Payment Accuracy. In fact, in our last contract, the auditor did not use a “Payment Accuracy” category in describing its findings (although they had an “Accurate Payment Frequency” measure). The goal of the RFR was to try to generally describe the services the GIC looks to procure; we look to the respondents to tell us how they would recommend that we approach our health care claims audit for the next two (four) years.

h. How does the Commonwealth define Processing Accuracy? Is this a frequency measurement of all error types (financial and nonfinancial) or is it a measurement of nonfinancial errors only?

See the answer to question 12(g), above.

i. If an audit firm does not utilize an electronic review of all medical claims (not an industry best practice to measure/evaluate benefit administration performance), but does have a well-established random, stratified sampling of a standard number of claims, would the Commonwealth be open to this approach?

Yes.

13) What are the GIC’s expectations about how an auditor should conduct the operational review? Should a site visit be involved?

The GIC recognizes that different auditors may take different approaches to auditing the claims payment and customer service operations of a health plan, and, as in the response to question 12 (g), the GIC is open to bidders’ suggestions about how such a review should be conducted. Having said that, please be aware that the GIC is not looking for its auditor to perform a SSAE-16 review of the health plans (although the auditor might wish to review some or all of the plan’s most recent SSAE-16 report in the course of its operational review). It is the GIC’s expectation that the operational review will include, but not be limited to, an on-site review of critical areas of the health plan’s operations.

13) CVS Caremark

a. How long has the PBM contract been in place?

The GIC’s current CVS/caremark contract began on July 1, 2015. However, CVS/caremark was also the incumbent vendor, and had been the UniCare Indemnity Plans’ prescription drug carve-out since July 1, 2010.

b. What is the approximate # of total paid claims in the plan year you would like to audit?

See the answer to question 11 (b) above for information about FY2015 paid claims for the GIC’s prescription drug carve-out. We do not know how many members will be covered by this plan, nor how many claims those members will have, in FY2017.

c. How many unique copay/coinsurance plans would you like included in the audit?

Each of the plans has a unique benefit design (potentially different copays, coinsurance and deductibles). And most vendors administer more than one plan (and therefore an audit of one of those plans would involve more than one benefit design). The GIC’s Member Handbooks for its health plans are available online, at http://www.mass.gov/anf/employee-insurance-and-retirement-benefits/employee-health-and-other-insurance-benefits/health-plans/retired-state-employees. Select the links for both retired state employees with and without Medicare to view the handbooks for all GIC plans.

d. Do any of your plans incorporate a deductible and/or a maximum out of pocket allowance? How many? If so, please specify how many are Rx only and how many are medical/Rx combined.

All of the GIC’s non-Medicare plans incorporate both a deductible and an out-of-pocket maximum (11 plans). Only the three UniCare State Indemnity Plans (Basic, PLUS, and Community Choice) have separate medical and prescription drug deductibles and out-of-pocket maxima.

e. In addition, are any components of the member copay excluded from accumulators, such as DAW penalties, non-formulary drug penalties, or mandatory mail penalties?

DAW penalties are excluded from accumulators. There is no “non-formulary drug penalty” per se; members are responsible for paying the entire cost of non-formulary drugs and those payments are not included in accumulators as the drug is not covered by the plan.

f. Are members subject to mandatory mail?

No.

g. Are there any drug categories where a maximum lifetime benefit applies?

No.

h. How many unique sets of underlying benefit options apart from the member out of pocket do you want included in the audit (where one benefit option includes a unique package of drug exclusions, prior authorizations, drug quantity rules and step therapy rules).

See the answer to question 11(c), above.

i. Does your plan include retirees covered under the Retiree Drug Subsidy (RDS) or Employer Group Waiver Plan (EGWP)? If so please indicate which type of plan is in place and whether you want this included in the audit scope.

The Medicare retirees who are part of the CVS/caremark plan were covered under the RDS program in FY2015, and this audit does not contemplate an audit of the RDS. In FY2017, those retirees will be in an EGWP plan, and we look to your proposal of what we should audit for this population and how you recommend doing so (see answer to question 11(c), above).

j. Under Section A.8. Pricing and Rebate Administration Analysis, there is a request for " Pricing assessment/validation of pricing guarantees/acquisition costs." Please provide background on the acquisition cost validation required. For example, does the contract specify Mail Order Acquisition Cost or Retail Pass Through pricing guarantees or both?

Two different contracts with CVS/caremark may be audited during this contract, and pricing terms may have changed from the contract in effect in FY2015 to the contract that is in effect in FY2017. For example, retail prescriptions were subject to pass-through pricing in FY2015, while in FY2016 and beyond the contracted pricing is average wholesale price (AWP) minus a percentage. The GIC’s contract with CVS/caremark is available online on the COMMBUYS website if you wish to view the details of the terms. As for the acquisition cost validation required, we look forward to hearing your firm’s recommendations about how to go about validating the prescription drug acquisition costs. Please see the answer to question 12(g), above.

k. Are there any exception copays outside the standard base copays, such as copay waivers for diabetic supplies, preventative drug copays, HCR copays, or other variables?

As mandated under federal health care reform (ACA), certain (preventive) drugs are covered with no copay ($0 copay). Also, there are a few state-mandated $0 copays (e.g. for certain oral cancer drugs)

14) Can you inform me if there are options for small business concerns to be listed as a subcontractor on this bid?

If a small business possesses the requisite health care claims auditing expertise and experience to conduct a portion of the work contemplated in this procurement, and choses to partner with another firm that possesses comparable expertise and experience and proposes to conduct the rest of the work contemplated in this procurement, those two firms are welcome to submit a bid for the GIC’s consideration.

a. I would like to subcontract on this contractual opportunity as a Health Care Management Consultant.

See the response to question #2, above.

b. How can I get hold of the Prime Contractors bidding on the GICPND1601.

The GIC does not know which firms are going to bid until the bids are received.

15) Who attended the bidders’ conference?

Bidders conference attendees included representatives of Claims Technologies Incorporated (remotely), KPMG, and Myers & Stauffer.

GIC FY2015 CLAIMS (self-insured plans) AND PREMIUMS (fully-insured plans) Pool I and Pool II

Pool I

Pool II

Total

* UniCare Basic and Medicare premiums are combined below

$253,671,123

$0

$110,075,150

$0

$103,329,462

$40,109,751*

$156,092,404

$276,258

$33,475,843

$1,392,276

$58,624,258

$196,571

$1,953,735

$0

$480,112,245

$0

$93,493,506

$487,396

$63,348,515

$1,670,147

$107,174,419

$903,724

$10,033,908

$315,568

$40,952,607

$0

$570,808,706

$0

$24,806,370

$214,099

$23,235,375

$241,689

$13,535,749

$919,426

$42,996,496

$19,225,478

$289,432,348