Date: October 28, 2026 Subject: Respondent’s Questions & State’s Response, 26RFP19878 In accordance with the subject Request for Proposals (RFP), the following are answers to respondent’s questions which have been submitted prior to the specified deadline of October 16, 2026 at 5:00 p.m. CT. These questions are for informational purposes only; they do not alter the requirements specified within the RFP. Any changes to the RFP will be accomplished by the Office of Procurement Management via an addendum.

*The State's response will be in Bold font following the respondent’s questions.

1. For an offeror that has not previously performed a GAGAS engagement, will the State accept a commitment to perform this audit in accordance with GAGAS (2024 revision), with staff meeting GAGAS continuing professional education before Audit Period 1 fieldwork, an independent GAGAS-experienced CPA performing engagement quality review as an approved subcontractor, and an external peer review obtained within the period GAGAS sets for an audit organization's first peer review?

State Response: The State requires that the contractor’s work conform to GAGAS performance audit standards. The State does not require prior completion of a GAGAS engagement or a formal certification of compliance. An offeror may meet this expectation through a commitment to obtain the required GAGAS training and related quality‑assurance elements within the timelines established under GAGAS. The State will evaluate all proposals in accordance with the criteria set forth in the RFP

2. Section 1.1.2(a) states that the Medical Claims Audit will be performed in accordance with Generally Accepted Government Auditing Standards (GAGAS). Please clarify whether the State requires the contractor to issue reports containing a statement of compliance with GAGAS, including the associated quality management and external peer review requirements, or whether the State expects the contractor's methodology, documentation, and reporting to align with GAGAS performance audit standards.

State Response: The State requires that the contractor’s methodology, documentation, and reporting align with the performance audit standards contained in Generally Accepted Government Auditing Standards (GAGAS). While the audit work must be conducted in accordance with GAGAS, the State does not require the contractor to issue reports that include a formal statement of compliance with GAGAS, nor does the State require the contractor to maintain a GAGAS-compliant quality management system or undergo an external peer review solely for purposes of this engagement.

3. Could you clarify which type of Generally Accepted Government Auditing Standards (GAGAS) audit BHRA expects to be performed? For example, will it be an attestation engagement (e.g., AUP) or a performance audit?

State Response: BHRA expects this engagement to be conducted as a Performance Audit in accordance with Generally Accepted Government Auditing Standards (GAGAS). The scope of work requires the auditor to evaluate the medical claims process, apply auditor-developed procedures, conduct statistical and judgmental sampling, assess accuracy and compliance, compare results to industry standards, and issue findings and conclusions

4. Will Wellmark provide a claim-level extract of 100% of paid medical claims (header and line detail, including diagnosis and procedure codes, allowed, paid and member cost-share amounts, and received and paid dates), together with the provider reimbursement terms and DRG contract terms needed to reprice claims? In what format, and how soon after each fiscal year end.

State Response: Per Sections 3.2 and 3.3 of the RFP, the Contractor will receive a claim-level extract for 100% of paid medical claims for each audit period, including necessary header, line, diagnosis, procedure, allowed, paid, member cost-share, and processing date fields. Wellmark will also provide the provider reimbursement terms and DRG-related contractual information required for repricing. The file format and delivery schedule following each fiscal year end will be coordinated with Wellmark and communicated to the selected Contractor

5. Does Wellmark’s claims platform include a pricing module or rules engine? If so, will the auditor have access to the pricing rules and conditions (for example, contract terms, fee schedules and DRG pricing logic) in order to validate claim pricing during the audit?

State Response: Wellmark will provide auditors with view-only access to applicable pricing information for the selected audit sample through Microsoft Teams. Access will be limited to the pricing information necessary to validate the sampled claims during the audit.

6. What claims system (system of record) does Wellmark use to process the State’s medical claims? Section 1.1.1 notes that the selected auditor will execute a Non-Disclosure Agreement with Wellmark. Will the auditor be given direct access to Wellmark’s system to perform the audit, or will the audit be conducted using data provided by Wellmark?

State Response: Wellmark utilizes Facets as its claims processing system of record for the State’s medical claims. The selected Contractor will conduct the audit using claims data provided by Wellmark’s External Audit team. Direct access to Wellmark’s claims processing system will not be provided.

7. For the electronic screening of 100% of paid medical claims, will the claims data be delivered to the auditor as a data file (download or extract), or will the auditor be required to access Wellmark’s system? If a data file will be provided, what file formats and delivery methods will be used?

State Response: Wellmark will provide claims data to the selected Contractor through electronic data files. The auditor will not be required to access Wellmark’s claims processing system directly. File formats and secure transmission methods will be coordinated with the selected Contractor. Historically, Wellmark has utilized Excel files and FTP for data exchange with the current auditor.

8. For DRG-contracted hospitals, which DRG system and version does Wellmark use to pay SDSEHP claims (for example MS-DRG or APR-DRG), and will grouper output be provided for each sampled claim? (Wellmark uses Coviti for DRG claims) State Response: Wellmark utilizes the APR-DRG methodology for applicable hospital claims. For selected audit samples, Wellmark will provide reports containing the relevant Grouper data used in determining claim pricing, allowing the auditor to review and validate the applicable pricing methodology.

9. Please provide the Non-Disclosure Agreement (NDA) Wellmark intends to execute with the selected vendor, if possible.

State Response: Unfortunately, Wellmark does not provide this until we are engaged with the auditor and know the scope of the audit.

10. Please indicate whether Wellmark's administrative services agreement contains provisions that limit review frequency, sample size, or data access.

State Response: Pursuant to Section 5.4, “Right to Examine Records; Audit,” of the Administrative Services Agreement with Wellmark, the State may conduct an audit no more frequently than annually, covering records from the preceding 24 months. Audit scope, methodology, and sample size will be established in accordance with generally accepted professional auditing standards and coordinated with Wellmark. Access to applicable claims and administrative records will be provided in accordance with the agreement's confidentiality and data access requirements.

11. Please indicate how in-network claims are priced by Wellmark. Is there a statewide fee schedule that is utilized, or are prices negotiated by Wellmark with each provider?

State Response: Prices are negotiated by Wellmark with each provider.

12. Will the State consider health plan payment-accuracy, claims pricing and claim-editing engagements performed for health plans as contracts “like the requirements of this RFP,” or must the three contracts be audits of a claims administrator performed for an employer or plan sponsor?

State Response: The State will accept prior engagements that are substantially similar in scope to the requirements of this RFP, including payment‑accuracy, claims‑pricing, or claim‑editing reviews performed directly for health plans. Such engagements will be considered comparable for purposes of demonstrating relevant experience, regardless of whether the client was a health plan or an employer/plan sponsor.

13. Prior reviews (Section 3.4). Where an offeror has a limited number of comparable prior reviews, may results be compared with published industry standards and with the performance standards in the State's agreement with Wellmark instead?

State Response: Yes. If an offeror has a limited number of comparable prior reviews, the State will accept comparisons to published industry standards and to the performance standards in the State’s agreement with Wellmark, consistent with Section 3.4.

14. Does the State expect on-site fieldwork at Wellmark or BHRA, and if so, how many visits per audit period and at which locations?

State Response: No on‑site fieldwork is anticipated. The scope of work is fully data‑driven, and all required information is expected to be provided electronically by Wellmark.

15. Section 1.1.2(b) refers to pharmacy claims auditing, while Section 3 covers medical claims only. Please confirm that pharmacy claims are out of scope.

State Response: Confirmed. Pharmacy claims are not included in the scope of work. The reference in Section 1.1.2(b) relates only to general auditing standards and does not expand the audit scope beyond medical claims.

16. 3.3 of the Scope of Services requires 100% of paid medical claims be reviewed for accuracy, turnaround time and identification of potential recovery and savings. However, 3.4, 3.5 and 3.6 call for a review of various sample of claims. Can you provide further detail on how 3.4, 3.5, and 3.6 differ from 3.2 given 100% of claims will already be analyzed?

State Response: The 100% electronic screening in Section 3.3 provides overall accuracy, turnaround time, and recovery/savings analysis across the full claim population. Sections 3.4, 3.5, and 3.6 require more detailed, manual reviews of smaller samples to evaluate specific issues such as financial accuracy, DRG coding, and out‑of‑network payment compliance that cannot be fully assessed through automated screening alone.

17. Prior audits. Has a medical claims audit of Wellmark's administration of the SDSEHP been performed previously? If so, can the State share the audit period, scope or report, and the number of claims sampled?

State Response: Yes. The State has routinely conducted medical claims audits as part of its responsibility to administer the State Employee Health Plan. During the previous contract term, these services were provided by CTI Audit Solutions, Inc. Information about that contract is publicly available on OpenSD. The State does not plan to release prior audit reports or sampling details as part of this procurement.

18. For an offeror that owns no vehicles, will hired and non-owned automobile liability satisfy Section 2.7(3)? (b) The cyber liability limit in Exhibit B, Section II is blank. What limit is required?

State Response: Yes. For offerors that do not own vehicles, hired and non‑owned automobile liability coverage will satisfy the requirement in Section 2.7(3). Regarding cyber liability limits, the State requires a limit of 3 million, and the agreement will be updated to reflect this amount.

19. Price. Should the cost proposal be stated as a fixed price per audit period? Is there a not-to-exceed budget for the contract (Section 2.5)?

State Response: Yes. Offerors should propose a fixed price for each audit period. The resulting contract will include a not‑to‑exceed amount for the initial term, with additional amounts added for any renewal periods. The not‑to‑exceed structure is used for contract administration and does not predetermine or limit the pricing proposed by offerors.

20. Cost proposal: Is there a particular pricing methodology the State prefers e.g., fixed fee, PMPM, etc. In addition, is the State open to alternative pricing models?

State Response: The State prefers a fixed price for each audit period, consistent with the structure of the RFP. Offerors may include alternative pricing models if they wish, but the evaluation will be based primarily on the proposed fixed pricing.

21. Please indicate whether the State prefers a fixed fee per Audit Period, and whether pricing for the two optional renewal years should be included.

State Response: Please see answer to questions No. 19 and 20.

22. In the event that our audit identifies a defect, is there a prescribed escalation process in which the auditor is expected to participate? Alternatively, will the auditor’s initial findings and recommendations suffice, with review and follow-up then transitioning to the State and/or Wellmark?

State Response: The Contractor will be expected to review all audit findings with the State, including any identified deficiencies, and provide recommendations for corrective action. The State will be responsible for determining appropriate next steps and coordinating any necessary follow-up with Wellmark. The Contractor is not expected to participate in a formal escalation process beyond presenting its findings, recommendations, and any necessary clarification requested by the State.

23. For claims denied on the basis of “medical judgment” (for example, medical necessity determinations), does the State expect these denials to be within the scope of the audit? If so, does the State require that they be reviewed by board-certified clinical staff?

State Response: No. Medical‑judgment denials, such as medical necessity determinations, are not included in the scope of this audit. Because these denials are out of scope, the State does not require review by board‑certified clinical staff.

24. Section 1.1.1 indicates approximately 314,300 medical claims paid annually, representing approximately $108 million in medical claims for Fiscal Year 2026. Can the State provide a breakdown of claim counts and amounts paid by claim type (for example, inpatient facility, outpatient facility, professional, DRG-paid hospital and out-of-network claims) and by plan (PPO and high-deductible plans)?

State Response: No. The State will not provide additional breakdowns of claim counts or paid amounts by claim type or by plan for this procurement. The information in the RFP should be sufficient for offerors to prepare their proposals.

25. Will BHRA expect submission of firms’ most recent peer review report?

State Response: No. The State is not requiring submission of peer review reports for this procurement.

26. To allow ample time to incorporate any answers to questions into our response, would BHRA consider an extension of the deadline for proposal submission to allow at least 10 business days after release of Q&A?

State Response: BHRA appreciates the request; however, we are unable to extend the proposal submission deadline. The deadline will remain as outlined in the RFP. We encourage all offerors to submit their proposals by the established deadline.

27. Section 2.2 indicates the services will begin July 1, 2027. However, Section 1.1.4 indicates the Audit Period 1 ends June 30, 2028. Can you confirm if one of these dates is incorrect or clarify how these timelines align?

State Response: Both dates are correct. The State of South Dakota’s benefit plan year and fiscal year run from July 1 through June 30. Services will begin July 1, 2027, as outlined in Section 2.2, and Audit Period 1 will cover the period of July 1, 2027, through June 30, 2028, as outlined in Section 1.1.4. These dates align with the State’s fiscal and benefit plan year.

28. Section 2.2 establishes a contract term of July 1, 2027 through June 30, 2030, and Section 1.1.4 defines Audit Period 3 as claims processed July 1, 2029 through June 30, 2030. Please clarify whether the State expects each Audit Period to be reviewed after the period closes, or whether the State expects ongoing or periodic monitoring of claims during each Audit Period.

State Response: Both dates are correct. The State of South Dakota’s benefit plan year and fiscal year run from July 1 through June 30. Services will begin July 1, 2027, as outlined in Section 2.2, and Audit Period 1 will cover the period of July 1, 2027, through June 30, 2028, as outlined in Section 1.1.4. These dates align with the State’s fiscal and benefit plan year.

29. Section 3.5 states that Audit Period 3 DRG claims will be selected from claims processed July 1, 2029 through June 30, 2030 (FY 2029). Please confirm that the intended fiscal year is FY 2030.

State Response: Confirmed. The correct fiscal year is FY 2030, covering the period July 1, 2029, through June 30, 2030. The reference to FY 2029 in Section 3.5 is a typographical error

30. The language of identifying DRGs that are most likely to have questionable coding implies a review of the medical record to determine correct coding by the provider. Is this the intention of the BHRA, or is the intention for a review of how the Health Plan processed the information submitted by the provider?

State Response: The audit does not require review of medical records or evaluation of provider coding accuracy. The intention is to review how the Health Plan processed the DRG‑related information submitted on the claim and to assess the accuracy of that processing.

31. As a CPA firm, we do not have audited financial statements. Will the State accept our internally prepared financial statements with an attestation of accuracy by our CFO? If not, is there other documentation that could be provided in lieu of audited statements?

State Response: Yes. The State will accept internally prepared financial statements with an attestation of accuracy by an authorized officer of the firm. The State is not requiring audited financial statements for this procurement

32. Please clarify the data access requirements as compared to the scope of work. The scope of work does not indicate data analytic capability through a dashboard or similar platform.

State Response: The State does not require the use of a specific data analytics platform or dashboard for this engagement. The State will accept any secure data‑analytic or reporting tools the contractor uses, provided they meet all State data security and technology requirements. Historically, data has been exchanged electronically, and the State remains open to the contractor’s preferred methods for analysis and presentation of results.

33. What is the amount of cyber liability insurance that is required?

State Response: Please see state’s answer to question 18—the state generally requires 3 Million in cyber liability insurance.

34. For 8.2 of the General IT Requirements - Is the State/State Health Plan the covered entity? Disclosure of all data for generalized use in a warehouse would likely not meet HIPAA requirements unless directed by law, can we assume that only relevant findings would be shared with the State?

State Response: Yes. For this engagement, the State Health Plan is the HIPAA covered entity, and the contractor will operate as a Business Associate under the required Business Associate Agreement. The State will receive only the information necessary to perform and evaluate the audit, consistent with HIPAA requirements. Section 8.2 does not require disclosure of all underlying data for generalized warehouse use; it applies only to data tables or outputs generated as part of the contractor’s solution or deliverables.

35. For 9.2 of the Vendor Hosted Solutions Requirements - is this specific only to relevant findings and not a generalized export of all claims and related data associated with all state employees?

State Response: Section 9.2 applies only to data tables or deliverables generated as part of the contractor’s proposed solution. It does not require a generalized export of all underlying claims data. The State will receive only the information necessary to support and evaluate the audit deliverables, consistent with applicable privacy and security requirements.

36. Can you please confirm that Wellmark Blue Cross and Blue Shield of South Dakota has as the third-party administrator (TPA) for both the medical and pharmacy plans State Response: The State confirms that Wellmark Blue Cross and Blue Shield of South Dakota serves as the third-party administrator for both the medical and pharmacy plans.

37. Does the South Dakota Bureau of Human Resources and Administration have access to medical and pharmacy claims or will the claims histories need to be coordinated with the TPAs?

State Response: The State will coordinate with its medical and pharmacy claims administrators, as applicable, to facilitate access to the claims data necessary to perform the audit.

38. Are administrative controls potentially operated by South Dakota Bureau of Human Resources and Administration (i.e. review of the TPA SOC reports, internal claims activity monitoring, service level commitment and tracking) to be consider within the scope of the performance audit.

State Response: No. The scope of this audit is limited to the review of Wellmark’s administration of medical claims. Administrative controls performed by the State are not part of the audit scope.

39. The RFP references an attached Exhibit A Business Associate Agreement, but it proceeds from page 23 directly to Exhibit B on page 24. Confirm whether Exhibit A was omitted from the issued package.

State Response: The State confirms that Exhibit A, the Business Associate Agreement, was inadvertently omitted from the original RFP posting. This document has since been added to the RFP materials and is now available on the State’s procurement website. To ensure all prospective Offerors receive the document, a copy will also be distributed via email to interested vendors.

40. RFP requirement 5.5 notes: The offeror’s proposal must highlight any requirement in Section 4 that the offeror’s proposed deliverables cannot comply with, and the offeror must provide any suggested “work-around” to the requirement in question or a future date that the offeror will be able to comply with the requirement. Please confirm that the reference to Section 4 is correct. RFP section 4 addresses Proposal Requirements and Company Qualifications State Response: Section 5.5 refers to the State’s IT terms, and the section reference should have been to Sections 9, 10, and 11 of the RFP not 4. Offerors should review those sections and identify any IT requirements their proposed deliverables cannot meet, along with any suggested work‑arounds or timelines for compliance.

41. Section 1.1.1 references annual pharmacy claims volume, and Section 1.1.2(b) references industry-standard methodologies for medical and pharmacy claims auditing. Section 3, Scope of Work, addresses medical claims only. Please confirm whether review of pharmacy claims is within the scope of this RFP.

State Response: Pharmacy claims are not within the scope of the RFP.

42. If pharmacy claims are not within scope, will the State consider a pharmacy claims review offered as an optional service under Section 5.4.3(c)?

State Response: The State is not considering pharmacy claims review as an optional service under Section 5.4.3(c) at this time.

43. Please also provide the State's expected schedule for data delivery, fieldwork, and final reporting for each Audit Period, including any allowance for claims run-out, and confirm whether the review of Audit Period 3 is expected to take place during a renewal year.

State Response: The State of South Dakota's benefit plan year and fiscal year run from July 1 through June 30. Each Audit Period will align with this timeframe. The State anticipates that data delivery, fieldwork, and final reporting will occur following the close of each Audit Period, allowing sufficient time for claims run-out and data reconciliation. Specific timelines will be established in coordination with the selected contractor and the State's claims administrator, Wellmark, to ensure the availability of complete and accurate claims data.

The State has not established a fixed claims run-out period or final reporting schedule at this time. These details will be finalized with the selected contractor. The review of Audit Period 3 is anticipated to occur following the conclusion of that Audit Period and may extend into a contract renewal year, subject to the final contract terms and audit schedule

44. Please confirm whether the 50 DRG claims in Section 3.5 and the 20 out-of-network claims in Section 3.6 are separate from, or included within, the 200-claim statistical sample in Section 3.4.

State Response: The total sample remains 200 claims per Audit Period.

45. Section 3.6 references external provider networks such as PHCS. Please confirm whether claims processed through the BlueCard program are within scope for pricing verification.

State Response: No. The State Health Plan does not utilize the BlueCard program for medical claims administration, and BlueCard claims are not within the scope of this audit.

46. Section 6.1 assigns 200 points to cost. Please describe how cost points will be assigned among offerors.

State Response: Cost proposals will be evaluated consistently across all Offerors, with a maximum of 200 points available as outlined in Section 6.1 of the RFP. Points will be assigned based on the competitiveness of each Offeror’s proposed pricing, using a consistent evaluation methodology.

47. Has the current contract gone full term?

State Response: The current contract remains active and is in its second and final one-year renewal option period. The contract has not yet completed its full term.

48. If there was a previous solicitation for these services, what was its title, number, release date, and due date?

State Response: The State last issued a Request for Proposal for Medical Claims Audit services in 2021, which can be found on OpenSD.

49. Please describe your level of satisfaction with your current or recent Contractor for the same purchasing activity, if applicable.

State Response: The State’s decision to issue this RFP is solely the result of statutory procurement requirements and the State’s internal policy for conducting competitive solicitations. The current RFP is not related to the State’s relationship with its existing contractor. Rather, it is part of the State’s standard process to ensure compliance with procurement law and to periodically evaluate available services in the marketplace.

50. What estimated or actual dollars were paid last year, last month, or last quarter to any incumbent(s)?

State Response: The current contract is available on OpenSD.

51. How are fees currently being billed by any incumbent(s), by Category, and at what rates?

State Response: The current contract is available on OpenSD.

52. Has South Dakota hired a contractor to perform these services in the past, and if so, can you identify the contractor(s) and provide copies of any reports that were generated?

State Response: Yes. The State of South Dakota has previously contracted for medical claims audit services as a result of a Competitive Request for Proposals published in 2021. The current contractor is CTI Audit Solutions, Inc. The previous contract can be viewed on OpenSD.

Prior audit reports are not being provided as part of this RFP process due to the potential inclusion of confidential, proprietary, and sensitive health plan information.

53. Who is the incumbent, and how long has the incumbent been providing the requested services?

State Response: The incumbent contractor is CTI Audit Solutions, Inc (CTI). CTI is currently providing medical claims audit services to the State of South Dakota and is in the second and final one-year renewal option period of its existing contract.

54. Have all options to extend the current contract been exercised?

State Response: Yes. The State has exercised all available contract renewal options, including the two optional, one-year extensions. No additional extension options remain under the current contract.

55. Sections 8 and 9 apply where a proposal includes an IT aspect, such as a web portal for data sharing or report delivery. If the contractor delivers findings through written reports and secure file transfer, without a login-based portal, please confirm whether Sections 8 and 9 will apply to the proposal.

State Response: BHRA accepts audit findings and reports delivered through secure file transfer and does not require a login-based web portal. However, the applicability of Sections 8 and 9 will depend on the technology and data security requirements associated with the proposed solution. Secure file transfer does not automatically exempt a contractor from applicable IT and security requirements.