RFP Document.pdf

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STATE OF SOUTH DAKOTA

INFORMATION TECHNOLOGY (IT) RFP

(Bureau of Human Resources and Administration 500 E Capitol Ave, Pierre, SD 57501)

South Dakota State Employee Health Plan Medical Claims Audit

PROPOSALS ARE DUE NO LATER THAN October 23, 2026

RFP #: 26RFP19878 STATE POC: State of South Dakota, EMAIL:

Bureau of Human Resources & Peggy.Canter@state.sd.us Administration

READ CAREFULLY

FIRM NAME: AUTHORIZED SIGNATURE:

ADDRESS: TYPE OR PRINT NAME:

CITY/STATE: TELEPHONE NO:

ZIP (9 DIGITS): FAX NO:

E-MAIL:

PRIMARY CONTACT INFORMATION

CONTACT NAME: Peggy Canter

TELEPHONE NO: 605-773-4099

FAX NO: E-MAIL: Peggy.Canter@state.sd.us

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1 General Information

1.1 Purpose of Request for Proposal (RFP)

1.1.1 Background:

Wellmark Blue Cross Blue Shield of South Dakota (“Wellmark”) has been administering the State’s self-funded medical and pharmacy plans since July 1, 2021.

Approximately 12,150 State employees and COBRA participants enrolled in four (4) State of South Dakota State Employee Health Plans (“SDSEHP”) which includes 2 low-deductible Preferred Provider Organization (“PPO”) plans and 2 high-deductible plans which offer a Health Savings Account (“HSA"). The total number of plan participants including spouses and dependent children is approximately 26,800. As of May 1, 2026, 65.00% of plan members were enrolled in the high-deductible health plans and 35.00% were enrolled in the low-deductible plans. Annual paid claims volume is approximately 314,300 medical claims and 282,700 pharmacy claims. For Fiscal Year 2026 (ended on June 30, 2026), the SDSEHP paid a total of approximately $160 million in total health plan costs (medical claims, prescription drug claims, and administrative fees), of which approximately $108 million was for medical claims alone.

The Bureau of Human Resources & Administration (“BHRA”) is soliciting proposals from vendors who can conduct a performance review of medical claims processing performed by Wellmark. The auditor selected through this RFP process will be required to execute a Non-Disclosure Agreement “(NDA”) with Wellmark.

1.1.2 Goals and Objectives

a. Perform the Medical Claims Audit in accordance with Generally Accepted

Government Auditing Standards (GAGAS) issued by the U.S. Government Accountability Office.

b. Follow industry-standard methodologies for medical and pharmacy claims auditing, including statistically valid sampling techniques.

c. Maintain auditor independence, appropriate qualifications, and relevant experience in health plan and claims audits.

d. Provide documentation and work papers sufficient for the State to validate findings, conclusions, and recommended corrections.

e. Comply with any additional federal or state requirements applicable to the State Health Plan, if relevant (e.g., OMB Uniform Guidance, only if federal funds or requirements are triggered).

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f. Verify that claims are being processed in compliance with the State’s plan Provisions;

g. Verify Wellmark procedures and controls, and negotiated network provider rates;

h. Measure the quality and timeliness of Wellmark’s claims processing performance;

i. Assess the reliability of Wellmark’s self-reported results for performance guarantees;

and

j. Assess the accuracy of claims data provided by Wellmark to the State.

1.1.3 Description of Components or Phases:

The work product is for three (3) Audit Periods, each with one twelve (12) month period.

Within the Audit Periods, each year will have a separate and distinct findings, reports and recommendations.

1.1.4 Scope of Components or Phases:

• Audit Period 1 will be July 1, 2027 to June 30, 2028 (Fiscal Year 2028)

• Audit Period 2 will be July 1, 2028 to June 30, 2029 (Fiscal Year 2029)

• Audit Period 3 will be July 1, 2029 to June 30, 2030 (Fiscal Year 2030)

1.2 Issuing Office and RFP Reference Number

The Bureau of Human Resources and Administration (“BHRA”) is the issuing office for this document and all subsequent addenda relating to it, on behalf of the State of South Dakota (“State”). The reference number for this transaction is RFP#26RFP19878. This reference number must be referred to on all proposals, correspondence, and documentation relating to this RFP. For purposes of this RFP, the State’s centralized IT agency, the Bureau of Information and Technology (“BIT”), must approve all IT related purchases.

1.3 Schedule of Activities (Subject to Change)

All deadlines in the Schedule of Activities are due by 11:59 p.m. CST. The Schedule of Activities for this RFP is as follows:

RFP Publication September 28, 2026 Deadline for Letter of Intent to Respond October 12, 2026 Deadline for Submission of Written Inquiries October 12, 2026 Deadline for Responses to offeror Questions October 21, 2026 Deadline for Proposal Submission October 23, 2026 Evaluation of Proposals to Determine Short List (If required) November 6, 2026 Discussions / Technical Review, if applicable November 16, 2026 Deadline for Completion of Site Visits (If required) November 9-13, 2026 Demonstrations and presentations (if required) November 9-13, 2026 Proposal Revisions (if required) November 30, 2026 Anticipated Award Decision/Contract Negotiation December 7, 2026

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1.4 Submitting a Proposal

All proposals must be completed and received by the Agency by the date and time indicated in Section 1.3 Schedule of Activities.

Proposals received after the Deadline for Proposal Submission will be late and ineligible for consideration.

All proposals must be signed, in ink or electronically, by a representative of the offeror who is legally authorized to bind the offeror to the proposal. Proposals that are not properly signed may be rejected. The offeror’s proposal must be prepared pursuant to the requirements of Section 5 Proposal Response Format of this RFP.

The State will only accept electronic proposals via email.

Each offeror must provide an electronic version of the proposal. The electronic version should be provided in MS Word or in PDF format to Peggy.Canter@state.sd.us. The email, including attachments, must be limited to 20MB in size.

No proposal will be accepted from, or no contract or purchase order will be awarded to, any person, firm, or corporation that is in arrears upon any obligations to the State of South Dakota, or that otherwise may be deemed irresponsible or unreliable by the State of South Dakota.

1.5 Certification Regarding Debarment, Suspension, Ineligibility, and Voluntary

Exclusion – Lower Tier Covered Transactions

By signing and submitting this proposal, the offeror certifies that neither its principals are presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation, by any Federal department or agency, from transactions involving the use of Federal funds. Where the offeror is unable to certify any of the statements in this certification, the offeror shall attach an explanation to its offer.

1.6 Non-Discrimination Statement

The State of South Dakota requires that all contractors, vendors, and suppliers do business with any State agency, department, or institution, provide a statement of non-discrimination. By signing and submitting their proposal, the offeror certifies they do not discriminate in their employment practices regarding race, color, creed, religion, age, sex, ancestry, national origin, or disability.

1.7 Restriction of Boycott of Israel

For contractors, vendors, suppliers, or subcontractors with five (5) or more employees who enter into a contract with the State of South Dakota that involves the expenditure of one hundred thousand dollars ($100,000) or more, by submitting a response to this solicitation or agreeing to contract with the State, the bidder or offeror certifies and agrees that the following information is correct:

The bidder or offeror, in preparing its response or offer or in considering proposals

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submitted from qualified, potential vendors, suppliers, and subcontractors, or in the solicitation, selection, or commercial treatment of any vendor, supplier, or subcontractor, has not refused to transact business activities, has not terminated business activities, and has not taken other similar actions intended to limit its commercial relations, related to the subject matter of the bid or offer, with a person or entity on the basis of Israeli national origin, or residence or incorporation in Israel or its territories, with the specific intent to accomplish a boycott or divestment of Israel in a discriminatory manner. It is understood and agreed that, if this certification is false, such false certification will constitute grounds for the State to reject the bid or response submitted by the bidder or offeror on this project and terminate any contract awarded based on the bid or response. The successful bidder or offeror further agrees to provide immediate written notice to the contracting executive branch agency if during the term of the contract it no longer complies with this certification and agrees such noncompliance may be grounds for contract termination.

1.8 Certification Relating to Prohibited Entity

For contractors, vendors, suppliers, or subcontractors who enter into a contract with the State of South Dakota by submitting a response to this solicitation or agreeing to contract with the State, the bidder or offeror certifies and agrees that the following information is correct:

The bidder or offeror, in preparing its response or offer or in considering proposals submitted from qualified, potential vendors, suppliers, and subcontractors, or in the solicitation, selection, or commercial treatment of any vendor, supplier, or subcontractor, is not a prohibited entity, regardless of its principal place of business, that is ultimately owned or controlled, directly or indirectly, by a foreign national, a foreign parent entity, or foreign government from China, Iran, North Korea, Russia, Cuba, or Venezuela, as defined by South Dakota Codified Law § 5-18A. It is understood and agreed that, if this certification is false, such false certification will constitute grounds for the State to reject the bid or response submitted by the bidder or offeror on this project and terminate any contract awarded based on the bid or response. The successful bidder or offeror further agrees to provide immediate written notice to the contracting executive branch agency if during the term of the contract it no longer complies with this certification and agrees such noncompliance may be grounds for contract termination and would be cause to suspend and debar a business under SDCL § 5-18D-12.

1.9 Modification or Withdrawal of Proposals

Proposals may be modified or withdrawn by the offeror prior to the established due date and time.

No oral, telephonic, telegraphic or facsimile responses or modifications to informal, formal bids, or Request for Proposals will be considered.

1.10 Questions Regarding RFP

All written questions should be sent to: Peggy.Canter@state.sd.us, only emailed questions will be accepted.

Each offeror may submit questions via email concerning this RFP to obtain clarification of requirements. No questions will be accepted after the date and time indicated in the

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above schedule of activities. Email questions to the email address listed above with the subject line “RFP#26RFP19878”. The questions and their answers will be sent to all offerors that submitted Letters of Intent, submitted questions, or requested the questions and answers via email before the proposal submittal date and will be sent by the date and time indicated in the above calendar of events. Offeror may not rely on any other statements, either of a written or oral nature, that alter any specification or other term or condition of this RFP that have not originated from the SD RFP Project Contact. Offerors will be notified in the same manner as indicated above regarding any modifications to this RFP. Offerors and their agents may not contact any state employee other than the buyer of record regarding any of these matters during the solicitation and evaluation process.

Inappropriate contacts are grounds for suspension and exclusion from specific procurements.

1.11 Prohibition on Solely AI-Generated Submissions

All questions, responses, and proposals submitted in response to this RFP must be thoroughly vetted, verified, and validated by the vendor's human staff. Submissions that are solely generated by Artificial Intelligence (AI) without substantive human review and oversight are strictly prohibited and may result in the disqualification of the proposal or rejection of the submitted questions.

1.12 Proprietary Information

The proposal of the successful offeror(s) becomes public information. Proprietary information can be protected under limited circumstances such as client lists and non-public financial statements. An entire proposal may not be marked as proprietary.

Offerors must clearly identify in the Executive Summary and mark in the body of the proposal any specific proprietary information they are requesting to be protected. The Executive Summary must contain specific justification explaining why the information is to be protected. Proposals may be reviewed and evaluated by any person at the discretion of the State. All materials submitted become the property of the State of South Dakota and may be returned only at the State's option.

1.13 Length of Contract

The length of the contract will be for a term of three (3) year(s). The State will have the opportunity to renew the contract annually for up to two (2) additional one-year time extensions. The extension(s) will not be automatic.

1.14 Governing Law

This RFP will be governed by and construed in accordance with the laws of the State of South Dakota. Any lawsuit pertaining to or affecting this RFP will be venued in Circuit Court, Sixth Judicial Circuit, Hughes County, South Dakota.

1.15 Site Visit

If site visits are required, they will be scheduled before the submission of the proposal.

Site visits will be made at the offeror’s expense.

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1.16 Presentations/Demonstrations

At the State’s discretion, the State may require a presentation or demonstration by an offeror to clarify a proposal. However, the State may award a contract based on the initial proposals received without a presentation or demonstration by the offeror. If presentations or demonstrations are required, they will be scheduled after the submission of proposals. Presentations and demonstrations will be made at the offeror’s expense.

1.17 Discussions

At the State’s discretion, the offeror may or may not be invited to have discussions with the State. The discussions can be before or after the RFP has been submitted.

Discussions will be made at the offeror’s expense.

1.18 Technical Review

At the State’s discretion, the State may require a technical review of the offeror based on the offeror’s proposal and response to the Security and Vendor Questionnaire.

1.19 Negotiations

This process is a Request for Proposal/Competitive Negotiation process. Each proposal will be evaluated, and each respondent will be available for negotiation meetings at the State’s request. The State reserves the right to negotiate on any component of every proposal submitted. From the time the proposals are submitted until the formal award of a contract, each proposal is considered a working document and as such, will be kept confidential. The negotiation discussions will also be held as confidential until such time as the award is completed.

2 Standard Contract Terms and Conditions

Any contract or agreement resulting from this RFP #26RFP19878 will include the State’s standard terms and conditions as listed below, the State’s standard Information Technology (“IT”) contract terms listed in Exhibit B, and any additional terms and conditions as negotiated by the parties. The offeror must indicate in its response any issue it has with specific contract terms. If the offeror does not indicate that there is an issue with a specific contract term, then the offeror will be deemed to have accepted the contract terms as written.

2.1 The Contractor will perform those services described in the Scope of Work, attached hereto as Section 3 of the RFP and by this reference incorporated herein.

2.2 The Contractor’s services under this Agreement will start on July 1, 2027 and end on

June 30, 2030 unless terminated sooner pursuant to the terms of the Agreement.

2.3 The State will have the option to renew this Agreement for two (2) additional one (1) year periods, under the same terms and conditions. If the State chooses to renew the Agreement, the State shall provide notice of intent to renew to the Contractor as mutually agreed upon prior to the end of the current Agreement term. If notice of intent to renew is given, the Agreement shall renew unless terminated by either party pursuant to the Termination Provision of this Agreement.

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2.4 The Contractor will not use State equipment, supplies, or facilities. The Contractor will provide the State with its Employer Identification Number, Federal Tax Identification Number, or Social Security Number upon execution of this Agreement.

2.5 The State will make payment for services upon satisfactory completion of the services.

The TOTAL CONTRACT AMOUNT is an amount not to exceed $ . The State will not pay Contractor's expenses as a separate item. Payment will be made pursuant to itemized invoices submitted with a signed state voucher. Payment will be made consistent with SDCL chapter 5-26.

2.6 The Contractor agrees to indemnify the State of South Dakota, its officers, agents, and employees, from and against all claims or proceedings for actions, suits, damages, liabilities, other losses or equitable relief that may arise at least in part as a result of an act or omission in performing services under this Agreement. The Contractor will defend the State of South Dakota, its officers, agents, and employees against any claim, including any claim, action, suit, or other proceeding related to the claim. The Contractor’s obligation to indemnify includes the payment of attorney fees and other costs of defense.

In defending the State of South Dakota, its officers, agents, and employees, the Contractor will engage other professionals, subject to the written approval of the State which will not be unreasonably withheld. Notwithstanding the foregoing, the State may, in its sole discretion and at the expense of the Contractor, engage attorneys and other professionals to defend the State of South Dakota, its officers, agents, and employees, or to assist the Contractor in the defense. This section does not require the Contractor to be responsible for or defend against claims or proceedings for damages, liabilities, losses, or equitable relief arising solely from errors or omissions of the State, its officers, agents, or employees.

2.7 During the term of this Agreement, the Contractor will obtain and maintain in force insurance coverage of the types and with the limits as follows:

1. Commercial General Liability Insurance:

The Contractor will maintain occurrence based commercial general liability insurance or equivalent form with a limit of not less than $1 million for each occurrence. If such insurance contains a general aggregate limit it will apply separately to this Agreement or be no less than two times the occurrence limit.

The insurance policy will name the State of South Dakota, its officers and employees, as additional insureds, but liability coverage is limited to claims not barred by sovereign immunity. The State of South Dakota, its officers and employees do not hereby waive sovereign immunity for discretionary conduct as provided by law.

2. Professional Liability Insurance or Miscellaneous Professional Liability Insurance:

The Contractor will procure and maintain professional liability insurance or miscellaneous professional liability insurance with a limit not less than $1 million.

3. Business Automobile Liability Insurance:

The Contractor will maintain business automobile liability insurance or equivalent form with a limit of not less than $1 million for each accident. Such insurance will include coverage for owned, hired, and non-owned vehicles.

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4. Workers’ Compensation Insurance:

The Contractor will procure and maintain workers’ compensation and employers’ liability insurance as required by South Dakota or federal law.

Before beginning work under this Agreement, Contractor will furnish the State with properly executed Certificates of Insurance which will clearly evidence all insurance required in this Agreement. In the event a substantial change in insurance, issuance of a new policy, cancellation, or nonrenewal of the policy, the Contractor agrees to provide immediate notice to the State and provide a new certificate of insurance showing continuous coverage in the amounts required. Contractor will furnish copies of insurance policies if requested by the State.

2.8 While performing services under this Agreement, the Contractor is an independent contractor and not an officer, agent, or employee of the State of South Dakota.

2.9 The Contractor agrees to report to the State any event encountered in the course of performance of this Agreement which results in injury to the person or property of third parties, or which may otherwise subject Contractor or the State to liability. The Contractor will report any such event to the State immediately upon discovery.

The Contractor's obligation under this section will only be to report the occurrence of any event to the State and to make any other report provided for by their duties or applicable law. The Contractor’s obligation to report will not require disclosure of any information subject to privilege or confidentiality under law (e.g., attorney-client communications).

Reporting to the State under this section will not excuse or satisfy any obligation of the Contractor to report any event to law enforcement or other entities under the requirements of any applicable law.

2.10 This Agreement may be terminated by either party hereto upon thirty (30) days written notice. In the event Contractor breaches any of the terms or conditions hereof, this Agreement may be terminated by the State at any time with or without notice. If termination for a breach is affected by the State, any payments due to Contractor at the time of termination may be adjusted to cover any additional costs to the State because of Contractor's breach. Upon termination the State may take over the work and may award another party a contract to complete the work contemplated by this Agreement. If after the State terminates for a breach by Contractor it is determined that Contractor was not at fault, then Contractor shall be paid for eligible services rendered and expenses incurred up to the date of termination.

2.11 This Agreement depends upon the continued availability of appropriated funds and expenditure authority from the Legislature for this purpose. If for any reason the Legislature fails to appropriate funds or grant expenditure authority, or funds become unavailable by operation of law or federal funds reductions, this Agreement will be terminated by the State upon five (5) business days’ written notice. The Contractor agrees that termination for any of these reasons is not a default by the State nor does it give rise to a claim against the State or any officer, agent, or employee of the State, and the Contractor waives any claim against the same.

2.12 This Agreement may not be assigned without the express prior written consent of the

State. This Agreement may not be amended except in writing, which writing will be

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expressly identified as a part of this Agreement and be signed by an authorized representative of each of the parties to this Agreement.

2.13 This Agreement will be governed by and construed in accordance with the laws of the

State of South Dakota, without regard to any conflicts of law principles, decisional law, or statutory provision which would require or permit the application of another jurisdiction’s substantive law. Venue for any lawsuit pertaining to or affecting this Agreement will be in Circuit Court, Sixth Judicial Circuit, Hughes County, South Dakota.

2.14 The Contractor will comply with all federal, tribal, state, and local laws, regulations, ordinances, guidelines, permits, requirements, and other standards applicable to providing services pursuant to this Agreement and will be solely responsible for obtaining current information on such requirements. Nothing herein will constitute a waiver by the State to any defense to jurisdiction nor will anything under this Agreement constitute an acknowledgement by the State that any tribe has or exercises any jurisdiction over this Agreement or the parties.

2.15 The Contractor may not use subcontractors to perform the services described in this

Agreement without the express prior written consent of the State. The Contractor will include provisions in its subcontracts requiring its subcontractors to comply with the applicable provisions of this Agreement, to indemnify the State, and to provide insurance coverage for the benefit of the State in a manner consistent with this Agreement. The Contractor will cause its subcontractors, agents, and employees to comply with applicable federal, tribal, state, and local laws, regulations, ordinances, guidelines, permits, and other standards and will adopt such review and inspection procedures as are necessary to assure such compliance. The State, at its option, may require the vetting of any subcontractors. The Contractor will assist in the vetting process.

2.16 The State reserves the right to reject any person from performing services under this

Agreement who the State believes would be detrimental to the services, presents insufficient skills, presents inappropriate behavior, or is considered by the State to be a security risk.

2.17 The Contractor hereby acknowledges and agrees that all reports, plans, specifications, technical data, miscellaneous drawings, software system programs and documentation, procedures, or files, operating instructions and procedures, source code(s) and documentation, including those necessary to upgrade and maintain the software program, and all information contained therein provided to the State by the Contractor in connection with its performance of services under this Agreement will belong to and is the property of the State and will not be used in any way by the Contractor without the written consent of the State. Papers, reports, forms, software programs, source code(s), and other material which are a part of the work under this Agreement will not be copyrighted without written approval of the State.

2.18 The Contractor certifies that neither Contractor nor its principals are presently debarred, suspended, proposed for debarment or suspension, or declared ineligible from participating in transactions by the federal government or any state or local government department or agency. Contractor further agrees that it will immediately notify the State if during the term of this Agreement Contractor or its principals become subject to debarment, suspension, or ineligibility from participating in transactions by the federal government, or by any state or local government department or agency.

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2.19 By signing this Agreement, the Contractor certifies and agrees that is has not refused to transact business activities, have not terminated business activities, and have not taken other similar actions intended to limit its commercial relations, related to the subject matter of this Agreement, with a person or entity that is either the State of Israel, or a company doing business in or with Israel or authorized by, licensed by, or organized under the laws of the State of Israel to do business, or doing business in the State of Israel, with the specific intent to accomplish a boycott or divestment of Israel in a discriminatory manner. It is understood and agreed that, if this certification is false, such false certification will constitute grounds for the State to terminate this Agreement. During the term of this Agreement, if the Contractor no longer complies with this certification, the Contractor agrees to provide immediate written notice to the State and agrees such noncompliance may be grounds for termination of this Agreement.

2.20 Pursuant to South Dakota Codified Law § 5-18A, by entering into this Agreement with the

State of South Dakota, the Contractor certifies and warrants that the Contractor is not a prohibited entity, regardless of its principal place of business, that is ultimately owned or controlled, directly or indirectly, by a foreign national, a foreign parent entity, or foreign government from China, Iran, North Korea, Russia, Cuba, or Venezuela, as defined by South Dakota Codified Law § 5-18A.

The Contractor agrees that if this certification is false, the State may terminate this Agreement with no further liability to the State. The Contractor further agrees to provide immediate written notice to the State if during the term of the contract it no longer complies with this certification, and the Contractor agrees such noncompliance may be grounds for contract termination and would be cause to suspend and debar a business under SDCL § 5-18D-12.

2.21 Any notice or other communication required under this Agreement will be in writing and sent to the address set forth above. Notices will be given by and to Director of Total Rewards on behalf of the State, and by and to ____________ , on behalf of the Contractor, or such authorized designees as either party may from time to time designate in writing. Notices or communications to or between the parties will be deemed to have been delivered when mailed by first class mail, provided that notice of default or termination will be sent by registered or certified mail, or, if personally delivered, when received by such party.

2.22 In the event that any court of competent jurisdiction will hold any provision of this

Agreement unenforceable or invalid, such holding will not invalidate or render unenforceable any other provision of this Agreement.

2.23 All other prior discussions, communications, and representations concerning the subject matter of this Agreement are superseded by the terms of this Agreement, and except as specifically provided in this Agreement, this Agreement constitutes the entire agreement with respect to the subject matter.

2.24 The waiver by either party of a breach or violation of any provisions of this Agreement will not operate as, or be construed to be, a waiver of any subsequent breach of the same or other provision of this Agreement.

2.25 Nothing in this Agreement is intended to constitute a waiver of sovereign immunity by or

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on behalf of the State of South Dakota, its agencies, officers, or employees.

2.26 Neither party will disclose the contents of the Agreement except as required by applicable law or as necessary to carry out the terms of the Agreement or to enforce that party’s rights under this Agreement. The Contractor acknowledges that the State of South Dakota and its agencies are public entities and thus are bound by South Dakota open meetings and open records laws. It is therefore not a breach of this Agreement for the State to take any action that the State reasonably believes is necessary to comply with the South Dakota open records or open meetings laws, including, without limitation, posting this Agreement on the website pursuant to SDCL § 1-27-46.

3 Scope of Work

3.1 Conduct a performance review audit of the medical claims process performed by

Wellmark for the following three (3) audit periods Audit Period 1 will be July 1, 2027 to June 30, 2028 (Fiscal Year 2028) Audit Period 2 will be July 1, 2028 to June 30, 2029 (Fiscal Year 2029) Audit Period 3 will be July 1, 2029 to June 30, 2030 (Fiscal Year 2030)

3.2 Electronic Screening of 100% of paid medical claims paid for each audit period.

3.3 For each audit period the electronic screening of 100% of paid medical claims must measure:

1. Claims processing accuracy rate (the incidence of claims processed without errors);

2. Payment incidence accuracy rate (the incidence of claims processed without payment error);

3. Financial accuracy rate (the percentage of paid dollars processed without error);

4. Claims turnaround time (the percentage of claims processed within fourteen (14) and thirty (30) calendar days; and

5. Identification of recovery/savings potential.

3.4 The results of the review must be compared to acceptable industry standards and to other similar reviews that the vendor has performed. In addition, the results will be compared to Wellmark’s self-reported performance results to assess the reliability of such.

Audit Period 1 Review of a combined financial stratified/attribute statistical sample of 200 processed during fiscal year period July 1, 2027, to June 30, 2028.

A significant percentage of the sample must be high dollar claims.

Audit Period 2 Review of a combined financial stratified/attribute statistical sample of 200 total claims processed during the fiscal year period July 1, 2028, to June 30, 2029. A significant percentage of the sample must be high dollar claims.

Audit Period 3 Review of a combined financial stratified/attribute statistical sample of 200 total claims processed during the fiscal year period July 1, 2029, to June 30, 2030. A significant percentage of the sample must be high dollar claims.

3.5 Judgment Claims Reviews Diagnosis-Related Group (“DRG”) Hospital Claims

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review of a randomly selected judgment sample of fifty (50) inpatient DRG hospital claims for each Audit Period will be performed to verify the accuracy of DRG claim processing.

Audit Period 1 Claims will be randomly selected from DRG contracted hospital claims processed during fiscal year period of July 1, 2027, to June 30, 2028

(FY28).

Audit Period 2 Claims will be randomly selected from DRG contracted hospital claims processed during the fiscal year period of July 1, 2028, to June 30, 2029

(FY29).

Audit Period 3 Claims will be randomly selected from DRG contracted hospital claims processed during the fiscal year period of July 1, 2029, to June 30, 2030

(FY 2029).

It is the State’s expectation that the audit firm will apply their own logic in identifying which DRGs are most likely to have questionable coding.

3.6 The Vendor will review Out-of-Network Claims for each Audit Period. Claims must be evaluated to verify that payments are consistent with the Wellmark’s contractual requirements. In addition to verifying compliance with the Health Plan requirements and any external network arrangements that may apply, a review of the following must be conducted:

1. If claim is subject to an external provider network, such as PHCS (Private Healthcare Systems), which provides supplemental PPO network access, a copy of repricing data from external network, a copy of network contract between vendor and Wellmark, and a copy of the applicable provider contract between the network and specific provider will be required;

2. Detailed reports of claim charges for funding requests from the State Health Plan’s bank account; and

3. Wellmark’s claim system’s payment history records for the plan member.

Audit Period 1 Claims of a randomly selected sample of 20 Out-of-Network (“OON”) claims processed during fiscal year time period of July 1, 2027, to June

30, 2028 (FY28).

Audit Period 2 Claims of a randomly selected sample of 20 OON claims processed during fiscal year time period of July 1, 2028, to June 30, 2029 (FY29)

Audit Period 3 Claims of a randomly selected sample of 20 OON claims processed during fiscal year time period of July 1, 2029, to June 30, 2030 (FY30)

3.7 The Contractor must follow HIPAA guidelines and be willing to sign a Business Associate Agreement with the State which is attached as Exhibit A – BHRA Business Associate Agreement.

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4 Proposal Requirements and Company Qualifications

4.1 The offeror is cautioned that it is the offeror's sole responsibility to submit information related to the evaluation categories and that the State is under no obligation to solicit such information if it is not included in the proposal. The offeror's failure to submit such information may have an adverse impact on the evaluation of the proposal and may result in the proposal being excluded as non-responsive.

4.2 Offeror's Contacts: Offerors and their agents (including subcontractors, employees, consultants, or anyone else acting on their behalf) must direct all their questions or comments regarding the RFP, the evaluation, etc. to the Primary Contact listed on the first page of this RFP. Offerors and their agents may not contact any state employee other than the Primary Contact regarding any of these matters during the solicitation and evaluation process. Inappropriate contacts are ground for suspension and exclusion from specific procurements. Offerors and their agents who have questions regarding this matter should contact the Primary Contact.

4.3 The offeror may be required to submit a copy of their most recent audited financial statements upon the State’s request.

4.4 The offeror must provide the information listed below for at least three contracts, either previous or current, performed by the offeror’s organization. The offeror must provide the following information related to at least three previous and current contracts, performed by the offeror’s organization, which are like the requirements of this RFP. The offeror must also provide this same information for any of its contracts that have terminated, expired, or not been renewed within the past three years.

a. Name, address and telephone number of client and a representative of that agency who may be contracted for verification of all information submitted;

b. Dates of the contract; and

c. A brief, written description of the specific prior services performed and requirements thereof.

4.5 No Broker Submission: For the purposes of this RFP, the State will not accept proposals from brokers on behalf of service providers that they represent. The State will receive proposals directly from service providers only. In addition, costs proposed for services cannot include fees, commissions, or revenue sharing (e.g. percentage of discount savings, etc.) with any broker or consultant.

5 Proposal Response Format

5.1 The offer must provide one (1) copy of their entire proposal, including all attachments, in Microsoft Word, Excel or PDF electronic format by email to Peggy.Canter@state.sd.us.

5.2 The proposal should be page numbered and should have an index and/or a table of contents referring to the appropriate page number.

5.3 Use of State Seal Restriction The offeror’s proposal should refrain from using the State of South Dakota State Seal in its proposal. Offerors are cautioned that use of the State Seal in any of its documents is illegal as per South Dakota Codified Law § 1-6-3.1. Use of seal or facsimile without authorization prohibited--Violation as misdemeanor. No person may reproduce, duplicate, or otherwise use the official seal of the State of South Dakota, mailto:Peggy.Canter@state.sd.us

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or its facsimile, adopted and described in §§ 1-6-1 and 1-6-2 for any for-profit, commercial purpose without specific authorization from the secretary of state. A violation of this section is a Class 1 misdemeanor.

5.4 All proposals must be organized and tabbed with labels for the following headings:

5.4.1 RFP Form. The State’s Request for Proposal form (see page 1 of this RFP) completed and signed.

5.4.2 Executive Summary. The one (1) or two (2) page executive summary is to briefly describe the offeror’s proposal. The summary should highlight the major features of the proposal. It must indicate any requirements, including any of the technical or cyber security requirements, that cannot be met by the offeror. The reader should be able to determine the essence of the proposal by reading the executive summary. Proprietary information requests should be identified in this section.

5.4.3 Detailed Response. This section should constitute the major portion of the proposal and must contain at least the following information:

a. A complete narrative of the offeror’s assessment of the work to be performed, the offeror’s ability and approach, and the resources necessary to fulfill the requirements. This should demonstrate the offeror’s understanding of the desired overall performance expectations.

b. A specific point-by-point response, in the order listed to each requirement described in Section 3.0: Scope of Work and Section 4.0: Proposal Requirements and Company Qualifications of the RFP. The response should identify each requirement being addressed as enumerated in the RFP.

c. A clear description of any options or alternatives proposed.

5.5 Response to State’s IT Terms 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.

5.6 Response to State’s Standard Contract Terms: The offeror’s proposal must indicate any issues the offeror has with specific contract terms found in Section 2 and Exhibit B.

If the offeror does not indicate that there is an issue with a specific contract term, then the offeror will be deemed to have accepted the contract terms as written.

6 Proposal Evaluation and Award Process

6.1 After determining that a proposal satisfies the minimum requirements stated in the Request for Proposal, the evaluator(s) will use subjective judgment in conducting a

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comparative assessment of the proposal by considering each of the following criteria, on a 1,000-point scale.

Description Points

Specialized expertise, capabilities, and technical competence as demonstrated by the proposed approach and methodology to meet the project requirements

Resources available to perform the work, including any specialized services, within the specified time limits for the project

Record of past performance, including price and cost data from previous projects, quality of work, ability to meet schedules, cost control, and contract administration

Availability to the project locale 50 Familiarity with the project locale 50 Proposed project management techniques

Ability and proven history in handling special project constraints

Cost 200

6.2 Experience and reliability of the offeror's organization are considered subjectively in the evaluation process. Therefore, the offeror is advised to submit any information which documents successful and reliable experience in past performances, especially those performances related to the requirements of this RFP.

6.3 The qualifications of the personnel proposed by the offeror to perform the requirements of this RFP, whether from the offeror’s organization or from a proposed subcontractor, will be subjectively evaluated. Therefore, the offeror should submit detailed information related to the experience and qualifications, including education and training, of proposed personnel.

6.4 The State reserves the right to reject any or all proposals, waive technicalities, and make award(s) as deemed to be the best interest of the State.

6.5 Award: BHRA and the highest ranked offeror will mutually discuss and refine the scope of services for the project and will negotiate terms, including compensation and performance schedule.

6.5.1 If BHRA and the highest ranked offeror are unable for any reason to negotiate a contract at a compensation level that is reasonable and fair to the State, BHRA will, either orally or in writing, terminate negotiations with the offeror.

BHRA may then negotiate with the next highest ranked offeror.

6.5.2 The negotiation process may continue through successive offerors, according to BHRA ranking, until an agreement is reached or BHRA terminates the

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contracting process.

7 Cost Proposal

7.1 Cost Proposal must detail cost breakdown for all audit services. The cost proposal shall include all direct and indirect expenses.

7.2 Cost Proposal must break out cost related to subject matter expert(s) professional services team, conference call time and travel expenses.

8 GENERAL IT REQUIREMENTS

If an offeror’s proposal includes an IT aspect, such as a web portal for data sharing or report deliver, the following applies:

8.1 Artificial Intelligence Use

The offeror must provide an explanation of its use of Artificial Intelligence, both in its proposed solution and the development lifecycle of the proposed solution. This requirement includes the offeror’s use of Generative AI (GenAI) tools/products. For GenAI tools/products, the offeror must provide the following:

• GenAI model name,

• product owner,

• product description (including purpose, functionality, and key characteristics),

• use case (or goal e.g. image recognition, natural language processing, text summarization),

• the intended information use (context for how information is used in the model) for the GenAI included in the offeror’s proposal,

• the geographical location of the tool, and

• how the offeror monitors and audits the tool’s compliance on use restrictions, data restrictions, legal compliance (non-discriminatory outputs), and biases in the tool’s outputs.

8.2 Hosting and Data Access Requirements

The State will own all data tables created as a result of the Agreement. The State must have the ability to manipulate data, run reports as needed, pull code tables, access raw data, and develop dashboards as needed through Microsoft Power BI, ESRI, Tableau, and associated platforms.

The offeror’s proposal must describe how the State can access data housed within the proposed solution for ingestion into a state data repository, encompassing available methodologies (e.g., application programming interface (API), flat file), data formatting, frequency of updates, and any inherent constraints. Additionally, the offeror’s proposal must provide a high-level architecture diagram, as part of the solution diagram, explaining the proposed solution's data provision mechanism.

If available, the offeror must provide separate, complete proposals for the offeror’s proposed solution to be hosted by the offeror, by the State on its internal infrastructure, and on the State’s Azure cloud hosted tenant as a PaaS solution. If any of the hosting

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options is not available, the offeror must clearly state that in the offeror’s proposal and provide an explanation as to why the hosting option is not available.

8.3 Single Sign-On Requirements

If the offeror’s proposal includes a deliverable with a login component, the proposal must describe how the deliverable will integrate with the State’s standard identity management service single sign-on (SSO).

The State’s SSO supports the industry standard OAuth 2.0 protocol. This identity management will handle password recovery and multi-factor authentication (MFA).

MFA is required for all application Administrators and may be required for other users.

The State’s SSO requirement and links to Microsoft’s official documentation can be found at: https://www.sd.gov/bit?id=bit_standards_single_sign_on

If the offeror cannot fulfill this identity management standard, the offeror’s proposal will be rejected from consideration.

8.4 SSO Logout Initiation Requirements

• The offeror’s deliverable must provide users with a clear and easily accessible logout mechanism (e.g., a “Logout” button/link).

• The logout functionality of the offeror’s deliverable must trigger a session-based logout process utilizing the sign-out endpoint found in the metadata document provided during implementation.

8.5 Session Timeout Requirements

• The offeror’s deliverables must allow for a customizable, State-defined inactive user session timeout period.

• The offeror’s deliverables must notify users of impending session expiration five minutes before the timeout occurs, providing users with the option to extend the session.

8.6 Session Termination on Browser Close Requirement

The offeror’s deliverables must clearly notify users that closing the browser window or tab is not a valid logout because the SSO session may remain active. The notice must further notify users that they are responsible for explicitly logging out to ensure complete session termination.

8.7 Onboarding/Provisioning of Users Requirement

The offeror’s proposal must describe how new users are onboarded or provisioned into the deliverable. The offeror must provide an automated process for onboarding and offboarding users or must provide a process that requires minimal manual steps.

8.8 Interfaces and Integration Requirements

The offeror’s proposal must describe how the deliverables can adapt to business https://www.sd.gov/bit?id=bit_standards_single_sign_on

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necessary interfaces using widely adopted open APIs and standards. Additionally, the offeror must make available or expose software services that would enable third-party developers to interface other business applications. The offeror must publish documentation for the software services in question. The offeror’s proposal must include a detailed description of system capability.

8.9 Web Application Vulnerability Scan Requirements

Any web-based deliverable must undergo a web application vulnerability scan (“Vulnerability Scan”). The Vulnerability Scan must identify misconfigurations or vulnerabilities such as those found in the OWASP Top Ten and must detail the certainty level of each finding.

Unless expressly indicated in writing, the State assumes all price…