Pharmacy Benefit Claims Monitoring

The Kentucky Personnel Cabinet, Department of Employee Insurance, is requesting proposals for pharmacy benefit claims monitoring services covering approximately 150,000 employees and retirees and 272,000 covered lives in the Kentucky Employees' Health Plan (KEHP), with proposals due September 4, 2026, and written questions due August 26, 2026.

Vendors must meet mandatory qualification and independence requirements: a minimum of five years of pharmacy benefit claims analysis experience as of January 1, 2026; demonstrated capability to analyze claims in near real time (any time after submission but prior to payment due date or within five days of receipt); and prior performance for at least one client with prescription claim volumes equivalent to or exceeding KEHP's volume. Vendors are automatically disqualified if they currently perform annual retroactive audits for KEHP, are affiliated through common parent companies or shared board members with KEHP contractors (including insurers, third-party administrators, pharmacy benefit managers, or entities performing drug utilization reviews), or refuse to provide two years of audited financial statements and recent financial disclosures.

The scope requires 100% analysis of pharmacy invoices and claims submitted by CVS Caremark or any future pharmacy benefit manager to validate accuracy and identify errors. The vendor must identify and resolve billing errors, inappropriate fees, and overpayments; negotiate corrections with contracted entities; and submit quarterly reports to the Personnel Cabinet and Legislative Research Commission detailing analysis summaries, identified errors, resolutions, and realized savings.

Compensation is limited to a maximum of 30% of total savings generated and collected by the vendor; no additional costs are permitted for travel, consulting, legal, or accounting fees. The initial contract term runs October 1, 2026, through June 30, 2028, with renewal options for up to two additional two-year periods subject to Finance and Administration Cabinet and Government Contract Review Committee approval. KEHP processed approximately 4.5 million pharmacy claims in 2025.

Evaluation is worth a maximum of 3,500 points: 2,500 for technical proposals, 500 for cost proposals, and up to 500 for oral demonstrations if required. The vendor must execute a Business Associate Agreement addressing HIPAA compliance, including comprehensive safeguards for Protected Health Information under 45 C.F.R. Parts 160, 162, and 164. Proposals must be submitted electronically through the Kentucky Vendor Self Service System in three separate sealed documents: technical proposal, cost proposal, and proprietary information.