PUBLIC EMPLOYEES INSURANCE AGENCYwvlegislature.gov/Joint/PERD/perdrep/PEIA_June_2015.pdfpg. | West Virginia Legislative Auditor Public Employees Insurance Agency The PEIA’s website

AGENCY REVIEW

PUBLIC EMPLOYEES INSURANCE AGENCY DEPARTMENT OF ADMINISTRATION

June 2015PE 15-04-571

AUDIT OVERVIEW

The Public Employees Insurance Agency Is Following Many Contract Administration Best Practices

Overall, the PEIA Website Is Good and Scores Relatively High in User-Friendliness, but More Improvement Can Be Made in Transparency

WEST VIRGINIA LEGISLATIVE AUDITOR

PERFORMANCE EVALUATION & RESEARCH DIVISION

JOINT COMMITTEE ON GOVERNMENT ORGANIZATION

Senate

Craig Blair, ChairChris Walters, Vice-ChairGreg BosoRyan FernsEd Gaunch Kent LeonhardtMark R. MaynardJeff MullinsDouglas E. FacemireRonald F. MillerCorey PalumboHerb SnyderBob WilliamsJack Yost

House of Delegates

Gary G. Howell, Chair Lynne Arvon, Vice-Chair Jim Morgan, Minority Chair Saira BlairAnna Border-SheppardScott CadleLarry FairclothDanny HamrickJordan R. HillMichael IhleKayla KessingerPat McGeehanMichel G. MoffattJoshua Nelson

Randy E. SmithChris StansburyMark ZatezaloMike CaputoJeff EldridgeMichael T. FerroWilliam G. HartmanJustin MarcumRupert Phillips, Jr.Peggy Donaldson SmithIsaac Sponaugle

Building 1, Room W-314State Capitol ComplexCharleston, West Virginia 25305(304) 347-4890



Aaron AllredLegislative Auditor

John SylviaDirector

Jill Mooney Research Manager

Matthew PauleyResearch Analyst

Adam FridleyReferencer

Performance Evaluation & Research Division | pg. �

Agency Review June 2015

CONTENTS

Executive Summary ....................................................................................................................................................................... 5

Issue 1: The Public Employees Insurance Agency Is Following Many Contract Administration Best Practices ................................................................................................................................................................. 7

Issue 2: Overall, the PEIA Website Is Good and Scores Relatively High in User-Friendliness, but More Improvment Can Be Made in Transparency..........................................................................................17

List of Tables

Table 1: PEIA’s Rate of Return Calendar Years 2012 and 2013 ....................................................................................14Table 2: Public Employees Insurance Agency Website Evaluation Score ...............................................................17Table 3: Website Evaluation Score ........................................................................................................................................18

List of Appendices

Appendix A: Transmittal Letter ................................................................................................................................................21Appendix B: Objectives, Scope and Methodology .........................................................................................................23Appendix C: HealthSmart and Express Scripts Incorporated Performance Measures ........................................25Appendix D: Website Criteria Checklist and Points Sysem ............................................................................................29Appendix E: Agency Response ................................................................................................................................................33

pg. 4 | West Virginia Legislative Auditor

Public Employees Insurance Agency

Performance Evaluation & Research Division | pg. 5


EXECUTIVE SUMMARY

AspartoftheAgencyReviewoftheDepartmentofAdministration,pursuanttothePerformanceReviewAct, Chapter 4,Article 10, Section 8 of the West Virginia Code, the LegislativeAuditorconductedaperformancereviewofthePublicEmployeesInsuranceAgency(PEIA).TheobjectivesofthereviewaretodeterminewhetherthePEIAfollowscontractadministrationbestpracticesinitsoversightofthecontractswiththird-partyadministratorsresponsibleformedicalandpharmaceuticalclaimsprocessingandwhetherPEIA’swebsiteisuser-friendlyandtransparent.Thefindingsofthisreviewarehighlightedbelow.

Frequently Used Acronyms in This Report:

ER:EmergencyRoomNIGP:NationalInstituteofGovernmentalPurchasingOFPP:OfficeofFederalProcurementPolicyPEIA:PublicEmployeesInsuranceAgencyPERD:PerformanceEvaluationandResearchDivisionTPA:Third-PartyAdministratorFOIA:FreedomofInformationAct

Report Highlights:

Issue 1: The Public Employees Insurance Agency Is Following Many Contract Administration Best Practices.

ThePEIApreparedclearperformancemeasuresandreportingrequirements.

ThePEIAconductedmonitoringprocessesincludingroutinelycommunicatingwithitsvendorsandsamplingthevendor’sworkforaccuracy.

ThePEIAcollectedmostpenaltiesinatimelymannerwhenTPAsdidnotmeetestablishedperformancemeasures.However,whenHealthSmartdidnotmeet establishedperformancestandards in three separate quarters in FY 2013, PEIA did not realize it had not receivedpaymentuntilPERDrequestedproofofpayment.

ThePEIAshouldpreparewrittenproceduresforitscontractadministrationprocess.

The PEIA conducted oversight of its utilization management vendor by reviewing vendorgeneratedreportsandholdingweeklymeetingtodiscussspecificcases.However,thePEIAshouldenforceacontractrequirementthattheutilizationmanagementvendorreportonPEIA’sreturnoninvestmentreceivedfromdiseasemanagementcostsavings.

Issue 2: Overall, the PEIA Website Is Good and Scores Relatively High in User-Friendliness, but More Improvement Can Be Made in Transparency.

ThePEIA’swebsitehasmanyuser-friendlyfeaturessuchasasearchtool,ahelplinkdisplayedoneverypage,andasite-map.Onlymodestimprovementsaresuggested.

pg. � | West Virginia Legislative Auditor


The PEIA’s website transparency could be improved. The PEIA could add features suchas including itsmissionstatementon itshomepage, linkingapageexplaining theagency’sperformancemeasuresandoutcomestoitshomepage,andprovidingaspecificpagethroughwhichmemberscouldfileacomplaint.

PERD’s Response to the Agency’s Written Response

The Office of the Legislative Auditor’s Performance Evaluation and Research Divisionreceived a written response from the Public Employees InsuranceAgency on June 1, 2015. Theagencyconcurredwithallthefindingsofthereport.TheagencyresponsecanbefoundinAppendixE.

Recommendations

1. PEIAshouldconsiderdevelopingawrittencontractadministrationmanual.

2. PEIAshouldconsiderincorporatingdisputeresolutionclausesinallfuturecontracts.

3. PEIAshouldconsider institutingaprocedure to formallydocument theprogressofongoingprojectsandissuesraisedwithHealthSmart.

4. PEIAshouldconsiderdocumentingitscontinuityofoperationsplanofaction.

5. The LegislativeAuditor recommends that the Public Employees InsuranceAgency make thesuggestedimprovementstoitswebsite,particularlyintheareaoftransparency.



ISSUE1

The PEIA follows many contract ad-ministration best practices.

The Public Employees Insurance Agency Is Following Many Contract Administration Best Practices.

Issue Summary

ThePublicEmployeesInsuranceAgency(PEIA)contractswithseveral third-party administrators (TPAs) to administer the agency’shealth insurance plans. The Performance Evaluation and ResearchDivision (PERD) reviewed PEIA’s oversight of the two largestTPAs:HealthSmartandExpressScript.PERDfoundthatthePEIAfollowsmanycontractadministrationbestpractices.ThePEIArequiresTPAstomeetperformancemeasuresand report them. Payments toTPAsare linkedtosatisfactoryperformance,andclaimsreimbursementsaresampledforaccuracy. Both contracts also have a right-to-audit clause. However,neithercontracthasacontingencyplan tocontinueoperations if thereis an emergency interruption of services. Also, only the HealthSmartcontract has a dispute resolution procedure. Furthermore, PEIA doesnot have written policies and procedures governing its oversight,which best practices specify. Written policies and procedures helpmaintainuniformity,consistencyandaccuracyincarryingoutoversightprocedures.

Background

PEIA outsources the function of administering the healthinsurance and pharmacy benefit plans to TPAs. In fiscal years 2011through2013,PEIAspentmorethan$56millioninadministrativefeestothetwoprimaryTPAswhoadministertheemployeehealthinsuranceand pharmacy benefits. PEIA contracted HealthSmart (named WellsFargoThirdPartyAdministratorsuntilDecember2011) tomanagetheclaims reviewandprocessingofhealth insurancebenefits provided toPEIAmembers. ExpressScripts,Inc. isPEIA’scontractedproviderofpharmacybenefitmanagementservices.

TheStateofWestVirginia’shealthinsurancebenefitsplanisself-funded.TheStateanditsemployeespayfixedmonthlypremiumsthatPEIAusestocoverthecostofhealthinsuranceandplanadministration.PEIAoversees thehealth insurance andpharmacybenefit for approximately223,000members.PEIApaidmorethan$1.4billion1inhealthinsurancebenefitsinfiscalyears2011through2013,whichequatestoanaverageofmorethan$486millionperyear.

1TheamountalsoincludesotherTPAsandisnotsingularlyreflectiveofclaimsben-efitspaidforthetwoprimaryTPAs.

pg. � | West Virginia Legislative Auditor


The PEIA does not have contingency plans in either the HealthSmart or Express Script contract, and only the HealthSmart contract has a dispute resolution procedure. In addition, the PEIA does not have written poli-cies and procedures for its oversight process.

PEIA Is Following Many Best Practices for Contract Administration.

PERD reviewed PEIA contract administration procedures andagencycontractadministrationdocumentationusingcriteriaestablishedby knowledgeable organizations. The Office of Federal ProcurementPolicy(OFPP)developedaguidebooktitled“AGuideToBestPracticesForContractAdministration”(Guide)toillustratebest-practicetechniquesforcontractadministration.TheGuideprovidesusefultoolstoprogramandcontractingofficialsinadministeringfederalcontracts.PERDalsousedpublicationsbytheNationalInstituteofGovernmentalPurchasing(NIGP)andotherfederalcontractadministrationpoliciesforbest-practicecriteria.

PEIA adheres to most of the common best practices in TPA oversight. The following best practices are incorporated in theHealthSmartandExpressScriptcontracts:

clearperformancemeasures, performancemeasurereportingrequirements, othercompliancereportingrequirements, claimsreimbursementsamplesrequiredforaccuracy, right-to-auditclause,and linkingTPApaymentstosatisfactoryperformance.

However, best practices stipulate that contracts should havea contingency plan against an emergency loss of vendor services,specifieddisputeresolutionprocedures,andestablishedwrittenpoliciesand procedures. The PEIA does not have contingency plans in eithertheHealthSmart orExpressScript contract, andonly theHealthSmartcontracthasadisputeresolutionprocedure.Inaddition,thePEIAdoesnothavewrittenpoliciesandproceduresforitsoversightprocess.

PEIA Has Clear Performance Measures and Performance Measure Reporting Requirements

PEIA’s contracts with TPAs include performance measures2and reporting requirements. PEIA received all reports on the TPA’sperformance. The performance goals are the benchmark for monthlyand/or annual TPA performance. Clearly stated contract requirementsandperformancemeasuresestablishstandardsforaccountability.

2SeeAppendixCforHealthSmartandExpressScriptsIncorporatedperformancemea-sures.

Performance Evaluation & Research Division | pg. �


PEIA Requires the TPAs to Report Performance

PEIA monitors TPA’s performance on meeting the contractedlevelofservicethroughquarterlyperformancestandardreports.ThesereportsshowTPA’sreportedlevelofserviceforeachquarteraswellasthe contractually required level of service. PEIA’s QualityAssuranceManagerreviewsthequarterlyreports.

PEIA prepares an agenda outlining items it will discuss in itsweekly meetings with representatives from HealthSmart and ExpressScripts.InthecaseoftheExpressScripts,PEIAtakesthedocumentationofcurrentprojectsandissuesonestepfurtherbymaintaininganactionlog.TheactionlogidentifiesallprojectsandissuesPEIAandExpressScriptsarecurrentlydiscussing,thepersonorentitytaskedwithresolvingtheissue, thestatusoftheissueandwhenfinalresolutionisexpected.The action-log serves a function in maintaining communication andcoordinationamongthepersonnelintheorganizationswhoareinvolvedinthecontractadministrationprocess.TheNIGPidentifiescoordinationas a general requirement for all contracts. PEIA should consider instituting a procedure to formally document the progress of ongoing projects and issues raised with HealthSmart.

PEIA Reviews Claims Reimbursements for Accuracy

PEIA reviews the accuracy of a stratified sample of weeklyreimbursement claims that HealthSmart and Express Script process.If PEIA were to not verify claims reimbursement payments, it wouldincrease the risk of PEIA paying for invalid and/or duplicate billings.PEIA compares the stratified sample of weekly reimbursement claimsto detailed processed health care and prescription claims data inHealthSmart’sandExpressScript’sdatabasesystems.PEIAreviewstheclaimssample formultipleaspectsofproperdeterminationof insurerspayments,aspectsofwhichincludetheclaimswerecorrectlydeterminedandcoded3and thecorrectproviderwaspaid. Asmallsampleof theweekly claims reimbursement checks reviewed by PERD found thatPEIAidentifiedafinancialerrorrateof0.22%,whichinthiscaseequatestoonly$100.PEIA’sinternalsamplingofweeklyreimbursementclaimsallows it to have an objective baseline to compare to TPAs reportedfinancialaccuracyerrorrate.

Additionally,PEIAgeneratesamonthlyduplicateclaimsreportthat identifies all potential duplicate billing errors made by eitherHealthSmartoramedicalservicesproviderduringthemonthinwhichthereportwasgenerated.PEIA’sQualityAssuranceSpecialistreviewseach lineof theduplicateclaims reportandmakesadeterminationon

3 Medicalcodingistheprocessoftransformingdescriptionsofmedicaldiagnosesandproceduresintouniversalmedicalcodenumbers.

A small sample of the weekly claims reimbursement checks reviewed by PERD found that PEIA identified a financial error rate of 0.22%, which in this case equates to only $100.



For instance, in one monthly dupli-cate claims report 70 claims were identified as possibly duplicative. The Quality Assurance Specialist reviewed all 70 claims finding that 22 were du-plicates. These 22 claims represent a possible PEIA overpayment of $2,200 during that particular month.

theduplicativestatusofeachclaim.Thespecialistthenreportsidentifiedduplicative claims to HealthSmart for further review. Any actualoverpaymentandorpossiblecorrectiveactionissubjecttoHealthSmart’sreview.Forinstance,inonemonthlyduplicateclaimsreport70claimswereidentifiedaspossiblyduplicative.TheQualityAssuranceSpecialistreviewedall70claimsfindingthat22wereduplicates.These22claimsrepresentapossiblePEIAoverpaymentof$2,200duringthatparticularmonth.Thedollaramountofoverpaymentmaybehigherorlowerinothermonths.Whileinthiscasethemonetaryvaluethatmightberecoveredfromproviders is relatively small, it indicates thatPEIA ismakinganefforttocurbpotentiallosses.

PEIAalsoconductedanemergencyroom(ER)copaymentauditin 2013 to determine if the HealthSmart had assessed the correct ERvisitcopay. AcorrectERvisitcopayisdeterminedbywhetherornottheERvisitwasanemergencyornot.Non-emergencyvisitstotheERhave ahigher copay than emergencies. PEIA found thatHealthSmarthadnotalwaysmadethecorrectdetermination.HealthSmarthadunder-collectedby$3,500becausesomenon-emergencyvisitswerechargedtheemergencyratecopay.Asaresult,inSeptember2013PEIArequestedHealthSmartauditallERvisitstodetermineiftheywerenon-emergenciesinordertoreducetheERuncollectedcopaymentcollectionamount.

PEIA Contracts for Independent Claims and Operational Audits

Inadditiontointernalmonitoringofcontracts,PEIAusesothermeans of controlling for HealthSmart’s and Express Script’s properfunctionality. ExamplesofPEIA’scontrolsonHealthSmartoperationsareasfollows:

PEIA engages an independent external auditor to auditHealthSmart’sandExpressScript’sinternalcontrols.

PEIA engaged an external auditor to assess HealthSmart’sclaims determination accuracy and the policies, proceduresand controls that support the administration of PEIA’semployeehealthplansinFY2011.

PEIA hired a consulting group to verify beneficiaries anddependentswereeligible.

TPA Payments Are Ultimately Linked to Satisfactory Performance

Best practices suggest that a vendor be paid based on theirperformance during a certain period of time. PEIA pays TPAs anadministrative services fee on a monthly basis. PEIA paid more than$56million inadministrative fees toHealthSmart andExpressScriptsinfiscalyears2011through2013,whichisanaverageofmorethan$18millionperyear.TheadministrativeservicesagreementrequiresTPAs



The contracts include accountability provisions that obligates the TPA to pay PEIA a financial penalty should it fail to provide the contracted level of service.

provideaspecifiedlevelofservice.ThecontractsincludeaccountabilityprovisionsthatobligatestheTPAtopayPEIAafinancialpenaltyshouldit fail toprovide thecontracted levelof service. However, sinceTPAperformanceisreportedquarterly,paymentforthreemonthshasalreadybeenmadebeforeaTPAincursapenaltyforpoorperformance.

OnnineinstancesbothHealthSmartandExpressScriptsdidnotmeetestablishedperformancestandards.Inmostoftheseinstances,PEIAinvoicedandcollectedthepenaltiesinatimelyfashion.However,inthreeseparatequartersinFY2013,whenHealthSmartdidnotmeetestablishedperformancestandardsPEIAdidnotrecoupthepenaltiesowed.4PEIApaidthemonthlyadministrativefeesandinvoicedtheTPA$37,000forthepenalty.However,PEIAdidnotrealizethepenaltyhadnotbeenpaiduntilPERDrequestedpaymentdocumentation. ToensurePEIAisnotpayingforpoorperformanceitmustbediligentinthemonitoringofnotonlywhenaTPAincursapenalty,butalsoofthepenaltyinvoicesthathavebedisbursedandifthepenaltyhasbeenreceived.PEIAindicateditwillchangeitsprocedurestoprovidegreaterassurancethatsuchagapinoversightwillnotreoccur.

PEIA Is Not Following Some Best Practices for Contract Administration.

Although several best practices for contract administration areimplementedbythePEIA,PERDfindsthatthefollowingbestpracticesarenotimplemented:

writtenproceduresforcontractadministration, dispute resolution procedures (only in the HealthSmart

contract),and contingencyplans.

PEIA Does Not Have Written Procedures for Contract Administration

PEIA has not developed written technical guidance and/ora procedures manual that would provide its staff direction on whatthe oversight role entails. Without management formally definingexpectationsandprocedures,thereisariskthatstaffmaynotfocusonareasofimportancetomanagementorareascriticaltocontractoversight,suchasensuringtheTPAsdetermineclaimsaccuratelyandefficiently.Writtenpoliciesandprocedures serveasaguide toagenciesand theirpersonnelinensuringaconsistent,high-qualitycontractadministrationprocess. PEIA should consider developing a written contract administration manual.

4HealthSmartdidnotmeetstandardsrelatedtothe“TelephoneCallsAbandonmentPercentage.”

PEIA paid the monthly administrative fees and invoiced the TPA $37,000 for the penalty. However, PEIA did not realize the penalty had not been paid until PERD requested payment docu-mentation.



PERD staff asked PEIA how it would address a dispute with Express Scripts. PEIA responded by stating, “. . . All disputes would be resolved under the laws of the [West Virginia].”

PEIA Has Dispute Resolution Procedures in Only the HealthSmart Contract

The HealthSmart contract has language defining how disputesbetweenPEIAandHealthSmartwillbehandle. However,theExpressScripts contract does not have such a provision. Dispute clauses aredesignedtofacilitatetheprocessintheeventadisagreementcannotberesolved.TheagreementwithHealthSmartindicatesthat,

IfadisputearisesoutofthisAgreement,oranymodificationsmadetotheAgreement… the parties agree to meet and attemptto resolve thedisputebynegotiations. Ifnegotiationsarenotsuccessful,thepartiesshallattempttoresolvethedisputeandmayconsidernon-bindingmediationusingtheAmerican Arbitration Association as themediator,orsuchotherfirmorassociationasagreeduponbytheparties.Thepartiesagree to make a good faith attempt toresolvethedisputepriortolitigation.

Thedispute clause, in addition toproviding the framework foraction, serves to encourage the parties to resolve disputes through thenegotiation process to the maximum extent practicable. According totheNIGP,allcontractsshouldcontainadisputeclausetoresolvemattersarising from unsettled claims. PERD staff asked PEIA how it wouldaddressadisputewithExpressScripts.PEIArespondedbystating,“...Alldisputeswouldberesolvedunderthelawsofthe[WestVirginia].”Theadditionofacontractprovisionrequiringmediationandarbitrationwould add assurances that PEIA and Express Scripts exhaust allreasonableavenuesofresolutionbeforeproceedingtolitigation. PEIA should consider incorporating dispute resolution clauses in all future contracts.

PEIA Has Not Included Contingency Plans in All Contracts

PEIAhascontractterminationclausesinitsTPAcontracts.TheseclausesdescribetherolesandresponsibilitiesoftheTPAandPEIAwhenthecontractends.Thecontractsdonotincludeacontinuityofoperationsprocedureorcontingencyplan.AcontingencyplanprovidesassuranceofcontinuityofservicesintheeventthataTPAdefaultsonitscontractualobligations.PEIAindicatedtoPERDstaffthatifitsTPAsweretodefaulton its obligations, it would seek services from the next lowest bidderfromtheoriginalsolicitation.5 PEIAhasdetermined that the riskofa5PEIAisexemptfromstatePurchasingDivisionRules. However, in theevent thatavendorfailstohonoracontractualtermorcondition,thePurchasingproceduresstatethatthePurchasingDirectorcanawardthecontracttothenextlowestbidderfromtheoriginalsolicitation.

PEIA indicated to PERD staff that if its TPAs were to default on its obliga-tions, it would seek services from the next lowest bidder from the original solicitation.

Performance Evaluation & Research Division | pg. 1�


PEIA did not provide PERD with doc-umentation that ActiveHealth report-ed or met its performance in disease management return on investment for which there is a monetary penalty.

TPAfailing to fulfill itsobligations is low. An interruption inclaims processing could mean PEIA members and providers wouldexperience a delay in the reception of medical services, prescriptionmedicationsorpayment. Thisdelaycouldbeharmful. PEIA should consider documenting its emergency continuity of operations plan of action, possibly including it in the TPA contracts or contract administration manual.

PEIA Did Not Provide Evidence That It Receives a Positive Rate of Return From the Utilization Management Vendor.

PEIA has contracted for utilization management. Utilizationmanagementisintendedtoreduceunnecessaryoruncoveredutilizationof plan benefits. Over the scope of this audit, PEIA has contractedHealthSmart toprovideutilizationmanagementservices. HealthSmartsub-contractedtheseservicestoaTPAnamedActiveHealth.ThecontractoutlinedfourperformancemeasuresthatActiveHealthwastomeetandreporton.Thefourperformancemeasuresare:

telephoneabandonmentrate, averagespeedofanswer, blockagepercentage,and diseasemanagementreturnoninvestment.

Thetelephoneabandonmentrateisthepercentageofcallsthatdisconnectbeforethecallisanswered.Theaveragespeedofanswerishowquicklya call is answered. The blockage percentage is the rate of calls thatare blocked from reaching the call center due to an overload of calls.Responsivenesstotelephonecallsisimportantwithrespecttoutilizationmanagement because providers and members need timely responsesto their calls for prior approval and pre-authorization. The diseasemanagementreturnoninvestmentisdeterminedbydividingthediseasemanagementcostsavingsbythetotaldiseasemanagementadministrativefeespaidbythePEIA.Diseasemanagementinvolvesprovidinghealthprograms that assist members in the management of diabetes, weightcontrolandrenalcare.

Thecontractprovides thatpenaltiescanbeassessedfor twoofthe fourperformancemeasures,onebeing the telephoneabandonmentrate and the other is the disease management return on investment.PEIAprovidedevidencethatActiveHealthreportedontwoof thefourperformancemeasures:thetelephoneabandonmentrate,andtheaveragespeedofanswer.ActiveHealthreportedthatithadmettherequiredlevelsofperformanceforboththeabandonmentrateandtheaveragespeedofanswer.However,PEIAdidnotprovidePERDwithdocumentationthatActiveHealth reported or met its performance in disease managementreturn on investment for which there is a monetary penalty, or if any



In calendar year 2013 the expenses for utilization management services were greater than the benefit received.

penaltieshadbeenimposed.Thecontractgivesacleardescriptionoftheperformanceguaranteethevendoristomeetwhichisequivalenttotwotoonereturnoninvestment.Thepenaltyfornotmeetingitis10percentofthediseasemanagementfees.Thediseasemanagementfeeisasetratebasedonthenumberofpolicyholders.

ThereisevidencethatPEIAreviewsvendor-producedutilizationreportsthatincludeaggregatestatisticsforthenumberofpre-admission,concurrentreviewsanddenialsofinpatienthospitalstaysandforpriorreview of outpatient surgeries or services. PEIA is also involved inmakingsomeutilizationmanagementdecisionsconcerningspecificcaseswiththevendorthatmayinvolverelativelylargemonetarypayments.

PEIAalsostatesthatitutilizesinformationgatheredfromitsowndatawarehouseandanalyzesittoidentifytrendsandoutliersinthedataeverytwoweeks. PEIAstatesthatananalysisofplanperformanceascomparedtoitsfinancialplanprovidesahigh-levelindicatorofwhetheraActiveHealthwaseffectiveinitsabilitytoreducemedicalcosts.However,the only document PEIA provided in response to PERD’s request tohowPEIAassessedtheperformanceofActiveHealthwasaspreadsheetindicatingthepercentageofprovidervisitsinvariouscategorieswithininpatientandoutpatientfacilitiesaswellaspharmacyvisits.

However,ActiveHealthprovidedPEIAwiththecostsavingsforoverallinpatientandoutpatientproceduresnotapproved.PERDreviewedtwoofthesequarterlyreports,eachforthefinalquarterofcalendaryears2012and2013.ActiveHealth’sreportedcostsavingsfromnotapprovinguse of some plan benefits in calendar year 2012 was over $5 millionand over $4.5 million in 2013. Table 1 shows PEIA’s rate of returnon the administrative fees paid to the utilization management vendor,ActiveHealth, as compared toActiveHealth’s estimated calendar yearcostsavings.PERD’scalculationsindicatethatincalendaryear2012thereportedcostsavingsexceededtheadministrativefeespaid.However,incalendaryear2013theadministrativefeespaidwerehigherthanthereportedcostsavings.Thiseffectivelymeansthatincalendaryear2013theexpensesforutilizationmanagementservicesweregreaterthanthebenefitreceived.

Table 1PEIA’s Rate of Return

Calendar Years 2012 and 2013CalendarYear CostSavings AdministrativeFees RateofReturn

2012 $5,085,526 $4,631,892 +9.79%2013 $4,537,510 $4,849,759 -6.44%

Source:PERDcalculationsusingreportedtotalannualcostsavingsfromActiveHealthreportsand PEIA administrative fees from the State Auditor’s Financial Information ManagementSystem.



PEIA needs to determine if utilization management is being performed at es-tablished performance standards and is cost effective.

TheLegislativeAuditorrecognizestheimportanceofutilizationmanagement,andthatitisnotentirelyaboutcostsavings.Policyholdersneedtoreceivetimelyandappropriatehealthcare,andasystemneedstobeinplacethatprovidesaccountabilityanddeterrentsagainstoveruse,misuse and abuseof services for thepurposeof containinghealthcarecosts.Nevertheless,PEIAneedstodetermineifutilizationmanagementis being performed at established performance standards and is costeffective.PEIAhasclearstandardsfortelephoneresponsivenessandthediseasemanagementreturnoninvestment.However,thecontractwithActiveHealthdidnothaveaperformancegoalforassessingtheoverallcosteffectivenessofthevendor’sutilizationmanagement.ThereisnoevidencethatActiveHealthreportedareturnoninvestmentfordiseasemanagementin2012or2013,andthereisnoevidencethatapenaltywasassessedorshouldhavebeenassessedonthisaspectofthecontract.

Conclusion

PERD’sreviewofthePublicEmployee’sInsuranceAgencyhasfound that it is following many best practices associated with propercontractadministration. PEIAhasimplementedthesebestpracticestogain assurance that it and its members receive the contracted level ofservice.However,PERDhasidentifiedafewareasthatcouldimprovethequalityofPEIA’soversightofitsmajorTPAcontracts.Theseareasincludehavingawrittenpoliciesandproceduresmanual,aswellashavingdisputeresolutionandcontingencyplanclausesinserteduniformlyinTPAcontracts.Withrespecttoutilizationmanagement,thereisnoevidencethat the vendor reported its performance on the disease managementreturnoninvestment. SomeaspectsofPEIA’sutilizationmanagementneedstoimprove.

Recommendations

1. PEIAshouldconsiderdevelopingawrittencontractadministrationmanual.

2. PEIAshouldconsiderincorporatingdisputeresolutionclausesinallfuturecontracts.

3. PEIA should consider instituting a procedure to formallydocumenttheprogressofongoingprojectsandissuesraisedwithHealthSmart.

4. PEIAshouldconsiderdocumentingitscontinuityofoperationsplanofaction.

pg. 1� | West Virginia Legislative Auditor




Table 2 indicates that PEIA integrates 62 percent of the checklist items in its website. This measure shows that overall the PEIA website needs only modest improvement.

Overall, the PEIA Website Is Good and Scores Relatively High in User-Friendliness, but More Improvement Can Be Made in Transparency.

Issue Summary PERD conducted a literature review on assessments ofgovernmental websites and developed an assessment tool to evaluateWestVirginia’sstateagencywebsites(seeAppendixD).Theassessmenttoollistsseveralwebsiteelements.Someelementsshouldbeincludedin every website, while other elements such as social media links,graphicsandaudio/videofeaturesmaynotbenecessaryorpracticalforsomestateagencies.Table2indicatesthatPEIAintegrates62percentofthechecklistitemsinitswebsite.ThismeasureshowsthatoverallthePEIA website needsonlymodest improvement. However, theoverallscore reflects stronguser-friendly features,but itcouldbehigherwithadditionaltransparencyfeatures.

Table 2Public Employees Insurance Agency

Website Evaluation ScoreSubstantial

ImprovementNeededMoreImprovement

NeededModestImprovement

NeededLittleorNo

ImprovementNeeded0-25% 26-50% 51-75% 76-100%

62%Source:TheLegislativeAuditor’sreviewofthePEIAwebsiteasofOctober20,2014.

PEIA’s Website Scores Very Well in User-Friendliness, but Could Use Improvement in Transparency.

In order for citizens to engage with an agency online, theyshould be able to gain access to the website and to comprehend theinformation posted there. A user-friendly website employs up-to-datesoftwareapplications, is readable,well-organized,providesa thoroughdescription of the organization’s role, displays contact informationprominently and allows citizens to understand the organization of theagency.Governmentalwebsitesshouldalsoincludebudgetinformation,revenuesources,performancemeasures,andotherfeaturestomaintaintransparencyandthetrustofcitizens.TheLegislativeAuditorreviewedPEIA’swebsiteforbothuser-friendlinessandtransparency.AsillustratedinTable3, thewebsitescoresnearlycompleteinuser-friendliness,butrelativelylowintransparency.PEIA should consider making website improvements to provide a better online experience for the public and its registrants.

ISSUE 2



Every page also has a navigation bar on the side of the page. These fea-tures allow website users to navigate the page, search for information they may need, and find answers to their questions.

Table 3Website Evaluation Score

Category PossiblePoints AgencyPoints PercentageUser-Friendly 18 16 89%Transparent 32 15 47%Total 50 31 62%Source:TheLegislativeAuditor’sreviewofPEIA’swebsiteasofOctober20,2014.

PEIA’s Website Is Easily Navigable And Only a Few Additional User-Friendly Features Are Suggested.

PEIA’s website readability is between an 8th and 9th gradereadinglevel,whichisclosetostandardcriteria.AreportpublishedbytheBrookings Institutedetermined thatgovernmentwebsite shouldbewrittenatan8thgradereadingleveltofacilitatereadability.Readable,plainlanguagehelpsthepublicfindinformationquickly,understandtheinformationanduseiteffectively.PEIA’swebsitehasasearchtoolandhelplinkdisplayedoneverypage,alongwithasite-map,FAQsectionandanoptiontoleavefeedbackaboutthewebsite.Allofthesefunctionsare displayed in a legible sans serif typeface. Every page also has anavigationbaronthesideofthepage.Thesefeaturesallowwebsiteusersto navigate the page, search for information they may need, and findanswerstotheirquestions.LinkstosocialmediaoutletsareavailabletoallowuserstopostPEIAcontenttosocialmediapagessuchasFacebookandTwitter,andRSSisavailablethatallowsuserstoreceiveregularlyupdatedwork.PEIAhasalsomadeamobiledevicefriendlyversionofthewebsite,somemberscaneasilyaccessinformationfromsmartphonesandtablets.

User-Friendly Considerations

Thefollowingareattributesthatcouldleadtoamoreuser-friendlyPEIAwebsite:

Foreign language accessibility – The website couldcontainalinktotranslateallpagesintolanguagesotherthanEnglish.

Online Survey/Poll–Thewebsitecouldincludeashort

survey that pops up and requests users to evaluate thewebsite.

PEIA’swebsitedoesnothavetheabilitytotranslatethewebsitetext intoother languagesorsurveyusers toevaluate thewebsite. TheabsenceoftheseelementslowersPEIA’soveralluser-friendlinessscorebutarenotnecessarilyessentialforthewebsite.

PEIA’s website does not have the abil-ity to translate the website text into other languages or survey users to evaluate the website.



The Website Criteria Checklist and Points System demonstrates that PEIA’s website has 15 of 32 core ele-ments that are necessary for a general understanding of the agency.

PEIA’s Website Can Be More Transparent.

A website that is transparent will have elements such as emailcontact information, the location of the agency, the agency’s phonenumber, as well as public records, budgetary data and performancemeasures.Atransparentwebsitewillalsoallowforcitizenengagementso that their government can make policies based on the informationshared.TheWebsiteCriteriaChecklistandPointsSystem(seeAppendixD)demonstratesthatPEIA’swebsitehas15of32coreelementsthatarenecessaryforageneralunderstandingoftheagency.

PEIA’s home page has the agency’s office email and physicaladdress,withanembeddedmapshowingtheofficelocation,aswellasits telephonenumber. Additionally,allPEIAexecutivestaffmembers’namesareonacontactpage.Thisallowscitizenstolocatetheinformationnecessarytocommunicatewiththeagency.Theagencyalsohassomepertinentpublicinformationonitswebsiteincludingtheagency’sprivacypolicy,pastauditsofPEIA,budgetary informationfor thepastseveralyears,informationoneventsandmeetingsandabriefhistoryofPEIA.PEIAhasalsomadeseveralinformationpublicationsavailabletousers.

Transparency Considerations

SeveralelementscouldbeaddedtoimprovethePEIAwebsite’stransparency. The following are a few attributes that PEIA shouldconsider:

Administrator’s Biography – A biography explainingthe administrator(s) professional qualifications andexperience.

Complaint Form–Aspecificpagethatcontainsaformtofileacomplaint.

Mission Statement – A statement, located on thehomepage,declaringtheagency’scorepurpose.

Agency Organizational Chart–Anarrativedescribingtheagencyorganizationcouldbeincluded,preferablyinapictorialrepresentationsuchasahierarchy/organizationalchart.

FOIA Information – Information on how to submit aFOIArequest,ideallywithanonlinesubmissionform.

The agency also has some pertinent public information on its website in-cluding the agency’s privacy policy, past audits of PEIA, budgetary infor-mation for the past several years, in-formation on events and meetings and a brief history of PEIA.



Performance Measures/Outcomes–Apagelinkedtothehomepageexplainingtheagency’sperformancemeasuresandoutcomes.

Website Updates–Awebsiteupdatestatusonscreenandideallyforeverypage.

While a user of the PEIA website can find information on thecomplaintandappealprocess,userscannotsubmitacomplaintonline.PEIA could also include information detailing the qualifications ofexecutivestaffofPEIAandanorganizationchartofhowPEIAoperates.Basedontheresultsofthiswebsiteevaluation,theLegislativeAuditorrecommends that PEIA make improvements to its website to increasetransparency.

Conclusion

Overall, PEIA’s website scores high in user-friendliness, butrelatively low in transparency. While users can find most neededinformationsuchasaplandescriptions,recentchangestoplans,andcontactinformation,addingotherelementswouldimprovethetransparencyoftheagencyonthewebsite.

Recommendation

5. The Legislative Auditor recommends that the Public EmployeesInsuranceAgencymakethesuggestedimprovements to itswebsite,particularlyintheareaoftransparency.

While a user of the PEIA website can find information on the complaint and appeal process, users cannot submit a complaint online.



Appendix ATransmittal Letter





Appendix BObjectives, Scope and Methodology

The Performance Evaluation and Research Division (PERD) within the Office of the LegislativeAuditorconductedthisperformancereviewofthePublicEmployeesInsuranceAgency(PEIA)aspartoftheagencyreviewoftheWestVirginiaDepartmentofAdministrationasrequiredbyWestVirginiaCode§4-10-8(b)(2).ThepurposeoftheAgency,asestablishedinWestVirginiaCode§5-16-7(a),istoestablishmajormedical,grouphospitalandsurgical,prescriptiondrug,andgrouplifeandaccidentaldeathinsuranceplansforeligibleemployeesandpromulgaterulesfortheadministrationoftheseplans.

Objectives

Therearetwoobjectivesinthisreview.ThefirstistodeterminewhetherthePEIAfollowscontractadministrationbestpracticesinitsoversightofthetwomajorthird-partyadministrators(TPAs)responsibleformedicalclaimsbenefitsprocessingandpharmacybenefitsmanagement.ThesecondobjectiveistoassessthePEIAwebsiteforuser-friendlinessandtransparency.

Scope

ThescopeforIssue1consistedofevaluatingPEIA’sprocessinoverseeingtwoofitsTPA’scompliancewithcontractprovisions.ThetwoPEIAcontractsincludedinthescopewerewithHealthSmartforprocessingmedicalclaimsbenefits,andwithExpressScriptsInc.formanagepolicyholderpharmacybenefits.PERDdidnot reviewor evaluateanyotherPEIAcontract. The timeperiodofour contract reviewcovered theprovisionsineffectfromJuly2010throughJune2013. Thescopeincludednineof thebestpracticesforcontract administration used by the National Institute of Governmental Purchasing (NIGP) and Office ofFederalProcurementPolicy(OFPP).Aspecificareaoffocuswithintheagencywasitsoversightofutilizationmanagement and the utilization management vendor. The scope did not include contract administrationprocessesorbestpracticesofHealthSmartorExpressScripts,onlythecontractadministrationbestpracticesofPEIA.PERDonlycommunicatedwithPEIAstaffnottheTPAs.Additionally,thescopedidnotincludeanevaluationofthesufficiency,appropriateness,oraccuracyoftheTPA’sinformation.ForIssue2thescopecomprisedareviewofPEIA’swebsiteonOctober20,2014.

Methodology

PERD gathered testimonial evidence through interviews with the PEIA’s staff. The purpose fortestimonial evidencewas togain abetter understandingor clarificationof certain issues such as contractprovision, and to confirm the existence or non-existence of a condition, or to understand the respectiveagency’spositiononanissue.PERDconfirmedbyeitherwrittenstatementsorthereceiptofcorroboratingevidencesuchtestimonialevidence.

PERDreviewedcopiesoftheHealthSmartandExpressScriptscontractseffectivefromJuly1,2010toJune30,2013.Theagencydidnothaveaproceduresmanualindicatingitsoversightprocedures.Therefore,wehaddiscussionswithPEIAstaffonwhatproceduresitfollowedinassuringHealthSmart’sandExpressScripts’compliancewiththecontracts.Inaddition,PEIAstaffprovideduswithinternalauditspreadsheetsthatdocumentedtheresultsof itsoversight. Wereviewthecontractstodetermineif theirprovisionwereconsistentwithbestpracticesasstipulatedbytheNIGPandOFPP.PERDchooseninecontract-oversight



standardswhichwefeltweregenerallyacceptedandthecoreofeffectivecontractoversight.Inmanycases,theTPAswererequired toprovideperformancereports to thePEIA. PERDdetermined that therequiredreportshadbeenprovidetothePEIAbyeachTPA.InordertodetermineifthereportshadtheappropriateinformationandthatthePEIAwasmonitoringthereports,PERDsampledperiodicreportsfortheircontent.In somecases,we found that the reportswerenotcompleteor theTPAhadnotmetor reported requiredperformance.IncasesinwhichPEIAshouldhaveimposedpenaltiesfornotmeetingperformancestandards,PERD requested documentation that PEIA had imposed and collected the penalties. This documentationincludedPEIAinvoicessenttoHealthSmartandExpressScripts,andTPAreceiptsofpayment.WedeterminedtheinvoicesandTPAreceiptssufficientandappropriate.

PERDconductedaliteraturereviewofgovernmentwebsitestudies,reviewedtop-rankedgovernmentwebsites,andreviewedtheworkofgroupsthatrategovernmentwebsitesinordertoestablishalistofessentialwebsiteelementsthatwouldenhancetransparencyanduser-friendlinesstoevaluatethePEIA’swebsite.Itisunderstoodthatnoteveryelementlistedinthemasterlististobefoundinanagencywebsitebecausesomeofthetechnologymaynotbepracticalorusefulforsomestateagencies.Therefore,PERDcomparedthePEIA’swebsitetotheestablishedcriteriaforuser-friendlinessandtransparencysothattheagencycandetermineifitisprogressinginstepwiththee-governmentmovementandifshouldmakeimprovementstoitswebsite.Forphysicalevidence,PERDtookscreenshotsofthewebsiteonOctober20,2014,thedateinwhichweevaluatedthewebsite.

We conducted this performance audit in accordance with generally-accepted government auditingstandards. Those standards require that we plan and perform the audit to obtain sufficient, appropriateevidencetoprovideareasonablebasisforourfindingsandconclusionsbasedonourauditobjectives.Webelievethattheevidenceobtainedprovidesareasonablebasisforourfindingsandconclusionsbasedonourauditobjectives.



Appendix CHealthSmart and Expess Scripts Incorporated Performance Measures

HealthSmart Performance Measures

Quality

FinancialErrorClaimisoneeitherincorrectlysettledwithrespecttodollaramountorincorrectlysettled,inwholeorinpart,withrespecttoawrongpayee.Noclaimshallbedeclaredafinancialerrorclaimifincorrect(actual)settlementamountdiffersfromcorrected(audited)settlementamountbylessthanonedollar.

FinanciallyCorrectClaimisaclaimwhichisnotafinancialerrorclaim.FinancialAccuracyAmountis100%foranysettledclaimwhichisnotafinancialerrorclaim.Ifafinancialerrorclaimisoneinvolvingawrongpayee,thenthefinancialaccuracyamountistheamountofclaimsettlementdirectedtothewrongpayee.

Quality performance measurements with respect to financial error claims and related financial accuracyamountsshallbebasedonTPA’smonthlyinternalauditandshallbereportedmonthlytoPEIA.TPAwillauditastatisticallyvalidrandomsampleofallsettledclaimsforeachone-monthauditperiod.PerformancemeasurementsreportedtothePEIAshallbebasedontheentiretyofthatsample.SamplesizeandperformancemeasurementsshallbereportedtothePEIAmonthly.

Twoqualityperformancemeasurementsshallbecalculatedeachmonthasfollows(Ndenotestheauditsamplesize):

Q1-FinanciallyCorrectClaimPercent=

100*(1-(NumberofFinancialErrorClaims/N))

ThestandardisthatQ1,roundedtoonedecimal,shallbenotlessthan96.0percentforeachmonth.

Q2-FinancialAccuracyAmountPercent=

100*(1-(SumofFinancialAccuracyAmounts/SumofAuditClaimSettlementAmounts))

ThestandardisthatQ2,roundedtoonedecimal,shallbenotlessthan99.0percentforeachmonth.

Timeliness

Claimturnaroundtimeisdefinedasthenumberofworkingdaysafterthedatetheclaimisreceivedinthemailorelectronicallyuntilthedatetheclaimisfinalized.Finalizedclaimsincludethosewhicharereadyforreleaseofpayments,denied,appliedtodeductible,closedorreferredtoPEIAforhandling.

Forexample,aclaimreceivedonTuesdayandfinalizedonthenextday,Wednesday,hasturnaroundtimeofoneday.Similarly,thatsameclaimfinalized,instead,ontheTuesdayoneweekhencewouldhaveturnaroundtimeoffivedays.

Claimturnaroundtimeshouldbecalculatedbyreferencetothe“TurnaroundDays”and“NumberofClaims--Cumulative%”columnsinareportwhichwillbeproducedeachmonth.Forpurposesofthisperformancestandardandcorrespondingmeasurement, this reportwillexcludeallclaimswhichareeitheradjustments



orclaimswhichweredelayed inprocessingat the requestof thePEIAasa resultofPEIAactions,or inaccordancewiththePlan.

Thestandard is thatclaim turnarounddays (Tl), rounded toonedecimal,andshallbe:not less than92.0percentofclaimswillbeprocessedintwelve(12)workingdays.

Telephone Responsiveness

TelephoneresponsivenessshallbemeasuredbytheSummaryAbandonmentRatePercentageReport,whichwillbeproducedforeachmonth.DenotethisabandonmentratepercentageasA1.ThestandardisthatA1,roundedtoonedecimal,shallbe:notgreaterthan3.0percent.

Express Scripts Incorporated Performance Measures

ServicePerformanceGuarantees Standard Penalty

1.NetworkSize

Atleast93%ofmemberswillhaveone(1)networkpharmacywithin10milesifanyretailpharmacyisavailableinthatdistance.ESIshallperformaGeoAccessanalysisofmembersuponrequestofPEIA,andshallnotifyPEIAanytimethenumberofnetworkpharmaciesinWestVirginiadecreasesby5%ormore.**

$49,100fortheyearinwhichGeoAccessisnotmet..Performancewillbereportedquarterly,ifapplicable.Penalties,ifany,willbepaidannually.*

2.RetailPoint-of-SaleClaimsAdjudicationAccuracy

ESIguaranteesafinancialaccuracyrateofatleast98%forallRxclaimsprocessedatpoint-of-sale.

$49,100fortheyearinwhichthisstandardisnotmet.Penalties,ifany,willbepaidannually.PerformancewillbemeasuredbyanannualauditconductedbyPEIA.*

3.Point-of-SaleNetworkSystemDowntime

ESIguaranteesthattheAnchorclaimsprocessingsystemwillbeoperatingatleast99.5%ofscheduleduptimeof162hoursperweek,asmeasuredannuallyontheESIbook-of-business.

$49,100fortheyearinwhichthisstandardisnotmet.Performancewillbereportedquarterly.Theguaranteewillbemeasuredandpenalties,ifany,willbepaidannually.*

4.ReportingRequirements

ESIguaranteesthatallclaimsinformationwillbeavailableforelectronicreportingwithin10businessdaysafterbilling,andthatExecutiveReportsandPerformanceGuaranteeReportswillbeavailable45daysaftertheendofthecalendarquarter.

$4,100foranymonthinwhichthisstandardisnotmet.Thisguaranteewillbemeasuredmonthlyandreportedquarterly.Penalties,ifany,willbepaidquarterly.*



5.DeskAuditsESIwillperformdeskauditsonatleast50%ofnetworkpharmacieseachyear.***

$49,100fortheyearinwhichthisstandardisnotmet.Performancewillbereportedandmeasuredannually.Penalties,ifanywillbepaidquarterlybasedonESI’sbookofbusiness.*

6.On-SiteAudits

ESIwillperformon-siteauditsofatleast10%ofWestVirginiapharmaciesthatareidentifiedindeskauditsasoutliers,outliersshallbedefinedasanydeskauditwithadiscrepancyamount/auditfindingof$5,000orgreater.

$49,100fortheyearinwhichthisstandardisnotmet.Performancewillbereportedandmeasuredannually.Penalties,ifanywillbepaidannually.*

7.CallAnsweringTime

ESIguaranteesthattheaveragespeedofanswer(ASA)ofmembercallswillnotexceed30second,excludingcallsabandonedbeforeanswering.

$4,100foranymonthinwhichthisstandardisnotmet.Thisguaranteewillbemeasuredmonthlyandreportedquarterly.Penalties,ifanywillbepaidquarterly.*

8.CallAbandonmentRate

Notmorethan3%ofmembercallswillbeabandoned.Abandonedcallsdonotincludeoutagescausedbyphonecompany.


9.PriorAuthorization

AllrequestsforPriorAuthorizationshallberesolved(approvedordenied)within72hours,excludingrequestinwhichESIiswaitingformoreinformationfromamemberorprovider.

5%ofclaimsprocessingfeesfortheperiodinwhichthisstandardisnotmet.Thisguaranteewillbemeasuredmonthlyandreportedquarterly.Penalties,ifanywillbepaidquarterly.(ThisperformancemeasureonlyappearsinthecontractwhichwasapplicablefromFY2002throughFY2012)

10.MemberCorrespondence

ESIshallrespondtoallcorrespondencefromrecipientsandproviderswithinanaverageoffive(5)businessdays.


11.MailOrder

ESIwillguaranteethatallmailserviceprescriptionswillbeshippedwithinanaverageof5businessdaysorlessfromreceiptbyESI.

5%ofclaimsprocessingfeesfortheperiodinwhichthisstandardisnotmet.Thisguaranteewillbemeasuredmonthlyandreportedquarterly.Penalties,ifanywillbepaidquarterly.



12.MailOrder—TurnaroundTimeforRoutine(Clean)Prescription

ESIGuaranteestodispenseprescriptionsnotsubjecttointerventionwithinanaverageoftwo(2)businessdays.

Prescriptions:ESIwillpayPEIA$12,275foreachfulldayabovethestandardtwo(2)businessdaysonanannualbasis.Themaximumannualpenaltywillbe$24,550.(ThisperformancemeasureonlyappearsinthecontractwhichwasapplicableasofJuly1,2013)

13.MailOrder—TurnaroundTimeforPrescriptionsSubjecttoIntervention

ESIGuaranteestodispenseprescriptionssubjecttointerventionwithinanaverageoffive(5)businessdays.

ESIwillpayPEIA$12,275foreachfulldayabovethestandardfive(5)businessdaysonanannualbasis.Themaximumannualpenaltywillbe$24,550.(ThisperformancemeasureonlyappearsinthecontractwhichwasapplicableasofJuly1,2013)

14.SuccessfulImplementation

ESIwillguaranteethattheimplementation/transitionwillbesuccessfulbasedoncriteriadeterminedinadvancedandagreedtobybothpartiesandwhichwillinclude:a.)99%ofmembersreceivingwelcomepacket/IDcardspriortotheeffectivedata,b.)allsystemsareavailableandoperationalasoftheeffectivedata,c.)plandesignandbenefitsset-upcorrectly,d.)MemberservicesrepresentativesaretrainedanddeliveringaccurateinformationtoMembers,e.)Sponsorissatisfiedwithimplementationandaccountmanagementteamperformance.

ThefollowingdollarswillbepaidtoSponsorifESIdoesnotcompletethedeliverablebythedatesnotedintheperformancestandard,assumingthatSponsorhasprovidedtheinformationnecessarytocompletethesedeliverables:BenefitPlanDesign-$0.50permemberGroupStructureandEligibilityLoad-$0.50permemberIDCards-$0.50permemberToll-FreeTelephoneNumber-$0.50permemberCommunications-$0.50permemberTheimplementationperformancestandardsareonetimeonlystandardstobebasedonSponsoreffectivedate.Themaximumimplementationpenaltywillbe$475,000.(ThisperformancemeasureonlyappearsinthecontractwhichwasapplicableasofJuly1,2013)

*BeforethebeginningofFY2013thispenaltyamountwascalculatedas“5%ofclaimsprocessingfees”**BeforethebeginningofFY2013thisperformancestandardwas“3%”***BeforethebeginningofFY2013thisperformancestandardwas“10%”



Appendix DWebsite Criteria Checklist and Points System


User-Friendly Description Total Points Possible

Total Agency Points

Criteria Theeaseofnavigationfrompagetopagealongwiththeusefulnessofthewebsite. 18 16

Individual Points Possible

Individual Agency Points

SearchTool Thewebsiteshouldcontainasearchbox(1),preferablyoneverypage(1). 2points 2points

HelpLink

ThereshouldbealinkthatallowsuserstoaccessaFAQsection(1)andagencycontactinformation(1)onasinglepage.Thelink’stextdoesnothavetocontainthewordhelp,butitshouldcontainlanguagethatclearlyindicatesthattheusercanfindassistancebyclickingthelink(i.e.“HowdoI…”,“Questions?”or“Needassistance?”)

2points 2points

Foreignlanguageaccessibility

AlinktotranslateallwebpagesintolanguagesotherthanEnglish. 1point 0points

ContentReadability

Thewebsiteshouldbewrittenona6th-7thgradereadinglevel.TheFlesch-KincaidTestiswidelyusedbyFederalandStateagenciestomeasurereadability.

Nopoints,seenarrative

8th-9thGradeReadingLevel

SiteFunctionality

Thewebsiteshouldusesansseriffonts(1),thewebsiteshouldincludebuttonstoadjustthefontsize(1),andresizingoftextshouldnotdistortsitegraphicsortext(1).

3points 3points

SiteMap

Alistofpagescontainedinawebsitethatcanbeaccessedbywebcrawlersandusers.TheSiteMapactsasanindexoftheentirewebsiteandalinktothedepartment’sentiresiteshouldbelocatedonthebottomofeverypage.

1point 1point

MobileFunctionalityTheagency’swebsiteisavailableinamobileversion(1)and/ortheagencyhascreatedmobileapplications(apps)(1).

2points 2point

NavigationEverypageshouldbelinkedtotheagency’shomepage(1)andshouldhaveanavigationbaratthetopofeverypage(1).

2points 2points

pg. �0 | West Virginia Legislative Auditor



FAQSection Apagethatliststheagency’smostfrequentaskedquestionsandresponses. 1point 1point

FeedbackOptionsApagewhereuserscanvoluntarilysubmitfeedbackaboutthewebsiteorparticularsectionofthewebsite.

1point 1point

Onlinesurvey/poll Ashortsurveythatpopsupandrequestsuserstoevaluatethewebsite. 1point 0points

SocialMediaLinks

Thewebsiteshouldcontainbuttonsthatallowuserstopostanagency’scontenttosocialmediapagessuchasFacebookandTwitter.

1point 1point

RSSFeeds

RSSstandsfor“ReallySimpleSyndication”andallowssubscriberstoreceiveregularlyupdatedwork(i.e.blogposts,newsstories,audio/video,etc.)inastandardizedformat.

1point 1point

Transparency Description Total Points Possible

Total Agency Points

Criteria

Awebsitewhichpromotesaccountabilityandprovidesinformationforcitizensaboutwhattheagencyisdoing.Itencouragespublicparticipationwhilealsoutilizingtoolsandmethodstocollaborateacrossalllevelsofgovernment.

32 15

Individual Points Possible

Individual Agency Points

Email Generalwebsitecontact. 1point 1pointPhysicalAddress Generaladdressofstageagency. 1point 1pointPhoneNumber Correctphonenumberofstateagency. 1point 1point

LocationofAgencyHeadquarters

Theagency’scontactpageshouldincludeanembeddedmapthatshowstheagency’slocation.

1point 1point

Administrativeofficials

Names(1)andcontactinformation(1)ofadministrativeofficials. 2points 2points

Administrator(s)biography

Abiographyexplainingtheadministrator(s)professionalqualificationsandexperience. 1point 0points

Privacypolicy Aclearexplanationoftheagency/state’sonlineprivacypolicy. 1point 1point

Performance Evaluation & Research Division | pg. �1



PublicRecords

Thewebsiteshouldcontainallapplicablepublicrecordsrelatingtotheagency’sfunction.Ifthewebsitecontainsmorethanoneofthefollowingcriteriatheagencywillreceivetwopoints:• Statutes• Rulesand/orregulations• Contracts• Permits/licensees• Audits• Violations/disciplinaryactions• MeetingMinutes• Grants

2points 1point

Complaintform Aspecificpagethatcontainsaformtofileacomplaint(1),preferablyanonlineform(1). 2points 0points

Budget Budgetdataisavailable(1)atthecheckbooklevel(1),ideallyinasearchabledatabase(1). 3points 2points

Missionstatement Theagency’smissionstatementshouldbelocatedonthehomepage. 1point 0points

CalendarofeventsInformationonevents,meetings,etc.(1)ideallyimbeddedusingacalendarprogram(1).

2points 1point

e-Publications Agencypublicationsshouldbeonline(1)anddownloadable(1). 2points 2points

AgencyOrganizationalChart

Anarrativedescribingtheagencyorganization(1),preferablyinapictorialrepresentationsuchasahierarchy/organizationalchart(1).

2points 0points

Graphiccapabilities Allowsuserstoaccessrelevantgraphicssuchasmaps,diagrams,etc. 1point 1point

Audio/videofeatures Allowsuserstoaccessanddownloadrelevantaudioandvideocontent. 1point 0points

FOIAinformationInformationonhowtosubmitaFOIArequest(1),ideallywithanonlinesubmissionform(1).

2points 0points




Performancemeasures/outcomes

Apagelinkedtothehomepageexplainingtheagenciesperformancemeasuresandoutcomes.

1point 0points

Agencyhistory

Theagency’swebsiteshouldincludeapageexplaininghowtheagencywascreated,whatithasdone,andhow,ifapplicable,hasitsmissionchangedovertime.

1point 1point

WebsiteupdatesThewebsiteshouldhaveawebsiteupdatestatusonscreen(1)andideallyforeverypage(1).

2points 0points

JobPostings/linkstoPersonnelDivisionwebsite

Theagencyshouldhaveasectiononhomepageforopenjobpostings(1)andalinktotheapplicationpagePersonnelDivision(1).

2points 0points

Performance Evaluation & Research Division | pg. ��


Appendix EAgency Response





Building 1, Room W-314, State Capitol Complex, Charleston, West Virginia 25305

telephone: 1-304-347-4890 | www.legis.state.wv.us /Joint/PERD/perd.cfm | fax: 1- 304-347-4939

Documents

PUBLIC EMPLOYEES INSURANCE AGENCYwvlegislature.gov/Joint/PERD/perdrep/PEIA_June_2015.pdfpg. | West Virginia Legislative Auditor Public Employees Insurance Agency The PEIA’s website