Conducted on OneExchange - pebp.state.nv.us · Introduction The State of Nevada Public Employees’...

Medicare Exchange Health Reimbursement Arrangement

Audit Report for

Conducted on

OneExchange Willis Towers Watson

Audit Period:

PEBP Plan Year 2017

Submitted By:

Health Claim Auditors, Inc.

TABLE OF CONTENTS

Page(s)

Introduction 1 - 2

Executive Summary of Findings 2 - 7

Other Customer Service Measurements 8

Overpayments 8

Explanation of Payments 9

Participant Funding 9

Participant Survey 9

Breakout of Claims Audited 10

Payment Accuracy 10

Financial Accuracy 11

Turnaround Times 12

Policy, Procedures and System 12 - 13

Customer Service Detail 13

Reporting 14

Specific Claim Audit Detail 15 - 26

Exhibit A –

Explanation of Payment 27 – 28

HCA 09/17 Page 1 St. NV. PEBP/WTW/PayFlex

State of NV. PEBP - Health Reimbursement Arrangement

Introduction

The State of Nevada Public Employees’ Benefits Program (PEBP) requested

Health Claim Auditors, Inc. (HCA) to conduct a Claims and System Audit on Willis

Towers Watson, contracted with PEBP as OneExchange from Towers Watson

(OneExchange), formally named as Extend Health. OneExchange is the current

contracted vendor for administration of the PEBP Medicare Exchange Health

Reimbursement Arrangement (HRA) plan. This audit is conducted per The State of

Nevada Division of Purchasing Request For Proposal (RFP) No. 1922.

OneExchange utilizes subcontractor, PayFlex*, to administrate the claims

adjudication function for the Medicare Exchange HRA PEBP plan. The onsite

portion of the audit was conducted in September 2017 at the PayFlex location in

Omaha, Nebraska.

* PayFlex, an Aetna company, is a benefit administrator specializing in the

administration of flexible spending accounts, health savings accounts, health

reimbursement arrangements and COBRA administration.

HCA was provided with a claim file from PayFlex of claims adjudicated for

PEBP’s Plan Year 2017 (July 2016 – June 2017). The file contained information

pertinent to 347,933 HRA claims representing $39,686,824.93 in requested

reimbursements. A claim is defined as each separate expense reimbursement

request. Requests that contain multiple expenses (such as prescriptions) are

separated and administered as separate claims.

The purpose of the audit was to assure that OneExchange/PayFlex is doing an

effective job of controlling claim costs while processing HRA claims accurately

and within a reasonable period of time.

The preliminary report was presented to OneExchange for additional comments

and responses on 15 September 2017. Additional comments/responses received

from OneExchange/PayFlex are included within the report and identified in

bold/italicized type. In situations where there is disagreement between HCA and

the Administrator as to what constitutes an error, both sides are presented in the

report. Final determination of error rests with the client. The statistical effect on the

Financial Accuracy measurement for each error is displayed in the HCA note

immediately after the OneExchange comment.

Detailed data for each of the items displayed within the results, both statistical and

non-statistical calculations, can be found in the Specific Claim Audit Details

chapter of this report, which begins on page 15.

A valid random selection of 400 claims plus no more than 200 bias* selected claims

were identified for audit as per agreement.


*Bias claims are not part of the random selection but were selected manually and

audited by HCA because of some “out of the ordinary” characteristic of the claim.

Bias claims are not included within the statistical calculations for measurement of

Performance Guaranteed categories within the Administration Agreement.

The valid random selection included claims from all categories adjudicated by

PayFlex. These categories included, but were not limited to: 1) deductibles; 2)

dental; 3) medical; 4) orthodontia; 5) over the counter; 6) premiums; 7)

prescriptions and 8) vision claims.

The Claim Financial Precision provision in the Agreement defines the

measurement of the “Total Amount Approved”. The statistical calculations for this

category includes all payments completed for the participant’s request for the entire

history of the claim up to the date the claim is audited.

EXECUTIVE SUMMARY OF FINDINGS

Guaranteed Performance Measurements - Audit Period: 01 July 2016

through 30 June 2017 (PEBP Plan Year 2017)

Metric Guarantee Measurement Actual Pass/Fail

Claim Processing

Turnaround Time

Processing will average two (2) business days

or less. Additionally, 98% of all claims will be

processed within five (5) business days.

0.59

Business

Days

Pass

Claim Processing

Payment Precision

Processing average precision will be at

least 98% or better.

96.0% Fail

Claim Financial

Payment Precision

Financial accuracy will be 98% or

better

96.36% Fail

Customer Service

Abandon Rate

The percentage of incoming calls

abandoned by participants be 5% or less

2.7%

Pass

Customer Service

Speed to Answer

Incoming telephone calls, on average, shall

be answered within thirty (30) seconds.

46.5 sec.

Fail

Reports

Reports will be available within ten (10)

business days of the end of the period. No Delays

Noted

Pass

HRA Web Services

99% availability of web services for

benefit information and HRA information

exclusive of scheduled maintenance.

99.0% +

Pass

Disclosure of

Subcontractors

Contractor shall not engage additional

subcontractors to maintain PEBP data nor

change the physical locations where PEBP data

is maintained and/or stored without written

authorization by PEBP.

No

Exceptions

Detected

Pass

Unauthorized

Transfer of PEBP

Data

All PEBP data will be stored, processed and

maintained solely on currently designated servers

and storage devices identified in this contract

amendment and/or prior contract documents.

No

Exceptions

Detected

Pass

Speed to Respond

to Issue(s)

98% of incoming participant issues are to

be responded to within 48 Hours of receipt

100%

Pass

Issue Resolution 98% of incoming issues escalated are to be

resolved within 30 business days

98.2%

Pass


Historical Statistics

The following reflects the historical statistical data since the origin of PEBP Health

Reimbursement Arrangement (HRA) claims administration by OneExchange. The

entries designated in bold red type are measurable categories below the Service

Performance Guarantees Agreement.

Period Audited Payment

Accuracy

Financial

Accuracy

Turnaround

Time

Telephone Response

Telephone Abandon Rate

Plan Year 2012 91.6% NA 1.2 days 0:19 1.07%

Plan Year 2013 98.7% 99.2% 1.1 days 0:15 0.94%

Plan Year 2014 98.2% 99.3% 1.3 days 0:19 1.30%

Plan Year 2015 98.0% 97.9% 1.3 days 0:24 1.47%

Plan Year 2016 98.7% 99.58% 1.1 days 1:50 4.15%

Plan Year 2017 96.0% 96.36% 0.59 days 0:46 2.7%

Trends/Issues

The audit revealed the following issues or trends detected from the random

selection and bias selected claims. Please note: the reference numbers in bold type

are claims from the random selection and are included within the statistical

calculations. Reference numbers in normal type were identified as issues in bias

claims as defined earlier and are not included within the statistical calculations of

this audit. Specific information regarding supporting reference numbers can be

found in the Audit Results Section in numerical sequence, which begins on page

15.

Duplicate premium paid; Supporting reference nos. 055, 143, 211 and 362

Paid without proper documentation;

Supporting reference nos. 089 and 315

Charge for multiple months premium not broken into individual

monthly charge; Supporting reference nos. 214 and 325

Dental paid without requesting dental insurance EOB on member

with dental insurance premiums being paid; Supporting reference nos. 220 and 312

Incorrect amount entered for reimbursement; Supporting reference nos. 316 and 377

Amount paid in excess of member’s requested amount; Supporting reference no. 018

Claim incorrectly denied; Supporting reference no. 111

Orthodontic claim paid without validation of possible insurance

payment; Supporting reference no. 124


Paid premium claim as recurring claim in error;

Supporting reference no. 136

Paid under incorrect member account; Supporting reference no. 147

Recurring reimbursement claim requested amount not paid; Supporting reference no. 189

Incorrect amount reimbursed due to incorrect calculation on

member and spouse’s combined premiums; Supporting reference no. 200

Claim should have been denied as duplicate/previously paid versus

requesting additional information; Supporting reference no. 219

Incorrect date of service entered; Supporting reference no. 252

Claim coded under incorrect type; Supporting reference no. 315

Requested RX amount entered versus actual RX charge; Supporting reference no. 372

The audit revealed the following issues, which appear to be administered properly

by One Exchange, but should be brought to client attention for proper notification

or verification. Specific information regarding supporting reference numbers can

be found in the Audit Results Section in numerical sequence, which begins on page

15.

TPD multiple dates of service entered as one day only due to internal

procedure change versus Mail claims which are broken into

“Derivative Claim Details” as monthly dates of service;

Supporting reference nos. 065, 067 and 175

Mail premium for month entered with start and end date of xx/1/xx; Supporting reference nos. 002 and 037

Member dis-enrolled in plan resulting in file overpayment; Supporting reference no. 038

Future dated premium paid since member paid premium in advance; Supporting reference no. 052

Dental charges paid with documentation showing insurance payment

but not discounted amounts; Supporting reference no. 104

Secondary verification of eligibility not performed on member with

documentation showing eligibility earlier than on system; Supporting reference no. 119


Other Audit Findings/Observations

OneExchange, originally contracted with PEBP as Extend Health, has been the

administrator of Health Reimbursement Arrangement (HRA) claims for the PEBP

retirees since July 2011.

HCA recognizes the accuracy of the claims adjudication and measurement of the

performance guarantees, however, reports the following detected issues of possible

concern:

Carrier Issues causing Participant Errors

In the previous audit, multiple errors were detected in this audit that concern the

communication and accuracy of information transmitted from the insurance

carriers contracted with OneExchange as providers to participants. Examples of

this issue include where the carrier failed to communicate dis-enrollments for

months at a time. This audit reflects no major findings of this issue for the last

nine months of the plan year 2017.

Overpayments

It is HCA’s opinion that overpayments have become a serious issue as new

identified overpayments are far greater than successful collections.

Overpayments were found to be $786,384.99 at the time of this audit

representing 1,315 claims. This amount is an increase of $82,063.69 (11.6%)

from the previous audit last year. Causes of overpayments vary from rescinded

fundings from PEBP, reimbursement errors to carrier issues as described above.

Collections for overpayments become very difficult to collect when they age

more than two (2) years. Currently, of the 1,315 claims, 960 (73%) claims

representing $615,159.81 in overpayments are greater than two (2) years of age.

OneExchange Comment: Note that these overpayments did not necessarily

occur two years ago, but occurred in Plan Years that were 2 or more Plan

Years previous to 2017.

Date of Service (DOS) Entries

An issue detected in previous audits as well as this audit, concerned the date of

service entries into the PayFlex system. It is the auditor’s opinion that the exact

date(s) of coverage should be entered into the adjudication system in order for

the system to detect issues such as possible duplicates. As example, if a carrier

bills for multiple months such as January 01 – March 30, it is entered into the

system as 01 January – 01 January, and the system cannot detect a possible

duplicate if the carrier would bill for an individual month such as 01 February

– 28 February. It is HCA’s opinion that this operational procedure has caused

the system to not detect duplicates as identified and reported within this audit.

PayFlex received an authorization from One Exchange to change this practice

effective July 2015 verified by email documentation. It appears this change was

instituted to accommodate for separating plan year data for policies that have

mid-month effective dates.


OneExchange Resolutions to Previously Identified Issues

OneExchange submitted action plans for resolution of errors/problems identified in

previous audits. This audit reviewed these items for the continuing compliance of

agreed implementations. The following chart displays the results of

OneExchange/PayFlex compliance with said agreement(s):

Identified Issue OneExchange Resolution Compliance Inconsistency in acceptable

documentation and dates of service:

Revise premium claims processing procedures

to be consistent across the designated claim

examiners that will process the PEBP claims.

YES

Multiple prescription claims

should be entered as

individual claim lines:

PayFlex will process prescription claims

submitted as individual claims with their own

individual date of service and prescription cost on

separate claim lines.

YES

Prescription claim to include

participant name:

All RX documentation will include the five

elements acceptable per PEBP MPD for

payment

YES

Claims to be tracked when

received via fax or mail

Set up a separate facsimile number for PEBP

participants with a dedicated individual in

control of the que.

YES

Incoming fax and mail to be

bar coded/scanned per

OE/PayFlex commitment

OE/PayFlex has decided to not scan these

documents per their internal

investigation.

HCA found no

current errors and

finds this decision

as acceptable

Explanation of Payment should

allow for additional claim details to

be listed (limited to 14 service lines):

EOP will have multiple pages if necessary to

allow as many lines as needed to display a

complete listing of services.

YES

Processing time for the auto

reimbursement (AR) files:

PayFlex’s target time frame to load files

is within 48 business hours of receipt.

YES

Claim reprocessing due to

retroactive eligibility changes:

PayFlex has addressed the retroactive eligibility

changes in their software release

YES

Requested amount vs. actual

premium amount:

Standard practice is to only approve the lesser of

the requested amount or the eligible amount and

the system will only reimburse up to the

available account balance.

YES

Education via communication

- “How to Read an EOP”:

Both manual and systemic processes have been

enhanced as a result of the services being

transitioned to OneExchange and PayFlex. We

will work together to draft a communication

document that will educate participants on “How

to Read an EOP”.

YES Participant

communication

can be reviewed

in Exhibit A

Validation of Carrier Commissions

During the September 17, 2015 PEBP Board of Directors meeting, the

OneExchange representative was quoted that the average annual amount of

commission that we receive for each individual that is enrolled is $300. It was

requested that HCA validate the commissions earned by Willis Towers Watson

for the audited period.

The data received for this issue reflects a total of 14,190 individuals enrolled

during the PEBP Plan Year 2017. Enrollment multiplied by $300.00 per episode

equals $4,257,000.00.


Conclusion

It is HCA’s unbiased opinion that metric measurements for this audited period

were equal to or better than the agreed values within the Service Performance

Standards Related to HRA Services Agreement (Agreement), Attachment N,

with the exclusion of the following;

1) Underperformance of the > 98% Claim Processing Payment Precision

Guarantee. Penalty is to be 2% of total fees for the twelve (12) month

period being audited.

2) Underperformance of the > 98% Claim Financial Precision Guarantee.

Penalty is to be 2% of total fees for the twelve (12) month period being

audited.

3) Underperformance of the thirty (30) seconds HRA Customer Service

Average Speed to Answer Guarantee. Penalty is to be 2% of total fees

for the twelve (12) month period being audited.

HCA recommends that PEBP consider the collection of the penalty for the

underperformance of these categories.

Identified overpayments have increased to $786,384.99 with a volume of 1,315

claims. HCA is recommending that OneExchange continue the reporting to

PEBP that displays the cause/reason for each overpayment and provide an

operational process to collect these overpayments. HCA also recommends that

this process include reporting to help quantify and/or aid in identifying the

responsible party of the overpayment.

HCA is recommending that overpayments remain “active” for possible

collections indefinitely but inquiring with PEBP that the future audit reports

not include overpayments aged greater than four (4) years of age to match

reporting of other PEBP long term vendor audits.

OneExchange comment: Ages of overpayments are not noted in standard

reporting and as such could not be excluded from future audits.

Overpayments by default remain “active” and only resolve due to full

overpayment recovery.

HCA recommends that OneExchange attempt a solution that addresses the issue

of the one date entered for service dates when multiple months or time periods

are billed. Correction of this issue would allow the adjudication system to detect

and prevent possible duplicates as observed in this audit.

OE Response: Based on our premium processing guide we are to enter the

premium month with a start & end date of the first day of the coverage

month. This sets up a contract in our system & when the system separates

the claim into monthly lines it creates a date span. This is required to allow

our system to automatically pay out each month as it incurs. This does not

affect duplicates getting caught as duplicates are caught based on the start

date only.


AUDIT FINDINGS – DETAIL

Other Customer Service Measurements

Per Agreement, OneExchange/PayFlex is to respond to 98% of participant

escalated issues within 48 hours of receipt.

HCA Findings: The reporting for this issue reflected that OneExchange achieved

a 100% rating for this issue.

Per Agreement, OneExchange/PayFlex is to resolve 98% of participant escalated

issues within 30 business days of receipt.


a 98.2% rating for this issue.

HCA requested a report that displays the percent of incoming participant issues that

are resolved during the first incoming call.


a 97.5% rating for this issue, below the performance agreement. The results for

Quarter one period was 94.2%, Quarter two was 98.8%, Quarter three was 97.6%

and Quarter four was 97.9% for an annual average of 97.5%.

Current Overpayments

OneExchange reported a total value of $786,384.99 in identified outstanding

overpayments status that have an effect on 1,315 claims. This measurement largely

increased from the previous audit measurements and represents an increase of

$82,063.69 (11.6%) in identified overpayment dollars and an increase of 171

(14.9%) effected PEBP claims.

HCA had requested a detail report for this category (to be copied to PEBP staff) to

identify the cause(s) and possible solution(s) of the increasing overpayment issue.

OneExchange comment: Each of the 1,315 lines would individually need to be

researched. OE will need to meet and work internally to develop a possible

solution. Historically, death of a participant is the leading cause of overpayments.

The current 1,315 identified overpayments have accrued since July 2011 when this

administrator was initially selected. Of the overpayments, 960 (73%) are aged

greater than two (2) years. The breakout of these overpayments is as follows:

Period Number of Overpayments Value of Overpayments

PEBP Plan Year 2012 341 $232,919.50

PEBP Plan Year 2013 223 $134,784.38

PEBP Plan Year 2014 192 $131,477.62

PEBP Plan Year 2015 204 $115,978.31

PEBP Plan Year 2016 174 $ 93,949.75

PEBP Plan Year 2017 166 $ 75,168.73

PEBP Pln Yr 18 to date 15 $ 2,106.70

TOTAL 1,315 $786,384.99


Explanation of Payment (EOP)

OneExchange and PayFlex have made numerous changes and additions to their

Explanation of Payment (EOP) forms provided to participants in compliance with

recommendations from the previous audits.

During this audit, review of multiple participant communications to

OneExchange/PayFlex including telephone calls, emails, etc. detected a common

inquiry regarding their EOPs. The EOP displays certain accounting of their account

identified as “roll-over”. Since this is not essential information to the participant,

HCA recommends that this data be eliminated, thereby, making the EOP briefer

and less confusing to the participant(s).

OneExchange comment: That is currently not an option at this time, as this

language is global to PayFlex’s book of business.

Participant Funding

The audit reviewed the timing of the PEBP funding as it was made available to the

participants. The following listing reflects the date that funds were available to

participants during the period of July 2016 through June 2017:

Qualified Month Date Funds Available Qualified Month Date Funds Available

July 2016* June 30, 2016 January 2017 December 30, 2017

August 2016 July 31, 2016 February 2017 January 31, 2017

September 2016 August 31, 2016 March 2017 February 28, 2017

October 2016 Sept. 30, 2016 April 2017 March 31, 2017

November 2016 October 31, 2016 May 2017 April 28, 2017

December 2016 Nov. 30, 2016 June 2017 May 31, 2017

Please note: A one (1) time fund deposit authorized by the PEBP Board of

Directors was conducted in July 2016.

Participant Survey

HCA requested the results of any Customer Surveys conducted within the audited

period. Results supplied as following:

Category

Qtr One

Qtr Two Qtr Three Qtr Four

Completed Surveys 188 291 451 316

Overall Service Satisfaction 4.1 of 5 4.2 of 5 4.0 of 5 4.3 of 5

CSR OSAT 4.3 of 5 4.5 of 5 4.3 of 5 4.6 of 5

CSR Care/Concern 4.2 of 5 4.8 of 5 5.0 of 5 5.0 of 5

Resolve Issue on Call 74.2% 83.7% 70.7% 82.6%

Recommend (NPS) 28 40 27 48

Satisfaction with Wait Time 3.8 of 5 4.1 of 5 4.0 of 5 4.4 of 5

CSR Ability to Find Solution 4.1 of 5 5.0 of 5 4.8 of 5 5.0 of 5

Work with CSR again? 84.4% 90.9% 84.1% 90.7%


Breakdown of Claims Audited

The individual claim requests audited were randomly selected from PEBP’s claims

listings as supplied by OneExchange. The detail claims listing supplied, reflected

each separate service as a claim. These claims were processed by

OneExchange/PayFlex from 01 July 2016 through 30 June 2017. These claims

were stratified by dollar volume to assure that HCA audited all types of claims.

The breakdown of the 400 random selected claims is as follows:

Type of Service Requested Amount Audited (Req – Denied) Paid Amount

Medical $ 8,644.21 $ 6,523.81 $ 3,191.13

Dental $ 9,919.20 $ 9,084.40 $ 8,748.40

Vision $ 4,614.76 $ 3,913.63 $ 3,757.57

Premiums $ 38,408.09 $ 36,635.72 $ 21,337.22

Prescription $ 3,323.98 $ 3,227.91 $ 2,669.15

Deductible $ 1,211.27 $ 1,148.07 $ 1,148.07

Over The Counter $ 197.60 $ 3.07 $ 3.07

Orthodontia $ 2,316.05 $ 2,316.05 $ 2,016.05

TOTAL $ 68,635.16 $ 62,852.66 $ 42,870.66

Payment Accuracy

Per agreement, payment accuracy for the randomly selected claims should be 98%

or above. Payment accuracy is defined as a claim that was processed for payment

without a payment or non-payment error. Payment Accuracy is calculated by

dividing the total number of claims not containing payment errors in the audit

period by the number of claims audited within the random selection.

The Payment Accuracy Percentage of the number of claims paid correctly from the

OneExchange random selection for this audited period is 96.0%.

Payment Accuracy

Medical …

Vision …

Premiums 58.30%

Dental …

Prescription…

Deductible1.80%

Orthodontia3.70%

Over The Counter0.01%

Claim Audited $ Distribution MedicalVisionPremiumsDentalPrescriptionsDeductibleOrthodontiaOver The Counter

98%

96.0%

80% 85% 90% 95% 100%

Payment Accuracy

Guarantee


Financial Accuracy

Per agreement, financial accuracy for the randomly selected claims should be 98%

or above. Financial accuracy is defined as total absolute value (overpayments and

underpayments) as difference of the correct payment amount. Financial Accuracy

is calculated by dividing the total dollar amount of claims not containing payment

errors in the audit period by the dollar amount of claims audited within the random

selection.

The Financial Accuracy Percentage of the number of claims paid correctly from

the OneExchange random selection for this audited period is 96.36%.

Financial Accuracy

Statistical calculations for the metric measurement of the Performance Guarantees

are calculated of the claims adjudicated from the period of 01 July 2016 through 30

June 2017 (PEBP Plan Year 2017). Specific audit error findings and issues can be

reviewed within the Specific Claim Audit Detail section of this report, which begins

on page 15.

Turnaround Time

Turnaround time for claim payments is measured in business days from the date

OneExchange/PayFlex receives the claim to the date the claim was processed and

also from the date received to the date of payment. Per agreement, all claims in

aggregate will be processed within an average of two (2) business days and 98% of

all claims will be processed within five (5) business days.

HCA requested a lag report from PayFlex that displayed the processing turnaround

times. This report reflected that the audited period turnaround time for processing

claims was 0.59 business days and also meeting the 98% of claims processed within

5 business days guarantee. The random selection was tested for the average

turnaround with a result of 2.0 business days.

During the audited period, OneExchange received 677 Emails from participants to

the Email team and 384 Emails to the Customer Service Support team seeking

information. The average time to respond to these emails was 24 hours. PayFlex,

please supply the information for this issue.

98%

96.36%

80% 85% 90% 95% 100%

Financial Accuracy

Guarantee


Policy, Procedures and System

OneExchange receives the funding and eligibility data directly from PEBP

and relays this information to PayFlex on a regular basis.

OneExchange applies received funding and eligibility data weekly, every

Thursday. OneExchange stated that they are moving toward updating

eligibility daily. Allocations are applied to the HRA’s by the first of the month.

Participants with retroactive qualification will receive their allocation on the next

weekly file following qualification.

Claims are received at the PayFlex facility in Omaha, Nebraska by mail, facsimile

and other third party requestors such as insurance carriers. PayFlex stated that all

claims received from PEBP participants are scanned into the PayFlex system the

date they are received and assigned a document identification number.

Claims are transferred and archived into the PayFlex adjudication system,

Complete Benefit Administration System CBAS) within forty-eight (48) hours of

receipt. PayFlex has utilized this system since 2006 and owns the key for any

program changes.

PayFlex has a two (2) level appeal process for claims questioned by PEBP

participants. If the two appeals are exhausted with PayFlex, the participant has the

right for a third level appeal. When this level is achieved, the claim is sent to

the client for final disposition.

PayFlex stated that they have internal written Standard Operating Procedures

(SOP). HCA reviewed these SOPs during the on-site portion of the audit:

1) Standard requirements for documentation from PEBP participants for

payment of premiums, prescriptions and medical reimbursement

requests;

2) Standard operations requirements of PayFlex associates for all processes

from receipt of the request to payment.

HCA had requested a written response from OneExchange and/or PayFlex that any

and all PEBP Personal Health Information (PHI) is retained with secured

practices within their operating systems and that no PHI is shared, transferred or

obtained to any other entity other than OneExchange or PayFlex, including any

subcontracted or entities that have acquired their businesses since the authorization

of their vendor contract with PEBP.

OneExchange comment: There has been No PHI shared or transferred or

obtained to any other entity

PayFlex stated that they have over fifty (50) experienced processors for requests

received in the Omaha, Nebraska facility. PayFlex stated that PEBP has no

dedicated processors assigned to their account, however, PayFlex has designated\

15 examiners to adjudicate the OneExchange client claims.


Initial processor training lasts from two (2) weeks to six (6) months depending on

the individual. PayFlex stated that they conduct internal audits on all processors.

New processors have 100% audit until the supervisor is satisfied with their

performance. Experienced processors have four (4) claim lines audited per every

three hundred and fifty (350) lines processed.

OneExchange stated that they have over three hundred (300) Customer Service

Representatives that address all incoming inquiries from client participants.

PayFlex also stated that they have over eighty (80) Customer Service

Representatives to provide services to their clients. Both OneExchange and

PayFlex stated that no Customer Service Representatives are dedicated to the

PEBP plan.

Customer Service

Per agreement, the average incoming telephone response time should be within

thirty (30) seconds or less. The report supplied by OneExchange reflected that the

average answer speed for all incoming calls during the period of 01 July 2016

through 30 June 2017 was 46.5 seconds (0:46.5)*. The average response time for

Quarter One was 135 seconds, 26 seconds for Quarter Two, 2 seconds for Quarter

Three and 20 seconds for Quarter Four. Please note: It is HCA’s opinion that the

report received may contain erroneous data as five (5) months of this year had a

telephone response time averaged at 4 seconds.

Telephone Average Response Time

Per agreement, the abandonment rate must be under five percent (5%) of total

incoming. HCA has reviewed the appropriate report for the audited period, which

revealed the abandoned calls ratio to be 2.7% for the period of 01 July 2016 through

30 June 2017 (period measurable against the Performance Agreement)*. The

average abandonment rate for Quarter One was 6.2%, 2.4% for Quarter Two,

0.27% for Quarter Three and 1.9% for Quarter Four. Please note: It is HCA’s

opinion that the report received may contain erroneous data as five (5) months of

this year had an abandonment rate averaged at 0.34%.

Abandonment Rate

Please note: OneExchange utilizes an Integrated Telephone System and these

customer service performances are measurements after the participant

completes the integrated inquiries that aid in the directing of the call.

30

46.5

0 10 20 30 40 50 60

Response (in seconds)

Performance Guarantee

5

2.7

0 1 2 3 4 5 6

Percentage of Calls Abandoned

Performance Guarantee


Reporting

Per Agreement, the following reports will be available within ten (10) business days

of the end of the reporting period if requested or scheduled by the last day of the

reporting period or later if agreed to by PEBP. Analyses of data or custom reports

are excluded.

Standard:

Ledger Summary

Production Payment Register

Deposit Summary

Payment Summary

Optional:

Employer Funding Summary

Employer Funding Detail Report

Overpaid Employees Report

Quarterly:

S.C.O.R.E. Analysis

Account utilization

Claim information

Direct Deposit

Benefit Reports (Included in the quarterly board presentation):

Retiree Enrollment Decisions

Retiree Premium Costs

Retiree Survey Results

Benefit Customer Service Matrices

Issue Resolution Summary

Quarterly board presentations will be provided fifteen (15) business days prior to

the quarterly board meeting where it is scheduled for presentation.


SPECIFIC AUDIT RESULTS Listed below are the errors or issues of discussion found by this audit while

processing the claims for PEBP Exchange HRA Plan.

Ref. No. 002 One Exchange claim no.

NOT charged in statistical calculation. Note to client for information only.

Mail – Premium

The coverage date entered into the system for this part D premium is

9/1/16 to 9/1/16. Shouldn’t date span be 9/1/16 to 9/30/16 versus 9/1/16

to 9/1/16?

Please note: on patient’s EOP the medical premium for $214.53 is

entered into system as 9/1/16 to 9/30/16.

One Exchange response: Based on our premium processing guide we are

to enter the premium month with a start & end date of the first day of the

coverage month. (pg. 4 of the premium processing guide under data entry)

The $214.53 is a recurring claim that was initially set up as 1/1/16-12/1/16.

This sets up a contract in our system & when the system separates the

claim into monthly lines it creates a date span. This is required to allow our

system to automatically pay out each month as it incurs. This does not

affect duplicates getting caught as duplicates are caught based on the start

date only.


Overpayment - $40.00

Patient submitted a Recurring Premium Reimbursement form for Dental,

Vision & hearing premiums of $54.00/mo. Patient submitted proof of

coverage from Senior Care Plus for a total of $94.00/mo. w/a * note that

displays “$54.00 of this premium is for dental, vision & hearing”.

Shouldn’t reimbursement be for $54.00 as requested versus $94.00/mo.?

One Exchange response: If the member requests reimbursement for an

amount that is less than the entire premium amount we still enter the

entire premium amount. This is required to identify duplicates. (Premium

Processing Guide pg. 5,g) This claim was processed correctly.

HCA note: It is understood why PayFlex enters the entire premium

amount(s) so the system can identify possible duplicates, however, there

are numerous reasons a member may not want reimbursement for the

entire amount and many systems can handle this scenario by identifying

possible duplicates by looking at multiple factors on a claim and pay a

different amount such as the one utilized by PEBP’s TPA.




Claim came in by mail

Documentation for premium shows coverage period of 7/1/16-7/31/16.

Shouldn’t 7/1/16-7/31/16 have been entered into system versus

7/1/16-7/1/16?

One Exchange response: Based on our premium processing guide we are

to enter the premium month with a start & end date of the first of the

coverage month (page 4 of the premium processing guide under data entry)



11/1/16-11/30/16 Med Part D premium pd $51.00 on 11/1/16 originally

EOP dated 2/3/17 now showing premium of $51.00 being denied due to

not being covered.

It appears in Feb 2017 contributions starting with 11/2016 were reversed.

Then in April 2017 contributions all the way back to 5/2015 were reversed.

Why?

One Exchange response: On 1/28/2017 we received notification that the

participant was disenrolled from their plan as of 10/31/2016. The

November 2016 to February 2017 allocations were retracted correctly.

On 4/12/2017 funds were retracted back to May 2015, which was due to

our file process at the time. The program start dates were changed in error

but then fixed back the next week, 4/19/2017. The file process has now

been automated to prevent this issue from occurring in the future.



Submission for Medicare premium of $534.00 (44.50/mo.) for DOS

1/2016-12/2016 received on 8/23/16.

Reimbursement was made for premiums for 9/2016, 10/2016, 11/2016 &

12/20/16. Since these DOS are in the future why are we paying these on

8/24/16? (Note: Patient paid premium in full)

One Exchange response: State of Nevada allows future dated premiums

to pay out if the member submits a standard claim form and provides us

with proof of payment showing they have already paid the premium.




Charge for dental premium for august for member

According to EOP $42.84 for Aug 2016 paid twice. Per documentation

could only find info for member. Has the Aug 2016 dental premium of

42.84 been paid twice?

One Exchange response: Yes the Aug 2016 $42.84 was paid out twice.

The member submitted twice. Once for only August and once for Aug-

Dec as recurring. The system did not catch the duplicate due to the

original amounts & dates of the recurring claim. 2nd claim should not

have been paid.



Claim for TPD from Anthem – appears to be premium for year

Entered into system as 9/1/16-9/1/16. Shouldn’t this have been broken

down into 12 months?

One Exchange response: TPD claims are entered with a start & end date

of the first of the month. If a date span is sent over from the carrier, only

the first of the start date is input into the system. This process was put in

place back in July of 2015 (as recorded in the previous audit). Inputting

a date span would cause many claims to be split & denied incorrectly.

One Exchange continues to work with the insurance carriers to move to

this standard & send as individual months on the files.

HCA Note: Claims for premiums received by Mail or Web with a multiple

month date span are broken down into “Derivative Claim Details” with

each month entered separately.



Claim for 3 months premium TPD from Anthem

Claim DOS entered as 9/1/16-9/1/16. Shouldn’t DOS reflect the 3 months

or should claim be broken into 3 lines, one for each month?

One Exchange response: TPD claims are entered with a start & end date of

the first of the month. If a date span is sent over from the carrier, only the

first of the start date is input into the system. This process was put in place

back in July of 2015 (as recorded in the previous audit). Inputting a date

span would cause many claims to be split & denied incorrectly. One

Exchange continues to work with the insurance carriers to move to this

standard & send as individual months on the files.

HCA Note: Claims for premiums received by Mail or Web with a multiple

month date span are broken down into “Derivative Claim Details” with

each month entered separately.




Audited claim denied for request of insurance EOB

See claim detail id xxxxxx DOS 9/20/16 - $13.00 paid with same

documentation as audited claim. Why was documentation accepted here

but not on audited claim?

One Exchange response: The 9/20/16 $13 was paid in error. This

document is not sufficient.



Patient submitted a request for 72.60 credit card payment to dentist

The DDS statement provided displays the dentist charge of $248.00,

Payment to the dentist of $175.40 from Delta Dental of MI, however the

statement does not display the network reductions, allowable discounts,

etc. and therefore the dentist would be taking advantage of the member.

In this scenario should we be requesting the Delta Dental EOB to reflect

any discounts that should have been applied?

One Exchange response: We do not require an EOB if we have an itemized

statement & we can see the insurance payments. Typically discounts/

adjustments would also be reflected on the statement if the provider is in

network, therefore an itemized statement showing insurance payments is

acceptable. (Claims Adjudication Manual pg. 29 DEN-6)



Patient submitted a request for reimbursement of 92.60 for DOS 8/23/16

dentist payment. Patient submitted dentist statement w/charges, proof of

92.60 payment and payment of insurance by Healthscope of $0.

Should this member have been reimbursed $92.60?

One Exchange response: Yes, the claim should have been approved &

paid. This claim was resubmitted and paid out 2/10/17. See: “111 PEBP

Audit.pdf”



Patient submitted request for reimbursement of Medicare premium for

8/1/16 to 8/31/16 of $243.60. Patient also submitted docs for Medicare

verification. System reflects PEBP funding did not start until 10/1/16.

Is there any process that would check w/PEBP for eligibility in such

circumstances?

One Exchange response: The eligibility dates come over on a file. There is

no secondary process for verification because the file that comes over is

controlled by PEBP.



Over/Underpayment - $0.00

Patient submitted a request of $2,000.00 for ortho services of 9/29/16

w/provider’s statement of $2,000.00 check payment on 9/29/16.

1) The provider statement reflects payments of insurance by Healthscope.

Shouldn’t the EOP have displayed the PayFlex remark “This expense may

be eligible for insurance benefits. Please submit the explanation of

benefits.”

2) Statement from provider reflects no insurance payment for these

services. Checked w/TPA, claim was never submitted to insurance &

possibility of payment under dental and/or medical DX would be

determined by PEBP’s administrator.

One Exchange response: 1) An itemized statement showing insurance

payments is sufficient. We would not require an EOB. 2) Orthodontia

expenses are recognized by the IRS as different from other claim

expenses. We do not require an EOB for ortho because there is no

estimated insurance. If insurance is involved it tis a set amount so the

member will never pay more than they are liable for. An EOB is not

acceptable without proof of payment because some EOBs show the entire

ortho but only pay out monthly. It might not prove the member actually

paid. (per page 27 of the processing guide). This claim was processed

correctly.

HCA note: It our opinion that Orthodontia services should be treated as all

dental claims. Many networks, including PEBP’s, have discounting,

maximum contract rates and possible payments that can be applied. In this

case, the itemized statement did not reflect any insurance payment(s) or

discounts. Actually, the claim was never submitted to HealthSCOPE for

adjudication. A payment error was charged but no financial error. It is our

opinion that technically, the $2,000 check payment should not have been

made without verification of the insurance reductions or possible payments

without the insurance EOB.



Overpayment - $14.00 Web claim

Claim for vision premium from VSP. Documentation shows payment of

$14.00 for Nov premium. DOS for this charge entered as 11/1/16-12/1/16.

Shouldn’t we have only paid $14.00 for this service?

(Note: Dec 12/1/16 VSP prem of $14.00 paid on claim detail id xxxxxx)

One Exchange response: The member submitted this as a Recurring claim

for a two month span. That is why we see 11/1-12/1 with a total requested

of $28 and a monthly contact amount of $14. (this claim is for two months)

The 2nd claim xxxxxx is not a part of the claims selection & would be a

biased claim. We acknowledge this claim is a duplicate and should not

have been paid. The member submitted the December claim a second

time. The member submitted the December claim a second

time. $28 was not a duplicate at the time of payout. The 2nd $14 was the

duplicate, which is a biased finding.

HCA Note: Documentation for audited claim shows payment of $14.00 on

10/27/16 to VSP – submitted by Web – no indication of recurring claim.

Claim id xxxxxx with claim detail ids of xxxxxx for DOS 12/1/16

documentation shows payment of $14.00 on 11/27/16 to VSP and xxxxxx

for DOS 1/1/17 documentation shows payment of $14.00 on 12/27/16 to

VSP. Two claims were paid for the same month creating the duplicate

payment. HCA looks at the history of the claims associated with these

payments. HCA has not received or could find any agreement language

that would not allow this type of duplicate payment to be excluded as a

calculated error.



Member set up recurring Medicare AARP Supplement plan dated 12/8/15.

1) TPD also being submitted from insurance carrier. TPD premiums, per

claims review, for 7/1/16, 8/1/16, 9/1/16 & 10/1/16 denied as dups to

recurring payment. Shouldn’t TPD for DOS 12/1/16 (audited) have also

been denied as a dup?

#2 NOT charged in statistical calculation. Note to client for information.

2) Also TPD for 11/1/16 (claim detail id xxxxxx) have also been denied?

One Exchange response: Both the Dec & November TPDs should be

denied as duplicates. The system failed to recognize these as duplicates

based on a processing error made by the examiner who keyed in the

recurring claim. She entered the claim as a MEDB premium type instead

of a MED premium type. Up until Nov 2016 our system checked for

duplication using expense type, date & amount. An enhancement was put

in to include the premium expense type at the beginning of Nov 2016.

This is why we see the duplicates being caught up until November. The

system would have caught this as a duplicate & denied appropriately if

the Recurring claim had been keyed correctly.




Appears the claim was for a different member & was paid under incorrect

account? Issue was discovered and overpayment requested on 12/28/16.

(Note: Multiple charges paid under incorrect account – total requested

overpayment 332.20)

One Exchange response: That is correct. Husband & wife submitted

multiple claims together in the same submission. The claims for husband

were keyed under wife’s account in error. Wife called in & requested we

deny husband’s claims & create an overpayment. Husband’s claims were

then keyed under his account. This was all resolved 12/27/16 & the

overpayment rectified by 1/17/17.



This reimbursement is for AARP Medical Supplement DOS 1/1/17

through 12/31/17. Member reimbursed 1541.75 for the entire year. Due

that DOS is entered into the system as 1/1/17-1/1/17, how will system

detect possible duplicates if member requests for reimbursement of one

or multiple months other than DOS 1/1/17?

One Exchange response: As stated in previous responses with how TPD

claims are put in the system, the process of only inputting the 1st day of

the begin date was put in place in July 2015. If the member were to also

submit manual claims, duplicates would not be caught. Carriers should

send these over as individual monthly amounts. One Exchange continues

to work with the carriers to move to this standard.



Premium – Mail

This reimbursement is for Medicare Part B. Member submitted Recurring

Medicare Part B Reimbursement form for 1/1/17 through 12/31/17 in the

amount of $134.00/mo.

His SSA letter dated 12Nov16 reflects his monthly deduction Part B of

$267.90/mo.

Each month for 2017 the system displays 2 claims each mo. – one for

134.00/mo. and one for 133.9.0/mo. Since member requested the $134.00

why is the 133.90/mo. being adjudicated?

One Exchange response: $134 is the Standard Medicare premium amount.

$133.90 is for the income related monthly adjustment amount, both are

eligible. However, members do not have to claim both amounts. If they

choose to only ask for the standard amount or just the IRMAA amount

we will honor that. (Premium processing guide pg. 2, #5) It seems in the

first submission he only asked for the IRMAA amount & in this

submission he asked for only the standard amount.




Recurring premium reimbursement – member requesting 181.50 per

month for premium for spouse. Why did we pay 225.47 for 3/1/17?

One Exchange response: $225.47 is the full premium amount for that

month and our process is to use the full amount. We have exceptions

where we can use the requested amount but because they asked for her

“without discounts” rate we have no idea what her real portion (with

discounts & adjustments) would be so we are required to then use the full

premium amount. This claim was processed correctly, per the Processing

Guidelines.

HCA Note: HCA understands the reasoning behind the amount paid

however, upon review of the file this claim is overpaid.

The member requested reimbursement for spouse only. Per documentation

from AARP Supplemental Plans member’s premium is $144.75/mo. and

spouse’s premium is $181.50. After discount & adjustments total monthly

payment due for both premiums for March 2017 is $225.47.

Member has TPD payment for AARP Med Supp of $110.47. (Member has

always had this premium as TPD per claims history.) Therefore, we should

have only reimbursed $115.00 for spouse’s portion of March 2017

premium. The documents within the file are sufficient to reflect that the

Reimbursements exceed the member’s liability and what is actually paid

by the member after discounting/adjustments are calculated, thereby,

creating said overpayment.



Charge appears to be for recurring premium reimbursement for Aug 2016

paid as: $55.00 on 7/5/17 & $96.42 on 8/1/17

Same premium amount for 8/1/16 came in as TPD and paid on 8/4/16.

Is audited claim a duplicate to TPD and should have been denied?

One Exchange response: Yes the audited claim is a duplicate to the TPD

claim & should have been denied.


Over/Underpayment - $0.00 Charge for $516.00 for 12 months ($43/mo.)

Claim was paid as: 1/1/17 req’d $172.00 pd $172.00

2/1/17 $172.00 $172.00

3/1/17 $172.00 $172.00

1) Why was claim paid as 3 months at 172.00 versus 12 months at 43.00?

2) Wouldn’t system be unable to catch a possible dup if member resubmits

for one month?

One Exchange response: 1) Data entry on this claim is incorrect. We

should have entered as individual months. Amount paid is correct. 2)

Correct, duplicates would not be caught. I’ve checked the account and to

date this was their only MED B submission. No duplicates found.



Over/Underpayment - $0.00 Claim denied for additional information

Claim had been paid under claim detail id xxxxxx received 1/18/17 &

adjudicated 1/27/17 w/same documentation

Shouldn’t charge on audited claim have been denied as a dup versus

denied requesting info?

One Exchange response: Claims examiners process off of what is

presented to them in the claim. They do not check the history of past

claims. Because the documentation was insufficient for this claim, they

denied appropriately.

HCA Note: Charge should have been caught by system as a duplicate

that had been previously paid versus requesting information that would

make the member go through the time and effort to supply the data only to

be denied again because this claim was already paid.



Dental claim paid without requesting dental insurance EOB. (No

insurance info showing on ledger sent as documentation.)

Shouldn’t we have denied for additional information/insurance EOB?

(Note: Claims history shows dental premiums being paid)

One Exchange response: If our documentation does not mention or

indicate insurance we can not assume they have dental insurance.

(pg. 27 of Claims Adjudication manual) Examiners do not go into

the claims history when processing so they would not have known

the history shows dental premiums being paid. They are to process

based off what’s presented to them in their claim. This claim was

processed correctly.

HCA note: In cases where there is possible reductions, etc. due to possible

insurance coverage, claims are denied and a request is made for an

insurance EOB. HCA believes this claim should have requested the EOB

especially with the fact that the system reflects positive dental insurance

for this member during this period.


Over/Underpayment - $0.00

Patient remitted reimbursement for 18.40 medical

Statement on Account displays DOS of 12/2/16. Receipt displays DOS

of 12/2/16 w/receipt date of 1/27/17

1) Entry into system reflect DOS of 1/27/17. Shouldn’t DOS have been

entered as 12/2/16?


2) Other claim requested for 216.60 for DOS 12/5/16 also entered as DOS

1/27/17.

One Exchange response: 1) Agree DOS should be 12/6/16. 2) Agree DOS

should be 12/5/16.




Per claims history TPD being paid for dental insurance

1) No indication on documentation received that dental insurance made a

payment. Shouldn’t we have denied the claim for dental EOB?

(Note: Total claim submitted for dental charges – DOS 3/3/17

pd 142.00, DOS 3/9/17 pd 2563.00 and DOS 3/25/17 pd 734.00

for a total of $3439.00 paid to member)


3) Claim detail id xxxxxx also for dental DOS 4/5, 5/9 & 6/22/17

requested 2879.10 and paid 2879.10 without documentation of dental

insurance payment or denial.

One Exchange response: Examiners process off of what is presented to

them in the claim. If no dental insurance is listed or indicated we can

not assume they have dental insurance so we allow the claim (see DEN-7

in claims adjudication manual pg.30). This claim was processed correctly.

HCA note: In cases where there is possible reductions, etc. due to possible

insurance coverage, claims are denied and a request is made for an

insurance EOB. HCA believes this claim should have requested the EOB

especially with the fact that the system reflects positive dental insurance

for this member during this period.


Overpayment - $7.00

1) Appears to be under type deductible versus dental

2) Per documentation appears there is dental insurance but no indication

on statement of actual dental insurance payment being made. Shouldn’t

this charge have been denied for request of dental EOB?

One Exchange response: The claim should be coded as Dental. $40 applied

to the deductible and is ok to allow. An EOB should have been requested

for the remaining $999.40. The requested EOB shows that this paid

amount is correct.

Update received from PayFlex on 13 September: PayFlex sought the EOB

for this claim and supplied a copy to HCA. The EOB from HealthSCOPE

reflected a billed amount of $3,469 with $33.00 deductible paid by patient

and a patient responsibility of $1,129.00. Even though the EOB should

have been obtained before any payment(s), only the $7.00 overpayment

(proof verifies payment of only $33.00 deductible)of the $40.00 payment

for the deductible was charged.



Overpayment - $6.17

Documentation provided only shows 2 RX claims for 8/29/16 – one for

$6.26 & one for $6.37. Please provide documentation for this charge on

audited for $6.17.

One Exchange response: This is a typo error. The amount entered should

be $6.37 not $6.17. As previously agreed upon, this was a data entry error.

Underpayment amount should be $0.20.

HCA Note: This charge should have been denied as a duplicate as DOS

8/29/16 for $6.37 had been previously paid under claim detail id xxxxxx.



Submission also contains health insurance premium of 183.96 for 3 mos.

Charges were lumped on one line as DOS 2/1/17-3/1/17 for $551.88,

paid 551.88.

Shouldn’t these charges have been paid by each month versus lumped all

together?

One Exchange response: The claims were lumped because the member

submitted a recurring claim. There is a monthly contract amount of

$183.96 listed. The examiner used the wrong end date, that is why the

system did not break out the claim into monthly lines. End date of 4/1

should have been used instead of 3/1. Amount paid out is correct .



Appears audited claim is duplicate payment of claim xxxxxx

Appears member set up recurring Medicare Part B reimbursement for

period 1/1/17 through 2/1/18 and also sends in recurring Medicare Part B

forms for each 3 months. Each are paid at $134.00/mo.

Duplicate payments for each of Feb 17, Mar 17, Apr 17, May 17, Jun 17

and July 17 – 3 mo recurring for 8/1-10/17 was denied for additional

info required.

One Exchange response: The audited claim is a duplicate & should be

denied. The other out of scope claims should also be denied. I will

correct the account & have an outreach to the member.




Member requested 22.14. Documentation shows actual RX charge of

22.24. Shouldn’t we have paid 22.24?

One Exchange response: For 213d expenses we go off of the amount the

member requested. Our total requested should always match their total

requested. This was keyed correctly.

HCA Note: Please see Ref. No. 316. This was also an RX reimbursement.

Due to an incorrect charge amount being entered, the system did not flag

the charge as the duplicate it was. This could be paid again if the member

resubmits requesting the correct amount of 22.24.



Member requested $82.36. Documentation received shows insurance

EOB and made payment with patient responsibility being 82.36.

Shouldn’t we have just paid 82.36?

(Note: Original denied for EOB from insurance on claim detail id xxxxxx

request for 82.36)

One Exchange response: This claim was entered with the wrong amount.

$82.36 should have been entered & paid. $329.43 was paid in error.


EXHIBIT A

Understanding Your Explanation of Payment (EOP) Statements

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