| Financial Audit Division | Released May, 2019 |
The Department of Human Services (DHS) is responsible for overseeing Minnesota’s public health care programs, and the department contracts with managed care organizations (MCOs) to provide certain administrative functions and services to enrollees. To manage pharmacy providers and related services under these programs, each MCO contracts with a “pharmacy benefit manager” (PBM). For calendar year 2018, eight MCOs reported $964 million in pharmacy expenses for Minnesota Health Care Programs (MHCP) to serve approximately 961,000 enrollees, including members who were enrolled in MHCP and also received Medicare coverage.
The Office of the Legislative Auditor audited these eight MCOs to determine their compliance with key legal and DHS contract requirements regarding MCO oversight of pharmacy benefit managers and reporting of pharmacy claims data to DHS. Our audit scope focused on DHS contracts and samples of payments to pharmacy providers reported to DHS by the MCOs during calendar years 2017 and 2018.
Blue Plus, Hennepin Health, Medica Health Plans, PrimeWest Health, South Country Health Alliance, and UCare complied with the legal and DHS contract requirements we tested for oversight of their respective pharmacy benefit managers. HealthPartners and Itasca Medical Care also generally complied with these requirements, although we identified some missing provisions related to subcontracts.
For the sample of pharmacy encounter records we tested, Blue Plus, Hennepin Health, HealthPartners, PrimeWest, and South Country Health Alliance complied with selected legal and DHS reporting requirements, and the payment information was accurate, complete, and timely. Itasca Medical Care, Medica Health Plans, and UCare Minnesota timely reported their encounter data but did not comply with DHS’s contract requirement to report the amount that was paid to the pharmacy provider.
Finding 1. HealthPartners did not address two key federal requirements in its contract with its pharmacy benefit manager.
Finding 2. Itasca Medical Care did not address four key state and federal requirements in its contract with its pharmacy benefit manager.
Finding 3. Itasca Medical Care did not comply with a Department of Human Services’ requirement to report in its encounter data the amounts that were paid to pharmacy providers. Instead, Itasca Medical Care reported the claim amounts that the MCO paid to its pharmacy benefit manager.
Finding 4. Medica did not comply with a Department of Human Services’ requirement to report in its encounter data the amounts that were paid to pharmacy providers. Instead, Medica reported the amounts that the MCO paid its pharmacy benefit manager for pharmacy provider services.
Finding 5. UCare did not comply with a Department of Human Services’ requirement to report in its encounter data the amounts that were paid to pharmacy providers. Instead, UCare reported the per-claim amounts that the MCO paid to its pharmacy benefit manager.
