s 368.014 L72AEC 2006 STATE OF MONTANA and MONTANA UNIVERSITY SYSTEM ANALYSIS AND EVALUATION OF CLAIMS PROCESSING FOR THE PERIOD JANUARY 1, 2004 THROUGH DECEMBER 31, 2005 COLLECTION STATE DOCUMENTS jAM I 2007 MONTANA STATE UaUARY IE15 E. 6th AVE. -! EN/ MONTANA 5< i Prepared Under Contract With: MONTANA LEGISLATIVE BRANCH, AUDIT DIVISION PO Box20170S,Helena MT59620-1^05 MontanaStaleLibrary 3 0864 1003 8893 6 LEGISLATIVE AUDIT DIVISION Scott A. Seacat, Legislative Auditor Deputy Legislative Auditors: Tori Hunthausen, James Gillett ChiefDeputy Legislative Auditor Jim Pellegrini November 2006 The Legislative Audit Committee ofthe Montana State Legislature: Enclosed is the report on the audit ofthe medical and pharmacy claims forthe employee benefits plans at the State ofMontana and the Montana University System forthe two years ended December 31, 2005. The audit was conducted by Wolcott & Associates undera contract between the firm and ouroffice. The comments and recommendations contained in this report represent the views ofthe firm and not necessarily the Legislative Auditor. The agencies' written responses to the report recommendations are included in the back ofthe audit report. ectfully submi Scott A. Seacat Legislative Auditor 06C-07 Room 160 StateCapitol Building PO Box 201705 Helena, MT 59620-1705 Phone(406)444-3122 • FAX (406)444-9784 E-Mail [email protected] Digitized by the Internet Archive in 2011 with funding from Montana State Library http://www.archive.org/details/analysisevaluati2006wolc STATE OF MONTANA and MONTANA UNIVERSITY SYSTEM ANALYSIS AND EVALUATION OF CLAIMS PROCESSING FOR THE PERIOD JANUARY 1, 2004 THROUGH DECEMBER 31, 2005 ADMINISTERED BY BLUE CROSS BLUE SHIELD OF MONTANA and ALLEGIANCE BENEFIT PLAN MANAGEMENT, INC. FINAL REPORT DECEMBER, 2006 PRESENTED BY WOLCOTT & ASSOCIATES, INC. 12120 STATE LINE ROAD, SUITE 297 LEAWOOD, KANSAS 66209 111 STATE OF MONTANA AND MONTANA UNIVERSITY SYSTEM HEALTH CARE PLAN AUDIT OF BLUE CROSS BLUE SHIELD OF MONTANA AND ALLEGIANCE BENEFIT PLAN MANAGEMENT, INC. JANUARY 1, 2004 - DECEMBER31, 2005 TABLE OF CONTENTS SECTION PAGE INTRODUCTION I- 1-1 U - STATISTICAL CLAIM AUDIT RESULTS - STATE & MUS n-i ELIGIBILITY m-i III - IV - BCBSMT & ALLEGIANCE REIMBURSEMENT IV- V - CLAIM PAYMENT TURNAROUND TIME v-i VI - COST CONTAINMENT VI- VII - LOGIC AND OTHER TEST RESULTS VII- OTHER REVIEW AREAS vm-i VIII - IX - PRIOR AUDIT RECOMMENDATIONS LX-l EXHIBITS DESCRIPTION OF ERRORS STATE & MUS (BCBSMT) EXHIBIT A - DESCRIPTION OF ERRORS MUS (ALLEGIANCE) EXHIBIT B - RESULTS OF SYSTEM TESTS EXHIBIT C BLUE CROSS BLUE SHIELD OF MONTANA RESPONSE - Traditional EXHIBIT D ALLEGIANCE BENEFIT PLAN MANAGEMENT, INC. RESPONSE - Trad. EXHIBIT E* Allegiance chose not to provide a response to the report