An Audit Report on Blue Cross Blue Shield of Texas, a Managed Care Organization
Learn how the AI-generated research projects were createdOverall Conclusion
The audit found that while the Health Plan accurately reported medical, administrative, and quality improvement expenses, its pharmacy expense reporting was flawed due to unallowable practices by the Pharmacy Benefit Manager, which could impact Medicaid costs and program integrity.
Source Document
Audit Scope
fiscal year 2018
Key Findings Summary
The $26.4 million in pharmacy expenses that the Health Plan reported in its fiscal year 2018 FSR did not reflect the final amount paid to the pharmacies, as it did not include funds a pharmacy was required to return to the Pharmacy Benefit Manager due to a year-end aggregation process. This process, based on an 'effective rate' contract, is considered unallo…
The encounter data reported by the Health Plan did not include any returned funds, and the methodology used by the Pharmacy Benefit Manager to calculate the return of funds was unallowable, as it combined multiple lines of business and did not specify the portion related to STAR Kids or other Medicaid programs.
The contract between the Pharmacy Benefit Manager and pharmacy providers established an 'effective rate' pricing methodology, which is different from spread pricing and is not prohibited by the Uniform Managed Care Contract. However, this methodology reduces price transparency and may impact the accuracy of reported pharmacy expenses, which are used to set c…
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AI-Assisted
AI Scope Summary
The audit aimed to assess the accuracy and completeness of financial data reported by Blue Cross Blue Shield of Texas for fiscal year 2018, focusing on pharmacy expenses, medical claims, and administrative costs, and to evaluate compliance with Medicaid program requirements and contractual obligations.
AI-Generated Insight
This report highlights significant issues in pharmacy expense reporting within Medicaid managed care, emphasizing the need for stricter oversight of pharmacy benefit management practices to ensure transparency, accuracy, and compliance with contractual and regulatory standards. The findings suggest potential long-term cost implications and the importance of robust internal controls and monitoring mechanisms.