Ohio Public Employees Retirement System (OPERS) REQUEST FOR PROPOSAL (RFP)

Transcription

1 Ohio Public Employees Retirement System (OPERS) REQUEST FOR PROPOSAL (RFP) For Pharmacy Benefit Manager Audit Services Date: December 07, East Town Street Columbus, Ohio PERS (7377) PLEASE NOTE: NO RESPONDENT SHALL ATTEMPT TO COMMUNICATE WITH OPERS CONCERNING THIS RFP IN ANY MANNER OTHER THAN AS SPECIFICALLY PROVIDED IN SECTION G.4 HEREOF. ANY COMMUNICATION WITH OPERS, OTHERTHAN AS SPECIFICALLY PROVIDED IN SECTION G.4 HEREOF, WILL RESULT IN IMMEDIATE DISQUALIFICATION FOR SUCH RESPONDENT. RESPONDENT SHALL INCLUDE A STATEMENT IN THE COVER LETTER TO ITS RESPONSE (SEE SECTION D.1.4) THAT IT UNDERSTANDS AND ACKNOWLEDGES THAT ANY COMMUNICATION WITH OPERS CONCERNING THIS RFP IN ANY MANNER OTHER THAN AS SPECIFICALLY PROVIDED IN SECTION G.4 HEREOF WILL RESULT IN IMMEDIATE DISQUALIFICATION FOR RESPONDENT.

2 Section A Background Retirement Board Financial Information Section B Overview Section C - Definitions Table of Contents Section D - Minimum Requirements Section E Scope of Engagement Section F - Proposal Content Cover Letter Questionnaire Understanding of Engagement Work Plan (including timeline with details of hours) Deliverables Auditor Personnel References Cost Sample Contract Additional Information Section G - Selection Criteria Section H - General Terms and Conditions for Submitting Proposals Section I - Instructions for Submitting Proposals Exhibits and Attachments Exhibit A - Pricing Attachment A - Contract Provisions Attachment B Business Associate Agreement 12/7/2016 PDP Audit RFP - 2

3 A. BACKGROUND Retirement Board In 1935, the Ohio Public Employees Retirement System (OPERS) began a tradition of providing excellent retirement benefits for state employees. With approximately $87.3 billion in assets, OPERS provides retirement, disability, and survivor benefit programs for public employees throughout the state who are not covered by another state or local retirement system. Currently, OPERS has more than 1,060,000 members of 3,700 public employers and over 205,600 retirees and surviving beneficiaries who receive monthly benefits. Financial Information The most recent OPERS Comprehensive Annual Financial Report is available on the OPERS website at: B. OVERVIEW The purpose of this Request for Proposals (RFP) is to seek proposals from qualified auditing firms to conduct the audit described in this RFP. See Section C, Minimum Requirements (and RFP process discussed below). A responding vendor also must include in its proposal pricing information using the form attached as Exhibit A to this RFP. A responding vendor will be referred to as You, Your or Your Organization throughout this RFP, as the context indicates. The audit firm that may be selected as a result of this RFP (Selected Auditor) must have the demonstrated experience and expertise to conduct the audit. The Selected Auditor also must possess analytical skills, in-depth pharmacy industry knowledge, and the skills necessary to provide OPERS with expert advice. The Selected Auditor will be expected to provide weekly updates to OPERS while conducting the audits. Any audit exceptions will be identified and reviewed with the Rx Administrator (see further below) to confirm the findings. The OPERS retiree health care program provides health care coverage to eligible OPERS retirees and their eligible dependents (collectively Participants ), and includes prescription drug (for all Participants) medical (for non-medicare and Medicare-eligible Participants) and voluntary dental and vision. (Medical, dental and vision audits are not included in this RFP.) As of December 31, 2015, OPERS had 224,832 Participants with prescription care coverage. Express Scripts, Inc. (ESI) currently administers the prescription drug coverage as OPERS pharmacy benefit manager (PBM). ESI administered prescription drug employer group waiver coverage (PDP EGWP) prior to 2016, which means ESI provided certain prescription drug coverage management to OPERS Medicare Part D eligible Participants. ESI also administered prescription drug coverage for non-pdp EGWP Medicare Participants. ESI administers commercial pharmacy coverage for OPERS non-medicare Participants. The audit of OPERS prescription drug coverage will be referred to as the Rx Administrator audit in this RFP. 12/7/2016 PDP Audit RFP - 3

4 The specific details for the Rx Administrator audit are provided in Section D, Scope of Engagement. This RFP will include four (4) phases: Phase 1 Minimum Requirements: Proposals must meet the Minimum Requirements contained in Section C, which OPERS will verify. Proposals that meet the Minimum Requirements will advance to Phase 2. Proposals that do not meet the Minimum Requirements will not be considered, reviewed, or evaluated. Phase 2 Written Proposals: OPERS will review and evaluate written proposals that meet the Minimum Requirements and determine, in its sole discretion, whether any Phase 2 vendors will be asked to make oral presentations. These vendors will advance to Phase 3. Phase 3 Oral Presentations: OPERS will provide clarifying questions to Phase 3 vendors asked to make oral presentations. The clarifying questions must be addressed during the oral presentations. OPERS will evaluate the oral presentations to determine, in its sole discretion, whether any Phase 3 vendors will advance to Phase 4. Phase 4 Contract Negotiations: Following evaluation of the written proposals and oral presentations, OPERS may determine a list of finalists and commence sequential negotiations as described in Section (F)(5). C. DEFINITIONS Average Wholesale Price (AWP) - The average wholesale price of a Covered Drug, as set forth in the current price list in recognized sources such as Medi-Span s National Drug Data File, if available, or other nationally recognized source in the retail prescription drug industry selected by ESI for all clients. The applicable AWP for prescriptions filled in the Mail Service Pharmacy will be the AWP for the lesser of: (i) the FDA s National Drug Code for the package size from which the Prescription Drug was dispensed, or (ii) package sizes of one hundred (100) units or sixteen (16) ounce quantities, or the next larger quantity if such specified quantities are not available. Centers for Medicare and Medicaid Services (CMS) -The Centers for Medicare and Medicaid Services (CMS) is a federal agency within the US Department of Health and Human Services Employer Group Waiver Plan (EGWP) - A group Medicare Part D prescription drug plan option that is offered to retirees, such as OPERS. A PBM contract with CMS to serve as the Medicare Part D Plan Sponsor and manage compliance with CMS regulations with regards to Part D prescription drug plans for retirees. Express Scripts Inc. The Pharmacy Benefits Manager (PBM) / Rx Administrator for OPERS commercial and EGWP plans. 12/7/2016 PDP Audit RFP - 4

5 Formularies - The list of FDA-approved Prescription Drugs and supplies and a limited group of non-prescription Drugs (e.g., insulin) developed either by ESI s Pharmacy and Therapeutics Committee and selected and adopted and/or customized by Sponsor. Information Technology Statement of Work (IT SOW) - The document which sets forth the technical requirements, procedures, formats and deadlines for specified electronic transfers of information, reports, and other electronic transactions under this Agreement, as agreed to by the parties and as amended from time to time by agreement of the parties during the Term of the Agreement. National Drug Code (NDC) - A unique product identifier used in the United States for drugs intended for human use. The Drug Listing Act of 1972 requires registered drug establishments to provide the Food and Drug Administration (FDA) with a current list of all drugs manufactured prepared, propagated, compounded, or processed by it for commercial distribution. Pass Through means the actual ingredient cost and dispensing fee paid by ESI to the Participating Pharmacy, as set forth in the specific Participating Pharmacy remittances related to Sponsor s claims. Pharmacy Benefit Manager (PBM) A third party administrator of prescription drug programs that is responsible for processing and paying prescription pharmacy claims. Pharmacy Drug Plan (PDP) An option for individuals who want to enroll in the Medicare Part D prescription drug coverage, which subsidizes the costs of prescription drugs for enrollees. A prescription drug plan (PDP) is a stand-alone plan, covering only prescription drugs. Retail Pharmacies An independent pharmacy, supermarket pharmacy, chain pharmacy or mass merchandiser pharmacy who has a state license to dispense medications to the general public at retail prices as a pharmacy. Retail community pharmacy does not include a pharmacy that dispenses prescription medications to patients primarily through mail, nursing home pharmacies, long-term care facility pharmacies, hospital pharmacies, clinics, charitable or not-for-profit pharmacies, government pharmacies, or pharmacy benefit managers. Rx Administrator Express Scripts, Inc. (ESI) is the Rx Administrator for OPERS commercial and EGWP plans Retiree Drug Subsidy (RDS) - A program offered by the Centers for Medicare & Medicaid Services (CMS) to reimburse health plan sponsors (municipalities, unions and private employers) for a portion of their eligible expenses for retiree prescription drug benefits. Specialty Drugs - Injectable and non-injectable Drugs on the CareLogic Drug List typically having one or more of several key characteristics, including: frequent dosing adjustments and intensive clinical monitoring to decrease the potential for drug toxicity and to increase the probability for beneficial treatment outcomes; intensive patient training and compliance assistance to facilitate therapeutic goals; limited or exclusive product availability and distribution; specialized product handling and/or administration requirements; protein synthesis is involved in the manufacturing process; and/or development of the Drug is associated with research conducted as part of or in any way related to the Human Genome Project. 12/7/2016 PDP Audit RFP - 5

6 Statement of Attestation Engagement Number 16 9SSAE-16) - An attestation standard put forth by the Auditing Standards Board (ASB) of the American Institute of Certified Public Accountants (AICPA) that addresses engagements undertaken by a service auditor for reporting on controls at organizations (i.e., service organizations) that provide services to user entities, for which a service organization's controls are likely to be relevant to a user entities internal control over financial reporting (ICFR). Summary Plan Description - A document containing a comprehensive description of the eligibility and benefits available through the pharmacy plan. D. MINIMUM REQUIREMENTS The Auditor must: D1. Be licensed to do business as appropriate and be in good standing with the Ohio Secretary of State. D2. Have a minimum of five (5) years of experience in conducting audits similar in size (minimum of 100,000 lives) and scope as this RFP. OPERS reserves the right to determine whether the experience of each Auditor meets this requirement. D3. All work relating to this project must be performed within the United States, including subcontracting of services to any off-shore companies or locations. D4. Confirm that the provisions contained in Attachment A shall be included in any contract with OPERS that may result from this RFP and such contract terms shall control in the event of any conflict. D5. Be able to conduct any on-site audit reviews at Express Scripts, Inc. (ESI) during normal business hours starting no earlier than April 1 st, 2017 with completion of the audit no later than November 30 th, E. SCOPE OF ENGAGEMENT E1. The Selected Vendor shall conduct an audit of Express Scripts, Inc. in accordance with the provisions and requirements of this RFP. The audit shall cover claims incurred January 1, 2014 through December 31, 2015 for both OPERS commercial and PDP EGWP plans. OPERS has the following objectives in completing the audit: E1.1 Determine if pharmacy claims are being adjudicated in accordance with the correct pricing terms (e.g. discounts, dispensing fees, administrative fees) for each review period. E1.2 Determine the accuracy of pharmacy claims adjudication with respect to plan design provisions (including by way of example only, copayments, coinsurance, quantity limits, excluded medications, prior authorizations, step therapy programs, reversed and reprocessed claims, Late Enrollment Penalty, Low Income Cost Sharing, Low Income Subsidy, Direct Subsidy, Plan to Plan, Medicare B, deductible coordination). 12/7/2016 PDP Audit RFP - 6

7 E1.3 Evaluate the accuracy of manufacturer rebates received by ESI and credited to OPERS. E1.4 Determine if pricing guarantees, such as drug ingredient discounts, dispensing fees, and rebates have been met as per the Pricing Schedule set forth in the Rx Administrator Agreement. E1.5 Determine if the annual reconciliation meets Centers for Medicare and Medicaid Services (CMS) requirements. E1.6 Determine if OPERS, based on agreed upon methodology, was paid the correct amount and the accurate revenue for each review period. E1.7 Evaluate whether the Rx Administrator processes and uploads OPERS data according to the deadlines and requirements of the Rx Administrator Agreement Information Technology Statement of Work (IT SOW) and that quality assurance processes are performed, including reviewing error reports and data issues for the PDP EGWP and the commercial pharmacy coverage. E1.8 Review and test the policies and procedures that the Rx Administrator has in place to implement the Financial Statement of Work (Financial SOW) for PDP EGWP and the commercial pharmacy plan. E1.9 Evaluate analyze and validate the status of the Rx Administrator s Agreement deliverables including the compliance and satisfaction of the contractual terms describing performance standards and guarantees and the maintenance of documentation indicating compliance with the SSAE- 16 report, as stipulated in the Rx Administrator Agreement. E1.10 Evaluate the Rx Administrator s administration of retiree drug subsidy (RDS). E2. SPECIFIC REQUIREMENTS The Rx Administrator audit scope incorporates the ten (10) categories of review outlined below. E2.1. Pharmacy Claims Pricing (Discount) Accuracy Review, which requires analyzing 100 percent of the claims incurred in the time period of the audit to confirm pricing accuracy. E2.2. Pharmacy Plan Design Accuracy Review, which requires analyzing the claims for each time period of the audit to determine whether Rx claims were processed according to OPERS prescription drug coverage. E2.3. Rebate Review, which requires identification of the top five (5) specialty drug manufacturers and the top five (5) traditional drug manufacturers comparing the rebates credited to OPERS for the audit review period under each manufacturer s contract with the Rx Administrator. E2.4. Pricing Guarantees, which requires analyzing 100 percent of paid claims to ensure that guarantees for drug ingredient discounts, dispensing fees, and 12/7/2016 PDP Audit RFP - 7

8 rebates have been measured, reported and paid (if not met) as per the Pricing Schedule set forth in the PBM Agreement. E2.5. Annual Reconciliation meets CMS requirements, which requires review of ESI s internal reconciliation processes based on CMS rules and regulations. E2.6. Pharma Revenue (donut hole), which requires review of the pass through from CMS to ESI and then the calculations to present OPERS with their revenue based on the time period under review. E2.7. Financial Statement of Work, which requires the Selected Auditor to review and test the policies and procedure that the Rx Administrator has in place to implement the Financial SOW for PDP EGWP and the commercial pharmacy coverage agreement. E2.8 Pharmacy Quality Assurance/Internal Controls, which requires review of the Statement on Standards for Attestation Engagement No. 16 (SSAE-16) report. E2.9 Retiree Drug Subsidy, which requires the Selected Auditor to review eligibility claims sent to RDS on behalf of OPERS to validate that OPERS received the correct revenue for the time period of the audit under review. E2.10 Eligibility, which requires review that the OPERS eligibility files are processed and uploaded timely to the Rx Administrator s eligibility system, and reviewed for errors, omissions and data quality. E3. CLAIMS PRICING (DISCOUNT) ACCURACY REVIEW E3.1 The Selected Vendor must request paid claims data from ESI covering the time period of the audit, and aggregate the discounts achieved for both brand name drugs and generic drugs. E3.2 The Selected Vendor must evaluate whether the proper Average Wholesale Price (AWP) was selected for all pharmacy claims. E3.3 The aggregated discounts will be compared to the PBM Agreement guarantees to determine the degree to which ESI met, exceeded, or fell short of the threshold. To the extent a shortfall is identified, The Selected Auditor will identify the amount of the shortage and work directly with the Rx Administrator to true-up any refund to OPERS. E3.4 The Selected Vendor will request a second dataset from ESI covering the time period of the audit that will represent a detailed claims file of all retail network pharmacy reimbursements. Using this file, the Selected Vendor will compare the network pharmacy reimbursement amounts to the invoiced amount and identify any claims where the discount was not passed through properly and calculate the aggregated discrepancy. E3.5 The Selected Vendor shall test a random sample of chain and independent pharmacies to ensure that pharmacy-specific discounts are being appropriately passed through to OPERS. The Selected Vendor must fully describe in the response to Question (F)(2.)(14.)(bullet #5) how the random sample would be selected. E3.6 Any exceptions will be identified and reviewed with ESI to confirm the findings. 12/7/2016 PDP Audit RFP - 8

9 E4. PHARMACY PLAN DESIGN ACCURACY REVIEW E4.1 The Selected Vendor will analyze the claims dataset to validate the correct application of plan design to ensure claims were processed in accordance with the Benefit Plan Level (BPL) set-up documents. Test areas will include, but may not be limited to, copayments, coinsurance, and exclusions, as well as other cost management features such as quantity level limits and step therapies. For certain edits, the Selected Vendor may test a sample of the results from the electronic analysis to validate findings. The Vendor must fully describe, in the response to Question (F)(2.)(15.)(bullet #5), which types of edits may require sample testing and how the sample would be selected. E4.2 The Selected Vendor shall perform a Part B review, which requires using best practices to identify claims paid by ESI that are covered under Medicare Part B and should be processed under Medicare Part B. Vendors must fully describe their process in the response to Question (F)(2.)(17.) E4.3 Any exceptions will be identified and reviewed with ESI to confirm the findings. E5. REBATE ACCURACY REVIEW E5.1 The Selected Vendor will request National Drug Code (NDC) level data showing rebate amounts invoiced by ESI to manufacturers to identify the top five (5) drug manufacturers and select their rebate contracts for onsite review. While onsite, the Selected Vendor will review the invoice records and rebate payments, comparing them to rebate contract terms and provisions applicable to each drug to assess that the correct rebate percentages were applied, taking into account any exceptions or adjustments based on volume, rebate eligibility criteria or other applicable terms. E5.2 The Selected Vendor will confirm the drug volumes invoiced for OPERS based on analysis of the claims data to ensure appropriate volumes were considered for rebate eligibility. E5.3 The rebate period to be considered in the audit shall be January 1, 2014 December 31, E5.4 The Selected Auditor will review the rebates payable to OPERS and confirm, if applicable, that a minimum Rebate per Brand Drug Claim submitted electronically through retail or mail service programs has/has not been achieved. E6. PRICING GUARANTEE ACCURACY REVIEW E6.1 The Selected Vendor will review retail claims to validate that guarantees related to Brand Average Wholesale Price Discounts, Generic Effective Discounts, and Dispensing Fees have/have not been met. E6.2 The Selected Vendor will review mail service claims to validate guarantees related to Brand Average Wholesale Price Discounts, Generic Effective Discounts, and Dispensing Fees have/have not been met. E7. ANNUAL RECONCILIATION 12/7/2016 PDP Audit RFP - 9

10 The Selected Vendor will review ESI s internal reconciliation processes based on CMS rules and regulations. E8. PHARMA REVENUE (donut hole) The Selected Vendor will review the pass through from CMS to ESI and then the calculations to present OPERS with their revenue based on the time period under review. E9. FINANCIAL STATEMENT OF WORK Review and test the policies and procedures that the Rx Administrator has in place to implement the Financial Statement of Work (Financial SOW) for PDP EGWP and the commercial pharmacy coverage agreement. E10. PHARMACY QUALITY ASSURANCE/INTERNAL CONTROLS The Selected Auditor will evaluate the Rx Administrator s system design and the suitability and effectiveness of internal controls to ensure processing integrity by obtaining and evaluating the applicable Statement on Standards for Attestation Engagements No. 16 (SSAE-16) report. E11. RETIREE DRUG SUBSIDY ADMINISTRATION The Selected Auditor will review eligibility and timing to ensure the Rx Administrator has forwarded complete data, including claims to RDS. Included in the review are reprocessed claims that have been transferred to and from the PDP EGWP. The Selected Auditor will validate that OPERS has received the maximum revenue for the time period of the audit. E12. PHARMACY ELIGIBILITY The Selected Auditor will review that the OPERS eligibility files were processed and uploaded timely to the Rx Administrator s eligibility system and reviewed for errors, omissions and data quality. E13. SCHEDULE (Project Timeline) Submit a detailed timetable (work plan) that presents key activities, milestones, and timing for completion of the project. The work plan should include the preparation of a draft audit report to be reviewed by OPERS before any final audit report is delivered. The work plan should also assume that the Rx Administrator audit will include auditing the PDP EGWP and the commercial pharmacy coverage. Please provide an overall project schedule for all audits. E14. AUDIT REPORT A final audit report will be required detailing the findings and recommendations of the audits. In addition, the final audit report will include a description of the project methodology and exhibits that provide additional details about the sample and the errors discovered. It is critical that the final audit report clearly identifies the extent of potential financial recovery for OPERS and any areas of disagreement with the particular audited Administrator. 12/7/2016 PDP Audit RFP - 10

11 E15. PROPOSED ADDITIONAL SERVICES In addition to the services described, please include any additional services You believe are applicable, and include the itemized fees for such services. The description of these services and the associated fees should be detailed in a separate section of Your proposal. The rationale for proposing these services should be included. E16. STATUS REPORTS Provide electronic status updates weekly to the designated representatives of OPERS. Conference calls will be scheduled, at a minimum, two times a month during the project timeline. E17. FINAL DRAFT AUDIT REPORTS Submit draft final audit reports to be reviewed before any final audit report is delivered. E18 FINAL AUDIT REPORTS Submit detailed, written final audit reports with recommendations. The written recommendation/reports must include, at a minimum: Executive summary Description of the audit process/procedures, including audit milestones and key events associated with those milestones Recommendations for corrective action to ensure accurate claims handling The Administrator s action plan in response to the Selected Auditor s recommendations Statement indicating the Selected Auditor has observed all conflict of interest requirements mandated by OPERS with respect to the audit process and has not received anything of value from the audited Vendors while performing audit services. E19 FINAL PRESENTATIONS Be prepared to provide an executive level presentation for OPERS Board based on the results of each audit and recommendation in the final reports. F. PROPOSAL CONTENT At a minimum, the proposal must include the following information. For ease of review, each requirement should be addressed in a separate section preceded by an index tab to identify the subject of the section. The proposal should be formatted on consecutively numbered pages and include a table of contents. F1. COVER LETTER F1.1 Vendor must include a cover letter, which will be considered an integral part of the proposal, in the form of a standard business letter, and must be signed by an individual who is authorized to bind the Vendor contractually. It must include: 12/7/2016 PDP Audit RFP - 11

12 a. A statement regarding the Vendor s legal structure (e.g. an Ohio corporation), Federal tax identification number, and principal place of business. b. Vendor s primary contact on this RFP, who has authority to answer questions regarding the proposal: 1. Organization Name 2. Contact s Name 3. Additional Contacts 4. Contact s Address 5. Contact s Phone Number 6. Contact s Address c. A statement that the Vendor s proposal meets all the requirements of this RFP. d. A statement that the Vendor has not submitted its proposal with the assumption that there will be an opportunity to negotiate any aspect of the proposal. e. A statement that the Vendor acknowledges that all documents submitted pursuant to this request may be subject to disclosure under Ohio s Public Records Act, see Section G.7 of this RFP. f. A statement that the Vendor acknowledges and agrees that the contract provisions contained in Attachment A shall be included in any contract with OPERS that may result from this RFP, and such contract provisions shall control in the event of any conflict. F2. QUESTIONNAIRE F2.1 Please provide your Organization s domestic office locations, identifying which location will be assigned this project. Please provide the following information: The full legal name of Your Organization; The address and telephone number of Your corporate office; and The current ownership of Your Organization, along with the name of any individual holding 10% or more of the stock or value of Your Organization, if applicable. F2.2 Please provide your Organization s organizational structure, including subsidiary and affiliated companies, and joint venture relationships. F2.3 How many years has Your Organization been in business? F2.4 Yes/No: Has Your Organization undergone any material change in its structure or ownership within the last 18 months? If yes, please describe. F2.5 Yes/No: Is any material change in ownership or structure currently under review or being contemplated? If yes, please describe. F2.6 If available, please provide a report, study, or assessment of Your Organization, prepared by an unbiased independent third-party source, concerning client satisfaction and measures of Your Organization s strengths and weaknesses vis-àvis your key competitors. 12/7/2016 PDP Audit RFP - 12

13 F2.7 Please provide your most recent financial statements including a statement of financial position, an annual income statement and balance sheet. F2.8 Please describe any material litigation to which Your Organization is currently a party. In addition, please describe any material litigation that Your Organization has been involved in over the last three (3) years. F2.9 Please provide a list and describe litigation brought or threatened against Your Organization by existing or former clients over the past five (5) years. F2.10 Please describe any relationships that Your Organization has with potential vendors to OPERS, including any potential fees or other remuneration Your Organization may receive for recommending their products or services. F2.11 Complete the following table, indicating the number of clients for whom Your Organization has provided services similar to those outlined in this RFP within the last three (3) years: Annual Pharmacy Spend (Allowed Charges) $9.99 million $10 - $49.99 million $50 - $99.99 million $100 million - $ million $150 million No. of Clients F2.12 Complete the following table, indicating the number of clients for whom Your Organization has provided services similar to those outlined in this RFP within the last five (5) years: Pharmacy Covered Lives 24,999 25,000 49,999 50,000 99, ,000 No. of Clients F2.13 How many pharmacy claims have You audited for discount accuracy in each of the last three (3) years? How many rebate dollars have You audited in each of the last three (3) years? F2.14 Does Your Organization have experience in performing pharmacy claims pricing (discount) accuracy review audits? How many years has Your Organization been conducting these pharmacy claims pricing (discount) accuracy review audits? How many of these pharmacy claims pricing (discount) accuracy review audits has Your Organization conducted in the past three (3) years for clients with 100,000 or more participants? What percentage of these were PBM claims pricing (discount) accuracy review audits? 12/7/2016 PDP Audit RFP - 13

14 Describe typical obstacles involved in conducting these pharmacy claims pricing (discount) accuracy review audits and Your corresponding remediation efforts and results. Is there a typical per member per year (PMPY) dollar discrepancy that Your Organization expects to uncover in an audit such as this one? If so, what would You expect the PMPY discrepancy to be? As outlined in Section (E) (3.5), fully describe which types of edits may require sample testing and how the sample would be selected, including the sample size. F2.15 Does Your Organization have experience in performing pharmacy plan design accuracy review audits? How many years has Your Organization been conducting these pharmacy plan design accuracy review audits? How many of these pharmacy plans design accuracy review audits have Your Organization conducted in the past three (3) years for clients with 100,000 or more participants? What percentage of these were ESI plan design accuracy review audits? Describe typical obstacles involved in conducting these pharmacy plan design accuracy review audits and Your corresponding remediation efforts and results. Is there a typical PMPY dollar discrepancy that Your Organization expects to uncover in an audit such as this one? If so, what would You expect the PMPY discrepancy to be? As outlined in Section (E)(4.1), fully describe which types of edits may require sample testing and how the sample would be selected, including the sample size. F2.16 Does Your Organization have experience in auditing rebate contracts between pharmaceutical manufacturers and PBMs? How many years has Your Organization been conducting these pharmacy rebate audits? How many of these rebate audits has Your Organization conducted in the past three (3) years for clients with 100,000 or more participants? What percentage of these were ESI rebate audits? Describe typical obstacles involved in conducting these pharmacy rebate audits and Your corresponding remediation efforts and results. Is there a typical PMPY dollar discrepancy that Your Organization expects to uncover in an audit such as this one? If so, what would You expect the PMPY discrepancy to be? F2.17 Does Your Organization have experience in performing Medicare Part B recovery audits? Describe how Your Organization would test for Medicare Part B expenses. F2.18 Does Your Organization have experience in auditing electronic eligibility timing, system processing and error testing? Describe how Your Organization would test for eligibility issues/errors. F2.19 Does Your Organization have experience in auditing clinical programs, including prior authorizations, step therapy programs, overlapping medications? Describe how Your Organization tests these programs. 12/7/2016 PDP Audit RFP - 14

15 F2.20 Provide a copy of a final audit report presented to a client of similar size operationally to OPERS and similar in scope for whom You have performed an audit within the last year, redacted to the extent necessary. F2.21 Describe Your internal quality assurance process for the auditing process. F2.22 Indicate Your Organization s specific, relevant experience, with auditing a PBM. F2.23 Indicate Your Organization s specific, relevant experience, in auditing transparent pricing arrangements. F2.24 Does Your Organization have a firm written code of conduct or set of standards for professional behavior? If so, attach a copy and state how the code or standards are monitored and enforced. F2.25 How does Your Organization identify and manage conflicts of interest? F2.26 Are there any potential conflicts of interest that Your Organization would have in providing the requested services to OPERS? If yes, explain. F2.27 List and describe any relationships and/or contacts Your Organization or its officers or employees has had with any OPERS Board member and/or staff member within the last twelve (12) months. F2.28 Has Your Organization or any officer or employee given any remuneration or anything of value directly or indirectly to any OPERS Board members, officers, or employees? If yes, identify the recipient and remuneration or thing of value. Additional information on the relevant Ohio ethics law may be found at: F2.29 Has Your Organization or any officer or employee given any remuneration or anything of value as a finder s fee, cash solicitation fee, or fee for consulting, lobbying or otherwise, in connection with this RFP? If yes, identify the recipient and remuneration or thing of value. F2.30 Describe Your organizational structure, including subsidiary and affiliated companies, and joint venture relationships. F2.31 Identify whether Your Organization currently performs any work for, provides services to, or receives compensation from, any PBM. Describe the work performed. F2.32 Does your organization currently have agreements in place allowing Your Organization to conduct plan design accuracy review audits with the Rx Administrator? If not, define downtime/lag involved in attaining such an agreement with the Rx Administrator. F2.33 Does your organization have experience in performing Medicare Part B recovery audits? Describe how Your Organization would test for Medicare Part B expenses. F2.34 Does Your Organization have experience in auditing electronic eligibility timing, system processing and error testing? Describe how Your Organization would test for eligibility issues/errors. 12/7/2016 PDP Audit RFP - 15

16 F2.35 Does Your Organization have experience in auditing retiree drug subsidy (RDS)? This would include subsidy, eligibility testing, allowable drug submission and timeliness of cost reporting. Describe how Your Organization would test for all the identified items. F2.36 Does your organization have experience in auditing clinical programs, including prior authorizations, step therapy programs, overlapping medications? Describe how your organization tests these programs. F2.37 Please confirm that Your Organization will execute a confidentiality agreement for purposes of conducting this audit. F2.38 Provide real-life examples of specific recommendations for corrective action You have provided to a client as a result of a recent PBM audit. Please include specific examples of recommendations that You feel were the most effective and produced the most tangible results for the client, redacted as necessary. F2.39 Describe any aspects of Your audit process that are unique to Your Organization and that distinguish You from your competitors. F2.40 Describe and explain Your sampling methodology in detail. Please include a description of the calculation/presentation of results. F2.41 Provide the action steps You would use to verify the coordination of benefits between Medicare Part B and Medicare Part D drugs as it pertains to Medicare Administrator and Rx Administrator. F3. UNDERSTANDING OF ENGAGEMENT F3.1 Please describe in detail your organization s understanding of the services requested in this RFP. F3.2 Please describe areas or processes not included in this RFP that your organization may examine in order to provide more complete services. F3.3 Please provide a narrative that supports why your organization believes that it is qualified to undertake the proposed engagement. F4. WORK PLAN (including timeline with details of hours) The proposal should set forth a work plan including: F4.1 Provide a description of how the Auditor will consult with and make presentations to OPERS staff during the engagement. F4.2 Provide a description of the service management and quality control procedures to be utilized. These should identify and describe any anticipated potential problems, the Vendor s approach to resolving these problems, and any special assistance that will be requested from OPERS. F4.3 Auditor should allow ample time to review all existing documentation pertaining to the services. 12/7/2016 PDP Audit RFP - 16

17 F4.4 A tentative schedule for performing the services for OPERS including estimated hours by major task and staffing plan to include both Auditor s and OPERS resources. F5. DELIVERABLES F5.1 The Auditor shall provide a draft work plan in response to Section E4, outlining the projected time to complete the audit. A final work plan must be completed within five (5) days of contract award. F5.2 The Selected Auditor shall provide OPERS weekly progress reports on the status of its audit, including any difficulties encountered and modifications needed to the work plan. F5.3 Upon completion of the preliminary findings, the Selected Auditor shall provide OPERS a draft report of its findings. F5.4 The Selected Auditor shall present preliminary findings to ESI for review and comment, allowing opportunity to address significant errors or discrepancies identified in the audit. OPERS shall be kept apprised of the progress of the audit throughout the process. F5.5 The Selected Auditor shall present a final report of findings to OPERS within two (2) weeks of audit completion. The Selected Auditor and OPERS will mutually agree on the format of the final report following contract award. The Selected Auditor must be willing to present onsite to OPERS identified staff members. F5.6 OPERS shall have full ownership of the deliverables, including documentation and other related work projects, as applicable. F5.7 The Selected Auditor will ensure that the Selected Auditor s subcontractors shall be obligated to assign to OPERS their ownership rights in any deliverables. F6. AUDITOR PERSONNEL F6.1 Provide an organizational chart of your company. Highlight the names/positions and office location of all persons who will work on the account. F6.2 Provide the name and a brief biographical sketch of the Lead Auditor who will have overall responsibility for this project. For this individual, provide the following: a. Description of experience b. Education c. Length of employment at organization d. Length of experience auditing PBMs e. Professional credentials and affiliations f. Description of this individual s specific responsibilities and duties under this contract g. List your five (5) largest clients (covered lives) in which the Lead Auditor has been involved F6.3 Provide the names, title, contact information and a brief biographical sketch of each of the individuals who will be performing the services outlined in this RFP. For each individual, provide the following: 12/7/2016 PDP Audit RFP - 17

18 a. Description of experience, i.e. work history b. Education c. Length of employment at the organization d. Length of experience auditing PBMs e. Professional credentials and affiliations f. Description of each individual s specific responsibilities and duties under this contract F6.4 Provide samples of work that relate to the scope of services you feel demonstrate the skill and talent of the audit team that would be assigned to this account. F6.5 Vendor is requested to perform all services and may not subcontract without the written consent of OPERS. For each of the Vendor s potential subcontractors, please provide a narrative with the following information: a. The subcontractor s name and address. b. A brief description of the work said subcontractor might perform. c. A brief description of the subcontractor s capabilities and d. Describe your oversight of the subcontractor and controls in place to ensure that expected performance levels are maintained. F6.6 Please describe your organization s procedures in the event that a contact person assigned to this engagement leaves your organization during the term of the engagement. F7. REFERENCES F7.1 The names, addresses and telephone numbers of a contact person for three (3) current clients. F7.2 The name and telephone number of a responsible official who may be contacted as a reference. F7.3 Provide a summary description of the scope of work. F8. COST F8.1 Please provide a not-to-exceed, fixed fee price quote for this project showing the fee for the project in total to include any and all reimbursable expenses including travel costs. OPERS expects all travel costs to be included in the costs quoted in Exhibit A. F8.2 Provide cost per hour for additional service work or if hourly costs are not applicable, the deliverables that Auditor intends to provide, and the cost associated with each deliverable. F8.3 State whether Auditor will negotiate its proposed fee if OPERS decides negotiation is appropriate as to any aspect of the proposal, including the fee, with the finalist(s). In no case, however, will the negotiated fee be higher than the fee submitted in the proposal. 12/7/2016 PDP Audit RFP - 18

19 F9. SAMPLE CONTRACT Please provide a sample contract for consideration if you are selected for this engagement, along with a copy of your certificate of insurance. The contract should reflect the specific scope and deliverables of this engagement as well as hourly fees for any potential work outside the scope of this engagement and response times. F10. ADDITIONAL INFORMATION The Auditor should provide any other information it believes relevant to the engagement. G. SELECTION CRITERIA G1. Proposals will be evaluated and OPERS will make any final decision to award the contract. G2. During the evaluation process, OPERS may, at its discretion, request any or all Auditors to make oral presentations. Such presentations will provide Auditors with an opportunity to answer questions regarding the Auditor s proposal. Not all Auditors may be asked to make such oral presentations. G3. Any pricing information submitted by an Auditor must be disclosed on the pricing pages as designated in this RFP. Any pricing information which appears elsewhere in the Auditor s proposal shall not be considered by OPERS. G4. Proposals may be evaluated based on the following criteria, (each criteria may be weighted, if desired): Evaluation Criteria Cover Letter Questionnaire Understanding of Engagement Work Plan Deliverables Auditor Personnel References Cost G5. After evaluation of the proposals, OPERS may determine a list of finalists and may commence sequential negotiations on any aspects of the proposals OPERS deems appropriate beginning with the highest scoring finalist. If OPERS does not reach agreement with the highest scoring finalist within seven (7) calendar days, or if in the opinion of OPERS negotiations reach an impasse, OPERS may decide not to award the contract or may begin negotiations with the second highest scoring finalist. OPERS may choose to continue such negotiation schedule with subsequent finalists on the same basis until a contract is negotiated, no other finalists remain, or OPERS decides not to award the contract. 12/7/2016 PDP Audit RFP - 19

20 H. GENERAL TERMS AND CONDITIONS FOR SUBMITTING PROPOSALS H1. Auditor acknowledges that OPERS is subject to the Ohio Public Records Act, and the documents submitted pursuant to this RFP may be subject to a public records request. Accordingly, Vendor must identify any material or documents that are confidential and clearly mark those items or documents at the time of submittal. If a request for records is made that includes information Vendor has identified as confidential, OPERS will make reasonable efforts to contact Vendor in sufficient time to allow Vendor to take appropriate legal steps to protect the confidential information from disclosure. If as a result of the position taken by Vendor regarding the confidentiality of the information OPERS is assessed any damages or fees, Vendor shall indemnify OPERS for such damages or fees. If no documents or materials are identified and marked by Vendor as confidential, Vendor will be deemed to have consented to the release of the document or material, and to have waived any cause of action against OPERS resulting from the release of the documents or materials. H2. Regardless of cause, late proposals, in whole or in part, will not be accepted and will automatically be disqualified from further consideration. It shall be the Vendor s sole risk to ensure delivery at the designated office by the designated time. Late proposals will not be opened and may be returned to the Vendor at the expense of the Vendor, or destroyed if so requested. H3. OPERS reserves the right, in its sole discretion, to reject any or all proposals submitted, and to waive as to any Vendor or as to all Vendors, any informality or irregularity in a proposal or proposals or any failure to conform to the instructions in this RFP. H4. This RFP is not a contract, not meant to serve as a contract, and does not constitute a promise to enter into a contract. H5. All documents, proposals and other materials submitted in response to this RFP will become the property of OPERS and will not be returned to Vendor. H6. Vendor agrees to comply with all terms, conditions and requirements described in the RFP. Any failure by any responding Vendor to so comply shall be grounds for rejection of that Vendor s proposal, as determined by OPERS in its sole discretion. H7. If a contract results from this RFP, neither the successful responding Vendor, nor anyone on its behalf (including its agents, affiliates, subcontractors and/or vendors), shall publish, distribute or otherwise disseminate any press release, advertising and/or publicity matter of any type or kind (collectively advertising material ) having any reference to OPERS, this RFP or the resulting contract, unless and until such advertising material first shall have been submitted to and approved in writing by OPERS. I. INSTRUCTIONS FOR SUBMITTING PROPOSALS Proposed Schedule of Events RFP Release Date December 7, 2016 Questions due from potential Auditors by (1:00 p.m. ET) December 19, 2016 OPERS response to questions posted on website January 6, 2017 Proposals due to OPERS (1:00 p.m. ET) January 10, 2017 Proposal evaluations and finalist interviews February 14, 2017 Effective date of contract Upon Signature 12/7/2016 PDP Audit RFP - 20

21 I1. Please provide five (5) hard copies, one redacted copy for public record requests and an electronic copy of your proposal by 1:00 Eastern Time, on January 10, 2017, to: Jay Yoho Manager Support Services & Procurement Ohio Public Employees Retirement System 277 East Town Street Columbus, OH I2. Questions concerning this Request for Proposal must be submitted in writing or via e- mail to The question and answer period will be from December 7 to December 19, Questions and answers will be posted on the OPERS website by January 6, I3. No Auditor shall attempt to communicate with OPERS concerning this RFP in any manner or at any time other than during the question and answer period (see H3) or the finalist presentations, if held (see section F2). Communication with OPERS, other than as previously described, will result in immediate disqualification. I4. This Request for Proposal is issued on December 7, OPERS reserves the right, in its sole discretion, to amend or cancel this RFP. 12/7/2016 PDP Audit RFP - 21

22 EXHIBIT A PRICING DELIVERABLES OPERS Service Audit Cost Est. Hours Claims Pricing Accuracy Plan Design Accuracy Rebate Review Performance Guarantees-Total Pricing Guarantees Annual Reconciliation Pharma Revenue (donut hole) Retiree Drug Subsidy Administration Quarterly Reporting (quality) Evaluate Eligibility Quality Assurance/ Internal Controls SOC 2,Type II TOTAL COST CORE DELIVERABLES: OPTIONAL DELIVERABLES (specify) TOTAL COST 12/7/2016 PDP Audit RFP - 22

23 ATTACHMENT A 1. CONTRACTOR S REPRESENTATIONS, WARRANTIES AND COVENANTS: Contractor represents, warrants and covenants that: it has the authority to enter into the Agreement and perform the services provided under the Agreement; it shall comply with all applicable federal, state and local laws in providing services under the Agreement, including, but not limited to, the reporting requirements contained in Sections et seq. of the Ohio Revised Code (Joint Legislative Ethics Commission), and the laws contained in Chapter 102 of the Ohio Revised Code (Ohio Ethics Commission) governing ethical behavior that apply to persons doing or seeking to do business with OPERS; and, it has not paid and will not pay, has not given and will not give, any remuneration or thing of value directly or indirectly to OPERS or to any of its board members, officers, employees, or agents, or any other third party related to Contractor s engagement under the Agreement, including a finder s fee, cash solicitation fee, or a fee for consulting, lobbying or similar services that could influence OPERS decision to enter into the Agreement. 2. DISCLOSURE AND USE OF RECORDS: Contractor shall not disclose or use any information concerning OPERS members or retirees, or any other confidential information obtained in providing services under the Agreement, without OPERS prior written consent. Contractor understands that OPERS is subject to the Ohio Public Records Act. If OPERS receives a public records request for records related to the Agreement, OPERS will reasonably attempt to contact Contractor in sufficient time to allow Contractor to take the legal steps it deems necessary to protect the confidential information from disclosure. Contractor shall indemnify OPERS if OPERS is assessed any damages or fees as a result of the position Contractor asserts regarding the confidentiality or public disclosure of the records. 3. ADVERTISING AND PUBLICITY: Neither Contractor, nor anyone on Contractor s behalf (including any or all of its agents, affiliates, subcontractors or Vendors), shall publish, distribute or otherwise disseminate any press release, advertising or publicity matter of any type or kind (collectively Advertising Material ) having any reference to OPERS or this Agreement, unless and until the Advertising Material is first submitted to and approved in writing by OPERS. 4. INDEMNIFICATION AND LEGAL ACTION: Contractor shall indemnify OPERS, its board members, officers, and employees against any claims, damages, costs or losses resulting from Contractor s negligent or intentional acts, or those of its officers, employees or agents, under the Agreement ( Indemnity Claims ). Contractor shall defend OPERS, its board members, officers and employees against Indemnity Claims, if OPERS requests that Contractor do so. OPERS will not be required to file a lawsuit to obtain reimbursement for the Indemnity Claims. OPERS shall not indemnify Contractor for claims, damages, costs or losses of any nature that arise under the Agreement ( Contractor s Claims ). Contractor may seek recovery of Contractor s Claims through legal action against OPERS, if appropriate. 12/7/2016 PDP Audit RFP - 23