oversight

Audit of the Federal Employees Health Benefits Program Operations at Health Alliance Plan

Published by the Office of Personnel Management, Office of Inspector General on 2018-05-10.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

U.S. OFFICE OF PERSONNEL MANAGEMENT
    OFFICE OF THE INSPECTOR GENERAL
             OFFICE OF AUDITS




  Final Audit Report

 AUDIT OF THE FEDERAL EMPLOYEES HEALTH
    BENEFITS PROGRAM OPERATIONS AT
          HEALTH ALLIANCE PLAN

         Report Number 1C-52-00-17-031
                 May 10, 2018
             EXECUTIVE SUMMARY 

                         Audit of the Federal Employees Health Benefits Program

                                    Operations at Health Alliance Plan 

Report No. 1C-52-00-17-031                                                                           May 10, 2018


Why Did We Conduct the Audit?                What Did We Find?

The primary objective of the audit was       This report identified overstated OPM MLR credits totaling
to determine if Health Alliance Plan
                                             $1,215,409 for contract years 2013 and 2014. Specifically,
(Plan) was in compliance with the
provisions of its contract and the laws      these overstated credits were derived due to the following
and regulations governing the Federal        identified errors:
Employees Health Benefits Program
(FEHBP). To accomplish this objective,       x   The Plan used inconsistent membership timeframes to
we verified whether the Plan met the             calculate the quality health improvement and tax
Medical Loss Ratio (MLR) requirements
                                                 allocation expenses for 2013.
and thresholds established by the U.S.
Office of Personnel Management
(OPM).                                       x   The Plan included claims for unsupported disabled and
                                                 ineligible overage dependents in their 2013 and 2014
Because of Program changes resulting
from OPM’s roll-out of its MLR                   claims data.
Program, we are no longer performing a
review of the FEHBP’s rates.                 We corrected the above errors in our audited MLR
Consequently, this change to our audit       calculations for each year. Consequently, this audit shows
process only allows us to verify whether     that the Plan overstated its reported 2013 and 2014 MLR
the calculated percentage of the             credits by $437,844 and $777,565, respectively.
premium paid is spent on patient related
health care expenses. It does not allow
us to assess the fairness of the premium     Our audit did not disclose any findings related to the Plan’s
paid for benefits received.                  procedures for fraud and abuse, debarment, and off-shore
                                             contracting. Additionally, our audit did not disclose any
What Did We Audit?                           findings related to our claim reviews for coordination of
                                             benefits, deceased members, high dollar scripts, member
Under Contract CS 1092, the Office of        eligibility, or non-covered benefits.
the Inspector General (OIG) completed
a performance audit of the FEHBP
MLR submissions to OPM for contract
years 2013 and 2014. Our audit
fieldwork was conducted from May 15,
2017, through October 4, 2017, at the
Plan’s office in Southfield, Michigan
and in our OIG Offices.


 _______________________
 Michael R. Esser
 Assistant Inspector General
 for Audits
                                                     i
         ABBREVIATIONS


CFR      Code of Federal Regulations
FEHBAR   Federal Employees Health Benefits Acquisition Regulations
FEHBP    Federal Employees Health Benefits Program
MLR      Medical Loss Ratio
OIG      Office of the Inspector General
OPM      U.S. Office of Personnel Management
Plan     Health Alliance Plan
QHI      Quality Healthcare Improvement
QI       Quality Improvement
SSSG     Similarly Sized Subscriber Group
U.S.C.   United States Code




                      ii
IV. MAJOR CONTRIBUTORS TO THIS REPORT
          TABLE OF CONTENTS
                                                                                                                        Page

         EXECUTIVE SUMMARY ........................................................................................ i


         ABBREVIATIONS .................................................................................................... ii 


  I.     BACKGROUND ..........................................................................................................1 


  II.    OBJECTIVES, SCOPE, AND METHODOLOGY ..................................................3 


  III.   AUDIT FINDINGS AND RECOMMENDATIONS ................................................6


         A. Medical Loss Ratio Review ....................................................................................6 


              1. Overstated Medical Loss Ratio Credit...............................................................6 


                   a.      QHI and Tax Allocation ..........................................................................6 


                   b.      MLR Claims Data ...................................................................................8 


                          i. Disabled Dependents ..........................................................................8 


                         ii. Late Terminations ...............................................................................9 


                        iii. Coordination of Benefits ..................................................................10 


                         iv. Deceased Members............................................................................10 


                          v. High Dollar Pharmacy Scripts ..........................................................10 


                         vi. Member Eligibility ...........................................................................10 


                        vii. Non-Covered Benefits ......................................................................10 


         B. Fraud and Abuse Review ......................................................................................12 


         C. Debarment Review ................................................................................................13 


         D. Offshore Contracting Review ...............................................................................13 


         Exhibit A (Summary of MLR Credit Adjustment) 


         Exhibit B (2013 MLR Credit Adjustment) 


         Exhibit C (2014 MLR Credit Adjustment) 

Exhibit D (Medical Claims Sample Selection Criteria/Methodology) 


Exhibit E (Pharmacy Claims Sample Selection Criteria/Methodology) 


APPENDIX (Health Alliance Plan’s January 12, 2018, Response to the Draft Report)


REPORT FRAUD, WASTE, AND MISMANAGEMENT

IV. MAJOR CONTRIBUTORS TO THIS REPORT
            I. BACKGROUND
This final report details the audit results of the Federal Employees Health Benefits Program
(FEHBP) operations at Health Alliance Plan (Plan). The audit was conducted pursuant to the
provisions of Contract CS 1092; 5 United States Code (U.S.C.) Chapter 89; and 5 Code of
Federal Regulations (CFR) Chapter 1, Part 890. The audit covered contract years 2013 and
2014, and was conducted at the Plan’s office in Southfield, Michigan.

The FEHBP was established by the Federal Employees Health Benefits Act (Public Law 86-
382), enacted on September 28, 1959. The FEHBP was created to provide health insurance
benefits for federal employees, annuitants, and dependents, and is administered by the U.S.
Office of Personnel Management’s (OPM) Healthcare and Insurance Office. The provisions of
the Federal Employees Health Benefits Act are implemented by OPM through regulations
codified in 5 CFR Chapter 1, Part 890. Health insurance coverage is provided through contracts
with health insurance carriers who provide service benefits, indemnity benefits, or
comprehensive medical services.

In April 2012, OPM issued a final rule establishing an FEHBP-specific Medical Loss Ratio
(MLR) requirement to replace the similarly-sized subscriber group (SSSG) comparison
requirement for most community-rated FEHBP carriers (77 FR 19522). MLR is the proportion
of FEHBP premiums collected by a carrier that is spent on clinical services and quality health
improvements. The MLR for each carrier is calculated by dividing the amount of dollars spent
for FEHBP members on clinical services and health care quality improvements by the total
amount of FEHBP premiums collected in a calendar year.

The MLR was established to ensure that health plans are meeting specified thresholds for
spending on medical care and health care quality improvement measures, and thus limiting
spending on administrative costs, such as executive salaries, overhead, and marketing. For
example, the threshold of 85 percent requires carriers to spend 85 cents of every premium dollar
on patient care and limits the amount that can go to administrative expenses and profit to 15
cents of every dollar. However, the MLR does not provide an assessment of the fairness of the
premium paid for benefits received, only that the calculated percentage of the premium paid is
spent on patient related health care expenses.

The FEHBP-specific MLR rules are based on the MLR standards established by the Affordable
Care Act (P.L. 111-148) and defined by the U.S. Department of Health and Human Services in
45 CFR Part 158. In 2012, community-rated FEHBP carriers could elect to follow the FEHBP-
specific MLR requirements, instead of the SSSG requirements. Beginning in 2013, however, the
MLR methodology was required for all community-rated carriers, except those that are state-

                                                1                   Report No. 1C-52-00-17-031
mandated to use traditional community rating. State-mandated traditional community-rated
carriers continue to be subject to the SSSG comparison rating methodology.

Starting with the pilot program in 2012 and for all non-traditional community-rated FEHBP
carriers in 2013, OPM required the carriers to submit an FEHBP-specific MLR. This FEHBP-
specific MLR calculation required carriers to report information related to earned premiums and
expenditures in various categories, including reimbursement for clinical services provided to
enrollees, activities that improve health care quality, and all other non-claims costs. If a carrier
fails to meet the FEHBP-specific MLR threshold, it must make a subsidization penalty payment
to OPM within 60 days of notification of amounts due.

Community-rated carriers participating in the FEHBP are subject to various Federal, state and
local laws, regulations, and ordinances. In addition, participation in the FEHBP subjects the
carriers to the Federal Employees Health
Benefits Act and implementing
                                                                   FEHBP Contracts/Members
                                                                           March 31
regulations promulgated by OPM.
                                                       25,000

The number of FEHBP contracts and                      20,000
members reported by the Plan as of
                                                       15,000
March 31 for each contract year audited
is shown in the chart on the right.                    10,000

                                                        5,000
The Plan has participated in the FEHBP
since 1962 and provides health benefits                     0
                                                                    2013           2014
to FEHBP members in the Detroit and                   Contracts    10,143          8,771

Southeastern Michigan areas.                          Members      20,534          17,100



There were no previous MLR audits of the Plan. However, a prior audit of the Plan covered
contract years 2009 through 2011. The audit found that the FEHBP premium rates were
developed in accordance with the Office of Personnel Management's rules and regulations for the
years audited.

The preliminary results of this audit were discussed with Plan officials at an exit conference and
in subsequent correspondence. A draft report was also provided to the Plan for review and
comment. The Plan’s comments were considered in preparation of this report and are included,
as appropriate, as an Appendix to the report.




                                                  2                   Report No. 1C-52-00-17-031
IV. OBJECTIVES,
II.  MAJOR CONTRIBUTORS
                SCOPE, ANDTO THIS REPORT
                          METHODOLOGY
 OBJECTIVES

 The primary objective of this performance audit was to determine whether the Plan was in
 compliance with the provisions of its contract and the laws and regulations governing the
 FEHBP. Specifically, we verified whether the Plan met the MLR requirements and thresholds
 established by OPM and paid the correct amount to the Subsidization Penalty Account, if
 applicable. Additional tests were also performed to determine whether the Plan was in
 compliance with the provisions of other applicable laws and regulations. Further, we reviewed
 the fraud and abuse, debarment, and offshore contracting program areas to ensure that the Plan
 had adequate policies and procedures covering these areas.

 Our audits of the MLR submission filed with OPM are completed in accordance with the criteria
 expressed in OPM’s rating instructions. The MLR audit evaluation includes an assessment of
 key components of the MLR calculation, including allowable claims, health care expenses, and
 quality health improvements (numerator), and the premium received, excluding applicable tax
 expenses (denominator). The result of the MLR calculation must meet OPM’s prescribed
 thresholds. If the calculation falls below the threshold, the health plan must pay a penalty
 determined by the variance between the actual MLR ratio and the established threshold.

 Although the FEHBP premiums used in the MLR calculation are ultimately determined by the
 premium rates proposed by the Plan and certified and paid by OPM, the OPM rating instructions
 no longer provide sufficient criteria to evaluate the fairness of those rates against the standard
 market value of similarly-sized groups. Furthermore, per the OPM rating instructions, health
 plans can utilize OPM’s total reported premium, as the denominator in the MLR calculation,
 which when utilized is not subject to audit. Since the majority of health plans choose this option,
 the premiums utilized in the MLR calculation are very frequently not available for audit and the
 fairness of the FEHBP premium rates cannot be evaluated.

 SCOPE

 We conducted this performance audit in accordance with generally accepted government
 auditing standards. Those standards require that we plan and perform the audit to obtain
 sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions
 based on our audit objectives. We believe that the evidence obtained provides a reasonable basis
 for our findings and conclusions based on our audit objectives.




                                                  3                   Report No. 1C-52-00-17-031
This performance audit covered
contract years 2013 and 2014. For                              FEHBP Premiums Paid to Plan

these years, the FEHBP paid
approximately $236.5 million in                       $140.0
premiums to the Plan.                                 $120.0




                                           Millions
                                                      $100.0

The Office of the Inspector General’s                  $80.0

(OIG) audits of community-rated                        $60.0

carriers are designed to test carrier                  $40.0

compliance with the FEHBP contract,                    $20.0

applicable laws and regulations, and the                $0.0
                                                                        2013                  2014
rate instructions. These audits are also              Revenue          $115.0                $121.5

designed to provide reasonable
assurance of detecting errors,
irregularities, and illegal acts.

We obtained an understanding of the Plan’s internal control structure, but we did not use this
information to determine the nature, timing, and extent of our audit procedures. Our review of
internal controls was limited to the procedures the Plan has in place to ensure that:

       x The FEHBP MLR calculations were accurate, complete, and valid; claims were
         processed accurately; appropriate allocation methods were used; and that any other
         costs associated with its MLR calculations were appropriate.

In conducting the audit, we relied to varying degrees on computer-generated billing, enrollment,
and claims data provided by the Plan. We did not verify the reliability of the data generated by
the various information systems involved. However, nothing came to our attention during our
audit utilizing the computer-generated data to cause us to doubt its reliability. We believe that
the available data was sufficient to achieve our audit objectives. Except as noted above, the audit
was conducted in accordance with generally accepted government auditing standards, issued by
the Comptroller General of the United States.

The audit fieldwork was performed from May 15, 2017, through October 4, 2017, at the Plan’s
office in Southfield, Michigan and in our offices in Jacksonville, Florida; Cranberry Township,
Pennsylvania; and Washington, D.C.




                                                        4                       Report No. 1C-52-00-17-031
METHODOLOGY

We examined the Plan’s MLR calculations and related documents as a basis for validating the
MLR. Further, we examined claim payments, quality health expenses, taxes and regulatory fees,
and any other applicable costs to verify that the cost data used to develop the MLR was accurate,
complete, and valid. We also examined the methodology used by the Plan in determining the
premium in the MLR calculations. Finally, we used the contract, the Federal Employees Health
Benefits Acquisition Regulations (FEHBAR), and the rate instructions to determine the propriety
of the Plan’s MLR calculation.

To gain an understanding of the internal controls in the Plan’s claims processing system, we
reviewed the Plan’s claims processing policies and procedures and interviewed appropriate Plan
officials regarding the controls in place to ensure that claims were processed accurately. Other
auditing procedures were performed as necessary to meet our audit objectives.

Additionally, we interviewed Plan officials and reviewed the Plan's policies and procedures
associated with its internal controls over the fraud and abuse, debarment, and offshore
contracting programs.

The tests performed for the medical and pharmacy claims, along with the methodology, are
detailed in the Exhibits D and E at the end of this report.

Finally, we examined the Plan’s financial information and evaluated the Plan’s financial
condition and ability to continue operations as a viable ongoing business concern.




                                                5                   Report No. 1C-52-00-17-031
III. AUDIT FINDINGS AND RECOMMENDATIONS
A. Medical Loss Ratio Review

  1. Overstated Medical Loss Ratio Credit                                           $1,215,409

     In order to assess the appropriateness of the Plan’s premium rates in 2013 and 2014, the
     Plan was required to file an MLR calculation under OPM’s MLR program. The MLR
     program replaced SSSG requirements with an MLR threshold. Simply stated, the MLR
     is the ratio of the FEHBP’s incurred claims (including expenses for quality healthcare
     improvements (QHI)) to total premium revenue determined by OPM.

     For contract years 2013 and 2014, OPM established an MLR threshold of 85 percent and
     created an MLR corridor. This threshold requires carriers to spend 85 cents of every
     health care premium dollar on health care expenses. If a carrier’s MLR falls between 85
     and 89 percent, no penalty is due. If a carrier’s MLR is less than 85 percent, the carrier
     will owe a subsidization penalty equal to the difference between the threshold and the
     carrier’s actual MLR, multiplied by the denominator of the MLR. If the MLR is over 89
     percent, the carrier receives a credit equal to the difference between the carrier’s reported
     MLR and 89 percent, multiplied by the denominator of the MLR. For contract year 2013,
     this credit can be used to offset any future MLR penalty and is available until it is used up
     by the Plan or the Plan exits the FEHBP. For contract year 2014, the credit can be used
     to offset any future MLR penalties for a period of five years.

     The Plan calculated an MLR of 93.92 percent for contract year 2013 and 91.61 percent
     for contract year 2014. Since these ratios exceeded the OPM established threshold of 89
     percent, the Plan received an MLR credit of $5,647,791 for 2013 and $3,120,141 for
     2014. However, during our review of the Plan’s MLR submission, we identified issues
     that resulted in an audited MLR that was lower than that calculated by the Plan for both
     years. As a result, we determined that the Plan’s MLR credit should be reduced by
     $437,844 and $777,565 in contract years 2013 and 2014, respectively. The specific
     issues that led to the credit adjustments were the following.

     a. QHI and Tax Allocation

        The Plan used a member-based methodology to calculate the FEHBP’s QHI and tax
        allocation expenses for contract year 2013. Specifically, the Plan calculated a
        membership ratio using the large group membership as of March 31, 2014, and the
        FEHBP membership as of December 31, 2013. While we are not opposed to the use

                                               6                   Report No. 1C-52-00-17-031
of a membership ratio to allocate expenses, it is our position that the large group and
FEHBP membership used by the Plan should be consistent and capture the same
timeframes. Section 3.3(a)(4) of the Plan's contract with OPM states that
participating carriers cannot submit or keep in their files data or information of any
description that is not complete, accurate, and current, as support for the FEHBP rate.
Additionally, the Plan did not maintain written policies and procedures for calculating
the allocation of their QHI and tax expenses to the FEHBP. Therefore, some of the
Plan's calculations could not be traced or recalculated using supporting
documentation. Consequently, we recalculated the FEHBP's expenses using the
December 31, 2013, large group and FEHBP membership totals that were
supportable.

The Plan’s QHI expense totaled $514,112 and the tax expense totaled $278,193 for
2013. However, our audited calculations resulted in a total QHI and tax expense
amount of $510,026 and $327,150, respectively. A comparison of the Plan’s total
expense to our audited expense resulted in a QHI expense variance of $4,086 and a
tax expense variance of $48,957. We used our audited QHI and tax expense amounts
in our audited 2013 MLR calculation.

Plan Response:

HAP used the 3/31/14 MLR filing as a basis for their membership, the support of
which comes from the annual filing information prepared in February for the State
on the Supplemental Healthcare Exhibit. The effective date of the membership that
is included in the State’s filing is 12/31/13. Additionally, HAP’s member months
totaling 224,378 was only 2 member months off of the OIG’s total member months
of 224,376. HAP is not sure how the OIG derived their member month amount, but
the difference changed the expense allocation by $4,085, which reduced the credit
by the same amount. Furthermore, the taxes and fees percentage allocated by the
OIG increased their amount by $48,957. In doing so, the OIG actually increased
the credit by $43,952.

“In summary, the net of these two items increased the credit by [$]39,487. The two
figures [$]4,085 and [$]43,952 do not net to the difference, since it is a formula and
one effects the numerator and one effects the denominator.” The main reason for
the decrease in the credit amount comes from the changes to the adjusted incurred
claims.




                                     7                   Report No. 1C-52-00-17-031
  OIG Comment:

  Our audited QHI and tax calculations include the December 31, 2013, large group
  membership of 3,301,364 that tied to the Supplemental Healthcare Exhibit and the
  MLR filing. The Plan’s calculation included 3,275,157 membership for the large
  group. Their membership tied to the March 31, 2014, HHS filing. The total FEHBP
  membership of 244,376 derived from the Plan’s enrollment support provided for
  2013.

  We determined the percentage of taxes allocated to HAP by using their Quality
  Improvements (QI) workbook, which was consistent with the methodology used in
  the 2014 tax allocation calculation. The Plan allocated 83.96 percent of their taxes to
  HAP, however, the QI workbook shows that 83.1 percent of their taxes should have
  been allocated.

  We calculated our audited rates using the revised tax allocation percentage and the
  December 31, 2013, large group and FEHBP membership data.

  The Plan did not provide any written policies and procedures in response to the draft
  report. Our position has remained unchanged for this finding.

b. MLR Claims Data

  i. Disabled Dependents

     The Plan does not maintain adequate supporting documentation for disabled
     dependents and was unable to retrieve documentation to support their eligibility
     prior to January 1, 2011. The FEHBP Handbook states that it is the
     responsibility of the subscriber's enrollment office     A lack of supporting
     to provide documentation for disabled dependents.        documentation resulted
     However, the Plan is responsible for maintaining         in the payment of
     this documentation per OPM Contract 1092 Section         claims for possible
     1.11(b), which requires insurance carriers to            ineligible members.
     maintain all records relating to the contract and to
     make these records available for a period of time specified by FEHBAR
     1652.204-70.

     Additionally, FEHBAR 1652.204-70 is incorporated into the contracts at Section
     3.4, which requires the carrier to maintain individual enrollee and/or patient claim

                                        8                   Report No. 1C-52-00-17-031
   records "for six years after the end of the contract term to which the claim records
   relate." By not maintaining eligibility documentation, which is necessary to
   ensure that the Plan is properly including claims for eligible disabled dependents
   in its incurred claims amounts, the Plan is not only potentially overstating its
   MLR, but it is also not in compliance with contractual and regulatory
   requirements for the maintenance of records.

   To test the impact that this lack of supporting documentation had on the claims
   universe, we reviewed five medical members and two pharmacy members,
   identified as disabled dependents, as part of our overage dependent claims review.
   We found that the Plan did not maintain appropriate documentation to support the
   eligibility for all seven disabled dependents. Consequently, we expanded our
   review to query all 2013 and 2014 medical and pharmacy claims for disabled
   dependents. Once these members were identified, we used SAS to query all 2013
   and 2014 claims incurred for these members. The claims identified from this
   query were removed from the numerator of our audited 2013 and 2014 MLR
   calculations. Specifically, we removed 753 medical claims totaling $241,843 and
   1,250 pharmacy claims totaling $163,055 from the numerator of the 2013 MLR
   calculation. Similarly, we removed 857 medical claims totaling $211,145 and
   1,161 pharmacy claims totaling $135,501 from the numerator of the 2014 MLR
   calculation.

ii. Late Terminations

   The Plan did not terminate coverage for ineligible overage dependents until the
   end of the calendar year. During our audit we met with Plan personnel to discuss
   their dependent termination policies and procedures. Per the
   Plan, they do not terminate dependent coverage for       The Plan’s 2013 and
   overage dependents until either contacted by OPM         2014 MLRs included
   or on their failsafe date of December 31st.              improperly paid claims
   However, according to the FEHBP benefit                  for dependents over the
   brochures, dependent coverage ends once                  age of 26.
   dependents turn 26 years of age, unless they are
   incapable of self-support. It should also be noted that dependents have coverage
   for an additional 31 days after their 26th birthday.

   Our sample of late terminations included 20 medical members and 22 pharmacy
   members. During our review, we found that the Plan did not properly terminate
   dependent coverage for all 42 members 31 days after their 26th birthday. Due to

                                     9                   Report No. 1C-52-00-17-031
   the systematic late terminations in our 2014 medical and pharmacy overage
   dependent samples, we queried all medical and pharmacy claims for members
   over age 26 that were not identified as subscribers, spouses, or disabled for
   contract years 2013 and 2014. We also queried members from the Plan's disabled
   member lists for both years. Once we identified our target universe for testing,
   we queried any claims that were processed for these members after the extension
   of coverage date (31 days after the member’s 26th birthday). The claims
   identified as being improperly paid were removed from the numerator of our
   audited MLR calculations for 2013 and 2014. We removed 252 medical claims
   totaling $63,343 and 214 pharmacy claims totaling $9,089 from the numerator of
   the 2013 MLR calculation. Similarly, we removed 777 medical claims totaling
   $382,754 and 665 pharmacy claims totaling $48,165 from the numerator of the
   2014 MLR calculation.

iii. Coordination of Benefits

   Based on our review, we concluded that the Plan correctly coordinated claims for
   members over age 65.

iv. Deceased Members

   Based on our review, we concluded that the Plan did not pay any medical or
   pharmacy claims for deceased members.

v. High Dollar Pharmacy Scripts

   Based on our review, we concluded that the Plan supported all high dollar claims
   with an original script.

vi. Member Eligibility

   Based on our review, we concluded that the Plan did not pay any medical benefits
   for members, other than those identified above, after they were terminated by the
   Plan, dropped coverage, or during a gap in coverage.

vii. Non-Covered Benefits

   Based on our review, we concluded that the Plan did not pay for benefits not
   covered in the FEHBP Plan brochure.

                                    10                 Report No. 1C-52-00-17-031
Plan Response:

“The sample size audited was for members in 2013 [and] 2014. These were not
new disabled dependents to HAP and were coded in our system prior to these
dates. Unfortunately, any documentation received from the payroll offices for the
sample members are in an offsite storage as these members were coded as
permanently disabled prior to 2011. … HAP maintains all documentation it
receives for FEHB members. As of August 2016, that documentation is now
scanned into a workflow system and is readily available for review. … If HAP does
not receive proper documentation from a payroll office for a disabled dependent –
our enrollment specialist will reach out to the payroll office [three] times to obtain
this approval documentation. These attempts will be documented in our workflow
system for reference. Unfortunately, it is very difficult to work with many of the
payroll offices when we need additional information. We use the contacts in the
CLER system but have been unsuccessful in attempts to solidify membership
details. … The workflow system houses all information and documentation for
FEHB membership and will be readily available and not sent to storage.”

“Prior to April 2017, our system was programmed to terminate any 26 year old
nondisabled dependent at the end of the calendar year unless we received an EDI
transaction for termination or notification from the family or payroll office. …
After April 2017, our system is now programmed to terminate 26 year old
nondisabled dependents as of the dependents date of birth. We have submitted a
request to have the system changed to 31 days after the dependents 26th birthday.
This request will be prioritized in 2018.”

OIG Comment:

We acknowledge the Plan’s claim that they have implemented a system to make the
documentation for disabled dependents available onsite after August 2016.
However, the necessary documentation for disabled dependents was not available for
our audit. We also acknowledge that the Plan is in the process of updating their
system to terminate ineligible overage dependents per OPM’s guidelines in 2018.
However, ineligible overage dependents were not terminated timely during our audit
scope. The Plan did not provide any written policies and procedures in response to
the draft report. Therefore, our position has remained unchanged for this finding.




                                    11                  Report No. 1C-52-00-17-031
      Conclusion

      We corrected the 2013 and 2014 MLR calculations for the errors identified above.
      A comparison of our audited 2013 and 2014 MLR calculations to the 2013 and 2014
      MLR calculations included in the Plan’s submissions to OPM showed overstated credit
      amounts in both years. Specifically, we identified overstated MLR credits of $437,844
      for 2013 and $777,565 for 2014.

      Recommendation 1

      We recommend that the contracting officer instruct OPM’s Office of the Actuary to
      decrease the Plan’s MLR credit by $437,844 for 2013.

      Recommendation 2

      We recommend that the contracting officer instruct OPM’s Office of the Actuary to
      decrease the Plan’s MLR credit by $777,565 for 2014.

      Recommendation 3

      We recommend that the Plan develop written policies and procedures to document their
      FEHBP QHI and tax allocation expense calculations.

      Recommendation 4

      We recommend that the Plan maintain adequate documentation from the responsible
      payroll offices for designated FEHBP disabled dependents.

      Recommendation 5

      We recommend that the Plan establish policies and procedures for terminating non-
      disabled FEHBP dependents 31 days after their 26th birthday.

B. Fraud and Abuse Review

   Based on our review, we concluded that the Plan has adequate procedures in place to provide
   reasonable assurance of detecting fraud and abuse and other illegal acts.




                                              12                  Report No. 1C-52-00-17-031
C. Debarment Review

   Based on our review, we concluded the Plan has procedures in place to identify providers
   debarred or suspended from participation in the FEHBP. Also, we determined the Plan has
   procedures in place to notify both the provider and the subscriber and to stop payment to
   debarred or suspended providers.

D. Offshore Contracting Review

   Based on our review, we concluded that the Plan has adequate procedures to ensure oversight
   of their offshore activities.




                                              13                 Report No. 1C-52-00-17-031
                        EXHIBIT A

                    Health Alliance Plan 

              Summary of MLR Credit Adjustment 



2013 Overstated MLR Credit                    ($437,844)


2014 Overstated MLR Credit                    ($777,565)


Total Overstated MLR Credit                   ($1,215,409)




                                             Report No. 1C-52-00-17-031
                                            EXHIBIT B
                                         Health Alliance Plan
                                     2013 MLR Credit Adjustment


                                                                  Plan             Audited
Adjusted Incurred Claims                                      $107,239,111      $106,761,781
Quality Health Improvement Expenses                             $514,112          $510,026

MLR Numerator                                                 $107,753,223      $107,271,807
Premium Income                                                $115,003,397      $115,003,397
Federal and State Taxes and Licensing or Regulatory Fees        $278,193          $327,150

MLR Denominator (a)                                           $114,725,204      $114,676,247
FEHBP Medical Loss Ratio (b)                                    93.92%            93.54%

2013 FEHBP MLR Lower Corridor (c)                                  85.00%          85.00%
2013 FEHBP MLR Upper Corridor (d)                                  89.00%          89.00%

Penalty Calculation (If (b) is less than (c), ((c-b)*a)               $0             $0
Credit Calculation (If (b) is greater than (c), ((b-d)*a)         $5,647,791     $5,209,947
Credit Adjustment Due To OPM                                                     ($437,844)




                                                                    Report No. 1C-52-00-17-031
                                          EXHIBIT C

                                       Health Alliance Plan
                                   2014 MLR Credit Adjustment


                                                                    Plan          Audited
Adjusted Incurred Claims                                        $108,724,647   $107,947,082
Quality Health Improvement Expenses                               $882,243       $882,243

MLR Numerator                                                   $109,606,890   $108,829,325
Premium Income                                                  $122,566,963   $122,566,963
Federal and State Taxes and Licensing or Regulatory Fees         $2,918,930     $2,918,930

MLR Denominator (a)                                             $119,648,033   $119,648,033
FEHBP Medical Loss Ratio (b)                                      91.61%         90.96%

2014 FEHBP MLR Lower Corridor (c)                                 85.00%         85.00%
2014 FEHBP MLR Upper Corridor (d)                                 89.00%         89.00%

Penalty Calculation (If (b) is less than (c), ((c-b)*a)              $0             $0
Credit Calculation (If (b) is greater than (c), ((b-d)*a)        $3,120,141     $2,342,576
Credit Adjustment Due To OPM                                                    ($777,565)




                                                                 Report No. 1C-52-00-17-031
                                               EXHIBIT D
                            Medical Claims Sample Selection Criteria/Methodology

                                                                                                      Results
 Medical Claims          Universe         Universe    Universe      Sample Criteria      Sample      Projected
  Review Area            Criteria        (Number)     (Dollars)        and Size           Type         to the
                                                                                                     Universe?

Coordination of
                                                                   15 claims with the
    Benefits         Members greater
                                          82,180                   highest amount
 w/Medicare –        than or equal to                $17,681,167                        Judgmental     No
                                          claims                   paid totaling
High Dollar 2014     age 65.
                                                                   $1,577,988.



 Coordination of                                                   Used SAS to
                     Members greater
    Benefits                              82,180                   randomly select 15    Random        No
                     than or equal to                $17,681,167
  w/Medicare –                            claims                   claims totaling
                     age 65.
  Random 2014                                                      $4,566.



                                                                   Used SAS to
                     Medical claims                                randomly select 25
   Dependent
                     for dependents        170                     members from the
 Eligibility 2014                                       N/A
                     greater than or     members                   universe after        Random        No
                     equal to age 26.                              removing duplicate
                                                                   members.



                                                                   Used SAS to
                                                                   randomly select 25
Deceased Member      Members greater
                                           64                      members from the
      2014           than or equal to                   N/A
                                         members                   universe after        Random        No
                     age 90.
                                                                   removing duplicate
                                                                   members.



                                                                   Used SAS to
Member Eligibility   Members with at
                                          17,204                   randomly select 25
     2014            least one medical                  N/A
                                         members                   members from the      Random        No
                     claim in CY 2014
                                                                   universe.




                                                                             Report No. 1C-52-00-17-031
                                                EXHIBIT E
                           Pharmacy Claims Sample Selection Criteria/Methodology

                                                                                                       Results
 Pharmacy Claims           Universe                                Sample Criteria and     Sample     Projected
                                            Universe   Universe
   Review Area             Criteria                                       Size              Type        to the
                                           (Number)    (Dollars)
                                                                                                      Universe?

                                                                   All 18 pharmacy          N/A             N/A
                        Pharmacy
High Dollar Scripts                                                claims in the
                        claims greater
      2014                                 18 claims   $399,503    universe totaling
                        than or equal to
                                                                   $399,503.
                        $15,000.



                                                                   Used SAS to
                                                                   randomly select 24
                        Pharmacy                                   members from the        Random           No
                        claims for                                 universe after
Dependent Eligibility
                        dependents           176                   removing duplicate
      2014                                               N/A
                        greater than or    members                 members and any
                        equal to age                               members selected in
                        26.                                        the Medical
                                                                   Dependent Eligibility
                                                                   review.



                                                                   Used SAS to
                                                                   randomly select 14
                                                                   members from the
                        Members                                    universe after
 Deceased Member        greater than or      63                    removing duplicate
                                                         N/A                               Random           No
       2014             equal to age       members                 members and any
                        90.                                        members already
                                                                   selected in the
                                                                   Medical Deceased
                                                                   Member review.




                                                                               Report No. 1C-52-00-17-031
                                            APPENDIX
                                                 
                                                                
ƒ—ƒ”›ͳʹǡʹͲͳͺ

                                                                   
Š‹‡ˆǡ‘—‹–›Ȃƒ–‡†—†‹–
”‘—’•
‹–‡†–ƒ–‡•ˆˆ‹…‡‘ˆ‡”•‘‡Žƒƒ‰‡‡–
ƒ•Š‹‰–‘ǡʹͲͶͳͷ

‡ƒ”             ǡ

—””‡•’‘•‡•–‘–Š‡ˆ‹†‹‰•ƒ†”‡…‘‡†ƒ–‹‘•‘ˆ–Š‡†”ƒˆ–ƒ—†‹–”‡’‘”–†‡–ƒ‹Ž‹‰–Š‡	
‘’‡”ƒ–‹‘•ƒ–‡ƒŽ–ŠŽŽ‹ƒ…‡Žƒǡ’Žƒ…‘†‡•ͷʹƒ†
ˆ‘”…‘–”ƒ…–›‡ƒ”•ʹͲͳ͵ƒ†ʹͲͳͶƒ”‡
‹…‘”’‘”ƒ–‡†„‡Ž‘™ǣ

                        DeletedbyOIG–NotRelevanttotheFinalReport

‡…–‹‘ͳƒƒ†ƒšŽŽ‘…ƒ–‹‘ȂʹͲͳ͵

   ͳȌ Š‡› ‹†‹…ƒ–‡† –Šƒ– ™‡ —•‡†  Žƒ”‰‡ ‰”‘—’ ‡„‡”•Š‹’ ƒ• ‘ˆ ͵Ȁ͵ͳȀͳͶǤ  ›
        ‡š’Žƒƒ–‹‘–‘–Š‡‹†‹…ƒ–‡†–Šƒ–—•‡–Š‡͵Ȁ͵ͳȀͳͶˆ‹Ž‹‰–Šƒ–™‡†‘ˆ‘”ƒ•ƒ
        „ƒ•‹•ˆ‘”ǯ•‡„‡”•Š‹’ǡ„—–‹–…‘‡•ˆ”‘–Š‡ƒ—ƒŽˆ‹Ž‹‰‹ˆ‘”ƒ–‹‘™‡Šƒ††‘‡
        ‹ 	‡„”—ƒ”› ˆ‘” –Š‡ –ƒ–‡ ‘ –Š‡ —’’Ž‡‡–ƒŽ ‡ƒŽ–Š…ƒ”‡ šŠ‹„‹–Ǥ Š‹• ˆ‹Ž‹‰ ™‹–Š –Š‡
        –ƒ–‡‹•–Š‡‹ˆ‘”ƒ–‹‘ƒ•‘ˆͳʹȀ͵ͳȀͳ͵Ǥƒ›‡˜‡––Š‡‡„‡”‘–Š•—•‡†™ƒ•
        ʹʹͶǡ͵͹ͺ ƒ† –Š‡ ˆ‹‰—”‡ –Š‡› Šƒ˜‡ ‹ –Š‡‹” •’”‡ƒ†•Š‡‡– ‹• ʹʹͶǡ͵͹͸Ǥ  †‹ˆˆ‡”‡…‡ ‘ˆ ʹ
        ‡„‡”‘–Š•Ǥƒ‘–•—”‡™Š‡”‡–Š‡›‘„–ƒ‹‡†–Š‡ʹʹͶǡ͵͹͸‘”‹•™Šƒ–ƒ–›’‘ǡ„—–
        –Š‹•…Šƒ‰‡†–Š‡—ƒŽ‹–›’”‘˜‡‡–•‡š’‡•‡ƒŽŽ‘…ƒ–‹‘„›̈́ͶǡͲͺͷǡ™Š‹…Š”‡†—…‡†–Š‡
        …”‡†‹–„›–Š‡•ƒ‡ƒ‘—–Ǥ
        
   ʹȌ ƒ‘–‡šƒ…–Ž›•—”‡™Š‡”‡–Š‡›‘„–ƒ‹‡†–Š‡–ƒš‡•ƒ†ˆ‡‡•’‡”…‡–ƒ‰‡–‘ƒŽŽ‘…ƒ–‡†–Š‡•‡
        ‡š’‡•‡•–‘–Š‡‹”’Žƒǡ„—–‹†‘‹‰†‘–Š‡›‹…”‡ƒ•‡†–Š‡‹”ƒ‘—–„›Ͷͺǡͻͷ͹ǤŠ‹•™ƒ•
        ˆ”‘›‘”‹‰‹ƒŽƒ‘—–‘ˆʹ͹ͺǡͳͻ͵–‘͵ʹ͹ǡͳͷͲǤ†‘‹‰•‘–Š‡›ƒ…–—ƒŽŽ›‹…”‡ƒ•‡†‘—”
        …”‡†‹–„›Ͷ͵ǡͻͷʹǡ™Š‹…Š–Š‡›…ƒ•—”‡Ž›†‘Ǥ
        
   ͵Ȍ •—ƒ”›ǡ–Š‡‡–‘ˆ–Š‡•‡–™‘‹–‡•‹…”‡ƒ•‡†–Š‡…”‡†‹–„›͵ͻǡͶͺ͹ǤŠ‡–™‘ˆ‹‰—”‡•
        ͶǡͲͺͷƒ†Ͷ͵ǡͻͷʹ†‘‘–‡––‘–Š‡†‹ˆˆ‡”‡…‡ǡ•‹…‡‹–‹•ƒˆ‘”—Žƒƒ†‘‡‡ˆˆ‡…–•–Š‡
        —‡”ƒ–‘”ƒ†‘‡‡ˆˆ‡…–•–Š‡†‡‘‹ƒ–‘”Ǥ–‹•…Ž‘•‡„—–‘ˆˆ„›͵͹ͻǤ
        

        
‹…‡ –Š‡•‡ –™‘ ‹–‡• ƒ…–—ƒŽŽ› ‹…”‡ƒ•‡ –Š‡ …”‡†‹– ˆ‘” ʹͲͳ͵ –Š‡ †‡…”‡ƒ•‡ ‹ –Š‡ …”‡†‹– …‘‡•
ƒ‹Ž›ˆ”‘–Š‡ƒ†Œ—•–‡†‹…—””‡†…Žƒ‹ƒ‘—–‘ˆͶ͹͹ǤŠ‡”‡ƒ•‘ˆ‘”–Š‹•‹•‹†‹…ƒ–‡†‹–Š‡
”‡’‘”– ˆ‘” ƒ ˆ‡™ †‹ˆˆ‡”‡– ˆ‹†‹‰•Ǥ Š‹• ‡– ™‹–Š –Š‡ …”‡†‹– ‹…”‡ƒ•‡ ‘ –Š‡ ƒ†‹ ƒ† –ƒš‡•
’”‘˜‹†‡•–Š‡‡–†‡…”‡ƒ•‡‹–Š‡…”‡†‹–‘ˆͶ͵ͺ–Šƒ––Š‡›ƒ”‡‹†‹…ƒ–‹‰Ǥ
                                                                              Report No. 1C-52-00-17-031

                       DeletedbyOIG–NotRelevanttotheFinalReport


‡…–‹‘‹ǤǦ‹•ƒ„Ž‡†‡’‡†‡–•ǡ’ƒ‰‡͵

   ͳȌ Š‡•ƒ’Ž‡•‹œ‡ƒ—†‹–‡†™ƒ•ˆ‘”‡„‡”•‹ʹͲͳ͵ƬʹͲͳͶǤŠ‡•‡™‡”‡‘–‡™†‹•ƒ„Ž‡†
       †‡’‡†‡–•–‘ƒ†™‡”‡…‘†‡†‹‘—”•›•–‡’”‹‘”–‘–Š‡•‡†ƒ–‡•Ǥˆ‘”–—ƒ–‡Ž›ǡƒ›
       †‘…—‡–ƒ–‹‘”‡…‡‹˜‡†ˆ”‘–Š‡’ƒ›”‘ŽŽ‘ˆˆ‹…‡•ˆ‘”–Š‡•ƒ’Ž‡‡„‡”•ƒ”‡‹ƒ‘ˆˆ•‹–‡
       •–‘”ƒ‰‡ƒ•–Š‡•‡‡„‡”•™‡”‡…‘†‡†ƒ•’‡”ƒ‡–Ž›†‹•ƒ„Ž‡†’”‹‘”–‘ʹͲͳͳǤ
       
   ʹȌ ƒ‹–ƒ‹•ƒŽŽ†‘…—‡–ƒ–‹‘‹–”‡…‡‹˜‡•ˆ‘”	‡„‡”•Ǥ•‘ˆ—‰—•–ʹͲͳ͸ǡ–Šƒ–
       †‘…—‡–ƒ–‹‘ ‹• ‘™ •…ƒ‡† ‹–‘ ƒ ™‘”ˆŽ‘™ •›•–‡ ƒ† ‹• ”‡ƒ†‹Ž› ƒ˜ƒ‹Žƒ„Ž‡ ˆ‘”
       ”‡˜‹‡™Ǥ‡ƒ”…Šƒ„Ž‡ˆ‹‡Ž†•‹…Ž—†‡„›‡„‡”ƒ‡ǡ†ƒ–‡‘ˆ„‹”–Šǡǡ‘”‡„‡”
       ‹†Ǥ
       
   ͵Ȍ ˆ  †‘‡• ‘– ”‡…‡‹˜‡ ’”‘’‡” †‘…—‡–ƒ–‹‘ ˆ”‘ ƒ ’ƒ›”‘ŽŽ ‘ˆˆ‹…‡ ˆ‘” ƒ †‹•ƒ„Ž‡†
       †‡’‡†‡–Ȃ‘—”‡”‘ŽŽ‡–•’‡…‹ƒŽ‹•–™‹ŽŽ”‡ƒ…Š‘—––‘–Š‡’ƒ›”‘ŽŽ‘ˆˆ‹…‡͵–‹‡•–‘‘„–ƒ‹
       –Š‹• ƒ’’”‘˜ƒŽ †‘…—‡–ƒ–‹‘Ǥ Š‡•‡ ƒ––‡’–• ™‹ŽŽ „‡ †‘…—‡–‡† ‹ ‘—” ™‘”ˆŽ‘™
       •›•–‡ˆ‘””‡ˆ‡”‡…‡Ǥˆ‘”–—ƒ–‡Ž›ǡ‹–‹•˜‡”›†‹ˆˆ‹…—Ž––‘™‘”™‹–Šƒ›‘ˆ–Š‡’ƒ›”‘ŽŽ
       ‘ˆˆ‹…‡•™Š‡™‡‡‡†ƒ††‹–‹‘ƒŽ‹ˆ‘”ƒ–‹‘Ǥ‡—•‡–Š‡…‘–ƒ…–•‹–Š‡•›•–‡„—–
       Šƒ˜‡„‡‡—•—……‡••ˆ—Ž‹ƒ––‡’–•–‘•‘Ž‹†‹ˆ›‡„‡”•Š‹’†‡–ƒ‹Ž•Ǥ
       
   ͶȌ Š‡™‘”ˆŽ‘™•›•–‡Š‘—•‡•ƒŽŽ‹ˆ‘”ƒ–‹‘ƒ††‘…—‡–ƒ–‹‘ˆ‘”  ‡„‡”•Š‹’
       ƒ†™‹ŽŽ„‡”‡ƒ†‹Ž›ƒ˜ƒ‹Žƒ„Ž‡ƒ†‘–•‡––‘•–‘”ƒ‰‡Ǥ‰ƒ‹ǡ –Š‹•™‘”ˆŽ‘™•›•–‡™ƒ•
       ‹’Ž‡‡–‡†‹—‰—•–ʹͲͳ͸Ǥ
       

                     DeletedbytheOIG–NotRelevanttotheFinalReport


‡…–‹‘‹‹ǤǦƒ–‡‡”‹ƒ–‹‘•ǡ’ƒ‰‡Ͷ

   ͳȌ ”‹‘” –‘ ’”‹Ž ʹͲͳ͹ǡ ‘—” •›•–‡ ™ƒ• ’”‘‰”ƒ‡† –‘ –‡”‹ƒ–‡ ƒ› ʹ͸ ›‡ƒ” ‘Ž†
       ‘†‹•ƒ„Ž‡† †‡’‡†‡– ƒ– –Š‡ ‡† ‘ˆ –Š‡ …ƒŽ‡†ƒ” ›‡ƒ” —Ž‡•• ™‡ ”‡…‡‹˜‡† ƒ 
       –”ƒ•ƒ…–‹‘ˆ‘”–‡”‹ƒ–‹‘‘”‘–‹ˆ‹…ƒ–‹‘ˆ”‘–Š‡ˆƒ‹Ž›‘”’ƒ›”‘ŽŽ‘ˆˆ‹…‡Ǥ
       
   ʹȌ ˆ–‡”’”‹ŽʹͲͳ͹ǡ‘—”•›•–‡‹•‘™’”‘‰”ƒ‡†–‘–‡”‹ƒ–‡ʹ͸›‡ƒ”‘Ž†‘†‹•ƒ„Ž‡†
       †‡’‡†‡–•ƒ•‘ˆ–Š‡†‡’‡†‡–•†ƒ–‡‘ˆ„‹”–ŠǤ‡Šƒ˜‡•—„‹––‡†ƒ”‡“—‡•––‘Šƒ˜‡–Š‡
       •›•–‡ …Šƒ‰‡† –‘ ͵ͳ †ƒ›• ƒˆ–‡” –Š‡ †‡’‡†‡–• ʹ͸–Š „‹”–Š†ƒ›Ǥ Š‹• ”‡“—‡•– ™‹ŽŽ „‡
       ’”‹‘”‹–‹œ‡†‹ʹͲͳͺǤ

                        DeletedbyOIG–NotRelevanttotheFinalReport

                                                   

                                                   

                                                                         Report No. 1C-52-00-17-031
Conclusion

‡…‘””‡…–‡†–Š‡ʹͲͳ͵ƒ†ʹͲͳͶ…ƒŽ…—Žƒ–‹‘•ˆ‘”–Š‡‡””‘”•‹†‡–‹ˆ‹‡†ƒ„‘˜‡Ǥ…‘’ƒ”‹•‘
‘ˆ‘—”ƒ—†‹–‡†ʹͲͳ͵ƒ†ʹͲͳͶ…ƒŽ…—Žƒ–‹‘•–‘–Š‡ʹͲͳ͵ƒ†ʹͲͳͶ…ƒŽ…—Žƒ–‹‘•‹…Ž—†‡†
‹–Š‡Žƒǯ••—„‹••‹‘•–‘•Š‘™‡†‘˜‡”•–ƒ–‡†…”‡†‹–ƒ‘—–•‹„‘–Š›‡ƒ”•Ǥ’‡…‹ˆ‹…ƒŽŽ›ǡ
™‡‹†‡–‹ˆ‹‡†‘˜‡”•–ƒ–‡†…”‡†‹–•‘ˆ̈́Ͷ͵͹ǡͺͶʹˆ‘”ʹͲͳ͵ƒ†̈́͹͹͹ǡͷ͸͸ˆ‘”ʹͲͳͶǤ

Recommendation1

‡”‡…‘‡†–Šƒ––Š‡…‘–”ƒ…–‹‰‘ˆˆ‹…‡”‹•–”—…–ǯ•ˆˆ‹…‡‘ˆ–Š‡…–—ƒ”›–‘†‡…”‡ƒ•‡–Š‡
Žƒǯ•…”‡†‹–„›̈́Ͷ͵͹ǡͺͶʹˆ‘”ʹͲͳ͵Ǥ

Recommendation2

‡”‡…‘‡†–Šƒ––Š‡…‘–”ƒ…–‹‰‘ˆˆ‹…‡”‹•–”—…–ǯ•ˆˆ‹…‡‘ˆ–Š‡…–—ƒ”›–‘†‡…”‡ƒ•‡–Š‡
Žƒǯ•…”‡†‹–„›̈́͹͹͹ǡͷ͸͸ˆ‘”ʹͲͳͶǤ

Recommendation3

‡”‡…‘‡†–Šƒ––Š‡Žƒ†‡˜‡Ž‘’™”‹––‡’‘Ž‹…‹‡•ƒ†’”‘…‡†—”‡•–‘†‘…—‡––Š‡‹”	
ƒ†–ƒšƒŽŽ‘…ƒ–‹‘‡š’‡•‡…ƒŽ…—Žƒ–‹‘•Ǥ

 ”‡…‘‡†• –Šƒ– ™‡ †‡˜‡Ž‘’ ™”‹––‡ ’‘Ž‹…‹‡• ƒ† ’”‘…‡†—”‡• –‘ †‘…—‡– –Š‡‹”
ƒ†‹‹•–”ƒ–‹˜‡ƒ†–ƒš‡š’‡•‡…ƒŽ…—Žƒ–‹‘•ƒ†™‡™‹ŽŽ†‘–Š‹•Ǥˆƒ…–ǡ‹ʹͲͳͶ–Š‡‡š’Žƒƒ–‹‘
‹•’”‘˜‹†‡†‹–Š‡ˆƒ””‹‰Š–‘Š‘™–Š‡ƒŽŽ‘…ƒ–‹‘‹•†‘‡ƒ•‘—””‡ˆ‡”‡…‡Ȁ’”‘…‡†—”‡ǡ•‘™‡ƒ›
ƒŽ”‡ƒ†› „‡ ‡‡–‹‰ –Š‹• ”‡“—‡•–Ǥ‡ Šƒ˜‡ ƒŽ”‡ƒ†› …‘’Ž‡–‡† –Š‡ ʹͲͳͷ ƒ† ʹͲͳ͸  
ˆ‹Ž‹‰•ǡ™Š‹…ŠŠƒ˜‡„‘–Š’”‘˜‹†‡†ƒ††‹–‹‘ƒŽ…”‡†‹–•–‘Ǥƒ…ŠŽ‹‡‹•‡šƒ…–Ž›”‡ˆ‡”‡…‡†ƒ•–‘
Š‘™–Š‡ƒ‘—–•ƒ”‡ƒŽŽ‘…ƒ–‡†–‘ƒ†™‡…‘–‹—‡–‘†‘–Š‹•‹–Š‡›‡ƒ”•ƒˆ–‡”ʹͲͳͶǤ

Recommendation4

‡”‡…‘‡†–Šƒ––Š‡Žƒƒ‹–ƒ‹ƒ†‡“—ƒ–‡†‘…—‡–ƒ–‹‘ˆ”‘–Š‡”‡•’‘•‹„Ž‡’ƒ›”‘ŽŽ
‘ˆˆ‹…‡•ˆ‘”†‡•‹‰ƒ–‡†	†‹•ƒ„Ž‡††‡’‡†‡–•Ǥ

         ͳȌ Š‡•ƒ’Ž‡•‹œ‡ƒ—†‹–‡†™ƒ•ˆ‘”‡„‡”•‹ʹͲͳ͵ƬʹͲͳͶǤŠ‡•‡™‡”‡‘–‡™
            †‹•ƒ„Ž‡††‡’‡†‡–•–‘ƒ†™‡”‡…‘†‡†‹‘—”•›•–‡’”‹‘”–‘–Š‡•‡
            †ƒ–‡•Ǥˆ‘”–—ƒ–‡Ž›ǡƒ›†‘…—‡–ƒ–‹‘”‡…‡‹˜‡†ˆ”‘–Š‡’ƒ›”‘ŽŽ‘ˆˆ‹…‡•ˆ‘”–Š‡
            •ƒ’Ž‡‡„‡”•ƒ”‡‹ƒ‘ˆˆ•‹–‡•–‘”ƒ‰‡ƒ•–Š‡•‡‡„‡”•™‡”‡…‘†‡†ƒ•
            ’‡”ƒ‡–Ž›†‹•ƒ„Ž‡†’”‹‘”–‘ʹͲͳͳǤ
            
         ʹȌ ƒ‹–ƒ‹•ƒŽŽ†‘…—‡–ƒ–‹‘‹–”‡…‡‹˜‡•ˆ‘”	‡„‡”•Ǥ•‘ˆ—‰—•–ʹͲͳ͸ǡ
            –Šƒ–†‘…—‡–ƒ–‹‘‹•‘™•…ƒ‡†‹–‘ƒ™‘”ˆŽ‘™•›•–‡ƒ†‹•”‡ƒ†‹Ž›ƒ˜ƒ‹Žƒ„Ž‡
            ˆ‘””‡˜‹‡™Ǥ‡ƒ”…Šƒ„Ž‡ˆ‹‡Ž†•‹…Ž—†‡„›‡„‡”ƒ‡ǡ†ƒ–‡‘ˆ„‹”–Šǡǡ‘”
            ‡„‡”‹†Ǥ
            
                                                                       Report No. 1C-52-00-17-031
       ͵Ȍ ˆ†‘‡•‘–”‡…‡‹˜‡’”‘’‡”†‘…—‡–ƒ–‹‘ˆ”‘ƒ’ƒ›”‘ŽŽ‘ˆˆ‹…‡ˆ‘”ƒ†‹•ƒ„Ž‡†
          †‡’‡†‡–Ȃ‘—”‡”‘ŽŽ‡–•’‡…‹ƒŽ‹•–™‹ŽŽ”‡ƒ…Š‘—––‘–Š‡’ƒ›”‘ŽŽ‘ˆˆ‹…‡͵–‹‡•–‘
          ‘„–ƒ‹–Š‹•ƒ’’”‘˜ƒŽ†‘…—‡–ƒ–‹‘ǤŠ‡•‡ƒ––‡’–•™‹ŽŽ„‡†‘…—‡–‡†‹‘—”
          ™‘”ˆŽ‘™•›•–‡ˆ‘””‡ˆ‡”‡…‡Ǥˆ‘”–—ƒ–‡Ž›ǡ‹–‹•˜‡”›†‹ˆˆ‹…—Ž––‘™‘”™‹–Šƒ›
          ‘ˆ–Š‡’ƒ›”‘ŽŽ‘ˆˆ‹…‡•™Š‡™‡‡‡†ƒ††‹–‹‘ƒŽ‹ˆ‘”ƒ–‹‘Ǥ‡—•‡–Š‡…‘–ƒ…–•‹
          –Š‡•›•–‡„—–Šƒ˜‡„‡‡—•—……‡••ˆ—Ž‹ƒ––‡’–•–‘•‘Ž‹†‹ˆ›‡„‡”•Š‹’
          †‡–ƒ‹Ž•Ǥ
          
       ͶȌ Š‡™‘”ˆŽ‘™•›•–‡Š‘—•‡•ƒŽŽ‹ˆ‘”ƒ–‹‘ƒ††‘…—‡–ƒ–‹‘ˆ‘”	
          ‡„‡”•Š‹’ƒ†™‹ŽŽ„‡”‡ƒ†‹Ž›ƒ˜ƒ‹Žƒ„Ž‡ƒ†‘–•‡––‘•–‘”ƒ‰‡Ǥ‰ƒ‹ǡ–Š‹•
          ™‘”ˆŽ‘™•›•–‡™ƒ•‹’Ž‡‡–‡†‹—‰—•–ʹͲͳ͸Ǥ

Recommendation5

‡ ”‡…‘‡† –Šƒ– –Š‡ Žƒ ‡•–ƒ„Ž‹•Š ’‘Ž‹…‹‡• ƒ† ’”‘…‡†—”‡• ˆ‘” –‡”‹ƒ–‹‰ ‘†‹•ƒ„Ž‡†
  †‡’‡†‡–•͵ͳ †ƒ›•ƒˆ–‡”–Š‡‹”ʹ͸–Š„‹”–Š†ƒ›Ǥ

       ͳȌ ”‹‘” –‘ ’”‹Ž ʹͲͳ͹ǡ ‘—” •›•–‡ ™ƒ• ’”‘‰”ƒ‡† –‘ –‡”‹ƒ–‡ ƒ› ʹ͸ ›‡ƒ” ‘Ž†
            ‘†‹•ƒ„Ž‡† †‡’‡†‡– ƒ– –Š‡ ‡† ‘ˆ –Š‡ …ƒŽ‡†ƒ” ›‡ƒ” —Ž‡•• ™‡ ”‡…‡‹˜‡† ƒ 
            –”ƒ•ƒ…–‹‘ˆ‘”–‡”‹ƒ–‹‘‘”‘–‹ˆ‹…ƒ–‹‘ˆ”‘–Š‡ˆƒ‹Ž›‘”’ƒ›”‘ŽŽ‘ˆˆ‹…‡Ǥ
            
       ʹȌ ˆ–‡”’”‹ŽʹͲͳ͹ǡ‘—”•›•–‡‹•‘™’”‘‰”ƒ‡†–‘–‡”‹ƒ–‡ʹ͸›‡ƒ”‘Ž†‘†‹•ƒ„Ž‡†
            †‡’‡†‡–•ƒ•‘ˆ–Š‡†‡’‡†‡–•†ƒ–‡‘ˆ„‹”–ŠǤ‡Šƒ˜‡•—„‹––‡†ƒ”‡“—‡•––‘Šƒ˜‡
            –Š‡•›•–‡…Šƒ‰‡†–‘͵ͳ†ƒ›•ƒˆ–‡”–Š‡†‡’‡†‡–•ʹ͸–Š„‹”–Š†ƒ›ǤŠ‹•”‡“—‡•–™‹ŽŽ
            „‡’”‹‘”‹–‹œ‡†‹ʹͲͳͺǤ

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‹…‡”‡Ž›ǡ






‹”‡…–‘”ǡ—†‹–‹‰‡”˜‹…‡•ƒ†‘’Ž‹ƒ…‡




                                                                         Report No. 1C-52-00-17-031
                                                               



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