Audit of the Information Systems General and Application Controls at Optima Health 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)

             OFFICE OF AUDITS

  Final Audit Report

          Report Number 1C-PG-00-17-045
                   May 10, 2018
                EXECUTIVE SUMMARY
                      Audit of the Information Systems General and Application Controls at
                                               Optima Health Plan
Report No. 1C-PG-00-17-045                                                                              May 10, 2018

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

 Optima Health Plan (Optima) is a       Our audit of the IT security controls of Optima and Sentara determined:
 subsidiary of Sentara Healthcare
 (Sentara) and contracts with the       •	 Sentara has an adequate risk assessment methodology in place.
 U.S. Office of Personnel                  However, Sentara could make improvements in this area by
 Management as part of the Federal         establishing a vendor risk management process.
 Employees Health Benefits Program
 (FEHBP).                               •	 Sentara could improve its logical access controls by strengthening
 The objectives of this audit were to
                                        •	 Sentara could improve its network security posture by improving
 evaluate controls over the
                                           network segmentation controls. In addition, restricting user
 confidentiality, integrity, and
                                           privileges on endpoint devices could protect against internal threats.
 availability of FEHBP data
 processed and maintained in            •	 Sentara conducts vulnerability scanning of its server network.
 Optima’s information technology           However, it does not have policies and procedures to ensure
 (IT) environment.                         vulnerabilities are adequately remediated.

 What Did We Audit?                     •	 Sentara does not have formally documented security configuration
                                           standards for its servers. In addition, Sentara is not following its
 The scope of this audit centered on       policies and procedures to ensure only supported software is used.
 the information systems used by
                                        •	 Sentara maintains adequate disaster recovery and business continuity
 Optima to process and store data
                                           plans. However, a business impact analysis of Optima’s FEHBP
 related to medical encounters and
                                           claims process has not been performed.
 insurance claims for FEHBP
 members. The audit also included       •	 Optima does not have procedures to validate vendor activities that
 general IT controls managed by            support the claims process.
 Optima’s parent company, Sentara
 Healthcare.                            Optima did not provide any comments in response to the draft report,
                                        other than stating they have begun the process to implement the

 Michael R. Esser Assistant
 Inspector General for

BIA       Business Impact Analysis
CFR       Code of Federal Regulations
FEHBP     Federal Employees Health Benefits Program
FISCAM    Federal Information Security Controls Audit Manual
GAO       U.S. Government Accountability Office
IT        Information Technology
NIST SP   National Institute of Standards and Technology’s Special Publication
OIG       Office of the Inspector General
OMB       U.S. Office of Management and Budget
OPM       U.S. Office of Personnel Management
Optima    Optima Health Plan
Sentara   Sentara Healthcare

                         TABLE OF CONTENTS

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

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

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

II.    OBJECTIVES, SCOPE, AND METHODOLOGY ..................................................2

III.   AUDIT FINDINGS AND RECOMMENDATIONS.................................................5

       A. Security Management ..............................................................................................5

       B. Access Controls .......................................................................................................6

       C. Network Security .....................................................................................................9

       D. Configuration Management ...................................................................................13

       E. Contingency Planning............................................................................................16

       F. Claims Adjudication ..............................................................................................17

       APPENDIX: Optima’s February 13, 2018, response to the draft audit report, issued
                 December 13, 2017.

                             I. BACKGROUND

This final report details the findings, conclusions, and recommendations resulting from the audit
of general and application controls over the information systems responsible for processing
Federal Employees Health Benefits Program (FEHBP) data by Optima Health Plan (Optima).

The audit was conducted pursuant to FEHBP contracts CS 2952; 5 U.S.C. Chapter 89; and 5
Code of Federal Regulations (CFR) Chapter 1, Part 890. The audit was performed by the U.S.
Office of Personnel Management’s (OPM) Office of the Inspector General (OIG), as established
by the Inspector General Act of 1978, as amended.

The FEHBP was established by the Federal Employees Health Benefits Act, enacted on
September 28, 1959. The FEHBP was created to provide health insurance benefits for Federal
employees, annuitants, and qualified dependents. The provisions of the Act are implemented by
OPM through regulations codified in Title 5, Chapter 1, Part 890 of the CFR. Health insurance
coverage is made available through contracts with various carriers that provide service benefits,
indemnity benefits, or comprehensive medical services.

Optima is a subsidiary of Sentara Healthcare (Sentara) which offers a wide range of health care
products and services in addition to its FEHBP line of business. This was our first audit of
Sentara and Optima’s information technology (IT) general and application controls. All Sentara
and Optima personnel that worked with the auditors were helpful and open to ideas and
suggestions. They viewed the audit as an opportunity to examine practices and to make changes
or improvements as necessary. Their positive attitude and helpfulness throughout the audit was
greatly appreciated.

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 The objectives of this audit were to evaluate controls over the confidentiality, integrity, and
 availability of FEHBP data processed and maintained in Optima’s IT environments. We
 accomplished these objectives by reviewing the following areas:

 •   Security management;

 •   Access controls;

 •   Network security;

 •   Configuration management;

 •   Contingency planning; and

 •   Application controls specific to Optima’s claims processing system.


 This performance audit was conducted in accordance with Generally Accepted Government
 Auditing Standards issued by the Comptroller General of the United States. Accordingly, we
 obtained an understanding of Optima’s internal controls through interviews and observations, as
 well as inspection of various documents, including IT and other related organizational policies
 and procedures. This understanding of Optima’s internal controls was used in planning the audit
 by determining the extent of compliance testing and other auditing procedures necessary to
 verify that the internal controls were properly designed, placed in operation, and effective.

 The scope of this audit centered on the information systems used by Optima to process medical
 insurance claims and/or store the data of FEHBP members. Sentara manages many of the
 information technology resources and processes supporting Optima. Therefore, the IT
 operations of Sentara were considered to be within the scope of this audit. The business
 processes reviewed are primarily located in Virginia Beach, Virginia.

                                               2                       Report No. 1C-PG-00-17-045 

The onsite portion of this audit was performed in August and September of 2017. We completed
additional audit work before and after the on-site visit at our office in Washington, D.C. The
findings, recommendations, and conclusions outlined in this report are based on the status of
information system general and application controls in place at Optima and Sentara as of October

In conducting our audit, we relied to varying degrees on computer-generated data provided by
Optima. Due to time constraints, we did not verify the reliability of the data used to complete
some of our audit steps, but we determined that it was adequate to achieve our audit objectives.
However, when our objective was to assess computer-generated data, we completed audit steps
necessary to obtain evidence that the data was valid and reliable.

In conducting this review we:

•	 Gathered documentation and conducted interviews;

•	 Reviewed Optima’s business structure and environment;

•	 Performed a risk assessment of Optima’s information systems environment and applications,
   and prepared an audit program based on the assessment and the U.S. Government
   Accountability Office’s (GAO) Federal Information System Controls Audit Manual
   (FISCAM); and

•	 Conducted various compliance tests to determine the extent to which established controls and
   procedures are functioning as intended. As appropriate, we used judgmental sampling in
   completing our compliance testing.

Various laws, regulations, and industry standards were used as a guide to evaluating Optima’s
control structure. These criteria include, but are not limited to, the following publications:

•	 Title 48 of the Code of Federal Regulations;

•	 U.S. Office of Management and Budget (OMB) Circular A-130, Appendix III;

•	 OMB Memorandum 07-16, Safeguarding Against and Responding to the Breach of
   Personally Identifiable Information;

                                             3		                    Report No. 1C-PG-00-17-045 

•	 Control Objectives for Information and Related Technologies 5: A Business Framework for
   the Governance and Management of Enterprise IT;


•	 National Institute of Standards and Technology’s Special Publication (NIST SP) 800-12,
   Revision 1, An Introduction to Information Security;

•	 NIST SP 800-30, Revision 1, Guide for Conducting Risk Assessments;

•	 NIST SP 800-34, Revision 1, Contingency Planning Guide for Federal Information Systems;

•	 NIST SP 800-41, Revision 1, Guidelines on Firewalls and Firewall Policy;

•	 NIST SP 800-44, Version 2, Guidelines on Securing Public Web Servers;

•	 NIST SP 800-53, Revision 4, Security and Privacy Controls for Federal Information Systems
   and Organizations; and

•	 NIST SP 800-61, Revision 2, Computer Security Incident Handling Guide.


In conducting the audit, we performed tests to determine whether Sentara and Optima’s practices
were consistent with applicable standards. While generally compliant, with respect to the items
tested, Sentara and Optima were not in complete compliance with all standards, as described in
section III of this report.

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  The security management component of this audit involved the
  examination of the policies and procedures that are the foundation of   Sentara maintains a
  Optima’s overall IT security program. We evaluated Optima’s             series of thorough IT
  ability to develop security policies, manage risk, assign security-     security policies and
  related responsibility, and monitor the effectiveness of various        procedures.
  system-related controls.

  Optima’s parent company, Sentara, has implemented a series of formal policies and procedures
  that govern the security management program for Optima. Sentara has developed a risk
  management methodology and creates remediation plans to address weaknesses identified in risk
  assessments. Sentara has also implemented adequate human resources policies and procedures
  related to hiring, training, transferring, and terminating employees.

  The following section documents an opportunity for improvement related to Optima’s security
  management program.

  1) Vendor Risk

     Optima contracts with several vendors that perform business processes related to health
     claims processing. However, Optima has not performed risk assessments of the IT security
     controls implemented by these vendors to protect the sensitive data they handle.

     NIST SP 800-53, Revision 4, states that “Risk assessments also take into account risk from
     external parties (e.g., service providers, contractors operating information systems on behalf
     of the organization, individuals accessing organizational information systems, outsourcing
     entities).” Failure to conduct risk assessments on all vendors to identify relevant threats,
     vulnerabilities, impacts, and likelihoods could leave Optima unknowingly susceptible to
     adverse events.

                                               5                      Report No. 1C-PG-00-17-045 

      Recommendation 1

      We recommend that Optima establish a formal process to assess vendor risk prior to service
      acquisition and then periodically over the course of the relationship. This process should
      also be applied to all existing vendors.

      Optima Response:

      “Optima Health does not have any comments concerning the draft report. Optima Health
      has begun the process to implement the recommendations outlined in the draft report.”

      OIG Comment:

      As part of the audit resolution process, we recommend that Optima provide OPM’s
      Healthcare and Insurance Office, Audit Resolution Group with evidence when it has fully
      implemented this recommendation. This statement applies to subsequent recommendations
      in this audit report that Optima agrees to implement.


  Access controls are the policies, procedures, and techniques used to
  prevent or detect unauthorized physical or logical access to
  sensitive resources.

  We examined the physical access controls at Optima’s facilities and
  the Sentara datacenter. We also examined the logical access
  controls protecting sensitive data in Sentara’s network environment
  and Optima’s claims processing applications.

  The access controls observed during this audit include, but were not limited to:

  •	 Procedures for appropriately granting and removing physical access to facilities and the

  •	 Procedures for appropriately granting and adjusting logical access to applications and
     software resources; and

  •   Routinely reviewing user access.

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The following sections document opportunities for improvement related to Optima’s physical
and logical access controls.

1) Windows Server Administrator Accounts

   Sentara manages the server administration function for Optima, and has implemented
   administrative or technical controls to protect sensitive administrative accounts.

   NIST SP 800-53, Revision 4, states that, “The organization requires that users of information
   system accounts, or roles, with access to … security functions or security-relevant
   information, use non-privileged accounts or roles, when accessing non-security functions.”

   Recommendation 2 

   We recommend that Sentara implement 


2) Privileged User Authentication

   NIST SP 800-53, Revision 4, requires “multifactor authentication for local access to 

   privileged accounts.” 

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   Recommendation 3 

   We recommend that Sentara implement 

3) Segregation of Duties

   Hiring managers are responsible for designating access rights to all information systems and
   applications for new employees. However, Optima does not have any formal guidance that
   prohibits the assignment of conflicting roles (i.e., a matrix of non-compatible roles).

   FISCAM states that “Entity-wide policies outlining the responsibilities of groups and related
   individuals pertaining to incompatible activities should be documented, communicated, and
   enforced.” Failure to provide adequate segregation of duties guidance increases the risk that
   users could be granted access to data and processes inappropriate for their job function.

   Recommendation 4

   We recommend that Optima develop policies and procedures to ensure that access to 

   information systems is granted with proper segregation of duties. 

4) Service Account Management

   Our logical access testing revealed a large number of active service accounts on Sentara
   systems. After receiving our test results, Sentara disabled the majority of these accounts, as
   they were no longer needed. We were told that

                     However, our test results indicate that this process has not been effective, 

   resulting in a large number of unnecessary service accounts.

   NIST SP 800-53, Revision 4, requires organizations to monitor the use of information system
   accounts and notify account managers when accounts are no longer required. Failure to
   disable unneeded service accounts increases the attack surface of information systems.

   Recommendation 5

   We recommend that Sentara implement an auditing process to ensure that service accounts
   are promptly disabled when no longer needed.

                                              8                        Report No. 1C-PG-00-17-045 

  5) Inactive Accounts

     Sentara does not have a process or technical control to disable accounts that have been
     inactive for an extended period of time.

     NIST SP 800-53, Revision 4, requires information systems to automatically disable inactive
     accounts. Failure to timely disable inactive accounts increases the risk of the accounts being
     subjected to attack and misused for malicious purposes.

     Recommendation 6

     We recommend that Sentara implement a process to disable accounts that have not been
     logged into for a defined period of time.

  6) Physical Access Reviews

     Optima conducts business operations at                           . A centralized facility
     management group at Sentara issues electronic access ID badges to all employees. Upon
     termination of employment, Sentara disables ID badge access. However, Sentara does not
     perform audits to ensure access has been disabled or to routinely verify that employees’ level
     of access remains appropriate.

     FISCAM states that “Management should regularly review the list of persons authorized to
     have physical access to sensitive facilities, including contractors and other third parties.”
     Failure to review physical access increases the risk that terminated employees have the
     opportunity to gain unauthorized entry to company facilities.

     Recommendation 7

     We recommend that Sentara implement procedures to conduct regular reviews of physical
     access to facilities to ensure only authorized personnel have physical access.


  Network security includes the policies and controls used to prevent or monitor unauthorized
  access, misuse, modification, or denial of a computer network and network-accessible resources.
  Sentara manages the technical environment that supports Optima’s claims adjudication process;
  we therefore evaluated Sentara’s controls related to network design, data protection, and systems

                                               9                       Report No. 1C-PG-00-17-045 

monitoring. We also reviewed the results of several automated vulnerability scans performed
during this audit.

We observed the following controls in place:

•   Preventive controls at the network perimeter;

•   Security event monitoring throughout the network; and

•   A documented incident response program.

The following sections document several opportunities for improvement related to Sentara’s
network security controls.

1) Firewall Configuration Review

    Sentara has firewalls placed at key locations at the network perimeter and maintains
    documented configuration settings of the firewalls in a central repository. However, Sentara
    does not routinely compare the documented configuration settings against the current
    configuration settings implemented on its firewalls.

    NIST SP 800-41, Revision 1, requires rulesets to be reviewed or tested periodically to make
    sure that the firewall rules are in compliance with the organization’s policies. Failure to
    routinely audit firewall settings increases the risk that unauthorized changes to the firewall’s
    configuration remain undetected.

    Recommendation 8

    We recommend that Sentara perform routine audits of its current firewall configurations
    against an approved firewall policy.

2) Internal Network Segmentation

    Firewalls are used at ingress and egress locations on Sentara’s
    network in order to control network traffic from external
    connections and vendors.

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   NIST SP 800-41, Revision 1, advises that, “Focusing attention solely on external threats
   leaves the network wide open to attacks from within. These threats may not come directly
   from insiders, but can involve internal hosts infected by malware or otherwise compromised
   by external attackers. Important internal systems should be placed behind internal firewalls.”

   Recommendation 9 

   We recommend that Sentara 

3) Administrator Rights

   Sentara has policies that prohibit the installation or modification of software without

   FISCAM states that “Broad or special access privileges, such as those associated with
   operating system software that allow normal controls to be overridden, are only appropriate
   for a small number of users who perform system maintenance or manage emergency
   situations.” Failure to restrict local administrator rights increases the risk of employees
   bypassing security policies resulting in unapproved software installation and system

   Recommendation 10

   We recommend that Sentara limit the number of personnel who have administrator privileges
   on their workstations to those with a need based on their job function.

4) Removable Media

   Sentara and Optima user endpoint devices are configured to enforce encryption on all data
   copied to removable media. 

                                             11                      Report No. 1C-PG-00-17-045 

   NIST SP 800-53, Revision 4, requires that an organization must employ the principle of least
   privilege, allowing only authorized access for users which are necessary to accomplish
   assigned tasks in accordance with organizational missions and business functions.

   In addition, NIST SP 800-53, Revision 4, states that “Organizations may restrict the use of
   portable storage devices, for example, by … disabling/removing the ability to insert, read or
   write to such devices.”                                                 increases the risk that
   sensitive data could be stolen and also increases the risk of introducing malware to Sentara’s

   Recommendation 11

   We recommend that Sentara restrict the use of removable media on users’ workstations to
   those with a valid and approved business need.

5) Web Application Vulnerability Scanning

   Sentara does not conduct routine web application vulnerability scanning. We were informed
   that web application scanning is conducted, but only when changes to the web application are

   NIST SP 800-44, Version 2, states that “Periodic security testing of public Web servers is
   critical.” Furthermore, NIST SP 800-44, Version 2, explains that “Vulnerability scanning
   assists a Web server administrator in identifying vulnerabilities and verifying whether the
   existing security measures are effective.” Failure to conduct routine web application
   vulnerability scanning increases the risk that unidentified weaknesses could be exploited.

   Recommendation 12

   We recommend that Sentara conduct routine credentialed web application vulnerability
   scanning on all of its web applications.

                                             12                      Report No. 1C-PG-00-17-045 

 6) Vulnerability Remediation

     Sentara conducts            credentialed vulnerability scanning on a subset of servers and
     workstations in its network environment. The scan results are reviewed to ensure that the
     scans completed successfully. However, Sentara does not have a process in place to ensure
     that vulnerabilities identified by the scans are remediated in a timely manner.

     FISCAM states that, “When weaknesses are identified, the related risks should be reassessed,
     appropriate corrective or remediation actions taken, and follow-up monitoring performed to
     make certain that corrective actions are effective.” Additionally, NIST SP 800-53, Revision
     4, requires organizations to remediate legitimate vulnerabilities identified in information
     systems and hosted applications. Failure to remediate vulnerabilities increases the risk that
     bad actors could exploit system weaknesses for malicious purposes.

     Recommendation 13

     We recommend that Sentara implement a process to ensure that vulnerabilities identified
     from vulnerability scanning are remediated in a timely manner.


 Configuration management involves the policies and procedures used to ensure that systems are
 configured according to a consistent and approved risk-based standard. Sentara employs a team
 of technical personnel who manage system software configuration for the organization. We
 evaluated Sentara’s management of the configuration of its computer servers and databases.

 Our review found the following controls in place:                      Sentara does not
                                                                        maintain approved
 •   Documented system change control process; and                      security configuration
                                                                        standards for its
 •   Established patch management process.                              operating platforms.

 The sections below document areas for improvement related to Sentara’s configuration 

 management controls. 

                                              13                     Report No. 1C-PG-00-17-045 

1) Security Configuration Standards

   Sentara deploys servers from pre-established system images. Servers are then further
   configured according to functional requirements. Sentara provided us with evidence of
   documented configuration standards, but the standards were in draft form and were not
   approved by management. Furthermore, the draft standards did not cover all operating
   systems that are currently in use by the organization. Security configuration standards are
   formally approved documents that list the specific security settings for each operating system
   that an organization uses to configure its servers.

   NIST SP 800-53, Revision 4, states that an organization should establish and document
   “configuration settings for information technology products employed within the information
   system … that reflect the most restrictive mode consistent with operational
   requirements … .”

   In addition, NIST SP 800-53, Revision 4, requires an organization to develop, document, and
   maintain a current baseline configuration of the information system.

   Failure to establish approved system configuration settings increases the risk that the system
   may not be configured in a secure manner.

   Recommendation 14

   We recommend that Sentara document approved security configuration standards for all
   operating system platforms and databases deployed in its technical environment.

2) Security Configuration Auditing

   As noted above, Sentara does not maintain approved security configuration standards for its
   operating platforms, and therefore it cannot effectively audit its system’s security settings
   (i.e., there are no approved settings to which to compare the actual settings).

   NIST SP 800-53, Revision 4, states that an organization must monitor and control “changes
   to the configuration settings in accordance with organizational policies and procedures.”

   FISCAM requires “Current configuration information [to] be routinely monitored for
   accuracy. Monitoring should address the … baseline and operational configuration of the
   hardware, software, and firmware that comprise the information system.” Failure to

                                             14                     Report No. 1C-PG-00-17-045 

   implement a configuration compliance auditing program increases the risk that servers are
   not configured appropriately and left undetected can create a potential gateway for
   unauthorized access or malicious activity.

   Recommendation 15

   We recommend that Sentara implement a process to routinely audit the configuration settings
   of servers to ensure they are in compliance with the approved security configuration
   standards. Note – this recommendation cannot be implemented until the controls from
   Recommendation 14 are in place.

3) System Lifecycle Management

   Sentara’s server inventory includes                     unsupported versions of operating
   systems. Software vendors typically announce projected dates (known as end-of-life dates)
   for when they will no longer provide support or distribute security patches for their products.
   In order to avoid the risk associated with operating unsupported software, organizations must
   have a process to anticipate end-of-life dates and phase out the deployment of such software
   prior to this window of exposure.

   Sentara stated that it is aware of the unsupported operating systems in its environment and
   that those systems will be retired when the business no longer needs the hosted application.
   However, Sentara policy states any system or application that is no longer supported shall be
   removed from the network by the end-of-life date.

   NIST SP 800-53, Revision 4, recommends that organizations replace “information system
   components when support for the components is no longer available from the developer,
   vendor, or manufacturer … .” NIST SP 800-53, Revision 4, also states that “Unsupported
   components … provide a substantial opportunity for adversaries to exploit new weaknesses
   discovered in the currently installed components.” Failure to upgrade system software leaves
   information systems open to known vulnerabilities without any remediation available.

   Recommendation 16

   We recommend that Sentara implement a methodology to ensure that information systems
   are removed or upgraded to supported software versions prior to the end of vendor support.

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  Contingency planning includes the policies and procedures that
                                                                            Sentara maintains
  ensure adequate availability of information systems, data, and
                                                                            thorough disaster
  business processes. We reviewed the following elements of
                                                                            recovery and business
  Sentara’s contingency planning program to determine whether
                                                                            continuity plans.
  controls are in place to prevent or minimize interruptions to Optima 

  business operations when disruptive events occur: 

  •   Disaster recovery plan (e.g., recovery of hardware and software infrastructure);

  •   Business continuity plan (e.g., people and business processes);

  •   Disaster recovery plan tests; and

  •   Emergency response procedures.

  We determined that the contingency planning documentation contained the critical elements
  suggested by NIST SP 800-34, Revision 1, “Contingency Planning Guide for Federal
  Information Systems.”

  The following sections describe areas for improvement related to Optima’s contingency planning

  1) Business Impact Analysis

      Sentara has not conducted a formal Business Impact Analysis (BIA) of the Optima
      organization. At the time of the audit, Sentara provided evidence that it is in the early stages
      of completing a BIA, and the BIA is scheduled to be completed at the end of calendar year

      NIST SP 800-34, Revision 1, states that, “The BIA is a key step in implementing … the
      contingency planning process … .” Three steps involved in accomplishing a BIA include
      determining business processes and recovery criticality, identifying resource requirements,
      and identifying recovery priorities for system resources. Failure to conduct a BIA increases
      the risk that Optima will not be able to recover critical business operations in a timely

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     Recommendation 17

     We recommend that Sentara and Optima complete a formal Business Impact Analysis for
     Optima business processes and information systems. We further recommend that Sentara
     incorporate the results into its disaster recovery plan.

  2) Backup Media Encryption

     As part of its IT disaster recovery strategy, Sentara stores backup tapes onsite in a virtual
     library and offsite at a secure vendor facility.

     NIST SP 800-53, Revision 4, states the organization should protect “the confidentiality,
     integrity, and availability of backup information at storage locations. Mechanisms employed
     by organizations to protect the integrity of information system backups include, for example,
     digital signatures and cryptographic hashes.”

     Recommendation 18 

     We recommend that Sentara 


  The following sections detail our review of the applications and business processes supporting
  Optima’s claims adjudication process.
                                            We reviewed the following processes related to claims
  adjudication: application configuration management, claims processing, member enrollment,
  and provider debarment.

  1) Application Configuration Management                                        Sentara has
                                                                                 implemented a
     We evaluated the policies and procedures governing application              thorough process
     development and change control over Optima’s claims processing              for managing
     systems.                                                                    software changes.

                                                17                      Report No. 1C-PG-00-17-045 

   Sentara has implemented policies and procedures related to application configuration
   management, and has also adopted a system development life cycle methodology that IT
   personnel follow during routine software modifications. We observed the following controls
   related to testing and approval of software modifications:

   •	 Policies and procedures that allow modifications to be tracked throughout the change

   •	 Unit, integration, and user acceptance testing are conducted in accordance with industry
      standards; and

   •	 A group independent from the software developers moves code between development
      and production environments to ensure separation of duties.

   Nothing came to our attention to indicate that adequate controls have not been implemented
   over the application configuration management process.

2) Claims Processing System

   We evaluated the business process controls associated with Optima’s claims processing
   system that ensure the completeness, accuracy, and confidentiality of transactions and data.

   We determined that Optima has implemented policies and procedures to help ensure that:

   •	 Claims are properly input and tracked to ensure timely processing;

   •	 Claims are monitored as they are processed through the system with real time tracking of
      the system’s performance; and

   •	 Claims scheduled for payment are actually paid.

   The sections below document areas for improvement related to Optima’s claims adjudication

                                            18		                    Report No. 1C-PG-00-17-045 

Claims Input Reconciliation

A vendor is responsible for scanning all claim files received     Optima does not have
by mail into Optima’s claims processing system. Currently,        procedures to verify the
Optima does not have a reconciliation process in place to         claims processing
verify that all scanned claims have been received for             activities performed by
processing.                                                       vendors.

FISCAM states that “The entity should have policies and procedures in place to reasonably
assure that all authorized source documents and input files are complete and accurate,
properly accounted for, and transmitted in a timely manner for input to the computer
system.” Failure to validate this process could lead to incomplete processing of properly
submitted claims.

Recommendation 19

We recommend that Optima establish a reconciliation process to ensure that all claims are
scanned and successfully transmitted to the claims systems by the vendor.

Output Reconciliation

Explanation of Benefits letters are printed by a vendor. Optima sends an electronic file to the
vendor to notify them of what needs to be printed and mailed. However, there currently is no
reconciliation process in place to ensure that all Explanation of Benefits have been printed
and mailed.

FISCAM states that “Formal procedures should be established for data processing to help
assure that … output control totals are accurate and are being verified, and the resulting
information is distributed in a timely … manner … .” Failure to provide accountability over
this process could lead to incomplete communication of benefit decisions with members.

Recommendation 20

We recommend that Optima establish a process to reconcile the print request files with the
output produced by the vendor.

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3) Enrollment

   We evaluated Optima’s procedures for managing its database of member enrollment data.
   Enrollment information is received electronically or in paper format and is either manually or
   automatically loaded into the claims processing system. All enrollment transactions are fully
   audited to ensure information is entered accurately and completely.

   Nothing came to our attention to indicate that Optima has not implemented adequate controls
   over the enrollment process.

4) Debarment

   Optima has documented procedures for reviewing the provider file for debarments and
   suspensions. Optima is notified by OPM when an update to the debarment list is available.
   An automated comparison of the OPM debarment list and providers within Optima’s claims
   processing system generates reports that will flag debarred providers. If an active provider is
   determined to be debarred, Optima personnel will manually update the provider file within
   the claims processing system. Optima adheres to the OPM OIG debarment guidelines to
   include initial member notification, a 15-day grace period, and then denial of subsequent

   Nothing came to our attention to indicate that Optima has not implemented adequate controls
   over the debarment process.

                                             20                     Report No. 1C-PG-00-17-045 


                                                                                        4417 Corporation Lane
                                                                                        Virginia Beach, VA 23462

February 13, 2018

Information Systems Auditor
Office of the Inspector General
U.S. Office of Personnel Management
Washington, D.C. 20415

Re: Report No. 1C-PG-00-17-045

Dear            :

I am in receipt of the above-referenced draft report, dated December 13, 2017, concerning the information
technology audit of Optima Health Plan conducted by the Office of the Inspector General at the U.S. Office of
Personnel Management. Thank you for allowing us the opportunity to review the draft report. Optima Health does
not have any comments concerning the draft report. Optima Health has begun the process to implement the
recommendations outlined in the draft report.

It has been a pleasure working with you and your colleagues on this important matter.


                                   Director, Information Technology

                                                                                 Report No. 1C-PG-00-17-045 

            Report Fraud, Waste, and
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