Audit of the Federal Employees Health Benefits Program Operations at Group Health Cooperative of South Central Wisconsin

Published by the Office of Personnel Management, Office of Inspector General on 2010-12-14.

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

                                                                         U.S. OfFICE OF PERSONl'\fEL Iv1IANAGEi\-1ENT
                                                                               OFfICE OF THE lNSPECTOR GENERAL.
                                                                                                 OFFICE Of AUD]TS


            Audit of the Federal Employees ·Hea·Jth Benefits

  Program Operations at Group Health Cooperative of

             Soutfu Centra I \'lisconsin

                                                           Report No. 1c- \V J-OO-l 0-041

                                                            O;;)J ~e~ December'                      14,         2010


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                                                                AunIT REPORT

                                                 Ftd!e.ral E mp]oyt:t:) H e.:l Ilh I3codlt~ Program

                                             Communi 'y. R Ii ted HeaJth MlallllE'11 'ance 0 lig~l.l nu.afio 11

                                             Group Hea.ltb Coopera~i"'{' of Sou ih Cemtral \Vi;,scoDsin

                                                  Contrat' Number CS ]1828· Plan Cove \\/J

                                                                  Madison. \Vilsconsin

                                    Report No. 1(,-\\")-00-10-04}                         Dafe:     12/14/10

                                                                                         M ichacl R. £sscr
                                                                                         ASSISt:lot ln~pcctur C·enenl
                                                                                            for Audits
                                    F t'd!eraJ Employees Healtb Bcnefits          Progr~D1

                           Co m l1il! u niity-Ha leu Hell Hh M a in ten;] nee 0 rga n iza ~i DIU

                          C:rOLlp Hea Ith Cooper,Hive of South Cc.:ntr~ 1 \\}~st:onsil1l

                                 ContnH:t Number CS 1828 - Plan COd!l' \V.J

                                                  .\];:uJ isorl, \:V'iscon"in

            RqpOft No.       ]1   c- \\/,JI-00-1 0-041                       DMc:     12/14/10

The Office e,f tbe Inspector Genero.l pedorrncd an alldi! of the Fed.:: I ,iI Ernployc..::s Hej)i,ih Benefits

P'ru,grarn (ftHBP;, ("rera!ions al Grour Health Cooperat: \'12 or SCful h CenlJ'rd \\;'is,con.sil1 (Plan;',

The 3:UelU covered CulltrilCl >Tars 20U4 thrnug:h 2009 ,net \\(15 COnd1JClcd at the- pt:m'$ artk.e in

lv~a;:k50n. \lli.scorlsill. Additional tield ''.ork was p~rforrned m our ofiicc:s, in Ja(ks.oll,.~,jk,

Floiidn, <lnd \V2Jsh~nghm. DoC. We found [hal Ule FEHBP rate~ ,\eTc devefor::u in accordance

with the 3ppllio.::a.hle law,,;. ]'eg(lII(J,tions,   ~lnJ   lht' Office ofPu<;onnel M;lllilgcmcnl'.,; !8lm@

inSlructi,ons for the y<2MS Qud.ileJ.

Hov·/ev{'r, tille P'I'wl couJd '!lot pnwidl':' ori!J\IlCl! source documentation ru support the Jg:c."~e\

factors and enrollmenlillseo to develop Ihe FI::I lRP <lmllh..:; slmJindy o;i7,('d silh:;eriber groups'

f8!es for aH yt2a.rS 2luUikdl. /\I[lhou~h \vc L1llimRlely receivEd :',llffi':-I-:TI\ Jc.lcumcn\~tion to valiJl:l!e

the raLes charged, th::' FEHBP c.. . . niraCl requires lhe Pltll1 [0 r<:IZil(] 3no make F!\':JJIJhk 3\1 records

s.upr:'oI1ing its rat.:' subrnis.s~[)n for a period of tive years ilrter Ihe end ofthc ClinLraCI term iO

\vhich the uecorJs relate.


    EXECUTlVE SlHvf\fAR\'                       ,                      ,	                                      ,

 J. f\ITRODUCTTO:'-J A\:D BACKGROUND	                                           ,'                   "              .

[1.	 ()BJE.CTI\"ES, SCOPE,. i-\~<D 1\1ETI-(ODOLOG\{ , __                       ~~.        .. _.. "                         3

W.	 AUDIT FINDINGS AND RECO\fl\·1F.0:DATJON                                                                                J

    Premium Rate Revie\v                                                                                                   5

    Records Retention....................   .                      .                 ..                                    5

IV.	 :YfAJOR C01\iTRJBLTORS 1'0 TH1S REPORT                                                              . ................ 7

    Append:,x (Group Health Cooperali\'e of South Central              \\··Lscl~ns.in 's

                 l''';o\'~mher   J 1, ?U lO respollse to the dnlft repan)

                        l.   J~~TRODUCTION            AND BACKGROUND

1n trod l.l etian

We completed an Ciudil ofthe Federal Employees Heallh Bc:nefils Program (FEHEP) operations
at Group Health Cooperative of Sou(n Cen(ral \,,'isconsin (Plan) in i\:fndisoll, \0/isconsin, The
andll covered contract years 2004 through 2009, The audit was conducted pursuant to the
provisions of Contract CS 1828: 5 USc. Chflprer 89~ and 5 Code of Federal ReguJn~;ons (CFR)
Chapter l. Pan 890. The audit WaS performed by 1he OlTtce ofPersonne1 M(\nagement's (OP\-l)
Office of the InspectOr G~llera~ (OJG), as establl shed by the Illsp,;:cl0r General :\ct of 1978, as


The FEHBP Wl'lS established by the Federal Employees Health Benefits Act (Pubiic La\-\' 86-382).
enncted on September 18. 1959. The FEHBP \\'as cr~Jled to pro'vide health insllr:1nee benefits
for federal employees. annuita.rtts, a.Ild derx~ndeills. Th-: FEHBP is a.dminislered hy OP'vf's
Retirernellt and 8ellefils Oflice. The provisions or the federal Employees Health Benefits Act
are itnple.ment~d by OPl\·f through regulatiuns codified in Chapter I. Pan 890 of Title 5, eFR,
Health insuranc.e covcrage is provided throLigh conuacts wiln h..::al1h Lllsurallce carriers \vho
provide service benefi tS. indemn5ly beneti ts, or comprehensive medica i ser\'\ccs,

Communi ty-rated carriers participatill.g in the rTH ElP ;we 5ubjc::ct (0 various federal, ,Slale and
local JoI\.VS, regulations, and ordinances. While most carriers are subject to stiite jurisdiction,
marlY ar~ fu.rther subject to the Health Maintc::nMlce Orgal1llation AcL of 1973 (Public LJ\v 9.3­
222), as amended (~.e., many cOlllnLuniry-rated carriers are federally <[u<:llified). In addition.
pm1icipation in the FEHBP subjects tbe carriers to the FederaJ Employees Health BeneJils Act
and implemenling, regulations promulgated by OPM.

The FEHBP should pay a market price rate,                                      FE-lBP Contrac:sll...' errbers
which is defined as the best rate offen~d 10                                                  ~Aar:::h   31
eit~1er of the two groups closest in S("L~ to                  3.500

the FEHBP. In contracting \vith
                                    -              F

community-rated canters, or\,1 rdics on
ca.'Tier compliance with appropriate lav.'s                    .:2,5CC- 1/
                                                                             '-­      f-f-­         -f J                       'i 1­

                                                                             '-       f-r­          -             f-­
                                                                                                                               ,,I   r­          -
and regulations and. consequently_ does not                    2,000·1/                                                        I:

negotia(e base rates. OP\-1 negoLiatiol1s
                                                               1.SOD ./
                                                                                      f­                                       ~            f­

relate primarily to the le\:,el or cov..:rage and
                                                               j   DOD·
                                                                                      f-                      -                ~
other unique features of the FEHB P.
                                                                   sooy               r-                      "'               r­           f-           '­

The chan to the right shows the ilumber of
FEHBP contracts [(nd membcl's reported by
                                                                          \ 2004
                                                                                                 •ze06 IIl-
                                                                                                                        ....   ~
                                                                                                                                          .... - ~

the Plan as of Mar..::h 31 for each COntract          ~    C<Jnlracrs      -:- 578
     ~   .6' 0 1.618 1,l1e­ 1.663 1,734
year aud lted.                                        o N\e;Tbers          3.055 3,02C J.011 3.204 3.035 3,082
                                                                                                                                                 ...- ­
The P12lfl h::!s p8.rLicipaLcct in ~hL FEHBP s~l1ce 1979 :::md provides bcalth benefits to FCHBP
members Ihroughoul Soulh Cemfi1ll Wi!>cunsifJ. The lasl 3udit (;onducted by our c,fficc \vas J full
~;.;ope audit and covered contract years 1998 ~hrol.Jgh 2002. All issues relnled to th?,t <Judit have
been reso1veu.

The prchn)inarj r~su1ts of ihis audit were discussed wllh Plan officials at an exit CODlfertl1ce and
in s<lbsequcnl correspondtnc~, /\ dr8ln repol1 \',-as also pro\'\ded to the Plan ti)r rev!;~\.'. : and
comment The Pl,Jfj's commen1s \l,.'ere considered in the preparation of this repot1 cmd are
i,nduded. as appropriate,. as Ihe Aprendix.


The prlmary objectlves of the [Judic were to verify that ~he Plan o\lered JJ1a~ket price rales to the
FEHEP and to verify (118t the loadings to the FEHlJP rates v,,'ere reasonaole and equilabk.
Add1tional tests were perfonncd to dctennine whether the Plan \vas 1]) compliance wi1h the
provisions of the la\""S and regulations governing the F[}-TBP,

                                                                                 FEH8P   Pr~miums   Paid 10 Plan

Wt:: eonduued trus perfomlance i1lldiL in
~ccordal1ce    with g~nerally acceplcd govemment
i!.uditLng standnrds. Those staildards require that                       S15
we plan i!.nd pertorm the audit to obtain                          'c:"
sufficient, approprii1te' evidence to provide a                           !10
reason(lb Ie b<)sis lor our fi ndi ngs and cone Ills lOilS
based on our ,llJd)1 objectives. \Ve h~lieve thCit
the evidence obtained provides a reasoflable basis                         so
for our fi no i ngs and conc Ius io n.s based on our
audit objecllves.                                                  • Revenue

This perfoll'nance audit covered contl'8ct years 2004 through 2009. For tbese years. lhe rEHBP
paid l:lpprOXlmately $75 million in premiums to the Plan. The premiums paid for each contmct
yeaJ' aud i ted aTe sho wn on the chm1 above,

OIG audits of community-rated cJmerS are cesigned to test carrier compliance vyi.th the fEHBP
contract. applicable lt1,\NS and regulalions, and OPl'v1 rate inslrucllOns. These alldlts arc 8150
designed to provide reasonJolc ilssurance of detectjng ClTors . irlcgularl1ies, and il;egi!.1 act::.

We obtilined an LLndersl<Jnding or'the Plan's internal control stnlcture\ but \\'e did n01 use (hi:;
information to detennine the naturt. liming. and extent of our audit proccl'lurc:s HllwcveL !he
audit included such teslS of (he Plan's rating system nnJ such othcr auditing procedures
considcrec l1..eccssdrY l1n(ler lhe circumstances O\lr review ofinlemctl controls \vas lirnitcd to the
procedures lhe PIJn hrls in pldee to el'lsur~ that:

         •	   Th~ appLOrri,\te   sim i lorly   siz~d   subscrlbeT groups (SSSG) wcrt selected:

        •	 the rJtes charged to {he fU-IGP were the nlctrket prlce rates (i.t" equiv3lenL to the                   b~$(
           Ti.lte oCfcred to lbe SSSGs): and

        •	 the l0<1d in g~ to the f EH BP Ta lcs were re<i sona blc and eq ui(Fibk.

In conducling the Cludit, wc relied to vnry)ng degrees on computcr-gencT,lted billing, emollment,
tlnd eJo.ims diltil rrovded by the Plan \Ve did not \'CL'j fy the reliabilily or the dJla generated by


the: various infonn2btlon1l systems \m.1olvcd, However,. l1ot.hing carne to our allcnliQIl dl:!'ing our
audit testing lltillLmg the comruter-generilted dal,,1 to cause L1S to dQubt its rcli"tilil).'. \Ve believe
tbn [he aVJilabk d?la \Va~ stlfticient to achlCve O'Jf audit objectives Excep\.as: l1Joled above, the
au\.iit \\'as conducted ~n accordance wl1n gener31IJy ;jccepted government uudil\ng stDndJrds.
issued by the Comptrol!er General of the lJniled Slfllcs

The audit fieldVl10rk was performed at the Plan:s offiCe in l\1<Jdlson, \'v'isconsin. during l\1ay
2010. Additionall iJlldlt \-vork \\'<1::; compleled at OHJ or11ccs in Washington. D.C.. and
Jacksonville, Florida.

[\'1e th odolog1'

Vie exami,ned rhe Plan's federal r()!e submissions: and related docume11(s a:; J baSIS for \'nlida\ing
tIie market price rates. rll :lddition, \,J.,.'e e:':8Hw1eJ the Wije devel,.)prntlH documenu!ion tll1d
bilJin.gs an ()ther groups, such as the SSSGs, to determine i r me market price \>./35 actually chargetl
to the FEHBP. Finally, \ve used the contract, the Fcd~ra~ EmployeesllcJ.ltb BenefIts Acqllisll~on
Regul<1liiulI"Is. and OP\fs Rate [nstruc!lons lUI Commllnily-RLited CuTTlers 10 detennme the
propriety of the FEHBr premiums <lnd the rcasl)J:12LblenC5s and ~cceplabillly uf the Plan's rating

To gain an underswnding of the lf1tem<1l1 controJs ittlhe Plan's r;,1{ing system. \vt re\lic:\Vcd the
PhnTs rating system's pollcics and procedures, interviewed approprlatc PJi)ll off,cials, <iIHJ
perfomld other auditing pwcedun;s ncccs.sury to meet our <Jud'i! objectives:.
                      UL AUDIT      Fl~INGS            AND RECOIVII\·f£:"lDATfON

Premium Rate JRe\'iew

nur audit sno\l,'ed that ahe Plsn"s r:Hing of the FEHBP ""as in Jccordanct:: with 1JH~. app!icable
]i;:lVv'S, reg~lJatjons.
                    and OP\oJ's rating instructions lO ca]Tiers for contract yea~s 1004 through .2009,
Conseq:ucnlly, the audit did noa idellti 1\' any questioned costs,

Records, Re1ention

The Plan did not pro\ide original source documentation to support the nHes chmged lO ihe
FEJ-JBP and the SSSGs. for contract years 2004 tlu'ough 2009. \Vitnout appropriate supporting,
dOClllnentallOIl, 11 is diftkullt Lo Jelennine lrthe FEHBP rates \~:e[e established in accordance
\>vith the Plan '~: contrac!. appllicable regulations, and OP\;1 cornrnLmllV-nl,ting guidelines" Unde\'
these circumstances, we It\llY halve to depend 011 other data, and a\ l 1rnes,. (\i fferent ral ing
methodologiles. to d1eterl11 \lie th~ appropriateness 0 f the FEH B t> fejes. Tht' outcome ofour
      ,    based 011 the b~st infomlatlOn available mav. result In a less de~ira'ble o'Lilcome to tbe
Plan Therefore, it iis in the bt:sl interest or a plan to retain the information needed to verify the
FEHBP and the SSSG~ rates, A\lhou~h \",e ultimately received sunicient do·cumentati,an to
validat.e llie' rates charged, lhe FEHBP contract requlres the p:Qn to retain anc make 8veJlable aJl
records suppor1i,ng its rare submission for a pcnoct of Sl\ years after ['he eno ofth~ COflLli'<3ICr ttn))
to \vhich the records r~late,

Plan l~i Comments (See Appel'ldi~i;

The PlaJll agrees that it did nc,t pro\'ide o:lginal suul'c"; doclimenta!ion to support t~)c age/sex
factor and enrollirnen1 repoJ1s f;"')r the FEHBP and SSSGs Hm.. . e\'er. (he 'Plan slates thCl~ 8!~thollJgh
It did nol ha\'e paper clocGmentaJliol1 of rhe exact ernployee counts originally !.!sEd inl devebpilflg
the age/gende~' factors. for the Federat Gr01lp and the SSSG ~roups, i! \~·as able to SUn11i1l3rlze and
plint" from dectrCH1tc files UHlt aLe kept. tlit:: informatiun the l:ludi lorS requested. \Vnjje 1hesc
rcpons did not mcHch e,l«1lcLI:;: with (he dala that 'ViiS origilialJy submitted, in eV~i'Y siiuatwn thcJc
were 110 s:1gfiffkao[ changeS ~o Lhe rate c;JlculciltOn'j.

The: Plan \....ent on to st.at..:' 11121 it alwilYs endeavorC'd to maintaln all infOnli<'11l0rl l.hac . .vas required
by the FEH BP C('nll'3lC1, During the revlcw. the auditors were able 10 point (Jut ,treas \\'here the
proccs.5 could be impro.. . ed. The Plan states that II immediately oH1de those im~Drov'e;r;ents even
before rece:1pt     or
                     the wrUtlen repon.

Since !he :dIiLlJitors found ihat {jH~ FEHBP rates ',"ere developed in accordance v"jth applicable
lav"'s:,, regulatiions. and [he Offict; 0 r Personnel Management's rat ing j nstrrlJctions.., and since the
dii1'erenc.es betwe~TI the origlll31 sourc~ documenlation and the rcconSlruck',d Jocumen~<Jtu(01i1 for
ah~ ;'ears in quesiion """erc nOl si.gnt1lc81lt, the Plan asks tli;), [he contJ8cling onllcer reconsider
aSSeS$lng a penalty.

GIG's Response to the Plan's Comments:

\Ve agree with the Plan r}ld[ tJ1C reconstructed data did not l1a've a significant impact on Ihe ra.le
cJlculations. Hov,'ev,:::r, the Pian i.s stin required to maintain the original source documentation to
supporl the Hites charged to the FEHBP and SSSGs lor a period offlve years alter the end of the
contract tenn to wh:icru the records relate. The Plal1 agrees tl181 it did not JI11eet this requirement
and stated that it has made changes lO lts systelll to ensure future comph2ll'ice. V/e acknowledge
the Plan's stated intenli on to j mp lement corrective act ion and \viH detemnm: if the chilnges have
been adequately rrnplemented during our next review of the Plan.


We recommend that the conl.racaillg officer infonn Ule Plan thaI:

        ..	   aPM expects it III[) tuny comply     wltll   the records relenli.on provisions of the contract
              and all <~pplicabk regulations:

        •	    i l sh ou~d ma ~1).ta1n toples 0 f all pen i nellt ra lin g documents that show the factors snd
              calculations the Plan us~s in developing the actual rates for the fEHBP and the
              groups cl~osest un size 10 the FEH.BP for each unaud'ited year;

        ..	   i1 sho uld mai;ntai n copies 0 f I he enrol Iment reports and other necessary suppori j ng
              documents for the FEHBP and the groups closest in size to the FEHBP for each
              llnalldi~ej year: fwd

        •	    the applicable cOl.nmllniiaY-rDted performance factors described in FEHBAR
              16U9 710.1-2 \....,.i]l be ath'ersely affected if in fonn31~lon requesled during audi(s is 1'101

Comrouniry-R:ued   AUl:hts   Group

               . ,,\ udi tor-Ill-Charge

                   Staff AuditOl'

                   Staff Auditor


                     Sell iar T earn Leader


                                                                                                                                                                                                       A,Jlrni;rU.;:·(rilth'c O/IiI,,',:,;
~.i~'·!i~"·~" "

+       !i!If
                           Group H~th
                       ,i:",                                                                                                                                                                           r 2(1'. j(IIIH) C)'. H;1!\lIn",r...'                    r''i'
:\---.):               :'. CooperatIve                                                                                                                                                                 r(j ~,,~ +·!"'i I
                                                                                                                                                                                                       kh ,Jlr",r, W ~ .' 3] ~ ...F)7 JI
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                                                                                                                                                                                                       \.!'v......\·.. ~h(,.( 1.\.'.. ( c'·Ji\l

          November 11.                            ~OIO

          Chier, COrnnHllll[:-;-R~~lcdA.uJ:it~ GrOiLlip
          U.S. Oftice of Personl1e 1 ~'h!lage mel'>!
           1900 E Sln;·:;~, N\V
           Room 6400
           \,I,':ashing.ton. I) C. 20-115-1 j 00


          Group HC"alth Cooperlllive oJ SO\ltlll CClltnd \\"'is('on~in (G HC-SC\\') is \1\ :cce'lJt of Yol.lr OcWbel1' 11 L;
          2010 k'.ter which il1cludes 1he d1l'al\. audd l'CP0rl 01,' (he rc:dcral Emp~oye~~ !-]e<!)th l~cn~nlS P"ogri'Vm
          (fFHBP) al GHC-SC\V The ;}lldiii (c..J\·eled contrac( y~ars 2004 t)wough 2009. This 1lertcr provlde.s our

          Th~ [Xt(,u l i\ e                        S Ulnlnary Sl C\fe~ "rlht Pl l1 111 cO\.lllld 110,1, [)ro v ide 0 ri,gi 11;;11 source                                       docun)(\111\{lll~~,n Til)                            s,uppon
          \hc Jgcisc:x                        r~Clors <1Tld
                                      en.mlllmcni used to de\'elt~p Ihe fEHl3P and ...... Allhough We viidll1fll hi1\c ))apel'
         docurnentat [LIn 0 f [he e:\ ill!.: I tn1 p loy'cc: counlS t ha I \I..·cre ur igi nail Y' used ill de \'c! or i ng I he l\ge.igenJer
         factors               ral
                      the (~eder<:ll Group and the SSSG groups we were able {o sumll1arii',c andl prin!. 110m
         e )ec~roni c f~le~ thJ I ,He kqJot, ill;;: Int'onnal ion 1he ,Hllditol's; requesced, ~ rOwe\'<.;'L these: rtpI)ns did no~
         malC]; e~:actly \vith the c.lJibl ;hal vvas orjgina1ly SI.lbl'nlnecJ. \Vhcn on S\I~, (h~ ~ludltor$ (hJ poini ODt
         some of thcs.: differ (;11('::5. \Ve immedinte1y, rc-]'al) ~ome of the colclll.:l1ions ~Ij dete.nnilnt the' impad                                                                                                                           or
         these differences. 1n every s)1u2Jukll l4, lhere \\'~re nO $ugmficarll changes: to the r,H..; culc\III:)\jons Your
         reowds shotlld )ncludc the: cn1{ljLs lhat OLHlillled IIl,;:$e nL lions.

          Our SYS[tJllS ar<:: intcr~lCl i\'c Jnd IlileJilllly ch~mg~. by Ilbc seco\1d, therefore ror :JII r3ting cllkl\I?,~onH" we
          ex I rae! a (Opy of i he 111 en1bcr5,hi p dVilCl ill I he Ii me \\'c use i l. r 11 addi [jon, 0 ul' C0n:; ~d \ loll g :I fill Mi cs
          receive J III ill"l thl).' d.J\vl1loaJd of om rnen()ber~lhip nile.,> \,,·hich Ih(;)' m()J1l[J.in. INe v.,.C!J'~ 41bk to sho',~ lhe
          <lud!tol'$ the d3(J tile ~nu 1he sumn'I,My" 0 r the fdc. as \\:<:11 as IraC2 7111 tl1lries. \\l11.:1L \\t belie\'c W,:J}: ,\
          pwbkm, W;1::;; th:J( it \\as Jiftllcudl for ihe j\JJlilOls [0 go bnck to the illccxactive ('1 Ie and sno\\. the Pfi~l'cj'
          lrail IhJI l1I<w.:heu \hc ()l"igill1dll.suhnissions. Our 1I1 cmbers"ltp SySle1ll permit') UI1lJn/ecJ inl'(lrmaliol1 lOOt:

          p0SIL'd by Cl nJul1itudc of l\~C:rs Iblll hng S/Jec i 8lisIS. GlaHns examInees. and )ll{em:d alldll~ors for exampk: I
          With dale slc,mjXcl d(Jc)lmenq;]~ion. iV1J.r,y 1~mcs the pnpu supporL n:c,::\ved ofren In,g.s DII(tl" iinformal;on
          GHC-SC\\/ receives. The GHC -SC\\! mcl1nbc.rship <lnd c\fJims syst~lns ;Ire lhe IllOst ;1,clv;1,nced sy:'lel.ns
          ollcred b y . J . kJding plQovUJer ofquJdlily dl:lt,l Sy:;tems ror !V2,,!l\lCiHe rrO\'lde.~·" sue,h ~-" CHC­

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_                              \'faI18.geml:nt
No\'ember 11,2010
Pl:Jgc 2

GHC -SC\\," now has eswblished a consolidated leposllol')' for <.ll] fEHBP Jnd SSSC/ inrc'nnmion, In lht.
                                recornl!lenu\?cJ or eVell suggested
prior fEHBP aUdl1S, this \',1,1:> not

GHC-SC\V has Cllways ~ndC:c.lvoreJ 10 maintain all :lnfOrrni]lion ~h,H W,I:> requiredl C)' (Ihc FEI-I8P
contrD.c\. \Ve believe thal the feeJbilcK \-vc received is 'bJsed on the fEHBP inicem!JI1 i~l1terpj'el'ilion Dr'
Ihnl con (rae l \ har has evo Ived 0 v~r the las [ Ii ve years since. our IaSl :iltldi l. ThIs ;'(': ill' 's al:Jd j I ic am had a
much di!'ferenl audiI proc\;,ss and style (h.an \ve enCOLIIl'jkred illl ow' hlSi FEHBP Jtldits, \~.,Ie ftc) (h'-"llhe
pllrpose 0 f an y (llld it is \I,VO ford: i\h.iSt i nl ponEint - did 'Vie do \,vhi1l \<.:e ",.ere l'c.(.jui1recll ie, do and
s~,c0nd,uilf - are there processes cr steps \ve need 10 ChJi.~lgc \Vc belie\'t- lh:..lj I.he lluthl s.ho\vo:::d 1 b2Jt we
did \"hal \\'(: werL supposc:d lO do, AnJ the auditors \vert able 10 point Olll Jrt:-lS \\ here \\'8 could
improve, We ll1lrYJ('dlcW:ly l~lad.: IllOSE ir-ilpro\'emenls - e\'en bdore lh~ wril1en rCpl)!1..

S ;ncc t.he audi lLns fOiHl.d Ihat the fEHBP Wf.(;$ v,-'ere de\doped in accord3ncc \.vi I h ~'PJ)j ill:ablc 110'1\'.'\,
regulations, and the Otlice of Pl"rsormd Managemenl"s 1~11~ng iJl1slruciiolls <md sirlcc: tile di lI'~tll',:;n~..::) in
b~l\veen the origincll source dOCUiT'ent(iljon anclthe l"eC,)1l511:~JCled dOClJIllcnl,illon from ·Ihe ye3 11's 111        1

queslion \Va;,; nul significml. \\'~ ask lhut the cUlltr3lctu,g officer reconSIder assc:;sing GlIC-SC\:,':J
penalty, Throughout the :eJr:;; GHC-SC\J.,.: has provided fedtr:J!1 t=:mploy,,:e5 'vvilh a plon:n high qll:lllily
health p18n, rated -1,'7 in the Nation according to CelJsurnc~' R,epo[s, ~llld 3\ iJ price ih~H is both lilir and
con I'orms 1.0 the requirements of the OCtice of Ptrsoru,c;'1 ''yr~l!i1gemellt.

Thililk you Cor giving us rhe: 0PPOrll\t1ilY' (C! provide om          ~edback     011 ih,.: <111dj1t reSt:lts,   rfyo~1   ha,vc ,my

t'un]ler questions, pk:{se do 11\.)1 hesitat..: 10 COI1(<1Cl HR,

Finance DireCLor

CC                               [Xi:cu1ivc  Director

                             Sales & I'.-L:llketing Dlreclor

        _                      Ulld-::nvriter


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