www.baltimoresun.com/business/bs-bz-insurance-audit-20120503,0,1606269.story

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State audits Maryland Health Insurance Plan

Didn't show use of competitive bidding and proper reviews

By Andrea K. Walker, The Baltimore Sun

6:58 PM EDT, May 3, 2012

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The agency that oversees the state's health plan for those uninsured because of preexisting conditions, paid a vendor nearly $367,000 for information technology services without proving that the contract was chosen through a competitive bidding process, a legislative audit has found.

The audit also said The Maryland Health Insurance Plan did not perform routine reviews to make sure the insurer that manages the plan for the state, CareFirst BlueCross BlueShield, was complying with its contract. CareFirst pays claims and determines patient eligibility among other services.

Oversight of CareFirst also was weak in another area, according to the audit. The Maryland Health Insurance Plan did not get an independent review of a new automated system CareFirst installed to manage claims.

The agency agreed with the findings and said it has made changes in its review and procurement process. For instance, a revised procurement policy requires written contractual agreements, which prevent issues like this in the future, said executive director Kent McKinney.

The agency also provides subsidized out-of-pocket prescription drug coverage for those enrolled in Medicare in addition to providing insurance to the uninsured.

The audit covered the periods of Jan. 1, 2008, to June 5, 2011. CareFirst paid claims of $179.5 million for care for the uninsured in fiscal year 2011. The state paid the insurer $10 million.

andrea.walker@baltsun.com

Twitter.com/ankwalker

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