Audit of Group Health Incorporated’s Federal Employees Health Benefits Program Pharmacy Operations as Administered by Express Scripts, Inc. for Contract Years 2015 through 2019

Submitting OIG:

Office of Personnel Management OIG

Date Issued:

Thursday, February 16, 2023

Agency Reviewed / Investigated:

Office of Personnel Management

Submitting OIG-Specific Report Number:

1H-08-00-21-015

Component, if applicable:

Federal Employees Health Benefits Program

External entity, if applicable:

Group Health Incorporated

Location(s):

Agency-Wide

Type of Report:

Audit

Questioned Costs:

$15,086,271

Funds for Better Use:

Number of Recommendations:

Report updated under NDAA 5274:

View Document:

Attachment	Size
1H-08-00-21-015.pdf	1.11 MB

Recommendation Number	Recommendation Status	Significant Recommendation
1	Open	No
We recommend that OPM's Contracting Officer require the Carrier to return $11,251,490 to the FEHBP for pass-through transparent drug pricing that was not received from the PBM for CYs 2015 through 2019.
2	Open	No
We recommend that OPM's Contracting Officer assess the Carrier $1,228,855 for LII on the questioned costs due back to the FEHBP for this finding, calculated through December 31, 2022. The LII should be adjusted to account for the date the questioned costs are returned to the program.
3	Open	No
We recommend that OPM's Contracting Officer require the Carrier to return $816,814 to the FEHBP for its portion of the PBM's non-specific drug discounts that were not received due to the Carrier's failure to move its FEHBP experience-rated group to a transparent PBM arrangement with pass-through pricing for CYs 2015 through 2019.
4	Open	No
We recommend that OPM's Contracting Officer assess the Carrier $100,559 for LII on the questioned costs due back to the FEHBP for this finding, calculated through December 31, 2022. The LII should be adjusted to account for the date the questioned costs are returned to the program.
5	Open	No

6	Open	No
We recommend that OPM's Contracting Officer assess the Carrier $56,697 for LII on the questioned costs due back to the FEHBP for this finding, calculated through December 31, 2022. The LII should be adjusted to account for the date the questioned costs are returned to the program.
7	Open	No
We recommend that OPM's Contracting Officer require the Carrier to return $957,512 to the FEHBP for the underpayment of drug manufacturer rebates and corresponding administrative fees that were withheld by the PBM for CYs 2015 through 2019.
8	Open	No
We recommend that OPM's Contracting Officer assess the Carrier $90,895 for LII on the questioned costs due back to the FEHBP for this finding, calculated through December 31, 2022. The LII should be adjusted to account for the date the questioned costs are returned to the program.
9	Open	No
We recommend that the Carrier return $45,986 to the FEHBP for the Federal group's portion of the penalties that were paid by the PBM to the Carrier for missed performance guarantees from CYs 2015 through 2019.
10	Open	No
We recommend that OPM's Contracting Officer assess the Carrier $5,595 for LII on the questioned costs due back to the FEHBP for this finding, calculated through December 31, 2022. The LII should be adjusted to account for the date the questioned costs are returned to the program.

Recommendation Number

Recommendation Status

Significant Recommendation

Additional Details

Open

We recommend that OPM's Contracting Officer require the Carrier to return $11,251,490 to the FEHBP for pass-through transparent drug pricing that was not received from the PBM for CYs 2015 through 2019.

Open

We recommend that OPM's Contracting Officer assess the Carrier $1,228,855 for LII on the questioned costs due back to the FEHBP for this finding, calculated through December 31, 2022. The LII should be adjusted to account for the date the questioned costs are returned to the program.

Open

We recommend that OPM's Contracting Officer require the Carrier to return $816,814 to the FEHBP for its portion of the PBM's non-specific drug discounts that were not received due to the Carrier's failure to move its FEHBP experience-rated group to a transparent PBM arrangement with pass-through pricing for CYs 2015 through 2019.

Open

We recommend that OPM's Contracting Officer assess the Carrier $100,559 for LII on the questioned costs due back to the FEHBP for this finding, calculated through December 31, 2022. The LII should be adjusted to account for the date the questioned costs are returned to the program.