Texas State Auditor's Office - Summary of Report 23-005

A Performance Audit

An Audit Report on the Health and Human Services Commission's Medicaid Managed Care Rate-setting Process

October 2022

Overview

Background

This report evaluates the Commission’s business processes for setting and implementing the Medicaid managed care rates, communicating the rates to oversight entities, and procuring its contracted actuary. This report also summarizes the rate-setting process and identifies significant drivers of costs in the rates. This is the second of three reports that the State Auditor’s Office will release to address Rider 5, page X-7, the General Appropriations Act (87th Legislature) requirements.

NOT RATED

MEDICAID MANAGED CARE COST DRIVERS

Significant cost drivers include: (1) expected changes in the cost of providing health care services and (2) changes in enrollment requirements. Health care costs comprise between 88 percent and 92 percent of the rates.

Jump to Chapter 1

LOW

RATE-SETTING PROCESS

The Commission established effective business processes for setting the fiscal year 2023 Medicaid managed care rates and established oversight processes for data critical to setting the rates.

Jump to Chapter 2

MEDIUM

COMMUNICATION WITH OVERSIGHT ENTITIES

The Commission’s rate reports addressed most required information; however, it could enhance communication with oversight entities by explicitly addressing certain General Appropriations Act requirements.

Jump to Chapter 3

LOW

CONTRACT PLANNING, PROCUREMENT, AND FORMATION

The Commission planned, procured, and formed its actuarial services contract in accordance with applicable requirements.

Jump to Chapter 4-A

HIGH

VENDOR SELECTION

The Commission followed applicable requirements in selecting its actuarial services contractor. However, contract team members did not consistently complete required certification and disclosure forms.

Jump to Chapter 4-B

LOW

CONTRACT OVERSIGHT

The Commission issued payments to its actuarial services contractor in compliance with applicable rules and monitored that contractor for compliance with the terms of its contract.

Jump to Chapter 4-C

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