Introduction
MISS. CODE ANN. § 25-15-11 and § 25-15-255 require the PEER Committee to prepare a report to the Legislature by January 1 of each year regarding contractors used by the Department of Finance and Administration (DFA) to administer the State and Public School Employees’ Health Insurance Plans (hereinafter referred to as the "plan" or the "plans"). Sections 25-15-11 and 25-15-255 specifically require PEER’s report to address:
•the processes by which the department procured its contractors;
•the contractors’ work products; and,
•contract expenditures.
MISS. CODE ANN. § 25-15-303, enacted April 24, 1997, creates the State and Public School Employees’ Health Insurance Management Board to administer the State Employees’ Life and Health Insurance Plans and the Public School Employees’ Health Insurance Plans. The section states that the Department of Finance and Administration shall provide "full-time personnel and technical support" to assist the board in the administration of the plans. With the exception of the board’s current third-party contract with Blue Cross Blue Shield of Mississippi and recent contract amendments, all of the health insurance contracts reviewed by PEER were executed by DFA prior to the board’s enactment. Currently, DFA, through its Office of Insurance, provides day-to-day management of the plans, while the board develops rules and regulations for their administration.
MISS. CODE ANN. § 25-15-11 and § 25-15-255 exclude from PEER’s report the third-party administrator contract used by DFA to process health claims. PEER also excluded from this review DFA’s provider network contracts because they primarily provide financial discounts to the plan rather than specific work products.
Overview
The Department of Finance and Administration has multiple-year personal service contracts with firms for administration and design of the state and public school employees’ insurance plans. During FY 1998, DFA did not enter into any new contracts except for the third-party administrator contract and network provider contracts which are excluded from PEER’s review.
DFA’s contracts already in effect and subject to review were approved by the State Personnel Board for FY 1998 and the Personal Service Contract Review Board for FY 1999 as required by state law. PEER reviewed DFA’s FY 1998 contractor work products and concluded that the contractors delivered work products in compliance with financial and other contractual requirements.
The Department of Finance and Administration expended $4,253,610 in Fiscal Year 1998 and $860,413 in the first two months of Fiscal Year 1999 on these contracts. DFA’s personal service contracts specify, as needed, contractor hourly fees and terms for reimbursement for travel expenses. Contractor hourly fees and travel expenses are limited to the availability of funds appropriated by the Legislature from the insurance premium account for the administration of the state and public school employees’ health insurance plans and the maximum expenditure anticipated amount reported to the State Personnel Board on the "Request for Contract Personnel Services Approval" forms.
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