Executive Summary

The Public Employee's Insurance Agency (PEIA) is designed to provide health, life, and prescription insurance for active and retired employees of the State of West Virginia and various related state and non-state agencies. In order to provide health and prescription services, PEIA contracts with third party administrators (TPAs) to manage the payment of medical and pharmacy claims. The Legislative Auditor generated a random sample of 505 policyholder files to test the eligibility information maintained in TPA databases. The results of the tests performed are summarized below:

Issue 1: A Sample of Public Employee Insurance Agency and Third Party Administrator Files Found No Differences in Eligibility Information.

There is a potential for many negative outcomes due to inaccurate eligibility information in a TPA database. The Legislative Auditor reviewed 505 PEIA and TPA files to determine if differences exist between the PEIA and TPA databases. No differences were found in the eligibility information contained in the databases reviewed.

PEIA has made efforts to improve the services and systems of the agency. The fact no differences were found in eligibility information between the systems appears to be a direct result of this effort. This is not to say all problems within the PEIA database have been corrected. The PEIA database appears to be outdated and difficult to manage, making it a constant struggle to maintain accurate information. The PEIA should continue efforts to improve the accuracy of the PEIA database until a replacement system can be developed.