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A Report onHealth and Human Services Commission ContractsDecember 6, 2017Members of the Legislative Audit Committee:Texas Government Code, Section 321.013(k), requires that, in devising its audit plan, the State Auditor’sOffice shall consider performing audits of Health and Human Services Commission (Commission) contractsthat exceed 100 million in annual value, including contracts between the Commission and managed careorganizations. Pursuant to that requirement, the State Auditor’s Office compiled a list of each Commissioncontract with a total value exceeding 100 million, as well as all contracts for managed care services.Based on unaudited information from the Commission’s Healthand Human Services Contract Administration and TrackingSystem (HCATS), the State Auditor’s Office identified 79contracts with a total value exceeding 100 million. Thosecontracts included: Nine contracts related to various aspects of operatingMedicaid, Children’s Health Insurance, MedicalTransportation, and administrative programs. Three contracts related to information technology andtelecommunications services. One contract related to pharmacy providers for the VendorDrug Program. Forty-nine contracts for managed care services. One interlocal contract related to mental health services. Sixteen long-term care contracts transitioned from theDepartment of Aging and Disability Services to theCommission during fiscal year 2017.Objective, Scope, and MethodologyThe objective of this project was to identify andanalyze Commission contracts exceeding 100million in total value, including those withmanaged care organizations.The project scope included active Commissioncontracts exceeding 100 million in total value andall contracts for managed care services as of June1, 2017.This project was not an audit. The project reliedon self-reported Commission information regardingcontracts and their associated expenditures. Thatinformation was not subject to the tests andconfirmations that would be performed in anaudit. However, the information in this report wassubject to certain quality control procedures tohelp ensure accuracy. The following members ofthe State Auditor’s Office staff performed theproject: Scott Labbe, CPA (Project Manager) Teri Incremona, CFE Joseph Smith, CISA Brianna C. Pierce, CPA (Quality ControlReviewer) John Young, MPAff (Audit Manager) Young,79MPAff(Audit Manager)According to the Commission, as of June 1, 2017, expenditures forJohnthosecontractshad totaledapproximately 93.3 billion. For the purposes of this project, HCATS was the most complete repository ofCommission contract data, including data on expenditures associated with those contracts. Additionally,the State Auditor’s Office reviewed expenditure data from the Commission’s financial system (the HealthSAO Report No. 18-006Robert E. Johnson Building1501 North Congress AvenueAustin, Texas 78701P.O. Box 12067Austin, Texas 78711 -20 67Phone: (512) 936 -950 0Fax: (512) 93 6 -9400Internet: www.sao. texas.gov

Members of the Legislative Audit CommitteeDecember 6, 2017Page 2and Human Services Administrative System) to determine the reasonableness of total expenditures forcertain contracts.The State Auditor’s Office will include the information identified in this report in its risk assessment processfor selecting contracts to audit during fiscal year 2018. A list of the 79 contracts discussed above is attachedto this letter.If you have any questions, please contact John Young, Audit Manager, or me at (512) 936-9500.Sincerely,Lisa R. Collier, CPA, CFE, CIDAFirst Assistant State AuditorAttachmentcc:The Honorable Greg Abbott, GovernorMr. Charles Smith, Executive Commissioner, Health and Human Services Commission

This document is not copyrighted. Readers may make additional copies of this report as needed. Inaddition, most State Auditor’s Office reports may be downloaded from our Web site: www.sao.texas.gov.In compliance with the Americans with Disabilities Act, this document may also be requested inalternative formats. To do so, contact our report request line at (512) 936-9500 (Voice), (512) 936-9400(FAX), 1-800-RELAY-TX (TDD), or visit the Robert E. Johnson Building, 1501 North Congress Avenue, Suite4.224, Austin, Texas 78701.The State Auditor’s Office is an equal opportunity employer and does not discriminate on the basis ofrace, color, religion, sex, national origin, age, or disability in employment or in the provision of services,programs, or activities.To report waste, fraud, or abuse in state government call the SAO Hotline: 1-800-TX-AUDIT.

AttachmentSummary of Health and Human Services Commission ContractsTable 1 lists each Health and Human Services Commission (Commission)contract with a total value exceeding 100 million, as well as all contracts formanaged care services. The Commission reported that unauditedinformation as of June 1, 2017. It generated that information from its Healthand Human Services Contract Administration and Tracking System (HCATS).For the purposes of this project, HCATS was the most complete repository ofCommission contract data, including expenditures associated with thosecontracts. Additionally, the State Auditor’s Office reviewed expenditure datafrom the Commission’s financial system (the Health and Human ServicesAdministrative System) to determine the reasonableness of totalexpenditures for certain contracts.Table 1Summary of Health and Human Services Commission ContractsContractNumberContractor NameContract DescriptionTotal Contract Expendituresas of June 1, 2017Medicaid, Children's Health Insurance, Medical Transportation, and Administrative Programs Contracts1Accenture LLC529-14-0125-00003Medical ClaimsAdministration 692,588,3602Maximus Inc.529-10-0005-00001Managed Care EnrollmentBroker Operations238,475,689 a3Logisticare Solutions529-11-0004-00002Non-emergency MedicalTransportation ProgramServices182,524,1554Medical TransportationManagement Inc.529-11-0004-00001Non-emergency MedicalTransportation ProgramServices169,633,6365Department of State HealthServices529-09-0133-00001Commission Program andAdministrative Services154,932,4536Department of State HealthServices529-11-0107-00001Vaccines for the Children’sHealth Insurance Program148,839,3907Maximus Inc.529-14-0006-00001Medicaid Eligibility SupportServices144,962,2408Texas Child Support DisbursementUnit529-12-0086-00001Commission Program andAdministrative Services107,540,1999Lefleur Transportation of TexasInc.529-15-0002-00010Commission MedicalTransportation ProgramManaged hmentA Report on Health and Human Services Commission ContractsSAO Report No. 18-006December 2017Page 1 1,945,108,270

Summary of Health and Human Services Commission ContractsContractNumberContractor NameContract DescriptionTotal Contract Expendituresas of June 1, 2017Information Technology and Telecommunications Contracts10Deloitte Consulting LLP529-08-0208-00001Texas Integrated EligibilityRedesign SystemMaintenance and Support 253,522,24411Northrop Grumman SystemsCorporation529-12-0006-00001Data Center Services forthe Texas IntegratedEligibility Redesign System135,553,09212Department of InformationResources529-13-0088-00001State Data Center Services171,712,363 aSubtotal 560,787,699Vendor Drug Program Contract13ProCare Pharmacy Direct Inc.529-09-0069-00164Vendor Drug ProgramPharmacy ProviderSubtotal 145,613,003 145,613,003Managed Care Contracts14Amerigroup Community Care ofTexas529-12-0002-00019Managed Care Services 11,202,926,45415United Healthcare Community Planof Texas529-12-0002-00009Managed Care Services7,897,983,99316Superior HealthPlan Inc.529-12-0002-00006Managed Care Services7,728,548,66317Superior HealthPlan Inc.529-12-0002-00007Managed Care Services7,269,639,48618Molina Healthcare Inc.529-12-0002-00008Managed Care Services7,081,782,75819Texas Children's Health Plan529-12-0002-00014Managed Care Services4,961,350,60220Community Health Choice529-12-0002-00003Managed Care Services4,282,439,39121DentaQuest Ventures Inc.529-12-0003-00002Managed Care Services4,004,939,35722MCNA Insurance Company529-12-0003-00003Managed Care Services3,090,826,51523Parkland Community Health Plan,Inc.529-12-0002-00004Managed Care Services2,926,264,58524Driscoll Children’s Health Plan529-12-0002-00010Managed Care Services2,267,252,92025Amerigroup Community Care ofTexas529-12-0002-00015Managed Care Services1,822,668,96226SHA LLC (FirstCare)529-12-0002-00001Managed Care Services1,650,196,05927Community First Health Plans529-12-0002-00020Managed Care Services1,649,219,79628Cook Children’s Health Plan529-12-0002-00002Managed Care Services1,630,330,10929United Healthcare InsuranceCompany529-13-0042-00004Managed Care Services1,540,417,13130Molina Healthcare Inc.529-10-0020-00005Managed Care Services1,429,587,63131Superior HealthPlan Inc.529-13-0042-00003Managed Care Services1,420,536,53732HealthSpring Life and HealthInsurance Company529-10-0020-00006Managed Care Services1,250,512,48133Aetna Health Inc.529-12-0002-00022Managed Care Services1,246,942,407AttachmentA Report on Health and Human Services Commission ContractsSAO Report No. 18-006December 2017Page 2

Summary of Health and Human Services Commission ContractsContractNumberContractor NameContract DescriptionTotal Contract Expendituresas of June 1, 201734Superior HealthPlan Inc.529-10-0020-00003Managed Care Services988,471,91935El Paso First Health Plans Inc.529-12-0002-00013Managed Care Services915,049,72536HealthSpring Life and HealthInsurance Company529-13-0042-00002Managed Care Services844,102,46437HealthSpring Life and HealthInsurance Company529-12-0002-00012Managed Care Services806,981,18938Superior HealthPlan Inc.529-15-0001-00001Managed Care Services706,745,84039Amerigroup Community Care ofTexas529-10-0020-00002Managed Care Services691,277,37940Scott and White Health Plan529-12-0002-00011Managed Care Services649,629,50141Amerigroup Community Care ofTexas529-13-0042-00001Managed Care Services609,136,29042Superior HealthPlan Inc.529-08-0001-00001Managed Care Services595,226,13143Superior HealthPlan Inc.529-13-0071-00008Managed Care Services442,129,17544United Healthcare InsuranceCompany529-13-0071-00010Managed Care Services441,919,45345Texas Children’s Health Plan529-13-0071-00009Managed Care Services430,965,57446Amerigroup Community Care ofTexas529-13-0071-00002Managed Care Services426,711,26947Molina Healthcare Inc.529-15-0058-00001Managed Care Services398,259,07648Blue Cross and Blue Shield of Texas529-12-0002-00017Managed Care Services391,318,45049Amerigroup Community Care ofTexas529-15-0060-00001Managed Care Services337,044,17350Seton HealthPlan Inc.529-12-0002-00005Managed Care Services301,448,87251Superior HealthPlan Inc.529-15-0061-00001Managed Care Services286,734,68752Sendero Health Plans Inc.529-12-0002-00021Managed Care Services206,943,91753Children’s Medical Center HealthPlan529-13-0071-00003Managed Care Services194,279,01954Cook Children’s Health Plan529-13-0071-00005Managed Care Services156,797,37755Driscoll Children’s Health Plan529-13-0071-00006Managed Care Services148,651,60356Community First Health Plans529-13-0071-00004Managed Care Services144,901,10657United Healthcare Community Planof Texas529-15-0059-00001Managed Care Services137,313,32058CHRISTUS Health Plan529-12-0002-00018Managed Care Services128,104,43059Blue Cross and Blue Shield of Texas529-13-0071-00007Managed Care Services120,695,55360Molina Healthcare Inc.529-08-0001-00002Managed Care Services115,645,33061HealthSpring Life and HealthInsurance Company529-15-0057-00001Managed Care Services70,823,33362Aetna Better Health of Texas529-13-0071-00001Managed Care Services63,210,846SubtotalAttachmentA Report on Health and Human Services Commission ContractsSAO Report No. 18-006December 2017Page 3 88,104,882,838