Special audit, Arizona Health Care Cost Containment System, Healthcare Group Program : a report to the Arizona Legislature

              Special Audit
Arizona Health Care Cost
Containment System–
Healthcare Group Program
Performance Audit Division
Debra K. Davenport
Auditor General
FEBRUARY • 2006
REPORT NO. 06 – 02
A REPORT
TO THE
ARIZONA LEGISLATURE
The Auditor General is appointed by the Joint Legislative Audit Committee, a bipartisan committee composed of five senators
and five representatives. Her mission is to provide independent and impartial information and specific recommendations to
improve the operations of state and local government entities. To this end, she provides financial audits and accounting services
to the State and political subdivisions, investigates possible misuse of public monies, and conducts performance audits of
school districts, state agencies, and the programs they administer.
The Joint Legislative Audit Committee
Representative Laura Knaperek, Chair Senator Robert Blendu, Vice Chair
Representative Tom Boone Senator Carolyn Allen
Representative Ted Downing Senator John Huppenthal
Representative Pete Rios Senator Richard Miranda
Representative Steve Yarbrough Senator Harry Mitchell
Representative Jim Weiers (ex-officio) Senator Ken Bennett (ex-officio)
Audit Staff
Melanie Chesney, Director and Contact Person
Dot Reinhard, Manager
Jason Taylor, Team Leader
Christel Beldin
Cathy Clark
Bruce Coleman
Anne Hunter
Copies of the Auditor General’s reports are free.
You may request them by contacting us at:
Office of the Auditor General
2910 N. 44th Street, Suite 410 • Phoenix, AZ 85018 • (602) 553-0333
Additionally, many of our reports can be found in electronic format at:
www.azauditor.gov
2910 NORTH 44th STREET • SUITE 410 • PHOENIX, ARIZONA 85018 • (602) 553-0333 • FAX (602) 553-0051
DEBRA K. DAVENPORT, CPA
AUDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
WILLIAM THOMSON
DEPUTY AUDITOR GENERAL
February 28, 2006
Members of the Arizona Legislature
The Honorable Janet Napolitano, Governor
Mr. Anthony D. Rodgers, Director
Arizona Health Care Cost Containment System
Dear Mr. Rodgers:
Transmitted herewith is a report of the Auditor General, A Special Audit, as defined in Arizona
Revised Statutes (A.R.S.) §41-1278, of the Arizona Health Care Cost Containment System’s
Healthcare Group (HCG) program. This report is in response to Laws 2005, Chapter 328, Section
24, and was conducted under the authority vested in the Auditor General by A.R.S. §41-1279.03. I am
also transmitting with this report a copy of the Report Highlights for this audit to provide a quick
summary for your convenience.
This report includes three findings that provide information only, and no recommendations are
presented. Included with this report is a written response from the Arizona Health Care Cost
Containment System.
My staff and I will be pleased to discuss or clarify items in the report.
This report will be released to the public on March 1, 2006.
Sincerely,
Debbie Davenport
Auditor General
Enclosure
Services:
The Arizona Health Care Cost Containment System’s
Healthcare Group (HCG) program provides affordable and
accessible healthcare coverage to Arizona’s small business-es,
defined as businesses with 50 or fewer employees, and
political subdivisions. HCG offers a variety of healthcare ben-efit
plans, including several medical plans, a vision plan, and
a dental plan.
HCG budgeted 41 FTE for fiscal year 2006, and 11 of these
positions were vacant as of January 20, 2006. The staff are
organized into six departments:
􀁺 Office of the Deputy Director—Responsible for execu-tive
management for HCG staff and programs, and
other activities such as strategic planning, and health-care
coverage market research and analysis.
􀁺 Finance and Administration—Responsible for things
such as HCG’s budget and expenditure manage-ment,
actuary analysis and rate setting, accounts
payable, and contractor financial oversight.
􀁺 Health Plan Benefit Plan Management—Responsible
for marketing and sales activities, as well as broker
relations, employer and member communications,
and outreach.
􀁺 Health Plan Operations—Responsible for things such
as the customer care call center, member services,
and information systems support.
􀁺 Medical Management—Responsible for, among other
things, overseeing the medical care provided,
approving medical policies, and supervising the HCG
employer wellness and chronic illness management
program.
􀁺 Compliance and Contract Administration—
Responsible for contract administration, grievance
management, and compliance and audit functions.
Facilities and equipment:
HCG leases approximately 6,000 square feet of a privately
owned facility located at 700 East Jefferson Street in Phoenix
PROGRAM FACT SHEET
Arizona Health Care Cost Containment System
Healthcare Group Program
Office of the
Deputy Director—4
Finance and
Administration—3
Health Plan Benefit
Plan Management—13
Health Plan
Operations—15
Medical
Management—4
Compliance and
Contract Management—2
Program revenue:
$40.5 million (fiscal year 2005, actual)
Program staffing:
41 FTEs, including 11 vacancies (as of January 2006)
Office of the Auditor General
Premiums—$36,116,572
General Fund
Appropriations—$4,000,000
Health Crisis
Fund—$200,000
Interest
Income—$158,696
at a cost of $7,400 per month. HCG has typical office equipment, such as office furniture, com-puters,
and printers.
Mission:
To reduce the number of uninsured Arizonans by providing innovative, affordable healthcare cov-erage
options to small businesses and political subdivisions, ensuring access to quality health-care
so that working Arizonans can maintain healthy lifestyles.
Program goals:
The Healthcare Group lists seven goals for fiscal year 2006, including goals to:
1. Increase enrollment in HCG to 32,000 members by July 2006.
2. Achieve a 98 percent customer satisfaction rating.
3. Achieve a measurable increase in brand recognition.
4. Introduce a new state-wide PPO product and new dental and vision programs.
5. Maintain a 98 percent retention rate throughout fiscal year 2006.
Adequacy of performance measures:
HCG has one outcome measure that tracks monthly program enrollment. Although the HCG is
in the process of developing other measures and has some informal measures in various areas,
HCG lacks formal input, output, efficiency, and quality measures. For example, although the
HCG measures member satisfaction through a yearly survey, the survey results are not docu-mented
in a list of performance measures that would accompany its goals and objectives.
Source: Auditor General staff analysis of unaudited financial schedules and personnel budgets prepared by the Healthcare Group for the years
ended or ending 2004 through 2006, Arizona State Master List for fiscal years 2003 through 2005, and other information provided by the
Healthcare Group.
State of Arizona
The Office of the Auditor General has conducted a special audit, as defined in
Arizona Revised Statutes (A.R.S.) §41-1278, of the Arizona Health Care Cost
Containment System’s (AHCCCS) Healthcare Group (HCG) program. This audit was
undertaken pursuant to Laws 2005, Chapter 328, Section 24, which provided for the
following scope: 1) examining HCG’s administrative costs; 2) determining whether
HCG’s financial reserves are adequate compared to reserves required for private
health insurance providers; and 3) determining whether HCG requires employer
groups to be without health insurance for 180 days before enrollment in HCG. This
audit was conducted under the authority vested in the Auditor General by A.R.S. §41-
1279.03.
Background
HCG provides health insurance primarily to Arizona’s small
business employees. HCG was originally established by
AHCCCS in 1986 to provide affordable and accessible
healthcare coverage to Arizona’s small businesses—currently
defined as businesses with 50 or fewer employees—and
political subdivisions.1 HCG was established to help address
the issue of the high number of working Arizonans whose
employers do not offer health insurance. HCG offers a variety
of healthcare benefit plans, including Health Maintenance
Organization (HMO) and Preferred Provider Organization
(PPO) plans, a vision plan, and a dental plan. For example,
HCG offers HMO benefit plans that provide different levels of
coverage for different prices. As of December 2005, there were
17,850 individuals enrolled in HCG’s benefit plans.
1 HCG was formally established in statute as a separate program within AHCCCS by Laws 1995, Ch. 260, §6 (A.R.S. §36-
2912).
Office of the Auditor General
SUMMARY
page i
Health Maintenance Organization—Benefit
plan that provides comprehensive managed
healthcare to members under a capitated-payment
structure, in which HCG pays an
HMO contractor a fixed amount per member
per month regardless of the healthcare
services performed. HMO members’ services
are covered when they receive their medical
care from healthcare providers that are part of
the HMO’s provider network
Preferred Provider Organization—Benefit plan
in which HCG pays healthcare providers on a
fee-for-service basis rather than a capitated
basis. Unlike HMO plans, members who
choose PPO plans may receive medical care
from healthcare providers that are not part of
the provider network (although at a greater
cost to the member).
HCG has various administrative costs (see pages 11
through 16)
HCG’s administrative costs encompass a variety of activities and are paid for from
several revenue sources. Statutes do not define what constitutes an administrative
cost. However, AHCCCS has defined administrative costs to include all costs
associated with the overall management and operation of an entity, such as
marketing, salaries and related benefits of administrative staff, and other operating
costs. During the 27-month period of July 1, 2003 through September 30, 2005,
HCG’s administrative costs totaled approximately $6.9 million and were paid
primarily from premium revenue but also from other sources.1 For example, the
Legislature appropriates a portion of the premium revenue HCG receives for
administrative costs. In addition, although the remaining premium revenue is
intended to pay for medical care costs including payments to HMO contractors,
HCG uses some of the revenue to pay certain administrative costs that would
normally be incurred by the HMO contractors, but are instead incurred by HCG, such
as the cost of issuing member handbooks. In total, approximately $6 million of
premium revenue was used for administrative costs during the period July 1, 2003
through September 30, 2005. In fiscal years 2004 and 2005, HCG was also
appropriated State General Fund monies totaling nearly $7 million, of which
approximately $700,000 was used to pay some of its administrative costs. HCG did
not receive a State General Fund appropriation for fiscal year 2006.
HCG’s approximately $6.9 million in administrative costs for the period July 1, 2003
through September 30, 2005, amounted to 8.5 percent of the program’s total costs.
The largest categories of administrative costs consist of salaries and benefits, and
professional and outside services. For example, HCG paid approximately $3.2
million in salaries and related benefits of HCG staff and AHCCCS staff who
performed HCG-related functions, including executive and administrative staff such
as a HCG executive director, actuarial support, sales and marketing staff, and
customer care staff. HCG also paid about $1.9 million for professional and outside
services. The types of services varied and included paying costs related to a
marketing contract, and for temporary staff to promote HCG and assist in outreach
and sales efforts. Other costs include brokers’ fees for enrolling qualified members.
Beginning in January 2005, HCG charged employers a portion of premiums to cover
member enrollment fees that are paid to agents or brokers who have signed
agreements with HCG to promote its benefit plans and enroll qualified members. Of
the nearly $143,000 collected through September 30, 2005, approximately $50,300
in enrollment fees were paid to brokers or agents for the 347 members they had
enrolled who, as required by the agreement, had remained enrolled in a HCG benefit
plan for 120 days.
1 Auditors reviewed the two most recent completed fiscal years of cost data and cost data for the first quarter of fiscal year
2006 in order to provide the most current information available at the time the audit work was conducted.
State of Arizona
page ii
HCG is taking steps to ensure financial stability (see
page 17 through 21)
HCG appears to be in-line with the insurance industry in its efforts to ensure financial
stability. While no universal standard exists for the amount of reserves insurance
companies should maintain, like other insurers in the healthcare industry, HCG uses
actuaries to determine and monitor its reserve amounts. The amount of reserves
needed can vary based on things such as whether there are any state regulatory
requirements, the size or type of the insurance company, and the type of benefit
plans offered. For example, Arizona’s insurance regulatory requirements focus on
protecting against insolvency and require health insurers to deposit about $1.5
million with the State Treasurer. In addition, insurers are required to submit annual
financial statements to Arizona’s Department of Insurance (DOI) that must be
accompanied by an opinion from a certified actuary regarding the assumptions and
methods used to determine reserves.
State agencies are not subject to Arizona’s insurance regulations. Therefore, since
HCG is part of AHCCCS, it is not subject to Arizona’s insurance regulations.
However, the processes that HCG uses for determining and monitoring its reserves
appear to be similar to those required of other insurers and in-line with industry
practices. Specifically, HCG, like other insurers, uses actuaries to determine its
reserve amounts. According to HCG’s actuaries, they used the National Association
of Insurance Commissioner’s risk-based model as a starting point for determining
HCG’s reserve amounts. In addition, they monitor HCG’s reserves amounts on a
monthly basis and make recommendations for adjustments as necessary. Further,
AHCCCS’ director indicated that after the PPO benefit plan has been in place for at
least 2 years, he would like to obtain a peer review of HCG’s actuarial work, which
can be useful for evaluating and enhancing the quality of the work product. The
director estimates this review would cost between $100,000 and $150,000.
Further, as other insurers do, HCG uses reserves for various purposes that are
intended to help ensure financial stability. HCG generally establishes its reserves by
benefit plan type. For its HMO benefit plans, in which the majority of HCG’s members
are enrolled, the HMO contractors are responsible for ensuring that medical claims
are paid. Because the HMO contractors also contract with AHCCCS’ other
programs, they are already required to meet AHCCCS’ equity-per-member and
performance bond requirements. Although not responsible for ensuring its HMO
claims are paid, HCG still retains at least 5 percent of its HMO premiums for two
purposes. First, to provide “stop-loss” coverage for its HMO contractors, which is
designed to help limit the amount of loss a contractor will experience within a year.
Second, to pay for other things, such as cost fluctuations due to the introduction of
new benefit plans, coverage changes, or future expansion into new locations.
According to HCG’s records as of December 2005, it had a HMO reserve of
approximately $2,776,000.
Office of the Auditor General
page iii
For its PPO benefit plans, which were established in late 2005, HCG also maintains
reserves for two main purposes. First, since HCG maintains ultimate responsibility for
ensuring that medical claims are paid for its PPO benefit plans, HCG maintains a
separate PPO reserve to pay for claims that have been incurred, but have not yet
been submitted for payment. Second, HCG reserves approximately 10 percent of its
PPO premiums for such contingencies as inadequate premiums or unanticipated
catastrophic events that result in excessive healthcare claims. As of December 2005,
250 members were enrolled in PPO plans, and according to HCG’s records, it had a
total PPO reserve of approximately $80,000.1 Also important, in addition to these
reserve amounts, HCG has net assets that could be used to pay either HMO or PPO
claims if needed. Specifically, according to HCG records, as of December 31, 2005,
it had net assets of approximately $1.1 million that were not designated or restricted
for specific purposes.
Finally, in addition to establishing reserves for the HMO and PPO benefit plans, HCG
employs various other methods to minimize its financial risk. For example, HCG
purchases insurance, known as reinsurance, to help cover large healthcare claims;
limits a member’s lifetime maximum benefit amount; and has the ability to increase
premiums as long as it provides its members with a 60-day written notice.
HCG has process to ensure applicants have not recently
had group healthcare coverage (see pages 23 through 25)
HCG has taken steps to ensure that small business applicants have been without
group healthcare coverage for the specified time period before obtaining healthcare
coverage from HCG. Statutes addressing HCG’s membership requirements were
changed in 2004 to require small businesses to be without group healthcare
insurance for 180 days prior to joining HCG. Therefore, HCG established a process
for ensuring that this requirement, known as the “bare period,” is met. Its processes
include training its sales representatives and contracted brokers regarding the
requirement prior to their being authorized to enroll applicants in HCG. In addition,
HCG developed a form that small business applicants must fill out and sign. This
form asks small business applicants whether they currently offer group health
insurance or did so within the past 6 months. By signing the form, small business
applicants certify, under penalty of perjury, that they have met the requirement. In
January 2006, this form was revised to authorize HCG to contact any previous
insurance companies to certify the dates and types of coverage previously provided.
Based on the processes HCG established and the work conducted as a part of this
audit, HCG appears to be taking appropriate steps to ensure that small businesses
are meeting the requirement of being uninsured for 6 months before enrolling in
1 According to HCG’s records, it had collected approximately $162,000 in PPO premiums as of December 31, 2005.
State of Arizona
page iv
HCG. Specifically, auditors examined a random sample of 30 small business
application files and found that each file contained a signed acknowledgment form
as required. In addition, a September 2005 external review failed to substantiate
allegations that AHCCCS’ director was encouraging applicants to avoid the bare
period requirement. Finally, auditors determined that DOI does not maintain
information on individuals or businesses who are insured with insurance companies
licensed in Arizona that could be used to determine prior coverage.
Office of the Auditor General
page v
State of Arizona
page vi
Office of the Auditor General
TABLE OF CONTENTS
continued
page vii
1
11
11
12
13
15
16
17
17
21
21
23
23
24
24
25
Introduction & Background
Finding 1: HCG has various administrative costs
Administrative costs include costs for managing and operating the
program
Several revenue sources used for administrative costs
HCG administrative costs comprise 8.5 percent of total program
costs
AHCCCS allocates costs to HCG
Recommendations
Finding 2: HCG is taking steps to ensure financial
stability
HCG uses reserves to help ensure financial stability
HCG uses various methods to minimize financial risk
Recommendations
Finding 3: HCG has process to ensure applicants have
not recently had group healthcare coverage
Businesses must be uninsured before joining HCG
HCG has established process for ensuring compliance
HCG appears to be adequately enforcing requirement
Recommendations
State of Arizona
TABLE OF CONTENTS
concluded
page viii
Appendix A: Healthcare Group Premium Rate Charts
HMO Benefit Plan Premiums, by Contractor
PPO Benefit Plan Premiums
Dental and Vision Plan Premiums
Appendix B: Healthcare Group Medical Benefit Plan
Comparisons
HMO Benefit Plan Comparison
PPO Benefit Plan Comparison
Agency Response
Tables:
1 Schedule of Revenues, Expenditures, and Changes
in Fund Balances
Years Ended or Ending June 30, 2004, 2005, and 2006
(Unaudited)
2 Administrative Expenditures by Source of Funding Compared
to Total Expenditures
July 1, 2003 through September 30, 2005
(Unaudited)
Figure:
1 Number of Individual Members
December 1995 through December 2005
a-i
a-iii
a-ix
a-xi
b-i
b-iii
b-v
7
14
6
The Office of the Auditor General has conducted a special audit, as defined in
Arizona Revised Statutes (A.R.S.) §41-1278, of the Arizona Health Care Cost
Containment System’s (AHCCCS) Healthcare Group (HCG) program. This audit was
undertaken pursuant to Laws 2005, Chapter 328, Section 24, which provided for the
following scope: 1) examining HCG’s administrative costs; 2) determining whether
HCG’s financial reserves are adequate compared to reserves required for private
health insurance providers; and 3) determining whether HCG requires employer
groups to be without health insurance for 180 days before enrollment in HCG. This
audit was conducted under the authority vested in the Auditor General by A.R.S. §41-
1279.03.
HCG primarily provides health insurance to small
businesses
HCG primarily provides health insurance to Arizona’s small business
employees. Although HCG may also serve political subdivision
employees, almost all of HCG’s members are small business
employees. HCG offers its members a variety of healthcare benefit
plans, including several medical plans, a vision plan, and a dental plan.
HCG covers the costs of providing these benefit plans with premiums it
receives from participating businesses.
HCG created to provide insurance to small businesses and political
subdivisions—HCG was originally established by AHCCCS in 1986 to provide
affordable and accessible healthcare coverage to Arizona’s small businesses—
currently defined as businesses with 50 or fewer employees—and political
subdivisions (see Small Business Eligibility Requirements text box on page 2 for
current eligibility requirements).1,2 Specifically, HCG was created to help address the
1 AHCCCS originally established HCG from a grant from the Robert Wood Johnson Foundation. HCG was formally
established in statute as a separate program within AHCCCS by Laws 1995, Ch. 260, §6 (A.R.S. §36-2912).
2 Beginning November 2004, HCG also became a state-qualified health plan for Health Coverage Tax Credit (HCTC)
subscribers. HCTC is a federal tax credit that pays 65 percent of qualified health plan premiums for eligible trade-impacted
workers and certain benefit recipients from the Pension Benefit Guaranty Corporation (a federal corporation
charged with protecting the retirement incomes for American workers with private-sector-defined benefit pension plans).
Office of the Auditor General
INTRODUCTION
& BACKGROUND
page 1
Participating businesses—
Arizona small businesses who
have enrolled with HCG to
provide health insurance for their
employees.
Members—Individuals who have
healthcare insurance through
HCG. Most members are
participating businesses’
employees and their dependents.
issue of the high number of working Arizonans whose
employers do not offer health insurance. Although
auditors were not able to readily identify historical
information about uninsured small businesses in
Arizona, a 2000 study estimated that only about a
third of small businesses in Arizona offer health
insurance to their employees, largely because few
private insurers serve small businesses or the cost of
providing health insurance is too expensive.1 HCG’s
enabling statute also requires HCG to provide
coverage to individuals without regard to health-status-
related factors such as medical condition or
claims experience. To meet these requirements, HCG
developed the following mission:
“To reduce the number of uninsured Arizonans by
providing innovative affordable healthcare coverage
options to small businesses and political subdivisions
ensuring access to quality healthcare so that working
Arizonans can maintain healthy lifestyles.”
Although its mission involves serving small
businesses and political subdivisions, over 99 percent
of HCG’s members are from small businesses, as
indicated in the text box “Healthcare Group Member
Information As of December 2005.”
HCG offers medical, dental, and vision
coverage—HCG has always offered medical
coverage to its members, and recently added dental
and vision coverage as well. Since HCG’s service
agreements are with participating business employers
rather than the individual employee members, the
employers maintain the right to choose which of these
healthcare benefit plans to offer their employees. The
benefit plans available are as follows:
􀁺 Health Maintenance Organization (HMO) benefit plans—HCG offers three HMO
benefit plans that provide different levels of coverage for different prices. In
general terms, an HMO provides comprehensive managed healthcare to
members under a capitated-payment structure in which HCG uses member
premiums to pay an HMO contractor a fixed amount per member, per month,
regardless of the healthcare services performed. HMO members’ services are
1 WestGroup Research, Small Business Survey: Arizona 2000.
State of Arizona
page 2
Employer Requirements
• Must have been in business in Arizona for at least 60 days.
• Must have between 1 and 50 full-time employees.1
o Must enroll 100 percent of its employees if 5 or fewer employees.2
o Must enroll 80 percent of its employees if more than 5 employees. 2
• Cannot have had previous group insurance coverage for 180 days prior to
participating.
Employee Requirements
• Must work or reside in Arizona.
• Must have been employed by a participating business for at least 60 days.
• Must work at least 20 hours per week.
1 When determining enrollment percentages, certain employees are exempted such as
those who have insurance through a spouse or a government subsidized program (see
A.R.S. §§36-2912(B) and (D).
2 HCG must allow a participating business to continue coverage if the business expands
employment beyond 50 employees after enrollment.
Small Business Eligibility Requirements
Small Business Members (including dependents) 17,710 individuals
• Total participating businesses—5,877
• Average participating business size—1.7
employees
• Average members per participating business—
3 individuals
Political Subdivision Members 101 individuals
• Total participating political subdivisions—10
Health Coverage Tax Credit Subscriber Members1 39 individuals
Total State-wide Members 17,850 individuals
1 See page 1, footnote 2 for an explanation of the Health Coverage Tax Credit.
Healthcare Group Member Information
As of December 2005
covered when they receive their medical care from
healthcare providers (i.e., doctors, hospitals, etc.) that
are part of the HMO’s provider network. HCG’s HMO
benefit plans include: 1) Classic, which is the most
comprehensive plan for those seeking a wide range of
benefits or requiring ongoing care due to chronic health
conditions; 2) Secure, for those with limited health
needs beyond routine medical care and preventive
services; and 3) Active, for those in good health who
require only preventive and routine healthcare. These
benefit plans are available to members in all counties
except Apache, La Paz, Mohave, and Navajo counties.
As of December 2005, 17,600 of HCG’s members were enrolled in HMO plans.
To provide the HMO benefit plans, HCG contracts with three HMO contractors
(also known as managed care contractors) on a capitated-rate basis. These
contractors—University Physicians, Inc., Mercy Healthcare Group, and Care 1st
Health Plan—also contract with AHCCCS’ other programs. HCG pays the
contractors a monthly capitated rate for each member who selects their benefit
plan. The contractors use the capitated rates to pay for medical claims and
administrative costs, and realize a profit. Under this arrangement, the
contractors—not HCG—are liable for medical claims that are incurred. To
provide incentive for these and future HMO contractors to serve HCG’s target
market, HCG bears responsibility for marketing and reduces its HMO
contractors’ risk by purchasing reinsurance for large claims. HCG also agrees
to limit its HMO contractors’ losses if reserve monies are available (see Finding
2, pages 17 through 21 for more information about HCG’s risk-reduction
efforts).1
􀁺 Preferred Provider Organization (PPO) benefit plans—In late 2005, HCG
also began offering two state-wide PPO benefit plans to ensure that it
offered medical coverage in all Arizona counties. In general, a PPO
provides healthcare via contracted providers that provide care at a
discount or negotiated rate. Unlike HMOs, HCG pays healthcare providers
on a fee-for-service basis rather than a capitated basis, and HCG rather
than a contractor is liable for medical claims incurred. Another difference
between the HMO and PPO plans is that members who choose the PPO
plan may receive medical care from providers that are not part of the
provider network (although at a greater cost to the member). HCG offers
two PPO benefit plans that provide different levels of service for different
prices: 1) Medallion, which is the more expensive plan and provides
1 A.R.S. §36-2912(I)(6) authorizes HCG to provide reinsurance for its HMO contractors.
Office of the Auditor General
page 3
Health Maintenance Organization—Benefit plan
that provides comprehensive managed
healthcare to members under a capitated-payment
structure, in which HCG pays an HMO
contractor a fixed amount per member per
month regardless of the healthcare services
performed. HMO members’ services are
covered when they receive their medical care
from healthcare providers that are part of the
HMO’s provider network.
Preferred Provider
Organization—Benefit
plan in which HCG pays
healthcare providers on a
fee-for-service basis rather
than a capitated basis.
Unlike HMO plans,
members who choose
HMO plans may receive
medical care from
healthcare providers that
are not part of the provider
network (although at a
higher cost to the
member).
comprehensive coverage, and 2) Medallion Plus, which is less expensive and
provides lower levels of coverage.1 See Appendices A and B for additional
information about HCG’s PPO benefit plans and premiums. As of December
2005, 250 of HCG’s members were enrolled in PPO benefit plans.
For the PPO benefit plans, HCG contracts with a third-party administrator (TPA)
to establish a state-wide network of providers and administer the claims-payment
process. The claims-payment process generally involves verifying
eligibility and claim accuracy; paying the fee-for-service medical claims using
monies received from HCG; and providing customer support for claims
inquiries.
􀁺 Vision and dental coverage—In 2005, HCG also began offering vision and
dental coverage state-wide. HCG uses a capitated-rate concept similar to that
of its HMO benefit plans to provide its vision and dental benefit plans.
HCG receives premiums from participating businesses—Premiums for
HCG’s benefit plans are submitted to HCG by participating businesses and political
subdivisions. At their discretion, employers either withhold premiums from their
employees’ pay or cover their employees’ premiums as a fringe benefit. Regardless
of who actually incurs the cost, the employers are responsible for submitting the
premiums to HCG on a monthly basis, by check, money order, online payment, or
automatic withdrawal. HCG then uses the premium monies to pay administrative and
medical costs, including capitated HMO payments, as discussed further in Finding
1 (see pages 11 through 16).
HCG faces risks to self-sufficiency
HCG’s method of setting premiums can result in threats to self-sufficiency.
Specifically, HCG is generally able to offer affordable health insurance because its
rating model is based on demographic factors rather than past healthcare utilization.
However, this model could backfire if HCG’s membership is reduced to a small
population of unhealthy individuals, which would require HCG to raise premiums
beyond an affordable level, as it did in the late 1990s. To ensure this does not happen
again, HCG is taking steps to enroll healthy members, such as increasing marketing
efforts and offering additional, more attractive healthcare options.
HCG uses community rating to set prices—To offer healthcare coverage at
an affordable price, HCG establishes its premiums using a modified community
rating model. Community rating involves setting a single premium for an entire group,
without regard for any differences among the group’s members that might affect
1 HCG is in the process of changing its PPO benefit plans. Specifically, HCG plans to phase out the existing PPO plans
and develop four new plans. The new plans, which HCG expects to offer in February 2006, are intended to more closely
resemble the relationship between price and levels of coverage inherent in the current HMO plans.
State of Arizona
page 4
medical costs, such as age, sex, current health status, or past healthcare utilization.
The opposite of community rating is experience rating. Under this method, insurers
consider current health status and past healthcare utilization to project the healthcare
costs associated with specific individuals or groups and then set different premiums
to cover the projected costs. In other words, under this approach, an insurer would
charge higher premiums for those individuals or groups who are at risk of being or
are currently in poor health, and would charge lower premiums for individuals or
groups who are in good health.
HCG’s model is a mix between community rating and experience rating. Specifically,
HCG sets premiums for different demographic groups, but does not set different
rates for individuals based on health status and past healthcare utilization (see
Appendix A for specific examples of HCG’s premiums). By using this model, HCG
does not have to charge a higher rate for higher-risk individuals. Instead, it can
subsidize the higher costs of high-risk individuals with the lower costs of low-risk
individuals. Statute authorizes HCG to consider age, sex, income, and community
rating when it establishes premiums.1 HCG could shift more toward experience rating
in the future, should it desire to do so. Although this would require specific healthcare
utilization information for all of HCG’s members, HCG’s contract with its TPA includes
the collection of this information, in addition to the administration of the PPO benefit
plans.
HCG required legislative subsidy starting in late 1990s—A downside of
HCG’s community rating is that HCG could end up with mostly high-risk, high-cost
individuals, and may have to increase premiums beyond what those individuals or
their employers could afford. According to HCG, this actually happened starting in
the late 1990s when, largely due to an overrepresentation of high risk individuals,
rates increased beyond what HCG’s members could afford. In 1997, HCG’s
membership was nearly 21,000 members. However, membership fell below 14,000
members by 1998 and reached a low of approximately 11,000 members by 2001
(see Figure 1, page 6), with the remaining members consisting primarily of
individuals with high rates of illnesses. As a result, HCG’s premium revenue
decreased while its medical costs remained constant. Thus, between fiscal years
1999 and 2005, the Legislature subsidized the HCG with a $3 to $8 million
appropriation each year from tobacco tax or litigation settlement monies, or the
General Fund.
HCG redeveloped its business model—In an effort to attract healthier
members and reduce the risk of its member pool, HCG redeveloped its business
model and the benefit plans it offered in fiscal year 2004. HCG’s changes included
increased marketing efforts primarily through insurance brokers, associations, and
sales presentations and the development of the current healthcare benefit plans,
which are intended to appeal to a variety of healthcare consumers.
As of December 2005, membership had increased to 17,850 members, and the
legislative subsidy has been eliminated for fiscal year 2006. HCG’s goals are to
1 A.R.S. §36-2912(P).
Office of the Auditor General
page 5
increase its enrollment to 32,000 by July 2006 and 50,000 members by July 2007.
HCG plans to rely primarily on word of mouth and the use of insurance brokers to
recruit new members. However, HCG also believes that its new benefit plans with the
range of choices will continue to attract new members and help it achieve its
membership goals.
Budget and organization
As indicated in Table 1, (see page 7), the largest source of HCG’s revenue is member
premiums. These premiums are appropriated to HCG for two purposes: 1) To pay for
providing medical coverage to HCG’s members (i.e., capitated payments to health
plans and claims payments to providers), and 2) to cover HCG’s administrative
costs, which include costs associated with the overall management and operation of
HCG, such as marketing and data processing. HCG contracts some of these
functions, but also maintains some of them in-house. See Finding 1 (pages 11
through 16) for additional information about HCG’s administrative functions and
related costs.
State of Arizona
page 6
Figure 1: Number of Individual Members1
December 1995 through December 2005
1 According to HCG, the average length of membership is approximately 2.5 years.
Source: Auditor General staff analysis of the AHCCCS Healthcare Group's
individual membership data as of December 31, 2005.
Membership in Thousands
5
10
15
20
25
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Year
Office of the Auditor General
page 7
Table 1: Schedule of Revenues, Expenditures, and Changes in Fund Balances1
Years Ended or Ending June 30, 2004, 2005, and 2006
(Unaudited)
2004 2005 2006
(Actual) (Actual) (Estimate)
Revenues:
Premiums $30,970,580 $36,116,572 $54,867,915
State General Fund appropriations 2,989,426 4,000,000
Reimbursement from Health Plans 2 1,140,172
Health Crisis Fund 200,000
Interest income 146,054 158,696 208,000
Total revenues 35,246,232 40,475,268 55,075,915
Expenditures and reversions:
Hospitalization and medical care expenditures
Capitated payments 28,394,664 30,961,220 43,850,955
Fee-for-service payments 3 1,052,414
Reinsurance premium payments 213,446 242,640 366,169
Stop-loss payments 4 5,592,399 4,755,706
Other 13,350
Total hospitalization and medical care expenditures 34,200,509 31,217,210 50,025,244
Administrative expenditures
Personal services and employee-related 947,804 1,652,513 2,656,396
Professional and outside services 267,928 1,425,442 911,732
Other 348,980 548,229 549,140
Equipment 310,374 81,027 30,723
Hospital and medical care-related 5 272,238 1,306,787
Total administrative expenditures 1,875,086 3,979,449 5,454,778
Total expenditures 36,075,595 35,196,659 55,480,022
Reversion to the State General Fund 300,000
Reversions to the Tobacco Tax and Health Care Fund6 1,185,606
Total expenditures and reversions 37,561,201 35,196,659 55,480,022
Excess of revenues over (under) expenditures (2,314,969) 5,278,609 (404,107)
Fund balance, beginning of year 9,984,082 7 7,669,113 12,947,722
Fund balance, end of year $ 7,669,113 $12,947,722 8 $12,543,615
1 For the purposes of this report’s discussion and analysis, financial activity in this schedule is presented primarily on a cash basis
rather than on HCG’s accrual basis used in its annually prepared financial statements.
2 Amount is repayment from HMO contractors for the recovery of payments made to contractors in fiscal year 2002 that were over
amounts the contractors were entitled to receive as discovered during the 2002 stop-loss analysis. For the purposes of this
presentation, these repayments were reported as revenue in the year they were received.
3 Amount is payments to contracted providers under HCG’s two PPO plans that began in early 2006.
4 Amount is payments to HMO contractors under the stop-loss contractual provisions. The 2004 amount relates to payments made for
the stop-loss analysis performed for prior years. The 2006 amount relates to payments recently made for the stop-loss analysis
performed for 2005 and estimated payments for stop-loss analysis performed for 2006. See Finding 2, page 19 for further
information relating to stop-loss payments.
5 As noted in Finding 1, page 15, amounts are costs that are similar to what HMO contractors incur. The large increase in 2006 relates
to the establishment of the new PPO plans in early 2006 and costs to establish and operate systems to collect healthcare utilization
information for HMO and PPO members and to process PPO claims.
6 Amount is a return of Tobacco Tax and Health Care Fund monies from the recovery of fiscal year 2002 overpayments.
7 The 2004 beginning fund balance includes approximately $3.3 million of remaining fiscal year 2003 appropriated Tobacco Tax and
Health Care Fund monies that were used to make stop-loss payments in 2004.
8 The 2005 ending fund balance includes approximately $3.4 million of available State General Fund appropriations that were used for
2006 stop-loss payments relating to the stop-loss analysis performed for 2005.
Source: Auditor General staff analysis of the Arizona Financial Information System (AFIS) Accounting Event Transaction File and AFIS
Status of Appropriations and Expenditures and Trial Balance by Fund reports for the years ended June 30, 2004 and 2005, and
AHCCCS-provided estimates for the year ending June 30, 2006.
HCG budgeted 41 FTEs for fiscal year 2006, which are organized into six departments:
􀁺 Office of the Deputy Director (4 FTEs, 2 vacancies)—Responsible for executive
management for HCG staff and programs, and other activities such as strategic
planning, and healthcare coverage market research and analysis.
􀁺 Finance and Administration (3 FTEs, 2 vacancies)—Responsible for things such
as HCG’s budget and expenditure management, actuary analysis and rate
setting, accounts payable, and contractor financial oversight.
􀁺 Health Plan Benefit Plan Management (13 FTEs, 4 vacancies)—Responsible for
marketing and sales activities, as well as broker relations, employer and
member communications, and outreach.
􀁺 Health Plan Operations (15 FTEs, 1 vacancy)—Responsible for things such as
the customer care call center, member services, and information systems
support.
􀁺 Medical Management (4 FTEs, 1 vacancy)—Responsible for, among other
things, overseeing the medical care provided, approving medical policies, and
supervising the HCG employer wellness and chronic illness management
program.
􀁺 Compliance and Contract Administration (2 FTEs, 1 vacancy)—Responsible for
contract administration, grievance management, and compliance and audit
functions.
Scope and methodology
This audit focused on the three areas required by Laws 2005, Ch. 328, §24.
Specifically, auditors reviewed HCG’s administrative costs, financial reserves, and
efforts to ensure that employer groups have gone without health insurance for 180
days before enrollment in HCG, and this report includes a finding in each of these
areas.
Various methods were used to study the issues addressed in this audit. General
methods included interviews with HCG officials and staff. Auditors also reviewed
Arizona Revised Statutes, Administrative Rules, and HCG’s policies and procedures
as well as information about its goals, objectives, and performance measures.
Auditors also used the following specific methods:
State of Arizona
page 8
􀁺 To examine HCG’s administrative costs, auditors reviewed statute to determine
whether statute outlined any specific requirements regarding HCG’s
administrative costs and also conducted research to identify administrative
costs definitions. To determine whether auditors could rely on AHCCCS’ internal
controls, auditors reviewed AHCCCS’ CPA firm’s workpapers related to work
performed on the internal controls over disbursements, payroll, and purchasing
and found that controls were deemed effective by the CPA firm. In addition,
auditors obtained detailed expenditure transaction information for HCG from the
Arizona Financial Information System (AFIS) Accounting Event Transaction File
for the period July 1, 2003 through September 30, 2005, and auditors ensured
the fiscal year 2004 and 2005 amounts matched the amounts used by
AHCCCS’ CPA firm during their annual financial audit to help ensure the
information used was complete and accurate. Auditors also agreed the
expenditure information for the period July 1, 2005 through September 30, 2005
to an AHCCCS-prepared Cash Basis Financial Statement for the Healthcare
Group Fund. Auditors then analyzed HCG’s expenditures by category and
determined the amount of administrative expenditures compared to total
expenditures. Auditors also reviewed various contracts and specific transactions
to determine what types of administrative activities contractors were performing
for HCG, and conducted several interviews with HCG staff to obtain additional
information as needed. Finally, since HCG is a separate program within
AHCCCS, auditors analyzed expenses to determine if AHCCCS had
appropriately allocated costs to HCG that pertain to HCG’s operation, such as
rent, printing, equipment, salaries, and data processing costs.
􀁺 To determine whether HCG’s financial reserves are adequate compared to
reserves required for private health insurance providers, auditors obtained and
analyzed information about the purposes of health insurance reserves, how the
amount of reserves should be determined, and whether there were any universal
standards regarding reserves for the healthcare industry, including information
from the Actuarial Standards Board, the American Academy of Acturies, the
Department of Insurance, the Journal of Risk and Insurance, the National
Association of Insurance Commissioners, and the U.S. Government
Accountability Office. In addition, auditors conducted several interviews with
HCG officials and staff as well as with officials from Arizona’s Department of
Insurance (DOI) to obtain additional information about reserve requirements.
Auditors also reviewed HCG’s contracts and other documents to determine
other efforts HCG was taking to ensure its financial stability.
􀁺 To determine whether HCG requires small businesses to be without group
health insurance for 180 days before enrolling in HCG, auditors reviewed statute
to identify the specific requirement and when the requirement became effective.
In addition, auditors interviewed HCG officials and staff to obtain additional
information about the requirement and to identify what processes HCG had
implemented in response to the statutory requirement. Auditors also reviewed
Office of the Auditor General
page 9
HCG’s policy and other documents developed by HCG to help ensure small
businesses were meeting the requirement. Further, to determine if HCG ensured
that all small business applicants completed and signed its form indicating the
requirement was met, auditors reviewed 30 small business files randomly
selected from all small business application files received between December 1,
2004 through December 1, 2005, to observe whether a completed and sign
form was contained within each file. Finally, auditors reviewed materials from an
internal and an external review that were conducted regarding allegations that
HCG employees were encouraging small business applicants to circumvent the
requirement.
􀁺 To develop the Introduction and Background section, auditors compiled
information from state laws, unaudited information from HCG’s Web site and
other agency-prepared documents, the State of Arizona Appropriations Report
for fiscal years 2004 through 2006, as well as information from the Arizona
Financial Information System (AFIS) Accounting Event Transaction File and AFIS
Status of Appropriations and Expenditures and Trial Balance by Fund reports for
the years ended June 30, 2004 and 2005, and AHCCCS-provided estimates for
the year ended June 30, 2006.
The audit was conducted in accordance with government auditing standards.
The Auditor General and staff express appreciation to the director and staff of
AHCCCS for their cooperation and assistance throughout the audit
State of Arizona
page 10
Office of the Auditor General
page 11
HCG has various administrative costs
HCG has statutory authority to use its revenues to pay administrative costs as well as
the costs of providing hospitalization and medical care for its members. AHCCCS
has defined administrative costs to include all costs associated with the overall
management and operation of an entity, such as data processing, marketing,
salaries and related benefits of administrative staff, and other operating costs. During
the period of July 1, 2003 through September 30, 2005, HCG used several revenue
sources to cover its administrative costs, such as State General Fund appropriations
and appropriated premiums. During this period, administrative costs comprised 8.5
percent of HCG’s total costs, and HCG has worked to account for all costs that
directly or indirectly relate to the HCG program.
Administrative costs include costs for managing and
operating the program
Statute allows HCG to use its revenues to pay administrative costs as well as the cost
of providing hospitalization and medical care for small employers and eligible
employees.1 HCG’s revenues come from various sources, including premiums,
donations, interest, and legislative appropriations. While statutes indicate that
administrative costs are subject to legislative appropriation, they do not define
administrative costs. However, AHCCCS has defined administrative costs in its
Arizona Health Care Cost Containment System Reporting Guide for Acute Health Care
Contractors to include all costs associated with the overall management and
operation of the entity, such as data processing, marketing, salaries and related
benefits of administrative staff, and other operating costs. This definition was used
for the purpose of analyzing HCG’s administrative costs for this audit.
1 For fiscal year 2004, HCG’s funding was authorized by A.R.S. §36-2913(C)(8). However, Laws 2004, Ch. 332, §§5 and 6,
created A.R.S. §36-2912.01, which currently authorizes HCG’s funding.
FINDING 1
State of Arizona
page 12
Several revenue sources used for administrative costs
HCG pays its administrative costs from multiple sources. Specifically, for the period
July 1, 2003 through September 30, 2005, HCG received the following revenues,
which were used to pay its administrative costs (also see Table 1, page 7 in the
Introduction and Background)1:
􀁺 State General Fund appropriations—HCG received an appropriation from the
State General Fund in both fiscal years 2004 and 2005 that could be used to pay
some administrative costs at HCG’s discretion. Of the nearly $7 million
appropriated to HCG in fiscal years 2004 and 2005, approximately $700,000
was used for administrative costs.2 HCG did not receive a General Fund
appropriation in fiscal year 2006.
􀁺 Premiums3—The Legislature appropriates a portion of premium revenue for
administrative costs; however, most premium revenues are appropriated for
paying hospital and medical-care costs. Additionally, HCG includes in the
premium rate a fixed amount per member, per month that is used to pay agent
or broker enrollment fees. As shown in Table 1 in the Introduction and
Background section (see page 7), for fiscal years 2004 and 2005, HCG annually
received over $30 million in premium revenues and is expecting to receive nearly
$55 million in fiscal year 2006. Approximately $6 million was used for
administrative costs during the period reviewed. Specifically,
􀂍 Annually appropriated premiums—For fiscal years 2004 through 2006, the
Legislature appropriated a total of approximately $8.4 million to pay for
HCG’s administrative costs. For the period July 1, 2003 through September
30, 2005, HCG spent over $5.7 million for administrative costs, with
approximately $2.6 million remaining to pay administrative costs for the rest
of fiscal year 2006.
􀂍 Continuously appropriated premiums—Statute continuously appropriates
most of HCG’s premiums for hospitalization and medical care costs. This
appropriation allows HCG to use its premiums for capitation payments to
its HMO contractors, which the contractors use to cover their administrative
costs, medical claims, and realize a profit. HCG also uses this
appropriation to pay for its own administrative costs, which are similar to
those administrative costs incurred by its HMO contractors. For example, in
fiscal year 2005, these continuously appropriated premiums paid for HCG’s
HCG received a State
General Fund
appropriation in fiscal
years 2004 and 2005,
but did not receive one
in 2006.
HCG uses a portion of
its premium revenue for
administrative costs.
1 Auditors reviewed the two most recent completed fiscal years of cost data and cost data for the first quarter of fiscal year
2006 in order to provide the most current information available at the time the audit work was conducted.
2 The remaining monies were paid to HMO contractors to pay capitated payments and to cover higher-than-expected
medical costs. See Finding 2 (pages 17 through 21) for further information.
3 Appropriations also include interest earned on HCG’s premiums; however, the amount of interest earned is insignificant
in relation to the total appropriation amounts.
Office of the Auditor General
page 13
cost of issuing new identification cards and member handbooks. During
the period reviewed, HCG spent approximately $261,000 of these
premiums for costs that it considers similar to its HMO contractors’
administrative costs.
􀂍 Agent or Broker fees1—Beginning in January 2005, HCG charged
employers for member enrollment fees that are paid to agents or brokers
who have signed agreements with HCG to promote its benefit plans and
enroll qualified members. Specifically, according to HCG, as of September
1, 2005, 1.5 percent of new and renewing members‘ premiums are used for
this purpose. Of the approximately $143,000 collected through September
30, 2005, approximately $50,300 in enrollment fees were paid to agents or
brokers for 347 members enrolled.2
􀁺 Health Crisis Fund—HCG has also received other monies for administrative
costs. Specifically, due to concerns regarding the number of uninsured
Arizonans, Executive Order 2004-16 provided $200,000 from the Health Crisis
Fund in June 2004 for HCG outreach and education of the public and the small
business community.3 For example, HCG spent approximately $40,000 for a
mail marketing campaign and telephone follow-up. These monies were used to
purchase mailing lists of small business employers in Maricopa and Pima
counties and mail correspondence to these businesses. In addition, the monies
were used to pay for approximately 10,000 calls to follow up on the mailed
correspondence.
HCG administrative costs comprise 8.5 percent of total
program costs
Auditors reviewed HCG administrative costs for the period July 1, 2003 through
September 30, 2005, and determined its administrative costs amounted to 8.5
percent of the program’s total costs.4 As shown in Table 2 (see page 14), HCG
HCG received $200,000
from Health Crisis Fund
for outreach and
education.
1 A.R.S. §39-2912.01(F) precludes broker commissions and fees from being paid for with monies appropriated for
administrative costs. Auditors determined that these fees were not paid with the monies appropriated for administrative
costs. However, in line with the AHCCCS’ definition of administrative costs, broker fees are considered administrative
costs, and therefore, were considered administrative costs for the purposes of our analysis.
2 The agreements between HCG and its agents and brokers require that members be enrolled in a HCG benefit plan for
120 days before HCG pays enrollment fees.
3 On December 29, 2004, HCG submitted a Healthcare Crisis Emergency Fund Report to the Governor, Speaker of the
House of Representatives, and President of the Senate. In the report, HCG indicated that its use of the Health Crisis Fund
monies contributed to a 10 percent membership increase between July and December 2004.
4 HCG’s administrative cost percentage by fiscal year was 5.2 percent for fiscal year 2004, 11.3 percent for fiscal year 2005,
and 10.5 percent for fiscal year 2006 (as of September 30, 2005). Based on auditor analysis, the large increase between
2004 and 2005 primarily related to the additional monies received from the Health Crisis Fund and an approximately $1.5
million increase in the annually appropriated premiums. These additional monies allowed HCG to enter a marketing
contract and provide additional monies to a HMO provider for administrative activities. In addition, HCG incurred
additional administrative costs relating to the establishment of the PPO and healthcare utilization system.
State of Arizona
page 14
incurred administrative costs of approximately $6.9 million over that period of time,
with the largest categories consisting of salaries and benefits, and professional and
outside services. Specifically:
􀁺 Salaries and benefits—HCG paid approximately $3.2 million in salaries and
related benefits of HCG staff and AHCCCS staff who performed HCG-related
functions. This was the largest of the program’s administrative cost categories.
According to HCG records, HCG paid for 21 and 34 positions in fiscal years
2004 and 2005, respectively, and budgeted for 41 positions in fiscal year 2006.
The positions include executive and administrative staff, such as a HCG
executive director, actuarial support, sales and marketing staff, and customer
care staff.
􀁺 Professional and outside services—HCG paid about $1.9 million for
professional and outside services. The types of services varied and included
Table 2: Administrative Expenditures by Source of Funding Compared to Total Expenditures
July 1, 2003 through September 30, 2005
(Unaudited)
Premiums
State
General
Fund
Annually
Appropriated Other 1
Health
Crisis
Fund Total
Percent of
Total
Expenditures
Salaries and benefits $3,222,865 $ 3,222,865 3.9%
Professional and outside
services $ 428,840 1,251,116 $197,063 1,877,019 2.3
Travel and other operating
expenditures 966,147 2,937 969,084 1.2
Equipment 130,000 264,813 394,813 0.5
Broker fees $ 50,275 50,275 0.1
Hospital and medical care
related expenditures 156,740
261,275
418,015
0.5
Total administrative
expenditures 715,580 5,704,941 311,550 200,000 6,932,071 8.5
Hospital and medical care
costs 2,559,426 3,332,047 2 68,682,983 74,574,456 91.5
Total expenditures $3,275,006 $9,036,988 $68,994,533 $200,000 $81,506,527 100.0%
1 This category includes premiums continuously appropriated and those collected for broker fees.
2 Amount is Tobacco Tax and Health Care Fund monies that were appropriated in fiscal year 2003, but spent in fiscal year 2004 for stop-loss payments.
Source: Auditor General staff analysis of Arizona Financial Information System (AFIS) Accounting Event Transaction File for the period July 1, 2003 through
September 30, 2005.
paying costs related to a marketing contract and providing a HMO contractor
with funding for marketing and network costs. For example:
􀂍 Marketing—HCG paid approximately $538,000 to a marketing firm to assist
in the development and coordination of marketing, promotions, and sales
support. The monies were also used to pay for advertising and graphic
design work. The contract was terminated on October 1, 2005, because of
insufficient funding.
􀂍 HMO contractor—HCG paid approximately $429,000 to one of its HMO
contractors. The contractor was allocated monies for marketing and
provider network costs, allowing it to pay for two sales representatives, a
network provider representative, and all related office space, equipment,
and other operating costs.
􀂍 Temporary staffing—HCG paid almost $210,000 for temporary staffing,
with over half of this paid with Health Crisis Fund monies to promote HCG
and to assist in outreach and sales efforts.
􀁺 Hospital and medical care-related—HCG paid almost $420,000 for
administrative costs that are similar to what its HMO contractors incur. For
example, HCG paid over $300,000 to the TPA, primarily to pay for costs
associated with establishing systems to collect healthcare utilization information
for HMO and PPO members and to process PPO claims.
Other administrative costs include travel, equipment, and other operating costs. For
example, HCG paid for a new telephone system, programming costs, and building
rent.
AHCCCS allocates costs to HCG
Since HCG is a separate program within AHCCCS, AHCCCS has attempted to
capture all costs that relate to HCG and allocate them accordingly. Specifically, HCG
has paid for typical costs such as its building lease (the lease includes utilities),
telecommunication, printing, advertising, equipment, supplies, repair and
maintenance, postage, and data processing costs. In addition, AHCCCS has
ensured other appropriate costs are charged to HCG. For example, AHCCCS has
charged a portion of department-level staff salaries to HCG for such functions as
accounting, actuary services, and information technology, which AHCCCS provides
in support of the HCG program. Further, according to AHCCCS management,
AHCCCS has recently worked to improve its cost allocation process to better ensure
that HCG pays its fair share of services provided by AHCCCS.
Office of the Auditor General
page 15
AHCCCS has worked to
improve its cost
allocation process, to
better ensure that HCG
pays its fair share of
services provided by
AHCCCS.
Recommendations:
This finding provides information only. Therefore, no recommendations are
presented.
State of Arizona
page 16
HCG is taking steps to ensure financial stability
HCG appears to be in-line with the insurance industry in its efforts to ensure financial
stability. While no universal standard exists for the amount of reserves insurance
companies should maintain, like other insurers in the healthcare industry, HCG uses
actuaries to determine and monitor its reserve amounts. Also, as other insurers do,
HCG uses reserves for various purposes that are intended to help ensure financial
stability. In addition, HCG uses other common methods to limit its financial risk, such
as maintaining reinsurance policies and establishing maximum benefit amounts for
its members.
HCG uses reserves to help ensure financial stability
HCG maintains reserves that it uses for various purposes designed to help ensure it
remains financially stable. The amount needed for reserves varies based on such
things as whether there are any state regulatory requirements, the size or type of
insurance company, and the type of benefit plans offered. Like other insurers, HCG
uses actuaries to help it determine the amount of reserves it should maintain. In
addition, similar to industry practices, HCG uses its reserves for various purposes
designed to help ensure financial stability.
Reserve requirements vary—Auditors’ review of literature and interviews with
DOI and HCG officials found that there is no universal standard regarding the
amount of reserves insurance companies must maintain. Rather, the amount
needed for reserves will vary based on things such as the specific state
regulatory requirements as well as the size or type of insurance company and
the type of benefit plans offered. For example, Arizona’s insurance regulatory
requirements focus on protecting against insolvency. Specifically, A.R.S.
§§20-1055 and 20-1056 require entities that either provide healthcare services
or arrange for healthcare services to deposit with the State Treasurer a
minimum of $500,000 plus a reserve consisting of 2 percent of charges collected
from enrollees up to $1,000,000. In addition, A.R.S. §§20-223 and 20-1059 require
Office of the Auditor General
page 17
FINDING 2
In broad terms, reserves are
accumulations of money
that an insurer needs to pay
for future business
obligations.
these entities to submit annual financial statements to DOI, which, pursuant to
guidelines approved by The National Association of Insurance Commissioners, must
be accompanied by a qualified actuary’s opinion regarding the assumptions and
methods used to determine reserves. However, Arizona’s insurance regulatory
requirements do not apply to state agencies. Therefore, because HCG is part of
AHCCCS, it is not subject to Arizona’s insurance regulations.
HCG uses actuarial services to determine reserve amounts—In-line
with industry practices, HCG uses actuarial services to determine and monitor its
reserve amounts. According to insurance industry practice, insurers should use the
services of a qualified actuary, who is a trained mathematician who analyzes the
costs and risks associated with providing insurance. Actuaries follow conduct
standards and practice standards that guide them in applying generally accepted
actuarial principles and practices.1 HCG used a national actuarial consulting firm for
its HMO premium-determination process in 2003, which included determining
reserve amounts. Since then, HCG began using two of its own actuaries for
determining the premium rates and reserve amounts for the HMO plans and HCG’s
new PPO plans. HCG’s lead actuary is a member of the American Academy of
Actuaries and, as a Fellow of the Society of Actuaries, holds the highest possible
actuarial designation.
Since HCG is not subject to Arizona’s insurance regulations, HCG’s actuaries are not
required to opine on the assumptions and methods used to determine reserves.
However, according to HCG’s actuaries, to determine reserve amounts, they used
the NAIC’s risk-based capital model as a starting point. This model helps insurers
determine the minimum amount of capital and surplus they must maintain according
to their level of financial risk. In addition, they also used industry-recognized
guidelines that contain rating structures for determining health benefit claim costs,
area factors that help adjust national average costs to specific geographical areas,
and other data that can be used to help modify expected claim costs based on items
such as deductible levels and benefit plan maximums.2 Further, HCG’s reserving
policy requires the actuaries to monitor reserve amounts on a monthly basis to
ensure their adequacy, making recommendations for adjustment as necessary.
Finally, AHCCCS’ director indicated that, after the PPO benefit plan has been in place
for at least 2 years, he would like to obtain a peer review of HCG’s actuarial work.
Actuarial standards do not require a peer review. However, a discussion paper on
actuarial peer reviews indicates that these reviews can be useful for evaluating and
enhancing the quality of the work product.3 The director estimates this review would
cost between $100,000 and $150,000.
1 For conduct standards see: Actuarial Standards Board. Joint Committee on the Code of Professional Conduct. Code of
Professional Conduct. January 2001; for practice standards see Actuarial Standards Board, “Actuarial Standards of
Practice.” http://www.actuarialstandardsboard.org/asops/htm (Feb. 2, 2006).
2 Milliman USA. “Milliman Health Cost Guidelines.” http://www.milliman.com/tools_products/HCGBROCH.pdf (Jan. 28,
2006).
3 American Academy of Actuaries, Committee on Professional Responsibility, Peer Review, Concepts on Professionalism.
September 2005.
State of Arizona
page 18
To determine reserve
amounts, actuaries
analyze costs and risks
associated with
providing insurance.
Office of the Auditor General
page 19
HCG reserves used for several purposes—In-line with insurance industry
practices, HCG retains a portion of its premiums to establish reserves that are used
for various purposes. HCG generally establishes reserves by benefit plan type, as
follows:
􀁺 HMO benefit plans’ reserve—The majority of HCG members (17,600) are enrolled
in HCG’s HMO plans, and the HMO contractors, not HCG, are responsible for
ensuring medical claims are paid. Because these HMO contractors contract with
AHCCCS, they are regulated by AHCCCS and not DOI.1 Therefore, to help ensure
HCG’s HMO contractors are able to meet their claims payment obligations, they
are required to meet AHCCCS’ equity-per-member and performance bond
requirements.2 AHCCCS defines equity as net assets that are not designated or
restricted for specific purposes. To meet AHCCCS’ equity requirements, HMO
contractors with fewer than 100,000 members must maintain $150 equity per
member, and contractors with 100,000 or more members must maintain $100
equity per member. To ensure HMO contractors continue to meet the
requirements, HCG staff monitor contractors’ monthly financial statements for
equity-per-member compliance.
A performance bond is an instrument that provides a financial guarantee,
generally in the amount of 1 month’s capitation (i.e., the fixed premium amount per
enrolled member). The amount of the performance bond required for AHCCCS’
contractors is 75 percent of 1 month’s capitation of the contractor’s total line of
business with AHCCCS, including HCG. Therefore, this results in a higher
performance bond amount than would be required for HCG alone. Since HCG’s
HMO contractors also contract with AHCCCS’ other programs, AHCCCS
monitors these requirements for all of its contractors’ lines of business as a whole.
Although not responsible for ensuring its HMO claims are paid, HCG retains at
least 5 percent of its HMO premiums to establish a HMO reserve that is used for
two different purposes. First, HCG uses its HMO reserve to provide “stop-loss”
coverage for its HMO contractors to help limit the amount of loss a contractor will
experience within a year. As discussed in the Introduction and Background (see
page 3), HCG pays its HMO contractors a capitated rate from which the
contractors pay their administrative costs and medical claims incurred as well as
realize a profit. However, according to its HMO contracts, if a HMO contractor
experiences losses, HCG will try to limit the amount of the loss. For example, for
some benefit plans, if the contractor’s medical loss ratio is higher than 86 percent
based on its annual audited financial statements, HCG will make a payment to the
contractor if monies are available to help bring the contractor’s medical loss ratio
to no greater than 86 percent.3 Conversely, the contracts also have a “stop-gain”
HMO reserve is used to
limit contractors’ losses.
1 A.R.S. §36-2903(L).
2 AHCCCS’ equity-per-member and performance bond requirements are similar to Arizona’s insurance code requirements
set forth in A.R.S. §§20-1055 and 20-1056 (see page 17).
3 Medical loss ratio refers to the percent of the contractor’s annual capitated payment that is used to cover its members’
medical costs.
For its HMO plans, the
contractors are
responsible for ensuring
claims are paid.
clause. For example, a contractor whose annual audited financial statements
show its medical loss ratio to be less than 80 percent is required to pay HCG an
amount equal to the difference between its medical loss ratio and 80 percent
multiplied by its total annual capitation payment. These payments would be
included in HCG’s HMO reserve.1
Second, HCG uses some of the HMO reserve for things such as cost
fluctuations due to the introduction of new products, coverage changes, or
future expansion into new locations. According to HCG’s records, it had
$2,776,000 in HMO reserves as of December 31, 2005.
􀁺 PPO benefit plans’ reserves—Approximately 250 of HCG’s members are
enrolled in its PPO plans. However, unlike its HMO plans, HCG maintains
responsibility for ensuring its PPO claims are paid. In-line with industry practices,
HCG maintains PPO reserves for two main purposes. First, it accumulates
resources to ensure that HCG can pay for claims that have been incurred, but
have not yet been submitted for payment or paid. According to HCG’s records,
as of December 31, 2005, it had approximately $64,000 restricted for this
purpose.
Second, HCG reserves approximately 10 percent of its PPO benefit plans’
premiums to accumulate resources to ensure that HCG can cover claims if its
premiums are inadequate, or to provide protection against unanticipated
catastrophic events that result in excessive healthcare claims. HCG also uses
this reserve for such things as cost fluctuations due to the introduction of new
products, coverage changes, or future expansion in new locations. According to
HCG officials, HCG retains a higher percentage of its PPO premiums compared
to its HMO premiums (see above) partly because PPO benefit plans are so new.
As a result, the healthcare utilization data HCG needs to estimate reserves for
its PPO benefit plans is limited. According to HCG’s records, as of December
31, 2005, HCG had approximately $16,000 set aside for these purposes.2
In addition to these reserve amounts, HCG has accumulated assets that could be
used to pay HMO and PPO claims if needed. Specifically, according to HCG records,
as of December 31, 2005, it had net assets of approximiately $1.1 million that were
not designated or restricted for specific purposes.
State of Arizona
page 20
1 As shown in Table 1, page 7, during fiscal year 2004, HCG had stop-loss expenditures of approximately $5.6 million that
related to prior years. For fiscal year 2006, HCG estimates making stop-loss expenditures of approximately $4.8 million
related to fiscal years 2005 and 2006.
2 The PPO plans were established in late 2005, and according to HCG’s records, it had collected approximately $162,000
in premiums as of December 31, 2005.
For its PPO plans, HCG
maintains responsibility
for ensuring claims are
paid and uses reserves
to protect against
excessive claims.
HCG uses various methods to minimize financial risk
In addition to establishing reserves for the HMO and PPO benefit plans, HCG
employs various other methods to minimize its financial risk. To help protect against
excessive healthcare claims and remain self-sufficient, HCG purchases reinsurance
to help cover large healthcare claims, limits a member’s lifetime maximum benefit
amount, and maintains the right to increase premium. Specifically:
􀁺 Reinsurance—HCG uses some of the premium amounts collected to purchase
an insurance policy, also known as reinsurance, to reduce the risk of
catastrophic loss on services provided under the HMO and PPO benefit plans.
Using these policies the risk of loss for both the HMO contractors and HCG (for
the PPO plans) is initially limited to an annual amount of $100,000 per insured
individual per policy year. If an individual incurs healthcare costs above
$100,000, reinsurance would generally cover between 50 to 90 percent of the
eligible claims costs in excess of the $100,000 up to the member’s lifetime
maximum (see below). Based on HCG’s records, for the period from August 1,
2002 through August 1, 2004, HCG’s reinsurance covered $138,724 worth of
claims related to 12 individuals.
􀁺 Lifetime maximums—HCG has established a maximum amount that it or its
contractors will pay for all covered services during a member’s lifetime. The
lifetime maximum for the HMO plans is $2 million, and the lifetime maximum for
the PPO plans is $3 million. If a member reaches his or her lifetime maximum,
the member becomes responsible for all of his/her additional healthcare costs.
􀁺 Premium increases—HCG, pursuant to A.R.S. §36-2912, has the right to
change premium rates during the year to help ensure premiums will cover the
cost of claims. Prior to making such a change, HCG must provide enrolled
businesses with a 60-day notice. In February 2003, according to HCG officials,
HCG implemented an across-the-board premium rate increase to account for
the possibility of higher-than-expected claims based on an actuarial study
completed when HCG redesignated its health plan benefits options and
reforecast medical cost trends.1
Recommendations:
This finding provides information only. Therefore, no recommendations are
presented.
Lifetime maximum for
HMO and PPO plans is
$2 million and $3
million, respectively.
1 Further, according to HCG officials, in March 2004, HCG implemented another premium increase, but this related to an
increase in HCG’s administrative fee for the HMO benefit plan (Classic) and the introduction of two new HMO benefit plan
options (Secure and Active).
Office of the Auditor General
page 21
Reinsurance generally
covers between 50 to 90
percent of the eligible
claims costs in excess
of the $100,000.
State of Arizona
page 22
HCG has process to ensure applicants have not
recently had group healthcare coverage
HCG has taken steps to ensure that small business applicants have been without
group healthcare coverage for the required time period before obtaining healthcare
coverage from HCG. HCG’s membership requirements were changed in 2004 to
require small businesses to be without group healthcare insurance for 180 days prior
to joining HCG. Therefore, HCG established a process for ensuring that this
requirement, known as the “bare period,” is met. Based on the work conducted as
part of this audit as well as other investigations, HCG appears to be adequately
enforcing this requirement.
Businesses must be uninsured before joining HCG
In 2004, the HCG membership requirements were changed to include a bare period
for businesses. Specifically, A.R.S. §36-2912(C) indicates that HCG is prohibited
from enrolling an employer group (i.e., small business) if the small business had
group healthcare coverage under an accountable health plan within the past 180
days. The bare period appears to have been established so that HCG would be
serving small businesses who were uninsured versus those who dropped their
current small group policies to join HCG. There are some exceptions to this
requirement. For example, the requirement does not apply to small businesses that
had their group healthcare coverage discontinued, such as when an insurance
company no longer covers a geographic area. In addition, this requirement does not
apply to political subdivisions or small businesses whose business owner or
employees had individual healthcare coverage or coverage through a spouse’s
group plan.
Office of the Auditor General
page 23
Uninsured requirement
added so small
businesses would not
drop private group
health insurance to join
FINDING 3
State of Arizona
page 24
HCG has established process for ensuring compliance
To ensure compliance, HCG established a policy that outlines the bare period
requirement as well as a step-by-step process for determining if small business
applicants are subject to and meet the requirement. First, HCG provides one-on-one
training to its sales representatives and contracted brokers regarding the bare period
requirement prior to their being authorized to enroll applicants in HCG, as well as
training during staff meetings. In addition, HCG developed a form that small business
applicants must fill out and sign. This form asks small business applicants whether
they currently offer group health insurance to their employees or did so within the
past 6 months. By signing the form, small business applicants certify, under penalty
of perjury, that they have met the bare period requirement. In January 2006, this form
was revised to authorize HCG to contact the previous insurance company to certify
the dates and types of coverage previously provided.
If HCG determines during the application process that a small business had group
health insurance within the past 180 days, HCG can defer the small business’
enrollment until the 180 day period is met; or if the small business does not want to
wait for the period to be completed, HCG will terminate the application and deny
enrollment. According to information provided by a HCG official, between November
2004 and 2005, HCG declined applications from more than 70 small business
applicants during the application process because they did not comply with the bare
period. Finally, according to AHCCCS, if an insurance company were to contact HCG
with a complaint that a small business dropped coverage with them to join HCG,
HCG would investigate the complaint because it would need to determine whether
an employer had fraudulently signed the acknowledgment form and was thus
ineligible for the program.
HCG appears to be adequately enforcing requirement
Based on the work conducted as a part of this audit, HCG appears to be adequately
enforcing the bare period requirement. Specifically, auditors examined a random
sample of 30 files for small businesses who applied to HCG group between
December 2004 and December 2005 and found that each file contained a signed
acknowledgment form as required.
In addition, a September 2005 external review failed to substantiate allegations that
AHCCCS’ director was encouraging applicants to avoid the bare period requirement.
Specifically, the Department of Administration contracted with Gallagher & Kennedy
P.A. to conduct an investigation on allegations that AHCCCS’ director instructed HCG
employees to encourage employers to circumvent the bare period. Based upon the
Small business
applicants must certify
they have not had group
health insurance.
External review found no
evidence that applicants
were encouraged to
circumvent
requirements.
firm’s review of documents and interviews with AHCCCS’ employees, former
employees, and consultants, the firm found no factual basis to support the
allegations. The firm also reported that, as a result of an internal investigation
conducted by AHCCCS, one HCG employee received a written reprimand, and
another employee was terminated due to inappropriate statements and other
improper conduct related to the allegations.
Finally, based on discussions with DOI, HCG, and AHCCCS officials, auditors
determined that there does not appear to be any additional steps HCG can take to
verify previous healthcare coverage. For example, while DOI has information on
which insurance companies are licensed and providing individual or group
healthcare plans in Arizona, it does not have information on individuals or businesses
who are insured with these companies that could be used to determine prior
coverage.
Recommendations:
This finding provides information only. Therefore, no recommendations are
presented.
Office of the Auditor General
page 25
State of Arizona
page 26
Healthcare Group Premium Rate Charts:
􀁺 HMO Benefit Plan Premiums, by Contractor (pages a-iii through a-viii)
􀁺 PPO Benefit Plan Premiums (pages a-ix through a-x)
􀁺 Dental and Vision Plan Premiums (page a-xi)
Source: Healthcare Group.
Office of the Auditor General
page a-i
APPENDIX A
State of Arizona
page a-ii
Office of the Auditor General
page a-iii
Rate
Tier
Age
Range Male Female Male Female Male Female Male Female
1 00-29 203.93 235.18 187.73 216.41 168.38 194.00 142.68 164.25
1 30-39 225.60 262.87 207.62 241.84 186.14 216.70 157.65 183.36
1 40-44 257.59 295.16 236.99 271.46 212.36 243.17 179.72 205.63
1 45-49 306.39 345.67 281.78 317.84 252.38 284.60 213.38 240.49
1 50-54 367.36 380.38 337.75 349.72 302.37 313.07 255.44 264.44
1 55-59 487.35 487.35 447.90 447.90 400.77 400.77 338.24 338.24
1 60-64 533.69 518.95 490.45 476.92 438.77 426.68 370.23 360.05
1 65 + 587.09 559.46 539.47 514.11 482.56 459.90 407.07 388.00
2 00-29 421.21 421.21 387.24 387.24 346.65 346.65 292.81 292.81
2 30-39 476.87 476.87 438.34 438.34 392.30 392.30 331.22 331.22
2 40-44 546.99 546.99 502.71 502.71 449.79 449.79 379.59 379.59
2 45-49 636.91 636.91 585.25 585.25 523.52 523.52 441.63 441.63
2 50-54 742.00 742.00 681.72 681.72 609.69 609.69 514.14 514.14
2 55-59 967.40 967.40 888.63 888.63 794.52 794.52 669.67 669.67
2 60-64 1046.89 1046.89 961.63 961.63 859.72 859.72 724.52 724.52
2 65 + 1140.80 1140.80 1047.82 1047.82 936.71 936.71 789.32 789.32
3 00-29 624.87 624.87 574.33 574.33 513.91 513.91 433.78 433.78
3 30-39 710.00 710.00 652.47 652.47 583.72 583.72 492.51 492.51
3 40-44 841.32 841.32 773.03 773.03 691.40 691.40 583.12 583.12
3 45-49 881.35 881.35 809.76 809.76 724.22 724.22 610.74 610.74
3 50-54 960.53 960.53 882.45 882.45 789.16 789.16 665.38 665.38
3 55-59 1195.69 1195.69 1098.33 1098.33 981.97 981.97 827.63 827.63
3 60-64 1286.18 1286.18 1181.40 1181.40 1056.18 1056.18 890.08 890.08
3 65 + 1336.23 1336.23 1227.35 1227.35 1097.22 1097.22 924.61 924.61
4 00-29 358.98 402.03 330.19 369.70 295.80 331.09 250.16 279.86
4 30-39 410.55 460.81 377.53 423.67 338.09 379.30 285.73 320.42
4 40-44 466.77 515.50 429.15 473.86 384.19 424.12 324.53 358.14
4 45-49 496.64 550.36 456.57 505.88 408.68 452.73 345.13 382.21
4 50-54 534.35 554.98 491.18 510.13 439.59 456.51 371.15 385.40
4 55-59 697.27 697.27 640.76 640.76 573.20 573.20 483.57 483.57
4 60-64 815.85 791.45 749.59 727.21 670.42 650.42 565.39 548.56
4 65 + 844.58 802.16 775.98 737.03 693.99 659.20 585.23 555.95
Rate Tier: 1 = Employee Only, 2 = Employee plus Spouse, 3 = Employee plus Family, 4 = Employee plus Child(ren)
For Provider questions call: Care 1st of Arizona Member Services - 602-778-8300, 1-866-560-4042
Care 1st 05-05
Care 1st of Arizona Network
Maricopa County
$500 Deductible
Option - H010
$1,000 Deductible
Option - H020
$2,000 Deductible
Option - H030
No Deductible
Option - H000
Premium Rate Chart
Classic Healthstyle
Effective September 1, 2005
Source: Premium Rate Charts for Healthcare Group (HCG) medical benefit plans, obtained from HCG by Auditor General staff on December 28, 2005.
HMO Benefit Plan Premiums, by Contractor
State of Arizona
page a-iv
Rate
Tier
Age
Range
No
Deductible
Option - H100
$500
Deductible
Option - H110
$1,000
Deductible
Option - H120
Rate
Tier
Age
Range
No
Deductible
Option - H200
$500
Deductible
Option - H210
1 00-29 119.83 104.22 93.16 1 00-29 97.05 84.58
1 30-39 154.21 133.89 119.47 1 30-39 124.52 108.28
1 40-44 170.47 147.90 131.89 1 40-44 137.50 119.48
1 45-49 190.00 164.75 146.85 1 45-49 153.11 132.94
1 50-54 239.23 207.20 184.51 1 50-54 192.46 166.88
1 55-59 276.73 239.56 213.19 1 55-59 222.44 192.73
1 60-64 353.30 305.61 271.78 1 60-64 283.64 245.51
1 65 + 547.88 473.43 420.62 1 65 + 439.12 379.63
2 00-29 233.91 202.71 180.59 2 00-29 188.34 163.40
2 30-39 302.67 262.01 233.19 2 30-39 243.29 210.79
2 40-44 335.17 290.05 258.05 2 40-44 269.28 233.21
2 45-49 374.25 323.75 287.94 2 45-49 300.49 260.14
2 50-54 472.70 408.66 363.25 2 50-54 379.18 328.00
2 55-59 547.72 473.37 420.65 2 55-59 439.12 379.70
2 60-64 700.88 605.47 537.82 2 60-64 561.52 485.28
2 65 + 1090.02 941.10 835.49 2 65 + 872.52 753.50
3 00-29 503.90 435.77 387.46 3 00-29 421.30 364.53
3 30-39 570.01 492.78 438.04 3 30-39 474.13 410.10
3 40-44 618.30 534.44 474.98 3 40-44 512.73 443.39
3 45-49 651.94 563.45 500.71 3 45-49 539.62 466.57
3 50-54 706.47 610.48 542.43 3 50-54 577.55 499.30
3 55-59 747.33 645.73 573.68 3 55-59 610.21 527.46
3 60-64 872.63 753.80 669.54 3 60-64 710.34 613.82
3 65 + 1371.97 1184.48 1051.53 3 65 + 1098.13 948.29
4 00-29 247.04 214.16 190.85 4 00-29 199.02 172.74
4 30-39 281.42 243.81 217.15 4 30-39 226.50 196.44
4 40-44 320.50 277.52 247.04 4 40-44 257.72 223.37
4 45-49 345.49 299.08 266.16 4 45-49 277.70 240.61
4 50-54 365.82 316.61 281.71 4 50-54 293.93 254.62
4 55-59 373.62 323.33 287.69 4 55-59 300.17 260.00
4 60-64 425.99 368.50 327.74 4 60-64 342.03 296.09
4 65 + 789.34 681.89 605.71 4 65 + 632.39 546.54
Rate Tier: 1 = Employee Only, 2 = Employee plus Spouse, 3 = Employee plus Family, 4 = Employee plus Child(ren)
For Provider questions call: Care 1st of Arizona Member Services - 602-778-8300, 1-866-560-4042
Care 1st 05-05
Maricopa County Maricopa County
Care 1st of Arizona Network
Premium Rate Chart
Secure Healthstyle
Effective September 1, 2005
Active Healthstyle
Effective September 1, 2005
Source: Premium Rate Charts for Healthcare Group (HCG) medical benefit plans, obtained from HCG by Auditor General staff on December 28, 2005.
HMO Benefit Plan Premiums, by Contractor (cont’d)
Office of the Auditor General
page a-v
Rate
Tier
Age
Range Male Female Male Female Male Female Male Female Male Female Male Female Male Female Male Female Male Female Male Female Male Female Male Female
1 00-29 223.91 258.76 205.85 237.84 184.24 212.82 155.60 179.65 198.42 229.32 182.41 210.76 163.26 188.59 137.87 159.18 195.97 226.58 180.10 208.20 161.13 186.23 135.97 157.09
1 30-39 248.08 289.65 228.03 266.20 204.07 238.15 172.28 200.95 219.84 256.70 202.08 235.91 180.83 211.04 152.65 178.07 217.20 253.71 199.59 233.11 178.54 208.47 150.61 175.81
1 40-44 283.76 325.65 260.78 299.25 233.32 267.68 196.90 225.81 251.48 288.62 231.10 265.20 206.77 237.21 174.47 200.10 248.53 285.34 228.36 262.14 204.23 234.42 172.24 197.64
1 45-49 338.20 382.01 310.75 350.97 277.95 313.89 234.45 264.69 299.73 338.57 275.40 311.05 246.33 278.17 207.76 234.57 296.34 334.82 272.24 307.57 243.43 274.99 205.23 231.78
1 50-54 406.18 420.73 373.17 386.52 333.72 345.64 281.37 291.40 360.00 372.89 330.74 342.56 295.76 306.32 249.36 258.25 356.07 368.84 327.06 338.79 292.41 302.89 246.43 255.25
1 55-59 540.03 540.03 496.05 496.05 443.46 443.46 373.72 373.72 478.65 478.65 439.64 439.64 393.04 393.04 331.21 331.21 473.62 473.62 434.98 434.98 388.81 388.81 327.55 327.55
1 60-64 591.74 575.30 543.51 528.42 485.86 472.39 409.39 398.06 524.47 509.90 481.72 468.34 430.62 418.68 362.83 352.78 519.04 504.59 476.67 463.42 426.04 414.20 358.88 348.92
1 65 + 651.30 620.48 598.18 569.89 534.70 509.43 450.50 429.22 577.27 549.95 530.19 505.09 473.92 451.51 399.27 380.42 571.34 544.27 524.70 499.84 468.94 446.74 394.98 376.29
2 00-29 466.12 466.12 428.23 428.23 382.95 382.95 322.89 322.89 413.22 413.22 379.65 379.65 339.50 339.50 286.26 286.26 408.64 408.64 375.37 375.37 335.60 335.60 282.84 282.84
2 30-39 528.21 528.21 485.24 485.24 433.87 433.87 365.73 365.73 468.26 468.26 430.17 430.17 384.64 384.64 324.24 324.24 463.18 463.18 425.44 425.44 380.33 380.33 320.47 320.47
2 40-44 606.41 606.41 557.02 557.02 497.99 497.99 419.69 419.69 537.58 537.58 493.79 493.79 441.47 441.47 372.06 372.06 531.86 531.86 488.48 488.48 436.63 436.63 367.87 367.87
2 45-49 706.72 706.72 649.10 649.10 580.24 580.24 488.90 488.90 626.49 626.49 575.42 575.42 514.39 514.39 433.41 433.41 619.96 619.96 569.36 569.36 508.87 508.87 428.65 428.65
2 50-54 823.94 823.94 756.71 756.71 676.36 676.36 569.78 569.78 730.40 730.40 670.81 670.81 599.59 599.59 505.11 505.11 722.92 722.92 663.87 663.87 593.31 593.31 499.69 499.69
2 55-59 1075.36 1075.36 987.51 987.51 882.53 882.53 743.26 743.26 953.26 953.26 875.39 875.39 782.33 782.33 658.89 658.89 943.75 943.75 866.59 866.59 774.38 774.38 652.06 652.06
2 60-64 1164.04 1164.04 1068.92 1068.92 955.24 955.24 804.45 804.45 1031.87 1031.87 947.56 947.56 846.79 846.79 713.13 713.13 1021.63 1021.63 938.10 938.10 838.24 838.24 705.81 705.81
2 65 + 1268.78 1268.78 1165.07 1165.07 1041.13 1041.13 876.72 876.72 1124.71 1124.71 1032.78 1032.78 922.93 922.93 777.20 777.20 1113.62 1113.62 1022.53 1022.53 913.68 913.68 769.28 769.28
3 00-29 692.95 692.95 636.56 636.56 569.17 569.17 479.79 479.79 614.53 614.53 564.54 564.54 504.81 504.81 425.57 425.57 607.74 607.74 558.22 558.22 499.03 499.03 420.51 420.51
3 30-39 787.90 787.90 723.73 723.73 647.04 647.04 545.31 545.31 698.69 698.69 641.80 641.80 573.82 573.82 483.65 483.65 691.14 691.14 634.77 634.77 567.41 567.41 478.06 478.06
3 40-44 934.38 934.38 858.20 858.20 767.15 767.15 646.37 646.37 828.53 828.53 761.00 761.00 680.30 680.30 573.23 573.23 819.79 819.79 752.88 752.88 672.91 672.91 566.83 566.83
3 45-49 979.02 979.02 899.18 899.18 803.76 803.76 677.18 677.18 868.11 868.11 797.33 797.33 712.75 712.75 600.54 600.54 859.00 859.00 788.87 788.87 705.06 705.06 593.89 593.89
3 50-54 1067.35 1067.35 980.27 980.27 876.19 876.19 738.12 738.12 946.39 946.39 869.20 869.20 776.94 776.94 654.56 654.56 936.57 936.57 860.09 860.09 768.67 768.67 647.41 647.41
3 55-59 1329.64 1329.64 1221.05 1221.05 1091.27 1091.27 919.11 919.11 1178.90 1178.90 1082.64 1082.64 967.60 967.60 814.99 814.99 1166.95 1166.95 1071.58 1071.58 957.58 957.58 806.38 806.38
3 60-64 1430.59 1430.59 1313.72 1313.72 1174.04 1174.04 988.76 988.76 1268.38 1268.38 1164.79 1164.79 1040.98 1040.98 876.73 876.73 1255.62 1255.62 1152.97 1152.97 1030.29 1030.29 867.56 867.56
3 65 + 1486.43 1486.43 1364.97 1364.97 1219.83 1219.83 1027.28 1027.28 1317.88 1317.88 1210.21 1210.21 1081.55 1081.55 910.88 910.88 1304.65 1304.65 1197.98 1197.98 1070.49 1070.49 901.38 901.38
4 00-29 396.60 444.61 364.48 408.56 326.10 365.48 275.21 308.33 351.70 394.26 323.25 362.31 289.22 324.12 244.10 273.47 347.70 389.87 319.49 358.21 285.80 320.37 241.08 270.18
4 30-39 454.11 510.18 417.29 468.75 373.28 419.25 314.90 353.58 402.70 452.38 370.06 415.66 331.04 371.78 279.29 313.58 398.22 447.46 365.88 411.08 327.22 367.60 275.95 309.92
4 40-44 516.83 571.18 474.86 524.75 424.70 469.27 358.17 395.67 458.29 506.45 421.08 465.30 376.62 416.12 317.64 350.87 453.31 501.02 416.44 460.25 372.38 411.52 313.95 346.87
4 45-49 550.15 610.07 505.45 560.45 452.02 501.17 381.15 422.51 487.81 540.93 448.19 496.95 400.84 444.38 338.02 374.67 482.56 535.20 443.30 491.61 396.38 439.53 334.14 370.44
4 50-54 592.21 615.23 544.06 565.19 486.52 505.38 410.18 426.06 525.10 545.49 482.42 501.14 431.40 448.13 363.74 377.82 519.50 539.72 477.21 495.76 426.67 443.26 359.63 373.58
4 55-59 773.95 773.95 710.90 710.90 635.54 635.54 535.59 535.59 686.20 686.20 630.30 630.30 563.51 563.51 474.90 474.90 679.13 679.13 623.75 623.75 557.57 557.57 469.76 469.76
4 60-64 906.21 879.01 832.31 807.34 744.00 721.68 626.83 608.07 803.43 779.33 737.93 715.79 659.65 639.86 555.79 539.16 795.29 771.41 730.38 708.46 652.82 633.23 549.92 533.43
4 65 + 938.26 890.95 861.74 818.31 770.28 731.48 648.96 616.30 831.85 789.90 764.02 725.51 682.95 648.55 575.40 546.46 823.45 781.88 756.23 718.08 675.91 641.82 569.35 540.67
Rate Tier: 1 = Employee Only, 2 = Employee plus Spouse, 3 = Employee plus Family, 4 = Employee plus Child(ren)
For Provider questions call: Mercy Healthcare Group Member Services - 602-798-2800, 1-800-780-2300
MHG 05-05
Mercy Healthcare Group Network
Premium Rate Chart
Classic Healthstyle
Effective September 1, 2005
Maricopa County Pima County
Coconino, Gila, Graham, Greenlee, Pinal,
Santa Cruz, Yavapai & Yuma Counties
No
Deductible
Option - H000
$500
Deductible
Option - H010
$1,000
Deductible
Option - H020
$2,000
Deductible
Option - H030
No
Deductible
Option - H000
$500
Deductible
Option - H010
$1,000
Deductible
Option - H020
$2,000
Deductible
Option - H030
No
Deductible
Option - H000
$500
Deductible
Option - H010
$1,000
Deductible
Option - H020
$2,000
Deductible
Option - H030
Source: Premium Rate Charts for Healthcare Group (HCG) medical benefit plans, obtained from HCG by Auditor General staff on December 28, 2005.
HMO Benefit Plan Premiums, by Contractor (cont’d)
State of Arizona
page a-vi
Rate
Tier
Age
Range
No
Deductible
Option - H100
$500
Deductible
Option - H110
$1,000
Deductible
Option - H120
No
Deductible
Option - H100
$500
Deductible
Option - H110
$1,000
Deductible
Option - H120
No
Deductible
Option - H100
$500
Deductible
Option - H110
$1,000
Deductible
Option - H120
Rate
Tier
Age
Range
No
Deductible
Option - H200
$500
Deductible
Option - H210
No
Deductible
Option - H200
$500
Deductible
Option - H210
No
Deductible
Option - H200
$500
Deductible
Option - H210
1 00-29 132.77 115.00 102.40 130.83 113.27 100.81 134.55 116.39 103.50 1 00-29 105.73 91.68 104.41 90.48 107.19 92.78
1 30-39 171.93 148.78 132.37 169.56 146.67 130.44 174.60 150.93 134.14 1 30-39 136.70 118.39 135.12 116.97 138.94 120.18
1 40-44 190.46 164.75 146.52 187.86 162.45 144.43 193.54 167.25 148.61 1 40-44 151.34 131.02 149.64 129.48 153.96 133.12
1 45-49 212.70 183.94 163.55 209.85 181.42 161.26 216.28 186.88 166.03 1 45-49 168.93 146.20 167.08 144.53 171.99 148.68
1 50-54 268.77 232.30 206.44 265.30 229.23 203.68 273.63 236.33 209.89 1 50-54 213.28 184.44 211.05 182.46 217.46 187.89
1 55-59 311.49 269.15 239.13 307.52 265.66 235.99 317.30 274.00 243.31 1 55-59 247.07 213.58 244.56 211.35 252.11 217.77
1 60-64 398.72 344.38 305.85 393.75 340.05 301.95 406.49 350.94 311.54 1 60-64 316.05 273.07 312.96 270.34 322.83 278.77
1 65 + 620.36 535.53 475.40 612.86 529.01 469.56 633.11 546.39 484.89 1 65 + 491.30 424.23 486.73 420.23 502.51 433.75
2 00-29 262.56 227.01 201.81 259.69 224.55 199.64 267.12 230.78 205.01 2 00-29 208.47 180.37 206.33 178.46 212.39 183.58
2 30-39 340.88 294.57 261.73 336.62 290.84 258.37 347.21 299.86 266.28 2 30-39 270.41 233.79 267.74 231.43 275.90 238.35
2 40-44 377.89 326.49 290.04 373.21 322.40 286.37 385.06 332.51 295.24 2 40-44 299.70 259.04 296.79 256.47 305.93 264.24
2 45-49 422.40 364.89 324.10 417.22 360.36 320.04 430.58 371.76 330.06 2 45-49 334.88 289.39 331.67 286.57 342.00 295.36
2 50-54 534.55 461.61 409.89 528.08 455.97 404.84 545.24 470.65 417.77 2 50-54 423.56 365.88 419.60 362.41 432.92 373.79
2 55-59 620.01 535.31 475.26 612.57 528.83 469.46 632.62 546.02 484.61 2 55-59 491.13 424.16 486.61 420.20 502.20 433.54
2 60-64 794.45 685.78 608.72 785.02 677.58 601.41 810.99 699.87 621.08 2 60-64 629.09 543.15 623.40 538.18 643.65 555.53
2 65 + 1237.70 1068.08 947.80 1223.22 1055.53 936.62 1264.22 1090.78 967.79 2 65 + 979.60 845.47 970.96 837.96 1003.02 865.50
3 00-29 569.69 492.09 437.06 565.08 488.14 433.57 580.87 501.52 445.25 3 00-29 470.67 406.69 466.43 402.98 480.91 415.31
3 30-39 645.00 557.05 494.67 637.39 550.44 488.77 657.87 567.94 504.16 3 30-39 530.22 458.05 525.47 453.91 541.96 467.97
3 40-44 700.01 604.48 536.75 691.76 597.33 530.36 714.11 616.44 547.18 3 40-44 573.72 495.56 568.60 491.10 586.57 506.43
3 45-49 738.32 637.53 566.06 729.63 630.00 559.35 753.28 650.23 577.16 3 45-49 604.02 521.70 598.65 517.02 617.64 533.23
3 50-54 800.43 691.10 613.58 791.05 682.97 606.32 816.81 705.01 625.74 3 50-54 646.78 558.58 641.05 553.59 661.47 571.04
3 55-59 846.98 731.25 649.18 837.06 722.65 641.52 864.39 746.06 662.15 3 55-59 683.60 590.33 677.56 585.07 699.22 603.59
3 60-64 989.70 854.35 758.37 978.16 844.34 749.46 1010.33 871.92 773.79 3 60-64 796.45 687.68 789.46 681.60 814.93 703.40
3 65 + 1558.47 1344.91 1193.48 1540.44 1329.32 1179.61 1591.90 1373.54 1218.69 3 65 + 1233.51 1064.64 1222.83 1055.39 1263.04 1089.90
4 00-29 277.37 239.92 213.38 275.15 238.01 211.69 282.25 243.97 216.82 4 00-29 220.39 190.77 218.15 188.79 224.59 194.23
4 30-39 316.54 273.69 243.32 312.57 270.22 240.19 322.30 278.50 247.44 4 30-39 251.36 217.49 248.87 215.28 256.35 221.62
4 40-44 361.04 312.08 277.37 356.56 308.17 273.85 367.81 317.76 282.25 4 40-44 286.56 247.84 283.77 245.38 292.43 252.74
4 45-49 389.52 336.65 299.16 384.71 332.45 295.38 396.92 342.86 304.53 4 45-49 309.07 267.25 306.09 264.63 315.52 272.64
4 50-54 412.66 356.62 316.86 407.60 352.19 312.89 420.59 363.28 322.64 4 50-54 327.38 283.04 324.24 280.28 334.28 288.83
4 55-59 421.56 364.28 323.67 416.39 359.77 319.62 429.69 371.12 329.60 4 55-59 334.41 289.12 331.21 286.30 341.49 295.05
4 60-64 481.20 415.73 369.29 475.36 410.63 364.72 490.68 423.72 376.24 4 60-64 381.57 329.80 377.98 326.65 389.85 336.77
4 65 + 895.07 772.70 685.92 884.51 763.53 677.74 913.86 788.73 699.99 4 65 + 708.84 612.07 702.49 606.54 725.40 626.18
Rate Tier: 1 = Employee Only, 2 = Employee plus Spouse, 3 = Employee plus Family, 4 = Employee plus Child(ren)
For Provider questions call: Mercy Healthcare Group Member Services - 602-798-2800, 1-800-780-2300
MHH 05-05
Pima County
Secure Healthstyle
Effective September 1, 2005
Maricopa County
Coconino, Gila,
Graham, Greenlee,
Pinal, Santa Cruz,
Yavapai & Yuma
Counties
Mercy Healthcare Group Network
Premium Rate Chart
Active Healthstyle
Effective September 1, 2005
Pima County
Coconino, Gila, Graham,
Greenlee, Pinal, Santa Cruz,
Yavapai & Yuma Counties Maricopa County
Source: Premium Rate Charts for Healthcare Group (HCG) medical benefit plans, obtained from HCG by Auditor General staff on December 28, 2005.
HMO Benefit Plan Premiums, by Contractor (cont’d)
Office of the Auditor General
page a-vii
Rate
Tier
Age
Range Male Female Male Female Male Female Male Female Male Female Male Female Male Female Male Female
1 00-29 154.51 176.13 142.75 162.60 128.70 146.43 110.06 124.98 151.59 172.47 140.24 159.39 126.66 143.78 108.66 123.08
1 30-39 182.93 211.45 168.85 195.02 152.01 175.39 129.67 149.35 179.03 206.56 165.43 190.70 149.17 171.74 127.60 146.61
1 40-44 213.39 243.19 196.82 224.15 176.99 201.41 150.69 171.24 208.44 237.21 192.44 218.84 173.29 196.88 147.89 167.75
1 45-49 243.83 273.73 224.74 252.19 201.93 226.46 171.69 192.32 237.83 266.71 219.40 245.92 197.39 221.07 168.17 188.10
1 50-54 304.85 315.35 280.75 290.42 251.97 260.59 213.80 221.04 296.76 306.91 273.50 282.82 245.70 254.03 208.83 215.84
1 55-59 359.11 359.11 330.57 330.57 296.47 296.47 251.23 251.23 349.16 349.16 321.60 321.60 288.66 288.66 244.99 244.99
1 60-64 446.24 434.14 410.55 399.45 367.92 357.99 311.36 303.00 433.30 421.61 398.84 388.11 357.66 348.08 303.04 294.97
1 65 + 490.49 467.79 451.19 430.35 404.21 385.60 341.88 326.23 476.03 454.11 438.07 417.95 392.71 374.74 332.53 317.40
2 00-29 306.92 306.92 282.71 282.71 253.78 253.78 215.42 215.42 298.78 298.78 275.41 275.41 247.47 247.47 210.42 210.42
2 30-39 373.20 373.20 343.56 343.56 308.14 308.14 261.14 261.14 362.79 362.79 334.16 334.16 299.96 299.96 254.58 254.58
2 40-44 443.39 443.39 408.00 408.00 365.70 365.70 309.58 309.58 430.57 430.57 396.39 396.39 355.54 355.54 301.36 301.36
2 45-49 490.95 490.95 451.66 451.66 404.70 404.70 342.40 342.40 476.49 476.49 438.55 438.55 393.20 393.20 333.05 333.05
2 50-54 605.98 605.98 557.25 557.25 499.02 499.02 421.76 421.76 587.58 587.58 540.52 540.52 484.28 484.28 409.69 409.69
2 55-59 693.42 693.42 637.52 637.52 570.71 570.71 482.10 482.10 672.01 672.01 618.03 618.03 553.52 553.52 467.94 467.94
2 60-64 869.86 869.86 799.49 799.49 715.40 715.40 603.84 603.84 842.40 842.40 774.44 774.44 693.23 693.23 585.52 585.52
2 65 + 947.80 947.80 871.05 871.05 779.31 779.31 657.63 657.63 917.66 917.66 843.53 843.53 754.95 754.95 637.44 637.44
3 00-29 467.01 467.01 429.80 429.80 385.32 385.32 326.32 326.32 453.43 453.43 417.49 417.49 374.54 374.54 317.57 317.57
3 30-39 563.77 563.77 518.62 518.62 464.66 464.66 393.08 393.08 546.86 546.86 503.27 503.27 451.15 451.15 382.04 382.04
3 40-44 672.02 672.02 617.99 617.99 553.42 553.42 467.77 467.77 651.38 651.38 599.22 599.22 536.87 536.87 454.16 454.16
3 45-49 704.72 704.72 648.01 648.01 580.23 580.23 490.34 490.34 682.96 682.96 628.20 628.20 562.76 562.76 475.95 475.95
3 50-54 824.74 824.74 758.19 758.19 678.66 678.66 573.15 573.15 798.88 798.88 734.61 734.61 657.80 657.80 555.92 555.92
3 55-59 909.07 909.07 835.61 835.61 747.81 747.81 631.35 631.35 880.31 880.31 809.36 809.36 724.58 724.58 612.11 612.11
3 60-64 1053.85 1053.85 968.52 968.52 866.54 866.54 731.25 731.25 1020.12 1020.12 937.71 937.71 839.23 839.23 708.58 708.58
3 65 + 1157.86 1157.86 1063.99 1063.99 951.82 951.82 803.01 803.01 1120.55 1120.55 1029.91 1029.91 921.58 921.58 777.89 777.89
4 00-29 264.15 292.94 243.53 269.95 218.89 242.49 186.19 206.04 257.52 285.31 237.60 263.12 213.81 236.59 182.24 201.40
4 30-39 322.79 359.72 297.36 331.27 266.97 297.25 226.66 252.15 314.15 349.81 289.59 322.33 260.24 289.49 221.31 245.91
4 40-44 374.98 412.64 345.27 379.85 309.77 340.66 262.66 288.66 364.54 400.91 335.86 369.23 301.57 331.38 256.08 281.18
4 45-49 406.38 445.93 374.11 410.40 335.52 367.94 284.34 311.62 394.88 433.04 363.69 398.73 326.43 357.74 277.01 303.35
4 50-54 458.85 476.20 422.26 438.20 378.53 392.77 320.54 332.50 445.53 462.28 410.19 425.58 367.97 381.72 311.96 323.52
4 55-59 533.50 533.50 490.79 490.79 439.75 439.75 372.05 372.05 517.61 517.61 476.36 476.36 427.08 427.08 361.70 361.70
4 60-64 686.15 665.94 630.91 612.38 564.92 548.34 477.37 463.43 665.01 645.50 611.69 593.78 547.95 531.96 463.41 449.95
4 65 + 757.09 719.39 696.05 661.44 623.10 592.18 526.32 500.31 733.52 697.12 674.58 641.16 604.13 574.28 510.69 485.56
Rate Tier: 1 = Employee Only, 2 = Employee plus Spouse, 3 = Employee plus Family, 4 = Employee plus Child(ren)
For Provider questions call: University Physicians Member Services - 520-690-6811, 1-888-708-2930
UPH 05-05
University Physicians Network
Premium Rate Chart
Classic Healthstyle
Effective September 1, 2005
Cochise, Graham, Greenlee & Santa Cruz Counties
No
Deductible
Option - H000
$500
Deductible
Option - H010
$1,000
Deductible
Option - H020
$2,000
Deductible
Option - H030
$2,000
Deductible
Option - H030
No
Deductible
Option - H000
$500
Deductible
Option - H010
$1,000
Deductible
Option - H020
Pima & Pinal Counties
Source: Premium Rate Charts for Healthcare Group (HCG) medical benefit plans, obtained from HCG by Auditor General staff on December 28, 2005.
HMO Benefit Plan Premiums, by Contractor (cont’d)
State of Arizona
page a-viii
Rate
Tier
Age
Range
No
Deductible
Option - H100
$500
Deductible
Option - H110
$1,000
Deductible
Option - H120
No
Deductible
Option - H100
$500
Deductible
Option - H110
$1,000
Deductible
Option - H120 Rate Tier
Age
Range
No
Deductible
Option - H200
$500
Deductible
Option - H210
No
Deductible
Option - H200
$500
Deductible
Option - H210
1 00-29 115.59 100.95 90.58 117.85 103.18 92.78 1 00-29 94.61 82.85 96.82 85.04
1 30-39 147.86 128.79 115.25 150.20 131.08 117.51 1 30-39 120.51 105.20 122.79 107.44
1 40-44 163.09 141.93 126.92 165.48 144.26 129.21 1 40-44 132.78 115.77 135.08 118.03
1 45-49 181.43 157.74 140.93 183.86 160.11 143.26 1 45-49 147.49 128.46 149.83 130.76
1 50-54 227.63 197.59 176.28 230.18 200.06 178.70 1 50-54 184.58 160.46 187.02 162.83
1 55-59 262.84 227.94 203.20 265.47 230.49 205.69 1 55-59 212.84 184.82 215.35 187.26
1 60-64 334.68 289.93 258.18 337.49 292.63 260.80 1 60-64 270.54 234.60 273.19 237.16
1 65 + 517.27 447.40 397.86 520.54 450.50 400.83 1 65 + 417.15 361.04 420.17 363.92
2 00-29 222.68 193.40 172.63 225.21 195.86 175.04 2 00-29 180.71 157.21 183.14 159.58
2 30-39 287.20 249.05 222.00 289.89 251.65 224.53 2 30-39 232.54 201.89 235.09 204.37
2 40-44 317.71 275.37 245.34 320.48 278.03 247.93 2 40-44 257.03 223.03 259.65 225.56
2 45-49 354.37 307.00 273.39 357.23 309.74 276.04 2 45-49 286.46 248.42 289.15 251.01
2 50-54 446.77 386.67 344.06 449.86 389.61 346.89 2 50-54 360.66 312.41 363.53 315.17
2 55-59 517.15 447.39 397.91 520.42 450.48 400.88 2 55-59 417.19 361.16 420.20 364.04
2 60-64 660.88 571.34 507.86 664.50 574.74 511.10 2 60-64 532.59 460.71 535.90 463.83
2 65 + 1026.03 886.30 787.21 1030.57 890.49 791.14 2 65 + 825.81 713.60 829.84 717.36
3 00-29 482.10 417.35 371.45 485.28 420.36 374.35 3 00-29 408.04 353.48 411.03 356.33
3 30-39 544.15 470.86 418.89 547.48 474.01 421.91 3 30-39 457.86 396.44 460.98 399.40
3 40-44 589.45 509.95 453.56 592.90 513.19 456.66 3 40-44 494.25 427.83 497.45 430.87
3 45-49 621.03 537.18 477.71 624.55 540.49 480.88 3 45-49 519.60 449.68 522.86 452.78
3 50-54 670.20 579.58 515.32 673.85 582.99 518.58 3 50-54 552.85 478.36 556.20 481.52
3 55-59 708.55 612.66 544.67 712.29 616.16 548.00 3 55-59 583.64 504.93 587.07 508.16
3 60-64 826.13 714.07 634.61 830.16 717.82 638.16 3 60-64 678.04 586.35 681.71 589.79
3 65 + 1290.71 1114.77 990.02 1295.90 1119.53 994.46 3 65 + 1038.61 897.34 1043.17 901.55
4 00-29 235.06 204.20 182.33 237.62 206.69 184.76 4 00-29 190.86 166.08 193.30 168.47
4 30-39 267.32 232.03 207.01 269.96 234.58 209.50 4 30-39 216.76 188.42 219.28 190.86
4 40-44 303.98 263.65 235.06 306.71 266.28 237.62 4 40-44 246.19 213.82 248.78 216.32
4 45-49 327.46 283.90 253.01 330.25 286.58 255.62 4 45-49 265.04 230.07 267.67 232.62
4 50-54 346.51 300.34 267.59 349.34 303.06 270.23 4 50-54 280.35 243.27 283.02 245.85
4 55-59 353.84 306.66 273.20 356.70 309.40 275.85 4 55-59 286.23 248.35 288.92 250.94
4 60-64 402.97 349.04 310.80 405.95 351.88 313.54 4 60-64 325.69 282.37 328.47 285.05
4 65 + 743.95 643.12 571.63 747.78 646.70 575.03 4 65 + 599.47 518.51 602.94 521.78
Rate Tier: 1 = Employee Only, 2 = Employee plus Spouse, 3 = Employee plus Family, 4 = Employee plus Child(ren)
For Provider questions call: University Physicians Member Services - 520-690-6811, 1-888-708-2930
UPH 05-05
University Physicians Network
Premium Rate Chart
Effective September 1, 2005 Effective September 1, 2005
Secure Healthstyle Active Healthstyle
Pima & Pinal Counties
Cochise, Graham, Greenlee, & Santa
Cruz Counties Pima & Pinal Counties
Cochise, Graham,
Greenlee, & Santa Cruz
Counties
Source: Premium Rate Charts for Healthcare Group (HCG) medical benefit plans, obtained from HCG by Auditor General staff on December 28, 2005.
HMO Benefit Plan Premiums, by Contractor (cont’d)
Office of the Auditor General
page a-ix
Rate
Tier
Age
Range Male Female Male Female Male Female Male Female Male Female Male Female Male Female Male Female Male Female
1 00-29 227.00 342.00 214.00 323.00 198.00 297.00 217.00 327.00 205.00 309.00 190.00 285.00 236.00 356.00 223.00 337.00 206.00 310.00
1 30-39 240.00 332.00 227.00 314.00 209.00 289.00 230.00 318.00 217.00 301.00 201.00 277.00 250.00 347.00 236.00 327.00 218.00 301.00
1 40-44 268.00 321.00 254.00 303.00 234.00 279.00 257.00 308.00 243.00 291.00 224.00 268.00 280.00 335.00 264.00 316.00 244.00 291.00
1 45-49 325.00 357.00 307.00 338.00 283.00 311.00 312.00 342.00 295.00 323.00 271.00 298.00 339.00 373.00 321.00 352.00 295.00 324.00
1 50-54 442.00 432.00 417.00 408.00 384.00 375.00 423.00 413.00 399.00 391.00 367.00 359.00 461.00 451.00 435.00 426.00 400.00 391.00
1 55-59 623.00 519.00 588.00 490.00 541.00 450.00 597.00 497.00 563.00 469.00 517.00 431.00 651.00 541.00 614.00 511.00 564.00 470.00
1 60-64 821.00 663.00 775.00 626.00 711.00 575.00 786.00 635.00 741.00 599.00 681.00 550.00 857.00 692.00 809.00 654.00 743.00 600.00
1 65 + 866.00 727.00 817.00 686.00 750.00 630.00 828.00 696.00 782.00 657.00 718.00 603.00 904.00 759.00 853.00 716.00 783.00 658.00
2 00-29 559.00 559.00 528.00 528.00 485.00 485.00 535.00 535.00 506.00 506.00 465.00 465.00 583.00 583.00 551.00 551.00 506.00 506.00
2 30-39 563.00 563.00 532.00 532.00 489.00 489.00 539.00 539.00 509.00 509.00 468.00 468.00 587.00 587.00 555.00 555.00 510.00 510.00
2 40-44 580.00 580.00 548.00 548.00 504.00 504.00 555.00 555.00 525.00 525.00 482.00 482.00 605.00 605.00 572.00 572.00 526.00 526.00
2 45-49 673.00 673.00 636.00 636.00 584.00 584.00 644.00 644.00 609.00 609.00 559.00 559.00 703.00 703.00 663.00 663.00 610.00 610.00
2 50-54 864.00 864.00 816.00 816.00 749.00 749.00 827.00 827.00 781.00 781.00 717.00 717.00 902.00 902.00 852.00 852.00 782.00 782.00
2 55-59 1133.00 1133.00 1069.00 1069.00 981.00 981.00 1084.00 1084.00 1023.00 1023.00 939.00 939.00 1183.00 1183.00 1116.00 1116.00 1025.00 1025.00
2 60-64 1475.00 1475.00 1391.00 1391.00 1277.00 1277.00 1411.00 1411.00 1331.00 1331.00 1222.00 1222.00 1541.00 1541.00 1453.00 1453.00 1334.00 1334.00
2 65 + 1584.00 1584.00 1494.00 1494.00 1371.00 1371.00 1515.00 1515.00 1429.00 1429.00 1311.00 1311.00 1654.00 1654.00 1560.00 1560.00 1432.00 1432.00
3 00-29 831.00 831.00 785.00 785.00 722.00 722.00 796.00 796.00 752.00 752.00 692.00 692.00 867.00 867.00 819.00 819.00 753.00 753.00
3 30-39 835.00 835.00 789.00 789.00 725.00 725.00 800.00 800.00 755.00 755.00 695.00 695.00 871.00 871.00 823.00 823.00 757.00 757.00
3 40-44 852.00 852.00 805.00 805.00 740.00 740.00 816.00 816.00 771.00 771.00 709.00 709.00 890.00 890.00 840.00 840.00 772.00 772.00
3 45-49 946.00 946.00 893.00 893.00 821.00 821.00 905.00 905.00 855.00 855.00 786.00 786.00 987.00 987.00 932.00 932.00 857.00 857.00
3 50-54 1137.00 1137.00 1073.00 1073.00 986.00 986.00 1088.00 1088.00 1027.00 1027.00 944.00 944.00 1187.00 1187.00 1120.00 1120.00 1029.00 1029.00
3 55-59 1405.00 1405.00 1326.00 1326.00 1218.00 1218.00 1345.00 1345.00 1269.00 1269.00 1166.00 1166.00 1467.00 1467.00 1385.00 1385.00 1272.00 1272.00
3 60-64 1747.00 1747.00 1649.00 1649.00 1514.00 1514.00 1672.00 1672.00 1578.00 1578.00 1448.00 1448.00 1825.00 1825.00 1722.00 1722.00 1581.00 1581.00
3 65 + 1856.00 1856.00 1751.00 1751.00 1608.00 1608.00 1776.00 1776.00 1675.00 1675.00 1538.00 1538.00 1938.00 1938.00 1829.00 1829.00 1679.00 1679.00
4 00-29 499.00 614.00 472.00 580.00 434.00 534.00 478.00 588.00 452.00 556.00 416.00 511.00 520.00 641.00 492.00 605.00 453.00 557.00
4 30-39 512.00 605.00 484.00 571.00 446.00 526.00 491.00 579.00 464.00 547.00 427.00 504.00 534.00 631.00 505.00 596.00 465.00 548.00
4 40-44 541.00 593.00 511.00 561.00 470.00 516.00 518.00 568.00 490.00 537.00 451.00 494.00 564.00 619.00 533.00 585.00 490.00 538.00
4 45-49 598.00 630.00 565.00 595.00 520.00 547.00 572.00 603.00 541.00 570.00 498.00 524.00 624.00 657.00 589.00 621.00 542.00 571.00
4 50-54 714.00 704.00 674.00 665.00 620.00 612.00 684.00 674.00 646.00 637.00 594.00 586.00 745.00 735.00 704.00 694.00 647.00 638.00
4 55-59 896.00 791.00 846.00 747.00 777.00 687.00 857.00 757.00 810.00 715.00 744.00 658.00 935.00 826.00 883.00 780.00 811.00 717.00
4 60-64 1093.00 936.00 1032.00 883.00 948.00 812.00 1046.00 896.00 988.00 845.00 907.00 777.00 1142.00 977.00 1077.00 922.00 990.00 847.00
4 65 + 1138.00 999.00 1074.00 943.00 987.00 867.00 1089.00 956.00 1028.00 903.00 944.00 830.00 1189.00 1043.00 1122.00 985.00 1030.00 905.00
Rate Tier: 1 = Employee Only, 2 = Employee plus Spouse, 3 = Employee plus Family, 4 = Employee plus Child(ren)
PPO 08-05
Apache, Cochise, Coconino, Gila, Graham,
Greenlee, La Paz, Mohave, Navajo,Pinal,
Santa Cruz, Yavapai & Yuma Counties
Effective January 1, 2006
Medallion PPO
$500
Deductible
Option - P210
$1,000
Deductible
Option - P220
Maricopa County Pima County
Premium Rate Chart
$2,000
Deductible
Option - P230
$1,000
Deductible
Option - P220
$2,000
Deductible
Option - P230
$500
Deductible
Option - P210
$1,000
Deductible
Option - P220
$2,000
Deductible
Option - P230
$500
Deductible
Option - P210
Source: Premium Rate Charts for Healthcare Group (HCG) medical benefit plans, obtained from HCG by Auditor General staff on December 28, 2005.
PPO Benefit Plan Premiums
State of Arizona
page a-x
Rate Tier
Age
Range Male Female Male Female Male Female Male Female Male Female Male Female
1 00-29 189.00 284.00 175.00 263.00 182.00 272.00 168.00 252.00 197.00 296.00 183.00 274.00
1 30-39 200.00 276.00 186.00 256.00 192.00 265.00 178.00 245.00 209.00 288.00 193.00 267.00
1 40-44 224.00 267.00 207.00 247.00 214.00 256.00 199.00 237.00 233.00 279.00 216.00 258.00
1 45-49 271.00 297.00 251.00 275.00 260.00 285.00 240.00 263.00 282.00 310.00 261.00 286.00
1 50-54 367.00 359.00 339.00 331.00 351.00 344.00 325.00 317.00 383.00 374.00 354.00 346.00
1 55-59 517.00 430.00 477.00 397.00 495.00 412.00 457.00 381.00 539.00 449.00 498.00 415.00
1 60-64 680.00 550.00 627.00 507.00 650.00 526.00 600.00 486.00 710.00 574.00 655.00 529.00
1 65 + 717.00 602.00 661.00 556.00 686.00 576.00 633.00 532.00 748.00 629.00 690.00 580.00
2 00-29 464.00 464.00 429.00 429.00 445.00 445.00 411.00 411.00 484.00 484.00 448.00 448.00
2 30-39 467.00 467.00 432.00 432.00 448.00 448.00 414.00 414.00 488.00 488.00 451.00 451.00
2 40-44 482.00 482.00 445.00 445.00 461.00 461.00 426.00 426.00 503.00 503.00 464.00 464.00
2 45-49 559.00 559.00 516.00 516.00 535.00 535.00 494.00 494.00 583.00 583.00 538.00 538.00
2 50-54 716.00 716.00 661.00 661.00 686.00 686.00 633.00 633.00 748.00 748.00 690.00 690.00
2 55-59 938.00 938.00 865.00 865.00 897.00 897.00 828.00 828.00 979.00 979.00 903.00 903.00
2 60-64 1220.00 1220.00 1125.00 1125.00 1167.00 1167.00 1076.00 1076.00 1274.00 1274.00 1175.00 1175.00
2 65 + 1310.00 1310.00 1208.00 1208.00 1253.00 1253.00 1155.00 1155.00 1368.00 1368.00 1261.00 1261.00
3 00-29 691.00 691.00 638.00 638.00 662.00 662.00 611.00 611.00 720.00 720.00 666.00 666.00
3 30-39 694.00 694.00 641.00 641.00 665.00 665.00 614.00 614.00 724.00 724.00 669.00 669.00
3 40-44 708.00 708.00 654.00 654.00 678.00 678.00 627.00 627.00 739.00 739.00 683.00 683.00
3 45-49 785.00 785.00 725.00 725.00 752.00 752.00 695.00 695.00 819.00 819.00 757.00 757.00
3 50-54 943.00 943.00 870.00 870.00 902.00 902.00 833.00 833.00 984.00 984.00 908.00 908.00
3 55-59 1164.00 1164.00 1074.00 1074.00 1114.00 1114.00 1028.00 1028.00 1215.00 1215.00 1121.00 1121.00
3 60-64 1446.00 1446.00 1334.00 1334.00 1384.00 1384.00 1277.00 1277.00 1510.00 1510.00 1393.00 1393.00
3 65 + 1536.00 1536.00 1417.00 1417.00 1470.00 1470.00 1356.00 1356.00 1604.00 1604.00 1479.00 1479.00
4 00-29 416.00 511.00 385.00 472.00 398.00 489.00 369.00 452.00 433.00 533.00 401.00 492.00
4 30-39 427.00 503.00 395.00 465.00 409.00 482.00 378.00 446.00 445.00 524.00 411.00 485.00
4 40-44 450.00 494.00 416.00 456.00 431.00 473.00 399.00 437.00 469.00 515.00 434.00 476.00
4 45-49 497.00 523.00 460.00 484.00 476.00 501.00 441.00 464.00 518.00 546.00 479.00 505.00
4 50-54 593.00 585.00 548.00 541.00 568.00 560.00 525.00 518.00 619.00 610.00 572.00 564.00
4 55-59 743.00 657.00 686.00 607.00 711.00 629.00 657.00 581.00 775.00 685.00 716.00 633.00
4 60-64 906.00 776.00 836.00 716.00 867.00 743.00 801.00 686.00 946.00 810.00 873.00 748.00
4 65 + 943.00 828.00 870.00 765.00 903.00 793.00 833.00 732.00 984.00 865.00 909.00 798.00
Rate Tier: 1 = Employee Only, 2 = Employee plus Spouse, 3 = Employee plus Family, 4 = Employee plus Child(ren)
PPO 08-05
Premium Rate Chart
Medallion PPO Plus
Effective January 1, 2006
$1000
Deductible
Option - P320
$2,000
Deductible
Option - P330
Maricopa County Pima County
Apache, Cochise, Coconino, Gila, Graham,
Greenlee, La Paz, Mohave, Navajo,Pinal,
Santa Cruz, Yavapai & Yuma Counties
$1000
Deductible
Option - P320
$2,000
Deductible
Option - P330
$1000
Deductible
Option - P320
$2,000
Deductible
Option - P330
Source: Premium Rate Charts for Healthcare Group (HCG) medical benefit plans, obtained from HCG by Auditor General staff on December 28, 2005.
PPO Benefit Plan Premiums (concl’d)
Office of the Auditor General
page a-xi
Dental and Vision Plan Premiums
State of Arizona
page a-xii
Healthcare Group Medical Benefit
Plan Comparisons
􀁺 HMO Benefit Plan Comparison (pages b-iii through b-iv)
􀁺 PPO Benefit Plan Comparison (pages b-v through b-vi)
Source: Healthcare Group.
Office of the Auditor General
APPENDIX B
page b-i
State of Arizona
page b-ii
Office of the Auditor General
page b-iii
HMO Benefit Plan Comparison
State of Arizona
page b-iv
HMO Benefit Plan Comparison (concl’d)
Office of the Auditor General
page b-v
PPO Benefit Plan Comparison
State of Arizona
page b-vi
PPO Benefit Plan Comparison (concl’d)
Office of the Auditor General
AGENCY RESPONSE
State of Arizona
February 23, 2006
Debra K. Davenport, CPA
Auditor General
2910 North 44th Street, Suite 410
Phoenix, AZ 85018
Dear Ms. Davenport:
I would like to thank you and your audit team for the professional and thorough way that you
managed the audit of the Healthcare Group of Arizona (HCG). The audit was invaluable to my
office and the management of Healthcare Group as we had the opportunity to evaluate the
processes, procedures and financial management of the health plan. We also appreciate the
disciplined way your staff reviewed the financial reserving methodology used by HCG. Now
that HCG is self funded it is critical that our financial reserving methodology assure there are
adequate reserve funds to reimburse health plan contractors for extraordinary medical losses and
to maintain financial long term financial stability. The audit provided an outside validation of
HCG effective financial management and statutory compliance.
Although there were no specific recommendations to respond to, the audit findings will serve as
a basis to improve processes and procedures going forward. There are areas we agreed to
continue to strengthen and improve such as operational and financial performance metrics, bare
period insurance validation beyond just an attestation, and financial oversight of contracted
health plan operations and financial stability. HCG financial management will continue to
closely monitor the adequacy of the health plan financial reserves. I also plan to have an outside
actuary peer review our methodology as soon as our HCG administrative budget will permit. As
a self funded health care coverage program, it is important to validate our reserving methodology
and management of medical cost risk meets appropriate health insurance actuarial practice.
As your audit documents, Healthcare Group now offers more than 15 different health benefit
options including Health Saving Account plans, contracts for dental, vision and four health plan
networks, and has expanded to offer statewide health plan coverage. In a recent satisfaction
survey, HCG received strong satisfaction results from members, especially regarding the new
benefit options and expanded networks. Healthcare Group has grown more than 50% over the
last 12 months. Managing the business and operational processes for the current level of
membership growth has required HCG to update telecommunication equipment, reengineer
systems and improve operational processes. Over the next 18 months HCG expects to grow to
over 50,000 members, doubling the number of small businesses and public employers
participating in the program.
Debra K. Davenport
02/23/06
Page 2
As membership has grown, the percent of premium dollars allocated for HCG administration and
operations has been reduced. To properly manage this enterprise and provide the level of
ongoing membership support small businesses need, HCG must be appropriated adequate funds
from the premium revenues collected for its general administration and customer care operations.
As the audit points out, there are high expectations placed on the effective financial management
and statutory compliance of HCG and the continued self-sufficiency of the program. Your
findings state the HCG administrative cost was 8.5% of total program cost between July 2003
and September 2005; however, by next fiscal year that percent will drop to 6.8%.
The key to financial sufficiency and keeping HCG premiums affordable is continued
membership growth and attracting not only the “forty-somethings” but also the “twenty-somethings”
to our health plan benefits. Marketing and sales expenditures for HCG are well
below expenditures of commercial health plans. Interest in HCG by small businesses remains
high. For HCG to be able to meet with businesses to explain all the benefits, premium rate,
verify employer eligibility and process all the enrollments requires an increasing amount of
resources and close oversight.
Finally, I would like to take this opportunity to remind those who have an interest in this audit
and the success of Healthcare Group of Arizona, that a high percentage of small businesses in
Arizona remain uninsured. The number one reason according to the Kaiser Foundation for small
business failure or declared bankruptcy is because of a major illness suffered by the small
business owner. Additionally, small businesses must now compete with large employers for the
same pool of employees. Large employers often have the competitive advantage for Arizona’s
labor market because they can offer health benefits. Nearly every state and local chamber of
commerce action agenda includes advocacy for affordable healthcare coverage for small
business. With the support and leadership of the Governor and the state legislature, HCG will be
part of the solution for affordable health care for Arizona small businesses.
Thank you for this opportunity to comment on the Healthcare Group of Arizona audit findings.
Sincerely
Anthony D. Rodgers
Director
04-03 Behavioral Health Services’
HB2003 Funding for Adults
with Serious Mental Illness
04-04 Department of Emergency and
Military Affairs and
State Emergency Council
04-05 Department of Environmental
Quality—Water Quality Division
04-06 Department of Environmental
Quality—Waste Programs
Division
04-07 Department of Environmental
Quality—Air Quality Division
04-08 Department of Environmental
Quality—Sunset Factors
04-09 Arizona Department of
Transportation, Motor Vehicle
Division— State Revenue
Collection Functions
04-10 Arizona Department of
Transportation, Motor Vehicle
Division—Information Security
and E-government Services
04-11 Arizona Department of
Transportation, Motor Vehicle
Division—Sunset Factors
04-12 Board of Examiners of Nursing
Care Institution Administrators
and Assisted Living Facility
Managers
05-L1 Letter Report—Department
of Health Services—
Ultrasound Reviews
05-01 Department of Economic
Security—Division of
Employment and
Rehabilitation Services—
Unemployment Insurance
Program
05-02 Department of Administration—
Financial Services Division
05-03 Government Information
Technology Agency (GITA) &
Information Technology
Authorization Committee (ITAC)
05-04 Department of Economic
Security—Information Security
05-05 Department of Economic
Security—Service Integration
Initiative
05-06 Department of Revenue—Audit
Division
05-07 Department of Economic
Security—Division of
Developmental Disabilities
05-08 Department of Economic
Security—Sunset Factors
05-09 Arizona State Retirement
System
05-10 Foster Care Review Board
05-11 Department of Administration—
Information Services Division
and Telecommunications
Program Office
05-12 Department of Administration—
Human Resources Division
05-13 Department of Administration—
Sunset Factors
05-14 Department of Revenue—
Collections Division
05-15 Department of Rev