Review of Regence HMO Oregon's Modifications to Its 2001 Adjusted Community Rate Proposal Under the Benefits Improvement and Protection Act of 2000

EXECUTIVE SUMMARY:

Our objectives were to determine whether Regence supported modifications to its 2001 adjusted community rate proposal under the Benefits Improvement and Protection Act (BIPA) of 2000 and used the additional capitation payments in a manner consistent with BIPA requirements.  Of the capitation payment increase in Regence's revised proposal, about $15.4 million was supported in the proposal's modifications and was used in a manner consistent with BIPA requirements.  However, we found (1) Regence did not provide adequate support for approximately $6.8 million in increased payments in the proposal's modifications and we could not determine how much of the amount was used in a manner consistent with BIPA requirements and (2) about $0.5 million was supported in the proposal's modifications but not used in a manner consistent with BIPA requirements.  We recommended that Regence (1) work with CMS to determine what portion of the about $6.8 million in increased payments was not used in a manner consistent with BIPA requirements and refund that amount to the Federal Government (2) refund the about $0.5 million to the Federal Government that was not used in a manner consistent with BIPA and (3) ensure that all estimated costs in future proposals are properly supported and used in a manner consistent with Federal requirements.  Regence did not concur with our findings and recommendations.