THE MISSISSIPPI LEGISLATURE

Introduction

State law authorizes the Department of Finance and Administration to administer the State Employees' Health Insurance Plan and the Public School Employees Health Insurance Plan and to enter into contracts with "accountants, actuaries and other persons from the private sector whose skills are necessary" to carry out the provisions of state law relative to the plans.

Section 4, Chapter 554, Laws of 1995, requires the PEER Committee to report annually to the Legislature regarding all contractors used by the Department of Finance and Administration (DFA) for the State and Public School Employees' Health Insurance Plans. Section 4 specifically requires PEER's report to address:

1. the processes by which the department pro-cured its contractors;
2. the contractors' work products; and,
3. contract expenditures.

Overview

Public contracting generally involves the devel-opment of a request for proposals (RFP), advertise-ment of the RFP, evaluation of proposals received, and award of a contract based on the evaluations. DFA, in contracting for its administrative (i.e., health consulting, actuary, or claims auditing), uti-lization review, and database information contrac-tors for fiscal years 1995 and 1996, adhered to ac-cepted public contracting principles.

DFA has formal contracts with its administra-tive, utilization review, and database information contractors which detail the contractors' responsi-bilities and services to be provided to the depart-ment. Each contractor performed work during fis-cal years 1995 and 1996 in compliance with con-tractual responsibilities.

During fiscal years 1995 and 1996 (through December 31, 1995), DFA expended $3,274,437.03 and $1,203,246.53, respectively, on its administra-tive, utilization review, and database information contractors. Because DFA's contracts with its ad-ministrative, utilization review, and database in-formation contractors contain hourly rates or dol-lar ranges of charges for services provided, the de-partment has few limits on the total amounts that may be expended on such contractors.

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