Audit of Regular Member Health Benefits

Final vetted report - October 2020

This report has been reviewed for potentially sensitive information. Where sensitive information has been removed, asterisks [***] appear; published information is UNCLASSIFIED.

Table of contents

• Acronyms and abbreviations
• Executive summary
• Management's response to the audit
• 1.0 Background
• 2.0 Objective, scope and methodology
  • 2.1 Objective
  • 2.2 Scope
  • 2.3 Methodology
  • 2.4 Statement of conformance
• 3.0 Audit findings
  • 3.1 Governance
  • 3.2 Expenditure compliance
• 4.0 Conclusion
• 5.0 Recommendations
• Appendix A – Audit objective and criteria
• Appendix B – Health Cost trends by fiscal year
• Appendix C – Management action plan
• End notes

Acronyms and abbreviations

AM

Administration Manual

BHC

Basic Health Care

CFAO

Chief Financial and Administrative Officer

CHRO

Chief Human Resources Officer

CM

Civilian Member

CM&C

Corporate Management and Comptrollership

CPA

Canadian Police Arrangement

DCFP

Deputy Commissioner Federal Policing

DG

Director General

DMHR

Delegated Manager Human Resources

DND

Department of National Defence

FAA

Financial Administration Act

FFD

Fit-for-duty

FHCPS

Federal Health Claims Processing Service

GL

General Ledger

HBP

Health Benefits Program

HR

Human Resources

HS

Health Services

HSO

Health Services Officer

IHPW

International Health Protection and Wellness

IS

Interdepartmental Settlement

JV

Journal Voucher

MOU

Memorandum of Understanding

NCS

National Compensation Services

NHQ

National Headquarters

OHC

Occupational Health Care

OHSB

Occupational Health and Safety Branch

OHSSO

Occupational Health and Safety Services Offices

OIC

Officer in Charge

PHA

Periodic Health Assessment

RCMP

Royal Canadian Mounted Police

RM

Regular Member

RMHB

Regular Member Health Benefits

S/Cst.

Special Constable

SHC

Supplemental Health Care

SOPs

Standard Operating Procedures

TEAM

The RCMP's financial system for expense and asset management

VAC

Veterans Affairs Canada

WRII

Work-Related Injury or Illness

Executive summary

To ensure that Regular Members (RMs) of the Royal Canadian Mounted Police (RCMP) are fit for duty and can maintain a certain level of employability, they have access to three levels of health care benefits. In addition to Basic Health Care (BHC), which is covered under provincial/territorial health care insurance plans, the RCMP provides RMs with Supplemental Health Care (SHC) and Occupational Health Care (OHC) benefits. SHC benefits are other health services/items not normally considered an insured benefit under provincial health care plans. OHC is an additional level of care that the RCMP may choose to provide to minimize limitations and restrictions that affect an RM's fitness for duty and to maximize employability, or when required as a result of a workplace injury or illness.

The RCMP has been outsourcing the administration of its SHC benefits since 1999 through the Federal Health Claims Processing Services contract overseen by Veterans Affairs Canada (VAC). The processing of health claims is provided through a third-party contractor on behalf of the three participating Departments: VAC, RCMP and the Department of National Defence (DND).

While SHC benefits are administered by the third-party contractor, the RCMP manages OHC benefits for RMs as they are not covered under the Government Employee Compensation Act nor by provincial/ territorial Worker's Compensation Boards. To address this, the RCMP established an internal determination process to help identify cases of work-related injuries/illnesses (WRII), and to enable access to RCMP OHC benefits in accordance with RCMP Administration Manual (AM) XIV. Access to OHC is not an automatic entitlement, but must be pre-approved by RCMP Health Services, on a case-by-case basis, to maximize fitness for duty and manage work related injuries and illnesses ^{Endnote 1} . Claims for OHC benefits are processed by the third-party contractor.

The objective of the audit was to determine whether an adequate management control framework was in place, and that RM health charges to the RCMP were appropriate ^{Endnote 2} . The audit scope included all RM SHC and OHC benefits processed by the third-party contractor, RM Health costs in the RCMP's financial system (TEAM), as well as the RCMP Determination Process in all divisions. The period of scope for the examination covered health benefits payments made between April 1, 2016 and March 31, 2018.

Overall, the audit found that there are control weaknesses within the RCMP in processing OHC claims, as well as, health expenses in TEAM, which are within the organization's control to address.

The audit also found that the third-party contractor processed sampled Regular Member Health Benefits (RMHB) claims in accordance with contract requirements, the Benefit Grid, and based on pre-authorization information entered by the divisions. In addition, the audit found that all sampled claims were for eligible RMs.

Additional detailed procedural guidance or Standard Operating Procedures are required for roles pivotal to the RMHB process (such as Benefits Coordinators, Nurses, and Health Services Officers) to ensure standardization of practices, appropriate processing, and cost control. Procedural guidance is also required for Health Services staff to ensure that all health expenses are appropriately captured in TEAM.

Without adequate monitoring at both the national and divisional levels, Human Resource and Corporate Management & Comptrollership management lack the information necessary to perform an oversight function and assess whether or not RMHB are being effectively managed, and that the health care expenses being approved are appropriate. Officers in Charge/Managers are not in a position to assess the appropriateness of the expenses they are approving, nor can they oversee the work being performed by the employees within their units, due to limited access to information and segregation from their staff. Audit testing results identified two duplicate payments, and instances of management override of controls.

Potentially significant inputs to assist in identifying risks and opportunities in the area of RMHB, such as a systematic analysis of work-related injuries/illness, determination process decisions, and Drug Utilization Reports are being underutilized. This is limiting the RCMP from responding to emerging risks in a timely manner and making it more difficult to focus efforts on the prevention of workplace injuries/illnesses. A greater focus on risk identification and response could also help decrease the overall cost of RMHB.

The management response developed in response to this report demonstrates the commitment from senior management to address the audit findings and recommendations. A detailed management action plan is currently being developed. Once approved, RCMP Internal Audit will monitor the implementation of the management action plan and undertake a follow-up audit if warranted.

Management's response to the audit

Human Resources (HR), Corporate Management & Comptrollership (CM&C), and Federal Policing (FP) agree with the findings and recommendations in the audit report. The provision of Regular Member (RM) health benefits demonstrates the Force's commitment to ensuring that Regular Members are fit for duty and can maintain employability. It is also aligned with the RCMP's Vision 150 central themes of our people and our stewardship.

The audit has identified areas of risk with respect to the RCMP's management of RM health benefits. Accordingly, with HR taking a lead role and ownership for most of the recommendations, detailed management action plans will be developed to mitigate the identified risks.

Gail Johnson

Chief Human Resources Officer

Dennis Watters

Chief Financial and Administrative Officer

Deputy Commissioner Michael Duheme

Federal Policing

1.0 Background

The Royal Canadian Mounted Police (RCMP) strives to ensure it maintains a modern, motivated, healthy, qualified and productive workforce, and promotes a healthy lifestyle and occupational safety to its membership. To ensure RMs are fit for duty and can maintain a certain level of employability, they have access to three levels of health care benefits:

• Basic Health Care (BHC) includes family doctor, medical and hospital services, as well as laboratory exams and tests covered under provincial/territorial health care insurance plans ^{Endnote 3} .
• Supplemental Health Care (SHC) benefits are other health services/items provided by health professionals in disciplines not normally considered an insured benefit under provincial health care plans ^{Endnote 4} . Examples include vision care, hearing aids, medical equipment, prescription drugs, dental care, psychotherapeutic services and physiotherapy/chiropractic/ massage therapy.
• Occupational Health Care (OHC) is an additional level of care that the RCMP may choose to provide to minimize limitations and restrictions that affect an RM's fitness for duty and to maximize employability, or when required as a result of a workplace injury or illness. As per the RCMP's AM.XIV.1, OHC is not an entitlement, but is based on case-by-case organizational business decisions ^{Endnote 5} .

As part of the Deficit Reduction Action Plan, the RCMP undertook the modernization of its health care services in 2012-13. Until that point, the RCMP had been assuming the administration and costs of all three levels of health care for RMs and Special Constables (S/Cst). Following the passing of the Jobs, Growth and Long-term Prosperity Act, RMs and S/Csts became "insured persons" under the Canada Health Act effective June 29, 2012, and were instructed to apply for provincial/territorial health cards. When RMs & S/Csts' BHC became the responsibility of the provinces and territories in which they resided, the RCMP ceased paying for BHC costs as of April 1, 2013 ^{Endnote 6} .

The RCMP has outsourced the administration of its SHC since 1999 through the Federal Health Claims Processing Services (FHCPS) contract overseen by VAC. At that time, the RCMP entered into a partnership with VAC for the processing of health claims. This partnership was established via a Memorandum of Understanding (MOU) between VAC (the managing partner), the RCMP and DND, and was subsequently renewed in November 2013 and updated in December 2016. The processing of health claims is provided through a third-party contractor. VAC manages the FHCPS contract with the third-party contractor on behalf of all three participating departments. The most recent FHCPS contract took effect on August 1, 2015, and has a seven year duration. Under the contract, the third-party contractor is billed directly for the goods and services provided to RMs, and in turn pays the supplier on behalf of, and based on, the RCMP Benefits Grid rules. A new SHC benefit model for RMs was implemented on January 1, 2014, which allows RMs some flexibility to choose how they invest their SHC benefits, specifically with respect to massage therapy, physiotherapy, chiropractic treatment, and acupuncture, which allows for a combined maximum allowance of $4,800 per calendar year. SHC entitlements are outlined in a Benefits Grid, which lists covered services, maximum dollar amounts, respective time limits, and pre-authorization requirements, and can be accessed by users through the third-party's online FHCPS Portal.

The RCMP manages OHC benefits for RMs and S/Csts as these categories of employees are among those not covered under the Government Employee Compensation Act, nor by provincial/territorial Worker's Compensation Boards. Access to OHC is not an automatic entitlement, but must be pre-approved by RCMP Health Services, on a case-by-case basis, to maximize fitness for duty and manage work-related injuries and illnesses ^{Endnote 7} . While the RCMP manages OHC benefits, the third-party contractor is responsible for processing claims for OHC benefits as part of FHCPS.

Responsibilities related to RMHB involve several stakeholders within the RCMP:

RMHB fall under the purview of the Chief Human Resources Officer (CHRO). While the Health Benefit Program (HBP) policy centre currently falls under the Director General (DG) Occupational Health and Safety Branch (OHSB) within Human Resources (HR), during the audit scope period it was under the DG National Compensation Services (NCS). The Director NCS was responsible for Section 34 approval for the VAC FHCPS (third-party contractor) invoices (composed of RM SHC and OHC expenses) to the RCMP. The Director HBP liaises with the third-party contractor for the FHCPS on behalf of the RCMP. Divisional Occupational Health and Safety Services Offices (OHSSOs), led by Officers in Charge (OICs)/Managers, report to their respective Commanding Officers.

In addition, under the Deputy Commissioner Federal Policing (DCFP), International Health Protection and Wellness (IHPW) is responsible for processing health care benefits claims for RMs and police officers from other police forces deployed on peacekeeping missions, as well as RCMP Liaison Officers, Analysts Deployed Overseas and their dependents.

Under the Chief Financial and Administrative Officer (CFAO), Corporate Management & Comptrollership (CM&C) is responsible for processing VAC FHCPS invoices as well as other health care expenses processed directly in TEAM, producing annual reports on health care costs and forecasting health care expenses. CM&C is also responsible for calculating and billing Provinces and Territories for their portion of health care costs as per the divisional administration formula in the Provincial and Territorial Police Service Agreements.

Following the transfer of BHC to the provinces/territories in 2013, the RCMP expected to yield savings in the range of $25M over three years. In 2012-13, total health care costs were $89M, and while there was a significant decrease because the RCMP was no longer paying for BHC in 2013-14 and 2014-15, health care costs increased close to pre-2013 levels in 2017-18 (See Appendix B).

In 2018, the Commissioner approved the Audit of Regular Member Health Benefits as part of the 2018-23 Risk-Based Audit, Evaluation and Data Analytics Plan.

2.0 Objective, scope and methodology

2.1 Objective

The objective of this audit engagement was to determine whether an adequate management control framework is in place and that RM health charges to the RCMP are appropriate ^{Endnote 8} .

Appendix A lists the audit objective and criteria.

2.2 Scope

The audit included all RM SHC and OHC benefits within the FHCPS, RM Health costs in TEAM, as well as the RCMP Determination Process in all divisions. The period of scope for the examination covered health benefits payments made between April 1, 2016 and March 31, 2018.

The audit did not include medical travel or health costs related to other employee types (i.e. Civilian Members [CMs], Special Constables and Public Service Employees) and retired RMs. The audit also did not include controls and processes in place at VAC, nor VAC disability pensions granted to active and/or retired RMs and related VAC treatment benefits, as the administration of VAC disability pensions and related VAC treatment benefits rests with VAC. As per Appendix B, VAC disability pensions have experienced a significant portion of the growth of RM health costs.

2.3 Methodology

Planning for the audit was completed in June 2019. In this phase, the audit team examined RCMP policies, the Government Employee Compensation Act, financial information from TEAM, the FHCPS contract and statement of work, and data from the third party contractor's FHCPS system.

Sources used to develop audit criteria include RCMP policies, the Financial Administration Act, and Audit Criteria related to the Management Accountability Framework developed by the Office of the Comptroller General.

The examination phase, which concluded in December 2019, employed various auditing techniques including:

• Reviews of policies, procedures and guidelines related to RMHB and RM health expenses.
• Walkthroughs of RMHB processes with the HBP Policy Centre, Divisional OHSSOs, Federal Policing's IHPW, and the third-party contractor.
• Site visits at select divisional OHSSOs (E/M, K/G, National Headquarters (NHQ)/National/V, J/L, IHPW) and at the third-party contractor.
• Detailed file reviews of a sample of 232 transactions at divisional OHSSOs visited, IHPW, and the third-party contractor:
  • 51 SHC transactions (at the third-party contractor)
  • 106 OHC transactions (divisional OHSSO, IHPW and the third-party contractor)
  • 75 TEAM RM health transactions for General Ledger (GL) codes 430, 432-435 (divisional OHSSO & IHPW)
• 10 FHCPS invoices processed through TEAM by the HBP.
• Targeted data analytics testing on all SHC and OHC transactions processed by the third-party contractor and transactions in TEAM for fiscal years 2016-17 and 2017-18 to identify trends and performance information related to RM health care costs.

Upon completion of each visit, the audit team held exit meetings to debrief management of the relevant findings.

2.4 Statement of conformance

The audit engagement conforms to the Institute of Internal Auditors' International Professional Practices Framework, and the Treasury Board of Canada Directive on Internal Audit as supported by the results of the quality assurance and improvement program.

3.0 Audit findings

The management of RMHB is complex, involving multiple stakeholders within the RCMP, RMs themselves, the third-party contractor, and service providers. The management of OHC benefits for RMs is the responsibility of RCMP OHSB and divisional OHSSOs, while the processing of OHC and SHC benefit claims is performed by a third-party contractor as part of the FHCPS. What follows is a synopsis of the overall findings by area of activity. The synopsis supports the more detailed findings included in sections 3.1 and 3.2 of this report.

The FHCPS third-party contractor

The audit team found that the third-party contractor processed sampled RMHB claims in accordance with contract requirements, the Benefit Grid, and based on information entered in the pre-authorizations created by divisions. In addition, the third-party contractor was fulfilling its performance reporting requirements as per the FHCPS contract, and made required reports available to the RCMP on the FHCPS third-party contractor Portal. The audit found that 98% of the sampled SHC benefit claims processed by the third-party contractor were compliant.

RCMP (OHC and TEAM)

The audit found control weaknesses with the RCMP's processing of RMHB and health charges. Specifically, roles pivotal to the RMHB and health charge processes, such as Benefits Coordinators, Health Services Officers (HSOs), and other Health Services (HS) employees require additional guidance and criteria to ensure standardization of practices, appropriate processing in both the FHCPS third-party contractor system and TEAM, and cost control.

The segregation of the OICs/Managers of divisional OHSSOs from their area of responsibility results in them not being able to properly exercise their Section 32/34 Financial Administration Act (FAA) authorities, not having access to all necessary information for decision-making, and not being able to monitor or oversee the work of HS personnel. There is no supervisory review or approval required for ***, and no subsequent monitoring by management.

The audit found gaps in RCMP controls, and that some controls are not functioning as intended. Also, a process has not been formalized within the RCMP for *** to the RCMP.

The audit noted a heavy reliance on paper-based records resulting in several information management issues including misfiling, missing documents, lengthy retention of RM medical files ***, and the inability for RMs to submit electronic claims to the third-party contractor. This impedes the ability of OHSSOs to make timely decisions supported by complete information.

3.1 Governance

We expected to find a governance structure to support the RMHB Program that included key elements such as:

• Authorities, accountabilities, and roles and responsibilities over RMHB established, assigned and understood
• Monitoring and oversight mechanisms in place to support the RMHB Program
• A process to report and communicate RMHB performance information to decision makers
• Key risks and opportunities related RMHB identified to implement an appropriate risk response

Authorities, accountabilities, roles and responsibilities

The RCMP's AM chapter XIV.1 – Health Care Entitlements and Benefits Program establishes high level accountabilities and roles and responsibilities for the various personnel involved in delivering RMHB.

Most of the decision making and administration related to RMHB is done at the divisional level through the 10 divisional OHSSOs and Federal Policing's IHPW. HSOs within Divisions and IHPW hold authority for medical preauthorization of certain SHC benefits and medical recommendations of OHC benefits coverage, while Commanding Officers/delegates (OICs/Managers OHSSO) hold financial authority to approve OHC benefit coverage for treatment and services up to $25K. During the audit scope period, OHC benefit coverage for treatment and services above $25K required DG NCS approval. The creation of authorizations in the FHCPS third-party Portal is the responsibility of the divisional Benefits Coordinators and processing of health transactions in TEAM rests with divisional administrative personnel.

As per AM ch.XIV.1,

...if VAC has not issued a ruling or granted a pension award to an eligible member, it is the Delegated Manager for Human Resources (DMHR) who will make a determination as to whether the condition of the member is work-related ^{Endnote 9} .

If the DMHR is unable to make a positive recommendation, the DG OHSB is responsible for making the final decision. Determination process denials can only be made by the DG OHSB. Decisions to extend OHC benefits to an RM for a condition that is not work-related, but rather to keep a RM "fit-for-duty" are made on a case-by-case basis and are left to the medical discretion of the HSO, subject to financial approval of the DMHR.

Within the FHCPS, the RCMP has expenditure authority for the FHCPS contract and all claims processed on its behalf by the third-party contractor. The RCMP is responsible for ensuring that RCMP specific information required to manage the FHCPS contract is provided, and monitoring and participating in governance related meetings.

The audit found that roles and responsibilities related to RMHB within the RCMP were generally clear and well segregated, with the following exceptions:

• ***. While this case was subsequently corrected by Accounts Payable, such gaps in segregation of duties could lead to inappropriate expenses being charged to the RCMP.
• While HSOs have the medical authority to support or recommend against the OHC benefit coverage for a proposed treatment plan, they informed the audit team that it is difficult to refuse a treatment plan because there is no set criteria to guide their decision-making. Policy provides discretion to the HSO to recommend OHC benefit coverage for various forms of evidence-based medical treatment by requiring that medical treatment be considered on a case-by-case basis for potential "maximization of employability."
• Benefits Coordinators can *** for RMHB.
• Divisional OHSSO OIC/Manager positions are overly segregated from the unit they oversee, in that they cannot actually monitor work performed by both the administrative staff and medical personnel in their unit and are unable to fully exercise their Section 32/34 authorities. While these managers have financial signing authority under Section 32 of the FAA to commit funds related to the coverage of OHC benefit expenses recommended by the HSOs, they are unable to review the full details of the circumstances for which these expenses are being paid in order to determine the appropriateness of the expense. It was also noted that OHSSO OICs/Managers do not have a budget for RMHB, as it is held centrally, and are therefore not truly exercising a Section 32 on RMHB processed in the third-party contractor's system. While the managers approved the "Occupational Health Recommendation For Treatment And Approval" Forms (Form 6039) in three of the four divisions visited, limited information was provided to them with the rationale being to protect the RM's privacy (e.g., no personal identifiers or medical history is provided). AM XIV.1 does not specify limitations on an OIC/Manager OHSSO's access to information required to render a decision related to OHC.
• In one division, OHC and extended SHC benefit approvals were carried out by the HSO and were not being brought to the OHSSO Manager for Section 32 approvals as required in AM XIV.1. Once approved by the HSO, *** circumventing the Section 32 approval and foregoing any additional oversight.
• Roles and responsibilities between Federal Policing's IHPW, Foreign Service Directive unit, and divisional OHSSOs are not clear and need to be further defined, as Canadian Police Arrangement (CPA) resources were being used for processing health claims that were not related to peacekeeping missions during the audit scope period.

The lack of guidance from OHSB and clear program parameters make it more difficult for HSOs to assess and make, based on a treatment plan, approval recommendations for OHC benefits and out of country SHC benefits, especially for making recommendations to deny the benefits coverage for the proposed treatment. This gap may ultimately limit the RCMP's ability to control program costs. OHC costs have doubled since 2013-14 from $9.9M in 2013-14 to $18.3M in 2017-18 (Appendix B).

In addition, this gap increases the risk of inconsistent decision making across the RCMP with respect to determinations and treatment recommendations/approvals. Finally, because of limited access to information, OICs/Managers divisional OHSSOs are not in a position to assess the appropriateness of the expenses they are approving.

Monitoring and oversight

The audit team found that responsibilities for monitoring over RMHB were not specifically assigned. While SHC benefits have more defined parameters with cost limits and automation through the third-party contractor's system, there is limited monitoring of FHCPS transactions by the RCMP.

The OHC benefit approval process is more subjective and involves administrative and medical OHSSO personnel. The appropriateness of OHC health benefits rests with the health care professional personnel (HSOs, Psychologists, Occupational Health Nurses and Nurse Practitioners), while the creation of authorizations in the FHCPS Portal is the responsibility of the Benefits Coordinators, the processing of transactions for TEAM rests with administrative personnel, and the financial approvals are held by OICs/Managers OHSSO. However, as they are segregated from their unit, OICs/Managers of OHSSOs do not have a mechanism to perform monitoring activities over RMHB as they are not permitted to access RM health information, nor are they able to monitor the work of HSOs or other OHSSO personnel creating a gap in oversight. In addition, there is no ***, nor are these subsequently monitored by OHSSOs and HBP management.

The varied HS processes which trigger the usage of OHC benefits were not sufficiently integrated which resulted in some OHC benefits being extended without the supporting documentation/rationale, or generally being captured under the category "Fit-for-duty". Although AM.X.IV stipulates that all health expenditures over $25K required the DG NCS' approval, the audit found that OHSSOs and HBP management interpreted this to strictly relate to individual transactions as opposed to the total cost of treatment plans. As a result, many RMs with treatment plans exceeding the overall cost of $25K were not approved by the DG NCS, presenting a gap in monitoring. Furthermore, there were three instances in the audit sample where ***.

*** by the RCMP. Accordingly, some of the sampled transactions resulted in inappropriate coding of charges, payment of non-entitled benefits, double payments, circumvention of the FHCPS process, health charges being paid by divisional budgets or CPA funds rather than through the centralized RM health budget, all of which had gone undetected and uncorrected prior to the audit. In 2016-17, there were 1944 RM health charge transactions in TEAM (excluding Journal Vouchers [JVs] and Interdepartmental Settlements [IS]) valued at $4.6M, while there were 2129 transactions valued at $4.3M in 2017-18. This includes 451 transactions from contracts primarily for health professionals valued at $7.3M over both fiscal years.

Although the HBP is performing some cost-tracking and analysis of health benefits usage, divisions are neither monitoring usage nor performing cost-tracking for health benefits. While cost-tracking and analysis of health benefits usage can be useful to identify trends in RMHB spending, it does not serve as a monitoring control to ensure the appropriateness or accuracy of health benefits expenses. Additionally, the OHSSOs included in audit site visits identified that they were not performing Unit Level Quality Assurance or reviews on health charges or FHCPS transactions. Nor has the HBP established a Unit Level Quality Assurance or review mechanism for processes carried out by divisional OHSSOs.

The DG NCS had Section 34 signing authority to approve payment of the twice-monthly invoices received from the third-party contractor. However, there was a lack of ability to monitor the appropriateness of the underlying transactions for which they were approving payment. These invoices are comprised of a large volume of underlying transactions. Since NCS was not part of the division medical expense approval process, they were not privy to information that would have allowed them to monitor the appropriateness of the transactions. CM&C relies on the Section 34 holder to validate the accuracy of the billing, and this is not something that they can easily monitor since they do not have access to the third-party contractor FHCPS Portal.

The RCMP is relying on the integrity of the divisional process and related monitoring, as well as the accuracy of adjudication and processing controls of the third-party contractor. This becomes an area of concern since there are gaps in the divisional processes on which the RCMP depends. Furthermore, there remains an inherent risk in relying on a third-party provider to ensure their billing is appropriate and accurate.

The lack of monitoring and oversight mechanisms increases the risk that policy can be circumvented, that benefits could be authorized and extended inappropriately, and that the RCMP pays more for RMHB than is required. Without adequate monitoring at both the national and divisional levels, management lacks the information necessary to perform an oversight function and gauge whether or not RMHB are being effectively managed, and ensure that health care expenses being approved are appropriate and accurate. There is also a missed opportunity to harness some of the information gathered to conduct trend analysis to proactively address any areas of concern such as rising costs.

Performance information

The audit team found that the third-party contractor is fulfilling its performance reporting requirements as per the FHCPS contract, and makes the required reports available to the RCMP on the FHCPS Portal. The extent to which these reports are actioned by divisional OHSSOs and the HBP varies, with some not being reviewed or acted upon at all. Examples of these reports include:

• The daily Drug Utilization Report for Divisions, which identifies RMs who have obtained prescriptions from specific families of medications identified by the RCMP that may have an impact on the RM's medical profile and fitness for operational duty
• PVAC reports, which identify pending claim requests that require approvals from divisional OHSSOs before they can be adjudicated by the third-party contractor
• The weekly RCMP Warning Employee Data Report & Invalid Employee Data Report, which validates RM eligibility
• The monthly Waive Report, which identifies authorizations created by divisional OHSSOs where benefit requirements such as frequencies, maximums, and prescriptions have been waived

Additionally, information on the third-party contractor's *** is provided and regularly discussed among the FHCPS Partners through bi-weekly, monthly, and quarterly meetings.

Divisional OHSSOs included in audit site visits identified that they did not conduct divisional reporting on RM health costs or RMHB, nor was it requested by divisional senior management. These OHSSOs confirmed that RMHB cases were not being brought forward to divisional senior committees. Rather, RMHB matters such as drug approvals and special cases were brought to national level committees including the Drug Formulary Review Committee and the Health Benefits Advisory Committee. For the audit scope period, only one request to make changes to RMHB was presented to the RCMP's Senior Executive Committee.

The audit found that the HBP and CM&C Finance conducted some reporting and analysis on RMHB costs and usage by Program of Choice, and type (OHC benefits vs. SHC benefits), but that this was limited to overall trends. However, because the benefit codes in the FHCPS third-party portal and the GLs in TEAM do not expressly identify whether a claim is for SHC or OHC (and whether OHC is a Periodic Health Assessment [PHA], WRII or Fit for Duty [FFD]) it is likely that the amounts reported for each type are not exact both by the third-party contractor and the RCMP.

Computer-assisted audit tests (CAATs)

In the absence of detailed performance analysis by the HBP and CM&C, as part of this audit, Internal Audit, Evaluation & Review's Data Analytics section performed targeted data analytics testing on the entire population of SHC and OHC transactions processed by the third-party contractor and health charge transactions in TEAM for the scope period in order to identify anomalies, trends, and performance information related to RM health care costs. The analysis below identifies trends that could be useful for decision-making ^{Endnote 10} .

• Approximately 82% of health care costs reimbursed by the third-party contractor are related to SHC, while approximately 18% of costs are related to OHC, including PHA-related expenses.
• Almost all RMs claimed benefits under SHC (99.5% in 2016-2017 and 100% in 2018).
• The average amount claimed per RM under SHC benefits ranged from $2.5K in 2016-17 to $2.7K in 2017-18, which is well under the combined maximums for dental ***, vision ***, and acupuncture, chiropractic, massage therapy, and physiotherapy ***. This demonstrates that most RMs are not claiming the full extent of the SHC benefits available to them on a yearly basis.
• Less than half of RMs submitted claims under OHC benefits (36.9% in 2016-17 and 38.6% in 2017-18). The average amount claimed across the total RM population under OHC benefits was $568 in 2016-17 and $557 in 2017-18. When calculated across only those RMs claiming OHC benefits, the average usage was $1.5K in 2016-17 and $1.4K in 2017-18.
• Almost 20% of SHC and OHC benefit expenses were related to medication expenses. Massage therapy (12-13%), psychological counselling (6%), and physiotherapy (5%) incurred under SHC benefits represent the next highest expenditure categories for both fiscal years.

Targeted analytics relating to the status of employees receiving benefits and potential duplicate payments identified the following irregularities:

• One employee who was a contingent worker had an expense reimbursed through the FHCPS third-party contractor. While the employee had previously been an RM until 2006, the claim service date was 2016.
• One instance where an RM appears to have been reimbursed twice for the same expense – once through TEAM and once through the FHCPS third-party contractor. In addition, the employee's TEAM reimbursement was incorrectly coded as a CM health expenditure.
• Four instances had claims processed in FHCPS with service dates after the RMs passed away, for benefits such as eyeglasses, ambulatory services, knee brace, and family counselling.

Opportunities exist to further leverage performance information to allow for monitoring of RMHB. With the exception of the performance information required within the FHCPS contract, because of a lack of a defined monitoring regime, performance information is not being used sufficiently to assist with monitoring, management decision-making, and resource allocation. HR senior management should determine which specific performance information is currently lacking for monitoring purposes, and assess how to obtain and use this information periodically.

Risk identification and response

The audit team found that the RCMP is not capturing internal information pertaining to RMHB and costs, work-related injuries/illnesses, and determination decisions in a systematic way which could assist in identifying any areas of risk or opportunity. Instead, RMHB issues are considered on a case-by-case basis as they are brought forward, and may not be analyzed from a workplace wellness or injury/illness prevention perspective.

Additionally, the audit found that the RCMP is provided limited information on ***, which would also be useful in focusing proactive efforts on prevention of workplace injuries/illnesses.

The audit found that the Drug Utilization Reports produced by the third-party contractor in the context of the FHCPS, were not being reviewed daily by the divisional OHSSOs included in the audit site visits. In one divisional OHSSO, they were not being reviewed at all. The Drug Utilization Report is a useful tool in identifying RMs who, on the previous day, had been prescribed and issued specific types of drugs/medications which are of concern to RCMP Health Services. These reports flag to divisional HSOs that an RM's fitness for duty may be impacted, as the RM may be placing ***. As such, HSOs may be required to adjust an RM's medical profile and fitness for operational police duties in real time. The lack of timely (or absence of) review of the Drug Utilization Reports could expose the RCMP to undue risk and liability in not responding to the flags identified.

A process to consider new medical treatments and drugs and approve them for inclusion in the benefits grid exists through governance committees, such as the Drug Formulary Review Committee and the Health Benefits Advisory Committee. However, these committees meet infrequently, and during the scope period the RCMP was subject to a freeze on RM terms and conditions of employment, which greatly limited the RCMP's ability to make changes to RM health and dental entitlements.

The HBP has integrated Gender-Based Analysis Plus into their policy consultations, ***.

Potentially significant inputs to assist in identifying risks and opportunities in the area of RMHB, such as a systematic analysis of work-related injuries/illness, determination process decisions, Drug Utilization Reports, and PVAC reports are being underutilized. This is limiting the RCMP from responding to emerging risks and makes it more difficult to focus efforts on prevention of workplace injuries/illnesses. A greater focus on risk identification and response could also help decrease overall cost of RMHB.

3.2 Expenditure compliance

We expected to find that:

• Policies and procedures for the administration and use of RMHB are established, standardized and communicated
• RMHB comply with RCMP policies, procedures and delegated financial authorities
• Controls are in place to ensure that RMHB expenses are appropriately captured in TEAM
• RMHB invoices are reviewed and approved in accordance with policies and delegated financial authorities
• Controls are in place to prevent, detect, and deter internal and external error and fraud
• A standardized process is in place to ensure that cases of improper use of RMHB are appropriately managed, reported, and rectified

Policies and procedures for RMHB

The RCMP's AM chapter XIV.1 describes RMHB entitlements and is available Force-wide through the Infoweb. The detailed Health Benefits Grid for health and dental entitlements is available on the FHCPS Portal. While AM ch.XIV.1 describes entitlements and provides directives to RMs and OHSSO staff on how to access health and dental benefits, the audit found that no national Standard Operating Procedures (SOPs) or manuals specific to the role of the Benefits Coordinator or on processing health claims exist. This poses a risk because Benefits Coordinators are responsible for processing all requests for OHC benefits and some exception-based SHC health and dental benefits for RMs, including creating authorizations in the FHCPS Portal, and because, in some cases OHSSO staff are required to process health charges through TEAM. Authoritative guidance would be useful to identify mandatory requirements and ensure standardization when extending OHC benefits to RMs via the third-party contractor FHCPS Portal or when processing invoices pertaining to health charges through TEAM.

The audit found additional weaknesses with AM ch.XIV.1. Some parts of the manual do not reflect current practices, there is misalignment with current reporting structures, authorities have not been reassigned to reflect structural changes, and there were no updates since July 2015, with the exception of Appendix XIV-1-3 Occupational Health Care Benefits, which was updated in August 2019.

While there were no formal divisional policies related to RMHB, some of the processes put in place to increase efficiencies in one division (namely the automatic renewal of psychological sessions and the automatic payment of invoices over 90 days old), have resulted in inappropriate (BHC, non-OHC) health charges being paid by the RCMP, and renewal of benefits without assessment of progress or risk to the RM receiving the health benefits.

Policy gaps and the lack of SOPs for Benefits Coordinators and OHSSO staff have led to the following issues, identified during sample file reviews:

• Circumvention of the FHCPS process to pay for health and dental charges, some of which are not health or dental entitlements
• Double payment of a $32K claim (through ***)
• Overstatement of RM health costs and under-reporting of health costs for other Categories of Employees (particularly CMs) due to GL miscoding for 42 samples totaling $17.4K
• Payment of non-mission related RM health and dental expenses with CPA funds for 4 transactions sampled totaling $29.4K

As the core policy for RMHB, AM XIV.1 should be maintained up to date to ensure consistent application of policy requirements. Additional detailed procedural guidance/SOPs are required for roles pivotal to the RMHB process, such as Benefits Coordinators, to ensure standardization of practices, appropriate processing, and cost control. Procedural guidance is also required to ensure that all health expenses are appropriately captured in TEAM.

RMHB compliance

The audit team reviewed a sample of 232 files, including SHC and OHC transactions paid through the third-party contractor and expenses processed in TEAM under the RM health GLs.

TEAM - RM health expenditure transactions

A sample of 50 random and 25 judgmental TEAM RM health expenditure transactions from fiscal years 2016-17 and 2017-18 was reviewed. Table 1 summarizes the compliance rates found in the TEAM samples by division (note: J Division did not have any transactions charged under RM health expenditure GLs in TEAM).

The audit found that 87% (65 of 75) of sampled transactions, representing $60.8K, were not compliant due to missing documentation, miscoding, bypassing the FHCPS Portal, and missing or invalid Section 32/34 approvals. The audit team was unable to assess 10 of the 75 samples (representing $2.8K) because the documentation for the eight TEAM transactions linked to those samples could not be located by their respective OHSSOs. Consequently, only 65 (or 87%) of the 75 selected samples could be fully reviewed.

The audit found that 65% (42 of 65) of the sampled files, representing $17.4K, had incorrect financial coding and should not have been charged under GLs reserved for RM health expenditures, for example, CMs, dependents of RMs, and police officers from other police forces. An additional sample belonged to an RM but was coded under the incorrect RM health GL code. There were also four transactions, totaling $29.4K, for non-mission related RM health and dental expenses which were inappropriately paid with CPA funds.

As well, 41%, (9 of 22) of the correctly-coded files, representing $38.8K, were for RM health expenses that should have been processed and paid through the third-party contractor, not in TEAM. In three of these cases, the file was paid through TEAM because the third-party contractor originally rejected the expense. In one case, a claim worth $32K was reimbursed ***, representing a duplicate payment, with neither amount formally recovered from the RM. The remaining five expenses would have been reimbursed by the third-party contractor had they been submitted. ***.

Compliance with FAA authorities was another significant issue. Section 34 approvals were missing from 26% (17 of 65) of transactions, and 11% (7 of 65) of transactions were approved under Section 34 by an individual without delegated authority. In one division, 63% (12 of 19) of files reviewed, totaling $2.2K, were missing Section 34 approval. An additional six transactions did not have evidence of a Section 32 approval on file.

FHCPS transactions processed through the third-party contractor

The audit team reviewed a sample of 157 files: 51 SHC, 101 random OHC (including 33 PHA files), and 5 judgmental OHC. Only one of the 157 files had a processing issue noted at the third-party contractor. However, 74% (78 of 106) of all OHC benefit files had compliance issues, attributable to RCMP procedures including a lack of pre-approvals, missing supporting documentation, and claims exceeding the amounts approved. Table 2 shows the results of samples reviewed.

Supplemental health care (SHC) benefits

The SHC benefits sample had a 98% compliance rate. SHC benefit files are almost exclusively processed through the third-party contractor, and limit controls are set for SHC benefit codes. All claimants in SHC benefit samples were RMs at the time the service or benefit was rendered. All claims sampled were submitted within 18 months of the service date and receipts for service were on file.

One file was missing a copy of the RM's prescription, which is not in accordance with RCMP requirements. Another file, while compliant with the SHC benefit policy, may not have been compliant with RCMP sick leave policy, specifically regarding approvals for personal travel outside the RM's detachment area while on medical leave. In this case, there was no evidence on file to support that the RM's Commander had approved travel prior to the RM leaving the country.

Overall occupational health care (OHC) benefits

***, OHC benefits require pre-approvals from the RCMP before they can be processed through the third-party contractor. The third-party contractor processes OHC benefit claims based on the information entered into the FHCPS Portal by the approving division. While it is possible to do so, ***.

All claimants in OHC benefit samples were RMs at the time the service or benefit was rendered. All claims sampled were submitted within 18 months of the service date and receipts for service were on file. Table 3 summarizes the results by division for the 73 OHC samples (68 random and 5 judgmental) reviewed, excluding all 33 OHC PHA samples.

OHC benefits – Random

The randomly selected files complied with applicable policies and related requirements 41% (28 of 68) of the time. All of the random and judgmental OHC benefit samples were reimbursed within the limits outlined in the applicable Benefit Grid and all providers were licensed to perform the services rendered. Noted issues were due to gaps in RCMP controls and related primarily to missing pre-approvals, a lack of supporting documents, and claim compliance. The third-party contractor processed the claims sampled in accordance with FHCPS contract requirements and based on information entered in the pre-authorizations created by the divisions.

Financial and medical pre-approvals were on file and appropriate in 52% (34 of 66) of cases requiring pre-approvals. Of the 32 cases that did not have an appropriate pre-approval:

• 22 were missing a financial pre-approval through Form 6039
• 7 cases had Section 32 approval on file but it had been performed by an individual who did not have delegated signing authority at the time
• 1 was an employer mandated assessment that did not have a financial pre-approval on file
• 2 were BHC or non-PHA expenses billed directly to the RCMP that the division chose to pay through the third-party contractor without any explanation or approval on file

The absence of financial pre-approval of OHC benefits is a gap in ensuring the appropriateness of OHC benefits and in ensuring control over RMHB costs.

Most claims respected the amounts approved under Form 6039; however ***.

OHC benefits – Judgmental

Each of the five judgmentally selected sample files had compliance issues. Two of the files were for expenses over $25K, ***. Another file was missing supporting documentation to support payment of an MRI, including the approved Form 6039. The final two files encompassed OHC benefits for treatments over the scope period, with 28 pre-authorizations for various services reviewed. Financial approval under Section 32 was not appropriate in one instance, because the signatory did not have financial signing authority at the time. More significantly, ***.

OHC - Periodic health assessments

PHA OHC benefit codes are used by service providers who perform medical examinations and tests related to RM PHAs. Expenditures on PHAs were approximately $1.7M in 2016-17 and in 2017-18 with 13,623 and 14,162 transactions respectively.

The audit team found that PHA OHC transactions present controls risks, including:

• ***
• ***
• ***
• ***
• ***

In addition to the issues with financial approvals, 12% (4 of 33) of the PHA samples had other compliance issues:

• 2 samples used incorrect billing codes which resulted in a portion of the expense being miscoded. In one case, a PHA expense was partially charged to the RM's SHC and not corrected. In the other case, they did not separate expenses for various tests into their respective billing codes.
• The other 2 samples appear to be duplicate billings for the same service. In one case, ***. In the other case, there were two sets of PHA laboratory work with service dates within five days, with same cost, vendor address and billing code. The audit team briefed these findings to the respective divisional OHSSO managers, who committed to further assess risks and address these issues.

Overall, expenses paid through TEAM and coded to RM health GLs were often not valid RM health expenses, belonged to a different GL code, or should have been processed through the third-party contractor. Only 13% (10 of 75) of the sampled TEAM files were compliant with all applicable policies and procedures. The miscoding of CM health charges in particular, misstates the health expenses incurred by those employees which could become an issue upon CM deeming. As well, non-mission related RM health and dental expenses were paid with CPA funds.

The third-party contractor processed RMHB sampled claims in accordance with contract requirements and based on information entered in the pre-authorizations created by divisions. Noted compliance issues were due to gaps in RCMP controls, and related primarily to missing pre-approvals, a lack of supporting documents, and ***.

Two of the sampled transactions were double-claimed, ***, and were only detected during this audit. The audit team briefed these findings to the DGs responsible for the affected units, who committed to further assess risks and address these issues.

RMHB expenses appropriately captured in TEAM

While the RCMP has controls in place to help ensure expenses are appropriately captured in TEAM, there are no controls specific to RMHB expenses. RMHB invoices are processed in the same manner as other standard invoices, with most RMHB invoices entered into TEAM by an individual within Accounts Payable, effectively separating the invoice entry and subsequent payment from the unit authorizing the payment. During the audit scope period, only a few individuals outside of Accounts Payable retained access to enter invoices directly into TEAM, including the one divisional OHSSO visited where the Health Services Clerk's access was not renewed when the individual vacated the position.

All invoices entered into TEAM by Accounts Payable are subject to the following procedures:

• Section 34 approval is verified on every 10^th invoice inputted into TEAM
• Invoices for amounts greater than $10K require a Purchase Order or Funds Commitment
• A "gating" function within TEAM will identify transactions which require additional review by Accounts Payable. The transactions are identified using criteria developed by Internal Control
• Internal Control conducts random sampling of TEAM transactions

Accounts Payable is not responsible for monitoring the appropriateness of health benefit claims. Accountability for ensuring the validity of expenses entered into TEAM, including accurate financial coding, resides with divisional OHSSOs and the individuals authorizing the expense under Section 34 of the FAA.

The audit found that divisional OHSSO employees were not always aware of the correct financial coding to use. Despite the GL code descriptions being available through Infoweb, some divisional OHSSO staff relied on outdated financial coding sheets. Additionally, the RCMP's GL coding descriptions for health costs do not expressly specify that certain GLs apply only to RMs, and many of the definitions are not consistent between the English and French versions. The risk of inaccurate coding of health costs is compounded because of the lack of ownership and monitoring of GL codes pertaining to health costs. This contributed to the significant amount of TEAM GL miscoding noted during the file review.

AM XIV.1 stipulates that most RMHB expenses should be processed through the third-party contractor, with only a few minor exceptions being paid via TEAM. However, RM health GLs in TEAM are not being monitored to detect RMHB transactions that should have been processed via the third-party contractor. The lack of monitoring has contributed to the payment through TEAM of health and dental services that were not entitled benefits.

Without monitoring RM expenses processed through TEAM, ***. This gap in controls increases the risk of duplicate payments, ***.

The lack of specific controls for RMHB in TEAM represents a risk for the RCMP. Audit sample testing identified some duplicate payments being made for RMHB and misstated health costs incurred by the RCMP for different categories of employees. In particular, the miscoded health expenses limit the ability to report on actual health costs by employee type, particularly over-representing RM health costs and underrepresenting CM health costs.

Review and approval of FHCPS (third-party contractor) invoices

The audit found that the HBP has established processes for the review and approval of FHCPS (third-party contractor) invoices along with the subsequent distribution of funds to the appropriate GLs. ***. For the scope period, the average amount invoiced for claims was approximately $4.9M monthly (or $2.5M per invoice). The average monthly amount invoiced for administrative costs was $40.6K.

The HBP initially receives an RCMP Billing Report through the FHCPS third-party contractor Portal which includes a breakdown of costs by type (e.g., All Hospital In-Patient Care – Electronic, Non-Electronic, Massage Therapy – Electronic, Non-Electronic). The HBP verifies these amounts against a separate report from the Information Management System within the third-party contractor Portal. Any discrepancies are reported to the third-party contractor; similarly, the HBP notifies the third-party contractor that the invoice is correct. ***.

***. The invoices reflect the amounts previously agreed upon with the HBP, and are ***. The DG responsible for the HBP (the DG NCS during the audit scope period; currently the DG OHSB) certifies as per Section 34 on the invoices and the HBP notifies VAC of this financial approval.

***. Invoice payment will always occur within the established deadlines ***. ***, the HBP prepares a JV to distribute the costs to the appropriate GLs in TEAM, using the breakdown of costs provided by the third-party contractor, which has already been reconciled by the HBP with the costs in the FHCPS third-party contractor Portal. The JV is approved by the DG NCS, and then sent to Financial Advisory Services – HR (CM&C), for processing.

The audit found that the data used for both issuing and reconciling the third-party contractor invoices comes from the same source – the FHCPS third-party contractor Portal, which processes all of the health-related invoices from RMs submitted to the third-party contractor. The RCMP must rely on this data because an independent source of data is not available to verify the amounts charged by third-party contractor. As a result, the accuracy of the amounts being billed depends entirely on the accuracy of the claims contained in the FHCPS third-party contractor Portal.

A random sample of 10 months of JV transactions and the associated FHCPS third-party contractor invoices was reviewed. In 12 of the 18 invoices reviewed, Section 34, although performed, ***. Two RMHB invoices were approved by the then acting DG NCS who signed Section 34 without having a valid signing authority on that date. The RCMP was not ensuring that the RMHB invoices were consistently approved within the timeframes specified in the MOU.

The nature of IS transactions does not give the RCMP an easy way to block a transaction prior to confirmation of Section 34 approval. The funds commitment used by the RCMP to transfer funds to VAC has been in place since April 2001. ***.

The audit also found that individuals with Temporary Signature Cards in place are not always ensuring the cards are activated prior to signing under either Section 32 or Section 34. Alternatively, records of the activation of this temporary authority are not properly recorded in TEAM.

Other control deficiencies

OHC benefits – WRII and FFD

Unlike other police forces or employers who are subject to provincial worker's compensation boards, the RCMP is in the position of trying to objectively manage its own OHC benefits for Work-Related Injuries and Illnesses, without a framework or specific criteria in place. The RCMP does not have sufficient guidelines to assist OHSSO staff in determining what qualifies as a WRII, what are acceptable treatments for WRII and which are not. Without guidelines, it is difficult to ensure a standardized approach to extend OHC benefits - short of approving all requests. Due to delays in the RCMP determination process for WRII, many cases in the audit sample were extended OHC benefits "pending determination." In addition, determination decisions were made without having Hazardous Occurrence Reports (Lab1070 or Form 3414) on file. The Hazardous Occurrence Report is a key control in the OHC process and should be used to support decision-making. Additionally, once VAC identifies that an RM has a WRII that qualifies for a Disability Pension, the RCMP must accept that determination and becomes responsible for the associated OHC benefit costs. The RCMP is not privy to the information or criteria used by VAC to render their decisions as to what qualifies as WRII.

The RCMP also has the ability to extend OHC benefits to keep RMs "fit-for-duty", however, the audit found that there are no guidelines elaborating the circumstances for extending OHC to return or keep RMs "fit-for-duty." This creates a grey area to capture any health charges which are not covered under BHC, SHC benefits, or deemed to be OHC-WRII benefits, and the absence of criteria makes it difficult to make objective and standardized decisions.

Financial approvals

During the scope period, health and dental benefits treatments over $25K required authorization from the DG NCS. File testing found 3 instances where benefits above this amount ***. This demonstrates that while this control exists in policy, ***.

Prescriptions for health treatments and medical devices

The audit found that tracking and maintenance of prescriptions relating to RM submitted claims for health treatments and medical devices and their validity period is limited. Prescriptions are a key control to ensure that a health treatment or medical device is legitimately required. For claims submitted by providers, the provider is required to attest to the existence of the prescription and is responsible for keeping it in their records. The provider is required to produce the prescription when subject to audit by the third-party contractor. For RM submitted claims, the RM is required to submit the original prescription with the first instance a SHC or OHC benefit is claimed, and must include copies of it with subsequent related claims. However, while the third-party contractor receives the prescription with the first instance, they will still process an RM's subsequent claim without a copy of the prescription or without verifying that the previously submitted claim is still valid, as the set-up of their information management system is not conducive to easily retrieving or viewing the original prescription.

File testing showed that for OHC benefits, there are instances where the ***, but the prescription was not on the RM's RCMP medical file, nor with the third-party contractor. This represents a risk for the RCMP that the benefit extended may not have been for a bona fide need.

Physicians under contract with the RCMP

The audit found that there is no mechanism for divisional OHSSO OICs/Managers ***, thereby increasing the risk of double claiming or double payment. In one division, the acting OIC was not aware that ***. Analysis of the physician's claims, which fall under two different provider identities in the FHCPS Portal, to the third-party contractor showed that the physician was among the highest billing providers to the RCMP in both 2016-17 (20th - billing $146.5K) and 2017-18 (41st - billing $108.5K). The physician's claims were also adjudicated anywhere between 1 to 838 days after the date of service (an average of 75 days), increasing the difficulty to monitor for duplicate claims.

As physicians ***, the RCMP should monitor *** to ensure appropriateness of charges.

Controls at the FHCPS third-party contractor

The audit found that the third-party contractor was meeting its contractual obligations pertaining to an appropriate system of internal controls. The third-party contractor system controls are in place to reject claims that are not aligned with the RCMP Benefit Grid. A number of system edits and business rules are in place to support accuracy in claims processing. Results of rejected claims are reported to the RCMP in the third-party contractor's Annual Report.

As per the FHCPS Statement of Work, the third-party contractor's Government Business Audit group conducts Provider Audits, Prescription Claim Reviews and sends Client Verification Letters to RMs. Client Verification Letters are sent to RMs randomly, not based on any analysis or risk assessment of the claims population, and according to the third-party contractor's audit group have not resulted in any recoveries. For reasons unknown to the HBP and the third-party contractor, the FHCPS contract does not stipulate a requirement for ***. The third-party contractor's audit group provides monthly status updates on their Provider Audits, related recoveries, and aged files (outstanding recoveries).

The FHCPS contract's ***, creates an opportunity for errors and irregularities to occur and go undetected. Consideration should be given to replacing Client Verification Letters with value-added audit procedures, or ceasing the requirement to send Client Verification Letters.

Process to manage, report, and rectify improper use of RMHB

The audit found that the third-party contractor has established reporting mechanisms and processes to identify and rectify improper use of RMHB. Data analysis is used to identify high risk-benefits or questionable trends. It is also used to perform Drug Claims Reviews and to identify providers for audit. In addition, there is an amounts owing recovery process.

The third-party contractor is responsible for collecting amounts receivable from providers, as a result of audits, claims errors, corrections or other adjustments. If after three months recoveries remain outstanding and the third-party contractor is unable to collect the amounts owing, the case is added to the Aged File list, and the third-party contractor suspends the provider's status. The Aged File is transferred to the RCMP, who is directed to seek internal guidance with regards to recovery of funds and/or write-offs.

The third-party contractor has reported a success rate over 90% in recovery of amounts owed by providers. In 2016-17 and 2017-18, the third-party contractor recovered $326K and $352K respectively from providers for all three Departments participating in the FHCPS. However, a process has not been formalized within the RCMP *** represents a gap in stewardship of resources and a missed opportunity for the RCMP to control costs related to RMHB. Some of the ***. RCMP Legal Services and/or Finance are being consulted prior to deciding on a course of action, which is likely increasing the delays in responses.

• In three cases, the third-party contractor was unable to recover the associated amounts owing, because ***.
• As of August 2019 the recovery amount identified for the three Aged File cases totaled $918K.

As previously identified, the audit found that the FHCPS contract does ***. As a result, third-party contractor only focusses on provider claims. Furthermore, the RCMP is ***, but is responsible for recovering RM overpayments due to the third-party contractor.

The audit also found that the RCMP does ***. This is a risk because there is ***, which may prevent and identify any duplicate claims. This control gap may result in further duplicate claims such as the two discovered by the audit team during file sample reviews, neither of which had been corrected at the time of the audit.

4.0 Conclusion

Overall, the audit found that there are control deficiencies within the RCMP in the processing of both OHC benefit claims and health expenses in TEAM, which are within the Force's control to address.

The audit found that the third-party contractor processed sampled RMHB claims in accordance with contract requirements, the Benefit Grid and based on pre-authorization information entered by OHSSOs. Furthermore, all sampled claims were for eligible RMs. Gaps identified with processes at the third-party contractor are a result of the RCMP not requesting that certain controls be implemented.

Additional detailed procedural guidance is required for roles pivotal to the RMHB process (such as Benefits Coordinators, Nurses, HSOs) to ensure standardization of practices, appropriate processing, and cost control. Procedural guidance is also required for Health Services staff to ensure that all health expenses are appropriately captured in TEAM.

Although the FHCPS third-party contractor system allows it, divisional *** would help ensure that providers do not overbill the RCMP and would help the RCMP contain costs for RMHB.

Without adequate monitoring at both the national and divisional levels, HR and CM&C management lacks information necessary to perform an oversight function and assess whether or not RMHB are being effectively managed and that health care expenses being approved are appropriate. OICs/Managers are not in a position to assess the appropriateness of the expenses they are approving, nor can they oversee the work being performed by the employees within their units, due to limited access to information and segregation from their staff.

With the exception of the performance information required within the FHCPS contract, because of a lack of a defined monitoring regime, performance information is not being used sufficiently to assist with monitoring, management decision-making, and resource allocation. Senior management within HR and CM&C should determine which specific performance information is currently lacking for monitoring purposes (such as coding of claims by SHC, OHC – PHA, OHC – WRII) and assess how to obtain and use this information periodically.

Potentially significant inputs to assist in identifying risks and opportunities in the area of RMHB, such as a systematic analysis of work-related injuries/illness, determination process decisions, and Drug Utilization Reports are being underutilized. This is preventing the RCMP from responding to emerging risks in a timely manner and making it more difficult to focus efforts on prevention of workplace injuries/illnesses. A greater focus on risk identification and response could also help decrease the overall cost of RMHB.

A process has not been formalized within the RCMP for ***. Not recovering amounts owed represents a gap in stewardship of resources and a missed opportunity for the RCMP to control costs related to RMHB.

The lack of specific controls for health charges in TEAM represents a risk for the RCMP, and resulted in misstated health costs for different categories of employees. The RCMP does not have a process in place to monitor, review or perform quality assurance ***. Such a process would assist in identifying, deterring, and correcting errors and improper uses of RM health charges, and making related recoveries.

Inadequate guidance and training for divisional OHSSO employees, combined with the lack of monitoring of RMHB claims and health charges, and limited oversight by OHSB and CM&C management, increases the risk that improper use of health benefits, duplicate reimbursements, and errors could continue.

5.0 Recommendations

1. The CHRO should follow-up on all double billing identified through the audit, including collection of amounts, and assessment of the need for additional analysis of transactions involving individual vendors with other double billing. The CHRO should lead this work and engage with the CFAO and DCFP, as appropriate.

2. The CHRO should ensure that AM XIV.1 is updated to ensure consistent application of policy requirements. Additional detailed guidance is required for roles pivotal to the RMHB process, such as OICs/Managers of divisional OHSSOs, HSOs and Benefits Coordinators to ensure standardization of practices, appropriate processing, and cost control.
   1. Provide criteria and guidance for the most common work-related injuries or illnesses, acceptable measures to keep a RM fit-for-duty and appropriate treatments.
   2. Provide guidance to Benefits Coordinators for the creation of authorizations in the FHCPS Portal, and develop risk-based thresholds for mandatory supervisory review.
   3. Review the governance structure and define the position requirements for the OICs/Managers of divisional OHSSOs to ensure that they can adequately fulfill their mandate. This would include providing mechanisms for OICs/Managers of OHSSOs to have access to sufficient information to monitor the work of HS personnel, including HSOs, and to properly execute their FAA authorities.
   4. Strengthen controls surrounding the ***.

3. The CHRO should clarify requirements concerning the processing and financial coding of health expenses in TEAM. Specifically, TEAM expenses charged to the RM health GLs (430, 432, 433, 434, 435 and 1299) should be monitored and any unusual charges should be further examined. The CHRO should lead this work and engage with the CFAO, as appropriate.

4. The CHRO should ensure that HR:
   1. Leverage performance information provided by the third-party contractor in the context of the FHCPS, including the Drug Utilization Reports, PVACs, and Waive Reports, to manage risk and support decision-making.
   2. Determine which specific performance information is currently lacking for RMHB risk identification and monitoring purposes, and assess how to obtain and use this information.
   3. Monitor, using data analytics and other risk-based verification, RMHB in the FHCPS and RM health charges in TEAM for compliance with policies, procedures and FAA authorities, to identify any improper charges or duplicate payments that would require further examination.

5. The CHRO should formalize a process for cases where the *** for further action.

6. The CHRO in collaboration with the DCFP, should clarify and further define roles and responsibilities, which would include expenditure monitoring, between Federal Policing's IHPW, Foreign Service Directive unit, and divisional OHSSOs to ensure that Canadian Police Arrangement resources are not being used for processing non-Mission related health claims.

7. The CFAO should review TEAM users, particularly those outside of CM&C, to limit access to appropriate employees for the processing of invoices.

Appendix A – Audit objective and criteria

Objective

To determine whether an adequate management control framework is in place and that RM health charges to the RCMP are appropriate ^{Endnote 12} .

Criterion 1

A governance structure is in place to ensure that the RMHB process is established and understood.

Criterion 2

RMHB expenses are compliant with policies, procedures and delegated financial authority.

Appendix B – Health cost trends by fiscal year ^{Endnote 13}

Appendix C – Management action plan

Date modified:

2021-02-02