REPORT DIGEST

DEPARTMENT OF HEALTHCARE AND FAMILY
SERVICES

COMPLIANCE EXAMINATION
FOR THE TWO YEARS ENDED JUNE 30, 2021

Release Date:  July 6, 2022

FINDINGS THIS AUDIT:  27

CATEGORY:  NEW -- REPEAT – TOTAL
Category 1:  3 -- 8 -- 11
Category 2:  6 -- 10 -- 16
Category 3:  0 -- 0 -- 0
TOTAL:  9 -- 18 -- 27

FINDINGS LAST AUDIT: 26

Category 1: Findings that are material
weaknesses in internal control and/or
a qualification on compliance with
State laws and regulations (material
noncompliance).
Category 2: Findings that are
significant deficiencies in internal
control and noncompliance with State
laws and regulations.
Category 3: Findings that have no
internal control issues but are in
noncompliance with State laws and
regulations.

State of Illinois, Office of the
Auditor General
FRANK J. MAUTINO, AUDITOR GENERAL

To obtain a copy of the Report
contact:
Office of the Auditor General, Iles
Park Plaza, 740 E. Ash Street,
Springfield, IL 62703
(217) 782-6046 or TTY (888) 261-2887

This Report Digest and Full Report are
also available on the worldwide web at
www.auditor.illinois.gov

INTRODUCTION

The digest covers our Compliance
Examination of the Department for the
two years ended June 30, 2021. A
separate Financial Audit as of and for
the year ended June 30, 2021, was
previously released on June 22, 2022.
In total, this report contains 27
findings, 8 of which were reported in
the Financial Audit.

SYNOPSIS

• (21-09) The Department of Healthcare
and Family Services did not perform
the duties required by the Illinois
Health Information Exchange and
Technology Act (Act).
• (21-20) The Department of Healthcare
and Family Services did not perform
parity compliance audits of managed
care organizations (MCOs).

FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS

NONCOMPLIANCE WITH THE ILLINOIS HEALTH
INFORMATION EXCHANGE AND TECHNOLOGY
ACT

The Department of Healthcare and
Family Services (Department) did not
perform the duties required by the
Illinois Health Information Exchange
and Technology Act (Act).

During our testing, we noted
Department management made a
determination the Department would not
operate the Illinois Health
Information Exchange (ILHIE).

As of September 30, 2017, the Illinois
Health Information Exchange Authority
(Authority) completed its wind down
through processing its final
transactions with the Health
Information Exchange Fund as part of
its transfer to the Department.  To
formalize this transfer, the Act was
amended on July 7, 2020, and all
duties previously assigned to the
Authority are now the responsibility
of the Illinois Health Information
Exchange Office (Office) created
within the Department.  As such, it is
now the responsibility of the Office
to promote, develop, and sustain a
health information exchange at the
State level (20 ILCS 3860/10), the
Office is mandated to:

• Establish the ILHIE, to promote and
facilitate the sharing of health
information among health care
providers within Illinois and in other
states.  ILHIE shall be an entity
operated by the Office to service as a
State-level electronic medical records
exchange providing for the transfer of
health information, medical records,
and other health data in a secure
environment for the benefit of patient
care, patient safety, reduction of
duplicate medical tests, reduction of
administrative costs, and any other
benefits deemed appropriate by the
Office.

• Foster the widespread adoption of
electronic health records and
participation in the ILHIE. (Finding
9, page 34)

We recommended the Department perform
its duties under the Act, or seek a
legislative remedy to eliminate the
Office and its duties.

The Department accepted the
recommendation and stated it will be
seeking a legislative remedy.

FAILURE TO PERFORM PARITY COMPLIANCE
AUDITS OF MANAGED CARE ORGANIZATIONS

The Department did not perform parity
compliance audits of managed care
organizations (MCOs).

During testing, we noted the
Department has not performed parity
compliance audits of MCOs and,
therefore, has not made the findings
and conclusions of these audits
available to the public on the
Department’s website.  This mandate
was added to the Illinois Insurance
Code (Code) by Public Act 100-1024,
which was effective on January 1,
2019.

The Code (215 ILCS 5/370c(d)(3))
requires the Department to perform
parity compliance audits of individual
and group plans and policies,
including, but not limited to, reviews
of:

a) nonquantitative treatment
limitations, including, but not
limited to, prior authorization
requirements, concurrent review,
retrospective review, step therapy,
network admission standards,
reimbursement rates, and geographic
restrictions;
b) denials of authorization, payment,
and coverage; and;
c) other specific criteria as may be
determined by the Department.

Further, the Code states the findings
and the conclusions of the parity
compliance market conduct examinations
and audits shall be made public.
(Finding 20, pages 51-52)

We recommended the Department perform
parity compliance audits of MCOs and
make the findings and conclusions of
those audits available to the public
on the Department’s website.  In
addition, we recommend the Department
should ensure, when it requires a
contractor to assist it in meeting
statutory mandates, the contractor is
in place with a fully executed written
agreement to comply with the mandate
in a timely manner.

The Department accepted the
recommendation and stated the
Department is in the process of
performing the required parity
compliance audit of the MCOs.

OTHER FINDINGS

The remaining findings are reportedly
being given attention by Department
personnel.  We will review the
Department’s progress towards the
implementation of our recommendations
in our next State compliance
examination.

AUDITOR’S OPINION

The financial audit report was
previously released. The auditors
stated the financial statements of the
Department as of and for the year
ended June 30, 2021, are fairly stated
in all material respects.

ACCOUNTANT’S OPINION

The accountants conducted a compliance
examination of the Department for the
two years ended June 30, 2020, as
required by the Illinois State
Auditing Act.  The accountants
qualified their report on State
Compliance for Findings 2021-001
through 2021-007, 2021-012, 2021-020,
2021-023, and 2021-027. Except for the
noncompliance described in these
findings, the accountants state the
Department complied, in all material
respects, with the requirements
described in the report.

The financial audit and this
compliance examination was performed
by Sikich LLP.

JANE CLARK
Division Director

This report is transmitted in
accordance with Section 3-14 of the
Illinois State Auditing Act.

FRANK J. MAUTINO
Auditor General

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