'u.s. OFFICB OF PERSO. NEL MANAGE1fENT OFFICE, OF THEJN PECTOR GE ;El~L

OFF C __ OF ,AUDITS

Subje t:

A D1 N GL AL C' AIMS W JERE 1\'10 TS A EXCEE COY D eRA GES

B' CROSSA () L ES I ~LD', NS

eport o. 'lA~99-'O ~10-030

ate~: January'~ ], 2Q.11

lJTION-~

a A_'ll.......,

Till .lIditri~rt tuu be Ill.11~lrlhult.d Ii) Fq;derlll uffic.i.ah ".,lL~;ln: t'f'~fljlUrJl!~~ for l~u~PljJlI~ali4l1l fI'f~ht lludiled jfrOgnlln, i'JU§. ~~tIil 'I"~l1urt JIlay oolltlll provriclll.ry dam ~'hlch III pr{jlllttl.'d Ill' hdtnll,lLW (Iii \.I,S.C.1911S)- Tbatfore, wllile 1I11$ ~udil f~IlDnju ' JhbJ~:

ulldff III fh~dhlll uflnfonll.l'ltioll Ac:tlll'ld Md" n'ail~hl~ to lbc 1JLlhkl-e. liD ~ 01 !t' J;Jn~, tallflcrll n~fll! (Clile t\ l!J'{igtdbtfort .rl'1el.!iil•.l1.IIlHepor~ ~I,l tlte gt.llilf Ipttldit a~ it mBr tolll ill propn;;h'r)'iDf<lTlnJl.t!OJllhatwiIIs ['fd ri1:tl from Ul~ Il'UlIlidy riisP'ibll«d CO,fa}':

U T D, 'TA S O"F CE OF PERSONN MANi\GEMENT "\V(.\~l -, tl "L(lll. D{~ 204l­

Office l}f tile: b'l>pe'{' ot G~nc:r I

AUDIT QRT

Federal Anployccs Heal' Bene Its Program Servicr BeneD Plan C ntracl ,.:' 1039

Blu~Cros~ Blue 'hield ASSQciatilUl

,- 'Ian: Code 10

010' al Claims, '¥ ' ere An O1t tsPaid .Ejl{ceeded Co,," ted Charges BlueCros_ and BIu Shield Plan: '

REPORT NO, ,lA-99-00-1O-030

:zs?K'L:.-"-Micliael R. Es,,~er A!!isislant Jnspecto Gener,&L

for Amrts'

--,"""",,,,,.,, --."",_.--_."""".." ---"--"'"

Of RSO E 'A !i 'nl! n" J ~ U415

( Iicl; of he , n~\.'k.X']Qr (i , ml

r C lYE U

-'cderal Employees: Hen tb Benefits Program Ser\~i Benefit Plan ontract CS 103

Blu ros BlueShield Association Plan Code 10

G oba] Claims where Amounts Ptud Exct!'eded CaYljred Charges B u ·Crpss and BJueShield Plans

REPO N. lA-99-00-HJ-030 DATE: JanuaI' 11 2011

This fina audit report, n the Federal Employees Hea th Benet1is "rogram (F HBP) op~r~ti ns SI an BlueCrossand Blue "hieid (Be ) plans que 'om; P.216,234 in he'a]lh benefit c:harge.s. The BlueCro~s BlueShield Association and/or B BS plans agreed with $3 ~655~291 and ' 'disagreed "ritb. 560,943 0 the questioned charge.

Our limited stope audit wa..q, conducted in aceordanc with Government Auditing Standard, The audit covered health benefit paYlD n [rom January 1~ 2QQS thro gh Janua1)' ..., I ~ 2010 as reported iIi tbe AnnuaJ Accounting Statemc11ts. pecifica] y~ we reviewed all facility claims tha we e reimbur ed during t:hi period where the a ounts paid ex(;eeded covered harge by S9,50n OT more. . sed on our levi ~w. w d tenllincd tha th BC B plan· :incorrectly paid 8 - Claims, resulting in net overcharge of$2,216,23 to the FEHBP .. ' peC'ifically the BellS plams overpald 82 claim" b.. 2 234.710 and, derpaid 3 claims by. 18476.

CON ENTS

"JAG:

'EXE UTJ\TE SUrvJMA..RY , ~ , '.. ~ , , J

INTRODUCTION A rn BACKGROlJND "."" , ,.1

,IT. DB ReT .TE: SCOPE AND MEn OUOLOGY.".. , «, , , ,.3

HI. AIID"T PINDING ANDRECO 1l\1ENDATIONS ." "'.. ,..', ,; ..•... "'~ , ;,. 5

Claims Vy'here Am unts Paid Exceeded Cavt,'red Cbarges " .. , ,., 5

IV. MAJOR CONTRlBUTO S TO THIS REPORT " , l 0

'V"SCI ED LES

A. SUMMARY 0 .CLAIM S 'NlPLE SELECTION. BY PLA .

B.QUEST10 fiD CHARGES BY PLAN

APPENDiX (BlueCross Bllle8hieid Association repJy.dated Jun~ 30: 2010,10 (e draft audi report)

AND HAC GROUND<

Tbis final audit report de1aiJ the findings, conclusions. and reGClmmendations l'esulting'fl'om our l'rnited seop" audit of tIle Federa En:pJoye s Heal h BemefitsProgtam (F ~HBP) operations at all BlueC' ss and BlueShield {BCH.') pJan',

. he audit was periOmled by the Office fPersolmel lianagement's (OPlvf) Office Qfthc lnspectQf General (OIG as established by the J.JJ..&.-pectot Genera Act of 1978. as amended.1

BAr_~ROUND

Th FEHBP was- establl hed b."the Federal Employee' Heat Benefits (}'EHB) . ct ('Publk Law 86-:382), enacted 011 eptember 28, 959. 'Ule FEHBP was Cl' at d to provide health insuranc,e benefLts. for federal OOlployees~ annuitants. and dependents. OPM s Heal' care and nstlrance Office ha.s overall [~sponsibility or administration of the F 'HBP. 'The pro\risions of l1e FEHB At, reo ilnple11leme .by OPM thrlmgh r guintions, w ieb are. codified in Title 5. Chapter ~ Part 890 of the Cod ofFederaL Regulations (CI·R}. H '31th insurane t.:u.vemge is made availa Ie

'ough contracts with various health ins.urance carriers.

The Bltl 'Oss Blue hjeld A. oiatio (Assodation), on behalf0 participatjug BCBS plans. has t: (ereu int.o a Govem.ment~vljde Service B~neflt Pian CPJltrac (es:] 039) ,,,ith OPM to P"J'ovlde a health henefi plan authorized b)lthe FEHB Act. The Assodntion de egates authority to participating local BeSS p aUf{ throughoUL the United States t pr'O~es h health benefit claims

fiTs fedc.ra.l su scrib rs., There tU approximately 63 local BeBS plans participating in the FEHDP.

The Asso iauon has established a Federal' Empl )'ee Program ,-<E I) Director _ O' ce in.. Wa.shington, D•.. to provide ceIltralized management for the ServL<;e Ben tit Plan. The FEP Dil'eCtor's atTIc coordinate.s the adminisu'ation ofthe contrad "villi the Association, member BeB plans, and Pro-·f.

Th A:SQctatiollha& also estabhshe 'a1:1 FEP Operations Center- Th~ a~tivities ofthe FEP Operaliol1s Center ar perfon ed by CareFi 'StBlueCross Blue-S ield. ID.eated in ;\-'ashingtort, D. . These ncth·itie.s in lude a,cting a 15cal intermediary bc1:\·veen the Associatlon ~d member ~ lans.~ v rifyillg subscriber eJigibilit},'; appro . g r: disapprovin_. the reimbur em nt £local pIa paYt en'lS ofFEHHP claims (us'ng cflmpuletized 78.tem edits). maintaining a history tl1e of' 1 FEHBP '.1fli s, and maintaining an acc-mmting Dfall program funrls,

ompliance ,"vith laws and regulation appHcabl~ 10 th FEHEP i the'e pon~'ibility ofthe Asso iation and ca h BeSS pIal's manag ment. Also, management ofeacl113CB, plan is r~sponsjble for establisbing and 11 aintaini.ng a srstc.tn ofintemal CQrr ols..

1 Thro &,haut rhis report, when we >i:far to "FEP" w at ret'Nrill_ to he Servi~e B nefj[ Pla111ipe.s of b lS{n~~. at thi;1 Phm. When we refh to the. fEHEfJ" we ar~ referring lo the fogyam t.h 1 provides health bellefit~ W dtltHl emphye~S',

1

Thi~ is our first global fl~djtot claim ',""here the amounts paid ~xceeded covered c arges fOI ili , BCBS plans. Our prelimiDaty results fO!: t . s: audir were p "eS~ ted in detail in dtaft: report, dated Apr' 15 .2010. Th ,A.'sociation·s co nmen1soffcred inespJnse to thedraftJ:'t:port were considered,in reparin, out final t-eport and are included as the App~ndi;x tc Ii' report.. , Also. add"tiona ,documentation prQ .i ed b)' the .Nsociatfonand C.l3S plans on variQus dat s through October27 j 2D J0 wa considered in prepaling our [mal rcpo ,

, , ,

VE

The objective of lhis. audit :vas to determine \",/,. eth.er the BCBS pam~ properly char ed the FEHBP for cl ims where the ~1lloum paid exceeded covered charges.

SCOPE

'N con ucted our limit d scope perfonnance alldit In a.c~ord~mce whh enerallyaccepted government auditing 'l.andards-. ase standards r- quire that V'i'e plan and perform me udit to obtain suft1cient and appropriate evidence to provide a reasonable ba. is for our findings and Cf'lll Iwions based on our udil objce i ·C. We.· elieve hat the evidence obtained pro rides a reasonable basi fot our findings and conclusions base.d on our . udit o~jective.

The audit covere~ health beJ;lefit paymen fJ:o January 1. 2008 r rough January 31 t 20 ~ 0 as reported in the Annual Accounting Statements,. ~ p-ecificalJ:, e re ri~wed fac,Hity I,JlailllS that were reimbursed during this period ';I,lhe e (he amount paid exceeded qovercd charges. Based on our'claim 'ananc.e ep()I'~ \. c identi cd 96,998 facilit;y claim' for this period ~N} ere e amo nt.'l paid exceeded cxwere c lBrges by a 'otal of 13 ,043,,267 (abo referred 10 as/Man 'cs or potential overpayment '). ~ From this univcr 'e, \'Ire .e.lected ~.t1d reviewed all facility ~aims \.vllere the amounts paid exec d' d ~overed charge' b-y $9 SOO or mor , Our sample included 2,599 facility claim totaling $5 ,410;745 in variances ot potentia overpaymeII S, for 49 of the 6_ BeBS plans (See Sched"lleA for the Sllmm;n' of the claim sample selections by pan).

We did n consider each Be S plan . t~ma1 antral structure itt planning an conductillO' OUT'

aUditing procedu e . Our a ldit approac c·onsistc::d mainly of ub tantive-1e t otrransactiGl1 and not teBts 0. . controls. TherefQre~ we do not express an opinion O!1each BCBS planls sy Will of internal contro s taken as a ,;"thole..

re also ondutl 'tests to dete:nnim: .hethcr the BeB plans had complied with the contra :t and the laws and regulation governing the FEHBP as they r late· c aim pa 'ments where the amounts paid e. ceeded covered charge '., The results of our tes indicaL hat:l with respec to th items tested: the BeBS plans did not fully campi)' witl the provisiollS 0 the con Tact rela ive t· claiul paymen wbel the amounts paid exceeded co e-red cluU'ge _ Exceptions note' in t c area reviewed are et forth in detail in the' o\udit Finding aDd eJ:Otnmend tion.,"' section of dus audit report, \V' h respect to the items no tested l nD hing came to our a.ttention that caused us to believe tbat the BesS plans bad no complied, in aU material respects, wi,th thos.e provisions.

1n conducting our audit. we reJie<l to varying degrees un comput~r;.gc era-ted data provided by he ,EP Direc or"' Offic~, the FEP Operatiot'lS Center, ano the BCB plans. Due to time

cQwtraint5, w did l10t verify the reliability of the data generated bJ' the V'llious information systems involve . However, "vh'it: utilizing the compute '-g nemted claw during Olll' avdiU

2 Thi'l univers ~xcfudes facility claLrns wherol:oe ~inounts paid ~x~ooded cm(en~d charges for the B ..BS phil! ~ years mat were previOlls it iillldited by the OIG,.

3

· te iug noth.ing came to Q.ur a 1e.lJtiQo to cause u . l doubt i s reliab11ity. We believe that the datil w·.~ i,lftlcient to achIeve our audit objecti'V'e"

The 3uditwas performed at our Q - ICes in ~~asbingtol'l") D.C.; Cranbeqy To "Illship, PellflsylvaJ1ia­and Jack OlwiUe, Florida fl.-om Au~ust 2010 'lIQugh Nov'ember 20110 ..

.!\ THODOLOG T

Ta te$t each BCBS plan~s compliance with t1u~ EHBP healh benefit provi ions relate-d 10 claim pa):me:nts where t1 e ~o1U1ts paid e ceed d covered charges, we se1cc ecl ..aJl fac-ilit)' clail

rb re rhe ;ullQun s paid exceeded c.overed charg" by 9, -00 r mort{ hat '(}re Identified in a computer sea-rcl1. Spe meally v,'e seJec eel -for revicw&juQgm ntai sample of2599 faciHt)' lainlS.. totaling $51,410,74 in variances Of potcnti overpayments (out of 96,998 facility

c1aims. totaling. $] 35,043::2:67 in varian,,: SOl" pptential Vt,Hl,a}1nCJJ{s).

Th facility clail celec'cd forrevie\v were submhteJ to each applicak'B 'plail for their re,irl?,\vand resjmll .\Ve then c~m4ucled a limited Ie jew' offucpJans'- greed re~ponse. and an expande.d ,tevieV'l of lb· . lsa-gree resp·:O., s lq determine th appropriate q lcs"tic.}1)ed amount, \V .. dld not project t sample result to th universe.

TI1. ·dC1etmim.\ 'on ofthe questisne.d amo\.1nt isb~ed on the F HB t:ontr ct, th~ Service Benefit Pla.n b:rochure;, and e A,socia ion's FEr adtninistr?-tivemanual.

ill ADDI FI DING AND RECOMM

The BCB plans incorrectly paid 85 claims. resulting in ne' ver barg s of $2,216.23410 he FEHBP" pecifica 1)', the neBS plans overpaid 82 claims by £2.234,710 and underpaid:: 'loims, by $18,476.

Contract CS 1039, Part HI. ectioll 3.2 (b)( 1) states, ~"The Carrier may c~ge a c S 'i.O he contract for a contract tenn if the coSt' a~itlal, allmvabJe? al1o~ab e, and rensona' e." Part 11, section .3(g) states~, .1Ifthe Mrier ot OPM d termines that a Member s c aim has be n paid' n ~rror for an reason"", ih, Carrier shaH make a prompt and diligent effort to recover he erroneou~' payment. " , .~:

Contract CS 1039~ Part II, seclion 2.6 states, ,; 'a) The Carrier :1 al coordu.1ate the payment of nefils under th"g contract with the payment c ' ts under M die are , '" b) The Carrier sball

no[ pay benefits und r this contract untiJ 't ha detcrrnin d whefher it is the primar ' mItder ' ." .'"

Section 6(') ofth FEHB Act provides that rates should. rcasonabl and equitably reflect lru costs' ofbenefiLS pro ided.

We performed a computer search on the BCB claims database, using our dat warehouse function; to ident.ii){ faciHty claims r in1bm~ed during the peribd January 1. 2008 thtou h . anuary 31, 2010 where the am01U1.t~ paid ext·ecded covered d4'trges. Ba.sed on our claim

ariance report we identified 96,99 , c.laims for this period whe.re the amounts prod exceeded covered ch" rges by a total QfS135 043,267,3 From this un'verse, \lve sele~te and reviewed at facility claims ""vhere the amount paid exceeded covered chal'g 50 by $9.5000,1:" more, and d termined if he BCBS l'lan 11aid these cl~~11S. correctly. Our ..ample inc,luded 2,599 facility claims. totaling $57A1O~74 ~ in Vat'anoes or pnltmtial oyerpaymel ts, for 4G 0 'th .63· CBS. plans (See chedule A fur til ' sUltlrnary ofthe claim sample selections by. ian).

Based on our review" \VC determin dhat 85 o!ihcse claims w re paid incorrectly. re 'ulting in net ver harges of$2.2 I6,234 to e FEHB ',,~ 8p~l.i· "~caHy the Bea plan overpai5.i 82 daim by

$2,234~ 710 and underpa-id 3 claims by $18,476 (See Sc d lie B for a sumn ary "Iftl)e c aiw payment eJTOrs by plan).

] This uruven::e ~ducles ['acllity claims fur the DCBS plans' years tllatV'/e.re previous!)' audited by the 010. •i In additton,heTI.: were 60 \;laim paymcmterrots, lotalirlg $J.049,~60 11"1 c,lverpa:ymenl' lhatwere i~lltit1ed hythe

CBS plans b fort: the start 0 . the: audit (i. 0. April IS, 2(10) ilJLQ. l.litju~red or vojd~d by the A~oejation s respof1!1,c da~e (1.11:0' Ju'J'Jc 30. 2010) to e drnft r~p()rt, Since ,,hese ovcrp;J.ytnenffi were identified by the BeaS pluf.ls b for~ Ihe 8mt ofour ~udil1!lli!. adjusted or voided by the Association':; respon5t: date to the draft repa ~ we did no~ question dlese OY rpaym t'lts in the final report.

5

, hese claim payment errors resulted from the following:

Th BeBS plans paid 4 claim ll~ing the it)corred pricing al owallces or methodologics: resulting in net overcharges of $1 ~398,32 7 t.o the FBHBP. These errors '~'ere due to the pIa g

using the incorrect per diems, diagnosis related group' g rates: or pereent ofcharge when pricing the claims, or not appl. ing the lesser ofbiUed charge. Conseql.lently.., the BeSs. plans verpaid J cl ims y 1:416,803 and und rpajd 3 c aims by 18 476.

•' 'Ine BeBS plans paid seven c aims. where ..be procedure-line c arge. \v re incorrectly bundled, resulting in overcharges of$223:93' to the FEHBP.

•' The BeSS plans inadve 'en y paid l up icate charge for 19b 'lalms re ~.1lting in o rcharg s of $ 72,,141 to th~ FEHBP.,

.' The BCBS ]ans did not properly coordina e eight claims with M dlc ,resulting in overc ' arges of $151.279 0 the FEHEr"

• Tlr BCB plans incorrectly priced four claul'1S due to provider billing eITOl's. resul "ng ill o rcrcharges of 129,623 0 the FEHBP.

•' In on iostanc , W l1Point BeBS 0 .' Georgia paid a claim Llsing the incorre t wnber of t1nys "hen pric.ing the claim, resu]tino:~ in an overcharge 01'$91 !634 to he E ..ffiP .

•' In two instances. Wellpoin1 BCBS i)fColoradoand Mountain Stat BCBS inadvertently paid or ~ nallowable servic • resulting in overc arges of $31)72'0 to the FEHBP.,

• 11 one ins anee" Well. oint BCBS of Indiana overpai.d a claim by $] 1) -77 du 0 an incorr ctly loaded hospital rate in c ptan' , local prici .g sy~ten].

'the $2,216,134 in questioned charges, 545,222 25 percent) were j'enilfied by the BeB ' plans before the start ofour audit (i.e., April 15, 2010). However, sinoe 1he BCB plans had not completed the recovery process and/or adjusted or voide these claim pnym ,nt ~ITorS by the Association'. response da e (i.e., June, 0.2010) to the draft repoTt l we are continuing qu tion th ~e ovcrc argcs. "be remaining questioned charg S 01'$1 ,671 012 (75 pl,':rcenL) wet identifit: as a Tesul' of our audit.

Tbe' As ocia:f~Ol agrees wi . $l,j06,946 of he que tioned over harges: and slate that tb BeBS plans Mve ree vert: 605,889 ofdle O"llerp{lyments as o' .rune. 30, 2010.

Regard· g e contested amounl to the drs l'epOIl fhe A~sodati n disagrees with these po entia1 overd1arges for the toll wing reason :

• The c1ailIl payment error \i ere adjusted or aided prior lo the start 0 the audit (April] 5.., 2010)"

6

.' The £, aim payment rrn;rs wer" adjl".l~ted or foided and the lener of l:redit ae-count adju In nts 1,vere mad on or after April 15~ 2010. but by t c re:ponse date (JUne 30~

2(10) to the draft rep!> .

TlI cia-'m pa.'ments error \Yere idenilii~d and r ovencs 'er initiated 'prior to April!5; 2010, but th~ recovW)" proce s had not bee completed as of June· 30,4.010.

• The claim were aid oorrec,tly accor lng !othe pJ ns' pricing methodolo ies.

Reg~rding con'ective action the Assodation states, '·our analysis: identi· ed That the i1lidityand C )mp~libi1ity Edit C92 (l-Jig. Dollar) in FEPExpress is being generated bast:d upon th C'ovete Charges as op osed to the Plan aBowances. BecamJl;: the clai., ." f-or hi';l dit are b sed upon Ute Plan' > alLO\vance·s xceeding the Covered Charges ... th..cte \VeTe claims that should have stopped prtvr t . payment lOt erification ofth allowances that did not defer. Had these c aims deferred for investitmtion....... ufthe PlaIl AJIovvance field. there i' th likelihood that thev. could have bee·11 corrected prjor to paymcm. A modiflcatio . to the FEPExptess dahil system 0 defer claims based upon the Plan Allowanc ~ has bee{ll requesred fur . nplefnentation by lsi quarter 3011. ...

To reduce these type' of claim err r~ fro ccurrillg ill the fun.lIe" Plans and the As 'ociatiQo pexD rro th~ foUov.,inJ!:

• Use confirmed audit errors a::' train] g t"Qols to enhance the prof'icienc...·of claims examiners. The Plans pCl'todlca -y conduct re:fi:e·sher train' g on tht CO!TCl:t metbod:s for coding, pricing and 1 e submission requir meuls for Ii type of c,l~jm!> along vdth any xceptions noted sine me previol.ls training session.

• e various Plan meetings; on~line \Ncbin IS, audit alens, BuH tins;' Plan visits an .the EP dmini:'itralive Mant al as tools to educate Plan staff an 'arioLl. componems of lh~ claims

adjudicatiDn process..

C0l1tinue to conduct the A..sS"ociatiou·Sc SysteD Wide Claim ReVie\v process to ide!'"uify claims on 11 pot-paymel t basis ,here the amoUllt paid is greater Ihan charge!> for Plan to revie\v an c rrec1. as nece sary.

\\lhile these measures are not absQlute- hey rovide rcasomlbl . ~SSlU"ances that SllCh 'terns vill be: identifi d and cDrrect~d. Accormngly* to th .e"-1cnt that" erwrs did occur, the pa: me t at good faith erronMus bene ts paym nts and fall ",Jthin the conte 't of e.S 1039, Sec 'on 2,3(g). : . ,

To further reduce the e type.s af cla' n e Ots in he futUf .the BeBS wul implelnent h~

follO'wing by ~·U~J.kt. 3 .20]0:

Modify Pta '. re-payment q alitj, review pro' SSC5 t" review a percentage of laims p "or to ubmlssion to the FEP Operations ~entl:r;. 'i h emp a~is Oil the impact of coding accuracy in the paYD1~l1t pIoce:$s. .

7

·' Add claim' that cover wo benefit eriods to thu As ociati n )'!itcu1 'Vide CJaim Review pmcesI)•

•' Inc·rease the claims sample size to valid,ate hat Plal:ls have accurately ev uated claims provided during th System Wide Clai Revi~,w process.

BCBSA win a so-evaluate the feasibility ofimplernentlng , , "additional controls bJ.. the 41'1.

quarter of '010 and. implemcntatJol1, ifdetermined to be feasib e. nu later t 2,lld quarter of 20 I,~:

DIG Comments:

After tf'vleW!ng the Assoeiation s respon. e and a.dditional documeutati'on provided by Ihe neBS plans, '''''C rev-ised the qu~stioned charges from our dmfLreport {() $2,2 5.234~ Based on the AS~(ldatjon's response and tlie BC13S plans.' additional documentation, we detennined that th As~(lcjation and/or plan' agre vith 5J ,655291 and isagree, with $560~-943 of the que tinned c £ltg-esl. Altho: gh the' Assodatjon anl t agte.es with $1, 06,946 in its \-miten response. the BeBS plans' ocun entation supports concl.II'T nee '"itb $1.655 29 ,..

Ba ed on Associatior' 1 SpQnBC and/or !.he BCBS pla1J~' documentation. me conte ted amount 0 f $560,943 repl'ese,n s the tanowing itt:ms;:

• $ 5.221ofth contested amount represenL,; ] I. claims where recQvery effort~ 'ere jn~tiated

by-three BeB, plans (BeB 01 Ilorida, \VellPolnt ueCro' f ,al"fOmia.• and BeBS (jf D lavvare) b~fore he audit started. How ver,: tile- p ,gus had not reoovered t!le.se overpayments Md adjustl:ld or '''aide the claltns by th~ Association' ~ Ie pons.: date 10 1he draft report. Since these o"\o'er'pa~'menis had not bee overed EUld returned to tb~ FEHBP by tb. Association'. cspon·ge date, ~ "are olltinuing to. question this anlOUll in the final report.

• S15 721 of the contested amount repl:esent~ on clab that 'as priced inC' rreet y by BeB of \Vyoming due to a provider billing error. As a r~sult of aut audit, lhe Plan voided lliis clah 011 May 18, 2m 0 to correct the oY'erpaym nt error.

ltecommendanUd 1

~"e recommend that the-contracting offiGer disallow $2J 234;710 for cJaim OVCle ges and vcrH~y

that the BeSS plans retl1£ all amounts l' l:OV red 1Q the FEHBP.

R ommendation 2

We recolnmend that the cunt acting 1ftlcer allow the BeBS plans to charge the EHBP $] 8,476 if additional pay lenls are made to Lhe providers to c.orrect 1.h underpuyments.

g

,Although teA sudation has ' eveloped a correct"',..'e ac,tion pJat,l to reduce paymcl error, rdating to dal 1S where arno Is paid t:X 'eeded cov~red diarges, we recotnmend t t the "can"'racnng officer lostruct tlre A sociation to ensure lhat th ' BCBS plans are f0110V'.1Ug the .carre tiv ~ action lan. Also, 'rve n: o11111end that "he tontrading office·r writy the additional correct'on action in luded ill the ,A,.~sod non's respon e ilia have 01' w11l be implenie,ned -as a resul ofour . udi 'iindhlg, Th13 stah.ts ofthes' .~qrrc:ctive actions. will a so he evslua ed d~uing

funn'(' audits scheduled by the DIG,

IV.· .AJORCO RIBUTORS TO THIS REPORT

EXJ?erjem~e-RatedAudits GroLlQ

~------ ,-~.-_ ..

Chief

,Senior Ieam Lender r

,Infoffi.'ill,tio.D y~t,t;rn.s Audits Group

Cbici,

Selliorlillonnation'rechnolt;gy pecialis{

Infonnation S stems Audi or. .

o

I umbu Tnllli PI~1l Sitr l.'f ClI\'creli

bl"'l" ·I.u • ~

Cluj 8ca~ fif NC'\\' M ldco Nfl. PtriDd "lJl)"ut tQ A b.:::ui:.:..l::--_-j--:(:.;~I;::IJ~.:.:m:,;;~_+_...;,;{:.,:;;Iw.I"\I1~n~+~=~.:;..:,_~1_'-'..:..:":':'::=:3,_1

..l!lIlUl\!)' I, ,(lOS· J Ill.LL'a.l)' II , :lll1O I '. :$1 15,245 0G5 Wdli'(lml HeElS I fG'(1~ GA J U.'fJ' 1, ~(If}R • J;ImLJ..lIf)' ~ 1. _0 lil ~7 l.~ 98,,9·l:!> OM Crm:Fu;sL ~ {Marylilllo , ~n"~"C An-: } MD J.. uM}' • 4\I(I~. JIJ1,1'ltlliJ'y 31 , 2.0 H) (l II o ()1l7 p, B (If \I~U LA JOIIUtlr)' 1., 2m S - ljJl\l.iU)' II ,20lfl! M.!J7 71A09 (JlI'J neBS uf AI~bMl l\ hnu~ry 1..2008 - JillllliJI}' I, 4 1 S2 2,471.7JY I,499,~t?9 ()lO he fll' I.d~h" He3 th S rvk'\l II) Jamlari 1. ~{)08 • J<Ulll.lI) J 1, ~(l1lJ 3 !. 4~ J,[79 46il,Qn 011 BOIS"rM!lSsa~r.I1SC~5;

D.2 BCD ClfW~'5ll:1n N~w Vcr\( MA NY

JanLl(lJ'p' I. WOS • 1~1 LIII.")' ;1. 2'0 J0 J39 ]U,156,264 1I,9l1'2,C~~

}anullI)' '>2fJ(l~ - ,:;LllL1Sl)' ll, i.. ]f) 1 3SJ.SJ2 4 ~,5/~

l-Tighlll:llf1" beDS f'I\, J. L1!l1)' J:. 2{]O~ - .llIJllJllry J J< ~m Q :1 L 71 S.;:l(}7 ,~ J,,179 nCB' l)f nnl'lI;:!lS~ TN Jmnl~I}' 1. 2(m8 -JUIliJ,,1t'!' 3], 2(11069 1,8~", 41 I.bUT. i,l1 BellS ~f'Wymning W'l J:muo..ry ,,:WOg· J.lUlIW}' • 1. 21,) 1{l ~~, 347 ,1.lJ ~ I 4111.103 DCBS (If IIfin :i It j, UI1I' 1,,, 21]08 ~JIJ.:mtill')' ,1, 20W {} n n W Ui'Qlnl RCBS ofOhio Oti Ja/lU .' I. 2008 -J.1Jlll.\ll'~ 31, WaJ 6J J.Gl,4·n lml~"'>"10 Br13S ofSoUlh C'olfol inR sc JlU1~al)' l" ;!OO~ - J n 3l, 2ll J() {l 0 W UP<lInt ncas Cli Ne','O-hnlp:'lhh~ NI J u.lIY i~ 2008 - [illua!'Y;'J.:10 In "j ~ t.D3 ~ ~6~-8 44V,i(i1' DCBS 1 Vermont \IT J,mIJ 'I. ZU~8 -Jilil\~~' 301. 2(1 I¢ J ~ 1~'7,4~..J1 , 1.5l,' n lIC' . [\tT~:;; TX Jllmlaf)' I, ;.lons . JrulU,1.f}' :II , ~o 1u rr 1,842.11:3 ' I,.\~O.{;~ • 1:1IPl;.inl I3Cas, ~) .. CDlom®, o JUlllI!lI)' Ii, 2008 .. .l'rml,llLT}' 31, ' (T HJ 1I~ J 40,(t{lJ ' ZiJ7,S47 W"llmrltk aeBS IJfI Vi' ]A .' IIIlV)' ,~ 08· IIIlUIlry:l"I, 2011J:H . ~\l.65~ b2;i,lll F!(~5 I~f Mi~ru~'M

aC1JS \}' Nrnih C ihrl MI lit

IlUIlJIIr ' I" :W()8 -I~ ilUID')' l J, 201 (J I:t d o J:lhLL '1. :W08 - IllJ1tilllY 31 r 2010 m !,77~ ,53{J . (~.tS2,828 2,3 &.292

DCB tlfNorl.l'lJkl1oLa NP .1 nLl~r}' i, 2008· '>!klllln()' 3J •l{ll 1..'1 2fl 5LUZ{I II ~~,971l 371 "B5(j C'llpl!8l 8hm P,'\ Janullfy I, "f!OR .1j\l1lm~ 31. ~fJ IH;ry \I UJ5 OOO.!N5 ..Ill ,711 bCJJS ofMon!LI" I. MT J WI!)' t,,2t1Oll.JOOluary ~J, ~(lHI 11 {) \J BC"IlS ofHuwulli m JiImI:lr)' I" 2DOS • fMOOJ)' ~.I. 20 Itl I~I :Ui2..)L)~ tl7:',I'N 41 1 ,9..72 W~UP11lrll BeSS· C)r1mJ 1:JnJ!' IN 1 IlLiflJ}' ~,ZOOS -Jamlilr}' lJ, ZOlf1 114· l, ~4.i I~ ,9'I(,,{J],1 ["S.? J ,911 DenS rnMi5.~IS5Ippi MS J UI1I}' l, 2no~ ~ JJlIl\llLl'}' ~ I, 2.01 D 1 4,5~tJ 41,8J8 36.2~j(

BCB,', r:>rFkmda FL. J~ \.2lJOS -J.I1TIIJllr}' ~I. ~OHl 5~ l,n4,472 2_637~ t~8 I,~ 13.016 BeDS -KmL~i.II.i City MO .l,l1luruy 1,2008 -l1Puary :!' 1,2(11 n n (l , n (I

R~S" OS l}j'ldaho 10 ~ IUijll')' • ~OO -JilnRi.Il~ 31 T 2111 U U 0 {J

A..rk.msa..!l DCBS AR JallUDry I, 20()~ - J al1lr.lry ~, • }.jJ1 O' 3 S}.iSS 9 ! 19.276 ~5,6n

W~III"(Ilnl IJ('!J.S of ~fll 01' J,{y .l8.lT\l1lf)' Ii" 1008 ~ lmoory ~ l, 2{I1D lof 2.,:l:'i,325 51\-6.831 J~l.S06

W~IIP1'J rrl HCBS Ullit~J [!fWi~clJ'l1sill Wl II 1"1 1,2008 -liIJll.U1l}' 11, 2{lllJ 2 C1(J, .. ti9 i6D, 9g I f19,02'>J EI'IIrir~ l'lCag Hor~n 13(.13.' [Ii" N w JersllY

N'i NJ I

Ja.'1LJD I, ~oo~ -lr.1l1 ly ~ I, 20W 215. ,1ii9"D7 16,l:i62,2l«J 6,-1'i:l,;'IJ J;Ifltnr)' J, ;l~09- 1I11UP..ry 31 > ~1J! IJ' ~ L~,7)l '09,~9J tS_.6~2

.IclIPl>lIIt aCBS ofC{lnnc-.:timJt IT , JOll'IUl~r .~, 21J\')~ - 'BnU1!llJ' '1. 20 In I ~ 4Mi, 19,] ~~2,. 17 456J21 Wdll'Ul'lIl. of ~l[ri;Ul1ia "'A ,1 J ~wl!}' I. 2lJ¢ , - 'unun.ry 3" I, ;!U IU .2 1, '~29,~l'l5 1,930.1 0 55 ·rl?~ B(.'B.'J DfNi'brns\4I Nt JIDlllilf'.' I, lOOS • • Ill')' ~ 1" 2{l rn ~ 0 If {/

MVtJ,fl1iiin &Ialt' HenS Ind.epeotlenl:l: BC' HCR of Am.:

WV PA AZ

Jl1.l'tIilll' 1".1(l{)~ - i~nURT1' 3[, ;Wlq· '\13 ~QSQ.~ lot J,307,il9ll­ t;,,27,3ll5 ,1i!1lL1.ll1)' 1,2008 .'~It\);Jif". :.si,2Uln 26 45~,1Jt<4 $)~.m I :m,!\B I JJlnUIJry I" 2\.'W)~ ... JQl1t,rrl')O:ll, lOll} 76 1,.4~A.5 ~:() , 4,] ;~,2:;S I 2,t1->4,6' 9 I

lt~t: aCBS of (~ 11

W~lIPoinl BCBS ofM~LM

OR ME:

Jnnr 1, 200~ - '~nu~ J .:lll tOJ I~6 2.S~S, Q'97 5.·m,m II :!.S49,Ml JUTlI ,. 1..200.11 - i1JllIW)' J I, IH 3, 471J 41() I,062.,~;o1 S 1,5"l

BOlS (> Rhoik W:llId WcllPG.i1l1 aC9 llf "":uk!

I{l

}IV

J.:m ry I, 21)!J - .'Bnll~, -I, :W1O' 1fl l3i5,lS2 \,"rf._ll 3 1,71511 JaIJuury 1,20011- ,bl1U81y 1r. 2[11' 1 :r~ 192 17\1.1,16 , I: J7,,)54

WcJlP~j I DeBS Qf Vlrgini:a Exc~lllJ~ Ileas rof 1J', Ro~~b~s1.l .. t ......rr:1J Rl:!l~lK~ B(,~ elf Jmh

V,'l. ,y

T

'a'l IJ I" lOOll • ,~I!I1Ulity j I, ~I L. 214 0,,.262,] JZ 11 ,12.~,!:9 , ·~-lI!:t'1·t765

J:mWll')' I., 2008 }~I1"iIl~' 31, 2,1l1D' 2M;i6 "3(/7",('5 l(l1;,{,'18

Jauu.alJV I, 2(1<J~ - JBIlIIJIry 31, :W.t c' ~ no,... ~ "538,01.5 2li,,'52 B. ()fCllil1Qrofo A Jil.l1utJry I. 200S - hr1~ ~1, ;ll,l l U 0 o o Rc~ BS <}fW~Ilt)..lQ.fj, WA .ImUllty L 20<:'8 - (1J111llry 3 , :WW II o o DeBS ",1Ala:>tu AJ: , JanLl.ilry,~".2I](Jti -.I~nim ll,Z(JW (l o WellnJ'>I); neBS ~J!'Sourh D<lkQW SO Jl1Jlu.a.)' I, 2003 - hm.oury' II "2..a100 (I, o {)

r'r~rn Be (W ingl"n) fA J'illl.l.i 'I, ~O(J8· ,l'hmwy 3.1 ~ ~IO' (.I d (I

Welll'(lmL BCBS, ~fMl5!OU i MO J:uJ~, I, ZOOS -lrulu:L"'Y j J, 20 10 I J ~,3'4<) 5,1..13 DeBS or M inlil'C:'ltJ~ N J 1L1: '1 fKl~ - JJI1lr.Jiiry :;1, 101 ()o JI.9 -/SIJ.M2 427,167

._--------_._......- ..- ...._----_._---------------­scn DH ,.."

I"~!I;~ 1 on V. CUEDlJ U:."

GLOII.\.. L CL L~S ''''lIERli: AM'OU!'(lS rAID F,XCEE»EO CO\'II:RED CH, RGES IILLJECRQ.I.'SA. D BUJl(.fH)tP J'lA~'S

BU, lMMl'V 011 Cl 1 SAMPL..E is '1.ECnO~S H PLAN

llCIU:DlJT.."E A

P~:!le'llin

. y~ CHt;(} LF.S

Gl.OllAL CLA1Mli WnElU~ A\10 t l'S rAlO EX CIUID ED COVEREJ} CI-I,\RGE BL I\;CROSS i\ND !I V~SJUELD PLANS

Sl'.lMARY OF _ AD'] SA~U>U:· ~U:C110,.s BYPLA

I )1 N~mb~r T9tillSA:'>1PLt

l'~lItnti~1

Phill ·ite' of \:,av~nd I TMpJ I)Y~rd'"l"llt;..~Ntll)Jbtr P!IInN'lt·me St~tt l'i;lnNI !i'~Dita tDAlIdil ·C!lIilJJJ1 Ch~(ges t\ mounts Pnid IV jl.rL~nl:L' si ",

079 E,l.:ul1U$ HeM IfCenlml N~w ¥otk NY J~l11,l~1J' J. 2C\(j~-JILl"UM}' J I ,1./ll0 13 ,$~ 13,J48 $64S,l9S $234,8S<J (18-1: OCI3$:l.'rK~~ kS Jatju~r:,.l, 2008 -!Wlll.ilf)' 31.' Ii) {l ,0 G n, (183 BOBS: 6fQkt:lholl\ll. OK: J3IIlilll)" , ZOt)S- Illl:11$r;t31.20 to 19 t 2~4S,95lJ 6.;1~7131 ~,J9"2SI

VS4 Ex~el U). CJ3S ~)fU tlee.- illMertO~11 ;-4)" .ilJllllil} • 20QS··''ln1,J~.~' 3l. O'li.l S, (tH,99S ' 22:),463 lllA67(IS5 Car-c1'lr$! I:K'BS (DC S'tIYI.ce AN~) PC J 11 . J. 20<W- JJIlUD()' 31, lOI u.s 6.217.9~5 1[,152.743 4:~j4,7 S 088 Be Qt'North~fQ Ptnr,syl\'onfa P.\. JM\llIry I, .008 - ]lJ\~r}' I, lO 0 6 t7.:!,125 2to:(~j.;l \H;.l £ 089 BeBS ('}f D~I~.Me DE J~ljll~r;.: UODS· 'i\1T\k1l)'JI~2010 1 ~. Su 2<J,1.5iJ .~7,{)iXl

092 Cor~FifSl BC~S lO¥t=lJ£) JtlI:tuM'! l. ;Wlli) - Jamli1l",o) l, 20111 ,I I '1,.110 2~kl{i0 23.850

-rOT:U. 2,399 5{i~ ,J~J,4'16 S12~.i5.4Jl] ~~i',.jQ,i-l5

;

"~n ~n~ TlItlll p~5...rn~ed AllIOUlI'is Ou~tloJ:!~1I by "tllr lImh~r PI "lUll $ltu~ Ctllim Cb I" ~s 1£H18 111119 211 (II

nLlJ hCL-t • of Ne\~ M~xi~o NM Q S(I tn Sll I) 10 $(!or~5

O()lJ Wt.IIProfllt RCFlt-:: {lfGcorgiil "arcFinll BCJJ.S (M loml S,t.:r\'f~ .!lIT!!)

GA MD

,.,"-

[I Hfl,3 •

(}91,&3'1 !,l,}49

flo f]

IJ (1

10UlD lJ

ij, (r 1

007 BCSS f)f l.ouisian~ U l' ~,,~ 2(1 35.32t! {} l) :t~,nn I; (lOS' [lcns uf AMlllffill AL Q 0 (I I) (J I) (i tllCI Be of IdahD 1 ,oa lh S~rv i~~~ fD {) 0 G I) f] It {I

011 fl as ;fMtIi ~cIll1S~1ts MA I: •HI 1.:1 0' ~4.0J~ 0 44.0LJ 0 012 BeDS I)f\Ve:ilcrn Nl:w VNI. J I ~ I' [) n tI (1 Ii 11 OlJ l1i,I!.hn1Ilrk BeBS p, G 0 () 1) {J (} 11

15 BeBS I;IfTrnllr.'iSCl: TN ], JR, OS 0' lR, r.l 0 1~,5 8 {J

1)](;

17 Be IjS of Wyi}JlIjng Be OftlI:i21Clis.

\\'y

It ]

n-JS,nJ

o (l \5,n1 Oi lJ

lJ ()

(f

i)1",721

0 l21 WcLLf'OIt1L BeDS <lfObiil Ot--r 12 5,181 ,8!M lO~, 22 30,265 145, 1~ l 11 i C12~

27 BCBS of QDtiJ !lrQJi.fl ~ clU\lInt BCBS or New !T,unp~bin:::

SC N[l

II 0'

(I

~

G fI I) {}

II

(I

11 l ~ I

02& BeaS ofV~m1AJn VT t l~.9Sg 1~.9S~ () !J 19:,958 029 ,BCBSo'fT TX .3 53,068 IS,flll 2:9.548 ll',S09 53,O61l CI]

31 WI: 'l'Poim BellS {I ColCllauo WllUmJJrl; BeBS Qn,,~ Ii

co llA

I 10, 27 [I

(I 16,3:17 0 I]

()

IT 16,327

(I

03 B S fMiclllllat\ 1'.11 (l [I I) (} ti [J

033 BeDS of Narl.h Cl1tol inll NC 2 42.017 7,997 J<1,01(1 {I ,12, 17 03-1 SeB:'> OrNO!~l Dakolu Nf> (} (I Q 0 0 (136 .i1pltrll BltHl.cros~ J)A 0 0 () (I !J (I 0 037

3g l:l l~. L rM 'llllIDlI

BCB10j f J w.Lii

Jl,ofJ"

Hl 0 ,'

0 0 [}

(I

{I

{JG o I

~)

039 WellPomt seas ofJndillt'.il R 1%.461) 1177.4H 13.103 5,814 19'6,~ fi fl 040 rJ41

(leus of Mi.o;:sl~~lPP"'

Bea ofFl lid MS FL

07

0 45[},918

U IJ 0 450,928

(]

fI [I

93,t~J

{I

357.777 642 BeGS pf Kans 5 'j'l)' MO i 0 0 I} (I {I

(l43 Ri1gcT1~ B5. "fIrJ3ho IJ 0 0 ) () (I 0 0 4

1l..l5 Arkaa'i.3:S f,lC/3S v.'c1U'omt BellS ()f Kt."ltLu,:}.."y

AR KY

2 I.

• 4.~91:i11267

0 44.8':N 0 (l

(I

)11 0")'" ,K99 11,2fl7

Il[}

047 W~UP(l!nt B\.:B: Uoilcd of WiSCOOS,LIJ, Wl 1. 97,.111. n,HJ I) () " 7J II (}

0..l.8 Empkrt'BCBS N\" \) 0 0 0 0 0 rI 049 Hori:t,\~n BC:a t N~ JCfilCJ' .r () () 0 0 () 0 [}

1J5J WellPllinl BeBS tlfe MU'liclIl CT I (I D " IJ 052 W!iIIr~ljllL Be ofCaliloml -1 1.61:1,445 :Q.,913 77.532- Il () !M\.~'~ 05), DCn:Sof L'bmwi NE 0 l) 0 Q I) C, 1.[

054 Moun lJlitl :'t Ie 8 CI3 wv :! 17,{••t t () 27,641 I} 27,641 ()uj llIikj.lelU.Ien~D , PA 2. 39 96 lJ.Z96 0 () 3.')):9(\ CI Q_6 iBChS Ari1.(ID~ I\Z l () 0 (I It 0 I;l (158 Rel\eLl~ BenS of Dreg 059 , ell I)ml [l "as I)fMIlin~

OJ ME

5;

I 1~,724

(5"UJl 1.7X~O 6,ll.94 (~.1 HI 0

0 I}

24,7201 (5.1 l!J

IJ

n !l60 IBeDS lJfro ·,d~ T~h1nd

{ltd iw l!Joinl Beas r eYlldil 1U NY

()

l {)

27.<14<1 0 0

17,444 ()

(l

()

I)

27.4~-'l

If [t

062 ,WcllPnird ElCI3~ (!fVirgll'l.lil '1\ 0 FJ ,21) l ,623 179585 () 193.2{J1i Il {Jf'l'1 E."lccllll~ Be BS lJf thJ: R.oet.~~ LCT Art.""/l NY 0 0 0 0 I} l) il Oull R~!>et]cc: B .Jl (I l.lfab U1 1. 2 ,2SJ (,,2:$3 () ZfI,2-} I}

11{)7 as LJrCllliflJrni(l CA 0 0 () () 0 (l 11 069 Rcgcncl; 8S of VllSiJing:roo W;.\ (J 0 15' 0 0 ()

07(1 BeDS of AlfISk B AK 0 0 () \~ [I 0 n 014 Wdbrt.ark BC ' C'f S~1Jth I)L\I.;<1tB SD 0 (1 (} 0 Il (/ If 075 Pn:Tllcr~ Be (Washing,tUli \ , 0 (l () 0 I) 0 (I

Q76 WdlP1lin BCBS (lfMJ58ouri MD 1 11,000 0 17,000 (j 17,llOr1 u 078 BeDS of Mmn~ota M 0 U (I 0 l} 0 (I

~. JU:DUU; 'f.!,

P ge lofZ

GLOB C JMS WnERE AMOU S ,\llH~. C~Vf:D (;0 EREn elL RGES 8 L1Ji.CROSS .lND BL ESHlEl.D PLA !'i

QUISTlONE:D CHARGE. BY PLAN

SCHEDllLl: "B :P;tg~:I: 11(2

TE.

f

GtO~.'\L CLAO~ ·WN. E lOl! TS PAID E."CI'.EDEU COYERED CHi .BLUECn.O SAND BWF.SH ·E D'.PL S:

Q r, Sl'tQNEI) CHARGES B ",f ,\,N

,Pl1l1L SHe' r\ll~1 Qut~ll(Hled Am'nullh Qu~stillJJlld b~' Yll'lIr, l'JII~ 1'11111

~wnfln 'prau NIlIi1e Siatt: ' Clihll.s, Chllrll0S 2.008 2110; 1O11l Altl'tn OisliareHMg l1'u,;c1l UI; BCBS (IfC'et.ltl'alHJ:w Y<Ut: 'NY U $\~ :'to $(J. SO , ·S~ $l)

Q&2 (leUS i:lfK3nse.~, KS (1 (j, V ,j (J (j I)

033 Be SofO h-olna OK ;I 2~.213 , Z&,273 Q 00, 261173 0 OM Ex~el.lllS, :a CBS (If lTti(:<l~W;i'terliJwtl, 'NY {1 6 I) 0 Q (l

,f}S5 C~Yin.lBC13S DC S~l'Yi~ i\r~1'I) DC !lo ~ ItJ,3~~ H ·~S2.114 n;7.39 310)54 1

1188 Be fNoohern Pe[lnsyiv~[liiJ. J'A r 2~,696 2 .6!l1i 1 {) 15;,696 .t

0&9' BCI3S nfDcl:rw1U1= DE l '7,300 t:l 2.7.. 1}11 j] 'lDlJ nom)092­ CmF.irst BesS ((lVt:f5ea..~j I 23.:552 I) :n.55~ 0 1..'>.55:\ ()

'rural llS S1,216,2~ S'708,(i83, $1.-123.456 S1l4,095 SJ,655,Z'l] S560i)4.3

I

APPE..\DlX

BluCCross BlueShteld Associanon

. A9~r.tIlfil:lTI I>nl'ld~en~&I' IIlul; Croll &n~ 1l1~tj &lIlp.'d "wn

Federal Empioye.~ l'rogmTi~

15J 0GStrtlet, N.W, "Vn SllirlgroUI D, f" 2I:mu5 'lQ2.9if;2. WOO f'll J::. 202.1)42-1 25

June 3D, 201 (J

Group Chief Expenence~Rat~d Audits Group Office of thl;l Inspector General U_S. Office of Personnel Management 1900 E Streei Room 6400 Wa$hlngron" DC 204,15-1100

'Referencej : OPM DRAFT AUblT REPORT Global Amount Paid Exceeded Covered Charges Audlt Report #1A-99..o0.;10...o30 (Report ated and received 041 512010)

This is On response 0 the above referenced U.S. Office of PersonneJ Management (OPM) Draij Audjt ReportCOI1Ci;HTling tile Global Amount Paid Exceeded Covered Charges for clafms paid from January 1,2008 through January 31. 2010.• wlth potentiaI everpayments ot~~i ng $57r410,745. Our comments concerning the findings in thlstepor1 are as follows: .

The OPM 0 G auditors recommended that the Blue Cross Blue Shield ASSQcil:ition (Association) and/or BCBS Plans review e sample of 2,599 fac.iUty· claims, totaling $57.410,745 t determine whetherlhe claims were paid properly, For all cfaim p~yment errors, ttle Bess plans should jnitiate recov~ry efforts immediately as required flY the FEHBP contract. and return all amounts recoveref,l to the FEHSP. After reviewing the listings of Amount Paid Exc~eded Covered Charges potential overpayments totaling $57,410,745[, the Associa ·on.

.does not contesf that 122 claims totaling $1,306.946 in claim payment.s were mad. As of June 30, 201 ,the Plans have recovered and returned $605)889 to the Program f-er these overpaymen1s~ This represents .0013 percent of the 96,998 facilityc ai'ms review:ed and .0096 percent of he facility cl,afms wher~ the amounts paidexoeeded oovered charges of $135043,267.. For the period of tile audit, It represents O.<J0007perce,nt of total facility claims paid of . $1B,3Sa,0371660

We contest the remainjng 2,477 claims tQtaHng $561 103,'799 (support proviqed) for ttte following reasons:' '

• $ 2,018,192 in ctai,m payments were voided and/or adjusted prior to the start of the audit (April 1,5,2010)." " , ,

$152 l 833 in claim payments were ~djllSted or voided and LQCA adjus ed on or after April 15, 2010 but by June 30,2010,

• $421 ,354 ~n claim payments. error ere idenffied and recov.ery V'las loitfaled prior 0 the start of this audit (April 15, 2010) but the re<::ovety proce.s:s had not been completed as of June 30, 2010"

• The remaining $53,511,420 In questroned claim payments were paid correctly according to the Plan's pricmg methodology.

Recommendation 3 and ReliEonse,

The DIG Auditors recommended that the contracting ~fficer instruct the Association to have the BeSS Plans: ldentify the root c8use(s) of the claim payment e/TOrS and implement com;wtive aotfons/proc'edures to pre'fent these types 0 errors in the, future, Based on our review of the Plan's confirmed tlverpayments,o r analysis identified that the Validity and Compatibility Edit C92 (His Dollar) in FEPExpres fS being .Qeneraled. based lipan the Covered . Charges as opposed to the Plan>~ allowances. Because the clLaims for this audit are based upon the Plans' allowances exceeding the Covered. Charges (Charged/Billed Amount)) there were claims that should have stopped prior to payment for verification of the allowanoes that did not defer. Had these claim deferreo for investigation of th~ P~an AIIDwan~ field, ther.e i$ tile likelihood th,at' they could, have beenoorrected prior to paymen . A modificatton to the FEPExpress claims system to defer claims based up-on the Plan Allowance as been requested for lmpJamentatio by1 11t quarter 2.011.

Our anaIys fS of the pJans' resuIts identlf1ed he fo11oWjng :

.. 64 clalms toteling $651,388 we~ paid incorrectly as a re~ult Ofprote5S0r error in pricrng, tl"Ie: claim using incorrect DRGs, Per Djemst allowa'r1ces or bundHng claIm lines for payment . .

• 55 claims totaling $601.955 were paid incorrectly as e. fE!sult of prQc~ss_or error in incorrect data or provider billJng er ors. . ..

To reduce these types o~ claim errors from occurring in the future, Plans and the Assocfa ion perform the foHowing:'

.' Use confirmed audJt errors as tra.iolng cols to enhance the proficienoy of claims eXBl11iner$. he Plans periodicaUy conduct foe-fresher training on the correct methods·for coding', pricing and the submIssion requirements fora I types of cJafms along with any exceptions noted since the previoll~ tr~inill9

s~ssion.

Use various ,Plan meeting&.' on-line webinaTS, a.ud;it ~Iert$, BlJlletlns, Plan vjslts al1~ the FEP AdnlinistfBifve Manual as tools to educate Plali staff on various compDnents of the claims adj:udlcatio process.

•' Continua to conduct the Association's System Wi e Clai Revi,ew process to Identify claims on a pos payment basis wllsre the amou t paid is greater than 'charges for Plans t9 rev'ew and correct as rlecess~ry,

While thesa measures are not absolute, ,they·provide reasonab le assurances that such items will be iden ified and corrected' According YJ 10 the extem that errors, did occur, the payments are good faith erroneoUs benefits payments and faU within the context of CS 1.039, Section 2.3(9)., Any benefit payments the Plan is unable to recover are allowable charges to tt1e Program. In addlUon. as good f-aith erroneous payments,' lost investmen in<?Ome does no appty to he payments identified in this finding ..

To further reduce hese types of claims errors in the fut re, SeBsAw111 implement the folloWing by August 31,. 2010;

.. Modify Plans' pre~payn1ent quality review processes to. revIew a petc-antage of claims prior to submission to the FEP Operations Center, with emphasis Or}

the l'mpac of codlng aceuracy 'intne Payment process. • Add c aims that cover tiNo betJsfit periods to the Association' System Wide

Claim Revjew process. • ' ncreaS8 the c aims sample site to valf ate that Plans have accurately

avaruated claIms provrded during the ~tem Wide Claim Review process.

seSSA will also e.vf:!fuate the feasibility of implementing the followingadditioneil oontTol:s by the4h quarter of 2010 and implementa lon l If determi ea to be 'feasible, no later than 2nd quarter 6f 201 t

• Defer clain s: for verification of the Plan Al owance when the Allowance exceeds the Coyeri;ld Charges (aiJIed Charges) bY$25,OOO or More. ft

Amourrt 'aid 'reaterThan Charges Audit June 30 2Q-10 Page 4 of4

should be noted that he Amount Paid is not de emi,r1i::d untH the daim passes all edits and as a resLiJtciil"nnot be iTicluded in a pre-pa.yment edit process.

• Defer direct data entry claims, special pricing claims and Plan caictJlated claims over adoll'armaximum (S50~OOO) to elrow Plans" to perform a· quality'

"reView prior to the· claim being released to FEP for processing,. • Defer for ela,ims that cover more than one benefit period for management

review before sLlb.rnittin9 the claim for processi t g.,

We appreciate the opportu ity to provide oUr respanse to each ofthe findings and request that our comments be included in their entirety as part of the Final Audit Report . . ....

Executive Director, F' rogram Integrity Federal Employee Program

Attachment

cc: