. u.s. OFFICE: OF PERSONNEL MANAGEMENT OFFICE OF THE INSPECTOR GENERAL·". " - . OFFICE OF AUDITS Finali\.uditReport . Subject:. . '. '. . . '.' . .." :.' . ,-."' ".' . .. .!\l1DI'I'()~('j140BAL . . ·'CLAIMS-TO-ENROLLMENTMATCH FOItBLUEeR()SSANUBLUESlIIELD PLANS· J . . . Rep()rt No. lA~99""OO~08~065. . Date: Jlme 23, 2009 --CAUTION- This audit report has been dislrib"ted to Vederal a~d non-Federal officials ·wbo a·...; ""spous'ble for tile administration of the audited contraet-. This andil report may contain pro·prierary data which isprol~cted by Fcde~allow (IS \JSC 1905); IherHore, while this audit report is available under the Freedom of Informalion Acl, caulion should be exeicised b.ef~re releasing the repon 10 tbe gen~ral public. . UNITED STATES OFFICE OF PERSONNEL MANAGEMENT Washington, DC 20415 Office of the Inspector General EXECUTIVE SUMMARY Federal Employees Health Benefits Program Service Benefit Plan Contract CS 1039 BlueCross BlueShield Association Plan Code 10 Global Claims-to~Enrollment Match BlueCross and BlueShield Plans REPORT NO. lA-99-00-08-065 DATE: ~~ne 23, 2009 This final audit report on the Federal Employees Health Benefits Program (FEHBP) operations for all BlueCross and BlueShield (BCBS) plans questions $2,961,748 in health benefit charges. The BlueCross BlueShield Association and/or BCBSplans agreed with $2,046,647 and disagreed with $915,101 of the questioned charges.. Our limited scope audit was conducted in accordance with Government Auditing Standards. The audit covered health benefit payments from 2005 through June 30, 2008 as reported in the Annual Accounting Statements. Specifically, we reviewed claims paid from January 1,2005 through June 30, 2008 that were potentially incurred when no patient enrollment records existed, during gaps in patient coverage, or after termination of patient coverage with the BCBS Service Benefit Plan. We determined that the BCBS plans paid 19,363 claim lines that were incurred when no patient enrollment records existed,- during gaps in patient coverage, or after termination of patient coverage, resulting in overcharges of$2,961,748 to the FEHBP. These claims were paid for ineligible patients. www.opm.goY www.usajobs.goY CONTENTS PAGE EXECUTIVE SUMMARY i 1. INTRODUCTION AND BACKGROUND .. ~ ~ l II. OBJECTIVE, SCOPE, AND METHODOLOGy 3 III. AUDIT FINDING AND RECOMMENDATIONS 5 Claims Paid for Ineligible Patients 5 IV. MAJOR CONTRlBUTORS TO THIS REPORT 10 V. SCHEDULE A - SUMMARY OF QUESTIONED CHARGES BY PLAN SITE APPENDIX (BlueCross BlueShield Association reply, dated December 23, 2008, to the draft audit. report) I. INTRODUCTION AND BACKGROUND INTRODUCTION This final audit report details the findings, conclusions, and recommendations resulting from our limited scope audit of the Federal Employees Health Benefits Program (FEHBP) operations at aU BlueCross and BlueShield (BeBS) plans. The audit was perfonned by the Office of Personnel Management's (OPM) Office of the Inspector General (OIG), as established by the Inspector General Act of 1978, as amended. BACKGROUND The FEHBP was established by the Federal Employees Health Benefits (FEHB) Act (Public Law 86-382), enacted on September 28, 1959. The FEHBP was created to provide health insurance benefits for federal employees, annuitants, and dependents. OPM's Center for Retirement and Insurance Services has overall responsibility for administration of the FEHBP. The provisions of the FEHB Act are implemented by OPM through regulations, which are codified in Title 5, Chapter 1, Part 890 of the Code of Federal Regulations (CFR). Health insurance coverage is made available through contracts with various health insurance carriers. The BlueCross BlueShield Association (Association), on behalf of participating BeBS plans, has entered into a Government-wide Service Benefit Plan contract (CS 1039) with aPM to provide a health benefit plan authorized by the FEHB Act. The Association delegates authority to participating local BeBS plans throughout the United States to process the health benefit claims of its federal subscribers. There are approximately 63 local BCBS plans participating in the FEHBP. The Association has established a Federal Employee Program (FEp l ) Director's Office in Washington, D.C. to provide centralized management for the Service Benefit Plan. The FEP Director's Office coordinates the administration of the contract with the Association, member BCBS plans, and OPM. The Association has also established an FEP Operations Center. The activities of the FEP . Operations Center are performed by CareFirst BCBS, located in Washington, D.C. These activities include acting as fiscal intermediary between the Association and member plans, verifying subscriber eligibility, approving or disapproving the reimbursement of local plan payments ofFEHBP claims (using computerized system edits), maintaining a history file of all FEHBP claims, and maintaining an accounting of all program funds. Compliance with laws and regulations applicable to the FEHBP is the responsibility of the management for the Association and each BCBS plan. Also, management of each BCBS plan is responsible for establishing and maintaining a system of internal controls. I Throughout this report, when we refer to "FEP" we are referring to the Service Benefit Plan lines of business at the Plan. When we refer to the "FEHBP" we are referring to the program that provides health benefits to federal employees. This is our first global claims-to-enrollment match audit on the BeBS plans. Our preliminary results of the potential health benefit overcharges were presented in a detailed draft report, dated September 5, 2008. The Association's comments offered in response to the draft report were considered in preparing our final report and are included as the Appendix to this report. Also, additional documentation provided by the Association and BeBS plans on various dates through March 25, 2009, was' considered in preparing our final report. 2 II. OBJECTIVE, SCOPE, AN)) METHODOLOGY OBJECTIVE The objective ofthi-6 audit was to determine whether the BCBS plans complied with contract provisions relative to patient enrollment eligibility. SCOPE Our limited scope performance audit was conducted in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient and appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objective. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objective. The audit covered health benefit payments from 2005 through June 30, 2008 as reported in the Annual Accounting Statements. Specifically, we reviewed claims paid from January 1,2005 through June 30, 2008 that were potentially incurred when no patient enrollment records existed, during gaps in patient coverage, or after termination of patient coverage with the BCBS Service Benefit Plan. Based on our claim error report, we identified 122,496 claim lines, totaling $12,896,198 in payments, for 8,357 patients that were potentially incurred when no patient enrollment records existed, during gaps in patient coverage, or after termination of patient coverage. From this universe of8,357 patients, we selected and reviewed all patients with cumulative claim line payments of $2,000 or more. Our sample included 73,273 claim lines, totaling $10,529,075 in payments, for 1,106 patients. We did not consider each BeBS plan's internal control structure in planning and conducting our auditing procedures. Our audit approach consisted mainly of substantive tests of transactions and. t:lot tests of controls. Therefore, we do not express an opinion on each BeBS plan's system of internal controls taken as a whole. We also conducted tests to determine whether the BCBS plans had complied with the contract and the laws and regulations governing the FEHBP as they relate to patient enrollment eligibility. The results of our tests indicate that, with respect to the items tested, the BCBS plans did not fully comply with the provisions of the contract relative to patient enrollment eligibility. Exceptions noted in the areas reviewed are set forth in detail in the"Audit Finding and . Recommendations" section of this report. With respect to the items not tested, nothing came to our attention that caused us to believe that the BCBS plans had not complied, in all material respects, with those provisions. In conducting our audit, we relied to varying degrees on computer-generated data provided by the FEP Director's Office, FEP Operations Center, and the BCBS plans. Due to time constraints, we did not verify the reliability of the data generated by the various information systems involved. However, while utilizing the computer-generated data during our audit testing, nothing came to our attention to cause us to doubt its reliability. We believe that the data was sufficient to achieve our audit objective. 3 The audit was performed at our offices in Washington, D.C.; Cranberry Township, Pennsylvania; and Jacksonville, Florida from January 2009 through May 2009. METHODOLOGY To test each BeBS PIan's compliance with the FEHBP health benefit provisions related to patient emollment eligibility, we selected all potential ineligible patients with cumulative claim line payments of $2,000 or more that were identified in a computer search. Specifically, we selected for review 73,273 claim lines, totaling $10,529,075 in"payments, for 1,106 patients (from a universe of 122,496 claim lines, totaling $12,896,198 in payments, for 8,357 patients) that were potentially incurred when no patient emollment records existed, during gaps in patient coverage, or after termination of patient coverage with the BCBS Service Benefit Plan. The claim line payments selected for review were submitted to each applicable BCBS plan for their review and response. For each plan, we then conducted a limited review of the agreed responses and an expanded review of the disagreed responses to determine the appropriate questioned amount. We did not project the sample results to the universe. The determination of the questioned amount is based on the FEHBP contract, the Service Benefit Plan brochure, and the Association's FEP administrative manual. 4 III. AUDIT FINDING AND RECOMMENDATIONS Claims Paid for Ineligible Patients $2.961,748 • The BCBS plans paid 19,363 claim lines that were incurred when no patient emollment records existed, during gaps in patient coverage, or after termination of patient coverage with the BCBS Service Benefit Plan, resulting in overcharges of $2,961,748 to the FEHBP. These claims were paid for ineligible patients. Contract CS 1039, Part III, section 3.2 (b)(l) states, 'The Carrier may charge a cost to the contract for a contract term if the cost is actual, allowable, allocable, and reasonable." Part II, section 2.3(g) states, "If the Carrier or aPM determines that a Member's claim has been paid in error for any reason, the Carrier shall make a diligent effort to recover an overpayment ... ." For the period January 1, 2005 through June 30, 2008, we performed a computer search to. identify claims paid that were potentially incurred when no patient enrollment records existed, during gaps in patient coverage, or after termination of patient coverage with the BCBS Service Benefit Plan. We identified 122,496 claim lines, totaling $12,896,198 in payments, for 8,357 patients that met this search criteria. Our search criteria took into consideration the 31-day grace period of temporary continuing coverage following termination of eligibility. From this universe of 8,357 patients, we selected all patients with cumulative claim line payments of $2,000 or more to review. OUf sample included 73,273 claim lines, totaling $10,529,075 in payments, for 1,106 patients. Based on our review, we determined that 19,363 claim lines, totaling $2,961,748 in payments, were paid fOf ineligible patients. z Our audit disclosed the following for these questioned claim line payments: • 'Eor4,374 of the claim lines questioned, the BCBS plans received the termination of member coverage notices from the federal payroll offices after the claims were already paid. However, the BCSS plans did not review and/or adjust these claims that were paid after the patients' tennination dates. As a result, the FEHBP was overcharged $905,610 in claim payments for patients that were not eligible for benefits. • For 2,949 of the claim lines questioned, data input errors occurred that resulted in incorrect member rosters (e.g., enrollment of a non-covered grandchild or other dependent). As a result, the FEHBP was overcharged $540,154 in claim payments for patients that were not eligible for benefits. 2 In addition, there were 6,836 claim lines, totaling $1,516,180 in payments, with eligibility errors that were identified by the BCBS plans before the start of our audit (i.e., September 5, 2008) and adjusted or voided by the Association's response due date (i.e., December 5, 2008) to the draft report. Since these eligibility errors were identified by the BCBS plans before the start of our audit and adjusted or voided by the Association's response due date to the draft report, we did not question these claim line payments in the final report. 5 • For 758 of the claim lines questioned, dependents were added incorrectly to the enrollment files based on the claims information. As a result, the FEHBP was overcharged $98,445 in claim payments for patients that were not eligible for benefits. • For 11,282 of the claim lines questioned, the BCBS plans did not provide specific reasons why these claim lines were paid for ineligible patients. The FEHBP was overcharged $1,417,539 for these claim payments. Most of these claim payment errors were already identified by the BCBS plans before the start of our audit, but were not adjusted or voided by the Association's response due date to the draft report. Of the $2,961,748 in questioned charges, $967,722 (33 percent) were identified by the BCBS plans before the start of our audit (i.e., September 5, 2008). However, since the BCBS plans had not completed the recovery process and/or adjusted or voided these claims by the Association's response due date (i.e., December 5,2008) to the draft report, we are continuing to question these overcharges. The remaining questioned charges of $1 ,994,026 (67 percent) were identified as a result of our audit. In addition, we identified the following procedural issues requiring corrective action by the Association andlor FEP Operations Center: • For 237 patients (15,828 claim lines, totaling $2,519,460 in payments) in our sample, the Association andlor BeBS plans identified that the contract holder (member) or patient had coverage under another contract "R" nurnberand/or·patient code (e.g., due to marital status change), but the claim history files were not combined. During our review, we identified thateach BCBS plan or the FEP Operations Center can combine a member's claims paid under one contract "R" number or patient code with the claims history of a different contract "R" number or patient code. However, when the FEP Operations Center performs this change to the member's claims history, the only field changed within the FEP Direct System, other than the contract "R" number or patient code, is the "File Correction Indicator" located in "the "Accumulator Screen". All dates and other claim data fields within the FEP Direct System remain the same. As a result, we did not receive the adjusted claim records for the contract "R" number andlor patient code changes performed by the FEP Operations Center. This adversely affected the preliminary results of our claim error report. Consequently, 15,828 claim lines in our sample, totaling $2,519,460 in payments, were initially identified as being paid for these 237 potentially ineligible patients; however, these claim lines were actually paid for eligible patients. • Numerous claim lines in our sample, totaling $1,101,246 in payments, were identified as being paid for ineligible patients because the members' effective or termination dates of coverage were entered incorrectly into the FEP Emollment System. For these sample items, we noted that the FEP Operations Center corrected the applicable patients' effective or termination dates of coverage in the FEP Enrollment System on or after July 1, 2008. 6 As a result of these enrollment date corrections, the patients' claims were actually incurred during effective dates of coverage. J Association's Response: In response to the draft audit report, the Association states, "BCBSA identified a total of $2,076,022 of the total questioned amount ... in claim payments that were incurred when no. patient enrollment records existed, during gaps in patient coverage, and/or after tennination of patient coverage. We noted the following reasons for $1,457,488 of the $2,076,022 in overpayments identified: • $986,793 in overpayments resulted from Member Tennination notices that were not received from the aPM Payroll Office until after the claims were already paid.. • $412,446 in overpayments were caused by input errors which resulted in the enrollment of a non-covered grandchild, or other dependents. • $58,249 in overpayments were the result of dependents added incorrectly to the enrollment file based upon claims information. We also determined that retroactive enrollment reports were not generated for some of the overpayments listed above because prior to August 18,2008, the FEP Enrollment System did not generate retroactive enrollment notices for enrollment changes that occurred at the Member level. As of August 18, 2008, the FEP Enrollment system now generates Member level retroactive enrollment reports so that Plans can initiate recovery and recover overpayments in a timely manner. Also, beginning with the FEP Director's Office March 2008 Systeln-Wide Claims Review process, tenninated member claims are now included to assist the Plans in identifying tenninated member claims that were paid in error so that overpayment recovery activity can be initiated timely. With respect to ... the BCBSA contested amount ... our review indicated the following ... • $1,595,848 in questioned claims were contested because recovery was initiated before the audit started and the claim was adjusted either before the' audit started or before our response to the Draft Report Response was submitted. • $883,509 in questioned claims were contested because the claim payment errors were identified and recovery was initiated before the audit; however, the claim has not yet been adjusted: 3 As part of our testing, we reviewed a sample of the patients' heallhbenefits election forms (Standard Form 2809) to verify the patients' effective enrollment periods. Also, we reviewed the FEP Direct System to verify if the enrollment date corrections were properly updated in the FEP Enrollment System and if the patients' claims were incurred during the "correcled" dates of coverage. 7 Documentation to support the contested amounts and to support initiation of ovelpayment recovery before the audit has also been provided.... The Plans will continue to pursue the remaining amounts as required byeS 1039, Section 2.3 ... Any benefit payments the Plans are unable to recover are allowable charges to the Program. In addition, as good faith erroneous payments, lost investment income does not apply to the overpayments identified in the finding." OIG Comments: After reviewing the Association's response and additional documentation provided by the BeBS plans, we revised the questioned charges from our draft report to $2,961)48. Based on the Association's response and the BeBS plans' additional documentation, we determined that the Association and/or plans agree with $2,046,647 and disagree with $915,101 of the questioned charges. Although the Association agrees with $2,076,022 in the written response, the BeBS plans' documentation only supports concurrence with $2,046,647. Based on the Association's response and/or the BeBS plans' documentation, the contested amount of$915,101 represents the following items: • $885,190 of the contested amount represents claims paid for ineligible patients that were identified by the BeBS plans before the audit started. However, the plans had not recovered these ovelpayments and adjusted or voided the claims by the Association's response due date to the draft report. Since these overpayments had not been recovered and returned to the FEHBP by the Association's response due date, we are continuing to question this amount in the final report. • $23,041 of the contested amount represents claim lines that BeBS plans state were paid for eligible patients. However, the plans did not provide sufficient documentation to support that these claim lines were paid for eligible patients. • $6,870 of the contested amount represents claims paid for ineligible patients where recovery efforts were initiated by the BeBS plans after the audit started, and the payments were recovered and the claims were adjusted or voided by the Association's response due date to the draft report. However, since the plans initiated recovery efforts after the audit started, we are continuing to question this amount in the final report. Recommendation 1 We recommend that the contracting officer disallow $2,961,748 in claim payments for ineligible patients, and verify that the BeBS plans return all amounts recovered to the FEHBP. Recommendation 2 We recommend that the contracting officer instruct the Association to develop a corrective action plan for identifying claims that were paid for ineligible patients so that the BeBS plans can initiate recovery efforts and recover overpayments in a timely manner. 8 Recommendation 3 We recommend that the contracting officer instruct the Association to verify if the FEP Operations Center has effective procedures to ensure that members' enrollment data, such as effective and/or termination dates of coverage, is entered correctly into the FEP Enrollment System. • Recommendation 4 We recommend that the contracting officer instruct the Association to have the FEP Operations Center either discontinue combining a member's· claims paid under one "R" number or patient code with the claims history of a different "R" number or patient code, or provide the necessary claim adjustment records to the OIG to account for these changes. 9 IV. MAJOR CONTRIBUTORS TO THIS REPORT Experience-Rated Audits Group A~ditor-In-Charge Auditor-In-Charge Chief Information Systems Audits Group Chief Senior Infonnation Technology Specialist _ Senior Information Technology Specialist 10 v. SCHEDULE A GLOBAL CLAIMS-TO·ENROLLMENT BLUECROSS ANn BLUESHIELD PLANS SUMl\1ARY OF QUESTIONED CHARGES BY PLAN SITE Reasons for Ibe Errors Qu..tioned Cba..... bv Year Plall Sile Qu..tioned Questione d PI:lD Number Pia.. Claim LiDOS Char1!." A1!.rees Plan Disal!nes ReaSOD 1 Roason 2 Reosoll3 Reason 4 2005 200.6 2007 2008 3 BCBS of New MeXleo 45 $ 9,929 S 9,929 $ $ - $ · $ - $ 9,929 $ 6,386 S 3.373 $ 170 $ - 5 W.UPoinl BCBS ofGeonna 253 $ 49,867 $ 15,078 $ 34,789 $ IS 078 $ 34,789 $ 37,372 $ 6,838 $ 5,657 $ 6 7 CareFirst BCBS (Maryland Service Area) BCBS of Louisiana 891 513 $ S 153210 110414 $ $ 57,795 110,414 $ $ 95,415 $ $ 38.570 $ 80,628 $ 19,225 $ $ 29.786 · $ $ 95415 - $ $ 107294 82,591 $ $ 32,664 11,108 $ $ 10.049 16.541 $ $ 3,203 168 9 acas of Alabama 160 $ 29854 $ 29,854 $ · $ 14,334 $ 15,520 $ · $ · $ 14134 $ 9781 $ 5.939 $ 10 ac of Idaho Health Service 17 $ 2,479 $ 2,419 $ $ 2,479 $ $ · $ · S $ 2,479 $ - $ 11 aCBS ofMassaehosetts 164 $ 42,171 $ 42,171 $ - $ 39,592 $ 2,579 $ $ · $ 297 $ 535 $ 40,715 $ 624 13 Hi~arkBCBS 201 $ 21,411 $ 20,490 $ 921 $ 7937 $ 7937 $ 2,958 $ 2,579 $ 1,115 ,$ 4,861 $ 15,355 $ 80 15 aCBS of Tellllessee 551 $ 50,514 $ 50,514 $ - S 28,676 $ 21,838 $ $ $ 20,346 $ 11,680 $ 8,567 $ 3.921 16 BCBS of Wvominp; 40 S 6,847 $ 6,847 $ - $ 6847 S $ $ '$ 761 $ - S 3,079 $ 3,007 17 BCBS of Illinois 504 $ 34,624 $ 9.428 $ 25,196 $ 9,238 $ 190 $ - $ 25,196 $ 12,256 $ 7170 $ 12,344 $ 2,854 21 WellPoint BCBS - Ohio 989 $ 89,995 $ 89,995 $ $ 40,041 $ 2.237 $ - $ 47,717 $ 48,264 $ 29.927 $ 11,300 $ 504 27 WellPoinl BCBS • New Hampshire 5 $ 517 $ 517 $ $ $ 517 S - $ - S S 517 $ . $ 28 BCBS ofVennont 3 $ 204 $ 204 $ S - $ 204 $ · s - s - $ 204 $ - S 29 BCaS of Te""" 2,055 S 289,570 $ 108,147 $ 181,423 $ 1,520 $ . 106627 $ · $ 181.423 $ 52,480 $ 136,754 $ 87,038 $ 13 298 30 WellPoint BeBS • Colorado 547 $ 101,079 $ 100,975 $ 104 $ $ S $ 101079 S 42,731 S 57,289 S 9J3 $ 146 31 Wellmark BeBS of rowa 3 S 8.911 $ 8.911 $ · $ 8,911 S S S - S - $ $ $ 8,911 32 BCBS ofMiehi~an 140 $ 24,593 $ 24593 S · $ . $ $ 3,178 S 21,415 S . $ 21,312 S 103 S 3178 33 BeBS of North Carohna l,242 S 120,961 $ 117,397 S 3,564 $ - $ - $ $ 120,961 $ 30,815 S 52.090 $ 32,770 S 5,286 36 Capital BC 19 S 5,035 $ 5,035 $ · S 4,530 $ 50S $ S $ 2391 $ 21 $ 2,623 . $ 37 BCBS ofMon!Ana 54 $ 6,408 S 6,408 $ · S 6,408 $ · $ $ $ 5,973 $ 435 S S 39 Well Point BCBS - Indiana 177 S 45998 $ 45,998 $ · $ 9,519 $ 32,639 $ $ 3,840 S 24,[32 $ 2,827 S 19,039 $ 40 BCBS ofMLSsissippi 224 $ 23.039 S 23,039 S $ S 23,039 S · S - $ 7,475 S 680 $ 10,879 S 4,005 41 aCBS of Florida 2157 $ 305,231 $ 130,884 $ 174,347 S 1,912 $ 102,877 $ 26,095 $ 174,347 $ 96,054 $ 74912 S 108,300 S 25,905 42 BCBS of Kansas City (Missouri) 159 $ 60,150 $ 60,150 $ $ 60150 $ $ - S · S 59,149 $ 101 S 900 $ . 44 Arkansas BCBS 93 $ 14,289 S 14,289 S 14,289 $ S $ - $ 11,Oll S 312 S 2,680 $ 276 45 WellPoint BCBS • K~n/Ucky 160 $ 32,890 S 32,820 S 70 $ 9,755 S $ 15,405 $ 7,730 $ 4,165 $ 17,063 $ 10,979 $ 683 47 WellPoint BCBS United ofWls""nsUl 484 $ 60,124 $ 60,047 $ 77 S 16,423 $ 4,374 $ 16,491 $ 22,836 S 21,957 $ 16,220 S 16397 S 5,550 48 Empire BCBS (WellPoint) 161 $ 30,782 $ 20,324 $ 10,458 $ 156 S · $ S 30,626 $ 3,323 $ - S 24,136 $ 3,323 49 Horizon BCBS of New Jersey 140 $ 27,202 $ 27,202 $ - $ 27.202 $ $ $ $ 14,463 S 7,236 $ 1565 $ 3,938 52 Well Point BC of CalIfornia 184 $ 126,078 $ 50,150 S 75,928 S 50,150 S - $ $ 75,928 $ 26,999 $ 46,744 S 44,153 $ 8182 53 Bcas of Nebraska 109 S 37,325 S 35,514 $ 1,811 $ 26,525 $ - $ · $ 10,800 $ 24,623 $ 6,660 S 2,074 $ 3,968 54 Mountain State BCSS 448 S 105,393 $ [05,393 $ - $ 8,603 $ 96,.790 $ - $ - $ 73,241 . S 25,603 $ 2,333 $ 4,216 55 lndeoendenee BC 3 $ 13,697 $ 13,697 $ $ 13,697 S $ - $ · S $ S 440 $ 13,257 56 BCBS ofArr>:ona 276 $ 66,887 $' 66,887 $ S 59007 $ 7,880 $ - $ - $ 8,3\9 S 9,100 S 42,481 $ 6,987 58 Re~ence BCBS of Ore~on 321 $ 34,050 $ 34,050 $ $ 34050 $ $ $ - $ 16,186 $ 15,210 $ 464 $ 2,[90 59 WeliPoint BCBS - Maine 34 $ 3,562 $ 3,236 $ 326 $ 3,236 $ $ $ 326 $ 110 S 2,343 $ 1,109 $ 60 BCBS of Rhode [sland 299 $ 15,482 S $ 15,482 $ - S · S $ 15,482 S 11,118 $ 4,085 $ 279 $ 61 WellPoint BCBS - Nevada 35 $ 967 $ 847 $ 120 $ 58 $ - S 16 S 893 $ 109 $ 396 S 376 $ 86 62 WellPoint BCBS • Vinrinia 706 $ 90,163 $ 90,163 $ - $ 11,064 $ 79,099 $ $ S 15,907 $ 31,629 $ 28210 $ 14,417 66 Regenee aCBS of Utah 264 $ 56,237 $ 36,744 $ 19,493 $ 36,744 $ · $ - $ 19,493 $ 12.222 $ 10,137 S 4,979 $ 28899 67 BS of California 535 $ 34,694 $ 19,317 $ 15,377 $ $ 200 $ · $ 34,494 S 4,989 $ 11,506 $ 14,965 $ 3,234 164 69 Re«ttce BS (Washin",on) 81 $ 5,950 $ 5,950 $ $ 1,618 $ $ 2,327 $ 2,005 $ 3,348 $ 543 $ 1,895 S 70 BeSS of Alaska 266 $ 272L2 $ 25,296 S 1.916 $ 25,296 $ $ S 1.916 S 5,527 $ 17,926 $ 3,718 $ 41 75 Premera BC (Washinltton) 78 $ 5.214 $ 5214 $ · $ 4,168 $ 1,046 S $ - $ 2,139 $ 1,709 $ 594 $ 772 76 WellPoinl BCaS of Missouri 302 $ 72,1I1 S 46,478 $ 25.633 $ 235 $ · $ 2,047 $ 69,829 $ 29,939 $ 34574 $ 2.377 $ 5,221 78 BCES of Minnesota 812 S 204,08S $ 204,085 $ · $ 142,878 $ 2,332 $ $ 58,875 $ 173,602 $ 21,341 . $ 6,809 $ 2,333 82 BCaS of Kansas 90 $ 11,711 $ : 1,711 $ - $ n,711 $ - $ $ S 2,517 $ S 9,194 $ Page 1 V. SCHEDULE A GLOBAL CLAIMS-TO-ENROLLMENT BLUECROSS AND BLUESHIELD PLANS SUMMARY OF QUESTIONED CHARGES BY PLAN SITE Reasons for the Errors Questioned Char~.. bv Year PI.n Site Questioned Questioned Plan Number Plan Claim Lines Chn".. A!!:rees Plan Disa!!:re.. Re.son 1 Reason 2 Reason 3 Reason 4 2005 20Q.6 2007 2008 83 BCBS of Oklahoma 721 $ 88,643 $ 25,294 $ 63,349 S 25,152 S . $ 142 $ 63,349 S [9,464 $ 24,096 $ [7535 S 27,548 84 Excellu, BCBS ofUtica-Watenown 45 $ 2,405 $ 2,405 $ $ 2,405 $ - $ - $ S 361 $ 2,044 $ - $ 85 CareFirst BCBS mc Setvice Area) J 572 $ 194,159 $ 27,617 $ 166542 $ 153 $ 12,499 $ - S 18! 507 S 121,213 $ 54.074 $ 15,098 $ 3,774 88 BC of Nonheastern PelUlsvlvania 10 $ 2,939 $ 2,527 $ 412 $ 2527 $ $ - $ 412 $ - $ 217 $ 2,722 $ 89 BCBS of Delaware 10 $ 2,138 .$ 2,138 $ $ 2,138 S - $ - $ $ 2,/38 $ $ . $ . 92 CareFirst BCBS (Overse...) 11 $ 2,348 $ S 2,348 $ $ - $ - $ 2,348 $ 2.348 $ $ . $ - Totals 190363 s 2,961,748 S 2,046,647 S 91~,IOI S 905,610 S 540,154 S 98,445 S 1,4 17,5J9 S 1,2630364 S 834,386 S 649,849 $ 214,149 BCBS = BlucCross BlueSbield BC = BlucCross BS = BlueShield Reasons for lhe Errors: Reason I ~ The BCBS plans received the termination of member coverage notices from the federa! payroll offices after the claims were already paid. However, when the member !ennination notices were subsequently received, the BCBS plans did not review and/or adjust these claims that were incurred llIld paid after the patients' termination dates. Reason 2 = Data input errors oe<:urred that resulted in incorrc<:t member roslers (e.g., enrollment of a non-eove..d grandchild or other dependent). Reason 3 = Dependents we.. added incorreclly to the enrollment files based on the claims information. Reason 4 = The BCBS plans did not provide specific reasOnS why these claim line. were paid for ineligible patients. Most of these claim payment errors were already identified by the BCBS plans before the start of our audit, but "'ere not adjusled or voided by the BCBS AssocialIon's response due dale to the draft report. Page 2 UNITED STATES OFFICE OF PERSONNEL MANAGEMENT Washington, DC 20415 Office of Ihc Inspector General AUDIT REPORT Federal Employees Health Benefits Program Service Benefit Plan Contract CS 1039 BlueCross BlueShield Association Plan Code 10 Global Claims-to-Enrollment Match BlueCross and BlueShield Plans REPORT NO. lA-99-00-08-065 DATE: June 23, 2009 www.opm.goY www.usajobs.goY APPENDIX BlueCross BlueShield Association An Assodation of Independent Blue Cross and Rlue Shjeld Plans December 23, 2008 Federal Employee Program - p .. Group Chief . udits Group Office of the Inspector General lJlOG Street, N.W. Wa~hinglon. 202.942.100ll D.C. 20005 Fall 202.942.1 125 U.S. Office of Personnel Management 1900 E Street, Room 6400 Washington, DC 20415-1100 Reference: OPM DRAFT AUDIT REPORT. Global Enrollment Audit Audit Report #1A-99-00.Q8-065 (Report dated and received 9/1/2008) Dear Mr. Hirschman: This is an update to the response to the aPM Global Enrollment Audit Report Response provided on December 10,2008. A11. Global Enrollment Audit Questioned Amount - $10,529,075 Blue Cross Blue Shield Association (BeSSA) Updated Res'ponse: For claims paid from June 1,2005 through June 30, 2008, OPM OIG identified 73,273 claim lines totaling $10,529,075 in potential health benefit overcharges. After reviewing the updated Plan responses to the OIG Draft Audit Report, SeSSA identified a total of $2,076,022 of the total questioned amount of $10,529,075 in claim payments that were incurred when no patient enrollment records existed, during gaps in patient coverage, andlor after termination of patient coverage. We noted the following reasons for $1 ,457,488 of the $2,076,022 in overpayments identified: . • $986,793 in overpayments resulted from Member Termination notices that were not received from the OPM Payroll Office until after the claims were already paid. • $412,446 in overpayments were caused by input errors which resulted in the enrollment of a non-covered grandchild, or other dependents. December 23, 2008 Page 2 of 3 • $58,249 in overpayments were the result of dependents added incorr:;ect/y to the enrollment file based upon claims information. We also determined that retroactive enrollment reports were not generated for some of the overpayments listed above because prior to August 18, 2008, the FEP Enrollment System did not generate retroactive enrollment notices for enrollment changes that occurred at the Member level. As of August 18, 2008, the FEP Enrollment system now generates Member level retroactive enrollment reports so that Plans can initiate recovery and recover overpayments in a timely manner. Also, beginning with the FEP Director's Office March 2008 System- Wide Claims Review process. terminated member claims are now included to assist the Plans in identifying terminated member claims that were paid in error so that overpayment recovery activity can be initiated timely. With respect to $8,373,363 of the SeSSA contested amount of $8,453,053, our review indicated the following: • $2,511,608 in questioned claims were contested because the contract holder/member had coverage under another contract id/member number (due to marital status change, etc.) and the claims history was not combined. • $1,101,246 in questioned claims were contested because the members' effective date or termination date was entered incorrectly into the FEP Enrollment System. • $2,281,152 in questioned claims were contested because the members' claims were incurred within the 30 day grace period for terminated members or members' coverage was changed to family coverage, etc., so the members still had coverage. • $1,595,848 in questioned claims were contested because recovery was initiated before the audit started and the claim was adjusted either before the audit started or before our response to the Draft Report Response was submitted. • $883,509 in questioned claims were contested because the claim payment errors were identified and recovery was initiated before the audit; however, the claim has not yet been adjusted. Documentation to support the contested amounts and to support initiation of overpayment recovery before the audit has been provided. In addition, we have attached a schedule listed as Attachment A that shows the amount questioned. contested and recovered by each Plan location. December 23,2008 Page 3 of 3 The Plans will continue to pursue the remaining amounts as required by CS 1039, Section 2.3 (9)(1). Any benefit payments the Plans are unable to recover are allowable charges to the Program. In addition, as good faith erroneous payments, lost investment income does not apply to the overpayments identified in the finding. We appreciate the opportunity to provide our response to this Draft Audit Report and would request that our comments be included in their entirety as part of the Final Audit Report. Sincerely, Attachment cc:
Audit on Global Claims-To-Enrollment Match For Bluecross and Blueshield Plans
Published by the Office of Personnel Management, Office of Inspector General on 2009-06-23.
Below is a raw (and likely hideous) rendition of the original report. (PDF)