oversight

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)

                                                         . 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

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