u.s. OFFICEOF PERSONNEL MANAGEMENT
OFFICE OF THE INSPECTOR GENERAL
OFFICE. OF AUDITS
Final Audit Report .
Subject:
...... .. •.· .. i·· . AUDIT.()NGLOBAL .... ... .
.DUJ,>LICA.T~CLA;nviPA\'MENTS FOR··
·6LUECRQSS· ANDBLUESHIELDPLANS
Report No. lA-:99~OO:"09-:036
Datc:bctober1.4, 2009
--CAUTION-
This audit rtporl has been distributed 10 Federal officials who are respon~ible (Dr the administration of the audited program. Tllis audit
report may containproprielary data whi.ch is protecled by Federallaw(18 U.S.C.19(lS). Therefore, while this audit report IS available
under the Freedom of Information Acl and made available ID the public on the OIG webpage, caution needs. to be exercised before
releasinglhe reporl 10 lilt general public as it may cillitllin proprietary iliformatioD thai was redacted from the publicly distributed copy.
UNITED STATES OFFICE OF PERSONNEL MANAGEMENT
Washington, DC 20415
OfficI) of flu'
InSpedor GenCl ai
AUDIT REPORT
Federal Employees Health Benefits Program
Service Benefit Plan Contract CS 1039
BlueCross BlueShield Association
Plan Code 10
Global Duplicate Claim Payments
BlueCross and BlueShield Plans
REPORT NO. lA-99-00-09-036 DATE:' October 1.4, 2009
Michael R. Esser
Assistant Inspector General
for Audits
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UNITED STATES OFFICE OF PERSONNEL MANAGEMENT
Washington, DC 20415
Office of the
Inspector General
EXECUTIVE SUMMARY
Federal Employees Health :eenefits Program
Service Benefit Plan Contract CS 1039
BlueCross BlueShield Association
Plan Code 10
Global Duplicate Claim Payments
BlueCross and BlueShield Plans
REPORT NO. lA-99-00-09-036 DATE: october 14, 2009
This final audit report on the Federal EPlployees Health Benefits Program (FEHBP) operations
at all BlueCross and BlueShield (BCBS) plans questions $9,560,5 I 6 in duplicate claim
payments. The BlueCross BlueShield Association (Association) and/or BCBS plans agreed with
$8,620,458 and disagreed with $940,058 of the questioned charges.
Our limited scope audit was conducted in accordance with Government Auditing Standards. The
audit covered health benefit payments from 2006 through March 31, 2009 as reported in the
Annual Accounting Statements. Specifically, we reviewed claims paid from January 1,2006
through March 31,2009 for duplicate payments charged to the FEHBP. We determined that the
BCBS plans improperly charged the FEHBP for 15,294 duplicate claim payments during this
period. These payments were unnecessary and unallowable charges, resulting in overcharges of
$9,560,516 to the FEHBP.
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CONTENTS
PAGE
EXECUTIVE SUMMARY ...... ;........................................................................................ i
I. INTRODUCTION AND BACKGROUND ..................................................................... 1
II. OBJECTIVE, SCOPE, AND METHODOLOGY ............................................................ 3
III. AUDIT FINDING AND RECOMMENDATIONS .................. ,...................................... 5
Duplicate Claim Payments .................. ~ ...................................................................... 5
IV. MAJOR CONTRIBUTORS TO THIS REPORT ............................................................ 9
V. SCHEDULES
A. QUESTIONED DUPLICATE CLAIM PAYMENTS BY PLAN
B. QUESTIONED DUPLICATE CLAIM PAYMENTS BY PLAN - BREAKDOWN
BY BEST AND NEAR MATCHES
APPENDIX (BlueCross BlueShield Association reply, dated July 31, 2009, to the
draft audit report)
I. INTRODUCTION AND BACKGROUND
INTRODUCTION
This timil audit report details the findings; conclusions, and recommendations resulting from our
limited scope audit of the Federal Employees Health Benefits Program (FEHBP) operations at all
BlueCross and BlueShield (BCBS) plans.
The audit was performed 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 heaJth 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 BCBS plans, has
entered into a Government-wide Service Benefit Plan contract (CS 1039) with OPM to provide a
health benefit plan authorized by the FEHB Act. The Association delegates authority to
participating local BCBS 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 (FEPI) 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
BlueCross and BlueShield 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 intennediary between the Association and member plans,
verifying subscriber eligibility, approving or disapproving the reimbursement of local plan
payments of FEHBP 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.
1
Findings from our previous global duplicate claim payments audit or all BeBS plans (Report No.
1A~99-00-08~008, dated September 11, 2008) for contract years 2004 and 2005 ate in the process
of being resolved.
Our preliminary results of the potential duplicate claim payments were presented in detail in a
draft report, dated May 1,2009. The Association's comments offered in response to the draft
report were considered in preparing olir final report and are included as the Appendix to this
report. Also, additional documentation provided by the Association and BeBS plans was
considered in preparing our final report.
2
II. OBJECTIVE, SCOPE, AND METHODOLOGY
OBJECTIVE
The objective of this audit was to determine whether the BeBS plans complied with contract
provisions relative to duplicate claim payments.
SCOPE
We conducted our limited scope performance audit 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 2006 through March 31, 2009 as reported in the
Annual Accounting Statements. Specifically, we reviewed claims paid from January 1,2006
through March 31, 2009 for duplicate payments charged to the FEHBP. Based on our claim error
reports, we identified],791,693 groups, totaling $78,852,500 in potential duplicate claim
payments. From this universe, we selected and reviewed 33,054 groups, totaling $27,335,369 in
potentia] duplicate claim payments.
We did not consider each BCBS plan's internal control structure in planning and conducting our
auditing procedures. Our audit approach consisted mainly of substantive tests of transactions
and not tests of controls. Therefore, we do not express an opinion on each BCBS 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 duplicate claim payments. 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 duplicate claim payments. 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, the FEP Operations Center, and the BeBS 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.
The audit was performed at our offices in Washington, D.C.; Cranberry Township, Pennsylvania;
and Jacksonville, Florida from August 3, 2009 through September 11,2009.
3
METHODOLOGY.
To test each BeBS plan's compliance withthe FEHBP health benefit provisions related to
duplicate claim payments, we selected judgmental samples of potential duplicate claims that
were identified.in a computer search.. Specifically, we selected for review 33,054 groups,
totaling $27,335,369 (out of 1,791,693 groups, totaling $78,852,500) in potential duplicate claim
payments?
The samples were submitted to each applicable BeBS plan for their review and response. We
then conducted a limited review of the plans' agreed responses and an expanded review of their
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.
2 The sample selections included 17,126 groups, totaling $13.325, 136 (out of 370,644 groups, totaling $24,778,433)
in potential duplicate payments under our "best matches" criteria, and 15,928 groups, totaling $14,0 I 0,233 (out of
1,421,049 groups, totaling $54,074,067) in potential duplicate payments under our "near matches" criteria.
4
III. AUDIT FINDING AND RECOMMENDATIONS
Duplicate Claim Payments $9,560,516
The BCBS plans improperly charged the FEHBP $9,560,516 for 15,294 duplicate claim
payments from January 1,2006 through March 31, 2009. These payments were unnecessary and
unallowable charges to the FEHBP.
Contract CS 1039, Part III, section 3.2 (b)(l) states, "The Carrier may charge a cosUo 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 OPM determines that a member's claim has been paid in
error for any reason, the Carrier shall make a prompt and diligent effort to recover the
erroneous payment.
Section 6(h) of the FEHB Act provides that rates should reasonably and equitably reflect the
costs of benefits provided.
We performed a computer search for potential duplicate payments on claims paid during the
period January 1, 2006 through March 31, 2009. For all BCBS plans, we selected and reviewed
17,126 groups, totaling $13,325,136 (out of 370,644 groups, totaling $24,778,433) in potential
duplicate payments, under our "best matches" criteria. We also selected and reviewed] 5,928
groups, totaling $14,010,233 (out of 1,421,049 groups, totaling $54,074,067) in potential
duplicate payments, under our "near matches" criteria. Our samples included all groups with
potential duplicate payments of $250 or more under the "best matches" criteria and $400 or more
under the "near matches" criteria.
Based on our review, we determined that 1 ] ,339 claim payments in our "best matches" sample
were duplicates, resulting in overcharges of $6,738,616 to the FEHBP. Also, we determined that
3,955 claim payments in our "near matches" sample were duplicates, resulting in overcharges of
$2,821,900 to the FEHBP. In total, 63 BeBS plans overcharged the FEHBP $9,560,516 for these
15,294 duplicate claim payments from January 1, 2006 through March 31, 2009 (See Schedule A
for a summary of the questioned duplicate claim payments by BCBS plan and Schedule B for a
breakdown of the questioned duplicate claim payments by "best matches" and "near matches,,).3
These duplicate claim payments resulted from the following:
• For 9,991 (65 percent) of the duplicate payments, the claims were not deferred on the claims
system as potential duplicates for review by the processors.
3In addition, there were 2,062 duplicate claim payments, totaling $1,768,245, that were identified by the BCBS
plans before the start of the audit (i.e., April 24,2009) and adjusted or voided by the Association's response date
(Le., July 31,2009) to the draft report. Since these duplicate claim payments were identified by the BCBS plans
before the start of our audit and adjusted or voided by the Association's response to the draft report, we did not
question these duplicate payments in the final report.
5
• For 5,303 (35 percent) of the duplicate payments, the claims were deferred as potential
duplicates on the claims system, but were overridden by the
processors.
Ofthe $9;560,516 in questioned duplicate payments, $930,034 (10 percent) were identified by
the BeBS plans before the start of our audit (i.e., April 24, 2009). However, since the BeBS
plans had not completed the recovery process andlor adjusted or voided these duplicate claims by
the Association's response date (i.e., July 31, 2009) to the draft report, we are continuing to
question these overcharges. The remaining questioned duplicate payments of $8,630,482 (90
percent) were identified as a result of our audit.
Association's Response:
The Association agrees with $8,542,354 of the questioned duplicate claim payments. The
Associations states that the BeBS plans have recovered $1,470,162 ofthese duplicate payments
as of July 24, 2009. The Association also states that the duplicate payments were good faith
erroneous benefit payments and fall within the context of CS 1039, Part II, section 2.3(g). The
BCBS plans will continue pursuing the overpayments as required by the FEHBP contract. Any
duplicate payments the plans are unable to recover, where due diligence is demonstrated, are
allowable charges to the FEHBP. As good faith erroneous payments, lost investment income
does not apply to the duplicate payments identified in this finding.
The Association states, "Further analysis of the ... two primary reasons for duplicate payments
identified the following:
• Duplicate claim payments totaling $3,397,043 were made because the processor
incorrectly overrode the duplicate deferral.
• Duplicate claim payments totaling $5,145,311 were made because the FEP claims system
did not defer the c1aim for evaluation by processors."
Regarding the contested amount, the Association states that the recoveries of the dupJicate
payments were initiated prior to the start of the audit (i.e., April 24, 2009), but the recovery
process has not been completed.
The Association states, "The FEP Director's Office continues to evaluate ways to improve the
prevention and detection of duplicate claim payments. In order to reduce the number of
duplicate payments, prior to this audit, the FEP Program implemented the following:
• Modified the FEPExpress System on January 1, 2009 to defer claims with the same
modifier or modifiers that have similar meaning.
• Updated the FEP Administrative Manual on January 1, 2009 to provide additional
instructions on the resolution of duplicate claim edits.
6
In addition, FEP will perform the following:
• Provide Plan training on the proper duplicate edit resoluti"ori process. . . __
• Increase duplicates included on the FEP quarterly duplicate post-payment Plan reports by
removing the criteria to match on allowed charges and match on all provider fields ....
• Modify our current duplicate reporting process to require Plans to submit the results of
their review of the Quarterly Duplicate Claims Reports·to the FEP Director's Office for
review and analysis ....
• Expand the FEPExpress duplicate edit criteria to defer claims if there is a match on two
ofthe five provider fields. Currently all provider fields must match in order for the claim
to defer as a possible duplicate ....
• Expand the FEPExpress duplicate claim reporting to generate monthly summary reports of
all duplicate claim edits overridden by processors for further Plan management review.
The FEP Director's Office will also receive a copy of the Plans' monthly summary
override reports for monitoring ....
• Remove the criteria for a match on covered charges from the duplicate edit criteria....
• Modify the FEPExpress System to prevent Plan Approved claims from by-passing the
duplicate edit logic."
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 $9,560,516. Based on the
Association's response and the BCBS plans' additional documentation, we determined that the
Association and/or plans agree with $8,620,458 and disagree with $940,058 of the questioned
duplicate claim payments. Although the Association only agrees with $8,542,354 in its
response, the BCBS plans' documentation supports concurrence with $8,620,458.
Based on the Association's response andlor the BCBS plans' documentation, the contested.
amount of $940,058 represents the following items:
• $930,034 of the contested amount represents 1,069 duplicate claim payments where recovery
efforts were initiated by 31 BCBS plans before the audit started. However, the plans had not
recovered these duplicate payments and adjusted or voided the claims by the Association's
response date to the draft report. Since these duplicate payments had not been recovered and
returned to the FEHBP by the Association's response date, we are continuing to question this
amount in the final report.
• $10,024 of the contested amount represents 22 duplicate payments where the Alaska and
Highmark BCBS plans did not provide sufficient documentation to support these contested
items.
Recommendation 1
We recommend that the contracting officer disallow $9,560,516 for duplicate claim payments
charged to the FEHBP, and have the BCBS plans return all amounts recovered to the FEHBP.
7
Recommendation 2
We recommend that the contracting officer ensure that the Association's corrective actions for
improving the prevention and detection of duplicate claim payments are· being implemented.
8
IV. MAJOR CONTRIBUTORS TO THIS REPORT
Exp~ti~!lce-Rated Audits Group
Auditor-In-Charge
Auditor
Auditor
Auditor
Chief
Information Systems Audits Group
Chief
.., .... ll1Vl Information Technology Specialist
9
SCHEDULE'A
Page 1 of3
GLOBAL DUPLICATE CLAIM PAYMENTS
, BLUECROSS AND BLUESHIELD PLANS
January 1,2006 - Much 31, 2009
QUESTIONED DUPLICATE CLAIM PAYMENTS BY PLAN
Pion Plan
Number of Number of Number of Reasons for the Dupliute Paymenls Amounts Que.tionecl by Year Total Pia.
Site ~ PI.n No",. St.te DUPS Plan Aeroes Pia. Disa~r_ Roason I R..son 2 Rooson 3 Reason 4 Ruso-n 5 ZOO6 2007 ZOOS 2009 QUelI/ia.ed A2I'CCS Di..!!r....
003 BCBS of N.w M.x.ico NM 107 83 24 51 9 0 18 29 S 54,474 S 17,145 S 33,797 S 54,617 $ (60,032 $ 100,522 $ 59,510
005 W.I1Point BCBS of Georgi. GA J09 98 11 43 17 0 0 49 S 15,428 S 22,915 $ 26,860 $ 11,742 $ 76,945 $ 66,965 $ 9,980
006 C"",Firsl BCBS (MD Service Ar••) MD 636 636 0 374 11 4 0 247 S 16,991 $ 83,289 $ 126,257 S 38,241 $ 324,778 S 324,778 S ·
007 BCBS of LouIS","a LA 503 503 0 372 !8 0 0 113 S 49,417 $ 60,036 $ 134,355 $ 15,931 S 259,739 $ 259,739 $ -
009 BCBS of Alabama AL 105 IDS 0 35 20 0 0 50 S 25,910 $ 10,054 S 13,022 $ 1,578 $ 50,563 $ 50,563 $ ·
010 BCBS of ldalto Health Service lD 26 24 2 2 0 0 0 24 $ $ 2,475 $ 9,902 $ . $ 12,377 S 11,681 $ 697
011 BCBS of Massachusetts MA 30 30 0 13 17 0 0 0 S 419 S 2,984 $ 1,421 $ 10,351 S 15,175 $ 15,175 S -
012 BCBS oeWestem New York NY 54 54 0 0 0 54 0 S 4,563 S 5,362 $ 4,808 S . $ 14,732 S 14,732 S ·
013 Highmari< BCBS PA
°
18 4 183 S 51,5113 $ 73,376 $ 58,112 S 16,117 $ 199,188 S 196,532 S 2,657
015 BCBS of Tennessee 1N
266
628
248
628 0
36
124
43
0 0
°
0 504 $ 54,399 $ 90,707 $ 171,614 S 16,473 S 339,193 S 339,193 S ·
016 BCBS of Wyorrung WY 0 0 2 $ J,29S $ 2,946 S 67,289 S 376 $ 7l,9Q6 S 71,9Q6 S ·
0]7 BCaS of Illinois IL
54
493
54
354 139
0
250
52
3 0
°
0 240 S 66,689 S 103,213 $ 144,612 S 12,481 $ 326,99:; $ 213,854 $ 113,142
021 WellPoint BCBS of Ohio OH 943 923 20 190 70 I 0 682 S 91,101 S 189,583' $ 236,846 S. 30,247 $ 547,777 S 532,625 S IS,iS2
024 BCBS of South Carolina SC 37 37 0 9 14 10 0 4 $ 340 $ 2,779 S 10,348 S 5,045 S 18,512 S 18,512 S -
021 WellPoint BCBS of New Hampshire NH 132 (2S 7 56 0 0 0 76 $ 13,416 S 22,806 $ 34,753 $ 2,497 $ 73,532 S 68,860 S 4,672
028 BCBS ofVennont VT 33 29 4 26 3 0 0 4 S 324 $ 3,995 S 5,733 S 4,064 $ . 14,116 $. 11,796 S 2,321
029 BCBS of Texas TX 1,003 750 253 573 40 '0 0 390 $ 116,988 S 150,258 S 3S7,520 $ 73,736 $ 698,502 $ 520,401 $ 178, 101
030 WeliPoinl BCBS of Colorado CO 566 439 127 153 8 0 228 177 S 80,974 $ 146,092 S 191,342 $ 26,180 $ 444,588 S 358,150 S 86,438
0] I Wellmark BCBS of Iowa lA 37 37 0 S 22 0 0 7 S 48 S 33,470 $ 1,684 $ 1,352 $ 36,554 $ 36,554 S ·
032 BeBS of Michigan Ml 255 246 9 119 12 I 91 32 $ 8,758 $ 19,562 $ 64,113 S 7,166 S 99,599 $ 94,977 S 4,622
033 BCSS of North Carolina NC 670 624 46 136 9 0 200 32S $ ]0,546 $ 69,058 S 216,702 S 47,S28 J 363,834 S 338,216 $ 25,618
034 BCBS of North Dakota ND 4 4 0 0 0 0 0 4 $ 515 $ 1,069 $ . $ S 1,584 $ 1,584 S
036 Capitlll BC PA 9 9 0 5 4 0 0 0 $ . S 479 $ 5,705 S 2,870 $ 9,053 $ 9,053 $
037 BeBS of MontJUla MT 3 3 0 I 0 0 0 2 S 550 $ $ 265 S 844 S 1,659 $ 1,659 'S ·
OJa BCBS of Hawaii HI ]3 33 0 16 5 0 0 12 S 1,739 S 3,093 S 9,506 S 3,380 $ 17,719 $ '17,719 $ ·
039 WellPornt BCSS of Indiana IN 787 781 6 158 26 0 428 175 $ 75,281 S 54,522 $ 170,632 $ 44,128 S 344,563 $ 342,674 $ 1,889,
040 BCBS of Mississippi MS 247 241 6 116 57 0 0 74 S 43,579 S 264,061 S 36,092 $ 3,137 S 346,868 $ 344,088 $ 2,780
041 BCBS of Florida FL 2096 203S 61 1083 920 0 0 93 $ 111 382 $ 38879$ $ 383681 $ 94,713 $ 978575 $ 903316 $ 75259
SCHEDULE A
Page 2 of3
GLOBAL DUPLICATE CLAIM PAYMENTS
BLUECROSS AND BLUESHIELD PLANS
January 1,2006 - March 31, 2009
QUESTIONED DUPLICATE CLAIM PAYMENTS BY PLAN
Plan Pia.
Number of Number of Number of R.a.ons for the Dupliute Payme.ts Amounts Questioned by Y.ar Total Pia.
Sitoll Pia. N.me SCate DUPS Plan A~r... Plan Di••u _ Re.,on I Reoson 2 Reason 3 Reason 4 Reason S 2006 looi lOOS 2009 Question'" Aerees Disaerees
042 BCBS of Kansas City MO 119 119 0 17 32 0 70 a s 8,202 S 14,119 S 44,096 $ 19,774 $ 86,191 $ 86,191 S -
043 Regenee BS ofldaho ID I I 0 I 0 0 0 0 S S - S S 1,136 S 1,136 S 1,136 S
044 Arkan.as BCBS AR 149 149 0 0 0 0 149 S 19,522 S 16,649 $ 26,963 $ 13,832 $ 76,966 $ 76,966 S
045 WellPDinl BCBS of Kentucky KY 456 456 0
°
81 19 S 255 96 $ 68,645 S 63,902 $ 106,616 S 33,031 S 272,194 S 272,194 $ -
047 W.IIPoinc BCBS of Wi"",nsin WI 295 280 15 41 9 0 175 70 S 16,090 $ 40,473' S 113,227 S 20,383 $ 190,174 $ 171,610 S 18,564
048 Empire BCBS NY 50 26 24 14 3 6 0 27 $ 7,761 S 17,157 $ 35,625 S 5,550 $ 66,093 $ 35,45~ $ 30,643
049 Horizon BCBS of New Je",ey NJ 274 269 5 189 44 0 10 31 $ 85,717 $ 208,805 S 130,192 $ 10,333 $ 435,048 $ 433,23~ S 1,813
050 WeUPomt BCBS of Connecticut CT 135 135 0 0 2 0 0 133 !£ 13,905 $ 12,532 :£ 40,544 S 11,596 $ 78,577 $ 78,577 $ -
052 Well Point BC of California CA 62 56 6 [2 2 0 42 6 S 1.946 S 19,399 :£ 59,976 $ 13,092 $. 94,413 $ 43,166 S 51,247
OS3 BeBS of Nebraska NE 145 133 [2 53 17 0 52 23 :£ 16,299 :£ 52,430 $ 30,460 $ 5,485 $ 104,674 '$ 96,737 :£ 7,936
054 MOWltain State BCBS WV 32 32 a 24 0 0 a 8 S 12,121 S 6,285 $ 3,834 $ - '$ 22,239 :£ 22,239 :£ -
055 Independence BC PA 33 33 0 5 13 0 3 12 :£ 21,860 :£ 17,052 S 2,844 :£ 10,420 :£ 52,177 :£ 52,177 $ -
056 BeBS of ArizOna AZ 198 150 48 117 32 0 0 49 S 20,602 :£ 40,110 S 50,569 $ 11,405 $ 122,687 S. 90,065 :£ 32,622
058 Regence BCBS DfOregon OR 92 92 0 36 29 I 5 21 S 9,730 :£ 22,957 $ 61,294 S 9,915 :£ 103,897 :£ 103,897 $
059 WellPoint BCBS of Maine ME [36 133 3 0 a 0 a [36 $ 6,J43 :£ 32,206 S 55,938 :£ 5,665 :£ 99,953 :£ 98,414 $ 1,539
060 BCBS of Rhode Island Rl 29 29 0 3 5 0 13 8 S 6,564 :£ 10,310 :£ 3,766 :£ 560 :£ 21,200 $ 21,200 S -
061 WellPoinl BCBS or Nevada NV 334 ][5 19 16 66 0 232 20 S 11,084 $ 42,348 S 63,453 :£ 16,245 $ 133,130 $: 122,799 $ 10,331
062 WellPDint BCBS of Virginia VA 686 671 15 27 436 0 1 222 S 32,373 $ 87,703 S 184,121 :£ 37,545 $: 342,342 $: 334,839 $ 7,503
064 Excellus BCBS "fthe Rochester NY 10 10 0 2 0 0 8 0 $ 454 $ 1,518 :£ 2,563 :£ 1,002 S 5,536 S 5,536 $
066 Regenc. BCBS of U<alJ UT 164 [62 2 [9 2 0 135 8 S 18,372 $ 32,188 S 45,537 S 8,229 $ 104,326 :£ 102,762 $ 1,564
067 BS of California CA 123 73 50 62 0 0 4 57 S 17,549 :£ 31,267 $ 27,603 :£ 17,333 :£ 93,752 S 51,064 S 42,688
069 Regence as of Washington WA 125 124 1 120 I 0 0 4 $ 6,929 $ 13,027 $ 35,466 $ 13,lIJ S 68,532 S 67,004 S 1,528
070 BCBS of Alaska AK 78 74 4 18 0 0 25 35 :I; S,HI $ 15,592 $ 32,285 $ 5,421 $ 61,609 S 54,242 $ 7,368
074 Wei!mark BCBS of South Dokola SD 13 13 0 g I 0 3 1 $ - :£ 278 $ 9,861 :£ 704 S 10,842 $ 10,842 $ .
075 l',ern.ra BC ofWoshington WA 107 105 2 2 0 0 7 98 $ 15,490 $ 9,555 $ 30,501 S 10,013 S 65,558 $ 59,446 $ 6,113
076 WeUPoint BCBS of Missouri MO 322 252 70 53 15 0 171 83 5 3,4% $ 24,600 :£ 150,154 $ 9,269 $ 187,519 $ 120,749 $ 66,770
078 BCBS ofMiMesota MN 26 26 0 a 0 a a 26 S 4,578 :£ 314 S 8,812 :£ 6,306 S 20,008 :£ 20,008 :£ -
079 Excellus BCBS ofCentroi New York NY 36 I 36 0 18 I 3 J4 0 $ 16,868 $ 1.055 $ 7,856 $ 1024 S 26802 S 26802 :I; -
SCHEDULE A
Page 3 of3
GLOBAL DUPUCATE CLAIM PAYMENTS
. BLUECROSS AND BLUESHIELD PLANS
January 1,2006 - March 31, 2009
QUESTIONED DUPLICATE CLAIM PAYMENTS BY PLAN
Plan
Number of Number of Numbe. of Rusons for Ibe Duplicate Payments Amounts Questio.ed by Year Total Plan Plan
Sit.1I Plan Name SUte DUPS PI•• Aerees Plan Dis.~rees Reason 1 Reason 2 Reason} Reason 4 Reason 5 2006 lOO7 1008 1009 Questioned Afrees Disa2rees
082 SCSS of Kansas KS !3 13 0 I 0 0 7 5 S 2,n7 s 2,666 S 3,581 S 322 S 8,896 S 8,896 S
083 BCBS or Oklahoma OK 35 I 285 66 207 10 0 5 129 S 52,424 $ 74,946 S 94,646 S 34,613 S 256,629 S 203,175 S 53,454
084 Exc.llus eees of Utica-Watertown NY 32 32 a II 2 6 II 2 $ 2,506 $ 5,345 $ 8,932 S 810 $ 17,593 S 17,593 $ -
OB5 Cor.First SCSS ( DC Servi"" Area) DC 665 65B 7 189 51 a 254 171 S 100,531 $ 74,673 $ 130,721 S 50,834 $ 356,760 S 352,284 S 4,476
088 se of Northeastern Pennsylvania PA IS 15 0 I 0 0 14 0 S - S 5,486 S 10,430 S - S 15,916 $ 15,916 $ -
089 sess oC Delaware DE 19 19 0 5 10 0 0 4 S 4,107 $ 2,842 S 7,093 S 1,954 $ IS,99S S IS,99S $ -
on CareFirst SCSS (Overse..) 103 94 9 2 9 0 7S 17 $ 8S43 $ 34,461 S 41938 $ 7248 S 92490 $ 81428 S 11 062
Total. 15,294 1,091 5,303 2.191 41 2,610 5,149 S 1,598,119 S 2,8S8,377 S 4,185,06B S 918,952 $ 9,560,516 S 8,620,458 S 940,058
In(.o.:rr'k.t Noc Deferred
Plan Sites Reviewed = 63 Ovtrridden Chllim Info Keying Error or f"ended Other
Plan Sites with Duplicate Claim Payment.! • 63
Reason 1
SCHEDULEB
Page 1 of3
GLOBAL DUPLICATECLAIM PAYMENTS
BLUE CROSS AND BLUESHIELD PLANS
January 1, 2006 - March 31, 2009
QUESTIONED DUPLICATE CLAIM PAYMENTS BY PLAN - BREAKDOWN BY BEST AND NEAR MATCHES
Best Matches Questioned Near Matches Questioned Total
Plan
Number of Questioned Number of Questioned Number of Questioned
Site # State
Plan Name DUPS Charges DUPS Charges DUPS Charges
003 BCBS of New Mexico NM 90 $ 121,270 17 $ 38,762 107 $ 160,032
005 WellPoint BCBS of Georgia GA 72 $ 43,991 37 $ 32,954 109 $ 76,945
006 CareFirst BCBS (MD Service Area) MD 469 $ 201,357 167 $ 123,422 636 $ 324,779
007 BCEIS of Louisiana LA 471 $ 214,258 32 $ 45,482 503 $ 259,740
009 BCBS of Alabama AL 59 $ 31,053 46 $ 19,511 105 $ 50,564
oro BCBS of Idaho Health Service ID 24 $ 10,725 2 $ 1,652 26 $ ·12,377
OIl BCBS of Massachusetts MA 26 $ 13,186 4 $ 1,989 30 $ 15,175
012 BCSS of Western New York NY 47 $ 8,906 7 $ 5,826 54 $ 14,732
013 Highmark BCBS PA 129 $ 74,428 137 $ 124,760 266 $ 199,188
015 BCBS of Tennessee TN 501 $ 227,928 127 $ 111,265 628 $ 339,193
016 BCBS of Wyoming WY 7 $ 4,524 47 $ 67,383 54 $ 71,907
017 BCBS of Illinois IL 389 $ 243,479 104 $ 83,516 493 $ 326,995
021 WellPoint BCSS of Ohio OH 827 $ 434,065 116 $ 1 [3,712 943 $ 547,777
024 BCBS of South Carolina SC 29 $ 15,247 8 $ 3,265 37 $ 18;512
027 WellPoint BCBS of New Hampshire NH 122 $ 68,095 10 $ 5,437 132 $ 73,532
028 BCBS of Vermont VT 28 $ 11,129 .5 $ 2,987 33 $ 14,116
029 BCBS of Texas TX 674 $ 426,087 329 $ 272,415 1,003 $ 698,502
030 WellPoint BCBS of Colorado CO 471 $ 375,115 95 $ 69,473 566 $ 444,588
031 Wellmark BCBS ofIowa lA 24 $ 20,390 13 $ 16,164 37 $ 36,554
032 BCBS of Michigan MI 228 $ 67,910 27 $ 31,690 255 $ 99,600
033 BCBS of North Carolina NC 632 $ 336,759 38 $ 27,075 670 $ 363,834
034 BCBS of North Dakota ND 4 $ 1,584 0 $ . 4 $ 1,584
SCHEDULEB
Page 20f3
GLOBAL DUPLICATE CLAIM PAYMENTS
BLUECROSS AND BLUE SHIELD PLANS
January 1~ 2006 - March 31~ 2009
QUESTIONED DUPLICATE CLAIM PAYMENTS BY PLAN - BREAKDOWN BY BEST AND NEAR MA TeHES
Best Matches Questioned' Near Matches Questioned Total
Plan
Number of Questioned Number of Questioned Number of Questioned
Site # State
Plan Name DUPS Charges DUPS Charges DUPS Charges
036 Capital BC PA 5 $ 4,678 4 $ 4,376 9 $ 9,054
037 BCSS of Montana MT 3 $ \,659 0 $ . 3 $ 1,659
·038 BCBS of Hawaii HI 22 $ 11,129 11 $ 6,590 33 $ 17,719
039 WellPoint BCBS ofIndiana rN 669 $ 229,985 118 $ 114,578 787 $ 344,563
040 BCBS of Mississippi MS 202 $ 312,131 45 $ 34,737 247 $ 346,868
041 BCSS of Florida FL 894 $ 546,993 1,202 $ 431,582 2,096 $ 978,575
042 BCBS of Kansas City MO 78 $ 38,797 41 $ 47,394 119 $ 86,191
043 Regence BS ofIdaho ID 1 $ 1, 136 0 $ " 1 $ 1,136
044 Arkansas BCBS AR 129 $ 62,475 20 $ 14,491 149 $ 76,966
045 WellPoint BCBS of Kentucky KY 376 $ 202,866 80 $ 69,328 456 $ 272,194
047 WellPoint BCBS of Wisconsin WI 252 $ 143,534 43 $ 46,640 295 $ 190,174
048 Empire BCSS NY 22 $ 18,254 28 $ 47,840 50 $ 66,094
049 Horizon BCBS of New Jersey NJ 204 $ 368,726 70 $ 66,321 274 $ 435,047
050 WellPoint BCBS of Connecticut CT 116 $ 59,979 19 $ 18,598 135 $ 78,577
052 WellPoint Be of California CA 53 $ 83,141 9 $ 11,272 62 $ 94,413
053 BCBS of Nebraska NE 118 $ 83,114 27 $ 21,559 145 $ 104,673
054 Mountain State BeBS WV 15 $ 8,392 17 $ 13,847 32 $ 22,239
055 Independence BC PA 22 $ 40,936 11 $ 11,240 33 $ 52,176
056 BCBS of Arizona AZ 161 $ 94,169 37 $ 28,518 198 $ 122,687
058 Regence BeBS of Oregon OR 64 $ 82,178 28 $ 21,718 92 $ 103,896
059 WellPoint BCBS of Maine ME 109 $ 77,747 27 $ 22,206 136 $ 99,953
060 BCBS of Rhode Island RI 22 $ 13,374 7 $ 7,827 29 $ . 21,201
SCHEDULEB
Page 3 of3
GLOBAL DUPLICATE CLAIM PAYMENTS
BLUECROSS AND BLUESHIELD PLANS
January 1, 2006 - March 31, 2009
QUESTIONED DUPLICATE CLAIM PAYMENTS BY PLAN - BREAKDOWN BY BEST AND NEAR MATCHES
Best Matches Questioned Near Matches Questioned Total
Plan
Number of Questioned Number of Questioned Number of Questioned
Site # State
Plan Name DUPS Charges DUPS Charges DUPS Charges
061 WellPoint BCBS of Nevada NV 297 $ 107,650 37 $ 25,481 334 $ 133,131
062 WellPoint BCBS ofVirginla VA 577 $ 287,101 109 $ 55,241 686 $ 342,342
064 Excellus BCBS of the Rochester NY 5 $ 3,150 5 $ 2,386 10 $ 5,536
066 Regence BCBS of Utah UT tl7 $ 66,038 47 $ 38,289 164 $ 104,327
067 BS of California CA 90 $ 66,036 33 $ 27,716 123 $ 93,752
069 Regence BS of Washington WA [ 11 $ 54,406 14 $ [4,126 125 $ 68,532
070 BCBS of Alaska AK 54 $ 43,298 24 $ 18,312 78 $ 61,610
074 WeJImark BCBS of South Dakota SD 8 $ 4,312 5 $ 6,530 13 S 10,842
075 Premera BC of Washington WA 98 $ 60,411 9 $ 5,147 107 $ 65,558
076 WellPoint BCBS of Missouri MO 273 $ 149,681 49 $ 37,838 322 $ 187,519
078 BCBS of Minnesota MN 26 $ 20,008 0 $ . 26 $ 20,008
079 Excellus BCBS of Central New York NY 31 $ 23,472 5 $ 3,331 36 $ 26,803
082 BCBS of Kansas KS 2 $ 786 11 $ 8,110 13 $ 8,896
083 BCBS of Oklahoma OK 218 $ 141,724 133 $ 114,904 351 $ 256,628
084 Excellus BCBS of Utica-Watertown NY 26 $ 11,510 6 $ 6,084 32 $ 17,594
085 CareFirst BCBS (DC Service Area) DC 497 $ 228,082 168 $ 128,678 665 $ 356,760
088 BC of Northeastern Pennsylvania PA 9 $ 6,004 6 $ 9,912 15 $ 15,916
089 BCBS of Delaware DE 6 $ 3,978 13 $ 12,017 19 $ 15,995
092 CareFirst BCBS (Overseas) 34 $ 24,089 69 $ 68,396 103 $ 92,485
Totals 11,339 $ 6,738,616 3,955 $ 2,821,900 15,294 $ 9,560,516
., APPENDIX
BlueCOO88 BlueSw.eld
Association
An Assocla!lon. oflndepelldem
mue Cross and Blue ShIeld Plans
Federal Employee Program
1510 G Street, N.W.
Washington. D.C. 20005
202.942.1000
July 31 2009
t
Fax 202.042.1125
Experience-Rated Audits Group
Office of the Inspector General
U.S. Office of Personnel Management
1900 E. Street, N.W., Room 6400
Washington, D.C. 20415
Reference: OPM DRAFT AUDIT REPORT
Global Duplicate Claim Payments Audit
Audit Report 1A-99-00-09-036
This is our preliminary response to the above referenced U.S. Office of
Personnel Management (OPM) Draft Audit Report concerning the Global
Duplicate Claim Payments Audit. Our final draft response will be submitted
to your office by July 31, 2009. Our comments concerning the findings in
the report are as f o l l o w s : '
Duplicate Claim Payments $27.335.369
The OPM Office of Inspector General (OIG) conducted the Duplicate Claims
Payment Audit in May 2009 through June 31, 2009. For the period
January 1, 2006 through March 31, 2009, OPM OIG selected and reviewed
17,126 groups, totaling $13,325,136 (out of 370,644 groups, totafing $24,778,433)
in potential duplicate payments, under its "best matches" criteria. OPM OIG also
selected and reviewed 15,928 groups, totaling $14,010,233 (out of 1,421,049
groups, totaling $54,074,067) in potential duplicate payments, under its "near
matches" criteria. OPM OIG samples included all groups with potential duplicate
payments of $250 or more under the ~best matches" criteria and $400 or more
under the "near matches" criteria. .
July 31,2009
Page 2
We do not contest that $ 8,542,354 in duplicate claim payments may have been
made in error. The overpayment represents .0002 percent of total medical claims
paid for the period under audit (for the period of January 1, 2006 through
March 31, 2009, the FEP Program paid $45,708,183,006 in medical claims).
As 6f July 24, 2009, we have recovered $1,470,162. Attachment A identifies total
confirmed duplicates and the amount recovered by each Plan location.
Further analysis of the Plan's two primary reasons for duplicate payments
identified the following:
• Duplicate claim payments totaling $3,397,043 were made because the
processor incorrectly overrode the duplicate deferral.
• Duplicate claim payments totaling $5,145,311 were made because the FEP
claims system did not defer the claim for evaluation by processors.
We contest $18,793,015 in duplicate claim payments for the following reasons:
• The duplicate claim was voided or adjusted prior to April 24, 2009 (the start
of the audit).
• Recovery of the duplicate claim was initiated prior to April 24, 2009 and the
claim was adjusted or voided on or after April 24, 2009.
• Recovery of the duplicate claim was initiated prior to April 24, 2009 but the
recovery process has not been completed.
• The claims were for a provider who provided different multiple procedures to
the same patient.
• The claims were for confirmed repeated procedures, multiple births, round
trip ambulance services, team surgery and medication doses more than
once a day.
• The claims were for procedures preformed on different body parts or on
different family members.
• The claims were for additional payments necessary to correct a prior
payment.
The FEP Director's Office continues to evaluate ways to improve the prevention
and detection of duplicate claim payments. In order to reduce the number of
duplicate payments, prior to this audit, the FEP Program implemented the
following:
July 31,2009
Page 3
• Modified the FEPExpress System on January 1, 2009 to defer claims with
the same modifier or modifiers that have similar meaning.
• Updated the FEP Administrative Manual on January 1, 2009 to provide
additional instructions on the resolution of duplicate claim edits.
In addition, FEP will perform the following:
., Provide Plan training on the proper duplicate edit resolution process by the
end of 4th quarter 2009. .
• Increase duplicates included on the FEP quarterly duplicate post-payment
Plan reports by removing the criteria to match on allowed charges and
match on a/l provider fields. This change will be implemented by the end of
4th Quarter 2009.
• Modify our current duplicate reporting·process to require Plans to submit the
results of their review of the Quarterly Duplicate Claims Reports to the FEP
Director's Office for review and analysis. This change will be implemented
with the 4th Quarter 2009 reports.
• Expand the FEPExpress duplicate edit criteria to defer claims if there is a
match on two of the five provider fields. Currently all provider fields must
match in order for the claim to defer as aposslble duplicate. This
modification will be implemented by the end of 2 nd Quarter 2010.
• Expand the FEPExpress duplicate claim reporting to generate monthly
summary reports of all duplicate claim edits overridden by processors for
further Plan management review. The FEP Directors Office wifl also
receive a copy of the Plans' monthly summary override reports for
monitoring. This modification will be implemented by the end of
2nd Quarter 2010.
• Remove the criteria for a match on covered charges from the duplicate edit
criteria. This modification will be implemented by the end of
2 nd Quarter 2010. .
• Modify the FEPExpress System to prevent Plan Approved claims from by
passing the duplicate edit logic. This modification will be implemented by the
end of 2 nd Quarter 2010.
To the extent that there were duplicate payment errorS, the payments were good
faith erroneous benefit payments and fall within the context of CS 1039, Section
2.3 (g). The Plans will continue to pursue the overpayment amounts as required
by CS 1039, Section 2.3 (9)(1). Any benefit payments the Plans are unable to
recover and where due diligence was demonstrated are allowable charges to the
Program. In addition, as good faith erroneous payments, lost investment income
does not apply to the payments identified in the finding.
We appreciate the opportunity to provide our response to the finding and
request that our comments be included in their entirety as part of the Final
Audit Report.
Executive Director
Program Integrity
Attachment
cc:
Audit on Global Duplicate Claim Payments For Bluecross and Blueshield Plans
Published by the Office of Personnel Management, Office of Inspector General on 2009-10-14.
Below is a raw (and likely hideous) rendition of the original report. (PDF)