u.s. OfFICE OF PERSONNEL MANAGEMENT OFFICE OF THE INSPECTOR GENERAL OFFICE OF AUDITS Final Audit Report Subject: AUDIT ON GLOBAL ASSISTANT SURGEON CLAIM OVERPAYMENTS FOR BLUECROSS AND BLUESHIELD PLANS Report No. lA-99-00-09-061 Date: March 30, 2010 --CAUTION- This audit report has been distributed to Federal officials who are responsible for the administration of the audited program. This audit report may contain proprietary data which is protected by federal law (18 U.S.c. 1905). Therefore, while this audit repnrt is available under the Freedom oflnformation Act and made available 10 the public on the OIG webpage, caution needs to be exercised before releasing the report to the general public as it rna)' contain proprietary information that was redacted from the publicly distributed copy. UNITED STATES OFFICE OF PERSONNEL MANAGEMENT Washington, DC 20415 Office of the Inspector General AUDIT REPORT Federal Employees Health Benefits Program Service Benefit Plan Contract CS 1039 BlueCross BlueShield Association Plan Code 10 Global Assistant Surgeon Claim Overpayments BlueCross and BlueShield Plans REPORT NO. IA-99-00-09-061 DATE: March 30, 2010 ~~- Assistant Inspector General for Audits www.opm.goY www.usa)obs.goY 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 Assistant Surgeon Claim Overpayments BlueCross and BlueShield Plans REPORT NO. 1A-99-00-09-061 DATE: March 30, 2010 This final audit report on the Federal Employees Health Benefits Program (FEHBP) operations at an BlueCross and BlueShield (BeBS) plans questions $1,806,296 in health benefit charges. The BlueCross BlueShield Association (Association) and/or BCBS plans agreed with $1,604,611 and disagreed with $201,685 of the questioned charges. Our limited scope audit was conducted in accordance with Government Auditing Standards. The audit covered health benefit payments from 2006 through July 31, 2009 as reported in the Annual Accounting Statements. Specifically, we reviewed claims paid from January 1,2006 through July 31,2009 that potentially were not paid in accordance with the BeBS plans' assistant surgeon pricing procedures. We determined that the BCBS plans incorrectly paid 3,061 claim lines, resulting in net overcharges of$I,806,296 to the FEHBP. Specifically, the BCBS plans overpaid 3,018 claim lines by $1,827,187 and underpaid 43 claim lines by $20,891. www.opm.gov WWW.llsaJobs.gov CONTENTS PAGE EXECUTIVE SUMMARy ' j I. INTRODUCTION AND BACKGROUND " 1 II. OBJECTIVE, SCOPE, AND METHODOLOGy 3 III. AUDIT FINDING AND RECOMMENDATIONS , 5 Assistant Surgeon Claim Payment Errors 5 IV. MAJOR CONTRIBUTORS TO THIS REPORT 10 V. SCHEDULES A. UNIVERSE AND SAMPLE OF POTENTIAL ASSISTANT SURGEON CLAIM OVERPAYMENTS BY PLAN B. QUESTIONED CHARGES BY PLAN APPENDIX (BlueCross BlueShield Association reply, dated December 7, 2009, 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 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 health insurance benefits for federal employees, annuitants, and dependents. OPM's Retirement and Benefits Office 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 I, Part 890 of the Code of Federal Regulations (CFR). Health insurance coverage is made available through contracts with various health insurance carriers. The B1ueCross B1ueShield 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 (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 B1ueCross Blueflhield, 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 Association and each BCBS plan's management. 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 assistant surgeon overpayment audit on the BCBS plans. Our preliminary results of the potential assistant surgeon claim overpayments were presented in detail in a draft report, dated September 2,2009. 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 BCBS plans on various dates through February 26, 2010, was considered in preparing our final report. 2 II. OBJECTIVE, SCOPE, AND METHODOLOGY OBJECTIVE The objective of this audit was to determine whether the BCBS plans complied with contract provisions relative to assistant surgeon claim payments, which should be paid in accordance with the BCBS plans' assistant surgeon pricing procedures. 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 July 31, 2009 as reported in the Annual Accounting Statements. Specifically, we reviewed claims paid from January 1,2006 through July 31,2009 that potentially were not paid in accordance with the BCBS plans' assistant surgeon pricing procedures. Based on our claim error reports, we identified 62,844 assistant surgeon claim groups, totaling $10,058,532 in potential overpayments, that may not have been paid in accordance with the BCBS plans' assistant surgeon pricing procedures.i From this universe, we selected and reviewed all assistant surgeon claim groups with potential overpayments of $250 or more. Our sample included 10,305 assistant surgeon claim groups, totaling $5,929,609 in potential overpayments, for 58 of the 63 plans (See Schedule A for the universe and sample of potential assistant surgeon claim overpayments by plan). 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 assistant surgeon 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 assistant surgeon claim payments. Exceptions noted in the areas reviewed are set forth in detail in the "Audit Finding and Recommendations" section of this audit 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 BCBS plans. Due to time constraints, we did not verify the reliability of the data generated by the various information 2This universe excludes the assistant surgeon claim groups for the BCBS plans' years that were previously audited by the OIG. 3 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 December 2009 through February 2010. METHODOLOGY To test each BCSS plan's compliance with the FEHBP health benefit provisions related to assistant surgeon claim payments, we selected all assistant surgeon claim groups with potential overpayments of$250 or more that were identified in a computer search. Specifically, we selected for review a judgmental sample of 10,305 assistant surgeon claim groups, totaling $5,929,609 (out of 62,844 groups, totaling $10,058,532) in potential overpayments, that may not have been paid in accordance with the BCBS plans' assistant surgeon pricing procedures. The sample groups were submitted to each applicable BCBS 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. 4 III. AUDIT FINDING AND RECOMMENDATIONS Assistant Surgeon Claim Payment Errors $1,806,296 The BCBS plans incorrectly paid 3,061 assistant surgeon claim lines, resulting in net overcharges of $1,806,296 to the FEHBP. Specifically, the BCBS plans overpaid 3,018 claim lines by $1,827,187 and underpaid 43 claim lines by $20,891. 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 prompt and diligent effort to recover the erroneous payment ...." Contract CS 1039, Part II, section 2.6 states, "(a) The Carrier shall coordinate the payment of benefits under this contract with the payment of benefits under Medicare ... (b) The Carrier shall not pay benefits under this contract until it has determined whether it is the primary carrier ...." 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 to identify claims that potentially were not paid in accordance with the BCBS plans' assistant surgeon pricing procedures. For the period January 1,2006 through July 31, 2009, we identified 62,844 assistant surgeon claim groups, totaling $10,058,532 in potential overpayments that met this search criteria. From this universe, we selected and reviewed all assistant surgeon claim groups with potential overpayments of $250 or more, and determined if the BeBS plans paid these claims properly. Our sample included 10,305 assistant surgeon claim groups (representing 28,090 claim lines), totaling $5,929,609 in potential overpayments, for 58 of the 63 plans (See Schedule A for the universe and sample of potential assistant surgeon claim overpayments by plan). The majority ofthese claim groups contained at least one primary surgeon and one assistant surgeon claim line. Based on our review, we determined that 3,061 assistant surgeon claim lines were paid incorrectly, resulting in net overcharges of $1,806,296 to the FEHBP. 3 Specifically, the BCBS plans overpaid 3,018 claim lines by $1,827,187 and underpaid 43 claim lines by $20,891 (See Schedule B for a summary of the assistant surgeon claim payment errors by plan). J In addition, there were 77 assistant surgeon claim overpayments, totaling $56,163, that were identified by the BCBS plans before the start ofthe audit (i.e., September I, 2009 ) and adjusted or voided by the Association's response due date (i.e., November 30,2009) to the draft report. Since these overpayments 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 overpayments in the final report. 5 These assistant surgeon claim payment errors resulted from the following: • The BCBS plans paid 1,060 claim lines using incorrect Medicare or plan procedure allowances, resulting in net. overcharges of $572,907 to the FEHBP. Specifically, the BCBS plans overpaid 1,035 claim lilies by $585,094 and underpaid 25 claim lines by $12,187. • The BCBS plans incorrectly paid 756 claim lines due to the plans' local claim systems improperly identifying the assistant surgeon modifiers. Consequently, the BCBS plans overpaid 755 claim lines by $413,891 and underpaid 1 claim line by $200, resulting in net overcharges of$413,691 to the FEHBP. • The BCBS plans incorrectly paid 305 claim lines due to manual processing errors, such as incorrect coding, overriding system edits, and using incorrect allowances. Consequently, the BCES plans overpaid 300 claim lines by $265,662 and underpaid 5 claim lines by $3,346, resulting in net overcharges of $262,316 to the FEHBP. • The BCBS plans incorrectly paid 344 claim lines that were subject to Omnibus Budget Reconciliation Act of 1993 (OBRA 93) pricing guidelines. These errors were due to Palmetto (an OBRA 93 pricing vendor) not recognizing the assistant surgeon pricing modifier and erroneously calculating the assistant surgeon fee. Consequently, the BCBS plans overpaid 341 claim lines by $203,995 and underpaid 3 claim lines by $1,142, resulting in net overcharges of $202,853 to the FEHBP. • The BeBS plans paid 175 claim lines using the billed charges instead of the Medicare or plan procedure allowances, resulting in net overcharges of $111,113 to the FEHBP. Specifically, the BCBS plans overpaid 173 claim lines by $111,425 and underpaid 2 claim lines by $312. • The BeBS plans incorrectly priced 104 claim lines due to provider billing errors, resulting in net overcharges of $41,624 to the FEHBP. Specifically, the BCBS plans overpaid 101 claim Jines by $44,609 and underpaid 3 claim lines by $2,985. • The BeBS plans paid 64 claim lines even though the procedures were not medically necessary or the surgical assistants were not required for the surgeries, resulting in overcharges of $30,995 to the FEHBP. • The BeBS plans inadvertently paid 40 claim lines twice, resulting in duplicate charges of $17,823 to the FEHBP. • The BeRS plans incorrectly paid 26 claim lines due to errors in the calculation ofthe assistant surgeon fee, which should have been priced at the applicable plan's percentage of the procedure allowance. Consequently, the BCBS plans overpaid 22 claim lines by $13,579 and underpaid 4 claim lines by $719, resulting in net overcharges of$12,860 to the FEHBP. • The BCBS plans inadvertently paid 21 claim lines for surgical assistants without support for the surgeons' claims or operative reports, resulting in overcharges of $6,83 3 to the FEHBP. 6 • The BCBS plans did not properly coordinate five claim lines with Medicare or the patient's primary insurance carrier, resulting in overcharges of $2,024 to the FEHBP. • In one instance, a BeBS plan paid a.claim that was incurred after termination of the patient's coverage, resulting in an overcharge of $317 to the FEHBP. Of the $1,806,296 in questioned charges, $130,940 (seven percent) were identified by the BCBS plans before the start of our audit (i.e., September 1, 2009). However, since the BCBS plans had not completed the recovery process and/or adjusted or voided these claim payment errors by the Association's response due date (i.e., November 30,2009) to the draft report, we are continuing to question these overcharges. The remaining questioned charges of$I,675,356 (93 percent) were identified as a result of our audit. Association's Response: The Association agrees with $1,556,704 of the questioned overcharges and states that the BCBS plans have recovered $445,463 of the overpayments as of December 7,2009. The Association completed a preliminary root causal analysis for the BCBS plans with large dollar findings. The Association states, "Results from this analysis identified the following: • Human Errors - where processors are responsible for pricing the assistant surgeon claims manually. • We only send the first three modifiers for OHRA 93 pricing. However, if the assistant surgeon modifier is in the fourth position it will not be sent to Palmetto for OBRA 93 pricing. We will complete our final root cause analysis for all Plans by March 31,2010 to determine any future system enhancements, policy changes and/or training opportunities." Regarding the contested amount, the Association disagrees with these questioned overcharges for the following reasons: • The claim payments were voided and/or adjusted prior to the start of the audit. • The claim payments were processed correctly in accordance with Medicare requirements and/or the Plan's provider contracts. Regarding corrective actions, the Association states, "The Association has or is in the process of taking the following actions: • Have Plans educate providers on the correct method for submitting charges for Assistant Surgeon services by 2nd Quarter 2010. 7 • Instruct Plans to use these confirmed errors as training tools to ensure that examiners know the proper coding requirements for the adjudication of Assistant Surgeon Claims by 2nd Quarter 2010. • Continue to include these claims in the FEP periodic System-Wide Claim Review Process .... • During 2010, we will develop and implement an edit that will defer claims with Assistant Surgeon modifiers when there is no discount applied to the allowance submitted.... • Update the FEP Administrative Manual ... with more specific coding details to include actual examples for each of the Assistant Surgeon Modifiers on how these claims should be submitted to the Operations Center for adjudication. • Add this Assistant Surgeon coding training to the Micro Regional Meetings provided by the Operations Center to Plans to ensure the Plans have face-to-face training. • During the ... Control and Performance of Palmetto, we will evaluate Palmetto's internal controls for generating pricing data for the Assistant Surgeon Modifiers to ensure compliance with Medicare pricing guidelines." GIG Comments: After reviewing the Association's response and additional documentation provided by the BCBS plans, we revised the questioned charges from our draft report to $1,806,296. Based on the Association's response and the BCBS plans' additional documentation, we determined that the Association and/or plans agree with $1,604,611 and disagree with $201,685 of the questioned charges. Although the Association only agrees with $1,556,704 in its written response, the BCBS plans' documentation supports concurrence with $1,604,611. Based on the Association's response and/or the BCBS plans' documentation, the contested amount of $201,685 represents the following items: • $130,940 of the contested amount represents 160 claim lines where recovery efforts were initiated by 11 BCBS plans before the audit started. However, the plans had not recovered these assistant surgeon claim overpayments 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. • $70,745 of the contested amount represents 103 claim lines, which were subject to OBRA 93 pricing, where the BCBS plans did not pay the claims using the applicable Medicare procedure allowances and/or percentages. The Association and/or BCBS plans did not provide documentation to support why these claim lines were not paid in accordance with OBRA 93 pricing. 8 Recommendation 1 We recommend that the contracting officer disallow $1,827,187 for claim overcharges and verify that the BeBS plans return all amounts recovered to the FEHBP. Recommendation 2 We recommend that the contracting officer allow the BeBS plans to charge the FEHBP $20,891 if additional payments are made to the providers to correct the underpayments. Recommendation 3 Although the Association has developed a corrective action plan to reduce assistant surgeon claim overpayments, we recommend that the contracting officer instruct the Association to ensure that the BeBS plans are following the corrective action plan. Also, we recommend that the contracting officer verify that the additional corrective actions included in the Association's response are implemented. 9 IV. MAJOR CONTRIBUTORS TO THIS REPORT Experience-Rated Audits Group Auditor-In-Charge Auditor- In-Charge Chie_ Information Systems Audits Group Chief Senior Information Technology Specialist Information Systems Auditor 10 SCHEDULE A Page 1 of2 V. SCHEDULES GLOBAL ASSISTANT SURGEON CLAIM OVERPAYMENTS BLUECROSS AND BLUESHIELD PLANS UNIVERSE AND SAMPLE OF POTENTIAL ASSISTANT SURGEON CLAIM OVERPAYMENTS BY PLAN UNIVERSE SAMPLE Site Assistant Surgeon Potential Period Subject Assistant Surgeon Potential Number Plan Name State Claim Groups Overpayments to Audit Claim Groups Overpayments 003 BCBS of New Mexico NM 282 $ 51,117 January 1,2006 through July 31,2009 78 . $ 33,065 005 WellPoint BCBS of Georgia GA 4,707 $ 606,424 January 1,2006 through July 31,2009 509 $ 200,278 006 CareFirst BCBS rvrn 652 $ 96,753 November 1, 2008 through July 31, 2009 79 $ 41,431 007 BCBS of Louisiana LA 279 $ 139,906 January 1,2007 through July 3 1,2009 145 $ 121,636 009 BCBS of Alabama AL 1,596 $ -'342,814 January 1,2006 through July 31, 2009 468 $ 219,686 010 BC ofIdaho Health Service ill 332 $ 46,599 January 1, 2006 through July 31, 2009 47 $ 21,543 011 BCBS of Massachusetts MA 440 $ 77,483 January 1,2006 through July31, 2009 105 $ 41,733 012 BCBS of Westem New York NY 92 $ 21,651 January 1,2006 through July 31, 2009 26 $ 15,531 013 Highmark BCBS PA 974 $ 66,248 January 1,2008 through Iuly 31,2009 77 $ 43,125 015 BCBS of Tennessee TN 201 $ 106,523 January I, 2008 through July 31, 2009 89 $ 96,297 016 BCBS of Wyoming WY 151 $ 30,051 January 1,2006 through July 31, 2009 40 $ 20,002 017 BCBS of Illinois II.. 746 $ 224,015 January 1,2007 through July 31, 2009 264 $ 171,759 021 Ohio WellPoint BCBS OH 3,165 $ 260,872 January 1, 2006 through July 31, 2009· 162 $ 88,957 024 BCBS of South Carolina SC 895 $ 148,999 January 1,2006 through July 3 I, 2009 117 $ 45,659 027 New Hampshire WellPoint BCBS NH 310 $ 48,932 January 1, 2008 through July 31, 2009 40 $ 21,112 028 BCBS ofVennont VI 24 $ 7,872 January 1,2008 through July 31,2009 12 $ 6,593 029 BCBS of Texas IX 6,142 $ 859,551 January 1,2007 through July 31, 2009 834 $ 499,106 030 Colorado WellPoint BCBS CO 3,267 s 187,171 January 1,2006 through July 31,2009 184 $ 102,794 031 Wellmark BeBS ofIowa IA 353 $ 62,829 January I, 2006 through July 31, 2009 93 $ 41,777 032 BCBS of Michigan tv1I 409 $ 53,17 I I anuary 1, 2006 through July 31, 2009 66 $ 25,173 033 BCBS of North Carolina NC 1,671 $ 348,665 January 1,2006 through July 31,2009 417 $ 218,346 034 BCBS of North Dakota ND 83 $ 8,576 January 1,2006 through July 31,2009 3 $ 809 037 BCBS of Montana MT 422 $ 39,130 January 1,2006 through July 31,2009 25 $ 11,706 038 BCBS of Hawaii ill 21 $ 4,707 January 1,2006 through July 31, 2009 4 $ 3,521 039 Indiana WellPoint BCBS fN 3,572 $ 378,695 January 1,2006 through July 3 1,2009 236 $ 93,878 040 BCBS of Mississippi MS 417 $ 113,077 January I, 2007 through July 31, 2009 186 $ 91,354 041 BCBS of Florida FL 4,665 $ 824,365 January 1, 2006 through July 31, 2009 721 $ 462,574 042 BCBS of Kansas City MO 441 $ 39,360 January I, 2006 through July 31, 2009 23 $ 15,032 043 Regence BS ofIdaho ill 148 $ 35,905 January 1,2006 through July 31, 2009 49 s 26,474 SCHEDULE A Page 2 of2 V. SCHEDULES GLOBAL ASSISTANT SURGEON CLAIM OVERPAYMENTS BLVECROSS AND BLUESHIELD PLANS UNIVERSE AND SAMPLE OF POTENTIAL ASSISTANT SURGEON CLAIM OVERPAYMENTS BY PLAN UNIVERSE SAMPLE Site Assistant Surgeon Potential Period Subject Assistant Surgeon Potential Number Plan Name State Claim Groups Overpayments to Audit Claim Groups Overpayments 044 Arkansas BCBS AR 108 s 12,887 January 1,2008 through July 31,2009 16 $ 5,690 045 Kentucky WellPoint BCBS KY 4,848 $ 317,452 January 1,2006 through July 31, 2009 112 $ 50,219 047 WellPoint BCBS of Wisconsin WI 935 s 317,980 January 1, 2006 through July 31, 2009 421 $ 255,192 048 Empire BCBS NY 605 $ 63,610 January 1,2007 through July 31, 2009 36 s 20,035 049 Horizon BCBS of New Jersey NJ 149 $ 21,935 November 1,2008 through July 31, 2009 25 $ 1l,249 050 Connecticut WellPoint BCBS CT 143 $ 28,716 January I, 2008 through July 3 1,2009 31 $ 14,719 053 BCBS of Nebraska NE 281 $ 31,968 January 1,2008 through July 31,2009 28 $ 12,316 054 Mountain State BCB S WV 87 $ 13,683 January 1,2007 through July 31, 2009 20 $ 6,776 056 BCBS of Arizona AZ 597 $ 79,332 January 1,2007 through July 31, 2009 87 $ 39,133 058 RegenceBCBS of Oregon OR 674 $ 100,555 January 1,2006 through July 31, 2009 121 $ 57,546 059 Maine WeliPoint BCBS ME 157 $ 15,873 January 1,2008 through July 31, 2009 17 $ 6,104 060 BCBS of Rhode Island RI 191 $ 30,500 January I, 2006 through July 31, 2009 32 $ 15,852 061 Nevada WellPoint BeBS NY 1,091 $ 138,883 January 1, 2006 through July 31, 2009 153 $ 108,870 062 Virginia WeliPoint BeBS VA 441 $, 51,633 January 1, 2008 through July 31, 2009 44 $ 21,273 064 BC BS of Rochester NY 25 $ 4,407 January 1,2006 through July 31, 2009 4 $ 2,009 066 Regence BCBS of Utah UT 1,952 $ 235,944 January 1, 2006 through July 31, 2009 264 $ 132,385 067 BS of California CA 2,445 $ 331,412 January I, 2006 through July 31, 2009 342 $ 162,230 069 Regence BS of Washington WA 3,734 s 409,708 January 1,2006 through July 31, 2009 314 $ 134,547 070 BCBS of Alaska AK 1,508 $ 1,042,028 January 1, 2006 through July 31, 2009 1,153 $ 997,124 074 Wellmark BCBS of South Dakota SD 370 $ 75,934 January 1,2006 through July 31, 2009 107 $ 45,766 075 Prernera BC WA 659 $ 99,516 January I, 2006 through July 31, 2009 84 $ 40,356 076 WellPoint BCBS of Missouri MO 1,249 $ 213,675 January 1,2006 through July 31, 2009 194 $ 104,433 078 BCBS of Minnesota MN 2,250 $ 850,753 January 1,2006 through July 31,2009 1,225 $ 720,809 079 BCES of Central NY NY 136 $ 35,015 January I, 2006 through July 31, 2009 53 $ 26,042 082 BCBS of Kansas KS 264 $ 60,645 January 1,2006 through July 31, 2009 96 $ 42,999 083 BCBS of Oklahoma OK 920 $ 126,765 January 1,2008 through July 31, 2009 95 $ 44,383 084 BCBS of Utica-Watertown NY 73 $ 16,844 January 1,2007 through July 31, 2009 23 $ 12,234 085 CareFirst BCBS DC 357 $ 61,801 November 1,2008 through July 31, 2009 77 $ 30,640 089 BCBS of Delaware DE 138 $ 37,617 January 1, 2006 through July 31, 2009 32 $ 27,724 Total 62,844 $ 10,058,532 10,305 $ 5,929,609 SCHEDULEB Page I of2 GLOBAL ASSISTANT SURGEON CLAIM OVERPAYMENTS BLUECROSS AND BLUESHIELD PLANS QUESTIONED CHARGES BY PLAN Site Total Questioned Amounts Questioned by Year Plan Plan Number Plan Name State Claim Lines Total Charges 2006 2007 2008 2009 Agrees Disagrees 003 BCBS of New Mexico N"M 18 $ 10,190 $ 952 $ 3,421 $ 5,233 $ 584 $ 2,689 $ 7,501 005 WellPoint BCBS of Georgia GA 114 $ 47,485 $ 6,761 $ 13,464 $ 16,968 $ 10,292 $ 41,860 $ 5,625 006 CareFirst BCBS MD 26 $ 20,117 $ - $ . $ 396 s 19,721 $ 20,117 $ 007 BCBS of Louisiana LA 29 $ 47,140 s - $ 1,390 $ 13,038 $ 32,713 s 47,140 $ · 009 BCBS of Alabama AL 21 $ 15,653 $ 6,881 $ 6,160 $ 1,235 $ 1,378 $ 14,845 $ 808 010 BC ofIdaho Health Service ill 7 $ 4,826 $ 1,659 s 1,370 $ 105 $ 1,692 $ 4,826 $ - 011 BCB S of Massachusetts MA 13 $ , 7,255 $ 2,169 $ 1,749 $ 829 $ 2,508 $ 7,255 $ · 012 BCBS of Westem New York NY 12 $ 8,920 $ 2,382 $ 562 $ 5,589 $ 386 $ 8,920 s - 013 Highmark BeBS PA 23 $ 15,709 $ - $ . $ 9,085 $ 6,624 $ 15,709 $ - 015 BeBS of Tennessee TN 63 $ 60,374 $ - $ - $ 16,050 s 44,324 $ 57,135 $ 3,239 016 BeBS of Wyoming WY I $ 1,189 $ -$ 1,189 $ - $ - $ -, $ 1,189 017 BeES of Illinois IL 45 $ 43,750 $ . $ 11,551 $ 23,573 $ 8,625 $ 27,357 $ 16,393 021 Ohio WellPoint BeBS OH 69 $ 43,844 $ 13,715 $ 17,719 $ 5,056 $ 7,354 $ 42,767 $ 1,077 024 BeBS of South Carolina se 13 $ 4,293 $ 1,871 $ 1,189 $ 1,407 $ (173) $ 4,293 $ 027 New Hampshire WelIPoint BCBS NH 10 s 7,879 s - s - $ 6,897 $ 982 $ 7,879 $ 028 BCB S of Vermont VT I $ 278 $ - $ - $ 278 $ - $ 278 $ · 029 BCBS of Texas TX 205 $ 194,407 $ - s37,405 $ 92,396 $ 64,606 $ 175,380 $ 19,027 030 Colorado WellPoint BCBS CO 154 $ 89,795 $ 24,710 $ 27,770 $ 12,561 $ 24,755 $ 89,795 $ 031 Wellmark BCBS ofIowa IA 21 $ 10,524 $ 5,577 $ 2,939 $ 1,344 $ 664 $ 4,738 $ 5,786 032 BCBS of Michigan MI 28 $ 10,761 $ 1,539 $ 1,572 $ 2,941 $ 4,709 $ 10,761 $ 033 BCBS of North Carolina NC 171 $ 86,830 $ 45,243 $ 11,274 $ 16,138 $ 14,175 $ 82,075 $ 4,754 034 BCBS of North Dakota ND 0 $ . $ . $ - s - $ - $ - $ 037 BCBS of Montana MT 7 $ 3,951 $ 1,288 s 1,158 $ 1,505 $ - $ 3,951 $ · 038 BCBS of Hawaii HI 3 $ 2,612 $ - s 255 $ - $ 2,357 $ 2,612 $ 039 Indiana WellPoint BCBS IN 83 $ 34,731 $ 8,738 $ 13,758 s 9,502 $ 2,732 $ 34,731 $ · 040 BCBS of Mississippi MS 121 $ 63,625 $ - $ 5,143 $ 11,287 $ 47,196 s 63,625 $ 041 BCBS of Florida FL 405 $ 235,472 $ 51,902 $ 43,293 $ 98,355 $ 41,922 $ 132,301 $ 103,172 042 BCBS of Kansas City MO 14 $ 9,496 $ 6,397 $ 293 $ 1,995 $ 812 $ 9,496 $ 043 Regence BS of Idaho ill 41 $ 19,525 $ 12,603 $ 1,626 $ 4,203 $ 1,094 $ 19,525 $ SCHEDULEB Page 2 of2 GLOBAL ASSISTANT SURGEON CLAIM OVERPAYMENTS BLUECROSS AND BLUESHIELD PLANS QUESTIONED CHARGES BY PLAN Site Total Questioned Amounts Questioned by Year Plan Plan Number Plan Name State Claim Lines Total Charges 2006 2007 2008 2009 Agrees Disagrees 044 Arkansas BCBS AR 3 $ 754 $ - $ - $ 754 $ - $ 754 $ - 045 Kentucky WellPoint BCBS KY 56 $ 27,664 $ 9,645 $ 8,791 $ 7,917 $ 1,310 $ 27,620 $ 43 047 WellPoint BeBS of Wisconsin WI 185 $ 84,113 $ 34,570 $ 33,988 $ 9,336 $ 6,219 $ 84,113 $ - 048 Empire BeBS NY 9 $ 6,993 $ - $ · $ 6,116 $ 877 $ 1,516 $ 5,477 049 Horizon BeBS of New Jersey NJ 6 $ 2,824 $ -$ - $ - $ 2,824 $ 1,876 $ 949 050 Connecticut WeI/Point BCBS CT 2 $ 640 $ - $ · $ .361 $ 280 $ 640 $ ~ 053 BeBS of Nebraska NE 7 $ 3,056 $ - $ - $ - $ 3,056 $ 3,056 $ - 054 Mountain State BCBS WV 1 $ 265 $ - $ - $ - $ 265 $ 265 $ - 056 BCBS of Arizona AZ 20 . $ 9,839 $ - $ 1,412 $ 5,289 $ 3,138 $ 9,839 $ - 058 Regence BCBS of Oregon OR 76 $ 44,215 $ 14,639 $ 15,750 $ 5,513 $ 8,313 $ 44,215 $ - 059 Maine WellPoint BCBS ME 2 $ 440 $ - $ · $ 440 $ - $ 440 $ - 060 BCBS of Rhode Island RI 16 $ lO,310 $ 4,281 $ 274 s 5,347 $ 408 $ 9,124 $ 1,186 061 Nevada WellPoint BCBS NY 163 $ 112,498 s 46,228 $ 26,656 s 22,494 $ 17,121 $ 112,261 $ 237 062 Virginia WellPoint BCBS VA 14 $ 1l,961 $ 314 $ - $ 9,750 $ 1,897 $ 10,995 $ 967 064 BC BS of Rochester NY 8 $ 3,242 $ - $ 407 $ 1,111 $ 1,723 $ 3,231 $ 11 066 Regence BeBS of Utah UT 193 s 88,603 $ 32,871 $ 14,633 $ 26,087 s 15,012 $ 88,369 $ 234 067 BS of California CA 117 $ 55,804 $ 34,604 $ lO,922 $ 6,643 $ 3,635 $ 55,804 $ - 069 Regence BS of Washington WA 135 $ 58,813 $ 16,955 $ 11,443 $ 13,731 $ 16,684 $ 54,503 $ 4,310 070 BCBS of Alaska AK 4 $ 212 $ - $ - $ 370 $ (158) $ 212 $ · 074 Wellmark BCBS of South Dakota SD 14 $ 8,445 $ 4,059 $ 1,615 $ 1,687 $ 1,083 $ 8,445 $ - 075 PremeraBC WA 25 $ 13,171 s 5,210 s 4,598 $ 499 $ 2,865 $ 9,564 s 3,607 076 WellPoint BeBS of Missouri MO 153 s 79,572 s 24,209 $ 18,801 $ 22,095 $ 14,467 $ 79,572 $ · 078 BCBS of Minnesota MN" 7 s 6,800 $ 429 s 732 $ - $ 5,640 $ $ 6,800 079 BCBS of Central NY NY 42 $ 19,003 $ 6,997 $ 5,594 $ 5,647 $ 765 $ 18,949 $ 53 082 BCBS of Kansas KS 2 s 2,027 $ 2,027 $ - s - $ - $ 2,027 $ - 083 BCBS of Oklahoma OK 34 $ 17,212 $ -$ - $ 8,247 $ 8,965 $ 13,109 $ 4,103 084 BCBS of Utica-Watertown NY 17 $ 8,302 $ - $ 2,408 $ 4,229 $ 1,666 s 8,302 $ - 085 CareFirst BCBS DC 9 $ 5,744 $ - $ - $ 2,097 $ 3,647 $ 5,744 $ · 089 BeBS of Delaware DE 23 $ 23,140 $ 4,902 $ 3,341 $ 10,224 s 4,673 s 18,004 s 5,136 Total 3,061 $ 1,806,296 $ 436,330 $ 367,615 $ 533,946 $ 468,405 s 1,604,611 $ 201,685 •• APPENDIX BlueCross Blue8hield Association An Association of Independent Blue Cross and Blue Shield Plans Federal Employee Program 1510 G Street, N.W. Washington, D.C. 20005 December 7,2009 202.942.1000 Fax 202.942.1125 I Group Chief xpenence- ate udits Group Office of the Inspector General U.S. Office of Personnel Management 1900 E Street, Room 6400 Washington,' DC 20415-1100 Reference: OPM DRAFT AUDIT REPORT Global Assistant Surgeon Audit Report #1A-99-00-09-061 (Report dated and received 9/2/2009) Dear This is in response to the above referenced U.S. Office of Personnel Management (OPM) Draft Audit Report concerning the Global Assistant Surgeon Audit for claims paid from January 1, 2006 through July 31, 2009, with potential overpayments totaling $5,929,609. Our comments concerning the findings in this report are as follows: Recommendation 1 The OPM DIG auditors recommended that the contracting officer disallow $5,929,609 for assistant surgeon overpayments charged to the FEHBP and have the BCSS Plans return all amounts recovered to the FEHBP. Response to Recommendation 1: After reviewing the listings of potential Assistant Surgeon overpayments totaling $5,929,609, the Association does not contest that $ 1,556,704 in Assistant Surgeon claim payments are confirmed overpayments. As of December 7,2009, we have recovered $445,463. We contest the remaining $3,890,229 in Assistant Surgeon claim payments for the following reasons: • $261,698 in claim payments were voided and/or adjusted prior to the start of the audit (September 1, 2009). December 7 r 2009 Page 2 of 4 • $3,628,531 in claim payments were processed correctly in accordance with Medicare requirements and/or the Plan's provider contracts. Additionally, there is $482,976 in potential overpayments that are still under investigation by the Plans. Recommendation 2 The DIG Auditors recommended that BCSSA provide the support for each payment error disagreed to that was identified in this audit finding (even if identified and/or adjustedlvoided prior to this audit by BCSS Association and/or a BCBS Plan). Response to Recommendation 2: The claim support for each of the confirmed overpayments has been submitted. Recommendation 3 The DIG Auditors recommended that the contracting officer instruct the Association to have the BCSS Plans identify the root cause(s) of the claim payment errors and implement corrective actions/procedures to prevent these types of errors in the future. Response to Recommendation 3: Based on our review of the Plan's results, we confirmed the following list of reasons why these claim errors occurred: • Manual errors (to include but not limited to incorrect coding/overriding system edits/using the incorrect allowances) by claim processors at the Plans resulting in an overpayment of $227,296; • Plan's local system did not properly identify the assistant surgeon modifiers; therefore the correct allowances were not provided resulting in an overpayment of $310,307; • The appropriate Medicare Percentage used in pricing the OBRA 93 claims was incorrect causing an overpayment of $168,905; • The Plans incorrectly submitted to the Operations Center the billed charges as opposed to the correct allowance for the assistant surgery services causing an overpayment of $107,962; - Page 3 of 4 • The Plans incorrectly applied the wrong Medicare or Plan allowances for claims resulting in an overpayment of $412,654; and • Other various reasons, including but not limited too, surgical assistant not usually required for the type of surgery performed, causing an overpayment of $314,878. In addition, we have completed our preliminary root causal analysis with Plans who had large dollar findings. Results from this analysis identified the following: • Human Errors - where processors are responsible for pricing the assistant surgeon claims manually. • We only send the first three modifiers for OBRA 93 pricing. However, if the assistant surgeon modifier is in the fourth position it will not be sent to Palmetto for OBRA 93 pricing. We will complete our final root cause analysis for all Plans by March 31 J 2010 to determine any future system enhancements, policy changes and/or training opportunities. . Corrective Actions: The Association has or is in the process of taking the following actions: • Have Plans educate providers on the correct method for submitting charges for Assistant Surgeon services by 2nd Quarter 2010. . • Instruct Plans to use these confirmed errors as training tools to ensure that examiners know the proper coding requirements for the adjudication of Assistant Surgeon Claims by 2 nd Quarter 2010. • Continue to include these claims in the FEP .periodic System-Wide Claim Review Process. We will also evaluate the impact on Plans' workload of reducing the audit review threshold amount from $1,000 to $500 by 2nd Quarter 2010. • During 2010, we will develop and implement an edit that will defer claims with Assistant Surgeon modifiers when there is no discount applied to the allowance submitted. Plans will then confirm that they actually performed the calculations and is sending the correct allowance or submit the applicable discount so that FEPExpress can December 7, 2009 Page 4 of 4 determine the correct FEP allowance. • Update the FEP Administrative Manual Volume II by 2 nd Quarter 2010 with more specific coding details to include actual examples for each of the Assistant Surgeon Modifiers on how these claims should be submitted to the Operations Center for adjudication. • Add this Assistant Surgeon coding training to the Micro Regional Meetings provided by the Operations Center to Plans to ensure the Plans have face-to-face training. • During the 1st Quarter 2010 Control and Performance of Palmetto, we will evaluate Palmetto's internal controls for generating pricing data for the Assistant Surgeon Modifiers to ensure compliance with Medicare pricing guidelines. Executive Director, Program Integrity Federal Employee Program Attachment cc:
Audit of Global Assistant Surgeon Claim Overpayments for BlueCross and BlueShields Plans
Published by the Office of Personnel Management, Office of Inspector General on 2010-03-30.
Below is a raw (and likely hideous) rendition of the original report. (PDF)