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
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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)