oversight

Audit on Global Duplicate Claim Payments for Bluecross and Blueshield Plans

Published by the Office of Personnel Management, Office of Inspector General on 2012-01-11.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                                     U.S. OFFICE OF PERSONNEL MANAGEMENT
                                                           OFFICE OF THE INSPECTOR GE NERAL
                                                                            OFFICE OF AUDITS




Final Audit Report

Subject:



                      AUDIT ON GLOBAL

                DUPLICATE CLAIM PAYMENTS FOR

               BLUECROSS AND BLUESHIELD PLANS





                                                 Report No. lA-99-00-Il-022


                                                            Date: Janua ry 11 , 2012




                                                                --CAUTIO N··


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rrpor l may ee ntaln proprirlll'1 dU ll wh ich is protected by Fcdu II 1.¥l' (18 l IS .C. 1905). T he refore, \II hile Ibis a udit report Is I v, il_ble
undrr the Freed om or Inform al io n Ar t lind mad e luihlble 10 Ihe p ublic on Ihe O IG web p1l2t . ea utlon ut tlh to he tur d .ell before
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                              UNITED STATES OFFICE OF PERSONNEL MANAGEMENT
                                                 wa shington, DC 204 15

  Office of the
Inspector General




                                              A UDIT REPORT



                                    Federal Emp loyees Health Bene fits Program
                                    Service Benefit Plan      Contract CS 1039

                                         BlueCross BlueShield Association

                                                   Plan Code 10

                                         Global Duplicate Claim Payments

                                         BlueCross and BlueShieid Plans





                            REPORT NO. IA-99-00- 11-022           DATE: J.anuary ) 1 , 2012




                                                                   2(// 1.­
                                                                  Michael R. Esser
                                                                  Assistant Inspector General
                                                                    for Audits




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                          UNITED STATES OFFICE OF PERSONNEL MANAGEMENT
                                              w ashin gton, DC 204 15

  Ollk t" of Itk­
Ins~,"l{ll   General




                                     EXECUTIVE SUMMARY




                                Federal Employees Health Benefits Program

                                Service Benefit Plan        Contract CS 1039

                                     BlueCross BlueShield Association

                                              Plan Code 10


                                     Global Dup licate Claim Payments

                                      BlueCross and BlueShieid Plan s





                       REPORT NO. IA-99-0 0-1l -022             DATE: J a n u ary 11 , 20 1 2


      Thi s final audit report on the Federal Employees Hea lth Benefits Program (FEHBP) operations
      at all BlueCro ss and BlueShi eld (BC BS) plan s questions $6,342,749 in duplicate claim
      paym ents. The BlueCro ss BlueShield Association andlor BeBS plan s agree d with $5,337,343
      and disagreed with $1 ,005,406 of the questioned charges.

      Our limit ed scope audit was conducted in accordance with Government Auditing Standards. The
      aud it covered health ben efit paym ent s from January 1, 200 8 throu gh Decem ber 3 1, 20 10 as
      reported in the Annual Accounting Statements. Specifically, usin g our " best matches" and "near
      matches" search criteria. we identified and reviewed claims paid from April I, 2009 through
      December 3 1, 20 10 for dup licate payments charged to the FEHBP. Addition ally, we identified
      and reviewed inpatient facility claims paid from January I, 2008 through December 3 1. 2010 with
      duplicate or overlapping date s of service. We determined that the BeBS plan s improperly
      charged the FEHBP for 6,592 dupli cate claim paymen ts. These payments wer e unn ecessary and
      unallowable charges, resulting in overcharges of $6,342,749 to the FEHBP.




                                                                                           WWW ,lt UJOIlS , COf
                                                  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 ...........................................................11

V.     SCHEDULES

       A. QUESTIONED DUPLICATE CLAIM PAYMENTS BY PLAN

       B. QUESTIONED DUPLICATE CLAIM PAYMENTS BY PLAN – BREAKDOWN
          BY SELECTION CRITERIA

       APPENDIX           (BlueCross BlueShield Association reply, dated June 7, 2011, 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 Healthcare and Insurance
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 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 (FEP 1) Director’s Office in
Washington, D.C. to provide centralized management for the Service Benefit Plan. The FEP
Director’s Office coordinates the administration of the contract with the Association, member
BCBS plans, and OPM.

The Association has also established an FEP Operations Center. The activities of the FEP
Operations Center are performed by CareFirst BCBS, located in Washington, D.C. These
activities include acting as fiscal intermediary between the Association and member plans,
verifying subscriber eligibility, approving or disapproving the reimbursement of local plan
payments 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.


1
 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 of all BCBS plans (Report No.
1A-99-00-09-036, dated October 14, 2009) for contract years 2006 through March 31, 2009 are in
the process of being resolved.

Our preliminary results of the potential duplicate claim payments were presented in detail in a draft
report, dated February 25, 2011. 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 August 31, 2011 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 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 January 1, 2008 through December 31, 2010 as
reported in the Annual Accounting Statements. Specifically, we performed computer searches on
the BCBS claims database, using our data warehouse function, to identify potential duplicate
payments charged to the FEHBP from January 1, 2008 through December 31, 2010.

    •   Using our “best matches” and “near matches” search criteria, we identified 1,002,792
        groups, totaling $44,974,456 in potential duplicate claim payments, for the period April 1,
        2009 through December 31, 2010. From this universe, we selected and reviewed 19,920
        groups, totaling $16,129,372 in potential duplicate claim payments. Our sample selections
        included all groups with potential duplicate payments of $250 or more under the “best
        matches” criteria and $350 or more under the “near matches” criteria.

    •   Using additional search criteria, we also identified 1,125 groups of inpatient facility
        claims with duplicate or overlapping dates of service, totaling $6,065,125 in potential
        duplicate payments, for the period January 1, 2008 through December 31, 2010. 2 From
        this universe, we selected and reviewed 856 groups, totaling $5,933,779 in potential
        duplicate claim payments. Our sample selections included all groups with potential
        duplicate payments of $1,000 or more.

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

2
 This universe excludes the inpatient facility claim groups for the BCBS plans’ years that were previously audited
by the OIG.




                                                         3
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 BCBS plans. Due to time
constraints, we did not verify the reliability of the data generated by the various information
systems involved. However, while utilizing the computer-generated data during our audit
testing, nothing came to our attention to cause us to doubt its reliability. We believe that the data
was sufficient to achieve our audit objective.

The audit was performed at our offices in Washington, D.C.; Cranberry Township, Pennsylvania;
and Jacksonville, Florida from August 2011 through October 2011.

METHODOLOGY

To test each BCBS plan’s compliance with the FEHBP health benefit provisions related to
duplicate claim payments, we selected judgmental samples of potential duplicate claims that were
identified in computer searches. Specifically, we selected for review 19,920 groups, totaling
$16,129,372 (out of 1,002,792 groups, totaling $44,974,456) in potential duplicate claim
payments, using our “best matches” and “near matches” search criteria. 3 Our sample selections
included all groups with potential duplicate payments of $250 or more under the “best matches”
criteria and $350 or more under the “near matches” criteria. Additionally, we selected for review
856 groups of inpatient facility claims with duplicate or overlapping dates of service, totaling
$5,933,779 (out of 1,125 groups, totaling $6,065,125) in potential duplicate payments, using other
search criteria. Our sample selections included all groups of inpatient facility claims with potential
duplicate payments of $1,000 or more.

The samples of potential duplicate claim payments were submitted to each applicable BCBS plan
for their review and response. For each plan, we then conducted a limited review of their agreed
responses and an expanded review of the disagreed responses to determine the appropriate
questioned amount. We did not project the sample results to the universe of potential duplicate
claim payments.

The determination of the questioned amount is based on the FEHBP contract, the Service Benefit
Plan brochure, and the Association’s FEP administrative manual.




3
 The sample selections included 8,888 groups, totaling $7,045,096 (out of 214,910 groups, totaling $13,592,458) in
potential duplicate payments under our “best matches” criteria, and 11,032 groups, totaling $9,084,276 (out of
787,882 groups, totaling $31,381,998) in potential duplicate payments under our “near matches” criteria.




                                                        4
                  III. AUDIT FINDING AND RECOMMENDATIONS

Duplicate Claim Payments                                                                               $6,342,749

The BCBS plans improperly charged the FEHBP $6,342,749 for 6,592 duplicate claim payments
from January 1, 2008 through December 31, 2010. These payments were unnecessary and
unallowable charges to the FEHBP.

Contract CS 1039, Part III, section 3.2 (b)(1) 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 OPM determines that a Member’s claim has been paid in
error for any reason, the Carrier shall make a diligent effort to recover an overpayment . . . .”

Section 6(h) of the FEHB Act provides that rates should reasonably and equitably reflect the
costs of benefits provided.

The following summarizes the results:

Duplicate Claim Payments - “Best Matches” and “Near Matches” Selection Criteria

We performed a computer search for potential duplicate payments on claims paid during the
period April 1, 2009 through December 31, 2010. For all BCBS plans, we selected and reviewed
8,888 groups, totaling $7,045,096 (out of 214,910 groups, totaling $13,592,458) in potential
duplicate payments, under our “best matches” criteria. We also selected and reviewed 11,032
groups, totaling $9,084,276 (out of 787,882 groups, totaling $31,381,998) 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 $350 or more under
the “near matches” criteria.

Based on our review, we determined that 4,314 claim payments in our “best matches” sample
were duplicates, resulting in overcharges of $2,997,289 to the FEHBP. Also, we determined that
1,970 claim payments in our “near matches” sample were duplicates, resulting in overcharges of
$1,794,997 to the FEHBP. In total, 62 BCBS plans overcharged the FEHBP $4,792,286 for
these 6,284 duplicate claim payments from April 1, 2009 through December 31, 2010 (See
Schedule B for a summary breakdown of these questioned duplicate claim payments for each
BCBS plan by “best matches” and “near matches”). 4




4
  In addition, there were 1,035 duplicate claim payments, totaling $1,186,170, that were identified by the BCBS
plans before the start of our audit (i.e., February 1, 2011) and adjusted or voided by the Association’s original
response due date (i.e., May 2, 2011) 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 original response due date
to the draft report, we did not question these duplicate payments in the final report.




                                                         5
Our audit disclosed the following for these questioned duplicate claim payments:

•   For 3,135 (50 percent) of the duplicate payments, the BCBS plans incorrectly paid the claims
    due to systematic processing errors. Generally, the claims were not deferred on the claims
    system as potential duplicates for review by the processors. As a result, the FEHBP was
    overcharged $2,325,545 for these duplicate claim payments due to systematic processing
    errors.

•   For 2,200 (35 percent) of the duplicate payments, the BCBS plans incorrectly paid the claims
    due to manual processing errors. Specifically, the claims were deferred as potential
    duplicates on the claims system, but the system edits were overridden by the processors. As
    a result, the FEHBP was overcharged $1,671,210 for these duplicate claim payments due to
    manual processing errors.

•   For 499 (8 percent) of the duplicate payments, we could not determine the specific causes of
    the claim payments errors. These duplicate claim payments totaled $470,866.

•   For 450 (7 percent) of the duplicate payments, the BCBS plans incorrectly paid the claims
    due to provider billing errors. These duplicate claim payments totaled $324,665.

Of the $4,792,286 in questioned duplicate payments, $447,146 (or 9 percent) was identified by
the BCBS plans before the start of our audit (i.e., February 1, 2011). However, since the BCBS
plans had not completed the recovery process and/or adjusted or voided these claims by the
Association’s original response due date (i.e., May 2, 2011) to the draft report, we are continuing
to question these overcharges. The remaining questioned duplicate payments of $4,345,140 (or
91 percent) were identified as a result of our audit.

Inpatient Facility Claims - Duplicate or Overlapping Dates of Service Selection Criteria

We performed a computer search for potential duplicate payments on inpatient facility claims
paid during the period January 1, 2008 through December 31, 2010. For all BCBS plans, we
selected and reviewed 856 groups of claims with duplicate or overlapping dates of service,
totaling $5,933,779 (out of 1,125 groups, totaling $6,065,125) in potential duplicate payments. 5
Our sample included all groups with potential duplicate payments of $1,000 or more.

Based on our review, we determined that 308 claim payments in our sample were duplicates,
resulting in overcharges of $1,550,463 to the FEHBP from 36 BCBS plans (See Schedule B for a
summary breakdown of these questioned duplicate claim payments by BCBS plan). 6

5
  This universe excludes the inpatient facility claim groups for the BCBS plans’ years that were previously audited
by the OIG.
6
  In addition, there were 67 duplicate claim payments, totaling $310,972, that were identified by the BCBS plans
before the start of our audit (i.e., February 1, 2011) and adjusted or voided by the Association’s original response
due date (i.e., May 2, 2011) 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 original response due date to the draft
report, we did not question these duplicate payments in the final report.




                                                           6
Our audit disclosed the following for these questioned duplicate claim payments:

•   For 122 (40 percent) of the duplicate payments, the BCBS plans incorrectly paid the claims
    due to systematic processing errors. Generally, the claims were not deferred on the claims
    system as potential duplicates for review by the processors. As a result, the FEHBP was
    overcharged $397,735 for these duplicate claim payments due to systematic processing
    errors.

•   For 100 (32 percent) of the duplicate payments, we could not determine the specific causes of
    the claim payments errors. These duplicate claim payments totaled $593,543.

•   For 55 (18 percent) of the duplicate payments, the BCBS plans incorrectly paid the claims
    due to provider billing errors. These duplicate claim payments totaled $284,120.

•   For 31 (10 percent) of the duplicate payments, the BCBS plans incorrectly paid the claims
    due to manual processing errors. Specifically, the claims were deferred as potential
    duplicates on the claims system, but the system edits were overridden by the processors. As
    a result, the FEHBP was overcharged $275,065 for these duplicate claim payments due to
    manual processing errors.

Of the $1,550,463 in questioned duplicate payments, $235,297 (15 percent) was identified by the
BCBS plans before the start of our audit (i.e., February 1, 2011). However, since the BCBS
plans had not completed the recovery process and/or adjusted or voided these claims by the
Association’s original response due date (i.e., May 2, 2011) to the draft report, we are continuing
to question these overcharges. The remaining questioned duplicate payments of $1,315,166 (85
percent) were identified as a result of our audit.

Association's Response:

Duplicate Claim Payments – “Best Matches” and “Near Matches”

The Association agrees with $3,894,579 of the questioned charges. The Association states that
the BCBS plans have recovered $1,508,875 of these duplicate payments to date.

For the contested claim payments, the Association states, “$412,708 in duplicate claim payments
are contested because recovery . . . was initiated prior to February 14, 2011 but not completed
prior to the audit period. The remaining questioned claims . . . are contested due to the
following:

•   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 provided more than once a day.
•   The claims were for procedures performed on different body parts, or by different providers
    or on different family members.




                                                 7
•   The claims were for additional payments to bring the original payment to the correct
    amount.”

Regarding corrective actions, the Association states, “We are in the process of implementing an
enhanced action plan to identify potential duplicate claims in the post payment process. The
action plan includes making technical edits to code logic to identify potential duplicate claims
prior to payment. Given the degree of complexity with regards to system and process changes,
our target date for implementation is 2nd quarter 2012. In the short term we will be making
process improvement and working with the Plans to better identify potential duplicate claims.”

Inpatient Facility Claims - Duplicate or Overlapping Dates of Service

The Association agrees with $1,188,781 of the questioned charges. The Association states that
the BCBS plans have recovered $351,296 of these duplicate payments to date.

For the contested duplicate claim payments, the Association states, “$221,040 in duplicate claim
payments are contested because recovery . . . was initiated prior to February 14, 2011 but not
completed prior to the audit period. The remaining questioned claims . . . are contested due to
the following:

•   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 provided more than once a day.
•   The claims were for procedures performed on different body parts, or by different providers
    or on different family members.
•   The claims were for additional payments to bring the payment to the correct amount.”

OIG 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 $6,342,749 ($4,792,286 plus
$1,550,463). If duplicate claim payments were identified by the BCBS plans before the start of
our audit (i.e., February 1, 2011) and adjusted or voided by the Association’s original response
due date to the draft report (i.e., May, 2, 2011), we did not question these claim payment errors
in the final report.

Based on the Association’s response and the BCBS plans’ additional documentation, we
determined that the Association and/or plans agree with $5,337,343 and disagree with
$1,005,406 of the questioned charges. Although the Association only agrees with $5,083,360
($3,894,579 plus $1,188,781) in its written response, the BCBS plans’ documentation supports
concurrence with $5,337,343.

Based on the Association’s response and/or the BCBS plans’ documentation, the contested
amount of $1,005,406 represents the following items:




                                                8
•   $682,443 of the contested amount represents 607 duplicate claim payments that were
    identified by the 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 original
    response due date to the draft report. Since these duplicate payments had not been recovered
    and returned to the FEHBP by the Association’s original response due date, we are
    continuing to question this amount in the final report.

•   $96,906 of the contested amount represents 109 duplicate claim payments where the
    recovery adjustments were reported incorrectly by BCBS of Florida. Specifically, when
    BCBS of Florida responded to these sample items, the plan stated that these duplicate claim
    payments were already recovered and adjusted. However, when we reviewed these claims in
    the FEP Direct System, we found that these duplicate claim payments had not been adjusted
    or voided. Therefore, we are continuing to question this amount in the final report.

•   $85,370 of the contested amount represents 103 duplicate claim payments where the BCBS
    plans did not provide sufficient documentation to support these contested items. Therefore,
    we are continuing to question this amount in the final report.

•   $70,430 of the contested amount represents 53 duplicate claim payments that the BCBS plans
    agree were paid incorrectly. However, due to overpayment recovery time limitations with
    providers, the plans state that these duplicate payments are uncollectible. The plans did not
    provide sufficient documentation to support the overpayment recovery time limitations with
    providers or the attempted recovery efforts for these duplicate payments. Therefore, we are
    continuing to question this amount in the final report.

•   $46,166 of the contested amount represents 43 duplicate claim payments that were identified
    by the BCBS plans after the audit started. Even though the plans recovered these duplicate
    payments and adjusted or voided the claims by the Association’s original response due date
    to the draft report, we are continuing to question this amount in the final report since these
    duplicate payments were identified after the start of the audit.

•   $24,091 of the contested amount represents 12 duplicate claim payments that BCBS of
    Minnesota incorrectly paid due to provider billing errors. In each instance, the service(s)
    were submitted once on a facility claim and once on a provider claim. As a result, the claim
    payments were duplicates.

Recommendation 1

We recommend that the contracting officer disallow $6,342,749 for duplicate claim payments
charged to the FEHBP, and verify that the BCBS plans return all amounts recovered to the
FEHBP (See Schedules A and B for summaries of these questioned duplicate claims payments
by BCBS plan).




                                                9
Recommendation 2

We recommend that the contracting officer require the Association to have the FEP Operations
Center identify the root cause(s) why the FEP Direct System allows claims to bypass duplicate
system edits.

Recommendation 3

We recommend that the contracting officer ensure that the Association’s additional corrective
actions for improving the prevention and detection of duplicate claim payments are being
implemented. These additional corrective actions are included in the Association’s response to
the draft report.




                                              10
              IV. MAJOR CONTRIBUTORS TO THIS REPORT

Experience-Rated Audits Group

               , Lead Auditor

              , Auditor

              , Auditor

                  , Auditor
___________________________________________________________

                  , Chief (

Community-Rated Audits Group

            , Chief

Information Systems Audits Group

            , Senior Information Technology Specialist




                                            11
                                                                                                V. SCHEDULES                                                                                              SCHEDULE A
                                                                                                                                                                                                             Page 1 of 4
                                                                                      Global Duplicate Claim Payments
                                                                                      BlueCross and BlueShield Plans
                                                                            Claims Paid from January 1, 2008 - December 31, 2010

                                                                        QUESTIONED DUPLICATE CLAIM PAYMENTS BY PLAN

 Site                                                 Number of Number of   Number of       Reasons for the Duplicate Claim Payments             Amounts Questioned by Year         Total            Plan           Plan
Number                 Plan Name              State     DUPS     Agrees     Disagrees   Systematic     Manual        Billing    Other          2008       2009          2010      Questioned        Agrees        Disagrees
  003    BCBS of New Mexico                    NM         38      18           20       $ 10,546 $ 23,028 $ 80,845 $               6,044   $   85,474 $ 13,000 $         21,988   $ 120,462     $    102,641    $ 17,821
  005    WellPoint BCBS of Georgia             GA         66      48           18       $ 22,236 $ 15,213 $ 10,572 $ 14,390                $      435 $ 21,005 $         40,970   $   62,410    $     36,387    $ 26,023
  006    CareFirst BCBS (MD Service Area)      MD        437      431           6       $ 387,316 $ 50,721 $              926 $ 144,501    $    3,653 $ 90,039 $ 489,772          $ 583,464     $    579,290    $      4,174
  007    BCBS of Louisiana                     LA        100      97            3       $      584 $ 112,317 $ 4,292 $ 31,660              $   64,490 $ 21,874 $         62,489   $ 148,853     $    130,021    $ 18,832
  009    BCBS of Alabama                       AL         84      84            0       $ 150,656 $        1,379 $         -  $      -     $      -    $ 102,525 $       49,510   $ 152,035     $    152,035    $        -
  010    BCBS of Idaho Health Service          ID         6        4            2       $      369 $       1,013 $ 2,163 $           -     $      -    $    1,045 $       2,501   $     3,545   $       2,539   $      1,006
  011    BCBS of Massachusetts                 MA         49      37           12       $    7,566 $ 85,379 $ 4,472 $              5,253   $   31,416 $ 63,825 $          7,429   $ 102,670     $     97,417    $      5,253
  012    BCBS of Western New York              NY         9        9            0       $    7,298 $         -     $       -  $      -     $      -    $    2,487 $       4,811   $     7,298   $       7,298   $        -
  013    Highmark BCBS                         PA         99      94            5       $ 57,431 $ 11,664 $ 7,756 $ 10,475                 $    1,340 $ 20,079 $         65,907   $   87,326    $     77,863    $      9,462
  015    BCBS of Tennessee                     TN        191      189           2       $ 146,509 $ 32,067 $              691 $      -     $   56,124 $ 41,998 $         81,145   $ 179,267     $    178,827    $        440
  016    BCBS of Wyoming                      WY          25       3           22       $      -     $       381 $ 22,770 $        6,325   $   29,095 $       105 $         276   $   29,476    $       1,646   $ 27,830
  017    BCBS of Illinois                      IL        215      134          81       $ 104,379 $ 80,766 $ 14,153 $ 12,874               $   33,085 $ 73,631 $ 105,455          $ 212,172     $    133,911    $ 78,260
  021    WellPoint BCBS of Ohio                OH        198      177          21       $ 71,904 $ 126,708 $ 12,564 $ 18,055               $    2,146 $ 107,183 $ 119,902         $ 229,231     $    156,650    $ 72,580
  024    BCBS of South Carolina                SC         11      11            0       $    1,762 $       3,768 $        857 $    2,396   $    2,396 $     1,451 $       4,936   $     8,783   $       8,783   $        -
  027    WellPoint BCBS of New Hampshire       NH         61      60            1       $    4,583 $ 12,675 $ 23,592 $             3,186   $    1,842 $ 23,373 $         18,821   $   44,036    $     43,860    $        176
  028    BCBS of Vermont                       VT         5        5            0       $    1,152 $       2,021 $         -  $      -     $      600 $     2,021 $         552   $     3,173   $       3,173   $        -
  029    BCBS of Texas                         TX        527      318         209       $ 195,424 $ 104,315 $ 53,879 $ 25,347              $   19,429 $ 135,953 $ 223,583         $ 378,965     $    256,838    $ 122,127
  030    WellPoint BCBS of Colorado            CO         95      81           14       $ 56,023 $ 18,759 $                -  $ 14,591     $    1,085 $ 60,051 $         28,237   $   89,373    $     49,870    $ 39,503
  031    Wellmark BCBS of Iowa                 IA         18      10            8       $    1,797 $       5,639 $ 1,690 $           -     $      112 $     2,709 $       6,305   $     9,126   $       4,836   $      4,290
  032    BCBS of Michigan                      MI        111      109           2       $ 19,918 $         9,298 $ 3,797 $         1,474   $       21 $ 14,529 $         19,936   $   34,486    $     33,509    $        976
  033    BCBS of North Carolina                NC        313      311           2       $ 97,574 $ 39,526 $ 61,033 $ 11,977                $    2,740 $ 102,982 $ 104,387         $ 210,109     $    207,863    $      2,246
  034    BCBS of North Dakota                  ND         5        3            2       $    3,621 $         963 $         -  $      -     $       47 $        -    $     4,537   $     4,584   $       3,621   $        963
  036    Capital BC                            PA         14      14            0       $    7,021 $         -     $       -  $      -     $      -    $    3,657 $       3,364   $     7,021   $       7,021   $        -
  037    BCBS of Montana                       MT         3        3            0       $      586 $         668 $         -  $      -     $      -   $       586 $         668   $     1,253   $       1,253   $        -
  038    BCBS of Hawaii                        HI         4        3            1       $      547 $         -     $      744 $      -     $      -   $        744 $        547   $     1,291   $         802   $        489
  039    WellPoint BCBS of Indiana             IN         99      83           16       $   27,582 $      26,720 $        409 $ 76,130     $    4,060 $ 107,360 $        19,421   $ 130,841     $    113,860    $ 16,980
  040    BCBS of Mississippi                   MS        196      195           1       $ 65,703 $ 48,536 $ 16,316 $               6,353   $    1,410 $ 41,087 $         94,412   $ 136,909     $    136,126    $        783
  041    BCBS of Florida                       FL        881      751         130       $ 172,027 $ 451,612 $ 44,561 $ 56,362              $   51,665 $ 272,377 $ 400,519         $ 724,562     $    602,797    $ 121,765
  042    BCBS of Kansas City (Missouri)        MO         63      62            1       $ 121,465 $ 23,021 $               -  $   61,365   $    1,050 $ 118,497 $        86,304   $ 205,851     $    186,339    $ 19,512
  043    Regence BS of Idaho                   ID         0        0            0       $      -     $       -     $       -  $      -     $      -    $       -    $        -    $       -     $         -     $        -
  044    Arkansas BCBS                         AR         31      28            3       $    8,436 $       3,999 $ 2,638 $ 79,412          $      -    $    6,687 $      87,797   $   94,484    $     92,568    $      1,917
  045    WellPoint BCBS of Kentucky            KY        145      107          38       $ 40,437 $ 75,505 $ 2,050 $ 29,525                 $    7,825 $ 53,676 $         86,017   $ 147,518     $    122,292    $ 25,226
  047    WellPoint BCBS United of Wisconsin    WI         44      41            3       $ 18,512 $         5,475 $ 18,924 $        3,914   $    1,753 $ 36,911 $          8,161   $   46,825    $     44,921    $      1,904
  048    Empire BCBS                           NY         65      33           32       $    5,370 $ 26,805 $ 12,296 $ 13,956              $    4,736 $ 19,182 $         34,509   $   58,428    $     19,837    $ 38,591
  049    Horizon BCBS of New Jersey            NJ        127      121           6       $   31,231 $      31,710 $ 24,762 $ 37,501         $   11,966 $ 39,560 $         73,678   $ 125,203     $    117,192    $      8,012
  050    WellPoint BCBS of Connecticut         CT         95      90            5       $ 14,553 $         6,762 $         -  $    1,978   $      668 $ 12,361 $         10,264   $   23,294    $     21,081    $      2,213
  052    WellPoint BC of California            CA         35      35            0       $ 14,107 $ 18,896 $ 1,157 $                8,724   $      426 $     1,861 $      40,597   $   42,884    $     42,884    $        -
  053    BCBS of Nebraska                      NE         72      72            0       $ 71,072 $         7,093 $ 2,207 $         2,335   $      -    $    9,513 $      73,195   $   82,708    $     82,708    $        -
  054    Mountain State BCBS                  WV          29      28            1       $ 12,569 $         8,186 $ 3,153 $           -     $      204 $     6,659 $      17,045   $   23,907    $     19,930    $      3,977
  055    Independence BC                       PA         34      34            0       $ 25,750 $         2,496 $         -  $      -     $      176 $     5,082 $      22,988   $   28,246    $     28,246    $        -
  056    BCBS of Arizona                       AZ         46      35           11       $    8,927 $ 12,934 $ 1,200 $              5,862   $      -    $ 12,278 $        16,645   $   28,923    $     22,381    $      6,542
  058    Regence BCBS of Oregon                OR         46      35           11       $ 27,109 $         4,756 $ 13,025 $        8,835   $   19,703 $ 16,955 $         17,067   $   53,726    $     47,060    $      6,666
  059    WellPoint BCBS of Maine               ME         74      73            1       $ 12,955 $ 22,863 $ 3,599 $ 22,139                 $      -    $    9,340 $      52,216   $   61,556    $     61,434    $        122
  060    BCBS of Rhode Island                  RI         22      22            0       $    3,591 $       2,401 $        741 $    6,067   $    2,048 $     6,633 $       4,119   $   12,800    $     12,800    $        -
  061    WellPoint BCBS of Nevada              NV         75      72            3       $ 23,104 $ 35,665 $               600 $      567   $      175 $ 11,822 $         47,939   $   59,936    $     56,915    $      3,021
  062    WellPoint BCBS of Virginia            VA        369      349          20       $ 113,013 $ 62,296 $ 8,041 $ 80,521                $    2,742 $ 78,240 $ 182,889          $ 263,871     $    255,321    $      8,550
  064    Excellus BCBS of the Rochester        NY         2        2            0       $      -     $       341 $         -  $      435   $      -   $        776 $         -    $       776   $         776   $        -
  066    Regence BCBS of Utah                  UT         53      53            0       $ 19,273 $         9,499 $ 1,611 $           545   $      -    $ 11,930 $        19,000   $   30,929    $     30,929    $        -
  067    BS of California                      CA        108      77           31       $   31,753 $ 23,535 $ 10,351 $             6,731   $    2,657 $ 41,911 $         27,803   $   72,371    $     58,356    $ 14,014
  069    Regence BS of Washington              WA         19      19            0       $    3,369 $       4,510 $         -  $      150   $      150 $     2,483 $       5,396   $     8,029   $       8,029   $        -
  070    BCBS of Alaska                        AK         52      51            1       $ 20,644 $         5,251 $ 16,239 $          406   $      -    $    9,445 $      33,095   $   42,540    $     40,932    $      1,608
                                                                                                                                                                                                                SCHEDULE A
                                                                                                                                                                                                                   Page 2 of 4
                                                                                        Global Duplicate Claim Payments
                                                                                        BlueCross and BlueShield Plans
                                                                              Claims Paid from January 1, 2008 - December 31, 2010

                                                                            QUESTIONED DUPLICATE CLAIM PAYMENTS BY PLAN

 Site                                                   Number of Number of   Number of       Reasons for the Duplicate Claim Payments                Amounts Questioned by Year          Total            Plan           Plan
Number                Plan Name                State      DUPS     Agrees     Disagrees   Systematic     Manual        Billing    Other             2008       2009          2010       Questioned        Agrees        Disagrees
  074    Wellmark BCBS of South Dakota          SD          7        4            3       $      -     $       268 $ 3,120 $            13      $      -    $    1,455 $       1,945    $     3,400   $       1,434   $      1,967
  075    Premera BC (Washington)                WA          56      55            1       $ 54,525 $ 12,596 $ 7,129 $                  533      $    2,703 $ 54,138 $         17,941    $   74,782    $     73,682    $      1,100
  076    WellPoint BCBS of Missouri             MO         108      103           5       $ 11,637 $ 33,486 $                -  $ 19,437        $    9,315 $ 21,908 $         33,337    $   64,560    $     57,785    $      6,774
  078    BCBS of Minnesota                      MN          21       6           15       $ 10,483 $ 12,769 $                -  $ 10,233        $      -    $ 19,314 $        14,171    $   33,485    $     14,163    $ 19,322
  079    Excellus BCBS of Central New York      NY          14      14            0       $    4,085 $         985 $         -  $      985      $      -    $    5,671 $         385    $     6,056   $       6,056   $        -
  082    BCBS of Kansas                         KS          7        6            1       $    2,903 $         262 $         -  $      -        $      -   $        529 $      2,635    $     3,164   $       2,903   $        262
  083    BCBS of Oklahoma                       OK         296      191         105       $ 81,442 $ 69,547 $ 94,742 $ 66,246                   $   78,609 $ 90,529 $ 142,838           $ 311,977     $    159,477    $ 152,499
  084    Excellus BCBS of Utica-Watertown       NY          20      20            0       $    2,906 $       2,115 $         -  $    3,126      $      -    $    3,410 $       4,737    $     8,147   $       8,147   $        -
  085    CareFirst BCBS (DC Service Area)       DC         469      451          18       $ 243,901 $ 141,882 $ 11,888 $ 62,142                 $    3,284 $ 60,840 $ 395,689           $ 459,813     $    449,036    $ 10,778
  088    BC of Northeastern Pennsylvania        PA          4        3            1       $    2,274 $         -     $       -  $ 10,069        $   10,069 $     1,543 $         731    $   12,343    $       2,274   $ 10,069
  089    BCBS of Delaware                       DE          29      28            1       $    6,641 $       9,666 $ 1,100 $           -        $      -    $    7,655 $       9,752    $   17,407    $     16,788    $        619
  092    CareFirst BCBS (Overseas)                          95      63           32       $ 53,131 $         3,567 $        131 $ 73,263        $   25,935 $ 42,659 $         61,499    $ 130,092     $     41,931    $ 88,161
                       Totals                            6,592      5,665       927       $ 2,723,279   $ 1,946,275   $ 608,785   $ 1,064,410   $ 578,861   $ 2,149,127   $ 3,614,761   $ 6,342,749   $ 5,337,343     $ 1,005,406



                                Plan Sites Reviewed =      63
           Plan Sites with Duplicate Claim Payments =      62
                                                                  Global Duplicate Claim Payments                                                                     SCHEDULE B
                                                                   BlueCross and BlueShield Plans                                                                        Page 3 of 4
                                                        Claims Paid from January 1, 2008 - December 31, 2010

                                  QUESTIONED DUPLICATE CLAIM PAYMENTS BY PLAN - BREAKDOWN BY SELECTION CRITERIA

                                                                                                                        Inpatient Facility Claims with
                                                                  Best Matches                  Near Matches           Duplicate or Overlapping Dates           Total Questioned
 Site                                                      Number of      Questioned     Number of      Questioned       Number of        Questioned      Number of       Questioned
Number                    Plan Name             State        DUPS          Charges         DUPS          Charges           DUPS             Charges         DUPS            Charges
  003    BCBS of New Mexico                     NM             28       $      33,640         8       $        4,909         2          $        81,913       38        $      120,462
  005    WellPoint BCBS of Georgia               GA            49       $      38,415        12       $       19,566         5          $         4,430       66        $       62,410
  006    CareFirst BCBS (MD Service Area)       MD            298       $     297,426       106       $       85,257        33          $       200,781      437        $      583,464
  007    BCBS of Louisiana                       LA            83       $      60,703         2       $        2,432        15          $        85,718      100        $      148,853
  009    BCBS of Alabama                         AL            10       $        5,891       73       $     145,144          1          $         1,000       84        $      152,035
  010    BCBS of Idaho Health Service            ID             2       $        1,756        4       $        1,790         0          $           -          6        $        3,545
  011    BCBS of Massachusetts                   MA            43       $      16,003         3       $        1,721         3          $        84,946       49        $      102,670
  012    BCBS of Western New York                NY             3       $        1,712        6       $        5,586         0          $           -          9        $        7,298
  013    Highmark BCBS                           PA            46       $      32,707        52       $       51,715         1          $         2,904       99        $       87,326
  015    BCBS of Tennessee                       TN           142       $      94,377        44       $       34,523         5          $        50,367      191        $      179,267
  016    BCBS of Wyoming                        WY              2       $          381       23       $       29,095         0          $           -         25        $       29,476
  017    BCBS of Illinois                        IL           153       $     110,818        50       $       54,238        12          $        47,116      215        $      212,172
  021    WellPoint BCBS of Ohio                  OH           126       $      92,800        61       $       28,536        11          $       107,895      198        $      229,231
  024    BCBS of South Carolina                  SC             6       $        2,713        4       $        3,674         1          $         2,396       11        $        8,783
  027    WellPoint BCBS of New Hampshire         NH            52       $      37,187         9       $        6,849         0          $           -         61        $       44,036
  028    BCBS of Vermont                         VT             2       $        1,152        3       $        2,021         0          $           -          5        $        3,173
  029    BCBS of Texas                           TX           280       $     160,408       232       $     163,791         15          $        54,766      527        $      378,965
  030    WellPoint BCBS of Colorado              CO           59        $      58,185       33        $       20,728         3          $        10,460      95         $       89,373
  031    Wellmark BCBS of Iowa                   IA           16        $        7,436       2        $        1,690         0          $           -        18         $        9,126
  032    BCBS of Michigan                        MI           91        $      24,846       20       $         9,640         0          $           -        111        $       34,486
  033    BCBS of North Carolina                  NC           236       $     141,209        73       $       53,228         4          $        15,671      313        $      210,109
  034    BCBS of North Dakota                    ND             2       $          963        3       $        3,621         0          $           -          5        $        4,584
  036    Capital BC                              PA             1       $          290       13       $        6,732         0          $           -         14        $        7,021
  037    BCBS of Montana                         MT             2       $          668        1       $          586         0          $           -          3        $        1,253
  038    BCBS of Hawaii                          HI             4       $        1,291        0       $          -           0          $           -          4        $        1,291
  039    WellPoint BCBS of Indiana               IN            64       $      31,088        32       $       24,022         3          $        75,730       99        $      130,841
  040    BCBS of Mississippi                     MS            98       $      73,420        97       $       62,388         1          $         1,100      196        $      136,909
  041    BCBS of Florida                         FL           572       $     424,435       256       $     210,458         53          $        89,668      881        $      724,562
  042    BCBS of Kansas City (Missouri)         MO             34       $      94,891        27       $       90,399         2          $        20,562       63        $      205,851
  043    Regence BS of Idaho                     ID             0       $          -          0       $          -           0          $           -          0        $           -
  044    Arkansas BCBS                           AR            23       $        9,385        7       $        5,687         1          $        79,412       31        $       94,484
  045    WellPoint BCBS of Kentucky              KY           105       $      86,692        34       $       32,054         6          $        28,772      145        $      147,518
  047    WellPoint BCBS United of Wisconsin      WI            39       $      21,426         4       $        6,475         1          $        18,924       44        $       46,825
  048    Empire BCBS                             NY            40       $      31,496        25       $       26,931         0          $           -         65        $       58,428
  049    Horizon BCBS of New Jersey              NJ            79       $      67,775        39       $       34,339         9          $        23,090      127        $      125,203
  050    WellPoint BCBS of Connecticut           CT            83       $      16,935       12        $        6,358         0          $           -         95        $       23,294
  052    WellPoint BC of California              CA           16        $      16,269       17        $       17,955         2          $         8,660       35        $       42,884
  053    BCBS of Nebraska                        NE           39        $      27,617       32        $       53,991         1          $         1,100      72         $       82,708
  054    Mountain State BCBS                    WV            13        $      12,899       14       $         7,856         2          $         3,153      29         $       23,907
  055    Independence BC                         PA            26       $      20,307         8       $        7,939         0          $           -         34        $       28,246
                                                                  Global Duplicate Claim Payments                                                                     SCHEDULE B
                                                                   BlueCross and BlueShield Plans                                                                        Page 4 of 4
                                                        Claims Paid from January 1, 2008 - December 31, 2010

                                  QUESTIONED DUPLICATE CLAIM PAYMENTS BY PLAN - BREAKDOWN BY SELECTION CRITERIA

                                                                                                                        Inpatient Facility Claims with
                                                                  Best Matches                  Near Matches           Duplicate or Overlapping Dates           Total Questioned
 Site                                                      Number of      Questioned     Number of      Questioned       Number of        Questioned      Number of       Questioned
Number                    Plan Name             State        DUPS          Charges         DUPS          Charges           DUPS             Charges         DUPS            Charges
  056    BCBS of Arizona                         AZ            31       $      18,530         8       $        6,532          7         $         3,861       46        $       28,923
  058    Regence BCBS of Oregon                  OR            26       $        8,862       14       $        8,307          6         $        36,558       46        $       53,726
  059    WellPoint BCBS of Maine                 ME            44       $      33,496        30       $       28,060          0         $           -         74        $       61,556
  060    BCBS of Rhode Island                    RI            11       $        3,196        7       $        3,339          4         $         6,265       22        $       12,800
  061    WellPoint BCBS of Nevada                NV            55       $      15,940        20       $       43,996          0         $           -         75        $       59,936
  062    WellPoint BCBS of Virginia              VA           286       $     181,663        65       $       36,696         18         $        45,511      369        $      263,871
  064    Excellus BCBS of the Rochester          NY             2       $          776        0       $          -            0         $           -          2        $          776
  066    Regence BCBS of Utah                    UT            30       $      15,939        23       $       14,990          0         $           -         53        $       30,929
  067    BS of California                        CA            58       $      32,028       50        $       40,343          0         $           -        108        $       72,371
  069    Regence BS of Washington               WA              9       $        5,234      10        $        2,795          0         $           -         19        $        8,029
  070    BCBS of Alaska                          AK            25       $      16,171       27        $       26,369         0          $           -         52        $       42,540
  074    Wellmark BCBS of South Dakota           SD             4       $        1,689        3       $        1,711          0         $           -          7        $        3,400
  075    Premera BC (Washington)                WA             36       $      17,902        10       $       16,363         10         $        40,518       56        $       74,782
  076    WellPoint BCBS of Missouri             MO             88       $      52,956        20       $       11,603          0         $           -        108        $       64,560
  078    BCBS of Minnesota                      MN             14       $      10,189        6        $       13,482          1         $         9,814       21        $       33,485
  079    Excellus BCBS of Central New York       NY            11       $        5,003       3        $        1,053          0         $           -         14        $        6,056
  082    BCBS of Kansas                          KS            5        $        1,703       2        $        1,462         0          $           -         7         $        3,164
  083    BCBS of Oklahoma                        OK           232       $     165,979       51        $       35,973         13         $       110,024      296        $      311,977
  084    Excellus BCBS of Utica-Watertown        NY            18       $        7,216       2        $          931          0         $           -         20        $        8,147
  085    CareFirst BCBS (DC Service Area)        DC           330       $     232,414       100       $     122,372          39         $       105,027      469        $      459,813
  088    BC of Northeastern Pennsylvania         PA            0        $          -         3        $        2,274          1         $        10,069        4        $       12,343
  089    BCBS of Delaware                        DE             6       $        1,681       21       $       10,006          2         $         5,720       29        $       17,407
  092    CareFirst BCBS (Overseas)                             26       $      11,111        54       $       42,419         15         $        76,563       95        $      130,092
                            Totals                           4,314      $ 2,997,289        1,970      $   1,794,997         308         $     1,550,463     6,592       $    6,342,749
                                                                                               AI' PEN DIX



                                                                           B1ut,-<Auss BlucShie1d
                                                                           Assodation
                                                                           An An od ation IIf Independent
                                                                           Blue Cro~ and Bille Shield PIa" .




June 7, 20 11	                                                             Federal Employee Program
                                                                           1310 G Street, N.W.
                                                                           Was hi ngto n, D.C. 20005
                                                                           202.942:.1000
 roup      Ie
Experi ence-Rated Audits Group
Office of the Inspecto r General
U.S. Office of Personnel Managem ent
1900 E Street, NW ., Room 6400
Wa shingto n, D ,C. 204 15

Reference:	           OPM DRAFT AUDIT REPORT
                      Global Duplicate Claim Paym ents Aud it
                      Aud it Report 1A-99-o0-11-022

Dear

Th is is ou r d raft response to the above referenced U.S. Office of Person nel
Man agement (OPM) Draft Aud it Report concerning the Globa l Duplicate Claim
Payments Audit. Our comments concerning the finding s in the report are as
follows :

Duplicate Claim Payments - Best and Near Matches                       $16,12 9,372

T he OPM Office of Inspector Ge neral (DIG) conducted the Dup licate Claims Payment
Audit from February 14'" throug h June 1, 201 1, For the period April 1, 2009 th rough
December 3 1, 20 10 , OPM O IG se lected and reviewed 8,888 groups, totaling
$7,045,096 (out of 214,910 groups, totali ng $13 ,592,458) in potential dup licate
payme nts, und er its "best matche s" criteria . OPM OIG also selected and reviewed
11,032 groups, totalin g $9,084,276 (out of 787 ,882 grou ps, total ing $3 1,381 ,998) in
potenti al duplicate payments, under its "near mat ches" criteria. OPM DIG sampl es
included all groups with potential duplicate payments of $250 or more under the "best
matches" criteria and $350 or more unde r th e "near matches" criteria.

Recom mendation 1:

OPM D IG reco mm ended that the Association andlor BCBS Plans review the sa mple s of
19,920 duplicate groupings, tota ling $16,129,372 in potentia l duplicate claim payments
charge d to the FEHB P , for th e purpose of ve rifying if the paymen ts we re paid properly.
For all d uplicate claim payments and/or clai m pay me nt errors , the BCSS Plans shou ld
initiate recovery efforts immediate ly as req uired by the FEHBP co ntract. and return all
amounts recovered to the FE HBP.


seSSA Response to Recomm endation 1:
June 7, 20 11
Page 2 of 4


We have reviewed the pot ent ial duplicate claim paym ents identified by OP M OIG and
initiated recove ry $3,8 94 ,579 that the Plans agree d to and contest claim paym ents
totali ng $12 ,234 ,793. See Att ach ment A which identifies total con firmed duplicates and
the am ount recovered by each Plan locat ion. T o date, Plan s have recover ed $1,508 ,875
of the $3 ,894,579 in overpay men ts identified.

Of the $ 12,234 ,793 in contested claim payments, $4 12,708 in duplicate cla im payment s
are con tested becau se recovery of the du plicate claim was initiated prior to February
14, 2011 but not co mpleted pr ior to the audit period. The remaining Question ed claim s
total ing $ 11 ,82 2,085 are contested due to the foil owing :

•	 The cla ims we re for the same provider who performed multiple proce dures to the
   sa me patient.
•	 The cla ims were for con fir med repeated pro cedures , multiple birth s, round trip
   ambulance services, team surge ry and medi cation doses pro vided more than once a
   da y.
•	 T he clai ms we re for procedures pe rform ed on different body parts, or by different
   providers o r on different family members.
•	 The clai ms we re for additio nal payment s to bring th e origin al paym ent to the correct
   amount.

Recommendation 2:

OPM OIG recommended that the Association provide supporting documentation for
each claim error identified during this audit. Thi s sho uld includ e co pies of th e claim ,
claim recovery informat ion, or any other type of docum entation that will provide support
for your res ponses .

seSSA Response to Recommendation 2:

FEP provided the documentation to support contested claims and recoveries as
requested by th e OPM OIG auditors.

Recommendation 3 :

OPM OIG recommended that the contr acting off icer instruct the Association to en sure
that all BeSS Pl ans are following the corrective action plan . They also recommended
that the contrac ting office r ins truct the Associa tion to have the BeSS Plans ide ntify the
root ca use(s) of the claim payment errors and implement corrective actions/additional
pro cedures to prev ent the se typ es of errors in the future .

seSSA Response to Recommendation 3:

We are in the process of impleme nting an enh anced action plan to identify potential
duplicate claims in the post pa yment pro cess . The action plan includes ma king
techni cal ed its to code logic to identify potential dup licate claims prior to paym ent.
Given the degree of complexity with regards to the system and process changes, our
target date for implementation is 2nd quarter 2012. In the short term we will be making
process improvement and working with Plans to better identify potential duplicate
claims.

Inpatient Facility Claims with Duplicate or Overlapping dates of Service $5,933 .779

The OPM Office of Inspector General (DIG ) conducted a computer search for inpatient
facility claims with potential duplicate or overlapping dates of service paid during the
period January 1, 2008 throu gh December 31, 2010. OPM OIG selected 856 group s,
totaling $5,933,779 (out of 1,125 groups, totaling $6,065,1 25) in potential duplicate
payments. OPM OIG samples included all gro ups with potential duplicate payments of
$1,000 or more.	                                                                       .

Recommendation 4:

OPM OIG recommended that the Association and/or BeBS Plans review the sample of
856 duplicate gro ups, totaling $5,933,779 in potential duplicate claim payments charged
to the FEHBP , for the purpose of verifying if t he payments were paid properly. For all
duplicate claim payments and/or claim payment errors, the Be SS Plans should initiate
recovery efforts immediately as required by the FEHSP contract. and return all amounts
recovered to the FEHBP.

seSSA Response to Recommendation 4:

We have reviewed the potential duplicate claim payments identified by OPM OIG and
initiated recovery $1,188,781 that the Plans agreed to and contest claim payments
totaling $4,744,998. See Attachment A which identifies total confirmed duplicates and
the amount recovered by each Plan location. To date, Plans have recovered $351.296
of the $1,188,781 in overpayments identified.

Of the $4 ,744,998 in contested claim payments, $221,040 in duplicate claim payments
are contested because recovery of the duplicate claim was initiated prior to February
14, 2011 but not completed prior to the audit period. The remaining questioned claims
totaling $ 4,523,958 are contested due to the following:

•	 The claims were for the same provider who performed multiple procedures to the
   same patient.
•	 The claims were for confirmed repeated procedures, multiple births, rou nd trip
   ambulance services, team surgery and medication doses provided more than once a
   day.
•	 The claims were for procedures perfo rmed on different body parts, or by different
   providers or on different family members.
•	 The claims were for additional payments to bring the original payment to the correct
   amount.

Recommendation 5:
OPM OIG recommended that the Association provide supporting documen tatio n for
each cla im error identified during this audit. Th is should include co pies of the claim,
claim recovery information, or any other type of documentation that will provide support
for your responses.

seSSA Response to Recommendation 5:

We have provided the documentation to support disagrees and recoveries as requested
by the OPM OIG auditors .

Recommendation 6:

OPM G IG recommended that the contracting office r instruct the Association to have the
BeS S Plan s identify the root cause(s) of the claim payment errors and implement
corrective actions! procedures to prevent these types of e rrors in the future.

seSSA Response to Recommendation6:

We are in the process of implementing an enhanced action plan to identify potential
dupli cate claims in the post payment pro cess . The action plan includes maki ng
tech nica l ed its to code log ic to identify potential dupl icat e claims prior to payment.
Given the degree of complexity with regards to the system and process changes , our
target date for imp lem entation is 2nd quarter 20 12. In the short term we w ill be making
process improvement and working with Plans to better identify potential duplicate
claims.




Executive Director

Program Integrity




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