oversight

Supplemental Report on the Audit of Global Non-Covered Ambulance Claims for BlueCross and BlueShield Plans

Published by the Office of Personnel Management, Office of Inspector General on 2014-04-17.

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

                                                     U.S. OFFICE OF PERSONNEL MANAGEMENT
                                                           OFFICE OF THE INSPECTOR GENERAL
                                                                            OFFICE OF AUDITS




Final Audit Report

Subject:


 SUPPLEMENTAL REPORT ON THE AUDIT OF
GLOBAL NON-COVERED AMBULANCE CLAIMS
  FOR BLUECROSS AND BLUESHIELD PLANS




                                             Report No. 1A-99-00-13-046


                                             Date:         April 17, 2014




                                                          --CAUTION--

This audit report has been distributed to Federal officials who are responsible for the administration of the audited program. This audit
report may contain proprietary data which is protected by Federal law (18 U.S.C. 1905). Therefore, while this audit report is available
under the Freedom of Information Act and made available to the public on the OIG webpage, caution needs to be exercised before
releasing the report to the general public as it may contain proprietary information that was redacted from the publicly distributed copy.
                                     Federal Employees Health Benefits Program
                                       Service Benefit Plan Contract CS 1039
                                         BlueCross BlueShield Association
                                                   Plan Code 10

                                 Global Audit of Non-Covered Ambulance Claims
                                         BlueCross and BlueShield Plans



                      REPORT NO. 1A-99-00-13-046                                    April 17, 2014
                                                                              DATE: ______________




                                                                                    AUDIT REPORT




                                                                               Michael R. Esser
                                                                               Assistant Inspector General
                                                                                 for Audits


                                                          --CAUTION--
This audit report has been distributed to Federal officials who are responsible for the administration of the audited program. This audit
report may contain proprietary data that is protected by Federal law (18 U.S.C. 1905). Therefore, while this audit report is available
under the Freedom of Information Act and made available to the public on the OIG webpage, caution needs to be exercised before
releasing the report to the general public as it may contain proprietary information that was redacted from the publicly distributed copy.
                                EXECUTIVE SUMMARY


                          Federal Employees Health Benefits Program
                            Service Benefit Plan Contract CS 1039
                              BlueCross BlueShield Association
                                        Plan Code 10

                        Global Audit of Non-Covered Ambulance Claims
                                BlueCross and BlueShield Plans



                REPORT NO. 1A-99-00-13-046                     April 17, 2014
                                                        DATE: ______________



This supplemental final report on the Federal Employees Health Benefits Program (FEHBP)
operations at all BlueCross and BlueShield (BCBS) plans questions $1,423,823 in health benefit
charges. The BlueCross BlueShield Association (Association) and/or BCBS plans agreed with
$466,670 and disagreed with $957,153 of the questioned charges.

The audit report covers health benefit payments from June 1, 2011 through December 31, 2012
as reported on the plans’ Annual Accounting Statements, and supplements our fiscal year 2012
Global Coordination of Benefits Audit (Report No. 1A-99-00-12-029) where we identified issues
related to the processing of claims for ambulance services. Specifically, we requested the
Association to identify all BCBS claims potentially containing non-covered ambulance services
during the reporting period. We selected for review all 11,834 claims (representing 27,266 claim
lines), totaling $2,953,809 in health benefit charges to the FEHBP, that the Association identified
as potentially containing non-covered ambulance services. Based on our review of this sample,
we determined that BCBS plans incorrectly paid 7,548 claims (representing 15,794 claim lines),
resulting in $1,423,823 in overcharges to the FEHBP.




                                                 i
                                               CONTENTS
                                                                                                                 PAGE

       EXECUTIVE SUMMARY .............................................................................................. i

 I.    INTRODUCTION AND BACKGROUND .....................................................................1

II.    OBJECTIVE, SCOPE, AND METHODOLOGY ............................................................3

III.   AUDIT FINDING AND RECOMMENDATIONS .........................................................5

              Non-Covered Ambulance Services ..........................................................................5

IV.    MAJOR CONTRIBUTORS TO THIS REPORT .............................................................9

V.     SCHEDULES

       A. SUMMARY OF SELECTIONS BY PLAN

       B. SUMMARY OF QUESTIONED CHARGES BY PLAN

       APPENDIX: BlueCross BlueShield Association’s October 1, 2013 reply to the draft
                 audit report, issued June 21, 2013.




                                                         i
                         I. INTRODUCTION AND BACKGROUND
INTRODUCTION

This supplemental 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 64 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
BlueCross BlueShield plans, and OPM.

The Association has also established an FEP Operations Center. The activities of the FEP
Operations Center are performed by CareFirst BlueCross BlueShield, 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 of all
FEHBP claims, and accounting for all program funds.

Compliance with laws and regulations applicable to the FEHBP is the responsibility of the
Association and plan management. 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
This is our first global audit of non-covered ambulance claims for the BCBS plans. Our sample
selections, instructions, and preliminary audit results were presented in detail in a formal
information request, dated April 1, 2013, and discussed in detail with the Association and BCBS
plan officials during the entrance conference on June 4, 2013. The Association’s October 1,
2013 comments offered in response to our draft report, dated June 21, 2013, 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 27, 2014 was considered in preparing our final report.




                                               2
                II. OBJECTIVE, SCOPE, AND METHODOLOGY

OBJECTIVE

The objectives of our audit were to determine whether the BCBS plans charged costs to the
FEHBP and provided services to FEHBP members in accordance with the terms of the contract.
Specifically, our objectives were to determine whether the plans complied with contract
provisions related to claims containing non-covered ambulance services.

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.

The audit covered health benefit payments from June 1, 2011 through December 31, 2012 as
reported on the plans’ Annual Accounting Statements. The scope of this audit was limited to the
review of paid claims that potentially contained non-covered ambulance services related to an
issue we identified during our fiscal year 2012 global coordination of benefits (COB) audit
(Report No. 1A-99-00-12-029). We issued a formal information request to the Association on
December 18, 2012, instructing the FEP Operations Center to identify all paid claims that
potentially contained non-covered ambulance services during the period of June 1, 2011 through
December 31, 2012. On April 25, 2013, the Association informed us that 11,834 claims, totaling
$2,953,809 in charges to the FEHBP, potentially contained non-covered ambulance services.
We selected for review all 11,834 claims (representing 27,266 claim lines).

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,
laws, and regulations governing the FEHBP as they relate to non-covered ambulance claims.
The results of our tests indicate that, with respect to claim payments that contained non-covered
ambulance services, the BCBS plans did not fully comply with the provisions of the contract.
Exceptions noted are explained in detail in the “Audit Findings 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 Operations Center and the BCBS plans. The BCBS claims data is provided to us on a
monthly basis by the FEP Operations Center and is uploaded into our internal data warehouse.
Through audits and a reconciliation process, we have verified the reliability of the claims data in



                                                 3
our data warehouse. However, due to time constraints, we did not verify the reliability of the
data generated by the FEP Operations Center, which was used to identify the universe of claims
within this review. 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 objectives.

The audit was performed at our offices in Washington, D.C.; Cranberry Township, Pennsylvania;
and Jacksonville, Florida from June 2013 through February 2014.

METHODOLOGY

To test each BCBS plan’s compliance with the FEHBP health benefit provisions, we selected for
review all 11,834 non-covered ambulance claims paid during the period of June 1, 2011 through
December 31, 2012 that were potentially not priced in accordance with the Service Benefit Plan
brochure. See Schedule A for a summary of the selections of potentially non-covered ambulance
claims by BCBS plan.

The sample selections were submitted to each BCBS plan for their review and response. We then
conducted a limited review of the plans’ “paid incorrectly” responses and an expanded review of
the plans’ “paid correctly” responses. Specifically, we verified the supporting documentation, the
accuracy and completeness of the plans’ responses, determined if the claims were paid correctly,
and/or calculated the appropriate questioned amounts for the claim payment errors. Additionally,
we reviewed the status of corrective actions that have been implemented by the Association, FEP
Operations Center and/or the BCBS plans. We did not project the sample results to the universe of
claims potentially containing non-covered ambulance services.

The determination of the questioned amount is based on the FEHBP contract, the 2011 and 2012
Service Benefit Plan brochures, and the Association’s FEP Administrative Manual.




                                                 4
                 III. AUDIT FINDING AND RECOMMENDATIONS
Non-Covered Ambulance Services                                                                      $1,423,823

During our FY 2012 global COB audit, we determined the FEP Direct system (which processes
and approves all FEP claim payments) and/or BCBS plan local systems were incorrectly
processing claims containing non-covered ambulance services. Based on our expanded review
of this error, we determined that the BCBS plans incorrectly paid an additional 7,548 claims
(representing 15,794 claim lines), resulting in net overcharges of $1,423,823 to the FEHBP. 2

The 2012 BCBS Service Benefit Plan brochure states that ambulance transport services are
covered under the following circumstances: “when medically appropriate and related to medical
emergency or accidental injury; or associated with inpatient hospital care or covered hospice.”
Additionally, non-covered services are defined as, “ambulance and any other modes of
transportation to or from services including but not limited to physician appointments, dialysis,
or diagnostic tests not associated with covered inpatient hospital care.”

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 prompt and diligent effort to recover the
erroneous payment . . . . The recovery of any overpayment must be treated as an erroneous
benefit payment, overpayment, or duplicate payment . . . . regardless of any time period
limitations in the written agreement with the provider.”

While reviewing the claims for the 2012 global COB audit, we identified a system error in the
FEP Direct claims processing system that allows payment for non-covered ambulance services as
defined by the Service Benefit Plan brochure. According to the Association, this system error
was identified in May 2011, and corrective actions to enhance FEP Direct to defer claims
containing non-covered ambulance services were implemented on April 1, 2012. Although
corrective actions were implemented to fix the FEP Direct system, the Association did not
instruct the BCBS plans to identify, review and/or adjust the claims that were potentially affected
by this error, or to initiate recoveries for the actual overpayments until after the start of our FY
2012 global COB audit.

On December 18, 2012, we issued a formal information request to the Association instructing the
FEP Operations Center to identify all claims paid during the period of June 1, 2011 through
December 31, 2012 that potentially contained non-covered ambulance services. Specifically, we
requested the FEP Operations Center to identify all paid claims containing procedure codes
A0021, A0080, A0090, A0100, A0110, A0120, A0130, A0140, A0160, A0170, A0180, A0190, A0200,
A0210, A0420, A0426, or A0428 that did not meet the Service Benefit Plan brochure’s criteria for
covered ambulance services. On April 25, 2013, the Association informed us that 11,834 claims
(representing 27,266 claim lines), totaling $2,953,809 in charges to the FEHBP, potentially
contained non-covered ambulance services. Due to the possible significant impact to the

2
 During our 2012 global COB audit, we questioned 558 claim lines, totaling $221,439 in overcharges to the
FEHBP. These overcharges are not included in the questioned costs of this supplemental final report.



                                                       5
FEHBP, we expanded our review and requested each BCBS plan to identify and/or review
claims that were potentially processed and paid incorrectly. We submitted these additional
11,834 claims for their review and response.

Based on our expanded review, we determined that 62 of the 64 BCBS plans incorrectly paid an
additional 15,794 claim lines, totaling $1,423,823 in overcharges to the FEHBP (See Schedule B
for a summary of questioned charges by BCBS plan).

Our audit disclosed the following for these overpayments:

   The BCBS plans incorrectly paid 10,733 claim lines because the BCBS plans’ local systems
    and/or FEP Direct system did not defer these claims for review. This resulted in overcharges
    of $1,023,160 to the FEHBP. In most instances, we determined these claims did not contain
    an emergency diagnosis code and the plans did not provide sufficient documentation to
    support payment for these services as described in the Service Benefit Plan brochure.
    Additionally, we determined that 30 percent of the claim payment errors were processed after
    April 1, 2012 (i.e., the date FEP Direct enhancements were implemented) and were related to
    a systematic processing error.

   The BCBS plans incorrectly paid 4,425 claim lines due to manual processing errors, resulting
    in overcharges of $310,109 to the FEHBP. For 3,946 of these claim lines (89 percent), the
    local plan processors overrode the non-emergency ambulance system deferral “C3P” in FEP
    Direct and allowed payment for these services. The plans did not provide sufficient
    documentation to support payment for these services as described in the Service Benefit Plan
    brochure.

   The BCBS plans incorrectly paid 636 claim lines due to provider billing errors (e.g., the
    incorrect use of modifiers and procedure codes), resulting in overcharges of $90,554 to the
    FEHBP.

Association’s Response:

The Association agrees with $399,231 of the questioned charges. The Association states the
plans will continue to pursue these overpayments as required by CS 1039, Part II,
section 2.3(g)(l).

Regarding the contested amount, the Association disagrees with these questioned charges for the
following reasons:

   Claims were for covered accidental injury transport, medical emergency transport, medically
    necessary hospital, skilled nursing home, or hospice transport, or were reviewed and
    approved for medically necessary ambulance transport.

   Claims were paid incorrectly; however, recovery was not initiated due to the threshold of
    recovery (less than $100) or the plans were unable to initiate recovery as a result of provider
    contract limitations.



                                                 6
Regarding corrective actions to reduce claim payment errors, the Association states, “The FEP
Direct claim system was updated on April 1, 2012 to include a system edit to prevent certain
non-emergency ambulance transport claims from paying without plan medical review. However,
[the Association] expects to evaluate the results of this audit to identify additional corrective
actions that will further reduce the occurrence of the overpayments in the future. We expect to
have this activity completed by November 30, 2013.”

OIG Comments:

After reviewing the Association’s response and additional documentation provided by the BCBS
plans, we determined that 62 BCBS plans incorrectly paid 7,548 claims, resulting in overcharges
of $1,423,823 to the FEHBP. Based on the Association’s response and the BCBS plans’
additional documentation, we determined that the Association and/or plans agree with $466,670
and disagree with $957,153 of these questioned overcharges. Although the Association only
agrees with $399,231 of these questioned overcharges in its response, the BCBS plans’
documentation supports concurrence with $466,670.

Based on the Association’s response and/or the BCBS plans’ documentation, the contested
amount of $957,153 is comprised of the following items:

   $746,154 represents 6,673 claim line overpayments where the BCBS plans’ local system
    and/or FEP Direct did not defer these claims for review and the plans did not provide
    sufficient documentation to support payment for these services as described in the Service
    Benefit Plan brochure.

   $210,999 represents 2,932 claim line overpayments where the BCBS local plan processors
    overrode the non-emergency ambulance deferral in FEP Direct and the plans did not provide
    sufficient documentation to support payment for these services as described in the Service
    Benefit Plan brochure.

Recommendation 1

We recommend that the contracting officer disallow $1,423,823 for claim overcharges and verify
that the BCBS plans return all amounts recovered to the FEHBP.

Recommendation 2

Due to the volume of claims identified after FEP Direct enhancements for non-covered
ambulance services were implemented, we recommend that the contracting officer require the
Association to have the FEP Operations Center identify the reason(s) why FEP Direct continues
to allow non-covered ambulance claims to process and pay. Also, we recommend that the
contracting officer require the Association to provide evidence or supporting documentation
ensuring that the FEP Operations Center implemented the appropriate system modifications.




                                                7
Recommendation 3

We recommend that the contracting officer require the Association to consider discontinuing the
use of modifiers as a source of edits on non-covered ambulance claims that allow the claims to
process and pay. Instead, the FEP Operations Center should develop programming
enhancements that rely on the patient’s history to evaluate compliance with the Service Benefit
Plan brochure criteria (i.e., when medically appropriate and related to medical emergency or
accidental injury; or associated with inpatient hospital care or covered hospice care) before
processing the claim payment.

Recommendation 4

Due to the volume of claims where the local plan processors overrode the FEP Direct system
edits for non-covered ambulance claims, we recommend that the contracting officer require the
Association to provide education and/or detailed training to the local BCBS plans related to
FEHBP coverage for non-covered ambulance services. Also, we recommend that the contracting
officer require the Association to provide evidence or supporting documentation ensuring that
the Association implemented the corrective actions.




                                               8
              IV. MAJOR CONTRIBUTORS TO THIS REPORT

Information Systems Audits Group

                 Chief

                Senior Team Leader

                    , Auditor-in-Charge

                , Auditor

                            , Auditor

Experience-Rated Audits Group

                  , Chief

Office of Management

                   , Senior Information Technology Specialist

              Senior Information Technology Specialist




                                             9
                                                                                                                                                                           SCHEDULE A
                                                                           V.    SCHEDULES
                                                                  GLOBAL AUDIT OF NON-COVERED AMBULANCE CLAIMS
                                                                                                                                                                              Page 1 of 2

                                                                          BLUECROSS AND BLUESHIELD PLANS

                                                                          SUMMARY OF SELECTIONS BY PLAN

                                                                                   FACILITY CLAIMS                      PROFESSIONAL CLAIMS                     TOTAL
 Site                                                                                 Claim        Total                     Claim       Total                  Claim      Total
Number                                Plan Name                   State   Claims      Lines     Amounts Paid      Claims     Lines    Amounts Paid     Claims   Lines   Amounts Paid
  003    BlueCross BlueShield of New Mexico (HCSC)                 NM        1           4                 $226     48         95            $13,435      49      99          $13,661
  005    WellPoint BlueCross BlueShield of Georgia                 GA       42         127             $11,246     315         672           $46,221     357     799          $57,467
  006    CareFirst BlueCross BlueShield (Maryland Service Area)    MD        5          10                 $620    667        1406           $69,742     672    1,416         $70,362
  007    BlueCross BlueShield of Louisiana                         LA       16          58               $8,698     73         171           $25,595      89     229          $34,293
  009    BlueCross BlueShield of Alabama                           AL       22          44               $2,275    510        1112           $86,086     532    1,156         $88,360
  010    BlueCross of Idaho Health Service                         ID        3           9               $2,075     19         47             $3,053      22      56           $5,128
  011    BlueCross BlueShield of Massachusetts                     MA       10          20                 $551    304         664          $113,605     314     684        $114,156
  012    BlueCross BlueShield of Western New York                  NY        0           0                   $0     77         156           $23,127      77     156          $23,127
  013    Highmark BlueCross BlueShield                             NY        1           2                  $59    585        1325           $84,458     586    1,327         $84,517
  015    BlueCross BlueShield of Tennessee                         TN       59         133               $8,624    733        1531           $91,107     792    1,664         $99,732
  016    BlueCross BlueShield of Wyoming                           WY       10          20               $2,866      9         18             $3,802      19      38           $6,668
  017    BlueCross BlueShield of Illinois (HCSC)                   IL        8          16               $2,888    438        1035          $157,701     446    1,051       $160,589
  021    WellPoint BlueCross BlueShield of Ohio                    OH       23          91             $34,095     420         917           $82,566     443    1,008       $116,661
  024    BlueCross BlueShield of South Carolina                    SC       11          33               $1,052     20         39             $3,232      31      72           $4,284
  027    WellPoint BlueCross BlueShield of New Hampshire           NH        1           1                  $73     48         94            $17,955      49      95          $18,028
  028    BlueCross BlueShield of Vermont                           VT        0           0                   $0     27         63            $10,028      27      63          $10,028
  029    BlueCross BlueShield of Texas (HCSC)                      TX       34         104             $16,234     876        2140          $462,047     910    2,244       $478,281
  030    WellPoint BlueCross BlueShield of Colorado                CO        8          17             $10,729      48         115           $27,058      56     132          $37,787
  031    Wellmark BlueCross BlueShield of Iowa                     IA       42         186             $22,018      74         202           $13,064     116     388          $35,082
  032    BlueCross BlueShield of Michigan                          MI        3          19               $1,316    225         483           $49,360     228     502          $50,675
  033    BlueCross BlueShield of North Carolina                    NC       42         196             $16,046     384         799           $57,213     426     995          $73,259
  034    BlueCross BlueShield of North Dakota                      ND        2           8                 $317     21         46            $26,043      23      54          $26,360
  036    Capital BlueCross                                         PA       11          24               $3,851      0          0                 $0      11      24           $3,851
  037    BlueCross BlueShield of Montana (HCSC)                    MT       12          33               $6,564     19         41            $12,744      31      74          $19,307
  038    BlueCross BlueShield of Hawaii                            HI        0           0                   $0     11         22             $5,638      11      22           $5,638
  039    WellPoint BlueCross BlueShield of Indiana                 IN       36         202             $19,306     167         419           $34,649     203     621          $53,954
  040    BlueCross BlueShield of Mississippi                       MS        0           0                   $0     67         197           $28,952      67     197          $28,952
  041    Florida Blue                                              FL        1           2                  $61    372         827           $85,123     373     829          $85,185
  042    BlueCross BlueShield of Kansas City (Missouri)            MO        0           0                   $0     80         169           $17,211      80     169          $17,211
  043    Regence BlueShield of Idaho                               ID        0           0                   $0      4         16               $469      4       16             $469
  044    BlueCross BlueShield of Arkansas                          AR        4          19                 $879     68         144           $28,369      72     163          $29,248
  045    WellPoint BlueCross BlueShield of Kentucky                KY        9          11               $1,113    177         395           $27,850     186     406          $28,964
  047    WellPoint BlueCross BlueShield United of Wisconsin        WI        4          51                 $852     45         102            $9,943      49     153          $10,794
  048    Empire BlueCross BlueShield (WellPoint)                   NY        1           2                  $55    259         585           $32,018     260     587          $32,073
  049    Horizon BlueCross BlueShield of New Jersey                NJ       96         302             $65,691     1003       2376          $117,736    1,099   2,678       $183,427
  050    WellPoint BlueCross BlueShield of Connecticut             CT        0           0                   $0     72         144           $27,156      72     144          $27,156
  052    WellPoint BlueCross of California                         CA        5          19               $2,069      0          0                 $0      5       19           $2,069
  053    BlueCross BlueShield of Nebraska                          NE        7          12               $4,401     19         38             $5,352      26      50           $9,753
  054    Mountain State BlueCross BlueShield                       WV        5          10                 $626    112         231           $16,927     117     241          $17,552
  055    Independence BlueCross                                    PA        0           0                   $0      0          0                 $0      0       0                $0
  056    BlueCross BlueShield of Arizona                           AZ        1           2                  $47     99         263           $72,268     100     265          $72,316
  058    Regence BlueCross BlueShield of Oregon                    OR        1           2                 $392     53         93            $28,251      54      95          $28,643
  059    WellPoint BlueCross BlueShield of Maine                   ME       12         150             $25,158      60         125           $12,079      72     275          $37,236
  060    BlueCross BlueShield of Rhode Island                      RI        0           0                   $0    208         434           $17,085     208     434          $17,085
  061    Wellpoint BlueCross BlueShield of Nevada                  NV        2          14               $2,193     26         54            $14,719      28      68          $16,912
  062    WellPoint BlueCross Blue Shield of Virginia               VA       10          89               $7,186    403         843           $52,589     413     932          $59,775
  064    Excellus BlueCross BlueShield of the Rochester Area       NY        0           0                   $0     31         66             $6,796      31      66           $6,796
  066    Regence BlueCross BlueShield of Utah                      UT        0           0                   $0     28         75            $12,753      28      75          $12,753
  067    BlueShield of California                                  CA        0           0                   $0    386         934          $190,587     386     934        $190,587
  068    Triple-S Salud, Inc of Puerto Rico                        PR        0           0                   $0      0          0                 $0      0       0                $0
  069    Regence BlueShield (Washington)                           WA        0           0                   $0    216         501           $51,947     216     501          $51,947
  070    BlueCross BlueShield of Alaska                            AK        0           0                   $0     34         74            $23,304      34      74          $23,304
  074    Wellmark BlueCross BlueShield of South Dakota             SD        0           0                   $0     22         62             $5,787      22      62           $5,787
  075    Premera BlueCross                                         WA        5          24               $5,284     22         52             $7,900      27      76          $13,184
                                                                                                                                                                                       SCHEDULE A
                                                                                                                                                                                          Page 2 of 2
                                                                            GLOBAL AUDIT OF NON-COVERED AMBULANCE CLAIMS
                                                                                   BLUECROSS AND BLUESHIELD PLANS

                                                                                    SUMMARY OF SELECTIONS BY PLAN

                                                                                             FACILITY CLAIMS                      PROFESSIONAL CLAIMS                     TOTAL
 Site                                                                                           Claim        Total                     Claim       Total                  Claim       Total
Number                                Plan Name                             State   Claims      Lines     Amounts Paid      Claims     Lines    Amounts Paid     Claims   Lines    Amounts Paid
  076    WellPoint BlueCross BlueShield of Missouri                          MO       22          81               $4,335    114         240           $21,594    136      321           $25,928
  078    BlueCross BlueShield of Minnesota                                   MN       22          85               $9,867     59         124           $45,439     81      209           $55,306
  079    Excellus BlueCross BlueShield of Central New York                   NY        0           0                   $0      7         16             $1,910      7       16            $1,910
  082    BlueCross BlueShield of Kansas                                      KS       10          20               $2,158     43         96            $11,298     53      116           $13,456
  083    BlueCross BlueShield of Oklahoma (HCSC)                             OK        0           0                   $0    166         360           $36,518    166      360           $36,518
  084    Excellus BlueCross BlueShield of Utica-Watertown                    NY        0           0                   $0     11         22               $530     11       22              $530
  085    CareFirst BlueCross BlueShield (DC Service Area)                    DC        4           8                 $572    749        1581          $107,895    753     1,589         $108,467
  088    BlueCross of Northeastern Pennsylvania                              PA        1           2                 $256      0          0                 $0      1        2              $256
  089    BlueCross BlueShield of Delaware                                    DE        0           0                   $0     68         140            $5,133     68      140            $5,133
  092    CareFirst BlueCross BlueShield (Overseas Area)                      DC        0           0                   $0      9         13             $5,872      9       13            $5,872
                                     TOTALS                                          624        2,262           $304,925    11,210     25,004       $2,648,884   11,834   27,266      $2,953,809

                                          Number of BCBS Plans Reviewed =    62
                                                                                                                                                                   SCHEDULE B
                                                                                                                                                                      Page 1 of 2
                                                           GLOBAL AUDIT OF NON-COVERED AMBULANCE CLAIMS
                                                                  BLUECROSS AND BLUESHIELD PLANS

                                                                  SUMMARY OF QUESTIONED CHARGES BY PLAN

 Site                                                                                     Total Questioned            Amounts Questioned by Year       Plan        Plan
Number                                 Plan Name                          State   Claim Lines     Total Charges         2011             2012         Agrees     Disagrees
  003    BlueCross BlueShield of New Mexico (HCSC)                         NM          55                    $6,635            $713          $5,923         $0          $6,635
  005    WellPoint BlueCross BlueShield of Georgia                         GA         606                   $47,530        $19,979          $27,551    $30,740         $16,791
  006    CareFirst BlueCross BlueShield (Maryland Service Area)            MD        1062                   $47,790        $18,484          $29,306     $4,919         $42,871
  007    BlueCross BlueShield of Louisiana                                 LA          96                   $10,051          $4,524          $5,527     $7,144          $2,907
  009    BlueCross BlueShield of Alabama                                   AL         700                   $57,066        $44,150          $12,916    $29,139         $27,928
  010    BlueCross of Idaho Health Service                                 ID          22                    $1,435            $691            $744       $578            $857
  011    BlueCross BlueShield of Massachusetts                             MA         212                   $28,856          $5,575         $23,281    $10,541         $18,315
  012    BlueCross BlueShield of Western New York                          NY          87                   $11,772          $7,123          $4,648       $263         $11,508
  013    Highmark BlueCross BlueShield                                     NY         455                   $17,690          $7,500         $10,190     $6,338         $11,352
  015    BlueCross BlueShield of Tennessee                                 TN         849                   $97,964        $26,128          $71,836    $96,984            $980
  016    BlueCross BlueShield of Wyoming                                   WY          5                     $1,263              $0          $1,263         $0          $1,263
  017    BlueCross BlueShield of Illinois (HCSC)                           IL         624                   $85,664        $34,392          $51,272     $3,719         $81,945
  021    WellPoint BlueCross BlueShield of Ohio                            OH         639                   $55,358        $17,777          $37,581    $23,080         $32,278
  024    BlueCross BlueShield of South Carolina                            SC          18                    $1,433            $186          $1,247       $844            $589
  027    WellPoint BlueCross BlueShield of New Hampshire                   NH          74                   $14,035          $5,428          $8,607     $1,781         $12,254
  028    BlueCross BlueShield of Vermont                                   VT          27                    $3,906            $469          $3,437        $49          $3,856
  029    BlueCross BlueShield of Texas (HCSC)                              TX        1396                  $143,599        $55,142          $88,457     $8,946        $134,653
  030    WellPoint BlueCross BlueShield of Colorado                        CO          84                   $35,486        $21,554          $13,932     $6,809         $28,677
  031    Wellmark BlueCross BlueShield of Iowa                             IA         148                   $15,787          $6,780          $9,007     $7,917          $7,870
  032    BlueCross BlueShield of Michigan                                  MI         209                   $13,353          $5,327          $8,026     $2,308         $11,045
  033    BlueCross BlueShield of North Carolina                            NC         766                   $60,472        $15,112          $45,360    $43,654         $16,818
  034    BlueCross BlueShield of North Dakota                              ND          32                   $17,133          $7,724          $9,409       $317         $16,816
  036    Capital BlueCross                                                 PA          4                     $1,690              $0          $1,690         $0          $1,690
  037    BlueCross BlueShield of Montana (HCSC)                            MT          26                    $7,176            $125          $7,051        $75          $7,102
  038    BlueCross BlueShield of Hawaii                                    HI          10                    $2,533          $1,562            $971       $517          $2,017
  039    WellPoint BlueCross BlueShield of Indiana                         IN         276                   $21,255        $10,231          $11,024     $8,182         $13,073
  040    BlueCross BlueShield of Mississippi                               MS          93                   $15,385        $11,455           $3,930     $6,265          $9,120
  041    Florida Blue                                                      FL         389                   $36,678        $12,186          $24,493     $6,512         $30,166
  042    BlueCross BlueShield of Kansas City (Missouri)                    MO          76                    $7,181          $1,661          $5,521     $3,169          $4,013
  043    BlueShield of Idaho                                               ID          5                       $235             $46            $190        $46            $190
  044    BlueCross BlueShield of Arkansas                                  AR          83                   $11,736          $5,385          $6,351       $428         $11,308
  045    WellPoint BlueCross BlueShield of Kentucky                        KY         305                   $22,318          $9,537         $12,780     $7,473         $14,845
  047    WellPoint BlueCross BlueShield United of Wisconsin                WI          56                    $5,515          $1,811          $3,704     $2,299          $3,216
  048    Empire BlueCross BlueShield (WellPoint)                           NY         390                   $18,531          $7,197         $11,334    $11,842          $6,690
  049    Horizon BlueCross BlueShield of New Jersey                        NJ        1870                   $86,673        $54,806          $31,867    $71,823         $14,850
  050    WellPoint BlueCross BlueShield of Connecticut                     CT          84                   $11,891          $3,205          $8,686     $2,621          $9,269
  052    WellPoint BlueCross of California                                 CA          3                     $1,070             $99            $972       $972             $99
  053    BlueCross BlueShield of Nebraska                                  NE          28                    $3,410            $194          $3,216         $0          $3,410
  054    Mountain State BlueCross BlueShield                               WV          94                    $5,284          $2,111          $3,174     $1,597          $3,687
  055    Independence BlueCross                                            PA          0                         $0              $0              $0         $0              $0
                                                                                                                                                                    SCHEDULE B
                                                                                                                                                                       Page 2 of 2
                                                               GLOBAL AUDIT OF NON-COVERED AMBULANCE CLAIMS
                                                                      BLUECROSS AND BLUESHIELD PLANS

                                                                  SUMMARY OF QUESTIONED CHARGES BY PLAN

 Site                                                                                     Total Questioned            Amounts Questioned by Year       Plan         Plan
Number                                  Plan Name                         State   Claim Lines     Total Charges         2011             2012         Agrees      Disagrees
  056    BlueCross BlueShield of Arizona                                   AZ         100                   $25,916          $8,252         $17,664      $2,240         $23,675
  058    Regence BlueCross BlueShield of Oregon                            OR          32                    $9,725          $4,471          $5,254      $1,072          $8,654
  059    WellPoint BlueCross BlueShield of Maine                           ME         103                   $15,632          $5,950          $9,681      $2,882         $12,750
  060    BlueCross BlueShield of Rhode Island                              RI         322                   $13,118          $9,258          $3,859        $899         $12,219
  061    Wellpoint BlueCross BlueShield of Nevada                          NV          31                    $9,942          $2,671          $7,271      $2,747          $7,196
  062    WellPoint BlueCross Blue Shield of Virginia                       VA         634                   $29,778         $10,795         $18,983      $3,615         $26,163
  064    Excellus BlueCross BlueShield of the Rochester Area               NY          28                    $2,792              $0          $2,792        $486          $2,307
  066    Regence BlueCross BlueShield of Utah                              UT          8                       $848              $0            $848          $0            $848
  067    BlueShield of California                                          CA         419                   $79,281         $16,784         $62,497        $114         $79,168
  068    Triple-S Salud, Inc. of Puerto Rico                               PR          0                         $0              $0              $0          $0              $0
  069    Regence BlueShield (Washington)                                  WA          279                   $36,410         $13,847         $22,563      $4,333         $32,077
  070    BlueCross BlueShield of Alaska                                    AK          28                   $10,214              $0         $10,214          $0         $10,214
  074    Wellmark BlueCross BlueShield of South Dakota                     SD          26                    $5,480          $1,792          $3,688      $2,414          $3,066
  075    Premera BlueCross                                                WA           23                    $4,290            $917          $3,373          $0          $4,290
  076    WellPoint BlueCross BlueShield of Missouri                       MO          150                   $16,907          $4,157         $12,750      $7,943          $8,964
  078    BlueCross BlueShield of Minnesota                                MN           76                   $29,750          $6,062         $23,688      $1,776         $27,974
  079    Excellus BlueCross BlueShield of Central New York                 NY          4                       $105             $50             $54          $0            $105
  082    BlueCross BlueShield of Kansas                                    KS          69                    $8,504          $5,064          $3,440        $539          $7,965
  083    BlueCross BlueShield of Oklahoma (HCSC)                           OK         181                   $17,732          $5,346         $12,386        $628         $17,104
  084    Excellus BlueCross BlueShield of Utica-Watertown                  NY          22                      $530            $432             $99          $0            $530
  085    CareFirst BlueCross BlueShield (DC Service Area)                  DC        1217                   $69,365         $33,434         $35,931     $22,338         $47,027
  088    BlueCross of Northeastern Pennsylvania                            PA          2                       $256              $0            $256        $256              $0
  089    BlueCross BlueShield of Delaware                                  DE          78                    $2,286          $1,532            $755        $647          $1,639
  092    CareFirst BlueCross BlueShield (Overseas Area)                    DC          4                     $2,118          $1,852            $267      $1,852            $267
                                  TOTALS                                            15,794              $1,423,823        $559,035        $864,788    $466,670        $957,153

                              Number of BCBS Plans with Overpayments =     62
                                   Appendix
                                                                     ••    '
                                                                               '
                                                                               ~
                                                                                   .


                                                                       BlueCross Blu eShield
                                                                       Association
                                                                       An Association oflndependent
                                                                       Blue Cross and Blue Shield Plans
October 1, 2013
                                                                       federal Employee Program
                                                                       13 10 G. Street, NW
                                                                       Washington, DC 20005
Group Chief 	                                                          202 .942.1000
                                                                       Fa.'< 202.942.1125
Experience-Rated Audits 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
                    No n-Covered Ambulance Services Global Audit
                    Audit Re port #1A-99-00-13-046

Dear

This is in response to the above- referenced U.S. Office of Personnel Management
(OPM) Draft Audit Report concerning the Global Coordination of Benefits Audit for
claims paid from June 1, 2011 through December 31, 2012. Our comments
concerning the findings in the report are as fo llows:

Rec ommendat ions 1, 2 and 3:

Non-Covered Ambu lance Service C harges 	                            $2,953,809

The OPM OIG submitted their sample of potential non covered Ambulance Service
payment errors to the Blue Cross Blue Shield Association (BCBS) on July 1, 2013.
The BCBS Association and/or the BCBS Plans were requested to review these
potential errors and provide responses by September 30, 20 13. The sample
included claims reimbursed from Ju ne 1, 2011 through December 31 , 20 12. OPM
O IG selected the entire population of 11 ,834 FEP claims, totaling $2,953,809 in
potential claim overpayments for review.

Blue Cross Blue Sh ield Association (BCBSA) Response:

After reviewing the OIG listing of potential non-covered Ambulance services totaling
$2,953,809, the BCBS Association identified the following :

   • 	 Claims were paid correctly for covered accidental injury transport.
   • 	 Claims were paid correctly for covered medical emergency transport.
   • 	 Claims were paid correctly for medically necessary hospital/skilled nursing 

       home/hospice transport. 

   • 	 Cla ims were paid correctly for claims reviewe d and approved for medically 

       necessary ambulance transport. 

~
Page 2
                                                

Plans disagreed to $5,472 in potential non-covered Ambulance services because
the overpayment was below the threshold for recovery (ove rpayments ranged from
.01 to $100) or because Plans were unable to initiate recovery as a result of provider
contract limits on recovery initiation.

Plans agreed that $399,231 of the questioned amount was paid in error and the
error was not identified by the start of the audit. These claims were paid in error as
a result of:

   •   Processor error for overpayments totaling $56,158.
   •   Provider bill ing errors for overpayments totaling $107,044.
   •   Plan local system pricing errors for overpayments totaling $53,488 .
   •   FEP Claim system pricing error for overpayments totaling $139 ,946.
   •   Other miscellaneous reasons totaling $42,595 .

The Plans will continue to pursue the remaining overpayments as requ ired by CS
1039, Section 2.3(g ) (1) .

Documentation to support all potential non-covered ambulance services were
provided on September 30 , 2013 . In addition, we have attached a schedule listed as
Attachment A that shows the amount questioned , contested , and agreed to by each
Plan location .

The FEPDirect claim system was updated on April1 , 2012 to include a
system ed it to prevent certain non-emergency ambulance transport claims
from paying without Plan medical rev iew. However, BCBSA expects to
evaluate the results of this audit to identify additional corrective actions that
will further reduce the occurrence of these overpayments in the future. We
expect to have this activity completed by November 30, 2013.

We appreciate the opportunity to provide our response to this Draft Audit
Report and would request that our comments be included in their entirety as
part of the Final Audit Report.




Managing Director
FEP Program Assurance

Attachments