oversight

Global Audit of Duplicate Claim Payments for BlueCross and BlueShield Plans

Published by the Office of Personnel Management, Office of Inspector General on 2014-08-19.

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:


                      GLOBAL AUDIT OF 

               DUPLICATE CLAIM PAYMENTS FOR 

              BLUECROSS AND BLUESHIELD PLANS 





                                              Report No. 1A-99-00-13-061


                                              Date:              August 19, 2014




                                                           --CAUTION-


This audit r epo1·t has been distributed to Federal officials who ar e responsible for the administration of the audited progr am. This audit
•·eport may contain proprietary data that is p1·otected by Federal law (18 U.S.C. 1905). Therefore, while this audit report is available
unde1· the F1·eedom of Information Act and made available to the public on the OIG webpage, caution needs to be exercised befor e
•·eleasing the rep01·t to the general public as it may contain proprieta1·y info1·mation th at was redacted from the publicly distJibuted copy.
                                                     AUDIT REPORT


                                      Federal Employees Health Benefits Program
                                      Service Benefit Plan    Contract CS 1039
                                           BlueCross BlueShield Association
                                                 Plan Code 10 and 11

                                       Global Audit of Duplicate Claim Payments
                                           BlueCross and BlueShield Plans



                      REPORT NO. 1A-99-00-13-061
                                                                                           August 19, 2014
                                                                              DATE: ______________




                                                                               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 and 11

                          Global Audit of Duplicate Claim Payments
                              BlueCross and BlueShield Plans



              REPORT NO. 1A-99-00-13-061                     August 19, 2014
                                                      DATE: ______________

This final audit report on the Federal Employees Health Benefits Program (FEHBP) operations
at all BlueCross and BlueShield (BCBS) plans questions $7,878,473 in claim overpayments.
The BlueCross BlueShield Association and/or BCBS plans agreed with $6,843,942 and
disagreed with $1,034,531 of the questioned charges.

Our limited scope audit was conducted in accordance with Government Auditing Standards. The
audit covered health benefit payments from January 1, 2011 through May 31, 2013, as reported in
the plans’ Annual Accounting Statements. Using various search criteria, we identified and
reviewed claims paid from January 1, 2011 through May 31, 2013 for potential duplicate
payments charged to the FEHBP. Based on our review, we determined that the BCBS plans
improperly charged the FEHBP for 9,544 claim payments, resulting in overcharges of $7,878,473
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 ............................................................6

                Duplicate Claim Payments .......................................................................................6

IV.    MAJOR CONTRIBUTORS TO THIS REPORT ..............................................................11

V.     SCHEDULES

       A. SUMMARY OF SAMPLE SELECTIONS BY PLAN

       B. SUMMARY OF QUESTIONED CHARGES BY PLAN

       APPENDIX: BlueCross BlueShield Association’s November 8, 2013 response to
                 the Draft Audit Report, issued August 1, 2013.
                         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 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
BCBS 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 file 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
each BCBS 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-99-00-11-022, dated January 11, 2012) for contract years January 1, 2008 through
December 31, 2010 are still in the process of being resolved.

Our sample selections, instructions, and preliminary audit results of the potential duplicate claim
payments were presented to the Association in a draft audit report, dated August 1, 2013. The
Association’s comments offered in response to the draft report were considered in preparing our
final report and are included as an Appendix to this report. Also, additional documentation
provided by the Association and BCBS plans on various dates through April 6, 2014 was
considered in preparing our final report.




                                                 2
                 II. OBJECTIVE, SCOPE, AND METHODOLOGY
OBJECTIVES

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 objective was to determine whether the plans complied with contract provisions
related 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 objectives. We believe that the evidence obtained provides a
reasonable basis for our findings and conclusions.

The audit covered health benefit payments from January 1, 2011 through May 31, 2013, as
reported in the BCBS plans’ Annual Accounting Statements. Specifically, we performed various
computer searches on BCBS claims data to identify potential duplicate payments charged to the
FEHBP from January 1, 2011 through May 31, 2013. Our searches identified 1,345,874 claim
groups, totaling $68,084,141 in payments, that potentially contained duplicate charges. We
selected 28,324 of these claim groups, totaling $27,058,522 in payments, for review during this
audit. See the attached Schedule A for a summary of our selection by BCBS Plan. A claim group
represents one claim payment “paid correctly” and one or more potential duplicate payments.
The universe of potential duplicate claim groups and our sample selected for review consists of
the following:

•   Using our “best matches” search criteria, we identified 288,388 groups, totaling $19,313,346
    in potential duplicate claim payments. Our “best matches” logic identifies and groups unique
    claim numbers that contain most of the same claim data, including patient code, procedure
    code, diagnosis code, and sex code. From this universe, we selected and reviewed 12,425
    groups, totaling $10,743,086 in potential duplicate claim payments. Our sample selections
    included all groups with potential duplicate payments of $250 or more.

•   Using our “near matches” search criteria, we identified 1,056,937 groups, totaling
    $45,388,069 in potential duplicate claim payments. Our “near matches” logic identifies and
    groups unique claim numbers that contain most of the same claim data, except for patient
    code, procedure code, diagnosis code, or sex code. From this universe, we selected and
    reviewed 15,499 groups, totaling $12,994,256 in potential duplicate claim payments. Our
    sample selections included all groups with potential duplicate payments of $350 or more.

•   Using our inpatient facility search criteria, which identifies duplicate or overlapping dates of
    service, we identified 549 groups, totaling $3,382,726 in potential duplicate payments. From
    this universe, we selected and reviewed 400 groups, totaling $3,321,180 in potential duplicate




                                                 3
   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 are explained in detail in the “Audit Finding and Recommendations” section of
this audit report. With respect to the items not tested, nothing came to our attention that caused
us to believe that the BCBS plans had not complied, in all material respects, with those
provisions.

In conducting our audit, we relied to varying degrees on computer-generated data provided by
the FEP Director’s Office, the FEP Operations Center and the BCBS plans. Through audits and
a reconciliation process, we have verified the reliability of the BCBS claims data in our internal
data warehouse which was used to identify the universe of potential duplicate payments. The
BCBS claims data is provided to us on a monthly basis by the FEP Operations Center, and after a
series of internal steps, uploaded into our data warehouse. However, due to time constraints, we
did not verify the reliability of the data generated by the BCBS plans’ local claims systems.
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 July 2013 through April 2014.

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. We selected for review 28,324 claim groups, totaling
$27,058,522 (from a universe of 1,345,874 claim groups, totaling $68,084,141) in potential
duplicate payments.

The samples of potential duplicate claim payments were submitted to each BCBS plan for its
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 verified on a limited test basis if the
plans had initiated recovery efforts, adjusted or voided the claims, and/or completed the recovery



                                                4
process by the audit request due date (i.e., October 1, 2013) for duplicate claim payments in our
sample. As part of our audit, we also reviewed the status of corrective actions to reduce
duplicate claim overpayments that have been or are in the process of being implemented by the
Association, FEP Operations Center and/or BCBS plans, as a result of our previous global audit.
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 2011 through
2013 Service Benefit Plan brochures, and the Association’s FEP Administrative Manual.




                                                5
                  III. AUDIT FINDING AND RECOMMENDATIONS
Duplicate Claim Payments                                                                               $7,878,473

We performed computer searches for potential duplicate payments on claims paid during the
period of January 1, 2011 through May 31, 2013. Our searches identified 1,345,874 claim
groups, totaling $68,084,141 in payments, that potentially contained duplicate charges. We
selected 28,324 of these claim groups, totaling $27,058,522 in payments, for review during this
audit. See the attached Schedule A for a summary of our selection by BCBS Plan.

Our review determined that 63 out of the 64 BCBS plans incorrectly paid 9,544 claim payments,
totaling $7,878,473 in overcharges to the FEHBP. See Schedule B for a summary of these
questioned charges by BCBS plan. 2 The claim payment errors were a result of the following:

•   4,454 duplicate payments, totaling $3,369,592, were overcharged to the FEHBP due to
    manual processing errors such as the incorrect use of override codes and allowances.

•   2,741 duplicate payments, totaling $2,596,173, were overcharged to the FEHBP due to
    provider billing errors.

•   2,237 duplicate payments, totaling $1,769,142, were overcharged to the FEHBP due to the
    duplicate claim bypassing the local plans’ claims system and/or the FEP Direct System (FEP
    Direct).

•   112 claim payments, totaling $143,566, were overcharged to the FEHBP due to an incorrect
    calculation in the member’s liability, or the claim was not properly coordinated with
    Medicare.

Of the $7,878,473 in total questioned charges, $1,034,531 (13 percent) was identified by the
BCBS plans before receiving our audit notification letter (i.e., June 3, 2013). However, since the
BCBS plans had not completed the recovery process and/or adjusted or voided these claims by
the audit request due date (i.e., October 1, 2013), we continue to question these charges. The
remaining questioned charges of $6,843,942 (87 percent) were identified as a result of our audit.

In addition to the questioned charges, our review identified a procedural issue requiring
corrective action by the Association and BCBS plans.

For 358 claims, the BCBS plans’ local claim processors did not properly update the FEP Direct
system to show that the local plan’s system did not process a payment to the provider. This
inconsistency created a variance in the amount paid between FEP Direct and the plans’ local
system. These 358 claim payment variances resulted in an overstatement of the amounts paid in

2
  Additionally, there were 785 claim payments, totaling $933,418 in overcharges, that were identified by the BCBS
plans before our audit notification date (i.e., June 3, 2013) and adjusted and returned to the FEHBP by the audit
request due date (i.e., October 1, 2013). Since these claim payments errors were identified by the BCBS plans
before the audit notification date and adjusted and returned to the FEHBP by the audit request due date, we did not
question these overpayments in the final report.


                                                         6
FEP Direct and the health benefit charges reported on the Annual Accounting Statements (AAS)
by $599,875. Since claims expense is considered when developing premium rates, overstating
the claims expense in the AAS may increase future rates.

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.”

Contract CS 1039, Part II, section 2.6 states, “(a) The Carrier shall coordinate the payment of
benefits under this contract with the payment of benefits under Medicare . . . (b) The Carrier
shall not pay benefits under this contract until it has determined whether it is the primary
carrier . . . .”

FEP Administrative Manual (FAM) Volume III, Chapter 3 states, “Plans receive claims from
members and providers for FEP members that have received care. Plans will perform initial
processing of these claims locally by varying degrees . . . once the Plan is ready to move a
claim through the adjudication process, the claims are sent to the FEP Operations Center for
processing and approval using FEP Express, the FEP Claims processing system. FEP Express
performs various edits on the claim and sends the Plan a response record indicating whether the
claims were rejected, deferred, or approved. Plans should not reimburse the provider or member
until an approval has been received from the FEP Operations Center. Once an approval response
is received for a claim, the Plan can then issue the checks or electronic payment to the provider
or member.”

Association’s Response:

In response to the draft report, the Association states, “BCBS Plans reviewed the potential
duplicate claim payments questioned by OPM OIG and agreed that $4,596,195 in claim payment
errors occurred. Of the confirmed claim payment errors, Plans have recovered overpayments
totaling $1,170,670. Claims totaling $151,902 are still under review.”

The Association disagrees with $22,462,327 of the questioned charges for the following reasons:

•   Recovery of the duplicate claim payment was initiated prior to the start of the audit or no
    payment was ever issued to the provider.

•   The claims were for the same provider who performed multiple procedures for the same
    patient.

•   The claims were for confirmed repeated procedures, multiple births, round trip ambulance
    services, team surgery or medication doses provided more than once per day.




                                                 7
•   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 original payment to the correct amount.

Regarding corrective actions to reduce duplicate payments, the Association states, “BCBSA
[Association] and Plans continue to implement an action plan to prevent duplicate payments
from occurring as well as identify potential duplicate claims in the post payment review process
if a duplicate payment has occurred. The action plan includes developing additional duplicate
code logic to identify potential duplicate claims prior to payment as well as modifying the FEP
post payment duplicate claim payment reports to more closely align with the OPM OIG global
duplicate claims listings.”

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 $7,878,473. If claim
overpayments were identified by the BCBS plans before the start of our audit (i.e., June 3, 2013)
and adjusted or voided by the audit request due date (i.e., October 1, 2013), 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 $6,843,942 and disagree with
$1,034,531 of the questioned charges. Although the Association only agrees with $4,596,195 of
those questioned charges in its written response, the BCBS plans’ documentation supports
concurrence with $6,843,942.

Based on the Association’s response and/or the BCBS plans’ documentation, the contested
amount of $1,034,531 represents the following items:

•   $559,992 of the contested amount represents claim overpayments where the BCBS plans
    initiated recovery efforts on or after our audit notification date (i.e., June 3, 2013) but before
    receiving our audit request (i.e., August 1, 2013), and also completed the recovery process and
    adjusted or voided the claims by the audit request due date (i.e., October 1, 2013). However,
    since the recoveries for these overpayments were initiated on or after our audit notification
    date, we continue to question this amount in the final report.

•   $280,809 of the contested amount represents claims that the BCBS plans agree were claim
    payment errors that were identified on or after our audit notification date (i.e., June 3, 2013)
    and recovery was not initiated as it was deemed uncollectible by the plans according to
    provider contracts. Therefore, we continue to question this amount in the final report.

•   $193,730 of the contested amount represents claim overpayments where the BCBS plans
    initiated recovery efforts before receiving our audit request (i.e., August 1, 2013) but had not
    recovered the overpayments and/or adjusted or voided the claims by the audit request due date
    (i.e., October 1, 2013). Since these overpayments had not been recovered and returned to the


                                                  8
   FEHBP by the audit request due date, we continue to question this amount in the final report.

The procedural finding was developed while reviewing the BCBS plans’ responses to our sample
selections and after receiving the Association’s response to the draft report. However, we
communicated our concern and had multiple discussions with the Association while developing
this procedural finding. The Association and/or FEP Operations Center continue to research this
procedural finding.

Recommendation 1

We recommend that the contracting officer disallow $7,878,473 for claim overcharges and verify
that the BCBS plans return all amounts recovered to the FEHBP.

Recommendation 2

We recommend that the contracting officer verify that the additional corrective actions included
in the Association’s draft report response are being implemented. Additionally, we recommend
that the contracting officer instruct the Association to provide evidence or supporting
documentation ensuring that the entire corrective action plan is implemented.

Recommendation 3

Due to the significant amount of manual processing errors, we recommend that the contracting
officer instruct the Association to enhance the current duplicate claim payment edits and
deferrals within the FEP Direct system to suspend a potential duplicate claim that has deferred in
FEP Direct until the original claim that processed has been voided, or the processor has provided
sufficient explanation as to why it is not a duplicate claim. Additionally, we recommend that the
contracting officer require the Association to provide education and/or detailed training to all the
local BCBS plans on how to identify a duplicate claim and properly use FEP Direct duplicate
override codes.

Recommendation 4

Due to the significant number of provider billing errors identified, we recommend that the
contracting officer instruct the Association to perform a risk analysis to determine high risk areas
related to duplicate provider billing errors, and the cost efficiency of implementing a system
edit(s) in the plans’ local systems and FEP Direct to prevent these types of errors from occurring
in the future. Additionally, if the analysis results in material savings to the FEHBP, we
recommend the contracting officer instruct the Association to add the system edits to the local
plans’ systems and/or FEP Direct to defer future provider billing errors for payment.

Recommendation 5

We recommend that the contracting officer require the Association to instruct the BCBS plans to
adjust the applicable claims in FEP Direct to reflect the actual amounts paid to the providers for
variances between the plans’ local claims systems and FEP Direct.



                                                 9
Recommendation 6

We recommend that the contracting officer require the Association to provide evidence or
supporting documentation ensuring that all BCBS plans received a formal notification of the
February 28, 2014 memo titled, “FEP OPM Global Audit Update,” and the updated procedure
clarifications to FAM Volume 3. Additionally, we recommend that the contracting officer
require the Association to closely monitor and evaluate the plans’ claim payment reconciliation
process and determine if additional procedures should be added to ensure final payments made
by plans balance with the amounts paid in FEP Direct.




                                               10
              IV. MAJOR CONTRIBUTORS TO THIS REPORT

Information Systems Audits Group

                , Chief

              , Senior Team Leader

                , Auditor-in-Charge

                Auditor

Experience-Rated Audits Group

                  , Chief

Office of Management

              , Information Technology Specialist




                                             11
                                                                                                                                                                                                SCHEDULE A
                                                                                              V. SCHEDULES                                                                                         Page 1 of 4

                                                                             GLOBAL AUDIT OF POTENTIAL DUPLICATE OVERPAYMENTS
                                                                                      BLUECROSS AND BLUESHIELD PLANS

                                                                                       SUMMARY OF SAMPLE SELECTIONS BY PLAN

                                                                                      BEST MATCHES                      NEAR MATCHES              INPATIENT FACILITY CLAIMS                TOTAL
                                                                                        Duplicate Potential                         Potential                         Potential                Potential
 Site                                                                     Duplicate                            Duplicate  Duplicate             Duplicate Duplicate                Duplicate
                               Plan Name                          State                  Claim    Duplicate                         Duplicate                         Duplicate               Duplicate
Number                                                                     Groups                               Groups Claim Lines               Groups    Claims                   Groups
                                                                                         Lines    Amount                            Amount                          Overpayments               Amount
 003     BlueCross BlueShield of New Mexico (HCSC)                NM          72           168        $55,208      82         95        $55,051     1         1             $4,098    155         $114,357
 005     WellPoint BlueCross BlueShield of Georgia                GA         233           238       $228,173     438        520       $262,964    16        17           $609,122    687       $1,100,259
 006     CareFirst BlueCross BlueShield (Maryland Service Area)   MD         833           986       $900,026     782        921       $519,334    13        13            $63,200   1,628      $1,482,560
 007     BlueCross BlueShield of Louisiana                        LA         151           156       $139,617     182        215       $175,757    23        23            $91,815    356         $407,190
 009     BlueCross BlueShield of Alabama                          AL         184           320       $154,968     297        358       $263,652     5         5            $14,863    486         $433,482
 010     BlueCross of Idaho Health Service                        ID          16            20        $11,215      17         20        $23,171     0         0                 $0     33          $34,386
 011     BlueCross BlueShield of Massachusetts                    MA         112           194        $71,470     209        269       $141,328    15        16            $46,167    336         $258,966
 012     BlueCross BlueShield of Western New York                 NY          17            20        $10,642      29         36        $19,810     1         1             $1,068     47          $31,520
 013     Highmark BlueCross BlueShield                            NY         361           450       $469,125     409        491       $293,234     7         7           $145,427    777         $907,786
 015     BlueCross BlueShield of Tennessee                        TN         300           387       $275,193     318        393       $322,625    23        23           $177,011    641         $774,829
 016     BlueCross BlueShield of Wyoming                          WY          25            25        $20,101      32         40        $30,192     0         0                 $0     57          $50,293
 017     BlueCross BlueShield of Illinois (HCSC)                  IL         434          1,141      $358,986     485        795       $357,055    13        14            $66,769    932         $782,810
 021     WellPoint BlueCross BlueShield of Ohio                   OH         445          1,027      $323,249     478        573       $413,755    12        13            $82,173    935         $819,178
 024     BlueCross BlueShield of South Carolina                   SC          17            36        $10,869      47         68        $28,464     5         5            $77,758     69         $117,092
 027     WellPoint BlueCross BlueShield of New Hampshire          NH          82            85        $61,242     158        189       $109,637     0         0                 $0    240         $170,879
 028     BlueCross BlueShield of Vermont                          VT          28            51        $16,224      11         11         $6,255     0         0                 $0     39          $22,479
 029     BlueCross BlueShield of Texas (HCSC)                     TX        1,436         2,644    $1,410,882    1,883      3,070    $1,778,409    44        44           $252,832   3,363      $3,442,123
 030     WellPoint BlueCross BlueShield of Colorado               CO         163           197       $167,149     257        316       $196,605     4         4            $57,342    424         $421,096
 031     Wellmark BlueCross BlueShield of Iowa                    IA          51            74        $29,267      35         40        $24,556    17        17            $57,817    103         $111,640
 032     BlueCross BlueShield of Michigan                         MI         152           380        $83,126     126        201        $90,228     3         3             $5,081    281         $178,436
 033     BlueCross BlueShield of North Carolina                   NC         463           482       $367,135     263        295       $256,794     9         9            $80,696    735         $704,625
 034     BlueCross BlueShield of North Dakota                     ND          29            41        $16,064      22         30        $19,143     1         1             $2,831     52          $38,039
 036     Capital BlueCross                                        PA          33            35        $26,915      44         57        $36,028     2         2           $147,679     79         $210,622
 037     BlueCross BlueShield of Montana (HCSC)                   MT          23            42        $19,651      28         30        $21,026     4         4            $41,198     55          $81,874
 038     BlueCross BlueShield of Hawaii                           HI          4             4          $2,215      14         15        $10,766     0         0                 $0     18          $12,981
 039     WellPoint BlueCross BlueShield of Indiana                IN         159           299       $168,423     145        189       $105,664     2         2            $19,530    306         $293,617
 040     BlueCross BlueShield of Mississippi                      MS         133           153        $86,663     180        275       $187,986     3         3            $10,915    316         $285,563
 041     Florida Blue                                             FL        1,288         1,320    $1,012,611     741        917       $589,966    16        16           $167,801   2,045      $1,770,379
 042     BlueCross BlueShield of Kansas City (Missouri)           MO          86            96       $102,073     141        143       $306,239     2         2             $2,232    229         $410,543
 043     Regence BlueShield of Idaho                              ID          0              0              $0      2          2         $1,070     0         0                 $0      2           $1,070
 044     BlueCross BlueShield of Arkansas                         AR          95           111        $62,043      80         94        $50,338     2         2             $7,493    177         $119,873
 045     WellPoint BlueCross BlueShield of Kentucky               KY         149           546       $104,110     168        349       $104,828     0         0                 $0    317         $208,938
 047     WellPoint BlueCross BlueShield United of Wisconsin       WI         218           345       $172,383     401        511       $314,898     0         0                 $0    619         $487,280
 048     Empire BlueCross BlueShield (WellPoint)                  NY         177           257       $229,292     694       1,140    $1,054,663    8         8            $113,366    879       $1,397,321
 049     Horizon BlueCross BlueShield of New Jersey               NJ         489           532       $461,318     621        769       $611,667    13        13            $72,064   1,123      $1,145,049
 050     WellPoint BlueCross BlueShield of Connecticut            CT          62            75        $55,703     159        179       $120,930     0         0                 $0    221         $176,633
 052     WellPoint BlueCross of California                        CA          64            90        $65,105      71         76        $60,695     5         6            $18,006    140         $143,806
 053     BlueCross BlueShield of Nebraska                         NE          69           130        $36,538      52         57        $38,511     8         8            $31,091    129         $106,141
 054     Mountain State BlueCross BlueShield                      WV          91           101        $88,660      80         91        $71,360     1         1             $1,156    172         $161,176
 055     Independence BlueCross                                   PA          40            44        $36,551      67         80        $66,077    14        15            $39,724    121         $142,352
 056     BlueCross BlueShield of Arizona                          AZ         164           177       $152,162     294        329       $222,159    12        12            $51,069    470         $425,390
 058     Regence BlueCross BlueShield of Oregon                   OR         132           143        $81,660     142        159        $97,771     2         2            $28,905    276         $208,337
 059     WellPoint BlueCross BlueShield of Maine                  ME          36            58        $21,472      78         88        $58,988     0         0                 $0    114          $80,460
 060     BlueCross BlueShield of Rhode Island                     RI          16            21         $9,137      68         77        $45,241     0         0                 $0     84          $54,378
 061     Wellpoint BlueCross BlueShield of Nevada                 NV          78            87        $54,937     116        141        $73,485     3         3            $12,401    197         $140,823
 062     WellPoint BlueCross Blue Shield of Virginia              VA         339           392       $231,757     529        593       $415,054    22        22           $140,260    890         $787,071
 064     Excellus BlueCross BlueShield of the Rochester Area      NY          64            79        $42,450      52         63        $41,623     2         2             $2,288    118          $86,360
 066     Regence BlueCross BlueShield of Utah                     UT         117           130        $84,525     142        181       $116,737     2         2            $30,003    261         $231,264
                                                                                                                                                                                       SCHEDULE A
                                                                                                                                                                                         Page 2 of 4

                                                                         GLOBAL AUDIT OF POTENTIAL DUPLICATE OVERPAYMENTS
                                                                                  BLUECROSS AND BLUESHIELD PLANS

                                                                                  SUMMARY OF SAMPLE SELECTIONS BY PLAN

                                                                              BEST MATCHES                     NEAR MATCHES              INPATIENT FACILITY CLAIMS                TOTAL
                                                                                Duplicate Potential                        Potential                         Potential                Potential
 Site                                                                 Duplicate                       Duplicate  Duplicate             Duplicate Duplicate                Duplicate
                               Plan Name                      State              Claim    Duplicate                        Duplicate                         Duplicate               Duplicate
Number                                                                 Groups                          Groups Claim Lines               Groups    Claims                   Groups
                                                                                 Lines    Amount                           Amount                          Overpayments               Amount
 067     BlueShield of California                             CA        242        251       $166,112    549        627       $431,706     0         0                 $0    791         $597,818
 068     Triple-S Salud, Inc of Puerto Rico                   PR         14         16         $8,755     4           8         $7,727     0         0                 $0     18          $16,483
 069     Regence BlueShield (Washington)                      WA         91         95        $55,056     83         87        $59,723     0         0                 $0    174         $114,780
 070     BlueCross BlueShield of Alaska                       AK        127        154        $94,246    208        269       $224,257     4         4             $7,826    339         $326,329
 074     Wellmark BlueCross BlueShield of South Dakota        SD         10         29         $4,161     27         31        $16,097     0         0                 $0     37          $20,258
 075     Premera BlueCross                                    WA         75         95        $62,795     86         98        $65,780    14        14           $205,945    175         $334,520
 076     WellPoint BlueCross BlueShield of Missouri           MO        146        204        $86,171    147        191       $101,773     0         0                 $0    293         $187,944
 078     BlueCross BlueShield of Minnesota                    MN        383       1,570      $326,027    118        336        $87,725    11        11           $110,537    512         $524,289
 079     Excellus BlueCross BlueShield of Central New York    NY         13         14         $7,769     18         19        $10,321     0         0                 $0     31          $18,090
 082     BlueCross BlueShield of Kansas                       KS         20         21         $7,602     43         44        $22,878     0         0                 $0     63          $30,480
 083     BlueCross BlueShield of Oklahoma (HCSC)              OK        310        714       $255,649    596       4,089      $389,844    5         5             $10,742    911         $656,235
 084     Excellus BlueCross BlueShield of Utica-Watertown     NY         7          7          $2,966     13         14        $26,074     0         0                 $0     20          $29,040
 085     CareFirst BlueCross BlueShield (DC Service Area)     DC       1,197      1,417    $1,031,791   1,810      2,033    $1,236,789    26        26           $114,622   3,033      $2,383,202
 088     BlueCross of Northeastern Pennsylvania               PA         3          3          $1,948     16         18        $14,985     2         2            $89,142     21         $106,075
 089     BlueCross BlueShield of Delaware                     DE         38         49        $33,927     35         42        $25,009     0         0                 $0     73          $58,936
 092     CareFirst BlueCross BlueShield (Overseas Area)       DC         19         19         $9,827     77        120        $61,775     3         4             $9,116     99          $80,718
                                TOTALS                                 12,425    19,047   $10,743,086  15,499     23,577   $12,994,256   400       407         $3,321,180  28,324     $27,058,522

                            Number of BCBS Plans Reviewed =    64
                                                                                                                                                                                                      SCHEDULE B
                                                                                                                                                                                                         Page 3 of 4

                                                                              GLOBAL AUDIT OF DUPLICATE CLAIM PAYMENTS
                                                                                  BLUECROSS AND BLUESHIELD PLANS

                                                                               SUMMARY OF QUESTIONED CHARGES BY PLAN

 Site                                                                      BEST MATCHES              NEAR MATCHES          INPATIENT MATCHES       TOTAL QUESTIONED

                                                                        No. of Dup   Overpayment No. of Dup   Overpayment No. of Dup Overpayment No. of Dup Overpayment                    Plan
Number                         Plan Name                        State   Payments       Amount     Payments      Amount     Payments    Amount     Payments    Amount       Plan Agrees   Disagrees
  003    BlueCross BlueShield of New Mexico (HCSC)               NM         44            $25,184     3             $2,148     0               $0    47          $27,332     $11,625        $15,708
  005    WellPoint BlueCross BlueShield of Georgia               GA         32            $31,279    28            $32,526     1           $1,132    61          $64,936     $54,191        $10,745
  006    CareFirst BlueCross BlueShield (Maryland Service Area) MD         694           $771,055    87            $94,174    10          $34,993   791         $900,222    $883,897        $16,324
  007    BlueCross BlueShield of Louisiana                       LA        129           $104,237   130           $117,788    16          $47,336   275         $269,361    $110,252       $159,109
  009    BlueCross BlueShield of Alabama                         AL        119            $53,314    63            $72,850     5           $6,198   187         $132,363    $126,577         $5,785
  010    BlueCross of Idaho Health Service                       ID         14             $6,590     4             $1,719     0               $0    18           $8,309      $8,309             $0
  011    BlueCross BlueShield of Massachusetts                   MA         20             $6,967    17             $9,346     1          $13,958    38          $30,271     $28,370         $1,901
  012    BlueCross BlueShield of Western New York                NY         14             $7,258     5             $6,396     0               $0    19          $13,654     $13,182           $471
  013    Highmark BlueCross BlueShield                           NY        196           $130,479    61            $55,770     2          $20,510   259         $206,760    $194,203        $12,557
  015    BlueCross BlueShield of Tennessee                       TN        161           $141,914    83           $121,980    14         $132,113   258         $396,007    $360,818        $35,189
  016    BlueCross BlueShield of Wyoming                         WY          1             $1,448     1               $361     0               $0     2           $1,809      $1,809             $0
  017    BlueCross BlueShield of Illinois (HCSC)                 IL        124            $83,796    73            $59,296     4          $24,101   201         $167,193    $139,472        $27,721
  021    WellPoint BlueCross BlueShield of Ohio                  OH        222           $133,881    78            $64,264     2           $5,273   302         $203,418    $185,365        $18,052
  024    BlueCross BlueShield of South Carolina                  SC          4             $3,807     5             $4,012     3          $33,696    12          $41,515     $41,515             $0
  027    WellPoint BlueCross BlueShield of New Hampshire         NH         16            $18,269    16            $15,141     0               $0    32          $33,410     $22,536        $10,874
  028    BlueCross BlueShield of Vermont                         VT         11             $4,983     3             $1,467     0               $0    14           $6,449      $6,449             $0
  029    BlueCross BlueShield of Texas (HCSC)                    TX        421           $277,132   207           $191,302     1           $4,108   629         $472,541    $324,845       $147,696
  030    WellPoint BlueCross BlueShield of Colorado              CO        111           $106,124    44            $32,572     1              $40   156         $138,736    $109,845        $28,891
  031    Wellmark BlueCross BlueShield of Iowa                   IA         16             $6,372     9             $6,925     1             $410    26          $13,706     $12,913           $793
  032    BlueCross BlueShield of Michigan                        MI         61            $31,569    31            $12,701     1           $6,784    93          $51,054     $45,887         $5,168
  033    BlueCross BlueShield of North Carolina                  NC        387           $261,240   148           $168,117     3           $8,612   538         $437,969    $422,620        $15,349
  034    BlueCross BlueShield of North Dakota                    ND          6             $4,396     2             $1,566     1           $2,891     9           $8,852      $5,260         $3,593
  036    Capital BlueCross                                       PA         13             $7,084    19            $14,432     0               $0    32          $21,515     $18,087         $3,428
  037    BlueCross BlueShield of Montana (HCSC)                  MT          2               $783     3             $3,009     1           $2,612     6           $6,404      $3,956         $2,448
  038    BlueCross BlueShield of Hawaii                          HI          0                 $0     1               $650     0               $0     1             $650       $650              $0
  039    WellPoint BlueCross BlueShield of Indiana               IN         68            $96,359    42            $26,614     0               $0   110         $122,973    $117,675         $5,298
  040    BlueCross BlueShield of Mississippi                     MS         33            $25,869     1               $576     3           $4,156    37          $30,601     $30,601             $0
  041    Florida Blue                                            FL        439           $334,347   347           $195,096    10         $192,412   796         $721,855    $634,026        $87,829
  042    BlueCross BlueShield of Kansas City (Missouri)          MO         50            $69,124    46           $219,556     2           $2,232    98         $290,912    $204,741        $86,171
  043    BlueShield of Idaho                                     ID          0                 $0     0                 $0     0               $0     0               $0        $0               $0
  044    BlueCross BlueShield of Arkansas                        AR         65            $41,146    14            $13,216     1           $4,743    80          $59,105     $50,171         $8,934
  045    WellPoint BlueCross BlueShield of Kentucky              KY        380            $54,657    39            $21,793     0               $0   419          $76,450     $68,572         $7,878
  047    WellPoint BlueCross BlueShield United of Wisconsin      WI         38            $26,082    19            $17,760     0               $0    57          $43,842     $43,538           $304
  048    Empire BlueCross BlueShield (WellPoint)                 NY         63            $74,562    91            $85,468     3           $6,721   157         $166,752    $165,445         $1,307
  049    Horizon BlueCross BlueShield of New Jersey              NJ        324           $219,569   108           $113,568    10          $22,672   442         $355,809    $337,812        $17,996
  050    WellPoint BlueCross BlueShield of Connecticut           CT         29            $25,597    23            $11,740     0               $0    52          $37,337     $36,757           $580
  052    WellPoint BlueCross of California                       CA         37            $42,752    27            $15,717     3          $32,229    67          $90,698     $76,899        $13,799
  053    BlueCross BlueShield of Nebraska                        NE         25             $9,499    12             $6,498     0               $0    37          $15,997      $2,000        $13,997
  054    Mountain State BlueCross BlueShield                     WV         58            $56,727    10             $6,856     1           $1,156    69          $64,739     $45,241        $19,497
  055    Independence BlueCross                                  PA         13             $4,143    17            $24,939     2             $986    32          $30,068     $28,157         $1,911
  056    BlueCross BlueShield of Arizona                         AZ         24            $13,508    25            $16,966     2          $18,669    51          $49,143     $48,524           $619
  058    Regence BlueCross BlueShield of Oregon                  OR         44            $39,110    22            $15,436     2          $44,473    68          $99,020     $88,659        $10,361
  059    WellPoint BlueCross BlueShield of Maine                 ME          7             $3,024    10             $6,376     0               $0    17           $9,400      $7,318         $2,082
  060    BlueCross BlueShield of Rhode Island                    RI          3             $2,216     4             $2,894     0               $0     7           $5,111      $5,111             $0
  061    Wellpoint BlueCross BlueShield of Nevada                NV         40            $28,822     9             $6,219     2           $1,484    51          $36,525     $36,525             $0
  062    WellPoint BlueCross Blue Shield of Virginia             VA        186           $122,588    94            $62,778     9          $54,849   289         $240,214    $226,019        $14,196
  064    Excellus BlueCross BlueShield of the Rochester Area     NY         57            $32,389     8             $3,404     0               $0    65          $35,793     $22,484        $13,310
  066    Regence BlueCross BlueShield of Utah                    UT         75            $53,292    37            $30,599     0               $0   112          $83,891     $40,013        $43,878
                                                                                                                                                                                                   SCHEDULE B
                                                                                                                                                                                                      Page 4 of 4

                                                                           GLOBAL AUDIT OF DUPLICATE CLAIM PAYMENTS
                                                                               BLUECROSS AND BLUESHIELD PLANS

                                                                            SUMMARY OF QUESTIONED CHARGES BY PLAN

 Site                                                                   BEST MATCHES              NEAR MATCHES          INPATIENT MATCHES       TOTAL QUESTIONED

                                                                     No. of Dup   Overpayment No. of Dup   Overpayment No. of Dup Overpayment No. of Dup Overpayment                    Plan
Number                          Plan Name                    State   Payments       Amount     Payments      Amount      Payments   Amount     Payments    Amount       Plan Agrees   Disagrees
  067    BlueShield of California                             CA         52            $42,520    60             $40,171     0              $0   112          $82,692     $49,200        $33,492
  068    Triple-S Salud, Inc of Puerto Rico                   PR         16             $9,877     9              $7,737     0              $0    25          $17,615     $10,969         $6,645
  069    Regence BlueShield (Washington)                     WA          54            $38,566    47             $26,689     0              $0   101          $65,254     $63,575         $1,680
  070    BlueCross BlueShield of Alaska                       AK         30            $20,665     6              $2,214     1          $1,625    37          $24,504     $16,079         $8,424
  074    Wellmark BlueCross BlueShield of South Dakota        SD         3              $1,593     4              $1,025     0              $0     7           $2,618      $2,234           $384
  075    Premera BlueCross                                   WA          21            $11,425    11              $8,635     7         $10,949    39          $31,009     $21,815         $9,193
  076    WellPoint BlueCross BlueShield of Missouri          MO          53            $27,333    18             $12,081     0              $0    71          $39,414     $38,646           $768
  078    BlueCross BlueShield of Minnesota                   MN          33            $18,767     8              $7,399     0              $0    41          $26,166     $16,838         $9,327
  079    Excellus BlueCross BlueShield of Central New York    NY         10             $4,675     3              $1,932     0              $0    13           $6,607      $6,607             $0
  082    BlueCross BlueShield of Kansas                       KS         5              $1,961     2              $1,774     0              $0     7           $3,735      $3,385           $350
  083    BlueCross BlueShield of Oklahoma (HCSC)              OK        115            $91,769   438             $36,343     1          $5,568   554         $133,680     $87,314        $46,366
  084    Excellus BlueCross BlueShield of Utica-Watertown     NY         1              $4,878     1                $641     0              $0     2           $5,519      $5,519             $0
  085    CareFirst BlueCross BlueShield (DC Service Area)     DC       1,026          $649,103   272           $369,164     12         $32,015  1,310      $1,050,282    $1,011,518      $38,765
  088    BlueCross of Northeastern Pennsylvania               PA         1                $351     6              $5,982     0              $0     7           $6,333      $6,333             $0
  089    BlueCross BlueShield of Delaware                     DE         21            $11,238    12              $7,069     0              $0    33          $18,307     $13,756         $4,551
  092    CareFirst BlueCross BlueShield (Overseas Area)       DC         13             $6,681    53             $37,388     0              $0    66          $44,070     $41,233         $2,837
                           TOTALS                                      6,330        $4,535,946   3,076        $2,560,822    138       $781,705   9,544     $7,878,473    $6,843,942   $1,034,531

                 Number of BCBS Plans with Overpayments =     63
                                  APPENDIX

                                                                      BlueCross BlueShield
                                                                      Association
                                                                      An Association of lndependent
November 8, 2013                                                      Blue Cross and Blue Shield Plans


                                                                      Federal Employee Program
                                                                      1310 G. Street, NW
Group Chief                                                           Washington, DC 20005
Experience-Rated Audits Group                                         202.942.1000
                                                                      Fax 202.942.1125
Office of the Inspector General
U.S. Office of Personnel Management
1900 E Street, Room 6400
Washington, DC 20415-1100

Reference:          OPM DRAFT AUDIT REPORT
                    Global Duplicate Claim Payments
                    Audit Report # 1A-99-00-13-061

Dear                 :

This is our draft response to the above referenced U.S. Office of Personnel
Management (OPM) Draft Audit Report concerning the Global Duplicate
Claim Payments Audit. Our comments concerning the findings in the report
are as follows:

Potential Duplicate Claim Payments                                  $27,058,522

For the period January 1, 2011 through May 31, 2013, OPM OIG selected and
reviewed 28,324 groups, totaling $27,058,522 (out of 1,345,874 groups, totaling
$68,084,141) in potential duplicate claim payments. OPM OIG sample selections
included all groups with potential duplicate payments of $250 or more under the
"best matches" criteria, $350 or more under the "near matches" criteria, and $1,000
or more under the "inpatient facility duplicate" criteria.

Recommendation 1:

The OPM OIG recommended that the contracting officer disallow $27,058,522 in
potential duplicate claim payments charged to the FEHBP, and verify that the BCBS
plans return all amounts recovered to the FEHBP.

BCBSA Response to Recommendation 1:

BCBS Plans reviewed the potential duplicate claim payments questioned by OPM
OIG and agreed that $4,596,195 in claim payment errors occurred. Of the confirmed
payment errors, Plans have recovered overpayments totaling $1,170,670. Claims
totaling $151,902 are still under review. The Plans contest the remaining questioned
duplicate claim payment errors totaling $22,462,327. See Attachment A which
identifies total confirmed duplicates and the amount recovered by each Plan
November 8, 2013
Page 2

location. Where possible, recovery has been initiated on the remaining confirmed
overpayments.

Of the $22,462,137 in contested claim payments, $586,717 in duplicate claim
payments are contested because recovery of the duplicate claim payment was
initiated prior to the start of the audit or no payment was ever issued to the Provider.
The remaining questioned claims totaling $21,875,610 are contested due to the
following:

• The claims were for the same provider who performed multiple procedures for
  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 per 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 original payment to the
  correct amount.

Recommendation 2:

The OPM OIG recommended that the Association provide supporting documentation
for each claim error identified during this audit. This should include copies of the
claim, claim recovery information, or any other type of documentation that will
provide support for your responses.

BCBSA Response to Recommendation 2:

BCBSA and BCBS Plans provided the documentation to support claims questioned
as requested by OPM OIG.

Recommendation 3:

The OPM OIG recommended that the contracting officer instruct the Association to
verify and support that all BCBS plans are implementing the corrective actions.

BCBSA Response to Recommendation 3:

BCBSA and Plans continue to implement an action plan to prevent duplicate
payments from occurring as well as identify potential duplicate claims in the post
payment review process if a duplicate payment has occurred. The action plan
includes developing additional duplicate code logic to identify potential duplicate
claims prior to payment as well as modifying the FEP post payment duplicate claim
payment reports to more closely align with the OPM OIG global duplicate claims
listings.
1!!!1111 

Page3

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

Sincerely,




-            . CISA
~ector, FEP Program Assurance


Attachment