oversight

Audit of the Federal Employees Dental and Vision Insurance Program Operations as Administered by UnitedHealthcare Insurance Company for Contract Years 2014 and 2015

Published by the Office of Personnel Management, Office of Inspector General on 2017-09-29.

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




               Audit of the Federal Employees Dental and Vision
                Insurance Program Operations as Administered
                   by UnitedHealthcare Insurance Company
                       for Contract Years 2014 and 2015
                                           Report Number 1J-0B-00-16-063
                                                September 29, 2017




                                                               -- CAUTION --
This report has been distributed to Federal officials who are responsible for the administration of the subject program. This non-public version may
contain confidential and/or proprietary information, including information protected by the Trade Secrets Act, 18 U.S.C. § 1905, and the Privacy Act,
5 U.S.C . § 552a. Therefore, while a redacted version of this report is available under the Freedom of Information Act and made publicly available on
the OIG webpage (http://www.opm.gov/our-inspector-general), this non-public version should not be further released unless authorized by the OIG.
              EXECUTIVE SUMMARY
        Audit of the Federal Employees Dental and Vision Insurance Program Operations
                     as Administered by UnitedHealthcare Insurance Company
Report No. 1J-0B-00-16-063                                                                                                                 September 29, 2017


Why Did We Conduct the Audit?                              What Did We Find?
The objective of the audit was to
determine whether costs charged to the
                                                           The results of our review showed that the Plan had sufficient
Federal Employees Dental and Vision                        policies and procedures in place to ensure that it accurately
Insurance Program (FEDVIP) and                             reported its annual accounting statement to OPM and accurately
services provided to its members for                       developed its FEDVIP rate proposals for 2014 and 2015.
contract years 2014 and 2015 were in
accordance with Contract Number                            Additionally, we found that the Plan’s proposed transfer of funds
OPM01-FEDVIP-01AP-13 (Contract)                            for unreimbursed FEDVIP expenses from contract years 2007 to
and applicable Federal regulations.                        2013 was allowable, accurate, and in compliance with the prior
                                                           contract.
What Did We Audit?
The Office of the Inspector General has                    However, the audit determined that the Plan did not coordinate
completed a performance audit of                           benefits with other Federal Employees Health Benefits Program
UnitedHealthcare Insurance Company’s                       carriers as is required by the Contract.
(Plan) annual accounting statements,
claims processing, and rate proposals as
they relate to FEDVIP operations for
contract years 2014 and 2015. We also
conducted a limited-scope review to
determine if a transfer of unreimbursed
expenses for FEDVIP operations from
contract years 2007 to 2013 was
correctly calculated and allowable. Our
site visit was conducted from
October 24 through 28, 2016, at the
Plan’s office in Columbia, Maryland.
Additional audit field work was
completed at our offices in Washington,
D.C. and Cranberry Township,
Pennsylvania.



 _______________________
 Michael R. Esser
 Assistant Inspector General
 for Audits
                                                                               i
        This report is non-public and should not be further released unless authorized by the OIG, because it may contain confidential and/or proprietary
                       information that may be protected by the Trade Secrets Act, 18 U.S.C. § 1905, or the Privacy Act, 5 U.S.C . § 552a.
                                            ABBREVIATIONS

    Act                            Federal Employee Dental and Vision Benefits Enhancement Act
                                   of 2004
    Contract                       Contract Number OPM01-FEDVIP-01AP-13
    EOB                            Explanation of Benefits
    FEDVIP                         Federal Employees Dental and Vision Insurance Program
    FEHB                           Federal Employees Health Benefits
    OIG                            Office of the Inspector General
    OPM                            U.S. Office of Personnel Management
    Plan                           UnitedHealthcare Insurance Company




                                                                       ii
This report is non-public and should not be further released unless authorized by the OIG, because it may contain confidential and/or proprietary
               information that may be protected by the Trade Secrets Act, 18 U.S.C. § 1905, or the Privacy Act, 5 U.S.C . § 552a.
IV. MAJOR CONTRIBUTORS TO THIS REPORT
          TABLE OF CONTENTS

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

         ABBREVIATIONS ..................................................................................................... ii 


  I.     BACKGROUND ..........................................................................................................1 


  II.    OBJECTIVES, SCOPE, AND METHODOLOGY ..................................................2

  III.   AUDIT FINDINGS AND RECOMMENDATIONS.................................................6

         A. Annual Accounting Statement Review ....................................................................6

         B. Claims Processing Review .......................................................................................6

              1. Coordination of Benefits....................................................................................6

         C. Rate Proposal Review .............................................................................................8

         APPENDIX (The Plan’s Response to the Draft Report, dated May 5, 2017)


         REPORT FRAUD, WASTE, AND MISMANAGEMENT

IV. MAJOR CONTRIBUTORS
            I. BACKGROUND
                       TO THIS REPORT

This report details the results of our audit of the Federal Employees Dental and Vision Insurance
Program (FEDVIP) operations as administered by UnitedHealthcare Insurance Company (Plan)
for contract years 2014 and 2015. The audit was performed by the U.S. Office of Personnel
Management’s (OPM) Office of the Inspector General (OIG), as authorized by the Inspector
General Act of 1978, as amended.

The FEDVIP was created on December 23, 2004, by the Federal Employee Dental and Vision
Benefits Enhancement Act of 2004 (Act). The Act provided for the establishment of programs
under which supplemental dental and vision benefits are made available to Federal employees,
retirees, and their dependents.

OPM has overall responsibility to maintain the FEDVIP website, act as a liaison and facilitate
the promotion of the FEDVIP through Federal agencies, be responsive on a timely basis to the
carriers’ requests for information and assistance, and perform functions typically associated with
insurance commissions such as the review and approval of rates, forms, and educational
materials.

OPM’s Contracting Office contracts with the Plan to provide vision coverage to Federal
beneficiaries enrolled in the Plan under the FEDVIP. The Plan’s responsibilities under Contract
Number OPM01-FEDVIP-01AP-13 (Contract) are carried out at its offices located in
Columbia, Maryland. Section I.11 of the Contract includes a provision, Inspection of Services –
Fixed Price, which allows for audits of the Plan’s FEDVIP operations.

This was the OIG’s first audit of the Plan’s administration of the FEDVIP. The initial results of
this audit were discussed with Plan officials during an exit conference on March 17, 2017. A
draft report was provided to the Plan on April 10, 2017, for its review and comment. The Plan’s
response to the draft report was considered in preparation of this final report and is included as
an Appendix.




                                                                        1                              Report No. 1J-0B-00-16-063
 This report is non-public and should not be further released unless authorized by the OIG, because it may contain confidential and/or proprietary
                information that may be protected by the Trade Secrets Act, 18 U.S.C. § 1905, or the Privacy Act, 5 U.S.C . § 552a.
IV. OBJECTIVES,
II.  MAJOR CONTRIBUTORS
                SCOPE, ANDTO THIS REPORT
                          METHODOLOGY

 The main objective of the audit was to determine whether costs charged to the FEDVIP and
 services provided to its members for contract years 2014 and 2015 were in accordance with the
 terms of the Contract and applicable Federal regulations. Additionally, we conducted a limited-
 scope review to determine if a transfer of unreimbursed expenses for FEDVIP operations from
 contract years 2007 to 2013 was correctly calculated and allowable.

 Our specific audit objectives included:

     Annual Accounting Statement Review
     	 To determine if the Plan’s premiums received and vision benefits paid were accurately
        reported in the annual accounting statements.

     	 To determine the Plan’s allocation methodology for administrative expenses and verify
        that the correct percentage was applied.

     	 To determine if the Plan’s proposed transfer of funds for unreimbursed expenses for
        FEDVIP operations from contract years 2007 to 2013 was allowable and in compliance
        with the prior contract. Specifically, to determine if the Plan’s calculation of the
        proposed transfer of unreimbursed expenses for FEDVIP operations from contract years
        2007 to 2013 was accurate and if the transfer should be approved by OPM.

     Claims Processing Review
     	 To determine if the Plan paid claims in accordance with the terms of the Contract, its
        annual benefit brochures, and its internal policies and procedures.

     	 To determine if the Plan paid any vision claims to debarred providers.

     	 To determine if the Plan properly coordinated vision benefits with other insurance
        providers.

     Rate Proposal Review
     	 To determine if the Plan accurately developed its FEDVIP premium rates.

 Scope and Methodology
 We conducted this performance audit in accordance with generally accepted government
 auditing standards. Those standards require that we plan and perform the audit to obtain

                                                                        2                              Report No. 1J-0B-00-16-063
 This report is non-public and should not be further released unless authorized by the OIG, because it may contain confidential and/or proprietary
                information that may be protected by the Trade Secrets Act, 18 U.S.C. § 1905, or the Privacy Act, 5 U.S.C . § 552a.
sufficient and appropriate evidence to provide a reasonable basis for our finding and conclusion
based on the audit objectives. We believe that the evidence obtained provides a reasonable basis
for our finding and conclusion based on the audit objectives.

This performance audit included reviews of the Plan’s annual accounting statement, claims
processing, and rate proposals as they relate to FEDVIP operations for contract years 2014 and
2015. Our site visit was conducted at the Plan’s office in Columbia, Maryland, from October 24
through 28, 2016. Additional audit work was completed at our offices in Washington, D.C. and
Cranberry Township, Pennsylvania.

The Plan reported the following premium revenue, claim benefits paid, administrative expenses,
and profit (loss) for contract years 2014 and 2015:

         Contract                   Premium                       Benefits              Administrative
                                                                                                                           Profit
          Year                      Revenue                        Paid                   Expenses
            2014                   $24,352,400                 $16,634,729
            2015                   $25,352,823                 $20,864,392
            Total                  $49,705,223                 $37,499,121

In planning and conducting the audit, we obtained an understanding of the Plan’s internal control
structure to help determine the nature, timing, and extent of our auditing procedures. This was
determined to be the most effective approach to select areas of audit. For those areas selected,
we primarily relied on substantive tests of transactions and not tests of controls. Additionally,
since our audit would not necessarily disclose all significant matters in the internal control
structure, we do not express an opinion on the Plan’s system of internal controls taken as a
whole.

We also conducted tests of accounting records and other auditing procedures as we considered
necessary to determine compliance with the Contract and 5 CFR Part 894. Exceptions noted in
the areas reviewed are set forth in the “Audit Findings and Recommendations” section of this
report. With respect to the items not tested, nothing came to our attention that caused us to
believe that the Plan had not complied, in all material respects, with those provisions.

In conducting the audit, we relied to varying degrees on computer-generated data provided by
the Plan. Due to time constraints, we did not verify the reliability of the data generated by the
various information systems involved. However, while utilizing the computer-generated data
during our audit, nothing came to our attention to cause us to doubt its reliability. We believe
that the data was sufficient to achieve our audit objectives.



                                                                       3                              Report No. 1J-0B-00-16-063
This report is non-public and should not be further released unless authorized by the OIG, because it may contain confidential and/or proprietary
               information that may be protected by the Trade Secrets Act, 18 U.S.C. § 1905, or the Privacy Act, 5 U.S.C . § 552a.
To determine whether costs charged to the FEDVIP and services provided to its members for
contract years 2014 and 2015 were in accordance with the terms of the Contract and applicable
Federal regulations, we performed the following audit steps:

    Annual Accounting Statement Review
    	 We reconciled the Plan’s premiums received and vision benefits paid to determine if they
       were accurately reported in the annual accounting statements.

    	 We met with Plan personnel to determine what allocation methodology was used for
       administrative expenses and recalculated the percentages based on direct and indirect
       costs to verify that the correct percentage was applied.

    	 We reviewed the prior contract to determine if the Plan’s proposed transfer of funds for
       unreimbursed expenses from contract years 2007 through 2013 was allowable and in
       compliance with the contractual requirements. Additionally, we reconciled the proposed
       transfer amount to vision claims benefits and general and administrative expenses
       incurred to operate the FEDVIP from 2007 through 2013 to determine if the Plan’s
       calculation is accurate and if the transfer of funds should be approved by OPM.

    Claims Processing Review
    	 We selected a random sample of 150 claims paid in 2014 and 2015, totaling $9,841, to
       determine if they were properly paid in accordance with the terms of the Contract, the
       Plan’s annual benefit brochures, and its internal policies and procedures. Specifically, we
       selected:
           o	 75 claims paid in 2014, totaling $5,445, from a universe of          claims paid,
               totaling $          ; and
           o	 75 claims paid in 2015, totaling $4,396, from a universe of          claims paid,
                                    1
               totaling $          .

    	 We reviewed all vision claims from 2014 and 2015 to determine if any were paid to
       providers debarred by the OPM OIG.

    	 We reviewed the Contract and the Plan’s 2015 benefit brochure to determine its
       responsibility for coordinating benefits. We also met with Plan personnel to determine its
       process for coordinating benefits and reviewed policies and procedures to determine if it


1
 2014 and 2015 claims data did not match what the Plan reported in its 2014 and 2015 Annual Accounting
Statements due to the universe of claims data including the gross amount of claims paid (insurance costs) and
adjustments for non-insurance costs while the claims reported in the Annual Accounting Statements included actual
claims paid and lab costs.

                                                                       4                              Report No. 1J-0B-00-16-063
This report is non-public and should not be further released unless authorized by the OIG, because it may contain confidential and/or proprietary
               information that may be protected by the Trade Secrets Act, 18 U.S.C. § 1905, or the Privacy Act, 5 U.S.C . § 552a.
          properly coordinated benefits with other Federal Employees Health Benefits (FEHB)
          Program carriers.

    Rate Proposal Review
    	 We traced the data used to develop the Plan’s 2014 and 2015 premium rate proposals
       back to supporting documentation to determine if the Plan accurately developed its
       FEDVIP premium rates.

The samples mentioned above that were selected and reviewed in performing the audit, were not
statistically based. Consequently, the results could not be projected to the universe since it is
unlikely that the results are representative of the universe taken as a whole.




                                                                       5	                             Report No. 1J-0B-00-16-063
This report is non-public and should not be further released unless authorized by the OIG, because it may contain confidential and/or proprietary
               information that may be protected by the Trade Secrets Act, 18 U.S.C. § 1905, or the Privacy Act, 5 U.S.C . § 552a.
III. AUDIT FINDINGS AND RECOMMENDATIONS

A. Annual Accounting Statement Review

   The results of our review showed that the Plan had sufficient policies and procedures in place to
   ensure that premiums received, claims paid, and expenses incurred were properly accounted for and
   reported to OPM in accordance with the Contract.

   Additionally, we found that the Plan’s proposed transfer of funds for unreimbursed FEDVIP expenses
   from contract years 2007 to 2013 was allowable, accurate, and in compliance with the prior contract.

B. Claims Processing Review

   1. Coordination of Benefits                                                                                                     Procedural

        The Plan did not coordinate benefits with FEHB Program carriers in accordance with the
        Contract’s requirements.
       The Plan did not
                                        Both the Contract [Section C (II)] and the Plan brochure (First Payor) state
         coordinate
                                        that the Plan is responsible for facilitating the First Payor process with
        benefits with
                                        FEHB Program carriers, which will provide primary benefits.
       FEHB Program 

          carriers.

                                During our audit, we reviewed the Plan’s universe of          claims paid in
        2014 and 2015 and found no indication that the Plan coordinated benefits with FEHB Program
        carriers. Additionally, the Plan stated that it does not coordinate benefits with FEHB Program
        carriers. Instead of coordinating benefits, the Plan updated its provider manual in July 2016, to
        require the vision providers to verify the member’s FEHB coverage and bill the FEHB Program
        carrier prior to billing the Plan. The Plan also stated that there are no mechanisms in place to
        track or determine if the providers are complying with the coordination of benefits requirements
        established by the provider manual.

        Based on the Plan’s response, it did not have procedures in place during the scope of our audit to
        properly ensure that claims were coordinated with FEHB Program carriers. It should be noted
        that the Plan’s responsibility for coordinating benefits with FEHB Program carriers dates back to
        January 1, 2007 (the inception of the FEDVIP). However, the Plan only updated its provider
        manual for coordination with FEHB Program carriers in July of 2016. Therefore, throughout its
        first nine-plus years of administering the FEDVIP, there were no controls in place to coordinate
        benefits between the Plan and FEHB Program carriers.


                                                                           6                              Report No. 1J-0B-00-16-063
    This report is non-public and should not be further released unless authorized by the OIG, because it may contain confidential and/or proprietary
                   information that may be protected by the Trade Secrets Act, 18 U.S.C. § 1905, or the Privacy Act, 5 U.S.C . § 552a.
    By requiring the providers to coordinate benefits, the Plan is deferring its responsibility to the
    provider. As a result of delegating its responsibility, and by not having a means of tracking or
    determining if its providers have coordinated benefits, the Plan is not meeting its requirements as
    set forth in the Contract. Also, by not monitoring the process, the Plan is inadvertently permitting
    an avenue for potential fraud where providers could coordinate with an FEHB Program carrier
    and also submit the claim to the Plan for full reimbursement.

    Recommendation 1

    We recommend that the Plan amend its existing policies and procedures to ensure that it properly
    coordinates benefits with those FEHB Program carriers that provide vision benefits.

    Plan Response:

    The Plan disagrees with the finding for the following three reasons:

             1.	 Because it’s brochure (First Payor) states that if a provider participates with both a
                 FEHB plan and a FEDVIP plan then the FEHB plan will pay benefits first and that
                 the FEDVIP plan allowance will be the prevailing charge in these cases;

             2.	 Because it’s provider manual instructs it’s providers to coordinate benefits with the
                 FEHB plan as primary and then the Plan as secondary. The Plan relies upon its
                 providers because they “are in the unique position of having line of sight to which
                 FEHBP health plans particular enrollees are covered by and whether there are
                 potentially overlapping vision services.”

                  The Plan stressed that this policy was put in place as an exception to its normal
                  business due to the requirements of the FEDVIP contract and that it normally does
                  not coordinate vision benefits. In relation to fraud, the Plan stated that the actual
                  overlap of FEHB coverage and FEDVIP coverage is minimal, the Plan believes that
                  the actual risk of fraud in these cases is small; and

             3.	 Lastly, because after it conducted a search of the claims paid during the scope of our
                 audit, it was unable to identify any claims that were coordinated with a FEHB carrier.
                 As part of its review the Plan concluded the following:
                 a.	 The main services provided by the FEHBP that would overlap with services that it
                     provides would be limited to examinations and resulting prescriptions written.
                     Lenses and frames are typically excluded from most FEHBP plans.



                                                                       7	                             Report No. 1J-0B-00-16-063
This report is non-public and should not be further released unless authorized by the OIG, because it may contain confidential and/or proprietary
               information that may be protected by the Trade Secrets Act, 18 U.S.C. § 1905, or the Privacy Act, 5 U.S.C . § 552a.
                      b.	 Most FEHBP plans require that services are provided by a plan provider. This
                          would reduce the opportunity as the provider utilized by the member may not
                          participate with the FEHBP plan.
                      c.	 The COB process would require the provider to submit the Explanation of
                          Benefits (EOB) from the FEHBP plan to it along with the claim. If the provider
                          does not furnish it with this information it would be unaware of the provider’s
                          other contractual arrangements.

        The Plan stated that it believes that these factors demonstrate the existence of a coordination of
        benefits process.

        OIG Comment:

        While we understand the difficulties involved with coordinating vision benefits, we do not believe
        that the Plan’s current processes meet the Contract requirements. This is because the Plan defers
        the coordination of benefits process solely to its providers without a mechanism to identify or
        track first payor claims.

        Additionally, we find that the Plan’s review of its FEDVIP claims further supports our finding
        because it states that if it is not provided an EOB from an FEHB provider, it would not know if
        coordination had occurred. Although the Plan states that FEHB vision coverage is very limited,
        our review found that approximately 48 percent of the FEHB Program carriers provide some type
        of vision coverage.

C. Rate Proposal Review

   The results of our review showed that the Plan had sufficient policies and procedures in place to
   accurately develop its 2014 and 2015 FEDVIP rate proposals.




                                                                           8	                             Report No. 1J-0B-00-16-063
    This report is non-public and should not be further released unless authorized by the OIG, because it may contain confidential and/or proprietary
                   information that may be protected by the Trade Secrets Act, 18 U.S.C. § 1905, or the Privacy Act, 5 U.S.C . § 552a.
                                                       APPENDIX

                                                                                                                      Specialty Benefits 
                                                                                                                  6220 Old Dobbin Lane 
                                                                                                                    Liberty 6, Suite 200 
                                                                                                                   Columbia, MD 21045 
                                                                                                                                         
May 5, 2017
 
 
 
                         
 
Chief, Special Audits Group
 
U.S. Office of Personnel Management 
Office of the Inspector General 
800 Cranberry Woods Drive, Suite 270 
Cranberry Township, PA  16066 
 
RE:  Comments to the Draft Audit Report No. 1J‐0B‐00‐16‐063 
 
Dear              : 
 
On  April  10,  2017,  the  United  States  Office  of  Personnel  Management,  Office  of  the  Inspector  General 
(“OPM/OIG”)  submitted  to  the  UnitedHealthcare  Vision  Plan  (the  “Plan”)  a  “Draft  Report”  (1J‐0B‐00‐16‐
063)  (“Draft  Report”),  detailing  the  results  of  its  audit  of  the  Federal  Employees  Dental  and  Vision 
Insurance Program (“FEDVIP”) operations as administered by the Plan for contract years 2014 and 2015.  
Upon submission, OPM/OIG requested that the Plan provide comments to the Draft Report. 
 
The Plan appreciates the opportunity to respond to this Draft Report and the willingness of OPM to help 
resolve  the  outstanding  issues  in  this  audit.    The  Plan  has  used  its  best  efforts  to  obtain  all  relevant 
information to respond to the Draft Report’s findings and recommendations.  This Response will address 
each issue presented in the Draft Report. 
 
Coordination of Benefits 
 
In  its  Draft  Report,  the  auditors  stated  “The  Plan  did  not  coordinate  benefits  with  Federal  Employees 
Health Benefits (FEHB) carriers in accordance with contract requirements.”  
 
The Plan respectfully disagrees with this assertion for the following reasons: 
 
           1.	 The Plan Brochure clearly states on page 10: 
                “First Payor – When you visit a provider who participates with both , your FEHB plan and your 
                FEDVIP  plan,  the  FEHB  plan  will  pay  benefits  first.    The  FEDVIP  plan  allowance  will  be  the 
                prevailing charge, in these cases.” [Please refer to Exhibit I – 2014 FEDVIP Brochure Excerpt] 
                 
                 
 

                                                                                                      Report No. 1J-0B-00-16-063
This report is non-public and should not be further released unless authorized by the OIG, because it may contain confidential and/or proprietary
               information that may be protected by the Trade Secrets Act, 18 U.S.C. § 1905, or the Privacy Act, 5 U.S.C . § 552a.
                         
May 5, 2017 
Page Two 
               
               
         2.	 The Plan has a coordination of benefits (“COB”) process which is documented in the Network 
              Administration Manual provided to all UnitedHealthcare Vision Plan providers.  The policy on 
              page 27 states in part: 
 
                   “The FEHB medical plan is primary and Spectera Eye care Networks is secondary.  Submit 
                  the following information to us…… 
                   A copy of the primary (medical) carrier’s EOB that shows the member’s liability and/or 
                      service denials
 
                   A copy of the original CMS‐1500 claim form
 
                       
              You  will  note  this  policy  is  an  exception  implemented  specifically  for  FEDVIP.  
              UnitedHealthcare  Vision’s  other  commercial  business  follows  the  industry  standard  of  not 
              coordinating  benefits  with  other  insurance  plans  or  payers.    [Please  refer  to  Exhibit  II  – 
              Network Administration Manual Excerpt] 
               
         3.	 The  Plan  provided  a  response  to  the  question  of  coordination  of  benefits  in  Information 
              Request 49 [Please refer to Exhibit III – IR49 with Plan Response] 
 
The auditors also stated in the Draft Report “….the Plan is inadvertently permitting an avenue for potential 
fraud where providers could coordinate with a FEHB carrier and also submit the claim to the Plan for full 
reimbursement.” 
 
The Plan does rely on its providers to adhere to the COB process as the providers are in the unique position 
of having line of sight to which FEHBP health plans particular enrollees are covered by and whether there 
are  potentially  overlapping  vision  services.      Additionally,  we  believe  that  the  risk  for  actual  fraud  is 
minimal  with  FEDVIP  in  that  there  are  only  a  small  number  of  services  that  overlap  between  the  vision 
services  offered  through  FEDVIP  and  those  offered  through  the  FEHBP  carriers.   For  example,  the  vision 
benefit  offered  through  the  FEHBP  are  primarily  for  Exam  Only  or  medically  based  vision  services  (i.e., 
lenses following cataract surgery).  
 
Therefore, the Plan believes that the information provided to the auditors during the audit and referenced 
in this Response demonstrates the existence of a Coordination of Benefits process.   
 
The Plan takes its contractual obligations very seriously and administers the FEDVIP in compliance with all 
Federal regulations, contractual provisions and OPM instructions. 
 
                                     




                                                                                                      Report No. 1J-0B-00-16-063
This report is non-public and should not be further released unless authorized by the OIG, because it may contain confidential and/or proprietary
               information that may be protected by the Trade Secrets Act, 18 U.S.C. § 1905, or the Privacy Act, 5 U.S.C . § 552a.
                       
May 5, 2017 
Page Three 
 
 
Once you have had the opportunity to review the information contained in this response, please contact 
me if you have any questions or require additional information.  Thank you for your ongoing cooperation 
in bringing resolution to this audit. 
 
 




 
 
                                                 




                                                                                                          Report No. 1J-0B-00-16-063
    This report is non-public and should not be further released unless authorized by the OIG, because it may contain confidential and/or proprietary
                   information that may be protected by the Trade Secrets Act, 18 U.S.C. § 1905, or the Privacy Act, 5 U.S.C . § 552a.
Exhibit I – 2014 FEDVIP Brochure Excerpt
 
                      Deleted by OIG – Not Relevant to Final Report
 
Exhibit II – Network Administration Manual Excerpt
 
                      Deleted by OIG – Not Relevant to Final Report
 
Exhibit III – IR49 with Plan Response
 
                                                                    PLAN RESPONSE: 
                                                                                                                                                         
 
      The  Plan  has  conducted  an  extensive  search  for  FEDVIP  Vision  claims  during  the  scope  of  the 
      audit  contract  years  2014  and  2015  to  determine  if  any  required  Coordination  with  another  Payer.   
      The  Plan  was unable to locate any such claims. 
 
      In  reviewing  the  claims  data  and  discussing  the  COB  process  for  vision  with  subject  matter  experts 
      from  the  Plan,  we  have  concluded  a  few  things  about  COB  as  it  relates  specifically  to  the  FEDVIP 
      program and  the manner in which the Plan administers the Vision benefit for FEDVIP members. 
 
      First,  the  instance  of  services  provided  by  FEHBP  carriers  that  would  overlap  with  services  provided 
      by  FEDVIP  are primarily  limited to  examinations (excluding contact examinations) and prescriptions 
      written  as  a  result  of  those  examinations.  Typically  lenses  and  other  materials  (i.e.,  frames)  are 
      excluded under  most  FEHBP  plans  unless  they  are  related  to  a  medical  condition  (such  as  lenses 
      following  cataract  surgery). 
 
      Secondarily,  the  requirement  of  the  majority  of  the  FEHBP  plans  is  for  any  vision  services  that 
      are  covered  must  be  performed  by  a  Plan  provider.  This  further  reduces  the  opportunity  for  there 
      to  be  a  circumstance  where  the  provider  is  a  Plan  provider  with  an  FEHB  carrier  and  a 
      UnitedHealthcare  Vision  Panel provider at the time of service. 
 
      The  process  for  COB  to  occur  in  those  circumstances  where  there  is  a  potential  for  services  to 
      be  covered  by  both  an  FEHBP  and  FEDVIP  provider  requires  the  Provider  to  submit  the  EOB 
      from  the  primary  payer  along  with  the  claim  for  UnitedHealthcare  Vision  to  review. If  the  Provider 
      does  not  furnish  UnitedHealthcare  Vision  with  this  information,  it  is  unlikely  that  the  Plan  would 
      have  awareness  of the Providers other contractual arrangements. 
 
      Finally,  the  member  is  paying  for  a  level  of  benefit  provided  under  their  FEHBP  carrier  and  they 
      are  paying  a  separate  premium  for  a  level  of  benefit  with  their  FEDVIP  carrier.  As  long  as  the 
      provisions  of  the  FEDVIP  carrier  are  being  administered  according  to  the  coverage  level  described, 
      the Federal  Government is not being disadvantaged nor is the member gaining an unfair advantage 
      for  the  benefits  provided. 
 
      For  all  of  these  reasons  stated,  it  is  the  Plan’s  position  that  it  is  not  unreasonable  that  there  are  no 
      COB  Vision claims to provide as examples for the 2014 and 2015 contract years. 


                                                                                                          Report No. 1J-0B-00-16-063
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                                                                                                       Report No. 1J-0B-00-16-063