oversight

Audit of the Multi-State Plan Program Operations at Blue Cross Blue Shield of Alabama

Published by the Office of Personnel Management, Office of Inspector General on 2018-01-16.

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

  AUDIT OF THE MULTI-STATE PLAN PROGRAM
  OPERATIONS AT BLUE CROSS BLUE SHIELD OF
                 ALABAMA


            Report Number 1M-0G-00-17-034
                    January 16, 2018
                 EXECUTIVE SUMMARY
                                 Audit of the Multi-State Plan Program Operations at
                                          Blue Cross Blue Shield of Alabama 

    Report No. 1M-0G-00-17-034                                                                        January 16, 2018




    Why Did We Conduct The Audit?             What Did We Find?

    The primary objective of our audit        Our audit of the 2017 MSP Program operations at BCBSAL
    was to obtain reasonable assurance        disclosed two procedural findings pertaining to enrollment.
    that Blue Cross Blue Shield of            Specifically, we identified the following:
    Alabama (BCBSAL) complied with
    the provisions of Contract                    	 BCBSAL processed six Healthcare Insurance Casework
    MSP-BCBS-2017-04 (Contract) and                  System cases untimely.
    applicable Federal regulations for
    contract year 2017.                           	 BCBSAL processed four enrollment form 834 errors
                                                     untimely, which resulted in three members overpaying
    What Did We Audit?                               approximately $982 for their health insurance premiums.

    The Office of the Inspector General       Our audit did not disclose any findings related to rates and
    has completed a performance audit of      benefits.
    the Multi-State Plan (MSP) Program
    operations at BCBSAL. Our audit of
    BCBSAL’s compliance with the 2017
    Contract and applicable regulations
    was conducted from July 17, 2017,
    through October 24, 2017, at
    BCBSAL’s headquarters in
    Birmingham, Alabama, and our
    offices in Cranberry Township,
    Pennsylvania, and Washington, D.C.


.

     _______________________
     Michael R. Esser
     Assistant Inspector General
     for Audits




                                                            i
                          ABBREVIATIONS

    Affordable Care Act   The Patient Protection and Affordable Care Act
    APTC                  Advanced Premium Tax Credit
    Association           Blue Cross Blue Shield Association
    BCBS                  Blue Cross Blue Shield
    BCBSAL                Blue Cross Blue Shield of Alabama
    CFR                   Code of Federal Regulations
    CMS                   Centers for Medicare and Medicaid Services
    Contract              Contract MSP-BCBS-2017-04
    HICS                  Healthcare Insurance Casework System
    MSP                   Multi-State Plan
    OIG                   Office of the Inspector General
    OPM                   U.S. Office of Personnel Management
    U.S.C.                United States Code




.
                                         ii
IV. MAJOR CONTRIBUTORS TO THIS REPORT
          TABLE OF CONTENTS

                                                                                                                               Page 

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


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


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


  II.    OBJECTIVES, SCOPE, AND METHODOLOGY ..................................................3 


  III.   AUDIT FINDINGS AND RECOMMENDATIONS.................................................5


         A. Enrollment................................................................................................................5 


               1. Enrollment Form 834 Error Processing Timeliness .........................................5 


               2. HICS Case Processing Timeliness ...................................................................7 


         B. Rates and Benefits....................................................................................................8 


         EXHIBIT A (Enrollment Form 834 Transaction Errors Sample Selection Criteria and
                   Methodology)

         EXHIBIT B (Healthcare Insurance Casework System (HICS) Cases Sample
                    Selection Criteria and Methodology)

         APPENDIX 1 (Blue Cross Blue Shield of Alabama’s Response to Audit Inquiry #1,
                  September 22, 2017)

         APPENDIX 2 (Blue Cross Blue Shield of Alabama’s Response to Audit Inquiry #2,
                  October 13, 2017)

         REPORT FRAUD, WASTE, AND MISMANAGEMENT
IV. MAJOR CONTRIBUTORS
            I. BACKGROUND
                       TO THIS REPORT
This final report details the results of our performance audit of the Multi-State Plan (MSP)
Program operations at Blue Cross Blue Shield of Alabama (BCBSAL). The audit covered
contract year 2017. It was performed by the U.S. Office of Personnel Management's (OPM)
Office of the Inspector General (OIG), as established by the Inspector General Act of 1978, as
amended.

The audit was conducted pursuant to the provisions of Contract MSP-BCBS-2017-04 (Contract);
the Patient Protection and Affordable Care Act (Affordable Care Act); Title 45 Code of Federal
Regulations (CFR), Chapter VIII, Part 800; and other applicable Federal regulations.
Compliance with the Contract as well as laws and regulations applicable to the MSP Program is
the responsibility of the Blue Cross Blue Shield Association (Association) and BCBSAL’s
management. Additionally, BCBSAL’s management is responsible for establishing and
maintaining a system of internal controls that provides reasonable assurance that:

     (1) the provision and payments of benefits and other expenses comply with legal,
     regulatory and contractual guidelines;

     (2) MSP funds, property, and other assets are safeguarded against waste, loss, unauthorized
     use, or misappropriation; and

     (3) data is accurately and fairly disclosed in all reports required by OPM.

Due to inherent limitations in any system of internal controls, errors or irregularities may
nevertheless occur and not be detected.

The MSP Program was established by Section 1334 of the Affordable Care Act. Under the
Affordable Care Act, OPM was directed to contract with private health insurers to offer MSP
products in each state and the District of Columbia. OPM negotiates contracts with MSP
Program Issuers, including rates and benefits, in consultation with states and marketplaces. In
addition, OPM will monitor the performance of MSP Program Issuers and oversee compliance
with legal requirements and contractual terms. OPM’s office of National Healthcare Operations
has overall responsibility for program administration.

The Association, on behalf of participating Blue Cross Blue Shield (BCBS) plans, entered into a
contract with OPM to participate in the MSP Program. Along with its participating licensees, the
Association offers 201 MSP options in 21 states. BCBSAL is one of 21 BCBS plans, or State-
Level Issuers, participating in the MSP Program in 2017.

                                             1                       Report No. 1M-0G-00-17-034
The Association is a national federation of 36 independent, community-based and locally
operated BCBS companies. The Association grants licenses to independent companies to use the
trademarks and names in exclusive geographic areas. It operates and offers health care coverage
in all 50 states, the District of Columbia, and Puerto Rico, covering nearly 106 million
Americans. Nationally, BCBS companies contract with more than 96 percent of hospitals and 93
percent of doctors and specialists.

BCBSAL is the largest provider of healthcare benefits in Alabama and administers health,
dental, and pharmacy programs that cover over 3 million members, including 2.2 million
Alabamians. With a commitment to offering the best value for its members, BCBSAL invests
over 92 cents of every premium dollar on medical care expenses. In 2017, BCBSAL offered two
MSPs on the Exchange, including both a gold and a silver plan.

This is our first audit of the MSP Program at BCBSAL. We selected BCBSAL because it
reported some of the highest enrollment numbers in the program in 2016. Additionally,
BCBSAL is a large independent Plan that joined the program in 2016 and has not been audited.

The preliminary results of this audit were discussed with BCBSAL and the Association officials
at an exit conference. Audit Inquiries were also provided to the Association and BCBSAL for
review and comment. BCBSAL’s comments were considered in preparation of this report and
are included as Appendices to the report.




                                           2                     Report No. 1M-0G-00-17-034
IV. OBJECTIVES,
II.  MAJOR CONTRIBUTORS
                SCOPE, ANDTO THIS REPORT
                          METHODOLOGY
 OBJECTIVES

 The primary objective of this performance audit was to obtain reasonable assurance that
 BCBSAL is in compliance with the provisions of its Contract with OPM and applicable laws and
 regulations governing the MSP Program for contract year 2017. Specifically, we reviewed
 enrollment, as well as rates and benefits.

 SCOPE

 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
 sufficient, 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 based on our audit objectives.

 The audit fieldwork was performed from July 17, 2017, through October 24, 2017, at BCBSAL’s
 headquarters in Birmingham, Alabama, and our offices in Cranberry Township, Pennsylvania,
 and Washington, D.C.

 We obtained an understanding of BCBSAL’s internal control structure and used this information
 to determine the nature, timing, and extent of our audit procedures. Our audit of internal controls
 was limited to the procedures that BCBSAL has in place for enrollment processing and
 prescription drug benefits. Because our audit was focused on internal controls over specific
 MSP processes, we will not express an opinion on the issuer’s system of internal controls as a
 whole.

 In conducting the audit, we relied to varying degrees on computer-generated data provided by
 BCBSAL and the Association. We did not verify the reliability of the data generated by the
 various information systems involved. However, based on the OIG’s experience with BCBS
 plans, nothing has come to our attention during our previous audit testing to cause us to doubt the
 reliability of their computer generated data. We believe that the available data will be sufficient
 to achieve our audit objectives.




                                              3                      Report No. 1M-0G-00-17-034
METHODOLOGY

We reviewed a judgmental sample of enrollment form 834 transaction errors to determine if
these errors were processed timely and accurately. The 834 transaction errors universe, samples,
and selection methodology are summarized in Exhibit A.

We also reviewed a judgmental sample of MSP Health Insurance Casework System (HICS)
cases to determine if these actions were processed timely and accurately. The HICS case
universe, samples, and selection methodology are summarized in Exhibit B.

Finally, we interviewed BCBSAL personnel regarding the Formulary Inadequate
Category/Class/Count Justification Form and reviewed supporting documentation for the drugs
listed on the form to verify that they are otherwise covered under medical benefits or generic and
over-the-counter options.




                                            4                      Report No. 1M-0G-00-17-034
III.
  IV. AUDIT
 II.   MAJORFINDINGS
      OBJECTIVES,    AND
             CONTRIBUTORS
                  SCOPE,  RECOMMENDATIONS
                         ANDTO THIS REPORT
                             METHODOLOGY
  A. ENROLLMENT                                                                   Procedural

   1. Enrollment Form 834 Error Processing Timeliness

      BCBSAL processed four enrollment form 834 errors untimely, resulting in MSP member
      overpayments of approximately $982.

      Contract Section 1.6(a) requires the issuer to "comply with         Untimely resolution
      Federal laws, regulations, and guidance ... ."                      of enrollment errors
                                                                            resulted in three
      Additionally, 45 CFR 800.106(b) requires issuers to "ensure               members
      that an eligible individual receives the benefit of advance              overpaying
      payments of premium tax credits ... and the cost-sharing            approximately $982
      reductions" prescribed by applicable laws and regulations.          for health insurance
                                                                               premiums.
      Furthermore, 45 CFR 800.401(c)(8)(i) states that issuers are
      responsible for "Establishing and maintaining a system of internal controls that provides
      reasonable assurance that … [t]he provision and payments of benefits and other expenses
      comply with legal, regulatory, and contractual guidelines … ."

      Finally, 45 CFR 156.460(a)(1) requires the issuer to reduce members’ premiums by the
      advanced premium tax credit (APTC), as applicable. 45 CFR 156.460(c) also requires
      the issuer to notify the member within 45 calendar days of identifying that the APTC was
      not applied as required and to “refund any excess premium paid by or for the
      enrollee … .”

      We reviewed a judgmental sample of 24 MSP enrollment form 834 errors that occurred
      from January 1, 2017, through April 30, 2017. Based on our review, we determined that
      four enrollment form 834 errors involved changes to the plan, APTC, and/or cost-sharing
      reduction amounts that impacted the amount of premium to be paid by the affected MSP
      members. However, these errors were resolved between 91 and 190 calendar days after
      the date of the error report. As a result, three of the four members overpaid
      approximately $982 for their health insurance premiums.

      We verified that BCBSAL subsequently took the appropriate actions to process the
      errors. In addition, we verified that BCBSAL has begun to credit the affected members
      for the applicable overpayments, which had an outstanding credit balance of


                                          5                         Report No. 1M-0G-00-17-034
approximately $539 at the time of our review. Although BCBSAL stated that the delays
did not impact claims, we are unable to verify that claims adjustments were not necessary
without supporting documentation.

BCBSAL explained that the delay in processing the enrollment form 834 errors was
generally due to the high volume of errors reported, a lack of resources to process the
errors, and priority placed on processing other errors and manual files, such as HICS
cases. Inadequate internal controls and procedures over the error resolution process may
also have contributed to the timeliness issues.

Although BCBSAL has elected not to participate in the MSP Program beyond 2017, the
issues with the enrollment form 834 error resolution process will continue to have an
impact on BCBSAL’s Federally Facilitated Marketplace membership, if left unaddressed.
In the case of the errors that we reviewed, the overpayments would not have been as
extensive, or may not have occurred at all, if the errors had been worked within 45
calendar days of the error report. Moreover, BCBSAL did not work these errors until
after we issued our sample selection, which raises broader concerns about how much
longer these members may have been overpaying for their coverage if we had not
selected these errors for review.

Issuer Response:

BCBSAL acknowledged that it processed four enrollment form 834 errors untimely,
which resulted in the identified MSP member overpayments. BCBSAL stated that all
balances due to the members have either been refunded or credited. Although
BCBSAL also asserted that existing controls over error processing are adequate
considering the small percentage of errors requiring manual intervention, it also stated
that it will continue to work to strengthen procedures and controls around the
enrollment form 834 error resolution timeliness.

OIG Comment

Based on our review of BCBSAL's response to our audit finding, we could not verify that
the outstanding credit balance had been refunded or credited to the members. In addition,
the existing controls that BCBSAL referenced encourage increased automation to reduce
the number of errors requiring manual intervention as well as accurate manual processing
of errors. However, the controls do not adequately address timely processing of errors
when they do occur, which continues to put members at risk of overpayment.




                                    6                      Report No. 1M-0G-00-17-034
   Recommendation 1

   We recommend that BCBSAL continue to monitor application of the outstanding credit
   balance totaling approximately $539 for the members impacted by the overpayments.

   Recommendation 2

   We recommend that BCBSAL continue to develop adequate internal controls and
   procedures over the enrollment form 834 error resolution process to ensure that errors are
   addressed more timely and to minimize potential member impact.

2. HICS Case Processing Timeliness

   BCBSAL processed six MSP HICS cases untimely from January 1, 2017, through 

   April 30, 2017. 

                                                                        Untimely
   Contract Section 1.6(a) requires the issuer to "comply with        processing of
   Federal laws, regulations, and guidance ... ."                  HICS cases could
                                                                   lead to delays in a
   Additionally, 45 CFR §156.1010(b) requires an issuer "in a       member’s ability
   Federally-facilitated Exchange [to] investigate and resolve, as      to access
   appropriate, cases ... forwarded to the issuer by HHS."              coverage.

   Furthermore, 45 CFR §156.1010(d) states that the issuer must generally resolve cases
   within 15 calendar days of receipt unless it is an urgent case, which must be resolved
   within 72 hours of receipt.

   Finally, the Centers for Medicare and Medicaid Services (CMS) Center for Consumer
   Information and Insurance Oversight Guidance entitled, "Casework Guidance for Issuers
   in Federally-facilitated Marketplaces, including State Partnership Marketplaces," dated
   March 13, 2014, notes that cases provided to issuers under CFR §156.1010(b) will be
   provided via the HICS web application. It also defines urgent cases as Level 1 and all
   other cases as Level 2.

   We reviewed a judgmental sample of 24 MSP HICS cases received from January 1, 2017,
   through April 30, 2017. Based on our review, we determined that six Level 2 HICS cases
   were resolved between 2 and 9 days after the 15 calendar days required by 45 CFR
   §156.1010(d). The cases were processed untimely due to a variety of issues,
   including: extensive manual intervention necessary to address enrollment form 834



                                        7                     Report No. 1M-0G-00-17-034
     errors; waiting for required member payments or guidance from CMS; and holiday
     business closures.

     Although the untimely resolution of HICS cases could potentially lead to delays in the
     affected member's ability to access necessary coverage, we did not observe these issues in
     any of the cases that we reviewed. BCBSAL took the appropriate action to accurately
     address each of the cases and had policies and procedures in place to meet HICS case
     timeliness requirements. The delays in meeting these requirements were largely beyond
     BCBSAL's control. Moreover, BCBSAL has elected not to participate in the MSP
     Program beyond 2017. As such, we are reporting this as an area of non-compliance but
     will make no recommendation.

     Issuer Response:

     BCBSAL acknowledged that it processed the six identified HICS cases untimely,
     noting that it is committed to processing HICS cases timely and will continue to work
     to ensure compliance with all applicable regulations.

     OIG Comment:

     While we acknowledge BCBSAL’s commitment to ensure that HICS cases are processed
     timely in compliance with applicable regulations, we cannot verify BCBSAL’s
     compliance in future audits since BCBSAL will not participate in the MSP program
     beyond 2017.

B. RATES AND BENEFITS

  Based on our review, we concluded that BCBSAL is in compliance with the Contract and
  applicable criteria for pharmacy drug benefits.




                                         8                      Report No. 1M-0G-00-17-034
                                         EXHIBIT A

                           Enrollment Form 834 Transaction Errors 

                          Sample Selection Criteria and Methodology 


                                                                                                Results
               Universe       Universe    Sample       Sample Selection           Sample      Projected to
 Review
               Criteria      (Number)    (Number)        Methodology               Type           the
                                                                                               Universe?
                                                    We assigned a number to
                                                     each MSP on-exchange
                                                        contract and used a
                                                    random number generator
                                                       from Random.org to
                                                      select a sample of 14
                                                    contracts with error codes
                                                        that had 20 or more
                                                            occurrences.
              Enrollment
               Form 834
                                                    We assigned a number to
              Transaction
                                                     each MSP off-exchange
                 Errors
                                                     contract associated with
               associated
                                                    one error code and used a
               with MSP
Enrollment                                          random number generator
                   and                                                            Random
 Form 834                                              from Random.org to
              Unidentified     1,150        24                                      and           No
Transaction                                           select a sample of four
               Contracts                                                         Judgmental
  Errors                                            contracts with errors. We
                  from
                                                      selected one additional
               January 1,
                                                      contract based on error
                 2017,
                                                     code nomenclature for a
                through
                                                       total of five sampled
                April 30,
                                                           transactions.
                  2017
                                                    We assigned a number to
                                                    each enrollment form 834
                                                       transaction error for
                                                    unidentified contracts and
                                                     used the random number
                                                          generator from
                                                    Random.org to select five
                                                        transaction errors.


                                                                    Report No. 1M-0G-00-17-034
                                                   EXHIBIT B

                   Healthcare Insurance Casework System (HICS) Cases
                        Sample Selection Criteria and Methodology 


                                                                                                                        Results
                Universe           Universe         Sample             Sample Selection               Sample          Projected to
 Review
                Criteria          (Number)         (Number)              Methodology                   Type               the
                                                                                                                       Universe?
                                                                   We assigned each case in
                                                                  the universe a number and
                                                                    used a random number
              2017 MSP                                                  generator from
              HICS Cases                                            Random.org to select 5
                  from                                              cases from each month,
                                                                                                      Random
               January 1,                                 1         resulting in 20 sampled
HICS Cases                           2,367             28                                              and
                 2017,                                                       cases.                                         No
                                                                                                    Judgmental
                through
                April 30,                                          We selected an additional
                  2017                                               eight HICS cases by
                                                                   identifying all cases that
                                                                    were processed over 15
                                                                             days.




        1
          Although we originally sampled 28 HICS cases, we subsequently determined as part of our review that four of the
        cases were related to non-MSP plans/members and had been erroneously included in the universe. Therefore, we
        only reviewed 24 of the cases that were confirmed to be related to MSP plans/members.



                                                                                      Report No. 1M-0G-00-17-034
                                   APPENDIX 1




September 22, 2017


U.S. Office of Personnel Management
Office of the Inspector General
800 Cranberry Woods Drive, Suite 130
Cranberry Township, PA 16066

Dear              :

Blue Cross and Blue Shield of Alabama (Blue Cross) appreciates the opportunity to respond to
the HICS Case Processing Timeliness finding (Audit Inquiry #1) identified during the recent
Multi-State Plan (MSP) Audit and concurs with the audit issue, as stated by the U.S. Office of
Personnel Management (OPM).

Blue Cross acknowledges that six Multi-State Plan (MSP) Healthcare Insurance Casework
System (HICS) cases were processed untimely from January 1, 2017 through April 30, 2017.

Of the 24 MSP HICS cases received from January 1, 2017 through April 30, 2017 that were
judgmentally selected by OPM for review, six Level 2 HICS cases were resolved between two
and nine days after the 15 calendar days required by 45 CFR §156.1010(d). The cases were
processed untimely due to a variety of issues, including: extensive manual intervention
necessary to address enrollment form 834 errors; waiting for guidance from CMS; and holiday
business closures. The delays in meeting the requirements were largely beyond Blue Cross’
control.

Blue Cross further acknowledges the following requirements:

   -   “Contract MSP-BCBS-2017-04 Section 1.6(a) requires the issuer to "comply with
       Federal laws, regulations, and guidance..."

   -   45 CFR §156.1010(b) requires an issuer "in a Federally-facilitated Exchange to
       investigate and resolve, as appropriate, cases... forwarded to the issuer by HHS."




                                                                   Report No. 1M-0G-00-17-034
                                    APPENDIX 1
    -   45 CFR §156.1010(d) states that the issuer must generally resolve cases within 15
        calendar days of receipt unless it is an urgent case, which must be resolved within 72
        hours of receipt.

Centers for Medicare & Medicaid Services (CMS) Center for Consumer Information and
Insurance Oversight Guidance entitled, "Casework Guidance for Issuers in Federally-facilitated
Marketplaces, including State Partnership Marketplaces," dated March 13, 2014, notes that cases
provided to issuers under

CFR §156.1010(b) will be provided via the HICS web application. It also defines urgent cases as
Level 1 and all other cases as Level 2.”

As noted in Audit Inquiry #1, Blue Cross made every effort to take the appropriate action to
accurately address each of the cases and had policies and procedures in place to meet HICS case
timeliness requirements. Blue Cross further acknowledges a recommendation or corrective
action was not requested by OPM due to the efforts made and the dissolution of the Blue Cross
MSP program. Blue Cross is committed to processing HICS cases timely and will continue to
work to ensure compliance with applicable regulations.

Sincerely,

Blue Cross and Blue Shield of Alabama                                  <Email Only>
450 Riverchase Parkway East
Birmingham, Alabama 35226




                                                                    Report No. 1M-0G-00-17-034
                                  APPENDIX 2




October 13, 2017


U.S. Office of Personnel Management
Office of the Inspector General
800 Cranberry Woods Drive, Suite 130
Cranberry Township, PA 16066

Dear               :

Blue Cross and Blue Shield of Alabama (Blue Cross) appreciates the opportunity to respond to the
Enrollment Form 834 Errors Processing Timeliness finding (Audit Inquiry #2) identified by the
U.S. Office of Personnel Management (OPM) during the recent Multi-State Plan (MSP) Audit and
acknowledges the following:

      Blue Cross processed four enrollment form 834 errors untimely, resulting in MSP member
       overpayments of approximately $982.

      45 CFR 800.106(b) requires issuers to "ensure that an eligible individual receives the
       benefit of advance payments of premium tax credits...and the cost-sharing reductions"
       prescribed by applicable laws and regulations.

      45 CFR 800.401(c)(8)(i) states that issuers are responsible for "establishing and
       maintaining a system of internal controls that provides reasonable assurance that the
       provision and payments of benefits and other expenses comply with legal, regulatory, and
       contractual guidelines."

      45 CFR 156.460(a)(1) requires the issuer to reduce members’ premiums by the advanced
       premium tax credit (APTC), as applicable. 45 CFR 156.460(c) also requires the issuer to
       notify the member within 45 calendar days of identifying that the APTC was not applied
       as required and to “refund any excess premium paid by or for the enrollee.”




                                                                  Report No. 1M-0G-00-17-034
                                   APPENDIX 2
Of the 24 MSP enrollment form 834 errors reviewed that occurred from January 1, 2017 through
April 30, 2017, there were four Enrollment Form 834 errors that involved changes to the plan,
APTC, and/or cost-sharing reduction amounts that impacted the amount of premium to be paid by
the affected MSP members.

Blue Cross concurs with OPM that these errors were resolved, appropriate actions were
subsequently taken to process the errors, and refunds/credits were provided to the affected
members for the applicable over/underpayments. Additional information necessary for OPM to
verify the resolution of these 834 errors is available upon request.

Although participation in the MSP Program will end December 31, 2017, Blue Cross is committed
to ensuring that all 834 errors are processed timely and in compliance with aforementioned
regulatory standards as it relates to Blue Cross’ Federally Facilitated Marketplace membership.

Recommendation 1: We recommend that BCBSAL continue to monitor application of the
outstanding credit balance totaling approximately $539 for the members impacted by the
overpayments.

Blue Cross Response: All balances owed have been either refunded or credited to the member.

Recommendation 2: We recommend that BCBSAL develop internal controls and procedures over
the enrollment form 834 error resolution processes to ensure that errors are addressed more timely
and to minimize potential member impact.

Blue Cross Response: For monitoring purposes, five meetings occur each week to ensure
enrollment continues to be effectively processed systematically. One meeting is dedicated to
document 834 enrollment requirements based on CMS weekly calls. Another meeting and three
status meetings are held each week with the Blue Cross team (comprised of system developers and
business area partners supporting the 834 error resolution process) to communicate, develop, and
implement requirements to ensure successful automated enrollment.

Approximately         Enrollment Form 834 errors have been received to date. With          on-
exchange contracts as of 8/31/17, approximately 98% of contracts enrolled have processed
systematically based upon weekly efforts to automate 834 enrollments. Of the               on-
exchange contracts enrolled, approximately 61% (      ) can be attributed to Blue Cross’ Multi-
State Plans products (Exhibit A).

These routinely scheduled meetings have occurred since the Affordable Care Act (ACA) was
implemented. As a result of the tremendous efforts to automate 834 enrollments, significant strides
have been made to systematically process 834 enrollment. Additionally, Blue Cross has procedures
to guide associates while working 834 errors. These documented procedures help to ensure


                                                                    Report No. 1M-0G-00-17-034
                                  APPENDIX 2
consistency and accuracy amongst associates. The errors are worked using procedures outlined in
the 834 Failed Transaction Error Instructions provided to Blue Cross staff (Exhibit B).

There have been numerous improvements on both the part of CMS and the issuer to increase the
number of 834 records that process systematically without manual intervention. The resources
work proactively to determine additional programming updates to further increase the amount of
records being processed. Because the majority of the records are being processed systematically,
the resources in place to ensure timely processing are adequate.

Blue Cross is committed to ensuring that all 834 errors are processed accurately and timely, in
compliance with aforementioned regulatory standards; and will continue to work to strengthen
procedures and controls around the 834 error resolution timeliness.

Sincerely,


Blue Cross and Blue Shield of Alabama                                 <Email Only>
450 Riverchase Parkway East
Birmingham, Alabama 35226




                                                                  Report No. 1M-0G-00-17-034
                                                                             



               Report Fraud, Waste, and
                   Mismanagement 

                        Fraud, waste, and mismanagement in
                     Government concerns everyone: Office of
                         the Inspector General staff, agency
                      employees, and the general public. We
                    actively solicit allegations of any inefficient
                          and wasteful practices, fraud, and
                     mismanagement related to OPM programs
                    and operations. You can report allegations
                                to us in several ways:


     By Internet:        http://www.opm.gov/our-inspector-general/hotline-to-
                         report-fraud-waste-or-abuse


      By Phone:          Toll Free Number:                  (877) 499-7295
                         Washington Metro Area:             (202) 606-2423


        By Mail:         Office of the Inspector General
                         U.S. Office of Personnel Management
                         1900 E Street, NW
                         Room 6400
                         Washington, DC 20415-1100
  
                                                                             
                                                                             




                                                                       Report No. 1M-0G-00-17-034