u.s. OfFICE OF PERSONNEL MANAGEMENT 

OFFICE OF THE INSPECTOR GENERAL 

OFFICE OF AUDITS 

Final Audit Report 

Subject: 

AUDIT ON GLOBAL 

ASSISTANT SURGEON CLAIM OVERPAYMENTS 

FOR BLUECROSS AND BLUESHIELD PLANS 

Report No. lA-99-00-09-061 

Date: March 30, 2010 

--CAUTION-­

This audit report has been distributed to Federal officials who are responsible for the administration of the audited program. This audit 

report may contain proprietary data which is protected by federal law (18 U.S.c. 1905). Therefore, while this audit repnrt is available 

under the Freedom oflnformation Act and made available 10 the public on the OIG webpage, caution needs to be exercised before 

releasing the report to the general public as it rna)' contain proprietary information that was redacted from the publicly distributed copy. 
UNITED STATES OFFICE OF PERSONNEL MANAGEMENT 

Washington, DC 20415 

Office of the 

Inspector General 

AUDIT REPORT
 

Federal Employees Health Benefits Program
 

Service Benefit Plan Contract CS 1039
 

BlueCross BlueShield Association
 

Plan Code 10
 

Global Assistant Surgeon Claim Overpayments
 

BlueCross and BlueShield Plans
 

REPORT NO. IA-99-00-09-061 DATE: March 30, 2010 

~~Assistant Inspector General 

for Audits 

www.opm.goY www.usa)obs.goY 
UNITED STATES OFFICE OF PERSONNEL MANAGEMENT
 

Washington, DC 20415
 

Office of the 

Inspector General 

EXECUTIVE SUMMARY
 

Federal Employees Health Benefits Program
 

Service Benefit Plan Contract CS 1039
 

BlueCross BlueShield Association
 

Plan Code 10
 

Global Assistant Surgeon Claim Overpayments
 

BlueCross and BlueShield Plans
 

REPORT NO. 1A-99-00-09-061 DATE: March 30, 2010 

This final audit report on the Federal Employees Health Benefits Program (FEHBP) operations 

at an BlueCross and BlueShield (BeBS) plans questions $1,806,296 in health benefit charges. 

The BlueCross BlueShield Association (Association) and/or BCBS plans agreed with $1,604,611 

and disagreed with $201,685 of the questioned charges. 

Our limited scope audit was conducted in accordance with Government Auditing Standards. The 

audit covered health benefit payments from 2006 through July 31, 2009 as reported in the 

Annual Accounting Statements. Specifically, we reviewed claims paid from January 1,2006 

through July 31,2009 that potentially were not paid in accordance with the BeBS plans' 

assistant surgeon pricing procedures. We determined that the BCBS plans incorrectly paid 3,061 

claim lines, resulting in net overcharges of$I,806,296 to the FEHBP. Specifically, the BCBS 

plans overpaid 3,018 claim lines by $1,827,187 and underpaid 43 claim lines by $20,891. 

www.opm.gov WWW.llsaJobs.gov 
CONTENTS
 

PAGE 

EXECUTIVE SUMMARy ' j 

I. INTRODUCTION AND BACKGROUND " 1 

II. OBJECTIVE, SCOPE, AND METHODOLOGy 3 

III. AUDIT FINDING AND RECOMMENDATIONS , 5 

Assistant Surgeon Claim Payment Errors 5 

IV. MAJOR CONTRIBUTORS TO THIS REPORT 10 

V. SCHEDULES 

A. UNIVERSE AND SAMPLE OF POTENTIAL ASSISTANT SURGEON CLAIM 

OVERPAYMENTS BY PLAN 

B. QUESTIONED CHARGES BY PLAN 

APPENDIX (BlueCross BlueShield Association reply, dated December 7, 2009, to 

the draft audit report) 
I. INTRODUCTION AND BACKGROUND
 

INTRODUCTION
 

This final audit report details the findings, conclusions, and recommendations resulting from our 

limited scope audit of the Federal Employees Health Benefits Program (FEHBP) operations at all 

BlueCross and BlueShield (BCBS) plans. 

The audit was performed by the Office ofPersonnel 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 Retirement and Benefits 

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 I, Part 

890 of the Code of Federal Regulations (CFR). Health insurance coverage is made available 

through contracts with various health insurance carriers. 

The B1ueCross B1ueShield 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 

ofits federal subscribers. There are approximately 63 local BCBS plans participating in the 

FEHBP. 

The Association has established a Federal Employee Program (FEp l

) 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 B1ueCross Blueflhield, 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 ofFEHBP claims (using computerized system edits), maintaining a history file of all 

FEHBP claims, and maintaining an accounting of all program funds. 

Compliance with laws and regulations applicable to the FEHBP is the responsibility of the 

Association and each BCBS plan's management. Also, management of each BCBS plan is 

responsible for establishing and maintaining a system of internal controls. 

I Throughout this report, when we refer to "FEP" we are referring to the Service Benefit Plan lines of business at the 

Plan. When we refer to the "FEHBP" we are referring to the program that provides health benefits to federal 

employees. 
This is our first global assistant surgeon overpayment audit on the BCBS plans. Our preliminary 

results of the potential assistant surgeon claim overpayments were presented in detail in a draft 

report, dated September 2,2009. The Association's comments offered in response to the draft 

report were considered in preparing our final report and are included as the Appendix to this 

report. Also, additional documentation provided by the Association and BCBS plans on various 

dates through February 26, 2010, was considered in preparing our final report. 

2
 
II. OBJECTIVE, SCOPE, AND METHODOLOGY
 

OBJECTIVE
 

The objective ofthis audit was to determine whether the BCBS plans complied with contract 

provisions relative to assistant surgeon claim payments, which should be paid in accordance with 

the BCBS plans' assistant surgeon pricing procedures. 

SCOPE 

We conducted our limited scope performance audit in accordance with generally accepted 

government auditing standards. Those standards require that we plan and perform the audit to 

obtain sufficient and appropriate evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objective. We believe that the evidence obtained provides a 

reasonable basis for our findings and conclusions based on our audit objective. 

The audit covered health benefit payments from 2006 through July 31, 2009 as reported in the 

Annual Accounting Statements. Specifically, we reviewed claims paid from January 1,2006 

through July 31,2009 that potentially were not paid in accordance with the BCBS plans' 

assistant surgeon pricing procedures. Based on our claim error reports, we identified 62,844 

assistant surgeon claim groups, totaling $10,058,532 in potential overpayments, that may not 

have been paid in accordance with the BCBS plans' assistant surgeon pricing procedures.i From 

this universe, we selected and reviewed all assistant surgeon claim groups with potential 

overpayments of $250 or more. Our sample included 10,305 assistant surgeon claim groups, 

totaling $5,929,609 in potential overpayments, for 58 of the 63 plans (See Schedule A for the 

universe and sample of potential assistant surgeon claim overpayments by plan). 

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 assistant surgeon 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 assistant surgeon claim 

payments. Exceptions noted in the areas reviewed are set forth 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. 

Inconducting our audit, we relied to varying degrees on computer-generated data provided by 

the FEP Director's Office, the FEP Operations Center, and the BCBS plans. Due to time 

constraints, we did not verify the reliability of the data generated by the various information 

2 This universe excludes the assistant surgeon claim groups for the BCBS plans' years that were previously audited 

by the OIG. 

3
 
systems involved. However, while utilizing the computer-generated data during our audit 

testing, nothing came to our attention to cause us to doubt its reliability. We believe that the data 

was sufficient to achieve our audit objective. 

The audit was performed at our offices in Washington, D.C.; Cranberry Township, Pennsylvania; 

and Jacksonville, Florida from December 2009 through February 2010. 

METHODOLOGY 

To test each BCSS plan's compliance with the FEHBP health benefit provisions related to 

assistant surgeon claim payments, we selected all assistant surgeon claim groups with potential 

overpayments of$250 or more that were identified in a computer search. Specifically, we 

selected for review a judgmental sample of 10,305 assistant surgeon claim groups, totaling 

$5,929,609 (out of 62,844 groups, totaling $10,058,532) in potential overpayments, that may not 

have been paid in accordance with the BCBS plans' assistant surgeon pricing procedures. 

The sample groups were submitted to each applicable BCBS plan for their review and response. 

We then conducted a limited review of the plans' agreed responses and an expanded review of 

their disagreed responses to determine the appropriate questioned amount. We did not project 

the sample results to the universe. 

The determination of the questioned amount is based on the FEHBP contract, the Service Benefit 

Plan brochure, and the Association's FEP administrative manual. 

4
 
III. AUDIT FINDING AND RECOMMENDATIONS
 

Assistant Surgeon Claim Payment Errors $1,806,296 

The BCBS plans incorrectly paid 3,061 assistant surgeon claim lines, resulting in net 

overcharges of $1,806,296 to the FEHBP. Specifically, the BCBS plans overpaid 3,018 claim 

lines by $1,827,187 and underpaid 43 claim lines by $20,891. 

Contract CS 1039, Part III, section 3.2 (b)(l) 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, "Ifthe Carrier or aPM 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 ...." 

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 ...." 

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

costs of benefits provided. 

We performed a computer search to identify claims that potentially were not paid in accordance 

with the BCBS plans' assistant surgeon pricing procedures. For the period January 1,2006 

through July 31, 2009, we identified 62,844 assistant surgeon claim groups, totaling $10,058,532 

in potential overpayments that met this search criteria. From this universe, we selected and 

reviewed all assistant surgeon claim groups with potential overpayments of $250 or more, and 

determined if the BeBS plans paid these claims properly. Our sample included 10,305 assistant 

surgeon claim groups (representing 28,090 claim lines), totaling $5,929,609 in potential 

overpayments, for 58 of the 63 plans (See Schedule A for the universe and sample of potential 

assistant surgeon claim overpayments by plan). The majority ofthese claim groups contained at 

least one primary surgeon and one assistant surgeon claim line. 

Based on our review, we determined that 3,061 assistant surgeon claim lines were paid incorrectly, 

resulting in net overcharges of $1,806,296 to the FEHBP. 3 Specifically, the BCBS plans overpaid 

3,018 claim lines by $1,827,187 and underpaid 43 claim lines by $20,891 (See Schedule B for a 

summary of the assistant surgeon claim payment errors by plan). 

J In addition, there were 77 assistant surgeon claim overpayments, totaling $56,163, that were identified by the 

BCBS plans before the start ofthe audit (i.e., September I, 2009 ) and adjusted or voided by the Association's 

response due date (i.e., November 30,2009) to the draft report. Since these overpayments were identified by the 

BCBS plans before the start of our audit and adjusted or voided by the Association's response due date to the draft 

report, we did not question these overpayments in the final report. 

5
 
These assistant surgeon claim payment errors resulted from the following: 

•	 The BCBS plans paid 1,060 claim lines using incorrect Medicare or plan procedure 

allowances, resulting in net.overcharges of $572,907 to the FEHBP. Specifically, the BCBS 

plans overpaid 1,035 claim lilies by $585,094 and underpaid 25 claim lines by $12,187. 

•	 The BCBS plans incorrectly paid 756 claim lines due to the plans' local claim systems 

improperly identifying the assistant surgeon modifiers. Consequently, the BCBS plans 

overpaid 755 claim lines by $413,891 and underpaid 1 claim line by $200, resulting in net 

overcharges of$413,691 to the FEHBP. 

•	 The BCBS plans incorrectly paid 305 claim lines due to manual processing errors, such as 

incorrect coding, overriding system edits, and using incorrect allowances. Consequently, the 

BCES plans overpaid 300 claim lines by $265,662 and underpaid 5 claim lines by $3,346, 

resulting in net overcharges of $262,316 to the FEHBP. 

•	 The BCBS plans incorrectly paid 344 claim lines that were subject to Omnibus Budget 

Reconciliation Act of 1993 (OBRA 93) pricing guidelines. These errors were due to 

Palmetto (an OBRA 93 pricing vendor) not recognizing the assistant surgeon pricing 

modifier and erroneously calculating the assistant surgeon fee. Consequently, the BCBS 

plans overpaid 341 claim lines by $203,995 and underpaid 3 claim lines by $1,142, resulting 

in net overcharges of $202,853 to the FEHBP. 

•	 The BeBS plans paid 175 claim lines using the billed charges instead of the Medicare or plan 

procedure allowances, resulting in net overcharges of $111,113 to the FEHBP. Specifically, 

the BCBS plans overpaid 173 claim lines by $111,425 and underpaid 2 claim lines by $312. 

•	 The BeBS plans incorrectly priced 104 claim lines due to provider billing errors, resulting in 

net overcharges of $41,624 to the FEHBP. Specifically, the BCBS plans overpaid 101 claim 

Jines by $44,609 and underpaid 3 claim lines by $2,985. 

•	 The BeBS plans paid 64 claim lines even though the procedures were not medically 

necessary or the surgical assistants were not required for the surgeries, resulting in 

overcharges of $30,995 to the FEHBP. 

•	 The BeBS plans inadvertently paid 40 claim lines twice, resulting in duplicate charges of 

$17,823 to the FEHBP. 

•	 The BeRS plans incorrectly paid 26 claim lines due to errors in the calculation ofthe 

assistant surgeon fee, which should have been priced at the applicable plan's percentage of 

the procedure allowance. Consequently, the BCBS plans overpaid 22 claim lines by $13,579 

and underpaid 4 claim lines by $719, resulting in net overcharges of$12,860 to the FEHBP. 

•	 The BCBS plans inadvertently paid 21 claim lines for surgical assistants without support for 

the surgeons' claims or operative reports, resulting in overcharges of$6,83 3 to the FEHBP. 

6
 
•	 The BCBS plans did not properly coordinate five claim lines with Medicare or the patient's 

primary insurance carrier, resulting in overcharges of $2,024 to the FEHBP. 

•	 In one instance, a BeBS plan paid a.claim that was incurred after termination of the patient's 

coverage, resulting in an overcharge of $317 to the FEHBP. 

Of the $1,806,296 in questioned charges, $130,940 (seven percent) were identified by the BCBS 

plans before the start of our audit (i.e., September 1, 2009). However, since the BCBS plans had 

not completed the recovery process and/or adjusted or voided these claim payment errors by the 

Association's response due date (i.e., November 30,2009) to the draft report, we are continuing 

to question these overcharges. The remaining questioned charges of$I,675,356 (93 percent) 

were identified as a result of our audit. 

Association's Response: 

The Association agrees with $1,556,704 ofthe questioned overcharges and states that the BCBS 

plans have recovered $445,463 of the overpayments as of December 7,2009. 

The Association completed a preliminary root causal analysis for the BCBS plans with large 

dollar findings. The Association states, "Results from this analysis identified the following: 

•	 Human Errors - where processors are responsible for pricing the assistant surgeon claims 

manually. 

•	 We only send the first three modifiers for OHRA 93 pricing. However, if the assistant 

surgeon modifier is in the fourth position it will not be sent to Palmetto for OBRA 93 pricing. 

We will complete our final root cause analysis for all Plans by March 31,2010 to determine any 

future system enhancements, policy changes and/or training opportunities." 

Regarding the contested amount, the Association disagrees with these questioned overcharges for 

the following reasons: 

•	 The claim payments were voided and/or adjusted prior to the start of the audit. 

•	 The claim payments were processed correctly in accordance with Medicare requirements 

and/or the Plan's provider contracts. 

Regarding corrective actions, the Association states, "The Association has or is in the process of 

taking the following actions: 

•	 Have Plans educate providers on the correct method for submitting charges for Assistant 

Surgeon services by 2

nd Quarter 2010. 

7
 
•	 Instruct Plans to use these confirmed errors as training tools to ensure that examiners know 

the proper coding requirements for the adjudication ofAssistant Surgeon Claims by 2nd 

Quarter 2010. 

•	 Continue to include these claims in the FEP periodic System-Wide Claim Review Process .... 

•	 During 2010, we will develop and implement an edit that will defer claims with Assistant 

Surgeon modifiers when there is no discount applied to the allowance submitted.... 

•	 Update the FEP Administrative Manual ... with more specific coding details to include 

actual examples for each of the Assistant Surgeon Modifiers on how these claims should be 

submitted to the Operations Center for adjudication. 

•	 Add this Assistant Surgeon coding training to the Micro Regional Meetings provided by the 

Operations Center to Plans to ensure the Plans have face-to-face training. 

•	 During the ... Control and Performance of Palmetto, we will evaluate Palmetto's internal 

controls for generating pricing data for the Assistant Surgeon Modifiers to ensure compliance 

with Medicare pricing guidelines." 

GIG 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 $1,806,296. Based on the 

Association's response and the BCBS plans' additional documentation, we determined that the 

Association and/or plans agree with $1,604,611 and disagree with $201,685 of the questioned 

charges. Although the Association only agrees with $1,556,704 in its written response, the 

BCBS plans' documentation supports concurrence with $1,604,611. 

Based on the Association's response and/or the BCBS plans' documentation, the contested 

amount of $201,685 represents the following items: 

•	 $130,940 of the contested amount represents 160 claim lines where recovery efforts were 

initiated by 11 BCBS plans before the audit started. However, the plans had not recovered 

these assistant surgeon claim overpayments and adjusted or voided the claims by the 

Association's response due date to the draft report. Since these overpayments had not been 

recovered and returned to the FEHBP by the Association's response due date, we are 

continuing to question this amount in the final report. 

•	 $70,745 of the contested amount represents 103 claim lines, which were subject to OBRA 93 

pricing, where the BCBS plans did not pay the claims using the applicable Medicare 

procedure allowances and/or percentages. The Association and/or BCBS plans did not 

provide documentation to support why these claim lines were not paid in accordance with 

OBRA 93 pricing. 

8
 
Recommendation 1 

We recommend that the contracting officer disallow $1,827,187 for claim overcharges and verify 

that the BeBS plans return all amounts recovered to the FEHBP. 

Recommendation 2 

We recommend that the contracting officer allow the BeBS plans to charge the FEHBP $20,891 

if additional payments are made to the providers to correct the underpayments. 

Recommendation 3 

Although the Association has developed a corrective action plan to reduce assistant surgeon 

claim overpayments, we recommend that the contracting officer instruct the Association to 

ensure that the BeBS plans are following the corrective action plan. Also, we recommend that 

the contracting officer verify that the additional corrective actions included in the Association's 

response are implemented. 

9
 
IV. MAJOR CONTRIBUTORS TO THIS REPORT 

Experience-Rated Audits Group 

Auditor-In-Charge 

Auditor- In-Charge 

Chie_ 

Information Systems Audits Group 

Chief 

Senior Information Technology Specialist 

Information Systems Auditor 

10
 
V. SCHEDULES 

SCHEDULE A 

Page 1 of2 

GLOBAL ASSISTANT SURGEON CLAIM OVERPAYMENTS 

BLUECROSS AND BLUESHIELD PLANS 

UNIVERSE AND SAMPLE OF POTENTIAL ASSISTANT SURGEON CLAIM OVERPAYMENTS BY PLAN 

Site 

Number Plan Name
 

003
 BCBS of New Mexico
 

005
 WellPoint BCBS of Georgia
 

006
 CareFirst BCBS
 

007
 BCBS of Louisiana
 

009
 BCBS of Alabama
 

010
 BC ofIdaho Health Service
 

011
 BCBS of Massachusetts
 

012
 BCBS of Westem New York 

013 Highmark BCBS
 

015
 BCBS of Tennessee
 

016
 BCBS of Wyoming
 

017
 BCBS of Illinois
 

021
 Ohio WellPoint BCBS
 

024
 BCBS of South Carolina
 

027
 New Hampshire WellPoint BCBS 

028 BCBS ofVennont
 

029
 BCBS ofTexas
 

030
 Colorado WellPoint BCBS
 

031
 Wellmark BeBS ofIowa
 

032
 BCBS of Michigan
 

033
 BCBS of North Carolina
 

034
 BCBS of North Dakota
 

037
 BCBS of Montana
 

038
 BCBS of Hawaii
 

039
 Indiana WellPoint BCBS
 

040
 BCBS of Mississippi
 

041
 BCBS of Florida
 

042
 BCBS of Kansas City
 

043
 Regence BS ofIdaho 

State 

NM 

GA 

rvrn 

LA
 

AL
 

ill 

MA 

NY 

PA 

TN 

WY
 

II..
 

OH 

SC 

NH 

VI 

IX 

CO 

IA 

tv1I 

NC 

ND 

MT 

ill 

fN 

MS 

FL 

MO 

ill 

Assistant Surgeon
 

Claim Groups
 

282
 

4,707
 

652
 

279
 

1,596
 

332
 

440
 

92 

974 

201 

151 

746 

3,165 

895 

310 

24 

6,142 

3,267 

353 

409 

1,671 

83 

422 

21 

3,572 

417 

4,665 

441 

148 

UNIVERSE 

Potential 

Overpayments

$ 51,117 

$ 606,424 

$ 96,753 

$ 139,906 

$ -'342,814 

$ 46,599 

$ 77,483 

$ 21,651 

$ 66,248 

$ 106,523 

$ 30,051 

$ 224,015 

$ 260,872 

$ 148,999 

$ 48,932 

$ 7,872 

$ 859,551 

s 187,171 

$ 62,829 

$ 53,17 I 

$ 348,665 

$ 8,576 

$ 39,130 

$ 4,707 

$ 378,695 

$ 113,077 

$ 824,365 

$ 39,360 

$ 35,905 

Period Subject 

to Audit 

January 1,2006 through July 31,2009 

January 1,2006 through July 31,2009 

November 1, 2008 through July 31, 2009 

January 1,2007 through July 31,2009 

January 1,2006 through July 31, 2009 

January 1, 2006 through July 31, 2009 

January 1,2006 through July31, 2009 

January 1,2006 through July 31, 2009 

January 1,2008 through Iuly 31,2009 

January I, 2008 through July 31, 2009 

January 1,2006 through July 31, 2009 

January 1,2007 through July 31, 2009 

January 1, 2006 through July 31, 2009· 

January 1,2006 through July 3 I, 2009 

January 1, 2008 through July 31, 2009 

January 1,2008 through July 31,2009 

January 1,2007 through July 31, 2009 

January 1,2006 through July 31,2009 

January I, 2006 through July 31, 2009 

Ianuary 1, 2006 through July 31, 2009 

January 1,2006 through July 31,2009 

January 1,2006 through July 31,2009 

January 1,2006 through July 31,2009 

January 1,2006 through July 31, 2009 

January 1,2006 through July 3 1,2009 

January I, 2007 through July 31, 2009 

January 1, 2006 through July 31, 2009 

January I, 2006 through July 31, 2009 

January 1,2006 through July 31, 2009 

SAMPLE 

Assistant Surgeon 

Claim Groups 

78 . 

509 

79 

145 

468 

47 

105 

26 

77 

89 

40 

264 

162 

117 

40 

12 

834 

184 

93 

66 

417 

3 

25 

4 

236 

186 

721 

23 

49 

Potential 

Overpayments 

$ 33,065 

$ 200,278 

$ 41,431 

$ 121,636 

$ 219,686 

$ 21,543 

$ 41,733 

$ 15,531 

$ 43,125 

$ 96,297 

$ 20,002 

$ 171,759 

$ 88,957 

$ 45,659 

$ 21,112 

$ 6,593 

$ 499,106 

$ 102,794 

$ 41,777 

$ 25,173 

$ 218,346 

$ 809 

$ 11,706 

$ 3,521 

$ 93,878 

$ 91,354 

$ 462,574 

$ 15,032 

s 26,474 
V. SCHEDULES 

SCHEDULE A 

Page 2 of2 

GLOBAL ASSISTANT SURGEON CLAIM OVERPAYMENTS 

BLVECROSS AND BLUESHIELD PLANS 

UNIVERSE AND SAMPLE OF POTENTIAL ASSISTANT SURGEON CLAIM OVERPAYMENTS BY PLAN 

Site 

Number Plan Name
 

044
 Arkansas BCBS
 

045
 Kentucky WellPoint BCBS
 

047
 WellPoint BCBS of Wisconsin 

048 Empire BCBS
 

049
 Horizon BCBS ofNew Jersey 

050 Connecticut WellPoint BCBS 

053 BCBS ofNebraska
 

054
 Mountain State BCBS
 

056
 BCBS of Arizona
 

058
 RegenceBCBS of Oregon
 

059
 Maine WeliPoint BCBS
 

060
 BCBS ofRhode Island
 

061
 Nevada WellPoint BeBS
 

062
 Virginia WeliPoint BeBS
 

064
 BC BS ofRochester
 

066
 Regence BCBS ofUtah
 

067
 BS ofCalifornia
 

069
 Regence BS of Washington
 

070
 BCBS of Alaska
 

074
 Wellmark BCBS of South Dakota 

075 Prernera BC
 

076
 WellPoint BCBS ofMissouri
 

078
 BCBS ofMinnesota
 

079
 BCES of Central NY
 

082
 BCBS of Kansas
 

083
 BCBS of Oklahoma
 

084
 BCBS of Utica-Watertown
 

085
 CareFirst BCBS
 

089
 BCBS of Delaware 

Total 

State 

AR 

KY 

WI 

NY 

NJ 

CT 

NE 

WV
 

AZ
 

OR
 

ME 

RI 

NY 

VA 

NY 

UT 

CA 

WA 

AK 

SD 

WA 

MO 

MN 

NY 

KS 

OK 

NY 

DC 

DE 

Assistant Surgeon


Claim Groups
 

108
 

4,848
 

935
 

605
 

149
 

143
 

281
 

87
 

597
 

674
 

157
 

191
 

1,091
 

441
 

25
 

1,952
 

2,445
 

3,734
 

1,508
 

370
 

659
 

1,249
 

2,250
 

136
 

264
 

920
 

73
 

357
 

138
 

62,844
 

UNIVERSE 

Potential 

Overpayments 

s 12,887 

$ 317,452 

s 317,980 

$ 63,610 

$ 21,935 

$ 28,716 

$ 31,968 

$ 13,683 

$ 79,332 

$ 100,555 

$ 15,873 

$ 30,500 

$ 138,883 

$, 51,633 

$ 4,407 

$ 235,944 

$ 331,412 

s 409,708 

$ 1,042,028 

$ 75,934 

$ 99,516 

$ 213,675 

$ 850,753 

$ 35,015 

$ 60,645 

$ 126,765 

$ 16,844 

$ 61,801 

$ 37,617 

$ 10,058,532 

Period Subject

to Audit 

January 1,2008 through July 31,2009 

January 1,2006 through July 31, 2009 

January 1, 2006 through July 31, 2009 

January 1,2007 through July 31, 2009 

November 1,2008 through July 31, 2009 

January I, 2008 through July 31,2009 

January 1,2008 through July 31,2009 

January 1,2007 through July 31, 2009 

January 1,2007 through July 31, 2009 

January 1,2006 through July 31, 2009 

January 1,2008 through July 31, 2009 

January I, 2006 through July 31, 2009 

January 1, 2006 through July 31, 2009 

January 1, 2008 through July 31, 2009 

January 1,2006 through July 31, 2009 

January 1, 2006 through July 31, 2009 

January I, 2006 through July 31, 2009 

January 1,2006 through July 31, 2009 

January 1, 2006 through July 31, 2009 

January 1,2006 through July 31, 2009 

January I, 2006 through July 31, 2009 

January 1,2006 through July 31, 2009 

January 1,2006 through July 31,2009 

January I, 2006 through July 31, 2009 

January 1,2006 through July 31, 2009 

January 1,2008 through July 31, 2009 

January 1,2007 through July 31, 2009 

November 1,2008 through July 31, 2009 

January 1, 2006 through July 31, 2009 

SAMPLE 

Assistant Surgeon Potential 

Claim Groups Overpayments 

16 $ 5,690 

112 $ 50,219 

421 $ 255,192 

36 s 20,035 

25 $ 1l,249 

31 $ 14,719 

28 $ 12,316 

20 $ 6,776 

87 $ 39,133 

121 $ 57,546 

17 $ 6,104 

32 $ 15,852 

153 $ 108,870 

44 $ 21,273 

4 $ 2,009 

264 $ 132,385 

342 $ 162,230 

314 $ 134,547 

1,153 $ 997,124 

107 $ 45,766 

84 $ 40,356 

194 $ 104,433 

1,225 $ 720,809 

53 $ 26,042 

96 $ 42,999 

95 $ 44,383 

23 $ 12,234 

77 $ 30,640 

32 $ 27,724 

10,305 $ 5,929,609 
Site 

Number Plan Name State Claim Lines 

003 18
 

005
 

BCBS of New Mexico N"M 

WellPoint BCBS of Georgia 114 

006 

GA 

CareFirst BCBS MD 26
 

007
 BCBS of Louisiana 29
 

009
 

LA 

BCBS of Alabama 21
 

010
 

AL 

BC ofIdaho Health Service ill 7
 

011
 BCB S of Massachusetts 13
 

012
 

MA 

BCBS of Westem New York 12
 

013
 

NY 

Highmark BeBS 23
 

015
 

PA 

BeBS of Tennessee 63
 

016
 

TN 

BeBS of Wyoming WY I 

017 BeES of Illinois 45
 

021
 

IL 

Ohio WellPoint BeBS 69
 

024
 

OH 

BeBS of South Carolina 13
 

027
 

se 

New Hampshire WelIPoint BCBS 10
 

028
 

NH 

BCBS of Vermont VT I 

029 BCBS of Texas 205
 

030
 

TX 

Colorado WellPoint BCBS 154 

031 

CO 

Wellmark BCBS ofIowa 21
 

032
 

IA 

28
 

033
 

BCBS of Michigan MI 

171 

034 

BCBS of North Carolina NC 

BCBS of North Dakota ND 0
 

037
 BCBS of Montana MT 7
 

038
 3
 

039
 

BCBS of Hawaii HI 

83
 

040
 

Indiana WellPoint BCBS IN 

121 

041 

BCBS of Mississippi MS 

405
 

042
 

BCBS of Florida FL 

BCBS of Kansas City MO 14
 

043
 Regence BS of Idaho ill 41

GLOBAL ASSISTANT SURGEON CLAIM OVERPAYMENTS 

BLUECROSS AND BLUESHIELD PLANS 

QUESTIONED CHARGES BY PLAN 

Total Questioned Amounts Questioned by Year 

Total Charges 2006 2007 2008 

$ 10,190 $ 952 $ 3,421 $ 5,233 $ 

$ 47,485 $ 6,761 $ 13,464 $ 16,968 $ 

$ 20,117 $ - $ . $ 396 s 

$ 47,140 s - $ 1,390 $ 13,038 $ 

$ 15,653 $ 6,881 $ 6,160 $ 1,235 $ 

$ 4,826 $ 1,659 s 1,370 $ 105 $ 

$ , 7,255 $ 2,169 $ 1,749 $ 829 $ 

$ 8,920 $ 2,382 $ 562 $ 5,589 $ 

$ 15,709 $ - $ . $ 9,085 $ 

$ - $ - $ 16,050 s 

$ 1,189 

$ 60,374 

$ - $ 1,189 $ - $ 

$ 43,750 $ . $ 11,551 $ 23,573 $

$ 43,844 $ 13,715 $ 17,719 $ 5,056 $ 

$ 4,293 $ 1,871 $ 1,189 $ 1,407 $ 

s 7,879 s - s - $ 6,897 $ 

$ 278 $ - $ - $ 278 $ 

$ 194,407 $ - s 37,405 $ 92,396 $ 

$ 89,795 $ 24,710 $ 27,770 $ 12,561 $ 

$ 10,524 $ 5,577 $ 2,939 $ 1,344 $ 

$ 10,761 $ 1,539 $ 1,572 $ 2,941 $ 

$ 86,830 $ 45,243 $ 11,274 $ 16,138 $ 

$ . $ . $ - s - $ 

$ 3,951 $ 1,288 s 1,158 $ 1,505 $ 

$ 2,612 $ - s 255 $ - $ 

$ 34,731 $ 8,738 $ 13,758 s 9,502 $ 

$ 63,625 $ - $ 5,143 $ 11,287 $ 

$ 235,472 $ 51,902 $ 43,293 $ 98,355 $ 

$ 9,496 $ 6,397 $ 293 $ 1,995 $ 

$ 19,525 $ 12,603 $ 1,626 $ 4,203 $ 

2009 

584 

10,292 

19,721 

32,713 

1,378 

1,692 

2,508 

386 

6,624 

44,324 

-

8,625 

7,354 

(173) 

982 

- 64,606 

24,755 

664 

4,709 

14,175 

-

-

2,357 

2,732 

47,196 

41,922 

812 

1,094 

Plan 

Agrees 

$ 2,689 

$ 41,860 

$ 20,117 

s 47,140 

$ 14,845 

$ 4,826 

$ 7,255 

$ 8,920 

$ 15,709 

$ 57,135 

$ -, 

$ 27,357 

$ 42,767 

$ 4,293 

$ 7,879 

$ 278 

$ 175,380 

$ 89,795 

$ 4,738 

$ 10,761 

$ 82,075 

$ - $ 3,951 

$ 2,612 

$ 34,731 

s 63,625 

$ 132,301 

$ 9,496 

$ 19,525 

SCHEDULEB 

Page I of2
 

Plan
 

Disagrees
 

$ 7,501
 

$ 5,625
 

$ ­ $ · $ 808 

$ - $ · s - $ - $ 3,239 

$ 1,189 

$ 16,393 

$ 1,077 

$ ­ $ ­ $ · $ 19,027 

$ ­ $ 5,786 

$ ­ $ 4,754 

$ ­ $ · $ ­ $ · $ ­ $ 103,172 

$ ­ $ ­
GLOBAL ASSISTANT SURGEON CLAIM OVERPAYMENTS
 

BLUECROSS AND BLUESHIELD PLANS
 

QUESTIONED CHARGES BY PLAN
 

Site 

Number Plan Name State 

044 Arkansas BCBS AR 

045 Kentucky WellPoint BCBS KY 

047 WellPoint BeBS of Wisconsin WI 

048 Empire BeBS NY 

049 Horizon BeBS ofNew Jersey NJ 

050 Connecticut WeI/Point BCBS CT 

053 BeBS of Nebraska NE 

054 Mountain State BCBS WV 

056 BCBS of Arizona AZ 

058 Regence BCBS of Oregon OR 

059 Maine WellPoint BCBS ME 

060 BCBS of Rhode Island RI 

061 Nevada WellPoint BCBS NY 

062 Virginia WellPoint BCBS VA 

064 BC BS of Rochester NY 

066 Regence BeBS of Utah UT 

067 BS of California CA 

069 Regence BS of Washington WA 

070 BCBS of Alaska AK 

074 Wellmark BCBS of South Dakota SD 

075 PremeraBC WA 

076 WellPoint BeBS of Missouri MO 

078 BCBS ofMinnesota MN" 

079 BCBS of Central NY NY 

082 BCBS of Kansas KS 

083 BCBS of Oklahoma OK 

084 BCBS of Utica-Watertown NY 

085 CareFirst BCBS DC 

089 BeBS of Delaware DE 

Total 

2009 

-

1,310 

6,219 

877 

2,824 

280 

3,056 

265 

3,138 

8,313 

-

408 

17,121 

1,897 

1,723 

15,012 

3,635 

16,684 

(158) 

1,083 

2,865 

14,467 

5,640 

765 

-

8,965 

1,666 

3,647 

4,673 

468,405 

Plan
 

Agrees
 

$ 754 

$ 27,620 

$ 84,113 

$ 1,516 

$ 1,876 

$ 640 

$ 3,056 

$ 265 

$ 9,839 

$ 44,215 

$ 440 

$ 9,124 

$ 112,261 

$ 10,995 

$ 3,231 

$ 88,369 

$ 55,804 

$ 54,503 

$ 212 

$ 8,445 

$ 9,564 

$ 79,572 

$ ­ $ 18,949 

$ 2,027 

$ 13,109 

s 8,302 

$ 5,744 

s 18,004 

s 1,604,611 

SCHEDULEB 

Page 2 of2
 

Plan
 

Disagrees
 

$ - $ 43 

$ - $ 5,477 

$ 949 

$ 

$ - $ - $ - $ - $ - $ 1,186 

$ 237 

$ 967 

$ 11 

$ 234 

$ - $ 4,310 

$ · $ -

s 3,607 

$ · $ 6,800 

$ 53 

$ - $ 4,103 

$ - $ · s 5,136 

$ 201,685 

Total Questioned 

Claim Lines Total Charges 

3 $ 754 

56 $ 27,664 

185 $ 84,113 

9 $ 6,993 

6 $ 2,824 

2 $ 640 

7 $ 3,056 

1 $ 265 

20 . $ 9,839 

76 $ 44,215 

2 $ 440 

16 $ lO,310 

163 $ 112,498 

14 $ 1l,961 

8 $ 3,242 

193 s 88,603 

117 $ 55,804 

135 $ 58,813 

4 $ 212 

14 $ 8,445 

25 $ 13,171 

153 s 79,572 

7 s 6,800 

42 $ 19,003 

2 s 2,027 

34 $ 17,212 

17 $ 8,302 

9 $ 5,744 

23 $ 23,140 

3,061 $ 1,806,296 

Amounts Questioned by Year 

2006 2007 2008 

$ - $ - $ 754 $ 

$ 9,645 $ 8,791 $ 7,917 $ 

$ 34,570 $ 33,988 $ 9,336 $ 

$ - $ · $ 6,116 $ 

$ - $ - $ - $ 

$ - $ · $ .361 $ 

$ - $ - $ - $ 

$ - $ - $ - $ 

$ - $ 1,412 $ 5,289 $ 

$ 14,639 $ 15,750 $ 5,513 $ 

$ - $ · $ 440 $ 

$ 4,281 $ 274 s 5,347 $ 

s 46,228 $ 26,656 s 22,494 $ 

$ 314 $ - $ 9,750 $ 

$ - $ 407 $ 1,111 $ 

$ 32,871 $ 14,633 $ 26,087 s 

$ 34,604 $ lO,922 $ 6,643 $ 

$ 16,955 $ 11,443 $ 13,731 $ 

$ - $ - $ 370 $ 

$ 4,059 $ 1,615 $ 1,687 $ 

s 5,210 s 4,598 $ 499 $ 

s 24,209 $ 18,801 $ 22,095 $ 

$ 429 s 732 $ - $ 

$ 6,997 $ 5,594 $ 5,647 $ 

$ 2,027 $ - s - $ 

$ - $ - $ 8,247 $ 

$ - $ 2,408 $ 4,229 $ 

$ - $ - $ 2,097 $ 

$ 4,902 $ 3,341 $ 10,224 s 

$ 436,330 $ 367,615 $ 533,946 $ 
••

APPENDIX 

BlueCross Blue8hield 

Association 

An Association of Independent 

Blue Cross and Blue Shield Plans 

Federal Employee Program 

1510 G Street, N.W. 

Washington, D.C. 20005 December 7,2009 202.942.1000 

Fax202.942.1125 

I Group Chief 

xpenence- ate udits Group 

Office of the Inspector General 

U.S. Office of Personnel Management 

1900 E Street, Room 6400 

Washington,' DC 20415-1100 

Reference:	 OPM DRAFT AUDIT REPORT 

Global Assistant Surgeon 

Audit Report #1A-99-00-09-061 

(Report dated and received 9/2/2009) 

Dear 

This is in response to the above referenced U.S. Office of Personnel 

Management (OPM) Draft Audit Report concerning the Global Assistant 

Surgeon Audit for claims paid from January 1, 2006 through July 31, 2009, 

with potential overpayments totaling $5,929,609. Our comments 

concerning the findings in this report are as follows: 

Recommendation 1 

The OPM DIG auditors recommended that the contracting officer disallow 

$5,929,609 for assistant surgeon overpayments charged to the FEHBP and have 

the BCSS Plans return all amounts recovered to the FEHBP. 

Response to Recommendation 1: 

After reviewing the listings of potential Assistant Surgeon overpayments totaling 

$5,929,609, the Association does not contest that $ 1,556,704 in Assistant 

Surgeon claim payments are confirmed overpayments. As of December 7,2009, 

we have recovered $445,463. 

We contest the remaining $3,890,229 in Assistant Surgeon claim payments for 

the following reasons: 

•	 $261,698 in claim payments were voided and/or adjusted prior to the start
 

of the audit (September 1, 2009).
 
December 7r 2009 

Page 2 of 4 

•	 $3,628,531 in claim payments were processed correctly in accordance 

with Medicare requirements and/or the Plan's provider contracts. 

Additionally, there is $482,976 in potential overpayments that are still under 

investigation by the Plans. 

Recommendation 2 

The DIG Auditors recommended that BCSSA provide the support for each 

payment error disagreed to that was identified in this audit finding (even if 

identified and/or adjustedlvoided prior to this audit by BCSS Association and/or a 

BCBS Plan). 

Response to Recommendation 2: 

The claim support for each of the confirmed overpayments has been submitted. 

Recommendation 3 

The DIG Auditors recommended that the contracting officer instruct the 

Association to have the BCSS Plans identify the root cause(s) of the claim 

payment errors and implement corrective actions/procedures to prevent these 

types of errors in the future. 

Response to Recommendation 3: 

Based on our review of the Plan's results, we confirmed the following list of 

reasons why these claim errors occurred: 

•	 Manual errors (to include but not limited to incorrect coding/overriding system 

edits/using the incorrect allowances) by claim processors at the Plans 

resulting in an overpayment of $227,296; 

•	 Plan's local system did not properly identify the assistant surgeon modifiers; 

therefore the correct allowances were not provided resulting in an 

overpayment of $310,307; 

•	 The appropriate Medicare Percentage used in pricing the OBRA 93 claims 

was incorrect causing an overpayment of $168,905; 

•	 The Plans incorrectly submitted to the Operations Center the billed charges 

as opposed to the correct allowance for the assistant surgery services 

causing an overpayment of $107,962; 
-
Page 3 of 4 

•	 The Plans incorrectly applied the wrong Medicare or Plan allowances for 

claims resulting in an overpayment of $412,654; and 

•	 Other various reasons, including but not limited too, surgical assistant not 

usually required for the type of surgery performed, causing an overpayment of 

$314,878. 

In addition, we have completed our preliminary root causal analysis with Plans 

who had large dollar findings. Results from this analysis identified the following: 

•	 Human Errors - where processors are responsible for pricing the assistant 

surgeon claims manually. 

•	 We only send the first three modifiers for OBRA 93 pricing. However, if 

the assistant surgeon modifier is in the fourth position it will not be sent to 

Palmetto for OBRA 93 pricing. 

We will complete our final root cause analysis for all Plans by March 31J 

2010 to determine any future system enhancements, policy changes 

and/or training opportunities. . 

Corrective Actions: 

The Association has or is in the process of taking the following actions: 

•	 Have Plans educate providers on the correct method for submitting 

charges for Assistant Surgeon services by 2nd Quarter 2010. . 

•	 Instruct Plans to use these confirmed errors as training tools to ensure 

that examiners know the proper coding requirements for the 

adjudication of Assistant Surgeon Claims by 2nd Quarter 2010. 

•	 Continue to include these claims in the FEP .periodic System-Wide 

Claim Review Process. We will also evaluate the impact on Plans' 

workload of reducing the audit review threshold amount from $1,000 to 

$500 by 2nd Quarter 2010. 

•	 During 2010, we will develop and implement an edit that will defer 

claims with Assistant Surgeon modifiers when there is no discount 

applied to the allowance submitted. Plans will then confirm that they 

actually performed the calculations and is sending the correct 

allowance or submit the applicable discount so that FEPExpress can 
December 7, 2009 

Page 4 of 4 

determine the correct FEP allowance. 

•	 Update the FEP Administrative Manual Volume II by 2nd Quarter 2010 

with more specific coding details to include actual examples for each of 

the Assistant Surgeon Modifiers on how these claims should be 

submitted to the Operations Center for adjudication. 

•	 Add this Assistant Surgeon coding training to the Micro Regional 

Meetings provided by the Operations Center to Plans to ensure the 

Plans have face-to-face training. 

•	 During the 1st Quarter 2010 Control and Performance of Palmetto, we 

will evaluate Palmetto's internal controls for generating pricing data for 

the Assistant Surgeon Modifiers to ensure compliance with Medicare 

pricing guidelines. 

Executive Director, Program Integrity 

Federal Employee Program 

Attachment 

cc: