u.s. OFFICEOF PERSONNEL MANAGEMENT 

OFFICE OF THE INSPECTOR GENERAL 

OFFICE. OF AUDITS 

Final Audit Report . 

Subject: 

...... .. •.·· .. i·· . AUDIT.()NGLOBAL .... ... . 

.DUJ,>LICA.T~CLA;nviPA\'MENTS FOR·· 

·6LUECRQSS·ANDBLUESHIELDPLANS 

Report No. lA-:99~OO:"09-:036 

Datc:bctober1.4, 2009 

--CAUTION-­

This audit rtporl has been distributed 10 Federal officials who are respon~ible (Dr the administration of the audited program. Tllis audit 

report may containproprielary data whi.ch is protecled by Federallaw(18 U.S.C.19(lS). Therefore, while this audit report IS available 

under the Freedom of Information Acl and made available ID the public on the OIG webpage, caution needs. to be exercised before 

releasinglhe reporl 10 lilt general public as it may cillitllin proprietary iliformatioD thai was redacted from the publicly distributed copy. 
UNITED STATES OFFICE OF PERSONNEL MANAGEMENT 


Washington, DC 20415 


OfficI) of flu' 

InSpedor GenCl ai 

AUDIT REPORT 


Federal Employees Health Benefits Program 


Service Benefit Plan Contract CS 1039 


BlueCross BlueShield Association 


Plan Code 10 


Global Duplicate Claim Payments 


BlueCross and BlueShield Plans 


REPORT NO. DATE:' October 1.4, 2009 lA-99-00-09-036 

Michael R. Esser 

Assistant Inspector General 

for Audits 

www.opm.gov www.usaJobs.goll 
UNITED STATES OFFICE OF PERSONNEL MANAGEMENT 


Washington, DC 20415 


Office of the 

Inspector General 

EXECUTIVE SUMMARY 


Federal Employees Health :eenefits Program 


Service Benefit Plan Contract CS 1039 


BlueCross BlueShield Association 


Plan Code 10 


Global Duplicate Claim Payments 


BlueCross and BlueShield Plans 


REPORT NO. lA-99-00-09-036 DATE: october 14, 2009 

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

at all BlueCross and BlueShield (BCBS) plans questions $9,560,5 I 6 in duplicate claim 

payments. The BlueCross BlueShield Association (Association) and/or BCBS plans agreed with 

$8,620,458 and disagreed with $940,058 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 March 31, 2009 as reported in the 

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

through March 31,2009 for duplicate payments charged to the FEHBP. We determined that the 

BCBS plans improperly charged the FEHBP for 15,294 duplicate claim payments during this 

period. These payments were unnecessary and unallowable charges, resulting in overcharges of 

$9,560,516 to the FEHBP. 

www.opm.gov www.usaJobs.gov 
CONTENTS 


PAGE 

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


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


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


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


Duplicate Claim Payments .................. ~ ...................................................................... 5 


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


V. SCHEDULES 

A. 	QUESTIONED DUPLICATE CLAIM PAYMENTS BY PLAN 

B. 	 QUESTIONED DUPLICATE CLAIM PAYMENTS BY PLAN - BREAKDOWN 

BY BEST AND NEAR MATCHES 

APPENDIX 	 (BlueCross BlueShield Association reply, dated July 31, 2009, to the 

draft audit report) 
I. INTRODUCTION AND BACKGROUND 


INTRODUCTION 

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

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

BlueCross and BlueShield (BCBS) plans. 

The audit was performed by the Office of Personnel Management's (OPM) Office ofthe 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 heaJth insurance 

. benefits for federal employees, annuitants, and dependents. OPM's Center for Retirement and 

Insurance Services has overall responsibility for administration of the FEHBP. The provisions of 

the FEHB Act are implemented by OPM through regulations, which are codified in Title 5, 

Chapter 1, Part 890 of the Code of Federal Regulations (CFR). Health insurance coverage is 

made available through contracts with various health insurance carriers. 

The BlueCross BlueShield Association (Association), on behalf of participating BCBS plans, has 

entered into a Government-wide Service Benefit Plan contract (CS 1039) with OPM to provide a 

health benefit plan authorized by the FEHB Act. The Association delegates authority to 

participating local BCBS plans throughout the United States to process the health benefit claims 

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

FEHBP. 

The Association has established a Federal Employee Program (FEPI) Director's Office in 

Washington, D.C. to provide centralized management for the Service Benefit Plan. The FEP 

Director's Office coordinates the administration of the contract with the Association, member 

BlueCross and BlueShield plans, and OPM. 

The Association has also established an FEP Operations Center. The activities of the FEP 

Operations Center are performed by CareFirst BCBS, located in Washington, D.C. These 

activities include acting as fiscal intennediary between the Association and member plans, 

verifying subscriber eligibility, approving or disapproving the reimbursement of local plan 

payments of FEHBP claims (using computerized system edits), maintaining a history file of all 

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

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

management for the Association and each BCBS plan. 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. 

1 

Findings from our previous global duplicate claim payments audit or all BeBS plans (Report No. 

1A~99-00-08~008, dated September 11, 2008) for contract years 2004 and 2005 ate in the process 

of being resolved. 

Our preliminary results ofthe potential duplicate claim payments were presented in detail in a 

draft report, dated May 1,2009. The Association's comments offered in response to the draft 

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

report. Also, additional documentation provided by the Association and BeBS plans was 

considered in preparing our final report. 

2 

II. OBJECTIVE, SCOPE, AND METHODOLOGY 


OBJECTIVE 

The objective of this audit was to determine whether the BeBS plans complied with contract 

provisions relative to duplicate claim payments. 

SCOPE 

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

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

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

conclusions based on our audit 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 March 31, 2009 as reported in the 

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

through March 31, 2009 for duplicate payments charged to the FEHBP. Based on our claim error 

reports, we identified],791,693 groups, totaling $78,852,500 in potential duplicate claim 

payments. From this universe, we selected and reviewed 33,054 groups, totaling $27,335,369 in 

potentia] duplicate claim payments. 

We did not consider each BCBS plan's internal control structure in planning and conducting our 

auditing procedures. Our audit approach consisted mainly of substantive tests of transactions 

and not tests of controls. Therefore, we do not express an opinion on each BCBS plan's system 

of internal controls taken as a whole. . 

We also conducted tests to determine whether the BCBS plans had complied with the contract and 

the laws and regulations governing the FEHBP as they relate to duplicate claim payments. The 

results of our tests indicate that, with respect to the items tested, the BCBS plans did not fully 

comply with the provisions of the contract relative to duplicate claim payments. Exceptions noted 

in the areas reviewed are set forth in detail in the "Audit Finding 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 BCBS plans had not complied, in all material respects, with those provisions. 

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

the FEP Director's Office, the FEP Operations Center, and the BeBS plans. 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 

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 August 3, 2009 through September 11,2009. 

3 

METHODOLOGY. 

To test each BeBS plan's compliance withthe FEHBP health benefit provisions related to 

duplicate claim payments, we selected judgmental samples of potential duplicate claims that 

were identified.in a computer search .. Specifically, we selected for review 33,054 groups, 

totaling $27,335,369 (out of 1,791,693 groups, totaling $78,852,500) in potential duplicate claim 

payments? 

The samples were submitted to each applicable BeBS 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. 

2 The sample selections included 17,126 groups, totaling $13.325, 136 (out of370,644 groups, totaling $24,778,433) 

in potential duplicate payments under our "best matches" criteria, and 15,928 groups, totaling $14,0 I 0,233 (out of 

1,421,049 groups, totaling $54,074,067) in potential duplicate payments under our "near matches" criteria. 

4 

III. AUDIT FINDING AND RECOMMENDATIONS 


Duplicate Claim Payments 	 $9,560,516 

The BCBS plans improperly charged the FEHBP $9,560,516 for 15,294 duplicate claim 

payments from January 1,2006 through March 31, 2009. These payments were unnecessary and 

unallowable charges to the FEHBP. 

Contract CS 1039, Part III, section 3.2 (b)(l) states, "The Carrier may charge a cosUo the 

contract for a contract term if the cost is actual, allowable, allocable, and reasonable." Part II, 

section 2.3(g) states, if the Carrier or OPM determines that a member's claim has been paid in 

error for any reason, the Carrier shall make a prompt and diligent effort to recover the 

erroneous payment. 

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 for potential duplicate payments on claims paid during the 

period January 1, 2006 through March 31, 2009. For all BCBS plans, we selected and reviewed 

17,126 groups, totaling $13,325,136 (out of 370,644 groups, totaling $24,778,433) in potential 

duplicate payments, under our "best matches" criteria. We also selected and reviewed] 5,928 

groups, totaling $14,010,233 (out of 1,421,049 groups, totaling $54,074,067) in potential 

duplicate payments, under our "near matches" criteria. Our samples included all groups with 

potential duplicate payments of $250 or more under the "best matches" criteria and $400 or more 

under the "near matches" criteria. 

Based on our review, we determined that 1 ] ,339 claim payments in our "best matches" sample 

were duplicates, resulting in overcharges of $6,738,616 to the FEHBP. Also, we determined that 

3,955 claim payments in our "near matches" sample were duplicates, resulting in overcharges of 

$2,821,900 to the FEHBP. In total, 63 BeBS plans overcharged the FEHBP $9,560,516 for these 

15,294 duplicate claim payments from January 1, 2006 through March 31, 2009 (See Schedule A 

for a summary ofthe questioned duplicate claim payments by BCBS plan and Schedule B for a 

breakdown ofthe questioned duplicate claim payments by "best matches" and "near matches,,).3 

These duplicate claim payments resulted from the following: 

• 	 For 9,991 (65 percent) of the duplicate payments, the claims were not deferred on the claims 

system as potential duplicates for review by the processors. 

3 In addition, there were 2,062 duplicate claim payments, totaling $1,768,245, that were identified by the BCBS 

plans before the start of the audit (i.e., April 24,2009) and adjusted or voided by the Association's response date 

(Le., July 31,2009) to the draft report. Since these duplicate claim payments were identified by the BCBS plans 

before the start of our audit and adjusted or voided by the Association's response to the draft report, we did not 

question these duplicate payments in the final report. 

5 

• 	 For 5,303 (35 percent) ofthe duplicate payments, the claims were deferred as potential 

duplicates on the claims system, but were overridden by the processors. 

Ofthe $9;560,516 in questioned duplicate payments, $930,034 (10 percent) were identified by 

the BeBS plans before the start of our audit (i.e., April 24, 2009). However, since the BeBS 

plans had not completed the recovery process andlor adjusted or voided these duplicate claims by 

the Association's response date (i.e., July 31, 2009) to the draft report, we are continuing to 

question these overcharges. The remaining questioned duplicate payments of $8,630,482 (90 

percent) were identified as a result of our audit. 

Association's Response: 

The Association agrees with $8,542,354 ofthe questioned duplicate claim payments. The 

Associations states that the BeBS plans have recovered $1,470,162 ofthese duplicate payments 

as of July 24, 2009. The Association also states that the duplicate payments were good faith 

erroneous benefit payments and fall within the context of CS 1039, Part II, section 2.3(g). The 

BCBS plans will continue pursuing the overpayments as required by the FEHBP contract. Any 

duplicate payments the plans are unable to recover, where due diligence is demonstrated, are 

allowable charges to the FEHBP. As good faith erroneous payments, lost investment income 

does not apply to the duplicate payments identified in this finding. 

The Association states, "Further analysis of the ... two primary reasons for duplicate payments 

identified the following: 

• 	 Duplicate claim payments totaling $3,397,043 were made because the processor 


incorrectly overrode the duplicate deferral. 


• 	 Duplicate claim payments totaling $5,145,311 were made because the FEP claims system 

did not defer the c1aim for evaluation by processors." 

Regarding the contested amount, the Association states that the recoveries of the dupJicate 

payments were initiated prior to the start of the audit (i.e., April 24, 2009), but the recovery 

process has not been completed. 

The Association states, "The FEP Director's Office continues to evaluate ways to improve the 

prevention and detection of duplicate claim payments. In order to reduce the number of 

duplicate payments, prior to this audit, the FEP Program implemented the following: 

• 	 Modified the FEPExpress System on January 1, 2009 to defer claims with the same 

modifier or modifiers that have similar meaning. 

• 	 Updated the FEP Administrative Manual on January 1, 2009 to provide additional 


instructions on the resolution of duplicate claim edits. 


6 

In addition, FEP will perform the following: 

• 	 Provide Plan training on the proper duplicate edit resoluti"ori process. . . __ 

• 	 Increase duplicates included on the FEP quarterly duplicate post-payment Plan reports by 

removing the criteria to match on allowed charges and match on all provider fields .... 

• 	 Modify our current duplicate reporting process to require Plans to submit the results of 

their review of the Quarterly Duplicate Claims Reports·to the FEP Director's Office for 

review and analysis .... 

• 	 Expand the FEPExpress duplicate edit criteria to defer claims ifthere is a match on two 

ofthe five provider fields. Currently all provider fields must match in order for the claim 

to defer as a possible duplicate .... 

• 	 Expand the FEPExpress duplicate claim reporting to generate monthly summary reports of 

all duplicate claim edits overridden by processors for further Plan management review. 

The FEP Director's Office will also receive a copy ofthe Plans' monthly summary 

override reports for monitoring .... 

• 	 Remove the criteria for a match on covered charges from the duplicate edit criteria .... 

• 	 Modify the FEPExpress System to prevent Plan Approved claims from by-passing the 

duplicate edit logic." 

OIG Comments: 

After reviewing the Association's response and additional documentation provided by the BeBS 

plans, we revised the questioned charges from our draft report to $9,560,516. Based on the 

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

Association and/or plans agree with $8,620,458 and disagree with $940,058 of the questioned 

duplicate claim payments. Although the Association only agrees with $8,542,354 in its 

response, the BCBS plans' documentation supports concurrence with $8,620,458. 

Based on the Association's response andlor the BCBS plans' documentation, the contested. 

amount of$940,058 represents the following items: 

• 	 $930,034 of the contested amount represents 1,069 duplicate claim payments where recovery 

efforts were initiated by 31 BCBS plans before the audit started. However, the plans had not 

recovered these duplicate payments and adjusted or voided the claims by the Association's 

response date to the draft report. Since these duplicate payments had not been recovered and 

returned to the FEHBP by the Association's response date, we are continuing to question this 

amount in the final report. 

• 	 $10,024 ofthe contested amount represents 22 duplicate payments where the Alaska and 

Highmark BCBS plans did not provide sufficient documentation to support these contested 

items. 

Recommendation 1 

We recommend that the contracting officer disallow $9,560,516 for duplicate claim payments 

charged to the FEHBP, and have the BCBS plans return all amounts recovered to the FEHBP. 

7 

Recommendation 2 

We recommend that the contracting officer ensure that the Association's corrective actions for 

improving the prevention and detection of duplicate claim payments are· being implemented. 

8 

IV. MAJOR CONTRIBUTORS TO THIS REPORT 

Exp~ti~!lce-Rated Audits Group 

Auditor-In-Charge 

Auditor 

Auditor 

Auditor 

Chief 

Information Systems Audits Group 

Chief 

..,.... ll1Vl Information Technology Specialist 

9 

SCHEDULE'A 

Page 1 of3 

GLOBAL DUPLICATE CLAIM PAYMENTS 

, BLUECROSS AND BLUESHIELD PLANS 

January 1,2006 - Much 31, 2009 

QUESTIONED DUPLICATE CLAIM PAYMENTS BY PLAN 

Pion Number of Number of Number of Reasons for the Dupliute Paymenls Amounts Que.tionecl by Year Total Pia. Plan 

Site ~ PI.n No",. St.te DUPS Plan Aeroes Pia. Disa~r_ Roason I R..son 2 Rooson 3 Reason 4 Ruso-n 5 ZOO6 2007 ZOOS 2009 QUelI/ia.ed A2I'CCS Di..!!r.... 

003 BCBS of N.w M.x.ico NM 107 83 24 51 9 0 18 29 S 54,474 S 17,145 S 33,797 S 54,617 $ (60,032 $ 100,522 $ 59,510 

005 W.I1Point BCBS ofGeorgi. GA J09 98 11 43 17 0 0 49 S 15,428 S 22,915 $ 26,860 $ 11,742 $ 76,945 $ 66,965 $ 9,980 

006 C"",Firsl BCBS (MD Service Ar••) MD 636 636 0 374 11 4 0 247 S 16,991 $ 83,289 $ 126,257 S 38,241 $ 324,778 S 324,778 S · 007 BCBS of LouIS","a LA 503 503 0 372 !8 0 0 113 S 49,417 $ 60,036 $ 134,355 $ 15,931 S 259,739 $ 259,739 $ -

009 BCBS of Alabama AL 105 IDS 0 35 20 0 0 50 S 25,910 $ 10,054 S 13,022 $ 1,578 $ 50,563 $ 50,563 $ · 010 BCBS of ldalto Health Service lD 26 24 2 2 0 0 0 24 $ $ 2,475 $ 9,902 $ . $ 12,377 S 11,681 $ 697 

011 BCBS of Massachusetts MA 30 30 0 13 17 0 0 0 S 419 S 2,984 $ 1,421 $ 10,351 S 15,175 $ 15,175 S - 012 BCBS oeWestem New York NY 54 54 ° 0 0 0 54 0 S 4,563 S 5,362 $ 4,808 S . $ 14,732 S 14,732 S · 013 Highmari< BCBS PA 266 248 18 36 43 4 ° 183 S 51,5113 $ 73,376 $ 58,112 S 16,117 $ 199,188 S 196,532 S 2,657 

015 BCBS of Tennessee 1N 628 628 0 124 0 0 0 504 $ 54,399 $ 90,707 $ 171,614 S 16,473 S 339,193 S 339,193 S · 016 BCBS of Wyorrung WY 54 54 0 0 52 0 ° 2 $ J,29S $ 2,946 S 67,289 S 376 $ 7l,9Q6 S 71,9Q6 S · 

0]7 BCaS of Illinois IL 493 354 139 250 3 0 0 240 S 66,689 S 103,213 $ 144,612 S 12,481 $ 326,99:; $ 213,854 $ 113,142 

021 WellPoint BCBS ofOhio OH 943 923 20 190 70 I 0 682 S 91,101 S 189,583' $ 236,846 S. 30,247 $ 547,777 S 532,625 S IS,iS2 

024 BCBS ofSouth Carolina SC 37 37 0 9 14 10 0 4 $ 340 $ 2,779 S 10,348 S 5,045 S 18,512 S 18,512 S - 021 WellPoint BCBS of New Hampshire NH 132 (2S 7 56 0 0 0 76 $ 13,416 S 22,806 $ 34,753 $ 2,497 $ 73,532 S 68,860 S 4,672 

028 BCBS ofVennont VT 33 29 4 26 3 0 0 4 S 324 $ 3,995 S 5,733 S 4,064 $ . 14,116 $. 11,796 S 2,321 

029 BCBS of Texas TX 1,003 750 253 573 40 '0 0 390 $ 116,988 S 150,258 S 3S7,520 $ 73,736 $ 698,502 $ 520,401 $ 178, 101 

030 WeliPoinl BCBS of Colorado CO 566 439 127 153 8 0 228 177 S 80,974 $ 146,092 S 191,342 $ 26,180 $ 444,588 S 358,150 S 86,438 

0] I Wellmark BCBS of Iowa lA 37 37 0 S 22 0 0 7 S 48 S 33,470 $ 1,684 $ 1,352 $ 36,554 $ 36,554 S · 032 BeBS ofMichigan Ml 255 246 9 119 12 I 91 32 $ 8,758 $ 19,562 $ 64,113 S 7,166 S 99,599 $ 94,977 S 4,622 

033 BCSS of North Carolina NC 670 624 46 136 9 0 200 32S $ ]0,546 $ 69,058 S 216,702 S 47,S28 J 363,834 S 338,216 $ 25,618 

034 BCBS of North Dakota ND 4 4 0 0 0 0 0 4 $ 515 $ 1,069 $ . $ S 1,584 $ 1,584 S 

036 Capitlll BC PA 9 9 0 5 4 0 0 0 $ . S 479 $ 5,705 S 2,870 $ 9,053 $ 9,053 $ 

037 BeBS of MontJUla MT 3 3 0 I 0 0 0 2 S 550 $ $ 265 S 844 S 1,659 $ 1,659 'S · OJa BCBS of Hawaii HI ]3 33 0 16 5 0 0 12 S 1,739 S 3,093 S 9,506 S 3,380 $ 17,719 $ '17,719 $ · 

039 WellPornt BCSS ofIndiana IN 787 781 6 158 26 0 428 175 $ 75,281 S 54,522 $ 170,632 $ 44,128 S 344,563 $ 342,674 $ 1,889, 

040 BCBS ofMississippi MS 247 241 6 116 57 0 0 74 S 43,579 S 264,061 S 36,092 $ 3,137 S 346,868 $ 344,088 $ 2,780 

041 BCBS ofFlorida FL 2096 203S 61 1083 920 0 0 93 $ 111 382 $ 38879$ $ 383681 $ 94,713 $ 978575 $ 903316 $ 75259 
SCHEDULE A 

Page 2 of3 

GLOBAL DUPLICATE CLAIM PAYMENTS 

BLUECROSS AND BLUESHIELD PLANS 

January 1,2006 - March 31, 2009 

QUESTIONED DUPLICATE CLAIM PAYMENTS BY PLAN 

Plan Number of Number of Number of R.a.ons for the Dupliute Payme.ts Amounts Questioned by Y.ar Total Pia. Pia. 

Sitoll Pia. N.me SCate DUPS Plan A~r... Plan Di••u_ Re.,on I Reoson 2 Reason 3 Reason 4 Reason S 2006 looi lOOS 2009 Question'" Aerees Disaerees 

042 BCBS of Kansas City MO 119 119 0 17 32 0 70 a s 8,202 S 14,119 S 44,096 $ 19,774 $ 86,191 $ 86,191 S - 043 Regenee BS ofldaho ID I I 0 I 0 0 0 0 S S - S S 1,136 S 1,136 S 1,136 S 

044 Arkan.as BCBS AR 149 149 0 ° 0 0 0 149 S 19,522 S 16,649 $ 26,963 $ 13,832 $ 76,966 $ 76,966 S 

045 WellPDinl BCBS of Kentucky KY 456 456 0 81 19 S 255 96 $ 68,645 S 63,902 $ 106,616 S 33,031 S 272,194 S 272,194 $ - 047 W.IIPoinc BCBS of Wi"",nsin WI 295 280 15 41 9 0 175 70 S 16,090 $ 40,473' S 113,227 S 20,383 $ 190,174 $ 171,610 S 18,564 

048 Empire BCBS NY 50 26 24 14 3 6 0 27 $ 7,761 S 17,157 $ 35,625 S 5,550 $ 66,093 $ 35,45~ $ 30,643 

049 Horizon BCBS of New Je",ey NJ 274 269 5 189 44 0 10 31 $ 85,717 $ 208,805 S 130,192 $ 10,333 $ 435,048 $ 433,23~ S 1,813 

050 WeUPomt BCBS of Connecticut CT 135 135 0 0 2 0 0 133 !£ 13,905 $ 12,532 :£ 40,544 S 11,596 $ 78,577 $ 78,577 $ - 052 Well Point BC of California CA 62 56 6 [2 2 0 42 6 S 1.946 S 19,399 :£ 59,976 $ 13,092 $. 94,413 $ 43,166 S 51,247 

OS3 BeBS of Nebraska NE 145 133 [2 53 17 0 52 23 :£ 16,299 :£ 52,430 $ 30,460 $ 5,485 $ 104,674 '$ 96,737 :£ 7,936 

054 MOWltain State BCBS WV 32 32 a 24 0 0 a 8 S 12,121 S 6,285 $ 3,834 $ - '$ 22,239 :£ 22,239 :£ - 055 Independence BC PA 33 33 0 5 13 0 3 12 :£ 21,860 :£ 17,052 S 2,844 :£ 10,420 :£ 52,177 :£ 52,177 $ -

056 BeBS of ArizOna AZ 198 150 48 117 32 0 0 49 S 20,602 :£ 40,110 S 50,569 $ 11,405 $ 122,687 S. 90,065 :£ 32,622 

058 Regence BCBS DfOregon OR 92 92 0 36 29 I 5 21 S 9,730 :£ 22,957 $ 61,294 S 9,915 :£ 103,897 :£ 103,897 $ 

059 WellPoint BCBS of Maine ME [36 133 3 0 a 0 a [36 $ 6,J43 :£ 32,206 S 55,938 :£ 5,665 :£ 99,953 :£ 98,414 $ 1,539 

060 BCBS of Rhode Island Rl 29 29 0 3 5 0 13 8 S 6,564 :£ 10,310 :£ 3,766 :£ 560 :£ 21,200 $ 21,200 S - 061 WellPoinl BCBS or Nevada NV 334 ][5 19 16 66 0 232 20 S 11,084 $ 42,348 S 63,453 :£ 16,245 $ 133,130 $: 122,799 $ 10,331 

062 WellPDint BCBS of Virginia VA 686 671 15 27 436 0 1 222 S 32,373 $ 87,703 S 184,121 :£ 37,545 $: 342,342 $: 334,839 $ 7,503 

064 Excellus BCBS "fthe Rochester NY 10 10 0 2 0 0 8 0 $ 454 $ 1,518 :£ 2,563 :£ 1,002 S 5,536 S 5,536 $ 

066 Regenc. BCBS of U<alJ UT 164 [62 2 [9 2 0 135 8 S 18,372 $ 32,188 S 45,537 S 8,229 $ 104,326 :£ 102,762 $ 1,564 

067 BS of California CA 123 73 50 62 0 0 4 57 S 17,549 :£ 31,267 $ 27,603 :£ 17,333 :£ 93,752 S 51,064 S 42,688 

069 Regence as of Washington WA 125 124 1 120 I 0 0 4 $ 6,929 $ 13,027 $ 35,466 $ 13,lIJ S 68,532 S 67,004 S 1,528 

070 BCBS of Alaska AK 78 74 4 18 0 0 25 35 :I; S,HI $ 15,592 $ 32,285 $ 5,421 $ 61,609 S 54,242 $ 7,368 

074 Wei!mark BCBS of South Dokola SD 13 13 0 g I 0 3 1 $ - :£ 278 $ 9,861 :£ 704 S 10,842 $ 10,842 $ . 

075 l',ern.ra BC ofWoshington WA 107 105 2 2 0 0 7 98 $ 15,490 $ 9,555 $ 30,501 S 10,013 S 65,558 $ 59,446 $ 6,113 

076 WeUPoint BCBS of Missouri MO 322 252 70 53 15 0 171 83 5 3,4% $ 24,600 :£ 150,154 $ 9,269 $ 187,519 $ 120,749 $ 66,770 

078 BCBS ofMiMesota MN 26 26 0 a 0 a a 26 S 4,578 :£ 314 S 8,812 :£ 6,306 S 20,008 :£ 20,008 :£ - 079 Excellus BCBS ofCentroi New York NY 36 I 36 0 18 I 3 J4 0 $ 16,868 $ 1.055 $ 7,856 $ 1024 S 26802 S 26802 :I; -
SCHEDULE A 

Page 3 of3 

GLOBAL DUPUCATE CLAIM PAYMENTS 

. BLUECROSS AND BLUESHIELD PLANS 

January 1,2006 - March 31, 2009 

QUESTIONED DUPLICATE CLAIM PAYMENTS BY PLAN 

Plan 

Sit.1I Plan Name SUte 

Number of 

DUPS 

Number of 

PI•• Aerees 

Numbe. of 

Plan Dis.~rees Reason 1 

Rusons for Ibe Duplicate Payments 

Reason 2 Reason} Reason 4 Reason 5 2006 

Amounts Questio.ed by Year 

lOO7 1008 1009 

Total 

Questioned 

Plan 

Afrees 

Plan 

Disa2rees 

082 SCSS of Kansas KS !3 13 0 I 0 0 7 5 S 2,n7 s 2,666 S 3,581 S 322 S 8,896 S 8,896 S 

083 BCBS or Oklahoma OK 35 I 285 66 207 10 0 5 129 S 52,424 $ 74,946 S 94,646 S 34,613 S 256,629 S 203,175 S 53,454 

084 Exc.llus eees of Utica-Watertown NY 32 32 a II 2 6 II 2 $ 2,506 $ 5,345 $ 8,932 S 810 $ 17,593 S 17,593 $ - OB5 Cor.First SCSS ( DC Servi"" Area) DC 665 65B 7 189 51 a 254 171 S 100,531 $ 74,673 $ 130,721 S 50,834 $ 356,760 S 352,284 S 4,476 

088 se of Northeastern Pennsylvania PA IS 15 0 I 0 0 14 0 S - S 5,486 S 10,430 S - S 15,916 $ 15,916 $ - 089 sess oC Delaware DE 19 19 0 5 10 0 0 4 S 4,107 $ 2,842 S 7,093 S 1,954 $ IS,99S S IS,99S $ - on CareFirst SCSS (Overse..) 103 94 9 2 9 0 7S 17 $ 8S43 $ 34,461 S 41938 $ 7248 S 92490 $ 81428 S 11 062 

Total. 15,294 1,091 5,303 2.191 41 2,610 5,149 S 1,598,119 S 2,8S8,377 S 4,185,06B S 918,952 $ 9,560,516 S 8,620,458 S 940,058 

In(.o.:rr'k.t Noc Deferred 

Plan Sites Reviewed = 63 Ovtrridden Chllim Info Keying Error or f"ended Other 

Plan Sites with Duplicate Claim Payment.! • 63 

Reason 1 ­
SCHEDULEB 

Page 1 of3 

GLOBAL DUPLICATECLAIM PAYMENTS 


BLUE CROSS AND BLUESHIELD PLANS 


January 1, 2006 - March 31, 2009 


QUESTIONED DUPLICATE CLAIM PAYMENTS BY PLAN - BREAKDOWN BY BEST AND NEAR MATCHES 

Best Matches Questioned Near Matches Questioned Total 

Plan 

Site # Plan Name State 

Number of Questioned 

DUPS Charges 

Number of Questioned 

DUPS Charges 

Number of Questioned 

DUPS Charges 

003 BCBS of New Mexico NM 90 $ 121,270 17 $ 38,762 107 $ 160,032 

005 WellPoint BCBS of Georgia GA 72 $ 43,991 37 $ 32,954 109 $ 76,945 

006 CareFirst BCBS (MD Service Area) MD 469 $ 201,357 167 $ 123,422 636 $ 324,779 

007 BCEIS of Louisiana LA 471 $ 214,258 32 $ 45,482 503 $ 259,740 

009 BCBS of Alabama AL 59 $ 31,053 46 $ 19,511 105 $ 50,564 

oro BCBS of Idaho Health Service ID 24 $ 10,725 2 $ 1,652 26 $ ·12,377 

OIl BCBS of Massachusetts MA 26 $ 13,186 4 $ 1,989 30 $ 15,175 

012 BCSS of Western New York NY 47 $ 8,906 7 $ 5,826 54 $ 14,732 

013 Highmark BCBS PA 129 $ 74,428 137 $ 124,760 266 $ 199,188 

015 BCBS ofTennessee TN 501 $ 227,928 127 $ 111,265 628 $ 339,193 

016 BCBS of Wyoming WY 7 $ 4,524 47 $ 67,383 54 $ 71,907 

017 BCBS of Illinois IL 389 $ 243,479 104 $ 83,516 493 $ 326,995 

021 WellPoint BCSS ofOhio OH 827 $ 434,065 116 $ 1 [3,712 943 $ 547,777 

024 BCBS of South Carolina SC 29 $ 15,247 8 $ 3,265 37 $ 18;512 

027 WellPoint BCBS ofNew Hampshire NH 122 $ 68,095 10 $ 5,437 132 $ 73,532 

028 BCBS of Vermont VT 28 $ 11,129 . 5 $ 2,987 33 $ 14,116 

029 BCBS ofTexas TX 674 $ 426,087 329 $ 272,415 1,003 $ 698,502 

030 WellPoint BCBS of Colorado CO 471 $ 375,115 95 $ 69,473 566 $ 444,588 

031 Wellmark BCBS ofIowa lA 24 $ 20,390 13 $ 16,164 37 $ 36,554 

032 BCBS of Michigan MI 228 $ 67,910 27 $ 31,690 255 $ 99,600 

033 BCBS ofNorth Carolina NC 632 $ 336,759 38 $ 27,075 670 $ 363,834 

034 BCBS ofNorth Dakota ND 4 $ 1,584 0 $ . 4 $ 1,584 
SCHEDULEB 

Page 20f3 

GLOBAL DUPLICATE CLAIM PAYMENTS 


BLUECROSS AND BLUE SHIELD PLANS 


January 1~ 2006 - March 31~ 2009 


QUESTIONED DUPLICATE CLAIM PAYMENTS BY PLAN - BREAKDOWN BY BEST AND NEAR MA TeHES 

Best Matches Questioned' Near Matches Questioned Total 

Plan 

Site # 

Plan Name 

State 

Number of Questioned 

DUPS Charges 

Number of Questioned 

DUPS Charges 

Number of Questioned 

DUPS Charges 

036 Capital BC PA 5 $ 4,678 4 $ 4,376 9 $ 9,054 

037 BCSS of Montana MT 3 $ \,659 0 $ . 3 $ 1,659 

·038 BCBS of Hawaii HI 22 $ 11,129 11 $ 6,590 33 $ 17,719 

039 WellPoint BCBS ofIndiana rN 669 $ 229,985 118 $ 114,578 787 $ 344,563 

040 BCBS of Mississippi MS 202 $ 312,131 45 $ 34,737 247 $ 346,868 

041 BCSS of Florida FL 894 $ 546,993 1,202 $ 431,582 2,096 $ 978,575 

042 BCBS of Kansas City MO 78 $ 38,797 41 $ 47,394 119 $ 86,191 

043 Regence BS ofIdaho ID 1 $ 1, 136 0 $ " 1 $ 1,136 

044 Arkansas BCBS AR 129 $ 62,475 20 $ 14,491 149 $ 76,966 

045 WellPoint BCBS ofKentucky KY 376 $ 202,866 80 $ 69,328 456 $ 272,194 

047 WellPoint BCBS of Wisconsin WI 252 $ 143,534 43 $ 46,640 295 $ 190,174 

048 Empire BCSS NY 22 $ 18,254 28 $ 47,840 50 $ 66,094 

049 Horizon BCBS ofNew Jersey NJ 204 $ 368,726 70 $ 66,321 274 $ 435,047 

050 WellPoint BCBS of Connecticut CT 116 $ 59,979 19 $ 18,598 135 $ 78,577 

052 WellPoint Be of California CA 53 $ 83,141 9 $ 11,272 62 $ 94,413 

053 BCBS of Nebraska NE 118 $ 83,114 27 $ 21,559 145 $ 104,673 

054 Mountain State BeBS WV 15 $ 8,392 17 $ 13,847 32 $ 22,239 

055 Independence BC PA 22 $ 40,936 11 $ 11,240 33 $ 52,176 

056 BCBS of Arizona AZ 161 $ 94,169 37 $ 28,518 198 $ 122,687 

058 Regence BeBS of Oregon OR 64 $ 82,178 28 $ 21,718 92 $ 103,896 

059 WellPoint BCBS of Maine ME 109 $ 77,747 27 $ 22,206 136 $ 99,953 

060 BCBS of Rhode Island RI 22 $ 13,374 7 $ 7,827 29 $ . 21,201 
SCHEDULEB 

Page 3 of3 

GLOBAL DUPLICATE CLAIM PAYMENTS 


BLUECROSS AND BLUESHIELD PLANS 


January 1, 2006 - March 31, 2009 


QUESTIONED DUPLICATE CLAIM PAYMENTS BY PLAN - BREAKDOWN BY BEST AND NEAR MATCHES 

Best Matches Questioned Near Matches Questioned Total 

Plan 

Site # Plan Name State 

Number of Questioned 

DUPS Charges 

Number of Questioned 

DUPS Charges 

Number of Questioned 

DUPS Charges 

061 WellPoint BCBS ofNevada NV 297 $ 107,650 37 $ 25,481 334 $ 133,131 

062 WellPoint BCBS ofVirginla VA 577 $ 287,101 109 $ 55,241 686 $ 342,342 

064 Excellus BCBS of the Rochester NY 5 $ 3,150 5 $ 2,386 10 $ 5,536 

066 Regence BCBS of Utah UT tl7 $ 66,038 47 $ 38,289 164 $ 104,327 

067 BS ofCalifornia CA 90 $ 66,036 33 $ 27,716 123 $ 93,752 

069 Regence BS of Washington WA [ 11 $ 54,406 14 $ [4,126 125 $ 68,532 

070 BCBS of Alaska AK 54 $ 43,298 24 $ 18,312 78 $ 61,610 

074 WeJImark BCBS of South Dakota SD 8 $ 4,312 5 $ 6,530 13 S 10,842 

075 Premera BC of Washington WA 98 $ 60,411 9 $ 5,147 107 $ 65,558 

076 WellPoint BCBS of Missouri MO 273 $ 149,681 49 $ 37,838 322 $ 187,519 

078 BCBS of Minnesota MN 26 $ 20,008 0 $ . 26 $ 20,008 

079 Excellus BCBS of Central New York NY 31 $ 23,472 5 $ 3,331 36 $ 26,803 

082 BCBS of Kansas KS 2 $ 786 11 $ 8,110 13 $ 8,896 

083 BCBS of Oklahoma OK 218 $ 141,724 133 $ 114,904 351 $ 256,628 

084 Excellus BCBS of Utica-Watertown NY 26 $ 11,510 6 $ 6,084 32 $ 17,594 

085 CareFirst BCBS (DC Service Area) DC 497 $ 228,082 168 $ 128,678 665 $ 356,760 

088 BC ofNortheastern Pennsylvania PA 9 $ 6,004 6 $ 9,912 15 $ 15,916 

089 BCBS of Delaware DE 6 $ 3,978 13 $ 12,017 19 $ 15,995 

092 CareFirst BCBS (Overseas) 34 $ 24,089 69 $ 68,396 103 $ 92,485 

Totals 11,339 $ 6,738,616 3,955 $ 2,821,900 15,294 $ 9,560,516 
.,

APPENDIX 

BlueCOO88 BlueSw.eld 

Association 

An Assocla!lon. oflndepelldem 

mue Cross and Blue ShIeld Plans 

Federal Employee Program 

1510 G Street, N.W. 

Washington. D.C. 20005 

202.942.1000 

July 31 Fax 202.042.1125 t 2009 

Experience-Rated Audits Group 

Office of the Inspector General 

U.S. Office of Personnel Management 

1900 E. Street, N.W., Room 6400 

Washington, D.C. 20415 

Reference: 	 OPM DRAFT AUDIT REPORT 

Global Duplicate Claim Payments Audit 

Audit Report 1A-99-00-09-036 

This is our preliminary response to the above referenced U.S. Office of 

Personnel Management (OPM) Draft Audit Report concerning the Global 

Duplicate Claim Payments Audit. Our final draft response will be submitted 

to your office by July 31, 2009. Our comments concerning the findings in 

the report are as follows:' 

Duplicate Claim Payments 	 $27.335.369 

The OPM Office of Inspector General (OIG) conducted the Duplicate Claims 

Payment Audit in May 2009 through June 31, 2009. For the period 

January 1, 2006 through March 31, 2009, OPM OIG selected and reviewed 

17,126 groups, totaling $13,325,136 (out of 370,644 groups, totafing $24,778,433) 

in potential duplicate payments, under its "best matches" criteria. OPM OIG also 

selected and reviewed 15,928 groups, totaling $14,010,233 (out of 1,421,049 

groups, totaling $54,074,067) in potential duplicate payments, under its "near 

matches" criteria. OPM OIG samples included all groups with potential duplicate 

payments of $250 or more under the ~best matches" criteria and $400 or more 

under the "near matches" criteria. . 
July 31,2009 

Page 2 

We do not contest that $ 8,542,354 in duplicate claim payments may have been 

made in error. The overpayment represents .0002 percent of total medical claims 

paid for the period under audit (for the period of January 1, 2006 through 

March 31, 2009, the FEP Program paid $45,708,183,006 in medical claims). 

As 6f July 24, 2009, we have recovered $1,470,162. Attachment A identifies total 

confirmed duplicates and the amount recovered by each Plan location. 

Further analysis of the Plan's two primary reasons for duplicate payments 

identified the following: 

• 	 Duplicate claim payments totaling $3,397,043 were made because the 

processor incorrectly overrode the duplicate deferral. 

• 	 Duplicate claim payments totaling $5,145,311 were made because the FEP 

claims system did not defer the claim for evaluation by processors. 

We contest $18,793,015 in duplicate claim payments for the following reasons: 

• 	 The duplicate claim was voided or adjusted prior to April 24, 2009 (the start 

of the audit). 

• 	 Recovery of the duplicate claim was initiated prior to April 24, 2009 and the 

claim was adjusted or voided on or after April 24, 2009. 

• 	 Recovery of the duplicate claim was initiated prior to April 24, 2009 but the 

recovery process has not been completed. 

• 	 The claims were for a provider who provided different multiple procedures to 

the same patient. 

• 	 The claims were for confirmed repeated procedures, multiple births, round 

trip ambulance services, team surgery and medication doses more than 

once a day. 

• 	 The claims were for procedures preformed on different body parts or on 

different family members. 

• 	 The claims were for additional payments necessary to correct a prior 


payment. 


The FEP Director's Office continues to evaluate ways to improve the prevention 

and detection of duplicate claim payments. In order to reduce the number of 

duplicate payments, prior to this audit, the FEP Program implemented the 

following: 
July 31,2009 

Page 3 

• 	 Modified the FEPExpress System on January 1, 2009 to defer claims with 

the same modifier or modifiers that have similar meaning. 

• 	 Updated the FEP Administrative Manual on January 1, 2009 to provide 

additional instructions on the resolution of duplicate claim edits. 

In addition, FEP will perform the following: 

., 	Provide Plan training on the proper duplicate edit resolution process by the 

end of 4th quarter 2009. . 

• 	 Increase duplicates included on the FEP quarterly duplicate post-payment 

Plan reports by removing the criteria to match on allowed charges and 

match on a/l provider fields. This change will be implemented by the end of 

4th Quarter 2009. 

• 	 Modify our current duplicate reporting·process to require Plans to submit the 

results of their review of the Quarterly Duplicate Claims Reports to the FEP 

Director's Office for review and analysis. This change will be implemented 

with the 4th Quarter 2009 reports. 

• 	 Expand the FEPExpress duplicate edit criteria to defer claims if there is a 

match on two of the five provider fields. Currently all provider fields must 

match in order for the claim to defer as aposslble duplicate. This 

modification will be implemented by the end of 2nd Quarter 2010. 

• 	 Expand the FEPExpress duplicate claim reporting to generate monthly 

summary reports of all duplicate claim edits overridden by processors for 

further Plan management review. The FEP Directors Office wifl also 

receive a copy of the Plans' monthly summary override reports for 

monitoring. This modification will be implemented by the end of 

2nd Quarter 2010. 

• 	 Remove the criteria for a match on covered charges from the duplicate edit 

criteria. This modification will be implemented by the end of 

2nd Quarter 2010. . 

• 	 Modify the FEPExpress System to prevent Plan Approved claims from bypassing the duplicate edit logic. This modification will be implemented by the 

end of 2nd Quarter 2010. 
To the extent that there were duplicate payment errorS, the payments were good 

faith erroneous benefit payments and fall within the context of CS 1039, Section 

2.3 (g). The Plans will continue to pursue the overpayment amounts as required 

by CS 1039, Section 2.3 (9)(1). Any benefit payments the Plans are unable to 

recover and where due diligence was demonstrated are allowable charges to the 

Program. In addition, as good faith erroneous payments, lost investment income 

does not apply to the payments identified in the finding. 

We appreciate the opportunity to provide our response to the finding and 

request that our comments be included in their entirety as part of the Final 

Audit Report. 

Executive Director 

Program Integrity 

Attachment 

cc: