. u.s. OFFICE: OF PERSONNEL MANAGEMENT 

OFFICE OF THE INSPECTOR GENERAL· ". " - . 

OFFICE OF AUDITS 

Finali\.uditReport 

. Subject:. 

. '. '. . . '.' . .." :.' . ,-."' ".' 

... .!\l1DI'I'()~('j140BAL . . ·'CLAIMS-TO-ENROLLMENTMATCH 

FOItBLUEeR()SSANUBLUESlIIELD PLANS· J . 

. . 

Rep()rt No. lA~99""OO~08~065. 

. Date: Jlme 23, 2009 

--CAUTION-­

This audit report has been dislrib"ted to Vederal a~d non-Federal officials·wbo a·...; ""spous'ble for tile administration of the audited contraet-. This andil 

report may contain pro·prierary data which isprol~cted by Fcde~allow (IS \JSC 1905); IherHore, while this audit report is available under the Freedom of 

Informalion Acl, caulion should be exeicised b.ef~re releasing the repon 10 tbe gen~ral public. . 
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 Claims-to~Enrollment Match
 

BlueCross and BlueShield Plans
 

REPORT NO. lA-99-00-08-065 DATE: ~~ne 23, 2009 

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

for all BlueCross and BlueShield (BCBS) plans questions $2,961,748 in health benefit charges. 

The BlueCross BlueShield Association and/or BCBSplans agreed with $2,046,647 and 

disagreed with $915,101 ofthe questioned charges.. 

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

audit covered health benefit payments from 2005 through June 30, 2008 as reported in the Annual 

Accounting Statements. Specifically, we reviewed claims paid from January 1,2005 through 

June 30, 2008 that were potentially incurred when no patient enrollment records existed, during 

gaps in patient coverage, or after termination of patient coverage with the BCBS Service Benefit 

Plan. We determined that the BCBS plans paid 19,363 claim lines that were incurred when no 

patient enrollment records existed,- during gaps in patient coverage, or after termination of patient 

coverage, resulting in overcharges of$2,961,748 to the FEHBP. These claims were paid for 

ineligible patients. 

www.opm.goY www.usajobs.goY 
CONTENTS
 

PAGE
 

EXECUTIVE SUMMARY i
 

1. INTRODUCTION AND BACKGROUND .. 	 l 

II. OBJECTIVE, SCOPE, AND METHODOLOGy	 3
 

III.	 AUDIT FINDING AND RECOMMENDATIONS 5
 

Claims Paid for Ineligible Patients 5
 

IV. MAJOR CONTRlBUTORS TO THIS REPORT	 10
 

V. SCHEDULE A - SUMMARY OF QUESTIONED CHARGES BY PLAN SITE 

APPENDIX	 (BlueCross BlueShield Association reply, dated December 23, 2008, 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 aU 

BlueCross and BlueShield (BeBS) plans. 

The audit was perfonned 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 health 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 ofthe Code ofFederal Regulations (CFR). Health insurance coverage is 

made available through contracts with various health insurance carriers. 

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

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

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

participating local BeBS 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 (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 ofthe FEP . 

Operations Center are performed by CareFirst BCBS, 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 oflocal 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 

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. 
This is our first global claims-to-enrollment match audit on the BeBS plans. Our preliminary 

results ofthe potential health benefit overcharges were presented in a detailed draft report, dated 

September 5, 2008. 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 BeBS plans on various dates through 

March 25, 2009, was'considered in preparing our final report. 

2
 
II. OBJECTIVE, SCOPE, AN)) METHODOLOGY
 

OBJECTIVE
 

The objective ofthi-6 audit was to determine whether the BCBS plans complied with contract 

provisions relative to patient enrollment eligibility. 

SCOPE 

Our limited scope performance audit was conducted 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 2005 through June 30, 2008 as reported in the 

Annual Accounting Statements. Specifically, we reviewed claims paid from January 1,2005 

through June 30, 2008 that were potentially incurred when no patient enrollment records existed, 

during gaps in patient coverage, or after termination of patient coverage with the BCBS Service 

Benefit Plan. Based on our claim error report, we identified 122,496 claim lines, totaling 

$12,896,198 in payments, for 8,357 patients that were potentially incurred when no patient 

enrollment records existed, during gaps in patient coverage, or after termination of patient 

coverage. From this universe of8,357 patients, we selected and reviewed all patients with 

cumulative claim line payments of $2,000 or more. Our sample included 73,273 claim lines, 

totaling $10,529,075 in payments, for 1,106 patients. 

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

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

and. t:lot tests of controls. Therefore, we do not express an opinion on each BeBS 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 patient enrollment 

eligibility. The results of our tests indicate that, with respect to the items tested, the BCBS plans 

did not fully comply with the provisions ofthe contract relative to patient enrollment eligibility. 

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, 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 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. 

3 
The audit was performed at our offices in Washington, D.C.; Cranberry Township, Pennsylvania; 

and Jacksonville, Florida from January 2009 through May 2009. 

METHODOLOGY 

To test each BeBS PIan's compliance with the FEHBP health benefit provisions related to patient 

emollment eligibility, we selected all potential ineligible patients with cumulative claim line 

payments of $2,000 or more that were identified in a computer search. Specifically, we selected 

for review 73,273 claim lines, totaling $10,529,075 in"payments, for 1,106 patients (from a 

universe of 122,496 claim lines, totaling $12,896,198 in payments, for 8,357 patients) that were 

potentially incurred when no patient emollment records existed, during gaps in patient coverage, or 

after termination of patient coverage with the BCBS Service Benefit Plan. 

The claim line payments selected for review were submitted to each applicable BCBS plan for 

their review and response. For each plan, we then conducted a limited review of the agreed 

responses and an expanded review of the disagreed responses to determine the appropriate 

questioned amount. We did not project the sample results to the universe. 

The determination ofthe 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
 

Claims Paid for Ineligible Patients	 $2.961,748 

• 

The BCBS plans paid 19,363 claim lines that were incurred when no patient emollment records 

existed, during gaps in patient coverage, or after termination of patient coverage with the BCBS 

Service Benefit Plan, resulting in overcharges of $2,961,748 to the FEHBP. These claims were 

paid for ineligible patients. 

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, "If the Carrier or aPM determines that a Member's claim has been paid in 

error for any reason, the Carrier shall make a diligent effort to recover an overpayment ... ." 

For the period January 1, 2005 through June 30, 2008, we performed a computer search to. 

identify claims paid that were potentially incurred when no patient enrollment records existed, 

during gaps in patient coverage, or after termination of patient coverage with the BCBS Service 

Benefit Plan. We identified 122,496 claim lines, totaling $12,896,198 in payments, for 8,357 

patients that met this search criteria. Our search criteria took into consideration the 31-day grace 

period oftemporary continuing coverage following termination of eligibility. 

From this universe of 8,357 patients, we selected all patients with cumulative claim line 

payments of $2,000 or more to review. OUf sample included 73,273 claim lines, totaling 

$10,529,075 in payments, for 1,106 patients. Based on our review, we determined that 19,363 

claim lines, totaling $2,961,748 in payments, were paid fOf ineligible patients.z 

Our audit disclosed the following for these questioned claim line payments: 

•	 'Eor4,374 ofthe claim lines questioned, the BCBS plans received the termination ofmember 

coverage notices from the federal payroll offices after the claims were already paid. 

However, the BCSS plans did not review and/or adjust these claims that were paid after the 

patients' tennination dates. As a result, the FEHBP was overcharged $905,610 in claim 

payments for patients that were not eligible for benefits. 

•	 For 2,949 ofthe claim lines questioned, data input errors occurred that resulted in incorrect 

member rosters (e.g., enrollment of a non-covered grandchild or other dependent). As a 

result, the FEHBP was overcharged $540,154 in claim payments for patients that were not 

eligible for benefits. 

2 In addition, there were 6,836 claim lines, totaling $1,516,180 in payments, with eligibility errors that were 

identified by the BCBS plans before the start of our audit (i.e., September 5, 2008) and adjusted or voided by the 

Association's response due date (i.e., December 5, 2008) to the draft report. Since these eligibility errors 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 claim line payments in the final report. 

5
 
•	 For 758 ofthe claim lines questioned, dependents were added incorrectly to the enrollment 

files based on the claims information. As a result, the FEHBP was overcharged $98,445 in 

claim payments for patients that were not eligible for benefits. 

•	 For 11,282 of the claim lines questioned, the BCBS plans did not provide specific reasons 

why these claim lines were paid for ineligible patients. The FEHBP was overcharged 

$1,417,539 for these claim payments. Most of these claim payment errors were already 

identified by the BCBS plans before the start of our audit, but were not adjusted or voided by 

the Association's response due date to the draft report. 

Of the $2,961,748 in questioned charges, $967,722 (33 percent) were identified by the BCBS 

plans before the start of our audit (i.e., September 5, 2008). However, since the BCBS plans had 

not completed the recovery process and/or adjusted or voided these claims by the Association's 

response due date (i.e., December 5,2008) to the draft report, we are continuing to question 

these overcharges. The remaining questioned charges of $1 ,994,026 (67 percent) were identified 

as a result of our audit. 

In addition, we identified the following procedural issues requiring corrective action by the 

Association andlor FEP Operations Center: 

•	 For 237 patients (15,828 claim lines, totaling $2,519,460 in payments) in our sample, the 

Association andlor BeBS plans identified that the contract holder (member) or patient had 

coverage under another contract "R" nurnberand/or·patient code (e.g., due to marital status 

change), but the claim history files were not combined. 

During our review, we identified thateach BCBS plan or the FEP Operations Center can 

combine a member's claims paid under one contract "R" number or patient code with the 

claims history of a different contract "R" number or patient code. However, when the FEP 

Operations Center performs this change to the member's claims history, the only field 

changed within the FEP Direct System, other than the contract "R" number or patient code, is 

the "File Correction Indicator" located in "the "Accumulator Screen". All dates and other 

claim data fields within the FEP Direct System remain the same. As a result, we did not 

receive the adjusted claim records for the contract "R" number andlor patient code changes 

performed by the FEP Operations Center. This adversely affected the preliminary results of 

our claim error report. Consequently, 15,828 claim lines in our sample, totaling $2,519,460 

in payments, were initially identified as being paid for these 237 potentially ineligible 

patients; however, these claim lines were actually paid for eligible patients. 

•	 Numerous claim lines in our sample, totaling $1,101,246 in payments, were identified as 

being paid for ineligible patients because the members' effective or termination dates of 

coverage were entered incorrectly into the FEP Emollment System. For these sample 

items, we noted that the FEP Operations Center corrected the applicable patients' effective 

or termination dates of coverage in the FEP Enrollment System on or after July 1, 2008. 

6
 
As a result ofthese enrollment date corrections, the patients' claims were actually incurred 

during effective dates of coverage.J 

Association's Response: 

In response to the draft audit report, the Association states, "BCBSA identified a total of 

$2,076,022 ofthe total questioned amount ... in claim payments that were incurred when no. 

patient enrollment records existed, during gaps in patient coverage, and/or after tennination of 

patient coverage. 

We noted the following reasons for $1,457,488 of the $2,076,022 in overpayments identified: 

•	 $986,793 in overpayments resulted from Member Tennination notices that were not received 

from the aPM Payroll Office until after the claims were already paid.. 

•	 $412,446 in overpayments were caused by input errors which resulted in the enrollment of a 

non-covered grandchild, or other dependents. 

•	 $58,249 in overpayments were the result of dependents added incorrectly to the enrollment 

file based upon claims information. 

We also determined that retroactive enrollment reports were not generated for some ofthe 

overpayments listed above because prior to August 18,2008, the FEP Enrollment System did not 

generate retroactive enrollment notices for enrollment changes that occurred at the Member level. 

As of August 18, 2008, the FEP Enrollment system now generates Member level retroactive 

enrollment reports so that Plans can initiate recovery and recover overpayments in a timely 

manner. Also, beginning with the FEP Director's Office March 2008 Systeln-Wide Claims 

Review process, tenninated member claims are now included to assist the Plans in identifying 

tenninated member claims that were paid in error so that overpayment recovery activity can be 

initiated timely. 

With respect to ... the BCBSA contested amount ... our review indicated the following ... 

•	 $1,595,848 in questioned claims were contested because recovery was initiated before the 

audit started and the claim was adjusted either before the' audit started or before our response 

to the Draft Report Response was submitted. 

•	 $883,509 in questioned claims were contested because the claim payment errors were 

identified and recovery was initiated before the audit; however, the claim has not yet been 

adjusted: 

3 As part of our testing, we reviewed a sample of the patients' heallhbenefits election forms (Standard Form 2809) 

to verify the patients' effective enrollment periods. Also, we reviewed the FEP Direct System to verify if the 

enrollment date corrections were properly updated in the FEP Enrollment System and if the patients' claims were 

incurred during the "correcled" dates of coverage. 

7 
Documentation to support the contested amounts and to support initiation of ovelpayment recovery 

before the audit has also been provided.... The Plans will continue to pursue the remaining 

amounts as required byeS 1039, Section 2.3 ... Any benefit payments the Plans are unable to 

recover are allowable charges to the Program. In addition, as good faith erroneous payments, lost 

investment income does not apply to the overpayments identified in the finding." 

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 $2,961)48. Based on the 

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

Association and/or plans agree with $2,046,647 and disagree with $915,101 of the questioned 

charges. Although the Association agrees with $2,076,022 in the written response, the BeBS 

plans' documentation only supports concurrence with $2,046,647. 

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

amount of$915,101 represents the following items: 

•	 $885,190 of the contested amount represents claims paid for ineligible patients that were 

identified by the BeBS plans before the audit started. However, the plans had not recovered 

these ovelpayments 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. 

•	 $23,041 ofthe contested amount represents claim lines that BeBS plans state were paid for 

eligible patients. However, the plans did not provide sufficient documentation to support that 

these claim lines were paid for eligible patients. 

•	 $6,870 of the contested amount represents claims paid for ineligible patients where recovery 

efforts were initiated by the BeBS plans after the audit started, and the payments were 

recovered and the claims were adjusted or voided by the Association's response due date to 

the draft report. However, since the plans initiated recovery efforts after the audit started, we 

are continuing to question this amount in the final report. 

Recommendation 1 

We recommend that the contracting officer disallow $2,961,748 in claim payments for ineligible 

patients, and verify that the BeBS plans return all amounts recovered to the FEHBP. 

Recommendation 2 

We recommend that the contracting officer instruct the Association to develop a corrective 

action plan for identifying claims that were paid for ineligible patients so that the BeBS plans 

can initiate recovery efforts and recover overpayments in a timely manner. 

8 
Recommendation 3 

We recommend that the contracting officer instruct the Association to verify if the FEP Operations 

Center has effective procedures to ensure that members' enrollment data, such as effective and/or 

termination dates of coverage, is entered correctly into the FEP Enrollment System. • 

Recommendation 4 

We recommend that the contracting officer instruct the Association to have the FEP Operations 

Center either discontinue combining a member's· claims paid under one "R" number or patient 

code with the claims history of a different "R" number or patient code, or provide the necessary 

claim adjustment records to the OIG to account for these changes. 

9
 
IV. MAJOR CONTRIBUTORS TO THIS REPORT 

Experience-Rated Audits Group 

A~ditor-In-Charge
 

Auditor-In-Charge
 

Chief 

Information Systems Audits Group 

Chief 

Senior Infonnation Technology Specialist 

_ Senior Information Technology Specialist 

10
 
v. SCHEDULE A
 

GLOBAL CLAIMS-TO·ENROLLMENT
 

BLUECROSS ANn BLUESHIELD PLANS
 

SUMl\1ARY OF QUESTIONED CHARGES BY PLAN SITE
 

Reasons for Ibe Errors Qu..tioned Cba..... bv Year 

Plall Sile

Number 

Qu..tioned 

Claim LiDOS 

Questione

Char1!." 

d PI:lD 

Pia.. A1!.rees Plan Disal!nes ReaSOD 1 Roason 2 Reosoll3 Reason 4 2005 200.6 2007 2008 

3 BCBS of New MeXleo 45 $ 9,929 S 9,929 $ $ - $ $ - $ 9,929 $ 6,386 S 3.373 $ 170 $ - · 5 W.UPoinl BCBS ofGeonna 253 $ 49,867 $ 15,078 $ 34,789 $ IS 078 $ 34,789 $ 37,372 $ 6,838 $ 5,657 $ 

6 CareFirst BCBS (Maryland Service Area) 891 $ 153210 $ 57,795 $ 95,415 $ 38.570 $ 19,225 $ $ 95415 $ 107294 $ 32,664 $ 10.049 $ 3,203 · 7 BCBS of Louisiana 513 S 110414 $ 110,414 $ $ 80,628 $ $ 29.786 $ - $ 82,591 $ 11,108 $ 16.541 $ 168 

9 acas ofAlabama 160 $ 29854 $ 29,854 $ $ 14,334 $ 15,520 $ $ $ 14134 · $ 9781 · $ 5.939 $ · 10 ac of Idaho Health Service 17 $ 2,479 $ 2,419 $ $ 2,479 $ $ $ S $ 2,479 $ - $ · · 11 aCBS ofMassaehosetts 164 $ 42,171 $ 42,171 $ - $ 39,592 $ 2,579 $ $ $ 297 $ 535 $ 40,715 $ 624 · 13 Hi~arkBCBS 201 $ 21,411 $ 20,490 $ 921 $ 7937 $ 7937 $ 2,958 $ 2,579 $ 1,115 ,$ 4,861 $ 15,355 $ 80 

15 aCBS ofTellllessee 551 $ 50,514 $ 50,514 $ - S 28,676 $ 21,838 $ $ $ 20,346 $ 11,680 $ 8,567 $ 3.921 

16 BCBS of Wvominp; 40 S 6,847 $ 6,847 $ - $ 6847 S $ $ '$ 761 $ - S 3,079 $ 3,007 

17 BCBS of Illinois 504 $ 34,624 $ 9.428 $ 25,196 $ 9,238 $ 190 $ - $ 25,196 $ 12,256 $ 7170 $ 12,344 $ 2,854 

21 WellPoint BCBS - Ohio 989 $ 89,995 $ 89,995 $ $ 40,041 $ 2.237 $ - $ 47,717 $ 48,264 $ 29.927 $ 11,300 $ 504 

27 WellPoinl BCBS • New Hampshire 5 $ 517 $ 517 $ $ $ 517 S - $ - S S 517 $ . $ 

28 BCBS ofVennont 3 $ 204 $ 204 $ S - $ 204 $ s - s - $ 204 $ · - S 

29 BCaS of Te""" 2,055 S 289,570 $ 108,147 $ 181,423 $ 1,520 $ 106627 $ $ 181.423 $ 52,480 $ 136,754 $ 87,038 $ 13 298 · 30 WellPoint BeBS • Colorado 547 $ 101,079 $ 100,975 $ 104 $ . $ S $ 101079 S 42,731 S 57,289 S 9J3 $ 146 

31 Wellmark BeBS of rowa 3 S 8.911 $ 8.911 $ $ 8,911 S S S - S - $ $ $ 8,911 · 32 BCBS ofMiehi~an 140 $ 24,593 $ 24593 S $ . $ $ 3,178 S 21,415 S . $ 21,312 S 103 S 3178 · 33 BeBS ofNorth Carohna l,242 S 120,961 $ 117,397 S 3,564 $ - $ - $ $ 120,961 $ 30,815 S 52.090 $ 32,770 S 5,286 

36 Capital BC 19 S 5,035 $ 5,035 $ S 4,530 $ 50S $ S $ 2391 $ 21 $ 2,623 $ · 37 BCBS ofMon!Ana 54 $ 6,408 S 6,408 $ S 6,408 $ $ $ $ 5,973 $ 435 S . S · · 39 WellPoint BCBS - Indiana 177 S 45998 $ 45,998 $ $ 9,519 $ 32,639 $ $ 3,840 S 24,[32 $ 2,827 S 19,039 $ · 40 BCBS ofMLSsissippi 224 $ 23.039 S 23,039 S $ S 23,039 S S - $ 7,475 S 680 $ 10,879 S 4,005 · 41 aCBS of Florida 2157 $ 305,231 $ 130,884 $ 174,347 S 1,912 $ 102,877 $ 26,095 $ 174,347 $ 96,054 $ 74912 S 108,300 S 25,905 

42 BCBS of Kansas City (Missouri) 159 $ 60,150 $ 60,150 $ $ 60150 $ $ - S S 59,149 $ 101 S 900 $ . · 44 Arkansas BCBS 93 $ 14,289 S 14,289 S 14,289 $ S $ - $ 11,Oll S 312 S 2,680 $ 276 

45 WellPoint BCBS • K~n/Ucky 160 $ 32,890 S 32,820 S 70 $ 9,755 S $ 15,405 $ 7,730 $ 4,165 $ 17,063 $ 10,979 $ 683 

47 WellPoint BCBS United ofWls""nsUl 484 $ 60,124 $ 60,047 $ 77 S 16,423 $ 4,374 $ 16,491 $ 22,836 S 21,957 $ 16,220 S 16397 S 5,550 

48 Empire BCBS (WellPoint) 161 $ 30,782 $ 20,324 $ 10,458 $ 156 S $ S 30,626 $ 3,323 $ - S 24,136 $ 3,323 · 49 Horizon BCBS of New Jersey 140 $ 27,202 $ 27,202 $ - $ 27.202 $ $ $ $ 14,463 S 7,236 $ 1565 $ 3,938 

52 WellPoint BC of CalIfornia 184 $ 126,078 $ 50,150 S 75,928 S 50,150 S - $ $ 75,928 $ 26,999 $ 46,744 S 44,153 $ 8182 

53 Bcas of Nebraska 109 S 37,325 S 35,514 $ 1,811 $ 26,525 $ - $ $ 10,800 $ 24,623 $ 6,660 S 2,074 $ 3,968 · 54 Mountain State BCSS 448 S 105,393 $ [05,393 $ - $ 8,603 $ 96,.790 $ - $ - $ 73,241 S 25,603 $ 2,333 $ 4,216 

55 lndeoendenee BC 3 $ 13,697 $ 13,697 $ $ 13,697 S $ $ S . - $ S 440 $ 13,257 · 56 BCBS ofArr>:ona 276 $ 66,887 $' 66,887 $ S 59007 $ 7,880 $ - $ - $ 8,3\9 S 9,100 S 42,481 $ 6,987 

58 Re~ence BCBS of Ore~on 321 $ 34,050 $ 34,050 $ $ 34050 $ $ $ - $ 16,186 $ 15,210 $ 464 $ 2,[90 

59 WeliPoint BCBS - Maine 34 $ 3,562 $ 3,236 $ 326 $ 3,236 $ $ $ 326 $ 110 S 2,343 $ 1,109 $ 

60 BCBS ofRhode [sland 299 $ 15,482 S $ 15,482 $ - S S $ 15,482 S 11,118 $ 4,085 $ 279 $ · 61 WellPoint BCBS - Nevada 35 $ 967 $ 847 $ 120 $ 58 $ - S 16 S 893 $ 109 $ 396 S 376 $ 86 

62 WellPoint BCBS • Vinrinia 706 $ 90,163 $ 90,163 $ - $ 11,064 $ 79,099 $ $ S 15,907 $ 31,629 $ 28210 $ 14,417 

66 Regenee aCBS ofUtah 264 $ 56,237 $ 36,744 $ 19,493 $ 36,744 $ $ - $ 19,493 $ 12.222 $ 10,137 S 4,979 $ 28899 · 67 BS ofCalifornia 535 $ 34,694 $ 19,317 $ 15,377 $ $ 200 $ $ 34,494 S 4,989 $ 11,506 $ 14,965 $ 3,234 · 69 Re«ttce BS (Washin",on) 81 $ 5,950 $ 5,950 $ $ 1,618 $ $ 2,327 $ 2,005 $ 3,348 $ 543 $ 1,895 S 164 

70 BeSS ofAlaska 266 $ 272L2 $ 25,296 S 1.916 $ 25,296 $ $ S 1.916 S 5,527 $ 17,926 $ 3,718 $ 41 

75 Premera BC (Washinltton) 78 $ 5.214 $ 5214 $ $ 4,168 $ 1,046 S $ - $ 2,139 $ 1,709 $ 594 $ 772 · 76 WellPoinl BCaS of Missouri 302 $ 72,1I1 S 46,478 $ 25.633 $ 235 $ $ 2,047 $ 69,829 $ 29,939 $ 34574 $ 2.377 $ 5,221 · 78 BCES ofMinnesota 812 S 204,08S $ 204,085 $ $ 142,878 $ 2,332 $ $ 58,875 $ 173,602 $ 21,341 $ 6,809 $ 2,333 · 82 BCaS of Kansas 90 $ 11,711 $ : 1,711 $ $ n,711 $ - $ $ S 2,517 $ . - S 9,194 $ 

Page 1 
V. SCHEDULE A
 

GLOBAL CLAIMS-TO-ENROLLMENT
 

BLUECROSS AND BLUESHIELD PLANS
 

SUMMARY OF QUESTIONED CHARGES BY PLAN SITE
 

Reasons for the Errors Questioned Char~.. bv Year 

PI.n Site 

Number 

Questioned 

Claim Lines 

Questioned 

Chn".. 

Plan 

Plan A!!:rees Plan Disa!!:re.. Re.son 1 Reason 2 Reason 3 Reason 4 2005 20Q.6 2007 2008 

83 BCBS ofOklahoma 721 $ 88,643 $ 25,294 $ 63,349 S 25,152 S . $ 142 $ 63,349 S [9,464 $ 24,096 $ [7535 S 27,548 

84 Excellu, BCBS ofUtica-Watenown 45 $ 2,405 $ 2,405 $ $ 2,405 $ - $ - $ S 361 $ 2,044 $ - $ 

85 CareFirst BCBS mc Setvice Area) J 572 $ 194,159 $ 27,617 $ 166542 $ 153 $ 12,499 $ - S 18! 507 S 121,213 $ 54.074 $ 15,098 $ 3,774 

88 BC of Nonheastern PelUlsvlvania 10 $ 2,939 $ 2,527 $ 412 $ 2527 $ $ - $ 412 $ - $ 217 $ 2,722 $ 

89 BCBS of Delaware 10 $ 2,138 .$ 2,138 $ $ 2,138 S $ $ $ 2,/38 $ $ . - - $ . 92 CareFirst BCBS (Overse...) 11 $ 2,348 $ $ $ $ $ 2,348 $ 2.348 $ $ . S 2,348 - - $ -

Totals	 190363 s 2,961,748 S 2,046,647 S 91~,IOI S 905,610 S 540,154 S 98,445 S 1,417,5J9 S 1,2630364 S 834,386 S 649,849 $ 214,149 

BCBS = BlucCross BlueSbield 

BC = BlucCross 

BS = BlueShield 

Reasons for lhe Errors: 

Reason I The BCBS plans received the termination of member coverage notices from the federa! payroll offices after the claims were already paid. However, when the member !ennination notices were subsequently received, the BCBS plans did not review and/or adjust 

these claims that were incurred llIld paid after the patients' termination dates. 

Reason 2 = Data input errors oe<:urred that resulted in incorrc<:t member roslers (e.g., enrollment of a non-eove..d grandchild or other dependent). 

Reason 3 = Dependents we.. added incorreclly to the enrollment files based on the claims information. 

Reason 4 =	 The BCBS plans did not provide specific reasOnS why these claim line. were paid for ineligible patients. Most of these claim payment errors were already identified by the BCBS plans before the start ofour audit, but "'ere not adjusled or voided by the BCBS 

AssocialIon's response due dale to the draft report. 

Page 2 
Office of Ihc 

Inspector General 

UNITED STATES OFFICE OF PERSONNEL MANAGEMENT
 

Washington, DC 20415
 

AUDIT REPORT 

Federal Employees Health Benefits Program
 

Service Benefit Plan Contract CS 1039
 

BlueCross BlueShield Association
 

Plan Code 10
 

Global Claims-to-Enrollment Match
 

BlueCross and BlueShield Plans
 

REPORT NO. lA-99-00-08-065 DATE: June 23, 2009 

www.opm.goY www.usajobs.goY 
APPENDIX 

BlueCross BlueShield 

Association 

An Assodation of Independent 

Blue Cross and Rlue Shjeld Plans 

December 23, 2008 

Federal Employee Program 

lJlOG Street, N.W. 

Group Chief Wa~hinglon. D.C. 20005 -

p .... udits Group	 202.942.100ll
 

Fall 202.942.1 125
 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 Enrollment Audit 

Audit Report #1A-99-00.Q8-065 

(Report dated and received 9/1/2008) 

Dear Mr. Hirschman: 

This is an update to the response to the aPM Global Enrollment Audit 

Report Response provided on December 10,2008. 

A11.	 Global Enrollment Audit 

Questioned Amount - $10,529,075 

Blue Cross Blue Shield Association (BeSSA) Updated Res'ponse: 

For claims paid from June 1,2005 through June 30, 2008, OPM OIG 

identified 73,273 claim lines totaling $10,529,075 in potential health benefit 

overcharges. After reviewing the updated Plan responses to the OIG Draft 

Audit Report, SeSSA identified a total of $2,076,022 of the total questioned 

amount of $10,529,075 in claim payments that were incurred when no 

patient enrollment records existed, during gaps in patient coverage, andlor 

after termination of patient coverage. 

We noted the following reasons for $1 ,457,488 of the $2,076,022 in
 

overpayments identified: .
 

•	 $986,793 in overpayments resulted from Member Termination notices 

that were not received from the OPM Payroll Office until after the claims 

were already paid. 

•	 $412,446 in overpayments were caused by input errors which resulted
 

in the enrollment of a non-covered grandchild, or other dependents.
 
December 23, 2008 

Page 2 of 3 

•	 $58,249 in overpayments were the result of dependents added 

incorr:;ect/y to the enrollment file based upon claims information. 

We also determined that retroactive enrollment reports were not generated 

for some of the overpayments listed above because prior to August 18, 

2008, the FEP Enrollment System did not generate retroactive enrollment 

notices for enrollment changes that occurred at the Member level. As of 

August 18, 2008, the FEP Enrollment system now generates Member level 

retroactive enrollment reports so that Plans can initiate recovery and 

recover overpayments in a timely manner. Also, beginning with the FEP 

Director's Office March 2008 System- Wide Claims Review process. 

terminated member claims are now included to assist the Plans in 

identifying terminated member claims that were paid in error so that 

overpayment recovery activity can be initiated timely. 

With respect to $8,373,363 of the SeSSA contested amount of $8,453,053, 

our review indicated the following: 

•	 $2,511,608 in questioned claims were contested because the contract 

holder/member had coverage under another contract id/member 

number (due to marital status change, etc.) and the claims history was 

not combined. 

•	 $1,101,246 in questioned claims were contested because the members' 

effective date or termination date was entered incorrectly into the FEP 

Enrollment System. 

•	 $2,281,152 in questioned claims were contested because the members' 

claims were incurred within the 30 day grace period for terminated 

members or members' coverage was changed to family coverage, etc., 

so the members still had coverage. 

•	 $1,595,848 in questioned claims were contested because recovery was 

initiated before the audit started and the claim was adjusted either 

before the audit started or before our response to the Draft Report 

Response was submitted. 

•	 $883,509 in questioned claims were contested because the claim 

payment errors were identified and recovery was initiated before the 

audit; however, the claim has not yet been adjusted. 

Documentation to support the contested amounts and to support initiation 

of overpayment recovery before the audit has been provided. In addition, 

we have attached a schedule listed as Attachment A that shows the 

amount questioned. contested and recovered by each Plan location. 
December 23,2008 

Page 3 of 3 

The Plans will continue to pursue the remaining amounts as required by 

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

recover are allowable charges to the Program. In addition, as good faith 

erroneous payments, lost investment income does not apply to the 

overpayments identified in the finding. 

We appreciate the opportunity to provide our response to this Draft Audit Report 

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

Final Audit Report. 

Sincerely, 

Attachment 

cc: