"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 with regard to VA claim payments...
"BCBS plans incorrectly paid 6,989 claims, resulting in $58,023,161 in overcharges to the FEHBP...
"...26 of the 64 BCBS plans entered into contracts with VA providers to pay FEP claims at rates that violated the “reasonableness” requirements of the Federal Regulation...
"157 claims were paid incorrectly due to manual processing errors such as incorrect coding, overriding system edits, and using incorrect allowances or billed amounts...
"102 claims were paid incorrectly due to provider billing errors, resulting in overcharges..."
"We submitted multiple requests asking theBCBS Association and/or plans to provide documentation ...Of these 4,361 claims, the Association or BCBS plans did not provide any documentation for 4,195 claims...
"The Association does not have oversight procedures in place to ensure that VA claims are being properly processed and paid...
"The BCBS plans ...do not have oversight procedures to ensure that the VA providers comply with the plans’ contracts...
"The Association is unable to produce any attestation that VA claims are being properly paid...
"...despite multiple requests, the Association and plans failed to provide ANY evidence that it was paying claims in a reasonable manner [emphasis in original]...
"The Association performs no audits or reviews of VA claim payments... it has no controls in place to validate that ... procedures are being followed or that they are effective for controlling costs charged to the FEHBP...
"The Association’s minimal oversight is particularly concerning when considering the enormous volume of claim payments.. approximately $1.7 billion during the 34-month scope of this audit...."
"The fact that the Association recognizes that [these sums] were paid in error, yet does not think that corrective actions to prevent future VA claims from paying in error is necessary, is fundamentally concerning to the overall operation of the Association in providing services on behalf of the Federal Government...
BCBS generally excused its conduct, arguing that the subject claim payments "... were the product of generally accepted business practices... and industry standard..."
OIG forcefully (i.e., underlined and bolded in their response) stated as follows:
We do not believe that any competitive business would voluntarily pay unreasonable costs if the funds were paid exclusively from its own commercial lines of business, as opposed to Federal funds that the plans do not have the same vested interest in protecting. [ ...]. We conclude that the plans did not make a “good faith” effort to reasonably pay claims to VA service providers on behalf of the FEHBP.
Christin, you are far too charitable. The Office of the Inspector General gave BCBS a pass simply by choice of method. They looked only at claims paid $500 *more* than the provider billed. No examination of the possibility of up-coding or overtreatment detectable by standard methods. The finding was 3.5% billing in error. That's enough for the auditor to say he did his job and get a mea culpa from BCBS. Then life goes on.
What's far more telling is BCBS' refusal to deliver details on 96% of the claims requested by the OIG. That's stonewalling of the first order. Forty-four million dollars worth. BCBS contends that no process improvement is required. Sure.