The federal government issued about $41.6 million in overpayments to Excellus BlueCross BlueShield in 2007, according to a report from the U.S. Department of Health and Human Services’ Office of the Inspector General (OIG).
The payments came under a Medicare Advantage contract, according to the report. Medicare Advantage plans are offered by private insurers, who receive payments from the federal government for Medicare beneficiaries they have enrolled.
The OIG audited an Excellus Medicare Advantage contract under which the Rochester–based health insurer, which is Central New York’s largest, received $488 million to administer health-care plans for 48,000 beneficiaries. The audit sampled diagnoses for 98 beneficiaries from the contract and found that 53 did not meet federal requirements.
Reasons the diagnoses did not meet federal requirements included that they were not supported by provided documentation, that Excellus failed to provide supporting documentation, and that the diagnoses were unconfirmed, the OIG report said.
The 53 cases sampled not meeting federal requirements resulted in more than $157,000 in overpayments to Excellus, the report stated. Based on that sample, it estimated Excellus received $41.6 million in overpayments in the 2007 calendar year.
The report recommended that Excellus refund the identified $157,777 in overpayments and work with CMS to calculate how much of the projected $41.6 million in extra payments should be refunded. It also recommended Excellus improve its current practices.
Excellus disagreed with several of the audit’s findings, the report said. Its objections included that the overpayment finding was based on flawed data.
The insurer’s vice president of communications, Elizabeth Martin, released the following statement on the report:
“The OIG’s audit findings relate to a federal payment model that was established with good intentions but didn’t fully recognize industry-wide documentation challenges for health plans, physicians, and other health-care providers. The health industry’s reimbursement system, in many cases, pays providers on the basis of procedures performed, not on the basis of the member’s condition, or diagnosis.
“The Centers for Medicare and Medicaid (CMS) holds insurers responsible for the accuracy of diagnosis data submitted to CMS. Insurers rely on providers to submit accurate diagnosis data on claims in order to appropriately document those diagnoses and related care in the medical records. We have more than 18,000 physicians submitting claims to us every day. We audit a portion of the claims and medical records for accuracy, completeness, and consistency. However, the medical-delivery system would grind to a halt if we made every provider submit all of the documentation for each and every claim they file on behalf of members. In fact, New York State law prohibits us from asking for records before payment.
“CMS recognizes this is an industry-wide issue, and it is adjusting its audit approach accordingly while continuing to encourage health plans to work with the provider community to improve documentation of claims and diagnoses.”
Contact Seltzer at rseltzer@cnybj.com