Office of Inspector General

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Office of Inspector General

• Office of Audits

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AUDIT GROUPS

• Jill Henderson, Chief
• Charles Gibbons, Chief
• Jeffrey Cole, Chief
• Melissa Brown, Chief
• Michael Esser, Chief
• Joyce Price, Chief

• Community-Rated Audits Group (CRAG)
• Experience-Rated and Special Audits Group (ERSAG)
• Information Systems Audits Group (ISAG)
• Blue Cross Blue Shield Audits Group (BCBSAG)
• Internal Audits Groups (IAG)
• Quality Assurance Group

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CRAG2005 SSSG Selection

• Select potential SSSGs at time of rate proposal
• Potential groups will have enrollment that is
  or 90 and
• Carriers must select at least 5 groups (but may
  have 5 groups). If 5 groups do not meet the
  above enrollment criteria, then the next closest
  group(s) in size to the FEHBP will be selected
  until 5 groups are in potential pool.

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CRAG2005 SSSG Selection (Cont)

• The two SSSGs submitted in the reconciliation
  will be selected from potential pool submitted in
  proposal
• This rule is effect for the 2005 rate year only

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CRAG2006 SSSG Selection

• Selection of potential SSSGs at time of the rate
  proposal is optional
• If a carrier selects this option, the two SSSGs
  selected in the reconciliation will come from the
  ten potential groups submitted in the proposal
• Otherwise, carriers will select the two SSSGs at
  the time of the reconciliation, as done in years
  prior to 2005.

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CRAGClaim Data Support

• Carriers using an ACR rating methodology are
  required to keep/store the following
• All claims and/or utilization data used in
  developing the FEHBPs and the SSSGs rates
• This experience database must include individual
  claims/utilization, not just summary information
• This experience data should be for all medical
  services, including pharmacy

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CRAGClaim Data Support (cont)

• If special benefit loadings are included in the
  FEHBPs rates, the carrier must show that the
  claims/utilization expenses for these special or
  additional benefits are not included in claims
  database
• For 65 enrollees who are covered by Medicare,
  the carrier must show, on an individual basis,
  that those members claims were coordinated with
  Medicare

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ERSAG

• Pharmacy Benefit Managers (PBMs)
• All experience-rated carriers other than BCBS
  (Employer Organizations, Experience-Rated HMOs)
• Long-Term Care
• FEGLI (Life Insurance)

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ERSAGPBMs

• Ultimate goal of reviews
• Recover inappropriate costs charged to FEHBP in
  previous years
• Identify areas that require improvement for
  future contracts and
• Positively impact future costs and benefits
  provided to the FEHBP enrollees

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ERSAGPBMs (cont)

• Hired an outside consultant to assist in PBM
  reviews
• Developed queries to identify
• Duplicate payments
• Package size substitutions
• Suspicious quantities
• Incorrect pricing (AWP, discounts, disp. fees)
• Member eligibility
• Non-covered drugs

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ERSAGPBMs (cont)

• Rebates
• PBMs are extremely reluctant to provide rebate
  information
• Not all paid to PBMs by drug manufacturers
  are considered rebates (at least by PBM)
• Performed on-site review of one PBM.
• Planning on-site review of second PBM.
• Plan on performing more reviews next year

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ISAGData Warehouse

• Currently contains the latest 3 years of claim
  data from BCBS plans nationwide
• Auditors can run queries from their own desk
• Allowed OIG to perform global audits of
  duplicate payments and COB
• Also used by OIGs investigators and
  administrative sanctions staff to identify
  potentially fraudulent activity by health care
  providers and subscribers in the FEHBP
• Warehouse is expanding to include all
  experience-rated carriers.

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Questions?

• Jill S. Henderson
• Chief, Community-Rated Audits Group
• [phone]
• Jill.Henderson_at_opm.gov