Purpose

To determine if BlueCross BlueShield's (Empire's) payments to St. Peter's Hospital (St. Peter's) for special items were made according to the provisions of the agreement between Empire and St. Peter's.  

Background

The New York State Health Insurance Program (NYSHIP) provides health insurance coverage to active and retired State, participating local government and school district employees and their dependents. The Empire Plan (Plan) is the primary health benefits plan for NYSHIP. The Department of Civil Service contracts with Empire to administer the hospitalization portion of the Plan. Empire processes Plan claims for hospital services in accordance with agreements they negotiate with member hospitals, including St. Peter's. Empire's payments to St. Peter's are generally based on standard fee schedules. However, St. Peter's is entitled to additional payments for certain special items (such as implants, drugs, and blood) that are not covered by the standard fee schedules. Per Empire's agreement with St. Peter's, the amounts of claims for special items should be related to St. Peter's costs to acquire them.

Key Findings

• We reviewed six claim payments (totaling $1,712,501) to St. Peter’s for special items and determined Empire overpaid them by $4,836.

Key Recommendations

• Recover the $4,836 from St. Peter’s for the overpayments we identified in this audit.

• Develop and implement the controls necessary to ensure that payments for special items comply with the terms of Empire’s contract with St. Peter’s.

Other Related Audits/Reports of Interest

• New York State Health Insurance Program: Payments Made to Stony Brook University Medical Center (2009-S-27)
• New York State Health Insurance Program: Payments for Selected Items to Selected Hospitals (2010-S-74)