Objective

To determine whether Empire BlueCross paid hospital claims for members who were not eligible. The audit covered the period January 1, 2014 through December 31, 2018.

About the Program

The Department of Civil Service (Civil Service) administers the New York State Health Insurance Program (NYSHIP), which provides health insurance coverage to over 1.2 million active and retired State, local government, and school district employees, and their dependents. NYSHIP’s primary health benefits plan is the Empire Plan, which serves about 1.1 million of the members. Civil Service contracts with Empire BlueCross (Empire) to administer the plan’s hospital benefits. From January 1, 2014 through December 31, 2018, Empire processed and paid about 6 million hospital claims totaling $13 billion.

A coordinated effort is required by Civil Service, Empire, employer health benefits administrators(HBAs), and members to maintain accurate and up-to-date eligibility records; however, Civil Service is ultimately responsible for ensuring these groups fulfill their duties. Civil Service maintains the New York Benefits Eligibility and Accounting System (NYBEAS) as the system of record for member enrollment and eligibility information, and notifies Empire of any changes in a member’s status.

Many contracts that Empire negotiates with hospitals limit recoveries to one year or less for claims paid on behalf of members who are retroactively disenrolled (i.e., when a member is disenrolled after the date their coverage ended; for example, action can be taken to disenroll a member on December 31, 2018, but the disenrollment period goes back to June 1, 2018). For contracts that do not include this retroactive disenrollment language, claims may be recovered for six years.

Key Findings

The audit identified 3,177 claims totaling $18.2 million that were paid for hospital services provided during periods when members were not eligible. The claims were paid due to various reasons, including retroactive disenrollments. For retroactive disenrollments, it took an average of nearly 400 days to cancel members’ coverage due to delays by Civil Service, HBAs, and members. In one example, Empire paid $186,000 in ineligible claims because it took more than eight years to retroactively disenroll the member. Overpayments also occurred due to errors in Empire’s processing of certain claims. Of the $18.2 million, Empire recovered $11.5 million and $2.1 million was beyond recoverability time frames, leaving $4.6 million to be recovered.

Key Recommendations

To Civil Service:

• Review the $4.6 million in claims paid for ineligible members and make recoveries, as warranted.
• Take corrective steps to help ensure NYBEAS reflects accurate eligibility information and updates are made promptly.
• Monitor the accuracy of Empire’s eligibility data and recovery of claims paid for disenrolled members.

To Empire:

• Ensure eligibility information used to process claims is complete and accurate and reconciles with current NYBEAS information.
• Take corrective steps to ensure all claims paid for ineligible members are identified and recoveries are made, where appropriate.