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Audit: State Health Plan loses millions in overpayments

Posted September 13, 2011

— The health insurance plan for state employees and retirees is losing millions of dollars each year by overpaying on medical claims and failing to recoup most of the money, according to a state audit released Tuesday.

The State Health Plan, which provides health coverage for more than 660,000 state workers, teachers, retirees and dependents, has been mired in red ink for years, forcing lawmakers to approve bailouts in recent years. In May, the General Assembly and Gov. Beverly Perdue reached a compromise on health plan reforms, including forcing workers for the first time to pay for their own coverage.

State auditors found several problems with the plan's oversight of claims, noting that the state might have lost up to $48.6 million to overpayments between July 2007 and June 2010. The auditors recommended using software to identify possible overpayments and the reasons the errors occurred and to exercise more oversight of Blue Cross Blue Shield of North Carolina, which administers claims for the health plan.

Interim Administrator Lacey Barnes said the plan is working to improve oversight of its contract with Blue Cross and would also implement more financial controls to identify and correct overpayments.

The health plan pursues only overpayments that have been verified by outside auditors and not any claims flagged as potential overpayments, according to the state audit. Also, Blue Cross' fraud recovery efforts are "well below industry standards," the audit states, meaning that the health plan recovers only 10 cents for every dollar spent on pursuing overpayments.

Additionally, the plan also pays Blue Cross a portion of money recovered from payment mistakes that the company made, and the plan and Blue Cross haven't worked together to ensure that the state pays a medical claim only after payment has been sought from private insurance or Medicare, according to the audit.

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  • ecualumni1982 Sep 14, 3:54 p.m.

    The state health plans is horrible, the state treasurer made a reasonable reccomendation the other year to have those who smoke or significantly overweight pay higher premiums, which seems fair given the bulk of the health care is being used by these groups. But, nooo everyone fat and who smoked protested and complained, citing age discrimination as if being older = being fat. Now, even those of us who workout everyday have to pay $21 dollars a mouth to cover these Glutons.

  • Grace0107 Sep 14, 1:36 p.m.

    "If Bev would allow other companies to compete with BCBS for coverages like it used to be, you would see BCBS clean up its act."....AMEN to that!!! I don not know why there is no competition for BCBS. Yes, for the first time, stat employees have had to pay, but the amount that you pay to have a member covered, excluding yourself is astronomical!! Just for my husband to be covered and myself (which is only $21.00), it is $598.00/month. The copay for Urgent Care is $78.00....I have a friend whose husband works for a furniture rental company and he only pays $20 copay for and Urgent Care visit. It is an utter shame that the healthcare for state workers has gotten so poor. And the worst part is, they DON'T CARE!!!

  • dontstopnow Sep 14, 12:45 p.m.

    I decided not to even have health insurance and this story about BCBS sure lets me know I decided right. And for those scratching their head, yeah, I would rather die than pay the fees and medical costs out there these days. Believe me, I am dead serious about that fact.

    I use my grandmother's remedies and call it quits. Sure beats the modern medicines that get you hooked 'and make you constantly sit in a doctors office waiting for someone to tell you what you already know. (Did I mention my grandmother was Cherokee Indian? Oh yeah, the native remedies are the best.)

    And besides, I don't like doctors very well anyway so this works out all around. :)

  • chevybelair57sd Sep 14, 11:20 a.m.

    Again no checks and balances, this state is terribly lax in fiscal responsibility, explains why we're in a budget crisis. goodby Bev, you hold no one accountable in your government, this explains the "deer in the headlights" look

  • laniohana Sep 13, 5:50 p.m.

    If the states can't get healthcare costs in check how do you think Obamacare is going to be any better

  • workingforthosethatwont Sep 13, 5:39 p.m.

    I disagree, BCBS has been the best I ever had. The only problem I ever had was a little slow on a payment but paperwork gets backed up sometimes.
    The problem I have is those that are not citizens draining our resources. We could stop that if the liberals didn't want to save the world.

  • iluvnc Sep 13, 5:17 p.m.

    I am a state employee. Four years ago I sent copies of EOB's to my legislators to show them how much the SHP was overpaying compared to the county BCBS plan that my husband had as my secondary coverage, the difference was astounding. I got a letter back from both legislators that said thank you for making us aware......as usual, nothing was done. Whomever is negotiating the rates that the SHP has to pay for each service needs to be fired. How can it be legal for a county BCBS plan to pay less than half the amount for the exact same service? It should be illegal to have different reimbursement rates.

  • are you kidding me Sep 13, 4:04 p.m.

    One payer system now...called medicare...for everyone...rich, middle, poor, congressman, president, everyone...stop this nonsense

  • Ears to the Ground Sep 13, 3:55 p.m.

    Many people are seem to be interperting the article differently from myself. The way I read it for every dollar the state is overcharged, they only ever recover ten cents of it. Meaning that they were originally over charge 49 million dollars but are able to recover 4.9 million dollars and thus are still overcharged about 44 million dollars.

  • djmlibra79 Sep 13, 3:44 p.m.

    "meaning that the health plan recovers only 10 cents for every dollar spent on pursuing overpayments."

    I see this as a problem... Why in the world would you spend a dollar to recover 10 cents??? Seems to me it would me more economical to write off ten cents rather than 90 that was wasted in getting the ten back.... Or perhaps this was just a poorly worded statement that does not adequately convey what was really intended by its author????

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