Objective

To determine whether Anthem Blue Cross (Anthem) effectively administered the recovery process and remitted all recoveries that the Department of Civil Service (Civil Service) was entitled to. The audit covered the period from January 2019 through May 2024. Additionally, we expanded our audit scope to January 2018 for claims impacted by contract recovery time frame limits.

About the Program

The New York State Health Insurance Program (NYSHIP), administered by Civil Service, is one of the nation’s largest public sector health insurance programs. NYSHIP covers about 1.2 million active and retired State, participating local government, and school district employees, and their dependents. The Empire Plan is the primary health benefits plan for NYSHIP, covering over 1 million members.

Civil Service contracts with Anthem to administer the Empire Plan’s Hospital Program, which includes coverage for inpatient and outpatient services provided by a hospital, skilled nursing facility, or hospice. In addition to processing and paying hospital claims for Empire Plan members, Anthem is responsible for standard claim recovery services under its contract with Civil Service. Typically, claim recovery services include reviewing claims for potential errors, including overpayments, and taking corrective action.

Key Findings

Our audit found that Anthem is not effectively administering the recovery process and is not remitting all recoveries that Civil Service is entitled to. During the audit period, Anthem either failed to recover or remit over $19.3 million in hospital claim overpayments to Civil Service. We found that Anthem used incorrect time frames to determine the recoverability of about $15.1 million in overpayments it identified, and was unable to accurately track collections and remittances through its recovery process for another $4.2 million. As a result of our audit, Anthem remitted $7.3 million in the overpayments we identified to Civil Service; however, nearly $12 million still needed to be either reviewed or remitted. We also found that Anthem’s contract negotiations with hospitals limited its ability to fully review $55.8 million in claim payments where Anthem initially identified that a portion of the payment had been made incorrectly.

Key Recommendations

• Review the $12 million in overpayments, make recoveries, and remit them to Civil Service as appropriate.
• When negotiating contracts with hospitals, evaluate the financial impact of extending recoverability time frames and ensure key policy terms are included to further enhance Anthem’s ability to recover overpayments.