Objective

To assess the extent of implementation of the four recommendations included in our initial audit report, Anthem Blue Cross – Coordination of Benefits With Medicare (Report 2023-S-30).

About the Program

The New York State Health Insurance Program (NYSHIP), administered by the Department of Civil Service (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, serving about 1.1 million of the members.

Anthem Blue Cross (Anthem) administers the Hospital Program of the Empire Plan, which includes coverage for inpatient and outpatient services provided by a hospital, skilled nursing facility, or hospice. Many enrollees and their dependents have other insurance coverage in addition to the Empire Plan such as Medicare, the federal health insurance program for people age 65 and older and for those under age 65 with certain disabilities.

Civil Service maintains eligibility and enrollment records for NYSHIP members and provides daily update files of changes to Anthem. The Centers for Medicare & Medicaid Services maintains eligibility and enrollment records for Medicare-enrolled individuals and provides monthly update files to Anthem.

Coordination of benefits is a process health insurance companies use for paying health care claims when people are covered by more than one insurance plan. Medicare typically pays claims as primary for enrollees who are age 65 and older and retired and, in most cases, the Empire Plan pays secondary.

The objective of our initial audit, issued on August 19, 2024, was to determine whether Anthem coordinated benefits to properly pay claims for NYSHIP Empire Plan members with Medicare coverage. The audit covered the period from January 2020 through June 2023. The initial audit reviewed eligibility records for retired members age 65 or older and found that Anthem improperly paid $5,259,416 because benefits were not properly coordinated. For example, Anthem’s eligibility system was not always updated timely with members’ Medicare-related information. Additionally, weaknesses in Anthem’s and Civil Service’s reconciliation of member enrollment data prevented opportunities for recovery.

The objective of our follow-up was to assess the extent of the implementation, as of January 15, 2026, of the four recommendations included in our initial audit report. 

Key Findings

Anthem has made progress in addressing the issues we identified in the initial audit. For example, Anthem has recovered and refunded $1,100,908 in overpayments to New York State and has provided training to examiners on the proper processing of claims for Medicare-primary members. Anthem officials also stated that they are working with Civil Service officials to enhance the current eligibility data reconciliation process. Of the initial report’s four audit recommendations, one was implemented, and three were partially implemented.

Key Recommendation

Anthem officials are requested, but not required, to provide information about any actions planned to address the unresolved issues discussed in this follow-up within 30 days of the report’s issuance.