One of the most high profile accounting firms in Portland, Moss Adams, has been hired to conduct a medical claims payment review and determine if Regence BlueCross BlueShield is entitled to $10 million for processing claims for the state and federal high risk pools.
The audit is being conducted for two primary reasons, Don Myron, OMIP’s administrator, told board members during a conference call last Friday afternoon.
“It came as a surprise to learn that nearly $10 million of expenses were discovered that Regence was unaware of,” he said. “And we’re trying to discover if there are even more expenses or if there could be credits that haven’t been discovered so we’re taking a closer look at reconciliations and administration of the program.”
Officials from Moss Adams intend to conduct the audit at Regence headquarters, and present their findings to OMIP’s board on Nov. 24 regarding the claims for the federal program.
There’s a very short window to recoup any federal funds that Regence may be owed, and a determination must be made before the end of this calendar year, said Myron, otherwise the state will no longer have access to any federal funds, which could represent half of the money owed to Regence, Myron said. “We are all anxious and want to get through this and have answers really quick.” The state audit is expected to be completed by Feb. 23.
When The Lund Report initially covered this story, we were refused contact with Myron by officials from the Oregon Health Authority
Instead, its spokeswoman, Alissa Robbins, sent us a statement that was co-authored by Regence spokesman Jared Ishkanian. It read: “OMIP and Regence are pleased to have a strong 20-plus year relationship, which includes processing $500 million in claims from 2011-2014 for Oregonians who required care. We are working collaboratively to ensure that the uncompensated funds discovered in the claims run out process are resolved as we conclude this program.”
That earlier statement implied that Regence may have been entitled to those $10 million in funds, but, now, with an audit underway officials will take a more objective look into what really transpired.
Moss Adams will be paid between $80,000 and $95,000 to conduct the audit, and an official contract will be signed shortly.
According to the draft document obtained by The Lund Report, the accounting firm will review 200-225 claims for the state and federal audit, to determine if there have been duplicative payments, and whether the payment shave been based on Medicare-based methodologies, inappropriate billing and correct network discounts. That contract was drafted by two high-level officials at Moss Adams – William Norris, partner and Francis Orejudos, senior manager.
Regence alleges that accounting errors had shorted the company for expenses paid as it administered the program, and, at an earlier OMIP meeting called to discuss the accounting errors, Chairman Robin Richardson indicated he’d like a third-party audit to verify the account transactions. That meeting occurred largely behind closed doors in executive session and was shielded from the public record. LINK WORD – ALLEGES
The high-risk Oregon Medical Insurance Pool ended its run at the end of 2013, but a temporary high-risk pool was extended for three more months through March 2014. Neither pool has been open to any new claims in the last seven months.
Throughout its tenure, Regence acted as the insurance claims administrator for OMIP, which provided medical coverage for people who had been rejected for coverage because of pre-existing medical conditions such as cancer, HIV infection and heart disease. The money to cover their insurance costs came from a complex blend of federal funds, premium taxes charged on Oregon health insurers and the relatively high premiums paid by the people receiving insurance.
Regence never paid any claims out of its own reserves, but would sometimes front expenses from an operating budget until it could be reimbursed from the pool’s general fund.
In her letter to OMIP, Stacy Simpson, a vice president at Cambia Health Solutions, the parent company of Regence, wrote: “The items identified thus far consist of non-routine transactions such as claims adjustments, premium refunds and producer referral fees which were not included on system generated program invoicing reports.”
She added that the discrepancy was discovered when Regence was paying out claims for out-of-state medical expenses and medications and began to run low on operating funds.
Diane can be reached at [email protected].
