New York State Health Insurance Program


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NYS Comptroller


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New York State Health Insurance Program
Empire BlueCross BlueShield Coordination of Benefits With Medicare Part A Payments

Issued: November 14, 2012
Link to full audit report 2011-S-31
Link to 90-day response

To determine if Empire BlueCross BlueShield (Empire) made inappropriate payments to hospitals on behalf of Empire Plan (Plan) members who were also eligible for Medicare Part A. The audit covered the period from January through December 2009.

The New York State Health Insurance Program (NYSHIP) provides health coverage to active and retired State, participating local government and school district employees and their dependents. The Department of Civil Service (Civil Service) contracts with Empire to administer the hospitalization portion of the Plan, which includes coverage for inpatient and outpatient hospital services.

Empire processes some claims as Coordination of Benefits (COB), meaning the benefits provided for a member under the Plan are coordinated with the benefits provided for the same member under another health care program. Some claims that Empire processes and pays are coordinated with Medicare. In 2009, Empire paid 957,965 claims totaling over $1.6 billion. Currently, the Empire Plan has nearly 230,000 members who are Medicare eligible.

Key Findings

  • We found Empire generally processed claims correctly when Empire paid as the primary payer for patients with both Empire Plan and Medicare coverage. However, we found Empire paid incorrectly as the primary payer on 13 claims totaling $254,141, when Medicare should have paid as the primary payer.
  • The largest claim payment in question ($55,098) was for a 71 year old member whose employment status was listed as "active." Therefore, Empire paid this claim as the primary payer. However, we followed up on this member and determined that he was "inactive." Consequently, Medicare should have been the primary payer, and Empire was responsible only for the deductible ($1,068). Because Empire was improperly designated as the primary payer, Empire overpaid the claim by $54,030 ($55,098 - $1,068).

Key Recommendations

  • Develop and implement controls to help ensure Empire pays correctly (as the secondary payer) when Medicare should be the primary payer.
  • Periodically confirm with Civil Service the employment status of members who appear to be Medicare-eligible and have active employment status.

Other Related Audits/Reports of Interest

Empire Blue Cross and Blue Shield: Payments for Selected Items to Selected Hospitals (2010-S-74)

State Government Accountability Contact Information:
Audit Director: Brian Mason
Phone: (518) 474-3271; Email:
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236