Over the past year, two audits have led to dropping 905 spouses and children of school employees who should not have been covered on the East Baton Rouge school system’s medical insurance program, leading to an estimated savings of more than $2.7 million.
Now, the school system is setting its sights on a different group: Employees who are eligible to use Medicare as their primary insurance, but instead are having their main medical bills paid for through the school system’s self-funded group insurance plan administered by Blue Cross Blue Shield.
On Thursday, the School Board hired Mercer, the consulting firm that conducted the first two audits, to conduct two more audits, focusing now on Medicare eligibility verification.
One audit will focus on 480 retirees who are now billing their medical claims to the school system’s group plan, but who may be eligible for either Medicare parts A or B, or both.
Like the two audits of the dependents of school employees, this one will ask for documentation from employees. In the previous two audits, hundreds of employees either did not respond or were unable to provide complete documentation that their spouses and children should be covered on the school system’s group plan. Each dependent dropped from the group plan is saving the school system an estimated $3,000.
The other audit approved Thursday will focus on Blue Cross Blue Shield and how accurate the insurer has been in processing medical claims. To do this, Mercer plans to pull a sample of 200 claims by retirees who are over 65 for an accuracy check. If Mercer finds problems, it may request a more extensive follow-up audit.
In 2005, the school system decided that from then on retirees who were eligible for Medicare would have to use that as their primary insurance.
School officials, however, say they suspect some Medicare-eligible retirees never switched from the school system group insurance to Medicare. This issue, and the potential for savings, became a rallying cry this spring for retirees who wanted the school system to look for other ways to save money rather than shifting retirees to a Medicare Advantage plan.
Sue Gambrell, a retiree, urged the board Thursday to use any money saved in these new audits to lower premiums for retirees.
The first two audits cost $75,000 plus postage. The two new Mercer audits are pricier, $111,000 in fees plus postage and other potential expenses.
Catherine Fletcher, chief business operations officer, told the board that she’s sure the savings will well outstrip the costs.
“I want to recoup as much money as I can,” she said.
The audit of Blue Cross Blue Shield was sparked by a mistake by the insurance giant. In 2011, during a computer conversion, the company ceased sending out reminder letters to East Baton Rouge Parish school retirees to enroll in Medicare if they were eligible to do so.
Mercer discovered in March that these letters were not going out. The school system then demanded Blue Cross correct any claims errors that may have resulted.
“For 2011 to 2013, we want (Blue Cross) to go back and refile those claims. We want to be made whole,” Fletcher said. “We want to be paid for medical care services that we should not have paid for. Medicare should have paid for them.”
Fletcher said Blue Cross has had four months to fix these problems and her patience has run out.
In particular, she wants an up-to-date list of which retirees are Medicare eligible and which ones are not. Fletcher said she needs the list to allow retirees to enroll in the fall in a new Medicare Advantage plan that Humana is providing retirees, something the board approved in May.
“I still do not have a good list on what costs we can recoup, who are those people,” Fletcher said.
Blue Cross spokeswoman Robin Mayhall said Blue Cross and school system representatives have met several times about this issue, including as recently as last week.
“They are aware that we have an internal group working diligently to make any needed corrections,” Mayhall said.
“We are cooperating fully with the school system and any of its representatives, and we will continue to do so.”
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