Special Investigations Unit (SIU)

Audit and Investigation Process

Blue Cross and Blue Shield of Nebraska (BCBSNE) utilizes software, data analytics, medical record reviews and other techniques, including patient and provider interviews and site inspections, to identify fraud, waste and abuse (FWA) and/or overutilization and misutilization on a prepayment and post-payment basis. 

Patient and Provider Interviews  

Patient interviews may be conducted to verify that items and services were provided as billed. BCBSNE staff will identify themselves as BCBSNE employees and present their contact as a routine verification of services or a random provider satisfaction survey. 

Provider interviews may be requested to clarify claims review findings and/or provide education. Provider interviews will be recorded to ensure communication is accurately captured.  

Site Inspections  

Site inspections may be performed as part of a random provider audit or when evidence suggests FWA may exist. BCBSNE will contact the provider in advance to schedule the site inspection. The provider will be notified by certified letter of the mutually agreed-upon date and time, as well as medical records or other information needed to validate billing accuracy and appropriateness. Advance notification of a site inspection may not be provided to the provider in certain circumstances, including if there is a concern of fraud or member harm. 

BCBSNE may coordinate a secure file transfer protocol (SFTP) before the site inspection for electronic records. Paper records will be scanned onsite. BCBSNE will observe the records being pulled or copied to the SFTP to ensure the complete record is provided. BCBSNE reserves the right to request additional records while onsite. 

Any interviews conducted during the site inspection will be recorded to ensure the communication is accurately captured. 

Prepayment/Post-Payment Review

BCBSNE may conduct prepayment and post-payment reviews to monitor and assess the accuracy of diagnosis and procedure coding and determine the medical necessity and appropriateness of items or services provided. 

As part of an SIU prepayment review, BCBSNE reserves the right to require a provider to submit medical records and other documentation supporting billed items and services with the claim. The provider may be required to submit paper claims, medical records and other supporting documentation via mail. Failure to provide the requested information with the claim will result in the claim being returned. 

Claims subject to prepayment and post-payment reviews include, but are not limited to:  

• Professional claims  
• Outpatient claims  
• Inpatient claims  
• Pharmacy claims  
• Dental claims  

Statistical Sampling to Identify Overpayments

A full claims audit or a sample audit may be conducted to identify atypical patterns of utilization or charges and to calculate improper payment amounts. BCBSNE will utilize RAT-STATS, a software package created and used by the U.S. Department of Health and Human Services’ Office of Inspector General, to select a random sample of claims to review. The confidence level of the sample size calculation shall not be less than 90%. BCBSNE may elect to perform a Probe Sample Audit or Statistical Sample Audit. 

Probe Sample Audit  

In a Probe Sample Audit, BCBSNE will select 20-40 of the claims identified via RAT-STATS and request medical records or other supporting documentation. If the requested documentation is not produced, the associated claim(s) will be applied to the error rate used to calculate the improper payment amount. BCBSNE reserves the right to conduct an unannounced onsite audit if records are not timely received. 

The improper payment amount is calculated as follows:  

• Calculate the total dollar overpayment in the probe sample. 
• Divide the total dollar overpayment by the total paid dollars of audited services to determine the error rate. Any underpayments found during the Probe Sample Audit will be subtracted from any overpayments and factored into the calculated error rate. 
• Multiply the error rate by the total paid dollars within the universe to determine the extrapolated overpayment. 
• Multiply the extrapolated overpayment by 80% to determine the settlement offer. 

Upon completion, the SIU will send a settlement offer to the provider for review. The provider has 30 business days to respond to the settlement offer with any objections, or BCBSNE will consider the settlement offer final and pursue repayment.  

Providers can request that a Statistical Sample Audit be performed if they do not wish to settle based on the Probe Sample Audit findings within 30 business days; however, BCBSNE will seek full recoupment of the extrapolated overpayment following the Statistical Sample Audit.  

Statistical Sample Audit

In a Statistical Sample Audit, BCBSNE will request medical records or other supporting documentation for all claims identified via RAT-STATS. If the requested documentation is not produced, the associated claim(s) will be applied to the error rate used to calculate the improper payment amount. BCBSNE reserves the right to conduct an unannounced onsite audit if records are not received. 

The improper payment amount is calculated as follows:  

• Calculate the total dollar overpayment in the statistical sample. 
• Divide the total dollar overpayment by the total paid dollars of audited services to determine the error rate. Any underpayments found during the Statistical Sample Audit will be subtracted from any overpayments and factored into the calculated error rate. 
• Calculate the statistical margin of error using RAT-STATS. 
• Multiply the lower limit error rate by the total paid dollars within the universe to determine the extrapolated overpayment. 

Upon completion, the SIU will send a Demand Letter to the provider for review. The provider has 30 business days to appeal any of the individual claims identified via RAT-STATS, in accordance with the appeal process outlined below, or BCBSNE will consider the overpayment demand final and pursue repayment. Audit and extrapolation methodologies used by BCBSNE are not appealable. 

Providers can request that a full audit be performed if they do not agree with the Statistical Sample Audit findings; however, BCBSNE may hold the provider financially responsible for all costs associated with the increased claim and record review time. Additionally, BCBSNE will adjust all claims that contain errors.