The News Courier in Athens, Alabama

December 2, 2012

Alabama looking to recover $5 million from audit


Associated Press

— MONTGOMERY, Ala. (AP) — Alabama's cash-strapped government could soon have nearly $5 million it wasn't expecting.

A state law enacted in 2011 lets the state government to pursue recovery audits for money overpaid or paid in error to companies that do work for the state. The first claim involving Blue Cross and Blue Shield of Alabama is nearly complete and it has turned up more than $4.8 million that should be repaid to the state, according to the law's sponsor and the state's chief examiner.

The law's sponsor, Senate President Pro Tem Del Marsh, said it's just the start.

"We believe there are tens of millions of taxpayer dollars to be recovered by the state," Marsh, R-Anniston, said.

But Marsh is also upset that none of that money has started flowing in yet.

He got the Legislature to vote unanimously for the bill in 2011 to allow Alabama's chief examiner of public accounts, Ron Jones, to contract with recovery audit firms to get back money overpaid to individuals or companies during the prior three years. Recovery audit firms get a percentage of what they recover. They only get paid if they recover funds.

Jones hired Recovery Audit Specialists of Washington to look at payments by the state government's health insurance programs for state employees and education employees, and it will get 9 percent of what it recovers.

The recovery audit of payments by the State Employees Insurance Board to Blue Cross for covering state employees has moved the fastest and identified money due the state from pharmacy rebates and management fees, Marsh and Jones said in an interview.

Marsh said he's concerned that the State Employees Insurance Board hasn't demanded the money from Blue Cross, particularly with the cost of health care for state workers increasing. "If someone owed me $5 million, I would want my $5 million," he said.

The recovery audit firm is also reviewing payments from the State Employees Insurance Board to Blue Cross for medical insurance coverage, but that is not as far along.

The board's executive director, William Ashmore, said, "We have not received a final report. As soon as we received a final report, we will present it to the board for appropriate action."

Ashmore said he doesn't know when that will occur. "We'd love to get it as soon as possible because we'd like to recover this money for the state," he said.

He said $5 million is a lot of money, but it is less than 1 percent of the $1.5 billion that the board has spent with Blue Cross Blue Shield of Alabama over the three-year period under review.

Blue Cross vice president Koko Mackin said the company has provided all information requested for the pharmacy and medical recovery audits. She said the company has not received a completed audit or request for reimbursement.

"Any discussion of segments of an incomplete audit would be inappropriate at this time," she said Friday.

Jones said the federal government has used recovery audits for years. Some state agencies have also initiated their own recovery audits in the past. But this is the first organized recovery audit process for state government as a whole, he said.

He and Marsh said the audits started with the health care programs for state employees and public school employees because they are such a big expense for the state. The next step, they said, is to look at health care expenses at public universities.