Blue Cross and Blue Shield of Illinois took control this month of hospital auditing for Blue Cross and Blue Shield of Michigan, which continued to be investigated by the U.S. Justice Department.
Michigan Blues executives are waiting for the completion of their own internal audits in an effort to clear up the federal probe into whether the Blues falsified records to protect a 27-year-old contract to act as Michigan's fiscal intermediary (Jan. 3, p. 18).
"There is no format or procedure or structure as to what will be done or how it's going to be done," said Rudolph Difazio, communications director for the Michigan Blues.
If the investigation reveals intentional wrongdoing, Blue Cross could lose the contract to handle Medicare Part A, which is valued at $15 million. Through that contract, Michigan Blues handle Medicare bills from 200 hospitals and 41 skilled-nursing facilities.
The federal government uses audits to measure whether contractors are abiding by the terms of their Medicare contracts. The audits address contractors' abilities to process claims and detect fraud.
The Michigan Blues, the nation's second-largest, handled benefits of $10 billion in 1992, including $4.3 billion in Medicare payments.