Medical Benefit Plan Administrator

We audited $211.6 million of costs billed to TVA by a contractor from January 1, 2006, through December 31, 2007, for the administration of TVA's medical benefit program. Our objective was to determine if the costs billed to TVA were in compliance with the contract terms and conditions. In summary, we found TVA had potentially been overbilled up to an estimated $473,024. The overbilling included (1) $327,513 in potentially duplicate line item charges; (2) $71,518 for unallowable procedures and services; (3) $4,659 for claims that exceeded plan limits; (4) $61,840 of audit recoveries that had not been credited to TVA; and (5) $7,494 of miscalculated claim payments.In addition, we found TVA had been billed an additional $1 million due to payment provisions the contractor had negotiated with some of the providers in its preferred provider organization network. These provisions, referred to as stop-loss provisions, effectively offset discounts TVA would have otherwise received when providers' costs exceeded specified amounts. Summary Only