Office of Inspector General audit report on Westinghouse Savannah River Company`s health benefit plan

Westinghouse Savannah River Company (Westinghouse) manages and operates the Savannah River Site, located in Aiken, South Carolina, for the US Department of Energy (Department). Westinghouse was self-insured for health benefits and contracted with Aetna Insurance to administer the plan (service payments to providers) from Calendar Year (CY) 1989 through 1996. Westinghouse`s administrative service contract with Aetna Insurance expired on December 31, 1996. Westinghouse chose Blue Cross/Blue Shield of South Carolina (BC/BS) to administer its health plan, effective January 1, 1997. After the contract was awarded to BC/BS, 47 health care providers in the Aiken area submitted their resignations as preferred providers for BC/BS. The health care providers complained that the fees received from BC/BS were less than they were previously paid through Aetna Insurance. As a result, Westinghouse instructed BC/BS to negotiate a modified fee schedule for all the health care providers in the Aiken area. The audit objective was to determine whether the health benefit costs incurred by Westinghouse under the BC/BS contract were necessary and reasonable