A Washington, D.C.-based audit company has identified nearly $5 million in potential overpayments or payments made in error that the state made to Blue Cross Blue Shield of Alabama during the past three years.

“They’ve identified $4.8 million they believe we can recover,” Ronald Jones, the state’s chief examiner, said.

The Department of Examiners of Public Accounts signed a contract with Recovery Audit Specialists in 2011 to look into the issue.

Earlier this month, the contract was extended for another year in an effort to recover more money, Jones said.

Jones said the audit involves a drug rebate program for state employees.

The contract was on the agenda of the Contract Review Permanent Legislative Oversight Committee earlier this month. State Sen. Bill Holtzclaw, R-Madison, who chairs the committee, could not be reached for comment.

Recovery Audit Specialists will be paid a portion of the recovered funds, an amount not to exceed 15 percent, according to the contract.

Jones said the potential bad billings are a mistake.

“I think it was an error; that’s how I would initially classify it,” he said.

In response to questions about the audit and possible overbilling, a Blue Cross Blue Shield spokeswoman sent the TimesDaily a statement.

“We are aware of the audit but have not yet received the audit report for review,” Koko Mackin wrote. “We look forward to working with the state in addressing any issues outlined in the audit.”

The contract with Recovery Audit Specialists states the company will review payments made to Blue Cross Blue Shield during budget years 2009, 2010 and 2011.