August 2, 2016

Claims Audit Reduces Fiduciary Risk and Future Expenditures

Business Situation:
Faced with potential increased scrutiny of fiduciary responsibility by the Department of Labor, this client engaged BMI to conduct an audit of their self-insured medical plan to demonstrate due diligence.

Utilizing our experienced staff and proprietary AUDiT iQ™ software, BMI set the following objectives:
  • Review 100% of all claims paid during a two year period.
  • Test claims against Summary Plan Descriptions, contracts and eligibility records.
  • Identify and analyze areas of possible fraud, waste, and abuse.
  • Confirm appropriate coordination of benefits.
  • Audit a sample of claims on-site at the third-party administrator’s payment facility.
  • Present detailed findings in addition to specific cost-savings recommendations based on the data and audit results.
  • Provide post-audit guidance and assistance.
Audit Finding:
  • Claims paid without appropriate coordination of benefits where other insurance was primary
  • Payment for non-covered services
  • Duplicate claims, improper coding and modifiers

Audit Outcome:
Initial adjustment amounts due to incorrect adjudication totaled $30,000.  A majority of the errors were attributed to auto adjudication where the processing system should have pended the claim for processor review. A dedicated Post-Audit Support Coordinator was assigned by BMI to coordinate resolution of the issues identified as a result of the audit.


Coinciding with the audit, BMI analyzed plan designs against the claims data resulting in over $250,000 in potential future savings by making suggested plan language revisions. Areas in the analysis contained observations where the plan is silent, lacking limitations or overly broad.