This client engaged BMI to conduct a claims audit of their self-insured medical plan after suspecting manual and electronic processing errors, payment for excluded services and overall inconsistent adjudication practices by their third-party administrator.
The client and BMI agreed upon the following objectives for an audit:
- Analyze 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.
- Duplicate payments for claims processed both manually and electronically.
- Incorrect pricing when for claims that should have been paid as out of network.
- Failure to establish appropriate medical necessity or prior authorization where required by the plan.
Coinciding with the audit, BMI analyzed plan designs against the claims data resulting in approximately $30,000 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.
Initial adjustment amounts due to incorrect adjudication exceeded $50,000. The third-party administrator immediately began work on system enhancement and implemented new procedures. A dedicated Post-Audit Support Coordinator was assigned by BMI to coordinate resolution of the issues identified as a result of the audit.