July 7, 2014

Following the Claims Dollars Leads to Confirmation of Client’s Suspicions

Audit Issue:    
Our client engaged us to conduct an audit of their medical claims administrated by their third-party administrator.  The client suspected a variety of claims processing errors including incorrect coding, copays, and duplicate claims over the course of a two-year period.

 Audit Finding:

Using a combination of our proprietary software AUDiT iQ™ to review of 100% of all claims paid during the audit period and an on-site visit to the administrator, BMI confirmed the following types of errors: 

  • Laparoscopic procedures billed without required primary procedures
  • In-network co-pays processed as out-of-network co-pays
  • Duplicate payments for same facility services
  • Unbundling (billing components of a service/procedure separately when they should one)

Third-Party Administrator Response:

Directly following the on-site visit, the third-party administrator agreed to the errors without question.  The administrator also agreed to address inadequacies in their claims processing software and internal adjudication policies.
Audit Outcome:
This audit finding identified over $50,000 in claims processing adjudication errors leading to additional ad-hoc reporting to quantify the overall financial impact of the errors.  A credit for the amount of these errors was requested and applied.  A subsequent audit is being planned to ensure compliance with corrective actions.