April 10, 2018

Medical Claims Audit Starts Path to Savings & Corrective Actions

Business Situation:

As one of several cost containment initiatives, this client engaged BMI to conduct an audit of their self-insured medical plan in order to verify the accuracy of claims payments made on their behalf.


Utilizing our experienced staff and proprietary AUDiT iQ™ software, BMI set the following objectives:

  • Analyze 100% of all claims paid by the third-party administrator during a 12 month period.
  • Test claims against Summary Plan Descriptions, contracts and eligibility records.
  • Identify areas of possible fraud, waste, and abuse.
  • Confirm appropriate coordination of benefits.
  • Audit a sample of claims at the third-party administrator’s payment facility.
  • Present detailed findings and specific cost-savings recommendations based on the data and audit results.
  • Provide guidance and assistance post-audit.

 Audit Finding:

  • Failure to confirm medical necessity for unlisted and experimental procedures.
  • Duplicate payments for laboratory services and office visits.
  • Failure to establish appropriate coordination of benefits for ER visits.

Audit Outcome:

The third-party administrator agreed to initial overpayment amounts exceeding $37,000 without explanation while disputing other issues.  As a result, BMI assigned a point person directly following the audit to help facilitate reimbursement, begin correction action and resolve remaining issues identified between the client and third-party administrator.

Coinciding with the audit, BMI analyzed plan designs against the claims data resulting in over $300,000 in potential future savings by making suggested plan language revisions to consider going forward. Areas in the analysis contained observations where the plan is silent, lacking limitations or overly broad.

Visit here to learn more about medical claims audits.