October 3, 2017

Upholding Health Plan Fiduciary Duty through Audit Proves Valuable

Business Situation:

This employer recently underwent an audit by the Department of Labor and wished to conduct a medical claims audit to demonstrate fiduciary oversight of their medical plan.


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

  • Review 100% of all claims paid during a 20 month 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 guidance and assistance post-audit. 

Audit Finding:

  • Failure to deny claims for services and procedures excluded by the plan.
  • Services paid beyond the plan’s stated calendar year visit limits.
  • Incorrect coding and reimbursement practices.

Audit Outcome:

Initial overpayment amounts due to incorrect adjudication on claims examined for the audit totaled $40,000. The administrator immediately began to adjust the incorrect claims and run impact reports to reveal additional financial impact. Post audit, BMI assigned a point person to help facilitate 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 $85,000 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.

Please visit here to learn more about claims audits.