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December 1, 2015

Value Realized – Periodic Claims Audits Test TPA Effectiveness

Business Situation:
BMI was engaged to audit this client’s medical and prescription drug plans to ensure benefits were being paid appropriately by their third-party administrator and to test their overall administrative effectiveness.

The administrator agreed to pay for the outside audit after the client expressed concern over how certain benefits were being administered.

Audit Finding:

Using the entire claims data files, AUDiT iQ™ ran 107 categories of analytic testing which revealed the following:
  • Payment for dependent pregnancies, vision services, fertility drugs and vaccinations not covered by the plan.
  • Payment for services without appropriate coordination of benefits 
 
Third-Party Administrator Response:
The administrator agreed to the claims payment errors and committed to run impact reports before initiating the recovery process. 
 
Audit Outcome:
Initial financial impact without knowing the results of the administrator’s recovery efforts was calculated at over $60,000.  A Post-Audit Support Coordinator has been assigned by BMI to begin coordinating resolution of the issues identified as a result of the audit. 
 
BMI’s proprietary analysis of plan design using the claims data also identified over $500,000 in additional potential future savings by making suggested plan language revisions.  Areas in the analysis contained observations where the plan was silent, lacking limitations and/or overly broad.