Understanding Gag Clause Prohibition Compliance

The Consolidated Appropriations Act of 2021 (CAA) significantly impacts group health plan fiduciaries by eliminating restrictions on data transparency and requiring fiduciaries to monitor their service providers. The Department of Labor (DOL) mandates that plan sponsors ensure plan resources are used correctly, with failure to uphold fiduciary duties leading to severe penalties. This white paper explores the implications of gag clause prohibitions, the importance of claims audits, and how plan sponsors can comply with these regulations to safeguard their fiduciary responsibilities.

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Due Diligence Medical + Pharmacy Claims Audits Reveal Systemic Mistakes

An employer in the manufacturing industry with over 450 employees engaged BMI to audit and verify the accuracy of medical and prescription claims payments. Both the medical and pharmacy claims audits identified errors related to claims processing, including payment for ineligible services and systemic administrative issues. The TPA agreed to overpayment amounts totaling over $70,000 and to run additional impact reports to identify any other claims impacted by the systemic issues uncovered. Follow-up audits are recommended for both areas to monitor progress and minimize financial risk.

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Over $2.2 Million Saved by Removing Ineligible Dependents

A consortium of regional school districts working together to save taxpayer dollars engaged BMI to verify the eligibility of 3,735 total spouses and children on their health plans. Plan eligibility rules contained a “working spouse” provision which meant any of the 1,207 spouses who had other coverage available to them through employment were ineligible.

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Major Savings with Periodic Dependent Verification

This transportation and logistics company periodically engages with BMI for dependent eligibility verification. Their previous audit was completed in 2017 and resulted in 180 dependents removed which equated to $630,000 in annual savings.

This most recent audit included the verification of 1,390 enrolled dependents to ensure there were no changes in eligibility and that all newly enrolled dependents were eligible for benefits.

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