The Benefits of Testing a Third-Party Administrator’s Effectiveness
Business Situation
After suspecting some claims were being paid in conflict with the plan’s intent, this client engaged BMI to conduct a claims audit of their self-insured medical plan.
Solution
The client and BMI agreed upon the following objectives for an audit:
Analyze 100% of all claims paid during a one year 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.
Audit Finding
Claims billed and paid for new patient visits despite seeing the same physician previously
Payment for non-covered birth control services
Failure to establish appropriate medical necessity for unlisted procedures
Audit Outcome
Initial claims audit adjustment amounts due to incorrect adjudication exceeded $180,000. The third-party administrator attributed many issues to incorrect edit review procedures and plan setup which they committed to correct. A dedicated Post-Audit Support Coordinator was assigned by BMI to coordinate 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 $170,000 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. For more information, please visit http://www.bmiaudit.com