Audit Finds Prior Authorization Not Provided Prior to Claims Payment
Audit Issue
The audited health plan required prior authorization for Durable Medical Equipment (DME) charges exceeding a stated amount.
Audit Finding
We used AUDiT iQ to select sample DME claims for on-site review. While on-site at the Administrator’s payment location, we confirmed that prior authorization was not provided prior to processing several large DME claims.
TPA/Carrier Response
The claims administrator acknowledged that its systemic edits were programmed to trigger a prior-authorization request only for specific hard-coded HCPCS DME codes and had not been subject to periodic updating.
Financial Error
The administrator agreed to financial errors amounting to more than $13,500.00 for the three samples we reviewed. They also agreed to thoroughly investigate past claims history to assess the total financial impact of similar errors.