Client Saved an Estimated $151K
Audit Issue
During our process of selecting audit samples, we identified multiple claimants who were no longer eligible for benefits. During our on-site review of documentation, we confirmed that the date of service for each of our selected samples was later than the termination date provided to us by the Plan Sponsor.
TPA Response
In its written response, the claims administrator stated that it relies on its customers to provide accurate and timely eligibility information.
Audit Finding
Termination dates are commonly reported by the Plan Sponsor on a retroactive basis. In this case, we reviewed claims for 16 terminated participants where the average delay between the date of termination and the date of notification was less than 30 days. Before these terminations could be processed by the administrator, expenses were incurred, claims submitted, and benefits paid. There was no process in place to retroactively identify and recover payments from these ineligible participants.
Financial Error
For the 16 audit samples we reviewed on-site, benefits for terminated participants exceeded $151,000.00. Three of these samples were more than $16,000 each.