Trust, but Verify Through BMI’s Implementation Audits
Audit Issue
Our client was changing administrators at the beginning of the year and wanted to make sure their system was set up to correctly pay before actual claims were paid.
Audit Finding
Of 56 unique categories that we tested, 27 were found to be compliant with the client’s plan design and/or generally accepted payment guidelines. 19 test categories contained errors such as:
B12 injections would have been paid despite being excluded by the plan.
Acne surgery would have been paid at 100% and not considered cosmetic.
Genetic testing would have been paid when it should have been denied.
Growth hormones were correctly denied, but the TPA would have paid for administration of the injection.
Certain foot care procedures excluded by the plan were coded to be denied if performed by a podiatrist, but paid if performed by any other physician.
Third-Party Administrator Response
The administrator agreed to findings in our report and agreed to make the appropriate changes to their system prior to paying actual claims, thus minimizing any potential plan losses and employee dissatisfaction with the new administrator.
Frequently Asked Questions About Pre-Implementation Audits
What is a Pre-Implementation Audit?
After administrators program their claims paying system around each employer’s plan language, they perform a pre-implementation audit to ensure the system is correctly paying test claims before paying actual claims. BMI can be an independent third party auditor that will perform its own testing of the administrator’s system setup.
When is a good time for a Pre-Implementation Audit?
If an employer has changed administrators or has implemented many changes for a new plan year, the timing is right. Please note, most administrators require 2-4 months notice before the new plan year is to go into effect.