Claims Adjudication Inspection Proves to be Invaluable
Audit Issue
Our client engaged us to conduct an audit of their medical and pharmacy claims administrated by their third-party administrator. The client felt unhappy with the way claims were being administered and wanted us to “inspect things under the hood”.
Audit Finding
Using a combination of our proprietary software AUDiT iQ™ to review of 100% of all claims paid during the audit period, our auditor’s expertise to choose sample selections and an on-site visit to the administrator, BMI confirmed the following types of errors:
Payment for Separate anesthesia charges for surgical procedures without clinical indication.
Payment for substance abuse hospitalization without medical necessity as required by the plan.
Payment for drugs requiring prior authorization which was not obtained.
Payment for additional 60-day supplies of drugs when the plan excludes more than a 30-day supply.
Third-Party Administrator Response
The third-party administrator agreed to the 33 payment errors identified on the medical claims audit and 41 payment errors on the pharmacy audit without question.
Audit Outcome
This audit finding identified over $123,000 in claims processing adjudication errors leading to additional ad-hoc reporting to quantify the overall financial impact of the errors. The client is currently reaching a settlement for compensation and reimbursement.
In addition to the errors identified through the audit, BMI’s analysis of plan designs and claims data identified an additional $128,000 in potential future savings by making plan suggested language revisions.
This client realized an unexpected direct and indirect ROI of over 300%.