Claims Audits – Immediate and Future Cost Reduction Strategy
Business Situation
For close to 10 years BMI has been engaged to audit this client’s medical plans every two years to ensure benefits are being paid appropriately by their third-party administrator and to test their overall administrative effectiveness.
Audit Finding
Of the 62 categories of analytic testing performed in AUDiT iQ™ using the entire claims data file, 54 categories triggered additional manual testing which identified potential errors such as:
Payment for excluded services related to certain behavior disorders and foot care
Lack of documentation to support medical necessity
Failure to conduct appropriate third-party potential liability investigations
Copay overpayments
BMI’s analysis of plan designs and claims data identified an additional $380,000 in potential future savings by making suggested plan language revisions. Areas in the analysis contained observations where the plan is silent, lacking limitations and/or overly broad.
Third-Party Administrator Response
The administrator agreed to claims payment errors including related payments for additional services provide to to the same patient and error type. The administrator disputed errors on additional audit samples, but is continuing to research various issues identified.
Audit Outcome
An initial reimbursement of agreed-to errant payments was issued to the client while BMI’s Post-Audit Support Coordinator began coordinating resolution of the disputed errors between the client and administrator.
The client is also considering making suggested plan language changes identified by BMI to yield additional savings.