Claims and Dependent Eligibility Audit Combination Exceeds Expectations
Business Situation
As part of a comprehensive risk management program, this client engaged BMI to conduct an audit of their third-party administrator to validate compliance and an audit of all enrolled dependents to verify eligibility.
Client Profile
School District
272 Employees Covering 693 Dependents
Claims Audit Finding
Medicare claims paid as primary when they should have been paid as secondary
Duplicate claims, improper coding and modifiers
Payment for non-covered services and procedures
Incorrect application of copayments
$177,000 in potential future savings by making plan language revisions
Dependent Eligibility Audit Finding
14 dependents (2% of total) failed to confirm eligibility.
Reasons for ineligibility included unreported divorces and voluntary removal.
Audit Outcome
Immediate savings achieved following both audits exceeded $65,000. These savings will continue to increase as both the third-party administrator and client now have mechanisms in place to prevent future losses.As a result of the dependent eligibility audit, the client will ask for more eligibility documentation at the time of hiring and consider quarterly or annual audits of enrolled dependents in the future.Many issues uncovered through the claims audit were attributed to system errors where the claim did not pend for processer intervention. The third-party administrator agreed to correct the issue and increase the type and number of internal quality audits as a prevention.