Coordination of Benefits Error Results in Benefits Overpayment of More Than $200,000
Audit Issue
Benefits were paid on a primary basis rather than a secondary basis.
TPA Response
In its written response, the claims administrator stated that at the time claims were first considered, the data file referenced for eligibility did not indicate the existence of other coverage. They stated that “other coverage info” was later obtained confirming that another plan should have paid benefits on a primary basis. No action was taken by the administrator upon its eventual awareness of other primary coverage.
Audit Finding
The administrator relied solely on the information available to them at the time it paid primary benefits. There was no process to adjust claims payments based on subsequent correction of “other coverage” information.
Financial Error
For four (4) audit samples reviewed on-site to assess the administrator’s effectiveness in administering the plan’s Coordination of Benefits provision, benefits were overpaid by more than $214,000. One claim alone amounted to almost $168,000 of that amount.