Due Diligence Health Plan Audit Produces Unexpected Results
Business Situation
With mounting pressure from their Internal Audit Department, our client selected BMI to conduct a medical and prescription drug claims audit solely for due diligence purposes confirming their fiduciary responsibilities.
Audit Finding
While on-site, our auditors discovered payment errors on audit samples that included, but were not limited to the following:
Payments for voluntary termination of pregnancy excluded by the plan.
Duplicate payments.
Payments for services inappropriate for the patient’s age.
Disregard for primary payer documentation.
Payment for marriage counseling services excluded by the plan.
Lack of documentation of medical necessity.
Application of incorrect copays to formulary and non-formulary drugs dispensed at retail.
Carrier/Third-Party Administrator Action and Response
The administrator responded to our findings initially by completing a thorough root cause analysis of all errors identified. Next, they began the process to correct individual claims as well as identify opportunities to prevent the same errors from happening in the future. Lastly, the administrator coached the claim benefit specialists on the identified errors, ran financial impact reports and developed an overpayment recovery program for the client.
Financial Error
Total initial overpayments on 33 audit samples amounted to over $45,000 in immediate savings. The client will also receive measurable long-term savings resulting from the corrective actions occurring with our guidance.