Value Realized – Periodic Claims Audits Test Administrative Effectiveness
Business Situation
BMI is 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
Using a combination of our proprietary software AUDiT iQ™ to analyze 100% of the claims and the expertise of our audit staff, BMI identified the following errors:
Failure to identify ineligible add-on codes, invalid CPT codes and inappropriate use of modifiers.
Lack of documentation to support medical necessity.
Payment for excluded services such as services related to dependent pregnancy.
Duplicate payments.
Third-Party Administrator Response
The claims administrator agreed to claims payment errors on 26 audit samples across 11 different error categories. They also agreed to run impact reports to help assess the overall financial impact of those errors beyond the 26 samples identified as errors.
Audit Outcome
A credit for the $77,000 in errors was issued to the client immediately along with their commitment to enhance system coding edits to prevent future errors. BMI assigned a Post-Audit Support Coordinator to walk the client through the audit findings and coordinate resolution to the identified errors.
In addition to errors identified and corrected directly through the audit, BMI’s analysis of plan designs and claims data identified an additional $743,000 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.