Claims Audit Confirms Employer’s Suspicions of TPA Accuracy

Business Situation

A statewide association of financial institutions engaged BMI to conduct an audit of their member’s medical claims paid by their third-party administrator (“TPA”). The association reported higher than expected costs and claimant activity with suspicion of various claims processing issues. 

Solution

Utilizing our experienced staff and proprietary AUDiT iQ™ software, BMI set the following objectives:

  • Analyze 100% of all medical drug claims paid by the TPA during a 17-month period.

  • Test claims against plan compliance, eligibility and areas of possible fraud, waste, or abuse.

  • Audit a sample of claims based on the analysis.

  • Present detailed findings and specific cost-savings recommendations based on the data and audit results.

Audit Findings

  • Discrepancies between application of plan year vs. calendar year deductibles, causing inaccurate applications towards deductibles.

  • Systemic payments for procedures specifically excluded by the plan

  • Duplicative payments of claims

Audit Outcome

Just over $155,000 in payment errors were identified by BMI during the audit. The TPA agreed to initial overpayment amounts close to $40,000 and will run an impact analysis to uncovered additional financial impact of the systemic errors on claims not reviewed by the audit. The TPA cited manual processor error and incorrect system configuration as the root cause for several of the additional issues identified.

At the audit’s conclusion, BMI assigned a specialist to walk through resolution recommendations including additional short and long-term solutions in order to prevent these types of errors or discrepancies from continuing to occur.

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