Claims Audit Reveals Over $2.5+ Million Paid Incorrectly

Business Situation

A leading security and facility services company asked BMI to audit medical claims paid by their new third-party administrator (TPA) after discovering situations where claims were paid that should not have been.

Solution

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

  • Analyze 100% of all medical claims paid by the TPA during a 16-month period.

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

  • Audit a sample of 250 claims based on the analysis.

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

Audit Findings

  • Payment errors within 127 samples that the TPA agreed to ($2.5M).

    • Annual limits exceeded for hospital inpatient stays and other services

    • Payment for services not covered by the plan

    • Applicable coinsurance applied incorrectly

  • Opportunity to clarify plan intent across 52 samples ($1.1M). Benefit areas including, but not limited to:

    • Sexual Dysfunction, Penial Prosthesis

    • Genetic Testing

    • Diagnostic Scans

    • Routine Vision

    • Copayments

    • Biofeedback

    • Cardiac Rehab

    • Durable Medical Equipment (DME)

    • Massage Therapy

    • Travel Immunizations

Audit Outcome

The TPA agreed to address overpayments exceeding $2.5 million dollars and conduct impact reports to identify other affected claims due to systemic issues. The TPA placed numerous claims in a recovery process. Some errors were attributed to manual mistakes, while investigations into root causes continue.

At the audit’s conclusion, BMI assigned a specialist to provide recommendations which included  short and long-term solutions to prevent errors and plan discrepancies in the future.

Medical Claims Audit, Healthcare Claims AuditRobert Temples