Claims Audits – Immediate and Long-term Cost Reduction Strategy

Business Situation

Our client’s employee benefits consultant engaged us to conduct an audit of their client’s third-party administrator to ensure medical and prescription drug claims were being paid appropriately.

Solution

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

  • Review 100% of all claims paid during a two year period.

  • Test claims against Summary Plan Descriptions, contracts and enrollment records.

  • Identify and analyze areas of possible fraud, waste, and abuse.

  • Confirm appropriate coordination of benefits.

  • Audit a sample of claims on-site at the third-party administrator’s payment facility.

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

  • Provide post-audit guidance and assistance.

Audit Finding

  • Incorrect application of copays and deductibles.

  • Duplicate claims and improper coding.

  • Failure to establish medical necessity for durable medical equipment.

Audit Outcome

Initial reimbursement amounts were calculated at over $23,000. A majority of the errors were attributed to the claims processor no longer assigned to the account. BMI also assigned a dedicated Post-Audit Support Coordinator to walk the client through the findings and coordinate resolution of the issues identified as a result of the audit.

BMI’s analysis of plan designs and claims data also identified over $380,000 in potential future savings by making suggested plan language revisions. Areas in the analysis contained observations where the plan is silent, lacking limitations or overly broad.

Audit Finding of the M..., AUDiT iQ, claims audit, medical and prescripti..., Medical Claims AuditsRandy Light, Founder + Executive Advisor