Claims and Dependent Eligibility Audit Combination Achieves Savings
Business Situation
As part of an effort to reduce overall health care costs, this client engaged BMI to conduct an audit of their third-party administrator to validate compliance and an audit of all enrolled dependents to verify eligibility.
Client Profile
Non-Profit Organization
718 Employees Covering 1,414 Dependents
Claims Audit Finding
Reimbursements allowed without submission of proper coding
Incorrect application of copayments
Duplicate payments
Payment for certain procedures above plan limits
$1.4 million in potential future savings by making plan language revisions
Dependent Eligibility Audit Finding
105 dependents (7.43% of total) failed to meet the plan’s definition of an eligible dependent.
Reasons for ineligibility included overage dependents, voluntary removal and unreported divorces.
Audit Outcome
Many issues uncovered through the claims audit were attributed to errors made by a claim processor no longer with the company. The third-party administrator agreed to coach staff, reprocess incorrect claims and initiate recovery of over $140,000 in errant claims payments. As a result of the dependent eligibility audit, the client removed 105 dependents from coverage to achieve an annual savings of $420,000.The initial savings identified above will continue to increase as both the third-party administrator and client now have mechanisms in place to limit further risk of incurring unnecessary health care expenses. Please visit here to learn more about claims audits or here to learn more about dependent eligibility audits.
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