Due Diligence Claims Audit Uncovers Major Systemic Issues

Business Situation

A large insurance pool of educators consisting of over 10,000 employees contacted BMI to perform an audit of claims paid for by their third-party administrator (“TPA”). The primary reason for the audit was because the TPA moved to a new platform for claims processing and no prior audits were ever conducted.

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 an 18-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

  • Incorrect large claims processing and pricing leading to overpayments

  • Miscalculations of accumulators related to deductible and out-of-pocket maximums

  • Payment for services not covered by the plan

  • Payment for state provided vaccines billed by the provider that should have been at no cost

Audit Outcome

The TPA agreed to initial overpayment amounts over $80,000 and to run impact reports to identify additional claims impacted by the systemic issues uncovered. Additionally, the TPA committed to provide updates to their system configurations to prevent mistakes going forward.

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

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