Failure to Apply Appropriate Discounts Cost Employer $65k+

Business Situation

A Fortune 100 manufacturer engaged BMI to audit medical claims paid by their third-party administrator (“TPA”). The primary reason for the audit was to verify the TPA’s accuracy of claims paid on their behalf.

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 12-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-saving recommendations based on the data and audit results.

Audit Findings

  • Procedural failures that missed opportunities to send qualified claims for discounting

  • Duplicate claims payments across multiple claims

  • Payment for services not covered by the plan

  • Failure to identify incorrect coding submitted by providers.

Audit Outcome

The TPA agreed to initial overpayment amounts over $65,000 and to run impact reports to identify additional claims impacted that were not sampled. Additionally, the TPA committed to providing additional claims processor training and feedback to claims adjudication teams. The total cost of overpayments identified during the audit included just under $78,000 within just 245 sampled claims. It is important to note that this amount will grow upon completion of the TPA-provided impact reports.

At the audit’s conclusion, BMI assigned a specialist to walk through a variety of recommendations including additional short and long-term solutions in order to prevent these types of errors and other plan discrepancies from continuing to occur. During this conversation, the customer shared that the report was the best she’s seen in all her years doing audits. She specifically appreciated the layout which was easy to understand and allowed her to easily find issues quickly within the report.

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