Health Plan Fiduciary Duty Upheld Through Claims Audit

Business Situation

A not-for-profit health system engaged BMI to audit medical claims paid by their third-party administrator (“TPA”) to demonstrate fiduciary responsibility over the plan’s administration to ensure benefits were being paid appropriately on behalf of plan participants.

Solution

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

  • Analyze 100% of all medical claims paid by the TPA during an 18-month period.

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

  • Identify areas of possible fraud, waste, or abuse and confirm appropriate coordination of benefits.

  • 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

Payments for excluded services such as private duty nursing, cosmetic procedures, and genetic counseling

  • Payments for chiropractic visits beyond the plan’s stated visit limitations

  • Separate payments related to coding procedures that should not be separately reimbursed

  • Payments for claims after the member’s coverage was terminated

Audit Outcome

The TPA agreed to initial overpayment amounts exceeding $50,000 and to run impact studies to identify additional claims affected by the issues discovered through the audit.  The TPA committed to review their processes and conduct additional claims processor training to ensure proper steps are taken to prevent errors occurring in the future.

At the conclusion of the audit, BMI assigned a specialist to walk through a variety of additional recommendations including both short-term and long-term solutions to resolve and prevent future claims processing errors from occurring.

Contact us to learn more about our medical claims audit solutions.

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