Focused Claim Audits Deliver Valuable ROI
TFG Partners – Client Results
The client had not audited its health benefits and wanted to better manage its vendors, compare performance amongst administrators, and have data to better meet ERISA and Sarbanes-Oxley regulatory requirements. A 100 percent review was selected because of expectations that it would deliver better accuracy and higher ROI versus traditional sample audits. This particular client has engaged TFG Partners on an on-going basis for three years to audit its two national commercial administrators, and added another smaller commercial administrator serving 5,000 employees starting in 2008.
- Industry: Food Services
- Number of employees (US): Approx. 35,000 (70,000 lives)
- Number of retirees: n/a
- Annual healthcare expenditure/payments reviewed: Over $200 million
- Type of audit: Healthcare
TGF Partners Solution
Initially, TFG Partners conducted a “base audit” covering two years of historic data. Key categories of “likely error claims” were identified and first reviewed on-site with the administrator. One result of the audit was that many unclear or misinterpreted benefit interpretations were identified and could be clarified and fixed as the result of fact-based discussions between the client and the administrator. This cleared the way for future correct administration and prevention of overpayments. Additionally, several areas with adjudication errors were identified for future administrator process improvements, and in some cases recovery, leading to direct refunds from the administrator.
The client is working with the administrator on follow-up meetings based on audit findings and carefully schedules performance reviews to assure that identified and agreed upon fixes are implemented. Several of the performance expectations have become part of the new service agreement, with performance guarantees tied to reasonable standards. One administrator has been provided preferred status based on, among other factors, strong payment accuracy performance, and thus lower overall cost to the client.
The last audit cycle identified over $314,000 of overpayments in the limited on-site sample review, with an additional $700,000 in potential overpayments from claims related to these sample claims.
Quote from a recent administrator report:
“HMO Plan- We have completed our review of the file for the one individual who was identified
as having potential overpayments valued at $106,955.23. We located claims which were overpaid, and initiated our recovery efforts. At this time we have recovered $101,496.45.”