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Claim Audit Service Case Studies

Claim Audit Case Studies

Case Study #1
The Project
The client, a major automotive manufacturer, included performance guarantees in each of its four ASO agreements with three commercial insurance carriers administering medical (HMO, Indemnity and PPO) and dental claims on behalf of the client’s self-funded health plan. The client wishes to determine if the administrators were meeting performance guarantees for financial accuracy, claims processing accuracy and claim payment turnaround time. Trilogy performed a random, statistically valid claim audit of each type of plan administered by the three insurance carriers and measured actual performance against the performance guarantees in the contract to determine if penalties were due the client.
The Findings
The initial audit performed by Trilogy determined that none of the carriers met any of the performance guarantees and that the client was due the maximum penalty of 7% of administrative fees. Trilogy has subsequently performed nine annual performance guarantee audits on behalf of this client and has continuously worked with the carriers to improve the quality of claims administration provided to the client.
Case Study #2
The Project
The client, a large hospital system, wished to determine if its third party administrator’s (TPA) performance met or exceeded industry standards in anticipation of possibly changing administrators. The client also wished to insure the highest level of discount was pursued by the TPA for admissions to facilities other than its own hospitals. Trilogy performed a benefits management operational review, a highly statistically valid random claim audit and a focused claim audit of all out-of-network hospital claims with over $10,000.00 in charges.
The Findings
The operational review performed by Trilogy identified several opportunities to tighten the administration of the plan and reduce costs. The results of the random audit confirmed the TPA was not meeting industry standards in the areas of financial accuracy, claims processing accuracy and claim payment turnaround time. And finally, the focused audit of large dollar claims identified significant overpayments due to the TPA’s failure to properly coordinate benefits with other insurance coverage, failure to pursue or correctly apply discounts, and failure to apply the limitations and exclusions of the plan.
Case Study #3
The Project
The client, a large commercial carrier, wished to ensure that an organization to which it subcontracted administration of a block of small group PPO business, was meeting or exceeding industry standards for claims processing quality. Trilogy was retained to perform an operational review and a statistically valid claim audit.
The Findings
The review performed by Trilogy confirmed the organization’s performance was below industry standard in the areas of financial accuracy, claims processing accuracy and claim payment turnaround time. Furthermore, Trilogy found the pre-existing limitation of the client’s policy was not being applied and claims were frequently repriced incorrectly. The carrier eventually changed the administrator for this block of business.
Case Study #4
The Project
The client, a large self-funded paper manufacturer, wished to determine the cause of its rapidly escalating claims costs and suspected the TPA’s poor performance may have been a factor. Trilogy was retained to perform a statistically valid claim audit as well as a claim audit of all claims over $5,000.00, with the exception of claims reimbursed under the client’s excess loss policy.
The Findings
Trilogy determined that although the TPA’s system was not highly automated, due to a high level of customer service commitment, the client’s claims were being accurately processed. The TPA exceeded industry standards in the areas of financial accuracy, claims processing accuracy and claim payment turnaround time. Further analysis of the focused claim audit findings indicated the increase in claims costs were related to the aging of the client’s employee population as well as high utilization of network facilities which did not offer the highest level of discounts.
Case Study #5
The Project
The client, a large Midwest manufacturing firm, requested Trilogy perform an annual baseline claims audit to assess the performance of its administrator. The client also requested Trilogy perform a focused audit of several claim types to determine if the administrator’s system had been updated to reflect recent plan changes.
The Findings
Trilogy’s audit of a statistically valid random sample of claims confirmed the administrator did not meet industry standards in the areas of financial accuracy and claims processing accuracy. Claim payment turnaround time exceeded the industry standard. The audit identified that the system was not correctly recalculating deductible and coinsurance accumulation subsequent to adjustments, the administrator was not applying commonly accepted NAIC rules regarding calculation of benefits secondary to other insurance, and precertification for outpatient surgery was not performed as required by the plan. Each of these issues increased claims expenses to the client. Findings from Trilogy’s focused audit indicated that recent plan changes had also not been programmed by the administrator and claims were not being administered in accordance with the client’s revised summary plan document.
Case Study #6
The Project
The client, a large manufacturing firm, requested Trilogy perform a baseline claims audit of its administrator, a commercial insurance carrier administering medical claims on behalf of the client's self-funded health plan. Trilogy performed an operational review, a statistically valid random claim audit and a focused audit of large dollar claim payments.
The Findings
Trilogy's statistically valid random audit confirmed the administrator exceeded industry standards and its performance guarantee in the areas of financial accuracy and claim processing accuracy, but fell below industry standard and its performance guarantee for claim payment turnaround time. The audit identified that the claim system was programmed to incorrectly calculate out-of-pocket maximums and was incorrectly applying emergency room copayments. In addition, it was determined that diagnostic services were not being paid according to the plan's benefits.
Case Study #7
The Project
The client, a large midwest manufacturing firm, requested Trilogy perform a baseline claims audit of its administrator, a commercial insurance carrier administering medical claims on behalf of the client's self-funded retiree health plan. Trilogy performed an operational review, a statistically valid random claim audit and a focused audit of large dollar claim payments.
The Findings
Trilogy's statistically valid random audit confirmed that the administrator was not meeting industry standards in the areas of financial accuracy and claim processing accuracy. Claim payment turnaround time exceeded the industry standard. The audit identified that the administrator was not adhering to the plan's language regarding coordination of benefits with Medicare, resulting in increased claims cost to the client.
Case Study #8
The Project
The client, a nationwide automotive part supplier, requested Trilogy perform a claims audit of its administrator, a commercial insurance carrier administering medical claims on behalf of the client's self-funded health plan. Trilogy performed an operational review, statistically valid random claim audit and a focused audit of large dollar claim payments.
The Findings
Trilogy's statistically valid random audit confirmed the administrator was far below industry standards in the areas of financial accuracy and claim processing accuracy, but met industry standard for claim payment turnaround time. The audit identified that the plan's pre-existing limitation and necessary investigations were not being properly administered, resulting in increased claim costs to the client. In addition, the system was incorrectly applying emergency room copayments and was incorrectly pricing anesthesia claims.
Case Study #9
The Project
The client, a large school district, requested Trilogy perform an annual claims audit of its administrator, a commercial insurance carrier administering medical claims on behalf of the client's self-funded health plan. Trilogy performed an operational review, a statistically valid random claim audit, a focused audit of large dollar claim payments and a focused audit of overpayments.
The Findings
Trilogy's statistically valid random audit confirmed the administrator exceeded industry standards in the areas of financial accuracy, claim processing accuracy and turnaround time. The audit identified that the claim system was programmed to incorrectly calculate the benefit for preventive colonoscopies. In addition, it was determined that conditions which may be pre-existing were not included in the carrier's list of conditions to investigate for pre-existing condition exclusions.
Case Study #10
The Project
The client, a self-funded union health and welfare plan, requested Trilogy perform a baseline claims audit to assess the performance of its third-party administrator. Trilogy performed an operational review, a statistically valid random claim audit and a focused audit of dental and vision claim payments.
The Findings
Trilogy's statistically valid random audit confirmed that the administrator was not meeting industry standards in the areas of financial accuracy and claim processing accuracy. The audit identified that the administrator's system was not programmed to adjudicate according to the plan amendment to track coinsurance for mental health/chemical dependency and to exclude infertility, resulting in increased claims cost to the client.
Case Study #11
The Project
The client, a non-profit consumer operated and oriented health plan established through the Affordable Care Act, requested Trilogy perform a claims administration review and medical claim audit of its healthcare claims administrator. Trilogy performed an operational review, a statistically valid random claim audit and focused audits of large dollar claim payments, outpatient and ambulatory surgery facility claims, and professional claims.
The Findings
Trilogy's statistically valid random audit confirmed the administrator fell below industry standards in the areas of financial accuracy and claim processing accuracy. The audit confirmed that the administrator met industry standards for turnaround time. The operational review provided recommendations related to staff training, the structure and standards of the quality assurance program, the administrator's standard procedure for the recovery of overpaid claims and the administrator's procedure for the investigation of potential coordination of benefits. The claims audit identified issues related to the application of copayments, the payment of laboratory expenses, the payment of observation room expenses, the application of repricing amounts, the calculation of the allowance for anesthesia services and the payment of routine wellness expenses.