Industries

A Regional Healthcare Facility

November 11, 2016

THE PROJECT

The client, a full-service, regional healthcare facility (Hospital), requested that AIM perform a baseline claims audit of its claims administrator which had been administering medical claims on behalf of the Hospital’s self-funded employee medical plan for many years. AIM performed a statistically valid, random sample claim audit, supplemented with – at the client’s request – a focused audit of claims involving coordination of benefits.

THE FINDINGS

The AIM claims audit revealed that the claims administrator was meeting the industry benchmark for claims processing accuracy, but fell far short of the industry benchmark for financial accuracy.

In addition, the audit identified numerous serious errors in claims processing, including:

  • There were numerous claims with overpayments (and several claims with underpayments) resulting from the claims administrator’s incorrect administration of the hospital’s own network rates (i.e., domestic claims). Approximately 20% of the domestic claims audited were incorrectly adjudicated. (Note: If the claims administrator is incorrectly adjudicating negotiated rates on this Hospital’s domestic claims, it is likely also incorrectly adjudicating this Hospital’s rates for every other plan it administers.)
  • There were errors found on coordinating benefits correctly for a COBRA participant also eligible for Medicare; the audit determined that more than $180,000 would need to be recovered for the Plan for this issue.
  • The claims administrator made no effort to recover claims paid after a retrospective termination of eligibility, explaining that it had not been instructed to do so by the Hospital.

With regard to coordination of benefits and the Hospital’s specific concerns, the audit determined that the claims administrator appears to be correctly administering coordination of benefits (COB) under the Plan in accordance with the Plan’s COB rule.

THE RESULT

As a result of AIM’s audit of the administrator’s claims processing performance and operational efficiency and effectiveness, a comprehensive quality improvement program was initiated specifically for the Hospital, to address both the claims adjudication failings and the operations inefficiencies. AIM continues to work with the claims administrator to improve the quality of claims administration provided to the Hospital, including follow-up on the recoveries for all overpaid amounts.

For more information contact your AIM representative at 1-866-284-4995.