Common Health Plan Audit Findings
KBM developed the Claim Management Quality Assurance Audit in 1994 to provide our self-insured clients the ability to evaluate the performance of Third Party Administrators (TPA) hired to process their health and/or Workers’ Compensation plan claims. Our Audit differs from a traditional financial audit in that it evaluates the complete administrative process as it relates to the benefit plan. A claim is followed from the time it’s received by the administrator to the time payment or denial is generated.
The Top 10 Health Plan Audit findings from 2016:
- System Programming: The claim processing system simply wasn’t loaded with the correct benefits
- The TPA and the Plan interpreted the benefits differently based on the Plan Document
- Subrogation (third party liability) was not pursued, or another benefit plan was available to pay claims
- The TPA did not apply network discounts accurately, or when appropriate
- Employee eligibility errors
- Public Goods Pool Surcharges (HCRA: NY and MA): The incorrect percent is applied and/or the claim was adjusted but HCRA was not
- Prompt Pay Penalties being applied to the Plan (client) and not the TPA
- Claim edits not identified, or not followed, by the claims processor. This can lead to incorrect payments (duplicate bills, provider bundling errors, and subrogation errors)
- Additional administrative costs charged to the Plan (client)
- Untimely claim processing
Reducing or eliminating these common errors creates savings for the client now and in the future. And, if a TPA isn’t performing up to industry standards, an Audit may result in the need for an RFP for TPA services. KBM Management recommends a Self-Funded client perform an Audit every 2 to 3 years. A Quality Assurance Claim Management Audit can be completed in an 8 – 12 week period.