This month’s Lost Benjamins Award highlights the importance of persistence and perseverance. During the performance of a comprehensive audit for a large, self-insured employer, Healthcare Horizons noted claim charges based on a 22% fee rate that appeared to have no explanatory basis. It initially appeared to be a fee charged by the employer’s third-party administrator (TPA), but it was reported as a medical expense. When discussing our initial findings, the TPA acknowledged it was a fee but could not explain the basis for the fee, although they contended it was an allowable fee. Healthcare Horizons requested that an explanation for the fee be provided along with evidence it was allowed under the employer’s contract. As time passed, we kept the employer informed and continued to monitor the status of the
issue and searched for any similar fees. We also reviewed prior years’ claims for any instances of such a
fee.
Seven Years of Persistence Pays Off
It became apparent that the TPA was unable to readily provide a description of the fee, nor the justification for it. However, the TPA was adamant that it was an appropriate fee under the contract terms. Months and then years passed with the issue unresolved, but the TPA continued to defend its position. Healthcare Horizons continued to audit all claims for any occurrences of the fee, noting several thousand each year among over a billion annually paid medical claims. Finally, after several years passed since the issue was first identified, the TPA acknowledged it could not provide any basis for the charge. At that time, Healthcare Horizons reported that over a seven-year period in which the fees had occurred, the employer was due a refund totaling over $660,000!
This is another example of the fundamental importance for employers to have annual comprehensive audits performed on 100% of medical claims. Even small systemic or repeated errors can add up to many Lost Benjamins- in this instance over 6,600 Benjamins that otherwise would have been lost and never found!