061317wsa Agenda Package9:00 am
9:15 am
9:45 am
10:00 am
10:30 am
Harnett County Board of Commissioners
Work Session
Tuesday, June 13, 2017
Audit Proposal for BCBS Medical Claims, Margie House
Performance Pay Plan Discussion, Brian Haney
County Manager's Report:
June 19 , 2017 Regular Meeting Agenda Review
NCACC 2017 Annual Conference, August 10-12 Durham County
Closed session
Adjourn
Board Meeting
Agenda Item
MEETING DA TE: June f 3, 2017
TO: HARNETT COUNTY BOARD OF COMMISSIONERS
SUBJECT: Audit Proposal for BCBS Medical Claims
REQUESTED BY: Heather D. Pollard, Director, HR and Risk Management
REQUEST:
Requesting BOC's approval to initiate a comprehensive BCBS medical claims audit with
MedReview to verify all Hamett County employee medical claims are being filed and paid
properly.
As we are self-insured, this is an excellent process to ensure BCBS is paying the medical and
pharmacy claims correctly. MedReview can implement immediately and anticipates a
projected audit timeline of three to four months. The findings may warrant a substantial
refund, as was the case with Durham County when the same audit determined they were
owed a six figure refund for incorrectly filed medical and pharmacy claims.
FINANCE OFFICER'S RECOMMENDATION:
COUNTY MANAGER'S RECOMMENDATION:
U:\BOC lte ms\BOC agenda fo rm 6-13-1 7.doc Page I of I
MedReview Medical and Pharmacy Claim
Audits Summary for Harnett County -Med Review
Besi des payroll , the biggest expense an empl oyer has is providing healthcare to their e mployees, ye t with out
conducting periodic audits of their Third Party Administrator (TPA) or Pharmacy Benefit Manager (PBM), they
have no idea if their claims are being paid correctly or if their benefits have been loaded correctly. The Insurance
companies do not pay nearly as much attention to self-insured clients as they do to their fully insured book of
business ...... it's not the Insurance company's money.
MedReview has been conducting audits since 1998. We have conducted audits on most every type of employer
group and have audited all of the large Carriers and PBM' s as well as many of the regional TPA' s. The function
of an audit is to validate the claims administrator processes and to certify that the Plan Document is being
adhered to. An audit will put the TP A/PBM on notice tha t the employer is payi ng attention to how their
claims are being paid.
Below is a brief description of o ur Medical Cl ai m and Pharmacy Claim A ud its .
M edical Claim Audits
Our first step is to conduct a thorough analysis of your plan documents, however your SPD's say that the
claim should be paid, we make sure that it was. Our data analyst and auditors apply the plan documents
against I 00% of the paid claims to choose a sample to be readjudicated onsite to make sure that no claim
was paid that did not meet the plan documents.
We look for COB, 3rd party liability, that deductibles and co-pays were applied correctly, we look for
duplicate payments, we make sure that claims were paid in a timely manner for the discount, that provider
discounts were applied correctly, that pre-certs were obtained and that claims were not paid that were
excl uded from th e plan.
Our audi t is not only conducted on the sample set of claims. For any error type that we fi nd in the sample
that we readj ud icated onsite, we w ill test the e nt ire data set a nd report o n any o ut of sam p le errors fou nd
and the fi na nc ial im pact to the pla n. O ur final report includes recommendati o ns to pla n la ng uage to
ensure that the plan's intenti o ns are be ing adh e red to and are not bei ng overridde n by the Standard
Operating procedures of the Admi ni strator.
MedReview provides post audit support as req uested by our clients and until our client is satisfied.
The ROI on our medical claim audits have a broad range, but averages 200% -300% just on recoveries
alone, not including future improvements. The combined ROI on City of Durham's medical and Rx audit
was close to 400%.
S COPE OF AUD IT
AU DIT S COPE BY CATEGORY
This scope document provides a n overview of MedReview 's approach for each scope category as we ll as
relevant background information.
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HEALTHCARE PLAN ADMINISTRATION-OPERATIONAL/ADMINISTRATIVE REVIEW
A general overview and assessment will be performed in each of the following key areas . Documentation
will be obtained through the use of an extensive Operational/Administrative Review Questionnaire, on-
site evaluations of written policies and procedures as well as on -site interviews with key personnel
managing core competencies.
• Staffing • Systems • Pricing
• Claim Process ing Workflow • Eligibility Maintenance • Provider Maintenance
• Third Party Liability • Adjustment Processing • Performance Standards
• Medical Management
The completed Operational Review Questionnaire will be included in the Final Audit Report which will
provide Harnett Coutny with a broad perspective of performance.
FOCUSED FINANCIAL AUDIT
MedReview will submit a data request to BCBSNC for comprehensive electronic claims and enrollment
extracts and corresponding data dictionaries. After agreement has been reached regarding the file
elements that will be received, the extracts will be ordered .
Upon receipt of the detailed extracts, MedReview will proof and cleanse the data, then confirm control
totals. We will query and test 100 % of the paid claims. Analysis for each potential error or anomaly
category will then be performed. After analytical assessments identify the errors and error sets within
Harnett County's claims population, claims with large dollar errors and sub-sets of claims within systemic
groups of errors are selected for site vi sit review .
Categories of error findings typically include:
• Eligibility (claims paid when coverage was not valid)
• Duplicate Payments (all or a portion of a claim was paid more than once)
• Coordination of Benefits (primary payer incons istency and Medicare COB inaccuracies)
• Subrogation
• Workers Compensation
• Exclusion & Limitations (non -covered services were allowed or Plan limit s not applied)
• Medical Coding (all or part of a claim overpaid due to bundling, unbundling or other anomalies)
• Timely Filing (claims were erroneous ly paid that were received after the claim filing deadline)
• Pricing (claims not priced per the provider contract provisions at key providers or other anomalies)
• Stop Loss Management (specific stop loss claim filing accuracy -if policy information is provided)
Once on-site, MedReview will review source documentation and work with BCBSNC's audit support
staff to validate its accuracy. Hardcopy pricing documentation will also be reviewed. Audit Works heets
will be completed for each sample claim and findings will be presented to BCBSNC.
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After a ll Audit Worksheets have been fi nalized, MedReview w ill send a Draft Audit Report along with
recommendations for c urative actions for all errors to BCB SNC. BCBSNC's responses will be included
in the Audit Report provided to Harnett County.
PROPOSED A UDIT T IMEL INE
• Aud it Implementatio n/Audit Data Gathering -Approximately 30 Days
• Contact and initial call(s) with Harnett County and BCBSNC to start the audit process
• Claim file(s) is requested
• Site Documentation and Operational Review Questionnaire -sent to
BCBSNC for completion with claim file(s) request
• Gathering of audit data from Hamett County and BCBSNC i.e . eligibility files,
Summary of Benefits data, etc ...
• Execution of audit and/or confidentiality agreement (if applicable)
• Sample Selec tion -Approximately 30 Days
• Receipt of clai m file
• Selection processin g
• Selection to B C BS NC
• Schedul ing O n -site audi t date
* Typically, the s ite visit i s schedul ed 60 days followi ng the receipt o f c laim data
• On-site Audit -5 business days -BCBSNC Scheduling limitations may apply
• Finali zation of Audit Findings -15 business days
• Audit Report -Approximately 30 -45 Days
• Draft report prepared and sent to BCBSNC for review and responses
• BCBSNC responses received and included in the final report
• F in al report fina li zed and presented to H amett County
• Fin al report conference call w ith Ha rnett Cou nty
• Post audit sup port as req uested
Pharmac y Audits
O ur pharmacy audi t s audit 100% of the pai d prescripti o n claims. We will check every prescript ion claim
and verify that the correct discount as stated in the contract was provided. We will analyze all dispensing
fees in the claim file to ensure that the client was not overcharged. The days' supply will be reviewed in
both mail order and retail and identify any claims which exceeded the plan's days' supply limitations.
We will estimate the amount of manufacturer rebate money generated by the prescription activity based
on the actual prescription claims processed during the audit period. The client can then compare this
estimate to the amount of rebate money received. We will identify prescriptions for restricted products
that were filled without Prior Authorization or in excess of quantity limits.
T he R OI on o ur pharmacy audit s have a broad range, b u t averages l 00% -200% just o n recoveri es a lone,
not inc ludi n g fu tu re improvements. T he ROI o n North Carolina St ate E mp loyees Credit Uni on pharmacy
audit was well over 400%.
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