Benefit Audit Overview

Orion has developed a highly specialized and unique audit approach to address benefits fraud and establish adjudication and provider controls. Orion audits each benefits plan from five different lenses:

  1. Contractual/Compliance Risk Assessment: Technical expertise and familiarity with the complexities within employer sponsored employee benefit plans.
  2. Data Sourcing and Analysis: Within PIPEDA, accessing all data on a transparent basis with full disclosure; Auditing and modelling the data; Selecting sample of claims for further validation.
  3. On-Site or Virtual Audit: Horizontal and vertical audit on full plan member claim data and full claims documentation.
  4. Provider Investigations: Identification and investigation of flagged vendors; Initial data analysis and on-site or virtual audit; Post-audit and employee interview preparation.
  5. Investigative Employee Interviews: Identifying members, strategy of interview process, and resources; Operational risk assessment.

The claims audit process addresses the following:

  • Claims System: Including claims paying processes, internal audit protocol, and fraud/abuse prevention and detection capabilities and resources;
  • Adherence to the Benefits Contract: Identifying misalignments between the claims system and the policy/contract;
  • Claims Adjudication Processes and Error Rate: Through substantive testing of actual claims processed under the plan;
  • Testing Plan Eligibility: Including plan enrolment, record keeping and administrative processes relating to employee and dependent information; and
  • Financial Accounting: Including an audit of paid claims and stop loss claims, expenses, taxes, and HST, as reported in monthly ASO statements.

In the insurance industry, the vast majority of claims processed by insurers are reimbursed on a “good faith” basis. This trust-based system can leave plans at risk for fraud and/or abuse.

 

Extended Health Care Claims

In recent years, Orion has observed an increased prevalence of claims irregularities in the areas of medical services and supplies, with the market for medical supplies largely unregulated.

Some potential areas of risk to employer sponsored benefit plans can include:

  • Generous or unlimited paramedical benefit allowances, such as physiotherapy or massage therapy;
  • Generous or unlimited benefit allowances for durable medical equipment, such as braces or compression stockings;
  • Claimant use of benefits that are not medically necessary;
  • Unscrupulous providers that encourage claimants to utilize more benefits than they may medically require; and
  • Increased use of online claim submission tools, such as web portals and mobile apps, which often do not require any claim documentation for assessment.

Some examples of Extended Health Care fraud and/or abuse include:

  • Personal training billed as physiotherapy services;
  • Use of incentives by providers (such as free shoes) to encourage plan members and their families to use benefits they may otherwise not medically require;
  • Uncovered aesthetic services (such as facials and pedicures) billed as massage therapy or acupuncture treatments; or
  • Claimants utilizing benefits each year to the maximum allowance because they don’t want to lose them as opposed to medically requiring a service or supply item.

Orion Audit can provide plan sponsors with an independent, objective analysis of their employee benefit plan and help to identify areas of potential risk or leakage. Recommendations regarding plan design efficiencies and tightening of controls can help plan sponsors control costs and ensure the longevity of the plan.

 

Prescription Drug Claims

Prescription drug fraud, waste and abuse can have a significant financial and safety impact on benefit plans. Common patterns observed are:

  • Over prescribing/prescribing of unsafe doses and drug combinations;
  • Billing for services not rendered;
  • Claims submitted with inflated drug prices or markup to increase pharmacy profit;
  • Double-doctoring or “doctor shopping” and poly-pharmacy use;
  • Duplicate drugs being submitted and dispensed; and
  • Over utilization and waste.

Orion strives to provide the necessary tools to efficiently mitigate risk and increase your level of assurance by bringing transparency to the claims adjudication process and implementing effective solutions to manage your plan.

 

Pharmacy Benefit Management

Optional services available through an audit:

  • Drug Utilization Reviews (DUR): Tackling over utilization and identifying areas of risk, waste and inefficiency;
  • Plan Performance Review: Cost and trend analysis;
  • Impact of Current Plan Design: Plan design measures are evaluated for their effectiveness, performance and cost containment value; and
  • Optimizing Plan Controls: Determining what measurers are most effective for each unique plan.

 

Dental Claims

Dental plans can be a widely abused benefit, which often goes unnoticed by plan members and plan sponsors. With the complexities of dental services and the corresponding fee guide procedure codes, it takes a skilled auditor with dental experience to identify abusive or irregular claiming patterns.

Common patterns include:

  • Up coding of services: billing for a more complicated/expensive service than was rendered;
  • Misrepresentation of services;
  • Billing for unnecessary services;
  • Billing for services not rendered;
  • Unbundling of services: splitting up a comprehensive procedure code into separate components to increase reimbursement;
  • Misrepresentation of dates of service; and
  • Waiving of copayments and deductibles.