Transcript Auditing self-funded insurance plans

St. Louis ACL User Group
Using ACL to Audit
Self-Funded Insurance Plans
April 14, 2010
Larry Pevnick, CPA
Insurance Practice Leader
314.983.1247 | [email protected]
1050 N. Lindbergh Blvd | St. Louis, Missouri 63132 | 314.983.1200 | www.bswllc.com
Self-Funded Insurance Plans
How it works:

Employer designs plan.

Employer funds risk.

Stop Loss insurance limits risk.
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TPA administers the plan.
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Self-Funded Insurance Plans
Why self-fund?


What are the benefits?

Eliminate taxes on premiums.
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Administrative costs reduced.
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Eliminate carrier profit margin.

Cash held in the company.
What are the risks?
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Self-Funded Insurance Plans
Parties Involved

Third Party Administrator (“TPA”)

Prescription Benefits Manager

Unions

Re-Insurers
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Internal Departments
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Human Resources/Benefits

IT

Finance
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Audit Planning
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Review the plan document
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Understand who does what
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Review the TPA’s SAS70
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Perform a risk assessment
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Audit Areas
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TPA Contract
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Eligibility
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Claims Paid
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Re-insurance
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Cost Reduction Efforts
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ACL Analysis Examples
Audit Area - TPA Contract
Verify performance guarantees were met.
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Example - Turnaround Time (“TAT”) on
claim payments

Calculate the difference between the date paid
and the date received.
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Develop computed field to designate the quarter
processing occurred.
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Use statistics command with filters to calculate
the average TAT per quarter.
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ACL Analysis Examples
Audit Area - Eligibility
Claims Paid are for Eligible Participants

Example – compare files using the JOIN
command to identify unmatched records.

HR Employee master -> Participant listing
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Participant listing -> Claim Payments

Terminated Employees -> Claim Payments
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ACL Analysis Examples
Audit Area – Claim Payments
Potential Drug Abuse

Example – Search for refill violations for
most commonly abused drugs.

Identify most commonly abused drugs.

Join abused drug listing to prescription claims.
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Use filters to search for exceptions to refill
quantities and date limits, specifically using
different pharmacies and/or doctors.
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ACL Analysis Examples
Audit Area – Re-Insurance
Verify Submission of Stop Loss Claims
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Example – Calculate total claims paid per
participant and identify any over deductible.
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Summarize medical claims by participant.
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Summarize RX claims by participant.
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Append files and summarize again by
participant.
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Filter over deductible amount (e.g. > $500,000).
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ACL Analysis Examples
Audit Area – Cost Reduction Efforts
Search for Use of Wellness Incentives

Example – Identify level of claims related to
smoking cessation.

Filter for prescription charges for drugs related
to smoking cessation.

Compare the number of participants using the
smoking cessation benefits to the overall
number of participants and compare to national
statistics on smoking.
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