For example, a careful review of a BCBSTX ASO contract reveals a common thread we see in most ASO contracts we have reviewed in the past which reads “If you want to audit us, this is the way you will do it.”
Below is an actual audit clause in a TPA’s contract:
“Audit And Correction Of Audit Errors: During the term of this Agreement and within one hundred eighty (180) days after its termination, the Employer or an authorized agent of the Employer (as mutually agreed to by the Claim Administrator and the Employer), may, upon ninety (90) days prior written notice to the Claim Administrator, conduct reasonable audits of the Claim Administrator’s records in regard to Claim Payments made under the Agreement.
Audits performed on a contingency fee basis will not be allowed or supported by the Claim Administrator.
All such audits shall be subject to the Claim Administrator’s external audit policy and procedures, a copy of which shall be furnished to the Employer up0n request to the Claim Administrator.
The Claim Administrator shall be responsible only for the correction of errors identified in specific claim payments subject to the terms and conditions of the Agreement and shall not be responsible for errors calculated to exist in a population of Claim Payments on the basis of a sample drawn from that population. Further, the Claim Administrator has the right to implement reasonable administrative practices in the administration of this Agreement. Minor deviations in claim payments from the provisions of the Agreement as a result of such reasonable administrative practices shall not be considered errors.”
Molly Mulebriar, expert forensic auditor, offers the following comments:
“Translation – You can only audit during the plan year or 180 days after termination with at least 90 days advance written notice. Audits can take a considerable amount of time and this is unreasonable”
“Also, you cannot audit on a contingency fee basis which is the vast majority of audit companies charge in this manner. “
“Also, the audits are subject to the claim administrator’s external audit policy? Basically this is saying if you want to audit us, this is the way you will do it. Basically you can audit this administrator but it will be extremely difficult to fix any audit errors.”
“The City of Lubbock may be in for some surprises here although I hope not. The Risk Manager and support staff are some of the best in Texas.”
City of Lubbock , TX is inviting you to participate in Bid #RFP 11-10144-DT – Self-Insured Health Care Claims Auditing Services.
Please click on the link below or enter the link information into your web browser address bar to view the bid.
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Agency Type: Municipality
Classifications: Click on the link below or enter the link information into your web browser address bar to view matching classifications. http://www.bidsync.com/DPX?ac=dnauccats&auctionid=1747330&supplieroid=1542579&userid=2580499&dncode=96FBB28LAGHLN5LRN8NPQR31NATQBTL
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|Bid Title:||Self-Insured Health Care Claims Auditing Services|
|Bid Number:||RFP 11-10144-DT|
|Bid Starts:||May 6, 2011 2:48:24 PM CDT|
|Bid Ends:||May 26, 2011 3:00:00 PM CDT|
City Hall, 1625 13th Street , Purchasing Conference Room 204, Lubbock, TX 79401
Will begin on May 17, 2011 10:00:00 AM CDT.
Attendance is optional
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