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Independent audit finds low overall claim error rates but flags systemic issues and overpayments across carriers
Summary
CTI presented FY23 claim-administrator audits of Harvard Pilgrim, Mass General Brigham and Tufts, reporting high overall financial accuracy but identifying systemic adjudication errors, duplicate or excluded-service payments and recommended focused carrier remediation, impact reports, and contract language to recover overpayments.
An independent claim-monitoring audit presented to the Group Insurance Commission (GIC) found high overall financial accuracy among the three audited carriers but identified a set of processing errors and systemic issues that the auditor recommended the commission and carriers address.
Marie Pollock, director of audits at CTI, told commissioners the FY23 audit used a statistically valid random sample (200 claims per carrier), a 100% electronic screening of the full claim population and a targeted 150-claim review. The audited period covered services incurred July 1, 2022 through June 30, 2023 (paid through Dec. 31, 2023).
CTI reported the following sample results: Harvard Pilgrim had five payment errors in the random sample — underpayments totaling $189.65 and overpayments totaling $57,758.96 — yielding a 98.74% financial accuracy rate (1.26% error). Mass General Brigham had 19 errors totaling $7,109.37 in overpayments (99.56% accuracy; 0.44% error). Tufts— sample showed six payment errors totaling $43,028.84 in overpayments (98.43% accuracy; 1.57% error).
CTI said some errors were adjudicated automatically (indicating systemic programming or configuration issues) while others were manual examiner errors. The firm also identified duplicate payments, payments for excluded services (for example, abdominoplasty and certain dental/x-ray services), claims paid during global prohibited periods, and patterns the auditors flagged as potentially fraudulent, wasteful or abusive for categories such as cardiovascular genetic testing and certain durable medical equipment.
CTI recommended the GIC meet with each carrier to review findings and implement continuous-quality-improvement follow-up. For systemic errors, CTI urged carriers to run impact reports, adjust affected claims where appropriate, and deliver those reports to the GIC so the magnitude of any issue is clear. CTI also recommended the commission review fees paid to carriers' overpayment-recovery vendors to confirm fees apply only to recoveries that are within GIC's control. Finally, CTI suggested negotiating contract language that would require carriers to "make GIC whole" when claim-processing issues are identified.
During questions, commissioners pressed CTI on what "systemic" meant in practice; CTI said it typically indicates programmatic issues such as benefit or copay misconfiguration that require vendor fixes. CTI added it will provide claims detail to carriers to support overpayment recovery analyses.
The commission took no formal action on the audit results at the meeting but CTI said it will continue post-audit follow-up with GIC and carriers as part of ongoing oversight.
