Forensic accounting investigation: Compliance with state health insurance regulations

Publicly traded health insurer

Client Challenge
Alleged regulatory noncompliance

Services provided Team of forensic accountants perform investigations
THE CHALLENGE Our client, a publicly traded insurance company providing casualty, accident and health insurance to its customers, received several inquiries from state insurance department regulators concerning the denial of certain line items on claims submitted for payment by providers of medical treatment. The inquiry outlined complaints from multiple health care providers, which were denied payment for services performed where a particular modifier was appended. As a result, our client launched a privileged internal investigation into the use of the modifier, as well as the allegations stated in the regulatory inquiry.  

WHAT THE TEAM DID Grant Thornton LLP was engaged by the company to provide forensic investigative services in this matter, specifically to conduct interviews, regulatory compliance assessments, and transaction testing to determine the root cause of the complaint and validity of the allegations. In doing so, we were asked to provide forensic accounting and advisory services and offer our findings, conclusions and recommendations as a result of the tasks we were engaged to perform.

Grant Thornton’s forensic accountants worked with the company’s special investigative unit that assisted with the investigation. Using forensic techniques, including interviews, data analytics and testing to perform both qualitative and quantitative analysis, we investigated the medical management and cost containment units. We learned during the investigation that as part of a cost savings initiative, the modifier project revised the company’s protocols for addressing medical bills when this modifier was added to the current procedural terminology (CPT) treatment codes.  

OUTCOME The investigation established that for a period of time, as a result of the modifier project, the medical management and cost containment unit routinely denied the portion of every bill that included certain modifiers, regardless of whether the provider submitted documentation to support the use of this modifier. As a result of our investigation, the company utilized our recommendations to put controls in place to mitigate the risk, make certain payments where the use for the modifier was appropriate and respond to regulators outlining plans for remediation.

CONTACT Frederick J. Kohm Jr.
Partner; Practice Leader
Forensic, Investigative and Dispute Services
T +1 215 376 6040