Honey is that really you? Dependent verification arrives in force

The Wall Street Journal’s Health Blog asks (Is Your Spouse Really Your Spouse? A Dependent Audit Wants to Know). Companies that offer benefits to their employees and dependents don’t want to pay health care costs for husbands and wives who aren’t the real thing. So they hire companies to check up on people to make sure they’re legit.

I haven’t experienced this particular kind of checking myself (perhaps because I own my own business) but it seems like just about every time a dependent or I have a claim we get a letter from some kind of auditor working for Blue Cross Blue Shield of MA wanting to make sure the charge is appropriate. Usually the instruction is to call a “recovery service” –typically done via interactive voice response– and answer some questions.

It’s kind of annoying and time consuming so I usually blow it off. Typically that results in another letter or two and then they give up. Maybe if I cost them more or triggered more doubts they wouldn’t give up so easily.

On average these interventions probably reduce costs to the insurance company or employer, otherwise they wouldn’t be sustained. Still, the spouse example shows pretty clearly a cost of having a patchwork of insurance plans rather than universal coverage with a single payer. In a single payer system it really doesn’t matter who’s married to whom or whether kids have aged out of their parents’ coverage, since everyone is in the system.

These kinds of checks are particularly onerous for people who are sick –just the ones who don’t have the strength to wade through all the requests or demands.

July 21, 2010

2 thoughts on “Honey is that really you? Dependent verification arrives in force”

  1. I suspect you’ll see a LOT more of this. I’ve already had several group clients “audited” on this; usually, I see maybe one every couple of years. Now, almost every one of my groups is getting “the letter.”

    I suspect a lot of this is the 26-year-old kiddie provision, but a lot is also being driven by carriers really pushing employers to trim back dependent coverage.

  2. Single payor doesn’t mean single premium. Unless you have a 100% tax funded system with no contribution you are still going to worry about accurate enrollment. For example most family plans don’t distinguish between 2 or more dependents. Becuase of that improperly keeping a dependent on, that should be paying single premium on their own, defrauds the system of revenue. An Ex wife who should be paying her own premium or additional taxes is another example of what audits catch.

    the 26 year old kiddie provision acurtaly reduced the need for audits as the largest single group of ineligibile active members were kids claiming to be in school that weren’t.

    We are being engaged by the employers wanting to trim their own dependent rolls to reduce cost. Better to eliminate ineligibile dependents then cut benfits.

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