Case Study Summary: Penstock uncovered $400,000 in overpayments for a national health plan after identifying improper reimbursement for an unlisted laboratory procedure code—an error buried in contract language and adjudication rules. Advanced analytics paired with contract and coding expertise revealed the full scope of inappropriate payments and helped prevent future leakage.

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Penstock partnered with a national health plan to investigate unusual, high-dollar payments tied to an unlisted laboratory procedure code—a billing category often used for new or emerging tests.

Under the plan’s provider contract, that code qualified for a $3,000 reimbursement only when paired with a very specific test/diagnosis for prostate cancer. But across hundreds of claims, the provider was receiving the full amount for unrelated unlisted services—simply because the claims processor saw the code, saw the rate, and paid it automatically.

These overpayments were buried deep in contract language and adjudication logic—precisely the kind of gray area where costly errors hide. Penstock’s combination of analytics and deep coding expertise uncovered the pattern, validated it against contract terms, and helped the plan recover hundreds of thousands of dollars in inappropriate payments.

What we did:

• Detected irregularities during chart review related to unlisted laboratory procedure codes
• Used data analytics to identify high-cost claims ($3,000 per test) inconsistent with contracted criteria
• Cross-referenced claims data with provider contract language to confirm scope of error
• Quantified and validated the total overpayment impact
• Provided the plan with clear, contract-supported findings and guidance to prevent recurrence

Results:

$400K

In confirmed recoverable overpayments

Penstock’s auditor-led analysis uncovered a contract misapplication that had gone unnoticed for months. By pairing advanced data mining with expert interpretation of CPT and HCPCS codes, Penstock transformed what appeared to be legitimate payments into verified recoveries.

The engagement not only recouped significant dollars but also strengthened the plan’s claims review process and prevented repeat leakage—proving once again that Penstock’s precision and human oversight deliver measurable financial protection for health plans.

Human-led. Tech-enabled. Auditor-controlled.

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