Drug Pricing Error: Case Study

Drug Pricing Error Case Study: 

The FBI estimates that between 3% and 10% of all healthcare costs are fraud, waste, or abuse charges, costing healthcare payers up to $300 billion each year. With healthcare margins shrinking every year, that’s a huge drag on the bottom line and an enormous opportunity for immediate impact. 

With an estimated 80% of medical bills containing at least one drug pricing error or other fraud, waste, and abuse charge, internal payment integrity efforts often get bogged down by the sheer volume of discrepant charges. Smart healthcare payer organizations are turning to a payment integrity partner that specializes in preventing overpayments caused by these charges. 

Alaffia Health combines unmatched subject matter expertise with a next-generation AI platform to achieve immediate results for our partner organizations. Alaffia delivers an average savings of 22% in excess of current network rates. How do we do it? Let’s explore one of the many cases where Alaffia made a big impact on their partners’ bottom line. 

The Situation: 

Our cutting-edge AI platform conducted an initial audit of an inpatient hospital claim that contained an unusual pharmacy charge. They flagged it as a potential overbilling case. The AI platform automatically requested supporting documentation from the provider and sent the case to one of Alaffia’s expert payment integrity analysts for review. 

The uniform bill showed 157 units billed under revenue code 0250 (Pharmacy charges) in the amount of $17,419.69. Upon reviewing the itemized bill, the analyst noted several charges for one medication were  billed at a much higher rate of $1398.78 per unit. The remaining charges for the same medication were all billed at $14.94. The analyst determined that the error was likely a clerical issue. . We contacted the provider to discuss the difference in charges. They agreed it was a clerical error, and the charges were adjusted to align with the correct pricing for the medication. 

Our Results:

The initial claim totaled $34442.20, including $17419.69 in pharmacy charges (revenue code 250.)

Alaffia identified overpayments for this claim of: $16606.08.

The new charge amount for revenue code 250 after Alaffia’s review is: $650.07

We reduced the amount of this claim to $17836.12

Alaffia’s AI-driven platform serves as a force multiplier. Our crack team of medical payment integrity analysts can then focus their attention on the claims most likely to contain expensive fraud, waste, and abuse costs. Our fusion of technology and understanding acquires consistent, proven results.

We leverage the force multiplier of AI-driven workflow automation and the expertise of billing, coding, and clinical analysts. This drives extraordinary results like this every single day. Schedule a call and learn how you can put Alaffia’s capabilities to work for you. 


  • Alaffia’s next-gen AI platform identifies claims that potentially contain fraud, waste, and abuse charges other editing programs often overlook. 
  • Alaffia’s analysts relentlessly ferret out errors or improper billing items to prevent overpayments by our partners. 
  • Our best-of-both-worlds fusion of advanced technology and human know-how gets unparalleled results
Alaffia analyst looks at medical drug pricing
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