Although auditing benefit plan claims sounds like back-office managerial work, it is a front-and-center priority for large employers with self-funded medical plans these days. In the aftermath of the COVID-19 pandemic year, medical bill auditing services are in high demand as plans run oversight. For most plans, 2020 was a year of extraordinary payments that need to be reviewed claim by claim. There have been numerous media reports about stratospheric overcharges for routine services, not to mention changes in utilization rates. It puts the spotlight on claim auditing as never before, and the dollar amounts are high.
Fortunately, the leading benefit plan auditing firms today employ electronic and human review methods vastly more sophisticated than they were even a few years ago. They can flag mistakes and detect fraud-and-abuse patterns with a high degree of accuracy. Much of it is because all of the best firms today review 100-percent of claims rather than the time-worn random sample method. When every claim payment is checked, not only are more errors detected, but also it's more straightforward to recommend system improvements to reduce future errors. It helps plans function at peak accuracy.
These days, executives in the c-suite are held closely accountable for stock prices and at nonprofits for avoiding budgetary overruns. Because the medical claims and pharmacy claims of self-funded plans present significant cost exposures, they can affect quarterly earnings reports and annual budget targets. Highly accurate 100-percent audits and the increasingly popular continuous claim monitoring services are excellent management tools for employer health plans. When there are cost increases, a monitoring service running on audit software can produce real-time explanations and details of claim payments.
Most self-funded plans today contract with third-party administrators (TPAs) to process their claim payments. Most are large health insurance carriers with well-established provider networks and negotiated rates. But nothing replaces close oversight, and it helps when the in-house managers of a self-funded health plan have real-time audit data about claim payments. It's easy for a TPA to go on auto-pilot and overlook some of the nuances of each plan's covered services and agreed-on rates with providers. Audits and real-time monitoring of claim payments reveal any discrepancies immediately.
