A health care plan is generally the centerpiece of a company's employee benefits offering and, if self-funded, is a significant cost exposure. As a result, in-house managers watch their third-party claims administrators (TPAs) more closely than ever. Scheduling a healthcare claims audit is one way to double-check that claim payments are going according to the plan. Changes can arise suddenly, and unless mistakes or overcharges are caught quickly, they can multiply into much larger problems. The old system of random-sample audits conducted infrequently was prone to irregularities and surprises.
Health plan claims auditing can, to some extent, trace its origins to government regulations under ERISA and later Sarbanes-Oxley. But as methods and technology improved, self-funded plans quickly saw the potential savings and better management that audits facilitate. Most advanced auditors today check 100-percent of claims and often use the same software for continuous monitoring. Both services are customarily budget neutral or better, meaning the value of the errors caught and recovered generally exceeds the audit price. Also, when executives ask for answers about claims costs, solutions are ready.
Nothing compares to continuous claims payment monitoring as a strategic management tool. Having real-time information about a health plan's costs and payments means everything. When mistakes are caught and corrected, with complete explanations of the sequence of events, it's a revelation compared to waiting a year for an audit. The stock market's expectations for profitability mean that every company needs to manage costs closely. Benefit plans like medical and pharmacy can cause large numbers that hit the balance sheet and affect quarterly earnings reports. Managing them closely is essential.
For anyone who hasn't yet been convinced about the value of continuously monitoring health plan claim payments, the coronavirus pandemic was an eye-opener. By now, everyone has read horror stories about tens of thousands of dollars in overcharges for simple services like testing. Monitored plans picked up and questioned the excessive (and questionable) charges immediately while unmonitored plans were caught flat-footed. There are times when unexpected changes occur quickly, and being prepared with a tightly managed plan always is preferable to the alternative.
