TFG Partners, LLC
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The Power Oversight Potential of Claim Audits
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The Power Oversight Potential of Claim Audits
When a third party pays millions of dollars on behalf of another entity, careful oversight is essential. Therefore, examining the relationship between an employer-funded health plan and its claims processor is essential. Medical claim auditors play a critical role in verifying the accuracy of payments. Even with low error rates, the financial stakes can be substantial. The primary function of these auditors is to identify errors and highlight potentially recoverable overpayments, which can present significant opportunities for cost containment. It also lets claims administrators know you have effective oversight.
These audit firms also typically evaluate prescription plan claims, offering their own oversight benefits. Some of these opportunities are straightforward, such as monitoring excessive early refills, while others involve identifying missed discounts and off-formulary brand-name medications. Conducting thorough reviews with effective methods can ensure that 100% of medical and pharmacy claims are checked, yielding impressive outcomes. Following best auditing practices involves scrutinizing every detail, and well-executed claims reviews can achieve this. Audits benefit most self-funded plans significantly.
Since the early days of claim auditing, which relied on random sampling and was less efficient, specialized firms have made great strides. Those that developed comprehensive systems capable of reviewing all claims have had the most profound effect. Other firms have adopted these improved methods, although results can differ based on the accuracy of the proprietary software used. Implementation audits, which occur after plans transition to new third-party administrators or pharmacy benefit managers, are particularly crucial. It’s wisest to catch mistakes early and fix them.
Regardless of how meticulous the setup is, the accuracy must be validated. Many service agreements with claims processors include guarantees for accuracy and provisions for self-reporting results. While these provisions are well-meaning, only an independent external audit can confirm adherence to these promises. Relying solely on self-reporting overlooks an important aspect: it uses the same systems that may have produced the original errors. When an auditor’s software reviews a claims payment system, it functions as a separate system checking another, adding an essential layer of verification.
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