How Do the Best Claim Audits Work?


Company Medical and Benefit Claims Auditing | TFG Partners

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Medical and prescription medicine costs rise continually, and each year that makes a healthcare claims audit more beneficial. Large employers that self-fund plans have a vested interest in accuracy, and most outsource their claim administration to third parties. Routine oversight is therefore crucial as plan sponsors want a greater comfort level and control over their cash outflows. Many times claim administrators hit their performance guarantees and are in a one to three percent error rate. Audits can flag those mistakes, and the recoverable ones can lead to budgetary gains.

The best healthcare claims audit combines a thorough electronic review with human oversight to produce highly accurate results. Specialist audit firms work in the field daily and update their software to anticipate every new development. They also learn from prior auditing for other plans about where the mistakes most commonly occur and how to find them. Your plan benefits from their expertise, and you can see an audit find savings of up to four times its price. Those are eye-opening statistics for financial managers looking for cost reduction opportunities waiting to be discovered.

Easier to read (and understand) reports also improve the value of the claim audit data. It can inform conversations or negotiations between third-party administrators and sponsors when it is understandable without special knowledge. The performance assurances carefully negotiated into many agreements only count if they are followed. Independent third-party verification by an auditor is one of the best ways to confirm the performance results. Anyone who has worked on plan management understands the need for accuracy. Flagged errors can be investigated for a clearer picture of the results.

Continuously monitoring claim payments using audit software is also a growing trend. It stays on top of issues in real-time and keeps plans better managed. During the coronavirus pandemic, when costs skyrocketed, monitored plans could track their claim payment accuracy more closely with no added effort. The value of it became clear as horror stories came in about overcharges and irregularities in billing for coronavirus hospitalizations and treatments. Auditors play a vital role in health care cost containment and produce data that can be useful for budgeting and negotiations.

 

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