There's No Downside to Medical Claim Auditing

Company Medical and Benefit Claims Auditing | TFG Partners

There are few things in a benefit plan manager's arsenal that have no downside, but medical claims auditing is one. Audits are budget neutral or better – it's common for them to flag four times as much in recoverable errors as the price for the service. They also improve member service because claims are paid more evenly, and their reports are helpful to C-suite management. Therefore, it's no wonder that benefit plan sponsors are auditing more often and with ever-improving results. It's a far cry from earlier days when audits were less routine and driven more by regulatory and compliance needs.

Continuous improvements and updates to audit technology have brought about many upgrades. Less staff time is required, and the results are more accurate. Random sample auditing is facing extinction as 100-percent of claims are now reviewed routinely. The accuracy improves substantially, and cost trends are detailed as never before. In situations like the recent coronavirus pandemic, the ability to closely review claim experience means everything. What might have been overlooked or summarized generally can now be explained in greater detail than ever before.

The improvements and cost-containment opportunities have primarily attracted the attention of self-funded plans sponsored by large employers. Corporations and nonprofits paying their employees' medical and pharmacy claims have high costs and need more frequent reviews. As auditors become more adept at finding and flagging irregularities, the opportunities for recoveries and corrections improve. The first 100-percent audit is an eye opener for most plan sponsors, and once the reports are in, it's common to schedule them routinely. It's an excellent management practice.

If you're a plan manager considering auditors, keep their independence in mind. Large generalist firms may offer the capability as one among many in their service offering. If your company already has a relationship with them, you might receive a proactive pitch. But large firms have many allegiances, and when you select a smaller specialist firm, they're only thinking about you. They also likely have more advanced software for clam reviews because they use it daily and keep it fine-tuned. What may sound like a small detail can significantly affect the accuracy of the audit report you receive.


TFG Partners

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