An Endorsement of Health Plan Claim Audits

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Company Medical and Benefit Claims Auditing | TFG Partners

When large employers self-fund their health plans and outsource the claim administration, oversight becomes essential. Medical claims auditing, and a similar review of pharmacy claims, is the best way to double-check. Third-party administrators and pharmacy benefit managers promise low error rates, but are they keeping them? An audit can tell you and often will flag unexpected errors that present opportunities for overpayment recoveries. In the aftermath of the pandemic, plans of all sizes scramble to control costs. Having more precise data about claim expenses always helps.

The news in claim auditing nearly every year is continued technological advances that improve accuracy. As electronic reviews are fine-tuned and become more sophisticated, the reports contain more data and answer more questions. It creates opportunities to use the audit to gain insight in addition to the usual oversight. Independent verification that TPAs and PBMs are meeting their error rate goals is also helpful. Depending on plan size, even tiny rate improvements can add to meaningful savings. Then you can assure stakeholders (company management, members, etc.) the health plan is functioning well.

Given the cost of prescription medications, it's no surprise that considerable emphasis continues on pharmacy claims. It's an entirely different set of criteria for the audit setup but less complicated in some ways. Formularies and provisions of prescription plans can be more concrete in some ways and lend themselves well to claim reviews. If you stop anything that falls outside your plan's provisions, it helps the bottom line immediately—the requirement to always dispense generics when available makes an enormous price difference. PBMs should be on the lookout at all times, also.

How much do claim audits cost? Less than zero in general because they routinely find savings up to four times the price of the service. There are few services you can hire that return money to your bottom line, but claim auditing is one of them. In considering the cost, you also need to look at future savings. Systemic errors that are caught and corrected after audits accrue savings for months and years to come. It's all part of more closely managing your plan and keeping your outside vendors on track. They process thousands of claims, each unique, meaning errors are always possible.

 

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