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The Importance of Health Plan Claim Audits


Employers sponsor and self-fund health and benefit plans for various reasons, including financial considerations. The costs of these plans can be substantial and vary widely due to external factors, making oversight such as reviewing claim payments in a medical and Rx audit essential. It's the most effective method of scrutinizing expenditures and ensuring that claim payments adhere to the plan's parameters. Over time, claim auditing has evolved from random sampling to examining 100% of claims. Initially considered a compliance function, it has become a crucial tool for plan sponsors. 


The need for oversight has become more critical with outsourcing claim payments and processing to third-party administrators and pharmacy benefit managers, which has removed direct control from the sponsoring company's staff. While this approach offers certain advantages and cost efficiencies, it also creates a need for frequent and thorough auditing. Conducting 100% claim reviews is highly effective in identifying systemic errors that can be rectified and prevented in the future, leading to significant cost savings. Otherwise, plan sponsors are over-relying on processors to self-police.


Many auditors offer proprietary software and can run periodic reviews of monitor claim payments in near real-time. Their work enables sponsors to maintain control and provide meaningful direction to third-party administrators and pharmacy benefit managers. This results in more accurate claim payments, especially important for members enrolled in high deductible coverage. Independent auditing firms specializing in claims are best positioned to deliver precise and outstanding results. They work in the field daily, which keeps them ahead of the curve with new techniques and knowledge. 


Their expertise and dedication to the company's interests make them valuable advocates for the plan. While generalist audit firms may offer similar services, specialized firms have advanced, proprietary software and a deep understanding of the field, requiring minimal time commitment from in-house staff. The value of claim audit services far exceeds the price, and they often find recoverable errors that are several times their cost. They also help achieve fiduciary best practices that are increasingly important. Plans are expected to spend every dollar properly and on behalf of their members as promised.


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