Health Plans: Audit Every Paid Claim

The methods and technologies used by medical claim auditors have advanced significantly since the days of relying on random sampling. Today, it is common to audit 100% of claims, achieving accuracy levels that were previously unimaginable. This approach aligns with higher expectations for managing substantial cost risks that can impact a company's financial outcomes. The practice of full claim auditing has gained traction since its introduction in the 1990s, thanks to software developments that made it feasible. In fact, anything less than a comprehensive audit today could overlook vital opportunities.

Self-funded medical and benefit plans aim to serve employees while responsibly managing costs. Mid-sized to large corporate employers and some nonprofit agencies typically offer these plans. Large health plans mainly handle claim processing. Initially mandated by ERISA, Sarbanes-Oxley, or state regulations for government plans, audits have evolved to be more frequent and precise, yielding improved outcomes. If you oversee a benefits plan, consider exploring the benefits of 100% audits. In the past, claims processing errors often went undetected until it was too late.

At that time, audits were performed only after problems arose, allowing mistakes to be repeated and compounded, leading to significant issues down the line. The process of rectifying these errors and recovering funds could be extended and burdensome, leaving self-funded plans temporarily financially strained. Today, thanks to more accurate and frequent audits, the financial sense of proactive measures is evident, resulting in better overall performance. When claim costs suddenly surge or exceed planned increases, it is now possible to understand the underlying reasons thanks to audit reports and data.

A growing trend in the claim auditing sector is continuous monitoring. Most auditing firms offer this service, enabling self-funded plans to enhance claims management by analyzing payments in real-time. This approach provides plan managers with essential data, ensuring they are always informed about payment patterns and cost trends. While medical and pharmacy benefit plans face the highest cost risks, similar continuous monitoring can be applied to dental, vision, and various other plans. Effective oversight requires diligent tracking of all outgoing payments to ensure their accuracy.