Managing health and pharmacy benefit plans carefully is a requirement for large employers that self-fund them. The costs are high, and with prices constantly rising, a medical insurance audit is one way to double-check the accuracy of claim payments. Audits today check 100 percent of claims and involve less human participation. Specialist claim auditors with advanced proprietary software have become the leaders in the field, with more advanced each year. For health plan sponsors looking to confirm the reports received from third-party claim administrators and pharmacy benefit managers, they help.
Prominent claim processors, often large health insurance carriers, have proven their value to self-funded plans by bringing their provider networks, negotiated rates, and advanced systems. But even they can miss an overcharge or occasionally make an error. While their service agreements may include self-auditing, only an independent review by an outside audit firm can confirm the accuracy. Oversight is a routine part of the system, and plans using it more often tend to be better managed. It's now common to monitor claim payments continuously with audit software running in the background at all times.
Replacing random samples with 100 percent reviews has improved claim auditing accuracy. It catches repeating error patterns and more minor individual mistakes, often hidden with random sampling. The quality has gone up without corresponding price increases thanks to the advances in software and systems. The arrival of executives with health plan experience, specifically in claim administration, has improved audit firms' capabilities. What started as regulatory and compliance issues has become a valuable management tool for self-funded plans.
One of the most significant opportunities to catch and correct claim processing errors is shortly after the switch to a new processor. Implementation audits after 90 days provide independent verification of processing accuracy and provide data for systemic improvements. There's always a member service benefit to accurate claim processing, and it's also helpful for financial management. Cost containment is an issue for every self-funded medical plan in an unending era of price increases. With the responsibility to spend dollars wisely, every medical and pharmacy benefits plan gains from claim auditing.
