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Self-funded corporate medical plans have always been audited routinely to comply with government regulations. Companies are conducting health plan audits more often – and some even monitor claim payments continuously. It's all thanks to the significantly more accurate 100-percent audit methods that are increasingly common today. Plans are serving their employee-members with more accuracy and paying the proper fees for the promised services. Even when claim processors make guarantees about the accuracy, some things fall through the cracks. It's wise to keep an eye on them.

In the early days of self-funded medical plan auditing, the random-sample method was used at most audit firms. It has a lot of drawbacks and was time-consuming for a company's in-house benefits team. But beginning in the 1990s and continuously improved until today, more powerful and accurate software made it possible to review 100-percent of claims. Since their start, 100-percent audits have revolutionized the industry and ushered in a new era of accuracy. The data developed by a review of all claims is concrete and actionable. It is a strategic management tool that helps plan managers.

At every large publicly traded corporation, upper management is under intense pressure to deliver value to shareholders. Large cost exposures like self-funded health plans that are not entirely predictable can affect earnings reports and, by extension, stock prices. Therefore, in-house health plan managers need to closely manage their programs and make sure external claims processors pay claims accurately. The total expenditures tell one part of the story about medical costs, and the audit fills in the blanks about how and why money was spent. Without claim payment data, the plans can go out of control.

When a company audits 100-percent of its claims and ideally monitors continuously, issues are detected early, and it's possible to correct them quickly. When claims are paid without oversight for extended periods, mistakes can multiple, and the dollar amount of problems can become huge. That's when it shows up on the balance sheet as skyrocketing costs without a detailed explanation and becomes a senior management issue. When you're catching and correcting things in real-time, plans are well managed continuously. If costs suddenly jump, there is the ability to take a look and understand why.


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