Mid and large-size corporate and nonprofit employers that sponsor benefits plans have significant financial exposure, especially for health plans and pharmacy benefits. It's why medical claim auditors are crucial partners in the effort to manage plans and costs better. If you're working in-house managing benefits plans, you may wonder about what's covered in a claim audit? The point-by-point answers come up next, but in general, everything that can affect costs and member services. The continuous advancement of audit software followed by expert review of the results will pick up every detail.
The first thing a claim audit does is verify the eligibility of each person for whom service was provided or paid. Then it goes line-by-line and makes sure that all charges meet the plan's contracted rates of fall within reasonable and customary standards. Duplicate charges are common and cause plans to spend money unnecessarily, so they are flagged for recovery. Sophisticated software also can review and reconcile invoices to check their bottom lines and review any administrative fees charged by third-party administrators or pharmacy benefit managers. All of these areas have a substantial opportunity for errors.
Next, a top-quality health and pharmacy claims audit will review cost-sharing with members and make sure it's running accurately. After that, it looks at payments per member versus plan limits and maximums. It adds a level of fairness so that all members are treated equally and in line with the plan's setup. If there are coordination of benefits opportunities, auditing will detect whether or not they have been applied correctly. Lastly, and this is a major one, it will verify whether or not third-party administrators and pharmacy benefit managers are meeting their performance guarantees as promised.
Because today's audits review 100-percent of claims, they achieve a level of accuracy not possible with random sample methods. There also are specialist firms that do nothing except audit claims, and they have immersion in the field and expertise that generalist firms do not. If audit cost is on your mind, ask some questions, and you'll find it's not uncommon for an audit to lead to recoveries that exceed three or four times its price. Depending on the size of your plan, those can add up to large numbers that, for corporations, impact quarterly earnings reports and the bottom line, and audit at least once a year.
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