When employers self-fund their employees' medical and pharmacy benefit plans, controlling cost increases becomes a significant challenge. That's why hiring healthcare auditing companies is crucial for plan sponsors. Claim auditing is essential for reviewing expenses, identifying errors, recovering overpayments, and ensuring fair treatment for all members. The first step is to audit a plan year and assess the findings, which often leads to audits of other years and the possibility of setting up continuous monitoring. Audits and monitoring establish important plan sponsor oversight.
Audint 100% of claim payments is optimal for achieving a high level of accuracy and helps in the early detection of overpayments. It also contributes to improving the system to prevent similar mistakes in the future. Claim payment oversight can yield up to four times the cost of an audit in recovered overpayments. Given the significant cost exposure of medical and pharmacy plans, auditing has transitioned from a regulatory compliance matter to a strategic management tool. Therefore, most plan sponsors now schedule audits with increasing frequency, as they have seen the wisdom in doing so.
The details of each plan description and the overwhelming complexity of medical expenses contribute to the risk of errors in claim payments. Since large third-party administrators handle most processing, defaults overriding your plan's unique rules are highly likely. As a result, auditors diligently set up their systems to identify inaccurate payments based on each plan's nuances. Even when third-party administrators (TPAs) or pharmacy benefit managers (PBMs) include performance guarantees, only oversight from an independent third party can confirm whether those guarantees are being met.
Independent claim auditors, especially the leading firms with proprietary software and highly accurate systems, are the best option. When these auditors include a human review and electronic audits, the accuracy levels further improve. If you oversee third-party administrators and pharmacy benefit managers, you'll be impressed by the clear audit reports available today. These reports help fulfill fiduciary responsibilities and serve as excellent cost management tools. Implementing the same audit software for continuous monitoring in the background can help identify emerging cost trends.