Vigilance is the key to success in almost any endeavor, and medical claim audits are no exception. When an audit-monitoring function is in place as health plan claims are paid (medical and pharmacy), you have a better chance of driving down error rates. It's particularly relevant to large employers self-funding benefit plans and having third-party administrators paying claims. Thanks to today's improved systems, it's notable and impressive that processing error rates have been driven down to the low single digits. However, there are always more savings to be found and member service improvements to make.

Given the hard-won lessons of the coronavirus pandemic, it's easy to see why more oversight and vigilance are essential. With the usual medical inflation combined with general inflation, costs are rising more rapidly than ever. In such an environment, there's an ever-greater need to find savings. There's no way to lower the inflation rate, so the only option is to focus on accuracy and check that negotiated rates are honored every time. When thousands of claims are paid, it's easy for small things to fall through the cracks and add up to more significant sums. Getting it right with the details matters.

The best claim audits do two things: they leverage best practices and zero in on the areas with the most significant potential for mistakes. The second thing is to consider your plan and its provisions uniquely. Large processors work for many plans and have established systems. It's not always a direct match with what your plan covers and can easily lead to oversights. It's also why implementation auditing matters so much. When you switch to a new third-party administrator for medical claims of pharmacy benefit manager, have an auditor check their work after 90 days. You need that oversight.

If you hit your groove with an audit firm and the results work well, stick with them. One of the most enlightening things is to compare year-to-year to see what works better and what does not. Also, when you spot expense trends in their infancy, you can manage with them in mind and avert future million-dollar problems. It's surprising to in-house managers at many employer-funded plans how much may have been missed in the past. When you start having clear information, you recover past errors and head off future ones. When you do, your plan functions better.  


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