Scheduling a medical insurance audit is one of the best ways to review your plan’s performance. Claim auditors look at all aspects of service delivery and payments to give members a clear report on plan health and service. If you only audit periodically, you miss opportunities to make continuous progress in improving performance overall. Significant cash outlays are on the line for large corporate and nonprofit employers self-funding their medical and pharmacy claims. Doublechecking claim payments is a wiser idea because of the never-ending price increases and the impact of events like the COVID-19 pandemic.
Some third-party administrators may side-step audits contractually or by promising low error rates and self-reporting. But even if their performance is strong and the relationship good, it’s always wise to run independent oversight. Claim processing errors can be human or systemic. The systemic ones tend to repeat, and if the audit runs on the same system, it’s not as likely to pick up the mistakes. Specialist auditing firms that do nothing except audit claims have perfected their software to the point it picks up even tiny errors. The level of accuracy is impressive, and you can trust the results.
Auditing claims also requires medical expertise, and auditors with a more financially (tax) focused practice often aren’t as effective as those with health carrier experience. It’s something to ask about when you’re hiring firms, and ensuring you have the optimal expertise helps. Choosing 100-percent claim reviews over random sampling is also a good idea. Anyone who tries to sell the benefits of random samples is out on a limb and common sense (plus years of experience) shows that nothing replaces a complete review. Doublechecking claims is a detail-oriented process, and reviewing each one counts.
Based on other means or past audits, if you know that your plan has specific areas for improvement, bring those up with your auditor. Left alone, they will pick up virtually all errors, but if you want data and reporting in greater detail in certain areas, it’s always wise to ask. Claim auditing firms that work in the field daily bring all their past learning to your project, and you’ll always benefit. It’s also notable how much reporting has improved in recent years. No longer do you need special knowledge to understand auditors’ reports. They’re prepared in language plan managers can read and grasp quickly.
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