The mission of every health plan, including those self-funded by large employers, is to serve members well and provide the care they need. But they are also large and complex financial undertakings that can bring significant financial issues when not closely managed. It's why medical claims auditing is on the front burner, especially since the coronavirus brought a spike in utilization rates. It's the best way for plans to make sure members are well served and costs managed. Auditing firms specializing in claims reviews as their only business have the right expertise. They do it daily and understand the complexities.
Using the COVID-19 pandemic as a case study points out the value of routine auditing. Overcharges and vast variations in rates for some new testing services made headlines. Third-party administrators (TPAs) promise to stay on top of the situation, but only audits and continuous monitoring of claim payments can confirm it's happening. Anyone who has managed a plan understands the value of oversight because TPA's self-reporting is all that exists without it. Expert claim auditors can find savings (errors, overcharges, etc.) with a value of up to four times their charge to conduct an audit.
Large nonprofit employers that self-fund their plans have fixed budgets and can not always draw on the reserves of a profit-making corporation. For them, accuracy in claim payments is a continuing issue, and during the coronavirus, many had budget pressure caused by a reduction in donations. When audits catch and report errors in real-time, they can be stopped before multiplying into larger problems. It's also been shown that TPAs are more conscientious when they know their work is being reviewed. Even in regular times, a monitoring service pays for itself year after year with identified cost savings.
Health plans need and deserve careful management. Members are better served, and the employer's funds are protected. There is little value in carefully writing a plan's rules for covered items if they won't be followed down to the letter. Regulators in the early days of self-funded plans added the periodic audit requirements for a good reason. Since then, it's become clearer why the review of claim payments can happen more often and be to everyone's benefit. Health care and prescription medicine costs continue to skyrocket, and keeping things well managed is crucial. It makes everything work better.