A sudden spike in claim costs gets the attention of medical and pharmacy sponsors, and the coronavirus pandemic was one of those events. Today, health plan auditing services are reviewing what happened for plans that did not have continuous monitoring of claim payments in place. There were many new variables as testing and treatments reached their peaks. Utilization rates were up for nearly all plans, and there were historical costs in areas where many people were hospitalized. The potential for billing errors was through the roof, and claims payment and processing teams were stretched thin.

When situations like these occur, they present unique opportunities to demonstrate the significant value of real-time claim auditing. Without it, plan sponsors are left to accept what was paid with little oversight except for assurances from third-party administrators and pharmacy benefit managers. There is periodic auditing to comply with regulatory requirements, but it is so far after the fact overpayment recoveries are limited and system fixes come too late. It's why well-managed plans audit themselves frequently or continuously and keep tabs on their payments and other service and financial metrics.

While overcharges and overpayment can occur in all areas, there are some common ones that audits are particularly effective at detecting. Two excellent examples are lab testing and imaging. One of the biggest opportunities is to question redundant testing where one test duplicates aspects of another. It happens when members' cases are not well coordinated among providers. TPAs promise to reduce redundancies, but only the proper oversight of a 100-percent claim audit can confirm they are doing it as promised. Physician's fees and anything above reasonable and customary also deserved audit review.

Pharmacy claims present an entirely different set of opportunities for auditing. They need to be checked initially for adherence to the plan formulary. It's also routine for name-brands to be dispensed for medicines where generics are available. The cost-reducing power of generics is only valuable when they are dispensed according to plan documents. Usage pattern reviews are the next item for pharmacy plan auditing. Monthly maximums, frequency of refills, and other things need double-checking. Drug manufacturers provide rebates in some cases, and audits review whether they are being received.