Discussions

The recent pandemic highlighted how an unexpected crisis can lead to skyrocketing health care costs. Many large employers with self-funded health plans experienced significant budgetary impacts. In the years after, understanding where the money went became crucial, which is where medical claim and PBM audit services step in as vital resources. Modern auditing firms utilize sophisticated claim audit software that allows them to review 100% of a health plan's claim payments in record time. The best companies also include a human review of any flagged items to ensure accuracy.

During a crisis like the COVID-19 pandemic, there are always people who seek to exploit it. Also, the pandemic created an environment ripe for overcharges and processing errors, particularly as third-party administrators (TPAs) were overwhelmed with increased workloads. The combination led to a perfect storm of financial discrepancies, making thorough auditing the most reliable way to resolve these issues and recover overpayments. For nearly every plan, especially those covering medical and Rx expenses, the cost of an audit is often less than the amount recovered.

It's a straightforward decision when the audit can be budget-neutral or even beneficial, helping improve overall plan performance. Today's auditing methods are significantly more accurate than the outdated random sampling techniques of the past, as they can now analyze every single claim paid. Most of the heavy lifting is done by the auditing firms, requiring minimal effort from in-house plan managers —a particularly valuable feature in departments that have faced downsizing over the years. Moreover, there's no reason for comprehensive audits to be a one-time thing.

Many self-funded plans are now opting for continuous monitoring services, where their claim payments are tracked in real time. It allows for quick identification of mistakes and helps reduce systemic errors in claim processing. TPA procedures may not always align with the specifics of each plan, but audits can highlight these discrepancies, leading to corrections that keep budgets and plan performance aligned. Ultimately, medical claim audits should be viewed not just as a reactive measure, but as management tools that can enhance financial oversight and operational efficiency within self-funded health plans.