If You Manage a Self-Funded Health Plan, Audit it Often

on June 30 at 04:15 PM
Years ago, self-funded medical plans relied on random samples when auditing claims, and there was an accepted level of accuracy that was far from perfect. But when technological advances in audit software brought significant improvements, auditing suddenly went from regulatory compliance to a strategic management tool. The leap ahead was the advent of 100-percent claim audits that reviewed every payment. They continue to this day and are improved every year. Today's in-house plan managers have access to oversight data that their predecessors would have never imagined, and it makes a difference.

Human review of the computer-generated data also remains an integral part of facility claims auditing when identifying error patterns. When repetitious mistakes are caught and corrected, it makes a significant contribution to improving plan performance. When costs are controlled and members better served, a plan meets its intended goals. Because health care costs in the United States increase each year substantially, claim auditing is an area that will continue to grow in financial importance. Adding a monitoring service after an audit is also a wise idea to keep costs in line.

Auditing health plans to make them work better requires cross-checking claim payments in a variety of ways. It's also vital to compare against summary plan descriptions to ensure claims are being paid per the plan's design. Because third-party administrators (TPAs) are often large health plans, it's common for them to pay according to their generic system and overlook some unique aspects of each plan. It's not always intentional but works out that way as processing is handled on their systems. Only careful auditing will turn up the discrepancies and help get payments corrected.

Today's auditors and monitoring services have made great strides ahead in data reporting along with greater accuracy. They provide clients with clear and easy-to-read reports that have the information needed for effective plan oversight. The human review that checks the claim payments flagged electronically also makes an essential contribution to the accuracy and the value of the reports provided. It achieves the level of accuracy that makes it possible to understand claims payment activity down to a fine level of detail. Together, these make claims audits today vastly different from a few years ago.

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