Self-Funded Medical Plans Can Work Better

on August 28 at 05:00 PM
When a large employer, whether corporate or nonprofit, makes the wise decision to self-fund a medical plan, some responsibilities accompany the benefits. One of them is ensuring the accuracy of claim payments, and medical bill auditing services are one of the best ways to do it. There was a time when many large plans had in-house staff to pay their claims. But by today, most have outsourced the function to third-party administrators (TPAs) that are customarily large health plans. The TPAs often have attractive provider networks and lower negotiated rates for services that are beneficial.

While TPAs can bring improvements in many ways, their people and systems may work more according to their coverage description than the unique one of your self-funded plan. It why auditing has gained popularity as both an oversight and coordination opportunity. The only way to understand how well a plan is operating is to check its claim payments. Now that audit software can quickly review 100-percent of claim payments, and in-house plan managers can understand the actual experience. It's also easy to flag error patterns and help detect fraud and abuse. All of these quickly improve a plan's performance.

While much of auditing and tighter plan management is about cost savings, it is also mindful of improving service to members. Dollars spent are intended to provide excellent medical care, and when claims are paid accurately, and overpayments stopped, it benefits members in the long run. A poorly managed plan with out-of-control costs often makes cutbacks reactively, reducing the care or making it more difficult to obtain. But when a plan is functioning well, and its resources are being wisely spent, fewer limits and reductions are needed in most cases. Auditing's goal is to improve performance.

When it goes a step beyond health plan claims, auditing also can bring quick improvements to pharmacy benefit plans. For example, it's common for more expensive brand-name medications to be prescribed and filled when lower-price generics are available. When an audit catches and flags improver name-brand dispensing, which often happens in a pattern or repeatedly, it can save thousands of dollars in a single operation. If you manage a self-funded plan and have not yet begun sophisticated auditing, you owe it to yourself and your plan to find out more. Today's audits recover more than they cost.

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