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Analyzing Employer Health Plan Claims

Doing an excellent job of managing employee benefit plans relies on information and data. It explains why medical claim auditing services are crucial in helping plan sponsors stay on track. With claim administration outsourced to third parties, it leaves some exposure, even when they perform well. Adding an audit function that runs frequently, if not continuously, closes the loop. Nothing substitutes for an auditor's independent review. Error rates have been driven down to the low single digits, which is excellent, but medical and prescription costs are at all-time highs, meaning any mistake is too much.

There's also a trend of class-action lawsuits against plans over their fiduciary responsibilities. Claim auditing is an excellent way to improve management and oversight. In the unfortunate event your plan becomes the target of a lawsuit, defending will be more straightforward when you have years of claim audit data to prove excellent performance. Plans that lack data and oversight leave themselves much more exposed. The lawsuits can be costly and shake members' confidence in plans. Avoiding both is the best route and taking steps to do it is intelligent. Like everything, performance expectations increase.

Having fresh claim audit data before you begin your annual budgeting process is also helpful. It gives added perspective to what your third-party administrator and pharmacy benefits manager are targeting. Adding opinions and perspectives always makes the process more informed and accurate. When you have the routine annual increase in health care prices coupled with general inflation, it strains budgets as never before. There is no way to manage many cost increases, but finding savings elsewhere can help, especially when it's realistic and will happen. Overall, you want your plan to come in on budget.

Customizing audits to suit a plan's end sponsor's needs is crucial. It's also vital to review every claim paid. Gone are the days of random sampling, which only caught repeating errors. When every payment is reviewed and analyzed, the results are more accurate and insightful. Managing a function as complex as health care payments requires daily vigilance and active oversight to double-check for errors. Things can still fall through the cracks with the best systems, and even they need their work reviewed routinely. We're in a new era of accountability with high prices and higher expectations.


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