With the continuous rise of healthcare costs, self-funded medical and prescription plans increasingly seek ways to manage and control expenses. Running a medical and Rx audit to doublecheck claim payments has emerged as a crucial strategy, proving to be cost-effective and potentially profitable. Through the thorough auditing of claims, organizations can recover audit costs with recovered overpayments. The trend has garnered attention from managers overseeing medium to large self-funded healthcare plans, mainly due to its potential for significant recoveries, which bright down costs.
Employer-funded plans today are predominantly managed by third-party administrators (TPAs) who handle claim processing. This reliance on TPAs highlights the importance of oversight, as TPAs are typically held to performance and accuracy guarantees within their service agreements. However, depending solely on self-reported data leaves plans vulnerable to unreported errors, which has surprised many plan managers upon discovering substantial variations in audit findings from what TPAs had been self-reporting. Identifying errors often brings systemic fixes to prevent future similar errors.
The swift and often unpredictable rise in costs, particularly amidst events such as the coronavirus pandemic, has led to an increased trend of more frequent auditing. This adjustment signifies a departure from the past auditing practice more to comply with regulatory requirements such as Sarbanes-Oxley or ERISA. Sponsors have realized the myriad benefits of close plan oversight and management, which directly impact plan members. Equally important, auditing ensures the consistency of claim payment practices for all members, a critical factor in engendering trust and satisfaction.
While TPAs and Pharmacy Benefit Managers (PBMs) may have the best intentions, it's acknowledged that everyone makes errors, and sometimes those closest to the situation overlook them. Therefore, the value of clear reports based on an auditor's data cannot be overstated. Audit findings are solid evidence, offering a basis for informed negotiations for future TPA service agreements. When selecting a claim audit firm, it's paramount to prioritize finding one entirely independent, possessing unique expertise and working in the field each day. Leveraging the experience of such a firm impacts the results achieved.
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