A few people still working in medical and pharmacy claims management may recall when audits were more to meet regulatory requirements. But everyone who has joined the field recently knows pharmacy, and medical claims auditing is an excellent management tool. The method and technology have been improved continuously through the years. Today, they have an impressive level of accuracy that makes annual auditing advantageous to every plan sponsor – and many choose to monitor their claims payments continuously with audit software running in the background.
The trend toward outsourcing medical claims payment processing to third-party administrators and prescription claims to pharmacy benefits managers has created a need for oversight. There was a time when some plans paid claims in-house, which gave them direct control over their operations. TPAs and PBMs commonly make performance guarantees but relying on them to self-report without an independent review can be risky financially and for member service. Hiring a specialist auditor to review 100-percent of claim payments is the most accurate way to ensure guarantees are genuinely met.
Corporate and nonprofit employers that sponsor medical and pharmacy plans find much to appreciate about annual claim audits, and many of their reasons are financial. The first is the funds that can be recovered as overpayments, duplicate charges, and other mistakes are flagged. The second is the budget-friendliness of the audits, which often recover four times as much as they cost. Not many consulting arrangements lead to savings and an economy of such magnitude. When you monitor claims continuously, you also receive cost trend information and are aware of things as they begin.
The independence of the claim auditing firm you select can also improve your results. When their only allegiance is to your plan and its accuracy, you'll receive an objective analysis. Larger generalist firms lack the specialization for claim audits and may have business relationships with others. You want a firm that will be your plan's advocate and have the expertise needed to flag every mistake or irregularity. Clear and easy-to-read reports with actionable content are also a must so that you can have meaningful conversations with TPAs and PBMs about their performance and accuracy.