Large employers sponsor (and self-fund) their health and other benefit plans for many reasons, including financial ones. But the costs are enormous and vary widely depending on external factors, so oversight and management are vital considerations. Medical claims auditing is one of the most effective ways to examine expenditures and make sure claim payments follow the plan's parameters. People with long-term experience in the field have witnessed an evolution as claim auditing went from random samples to 100-percent of claims. Originally audits were a compliance function, and today they are management tools.
The value of, and need for, oversight has heightened as claim payments, and processing has been moved out of the house. The trend to use third-party administrators and pharmacy benefit managers have removed direct control from the sponsor company's staff. The new arrangements have advantages and cost efficiencies and create a greater need for auditing. It's the most effective way to see that TPAs and PBMs meet their performance guarantees. 100-percent audits are also effective at flagging systemic errors that can be corrected and prevented in the future. The cost savings can be significant.
More plans these days are running audit software in the background as part of a continuous monitoring service. It brings audit-like reports that are highly effective oversight and plan management tools in real-time. It puts sponsors in the driver's seat and allows for more meaningful direction to TPAs and PBMs. There can be a temptation to cede control for claims administration to vendors, but wiser sponsors retain some control element since their dollars are the ones flowing out the door. Members benefit from more accurate claim payments, especially those enrolled in high deductible coverage.
Independent auditing firms specializing in claims are a company's best bet for accuracy and excellent results. Because they specialize in the field, their people have particular expertise that's tough to match. They have allegiances to no one except for your company, which means you have an advocate for your plan and its interests. Generalist audit firms may offer similar services, but they have complicated business relationships with others in the field. Most specialist firms also have advanced, proprietary software that works quickly and with a minimum time commitment from your in-house staff.