Claim Audits = Better Self-Funded Plan Performance

Company Medical and Benefit Claims Auditing | TFG Partners

For many good reasons, large employers, both corporate and institutional, tend to have self-funded medical coverage for their employees. When they are well managed, the plans save money and serve employees well. It's why medical claim auditing had increasing importance because it's the tool that gives in-house plan managers an oversight ability. Today, most claim payments are outsourced to third-party administrators (TPAs), and without auditing, the in-house staff loses an element of control. Because the stakes are high (paying for medical care is expensive), claim payments need to be reviewed.

Government audit requirements from ERISA and Sarbanes-Oxley were the genesis for plan auditing, but it has become crucial for far more than meeting government requirements. It's a strategic management tool, and when 100-percent of claim payments are reviewed, there is much to be gained. Member service improves along with cost containment, and members with high-deductible coverage also benefit from highly accurate claim processing. TPAs make promises about their processing accuracy, but only auditing shows whether or not it's true. Good in-house managers double-check to verify it.

Fluctuations in medical expenses for large publicly traded companies hit the balance sheet and can affect quarterly earnings reports. When unexpected events like the coronavirus pandemic come up, all eyes turn to medical claim expenses. Plans that paid a continuous monitoring service with auditing have the most precise idea about what is happening with payments in real-time. TPAs may report the data one way, but when you're monitoring with sophisticated software, their data can be verified. Management expects in-house managers to have details and expectations for unexpected cost fluctuations.

Service agreements with TPAs often have performance guarantees, and it's also good to check against those commitments to see if they are being honored. Independent auditing firms that specialize in facility claim auditing provide clear, unbiased reports about plan performance. They often support what TPAs are reporting but can be eye-opening when they don't have the same findings. Even if an audit shows 96-percent accuracy when a TPA says 100-percent, the four percent difference can add up to sizeable sums of money. It's why audits and monitoring pay for themselves nearly always.

 


TFG Partners

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