Discussions

The budget figures for self-funded benefits plans, especially those managed by large employers, have always been critical. With healthcare and pharmacy costs continually on the rise, the financial strain has become even more pronounced due to the coronavirus pandemic. It makes medical claim auditors more essential than ever. For in-house managers overseeing payments made by third-party administrators (TPAs), an audit serves as a valuable management tool, providing objective data on TPA performance. Even when TPAs self-report on performance, an independent review is essential.

When seeking or interviewing potential audit firms, it's advisable to focus on two key criteria. First, opt for a firm that specializes in claim audits. While larger auditing firms may offer this service as part of a comprehensive menu, their expertise typically pales in comparison to firms dedicated solely to this niche. Second, ensure that you select an independent auditing firm with no conflicts of interest. When an auditor is committed exclusively to representing your plan's best interests, you can expect to receive the most accurate and unbiased data insights that can be transformative for your oversight strategies.

Another topic for discussion is the frequency of these audits. Initially, audits served as compliance mechanisms under regulations such as ERISA and Sarbanes-Oxley. However, they have evolved into tools for performance evaluation and cost management. Medical plan expenditures affect the bottom line, and meticulous oversight of claim payments has become critical. From a member service standpoint, audits can enhance the consistency of claim payments, ensuring that members are treated fairly and equitably. They also help guarantee that TPAs adhere to the plan's rules for processing claims.

Specialist auditing firms often require minimal involvement from in-house staff, streamlining the audit process and delivering findings in both summary and detailed formats. These firms can quickly identify errors and flag excessive charges. Addressing mistakes early facilitates corrections and helps recover overpayments. For upper management, especially those under pressure from shareholders and boards, receiving detailed and accurate audit reports can be a game-changer. Ultimately, it enables everyone involved to perform their roles more effectively and with greater confidence.