Medical claim audits started as a compliance requirement for most employer-funded health plans and were conducted by random sample. It satisfied regulators but provided little actionable data for in-house plan managers. Thankfully beginning in the 1990s and continuing to today, technology and methods have improved. It means that audits now review 100-percent of claims paid and check each one for hundreds of data points. The flag errors underpin the recovery of overpayments or other irregularities. If you ask companies that sponsor high-performing plans, they'll praise auditing.
Independent specialty audit firms working in the claims area have particular expertise. They do nothing else so their expertise is unmatched, and their accuracy is impressive. Reports that don't take special knowledge to read also make the results of their work more valuable as an oversight. With most claim processing now outsourced to third-party administrators and pharmacy benefit managers, having an unbiased review is essential. The systemic improvements that follow a thorough audit improve a plan's performance and help service members better. It can be a useful cost-control tool each year.
If ever an event drove home the value of health care claims audits, it was the coronavirus pandemic. Utilization rates spiked, new testing and protocols were added hastily and understaffing affected every work area. They were the perfect storm to put medical plans under intense financial pressure, and audits afterward unwound what happened. They're led to the recovery of some overpayments and informed negotiations and adjustments to covered services. TPAs and PBMs have their systems and layer each plan onto them. It's easy for them to operate on auto-pilot and overlook specifics.
Audits begin focused on payment and cost savings, but they can give an excellent read on how a plan is performing. Sponsors can ask auditors to report on trends and analyze data in any way. As the accuracy of reviews and reporting has improved, it's been an eye-opener to many in the industry. TPAs and PBMs operate more cautiously when oversight is in place. Most have performance guarantees, but the only way to confirm their met is with independent oversight. Members with high deductible coverage also benefit from more accurate claim processing; it's a win-win on many levels and makes an impact.