The COVID-19 pandemic upended many parts of life and business, and medical claims were no exception. The increase in claim volume and medical expenses were unprecedented, and, in its wake, precise medical claims auditing is essential. It's especially true for the self-funded pans of large and mid-size corporate and nonprofit employers. Most now outsource their payments and processing to large health plans acting as third-party administrators. It means oversight is more critical as the payments are handled out-of-house and away from the watchful eye of in-house plan managers.
Many large employers with self-funded benefits programs are also taking a close look at continuous monitoring services. It uses sophisticated audit software to check claim payments in real-time. The main advantage is catching patterns of errors and overcharges while they are small. It's a better way to manage, and recovering overcharges is much less complicated when it's handled promptly and for smaller amounts. Working retroactively following an audit brings many more complications in most cases. C-suite executives also prefer for large-cost items like health claims to be closely managed in real-time.
There is no doubt that most TPAs build performance and accuracy guarantees into their contracts – but unless you audit, how do you know for sure they are being met? Large health plans have hundreds of details and thousands of claims paid. It is easy for errors to stay out of view in those high volumes when they are small percentages of the overall volume. But given the high cost of medical services and prescription medicines, even a very minuscule error rate can ultimately add up to significant numbers. Given the cost exposure, it's easy to understand why most self-funded plans audit and monitor.
Today's health plan claim audits are conducted on advanced software at the leading edge of technology. When followed by a human review undertaken by experienced professionals, the accuracy of audits is impressive. In the early days, a random-sample technique was employed that has been replaced with 100-percent audits that review every claim. Besides catching mistakes and overcharges, they can flag fraud and abuse even when the schemes are sophisticated. Controlling costs and better serving members requires plans to function optimally, and audits help them do it consistently.