Self-funded benefit plans are turning more frequently to health plan and PBM auditing services in response to increasing medical costs. As large and mid-size employers continue to fund healthcare and prescription drug expenses, the fiscal burden has only intensified, especially since the coronavirus pandemic, which drove utilization and costs to record highs. Auditing offers an essential guard against these increases, particularly when they result from billing errors or overcharges. In-depth audits identify questionable charges, enabling plans to recover funds and diminish future financial risks.
Most claim processors promise accuracy in their service agreements and may even conduct self-audits. However, depending on internal checks leaves room for error. The most reliable way to ensure claim accuracy is through independent audits conducted by firms specializing in healthcare claim reviews. Plan managers should diligently evaluate potential auditors, favoring those with deep industry expertise and a proven track record in health plan claims. Since health claim auditing is unique and detailed, specialized knowledge is essential to work through the complexities of medical and pharmacy billing.
Routine claim auditing also acts as a deterrent, encouraging providers to submit accurate bills. When errors or overcharges are identified and refunds are pursued, providers are incentivized to improve billing accuracy in the long run. Given the volume and complexity of claim payments, sophisticated audit software is necessary to uncover every recoverable error. Today, it is standard practice to review 100% of claims electronically, an improvement over the old method of random sampling. More precise and comprehensive claim reviews play a vital role in controlling costs for self-funded health plans.
Another emerging trend is continuous claim auditing, where audits are performed year-round, and each claim is reviewed as it is paid. The affordability of claim auditing services regards them as financial opportunities rather than expenses. Additionally, continuous auditing reduces the administrative burden on in-house staff, as auditors manage most of the process and supply clear, actionable reports. These reports are valuable resources for meetings and negotiations with third-party administrators and pharmacy benefit managers, eventually supporting better monetary outcomes for employers.