The Trend in Claim Auditing is More Often

The need for detailed oversight of medical claims auditing and Rx audits has increased. With outside vendors handling administration and making the payments, double-checking is essential. Large employers sponsoring health plans, whether corporate or nonprofit, are requesting audits more frequently to ensure accuracy and identify potential savings. The trend of outsourcing claim processing has made oversight crucial, and audit reports have become strategic management tools. Given recent inflation and the relentless rise in costs, analyzing claim payments is even more vital. 

Initially, auditing self-funded benefit plans was primarily driven by compliance requirements such as ERISA and Sarbanes-Oxley. Advancements in software have led to the norm of 100% audits, significantly improving data accuracy and thoroughness. Sponsors have been impressed by the savings and recoveries uncovered during audits, often exceeding four times the audit cost. As a result, there is a growing emphasis on regular auditing and continuous monitoring of claim payments. Large employers handle thousands, if not millions, of claims annually, leading to significant financial exposure. 

With pressure from stockholders and investors, C-suite executives are increasingly focused on controlling and explaining costs when budgets are exceeded. Audits and monitoring provide the basis for well-informed meetings and better oversight, allowing for greater accountability for all cash outflows. Third-party administrators and pharmacy benefit managers may provide accuracy guarantees, but relying solely on their self-reporting leaves room for error. As a result, claim audits have become crucial for certifying the accuracy of their work and the management of plan sponsors.

Looking ahead, the data from audits and monitoring will inform future planning and provide valuable insights into expenditure patterns. Independent auditing firms specializing in claim audits bring a unique perspective, often leveraging their technology expertise and prior experience from large health plans to contribute significantly to accuracy. To many plan sponsors and their HR departments, auditors become trusted allies and advocates for their best interests. Oversight keeps claim administrators doing their best; if they don't, it's caught and corrected to prevent mistakes from spiraling out of control.