Why Claims Audits are More Important Now

Auditing claims is essential for employer-sponsored health plans, including medical-administrator and pharmacy benefit manager audits. While vendors offer performance guarantees, even small error rates can add up to high costs. Using advanced software to conduct comprehensive electronic audits of all claims quickly reveals payment issues and opportunities for improvement. These audits help recover erroneous payments and serve as an invaluable plan management tool. The most effective health plans audit their claims regularly or maintain continuous monitoring to ensure ongoing accuracy and integrity. Recently, the trend toward more frequent auditing has accelerated, especially in light of the pandemic, which underscored its importance. Many health plans experienced a surge in utilization and unusually high charges for certain services. Those with established relationships with expert auditors were better equipped to manage these challenges. In contrast, plans that audited less frequently or lacked auditor partnerships found themselves unprepared, often struggling to address sudden spikes in costs. Proactive auditing helps prevent errors and is more effective than attempting to fix problems after they escalate. Today’s claim audits are more accurate and efficient than ever, thanks to continual technological advancements and the expertise of professionals experienced in large health plans. Many employer-funded plans rely on insurance carriers to process claims, making it crucial to understand each carrier’s unique system configuration. The most effective audit software is tailored to the carrier’s processes, maximizing accuracy. When audits are precise, their value is clear—claim auditing is ultimately about effective plan management, not just regulatory compliance. Finally, the choice of audit firm is critical. Boutique firms that specialize in the field bring deep expertise, often surpassing generalist firms' capabilities. While traditional audits focus on taxes and compliance, claim reviews demand an understanding of medical billing and health care systems. This complexity means that expertise in health claims is invaluable—sometimes even more so than financial auditing skills. Organizations with existing relationships with generalist auditors should reconsider who conducts their claim audits, as specialized knowledge can significantly affect outcomes.