Oversight of Large Employer Self-Funded Medical Plans

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Company Medical and Benefit Claims Auditing | TFG Partners

The budget numbers have always been significant for the self-funded benefits plans of large employers, especially for medical and pharmacy coverage. Never-ending increases in costs keep the numbers rising every year, and expenses related to the coronavirus pandemic kicked things up another notch. It's why having a healthcare claims audit of your company's plan matter now more than ever. Auditing is crucial if you're an in-house manager trying to run oversight of claim payments made by a TPA (third-party administrator). It is a management tool that gives you factual data on your TPA's performance.

When you're searching for or interviewing audit firms, many in the industry advise you to go for two things. The first is a firm that specializes in claim audits. Big audit firms may offer it on a menu of services, but their expertise often lags those who specialize in the field. The second factor is finding an independent firm with no other allegiances than auditing your benefit claims. When an auditor has only your plan's best interests at heart, you'll get the most accurate and reliable data that's not skewed for any purpose. Plan managers working in-house are often surprised and impressed by what audits report.

How often to audit claim payments is another frequent topic of conversation. What started as a compliance function under ERISA or Sarbanes-Oxley has evolved into a performance and cost management tool. Medical plan costs hit the bottom line and can impact quarterly earnings reports for publicly traded companies. It makes closer claim payment oversight a must. From a member service perspective, auditing can improve the consistency of claim payments to treat members fairly and evenly. It also helps assure that the TPA upholds a plan's rules and requirements in processing claims.

Expectations for audit accuracy have increased through the years as the proprietary software on which they run has been improved. Firms today require very little time from in-house staff to complete an audit and report their findings in both overview and detail form. They can flag mistakes and root out overcharges in as many areas as they occur. Catching errors soon after they occur makes them easier to correct and recover overpayments. Upper management under pressure from shareholders and the board will appreciate the detail and accuracy of better reports. It helps everyone do their jobs better.

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