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Why Audit Benefit Plan Claims?
When looking for ways to serve members well and control costs, benefit plan sponsors may overlook the value of claims auditing. For some, the thought of an audit’s price may be front of mind. But experience shows that claim reviews add to the bottom line, not subtract from it, and can be charged as plan expenses.
A TFG audit commonly finds recoverable errors that are four or more times the project cost.
Why audit medical, pharmacy, and other benefit claims? It’s common to assume that your third-party administrator (TPA) or pharmacy benefit manager (PBM) pays claims with reasonable accuracy. Many guarantee their performance and promise low single-digit error rates.
However, you, as a plan sponsor, have the fiduciary responsibility to ensure that the accuracy is delivered. This is a critical issue in today’s world, where both governmental agencies and plan members alike increasingly hold the plan sponsor accountable for prudently managing the plan’s resources.
And no matter how accurate your administrators are, there are always cases of missed discounts or rebates, wrong or duplicate billing, errors in member eligibility, problems with plan setup, etc. Periodic claim auditing is the best way to conduct needed oversight.
What Do Claim Audits Check and Report?
Benefit plan claim audits check and report on every key area your claim administrator handles. When 100 percent of claims are reviewed, and the findings reported clearly, you have an instant independent analysis of how your plan is working. We at TFG Partners have a library of hundreds of error detection algorithms, and here are some of the most common issues we audit for you:
Even though they include several phases, our pharmacy and medical claim audits move quickly and require very little of your time. Once the initial setup is completed, we review 100 percent of your claims electronically. The software tests all claims against your plan setup, medical and correction adjudication requirements, other payer coordination, and eligibility data and includes all adjustments and reversals. Our process is a vast improvement compared to earlier random-sample methods.
Next, we add human oversight to examine the error patterns discovered in the electronic review closely. Individual claims are flagged for scrutiny when they demonstrate an irregularity. Also, our error tests are customized to your plan and differ for medical, pharmacy, and other benefit claims.
Fiduciary Best Practices: A New Urgency
A new urgency in following “fiduciary best practices” is sweeping through the employer-funded health benefits industry. It’s sparked by highly publicized class-action lawsuits filed by activist law firms and, more recently, a landmark suit of members suing the plan sponsor for derogation of those fiduciary responsibilities. In summary, a growing list of employers sponsoring plans, as well as the managers of these plans, are being sued.
Medical claim auditing falls under fiduciary best practices and is an excellent way to gather plan performance data to make improvements and defend against lawsuits. Some plans go as far as monitoring their claims continuously with monthly reporting.
Fiduciary Best Practices: A New Urgency
A new urgency in following “fiduciary best practices” is sweeping through the employer-funded health benefits industry. It’s sparked by highly publicized class-action lawsuits filed by activist law firms. They are targeting a growing list of large employers sponsoring plans.
Medical claim auditing falls under fiduciary best practices and is an excellent way to gather plan performance data to make improvements and defend against lawsuits. Some plans go as far as monitoring their claims continuously with monthly reporting.
What Plans Does Claim Auditing Help?
TFG Partners claim review services are appropriate for all mid and large-size employer-funded plans. The more members you have enrolled and the more complex your benefits set up, the higher the probability of claim payment irregularities and errors.
An even more significant long-term opportunity lies in identifying setup errors that can be corrected to stop problems that multiply over time. It reduces costs and waste and means fewer incorrect payments that need to be recovered in the future.
Our work improves your plan performance to both help employees and reduce costs.
What we do helps more than bare-bones audits, reporting only data and doing little else.
Plan sponsors with accurate audit data in hand are much better positioned for revising and improving contracts with TPAs and PBM’s) Over time, these improvements significantly help control benefit plan costs.
What Process Steps are Included?
Step #1
Review Plan Provisions
Step #2
Audit and Analysis
Step #3
Advice
Step #4
Recovery
Our Claim Audits Produce a Healthy ROI
The return on investment (ROI) for our benefit claim audits is impressive. The returns routinely go as high as four or more times the price of the service. And once problems get fixed, ongoing overpayments disappear. It’s rare to contract for an outsourced service that adds to your bottom line, but we offer that opportunity.
When your auditor is your advocate, your plans perform how they are supposed to — employees are well served, and costs are managed. Since our founding, we’ve been dedicated to the ideals of caring for employees better while saving companies money.
To us, it has always made sense to add value as we work so that our services are revenue-positive. As a top medical auditing claims company, we provide the industry’s best ROI.
Our Claim Audits Produce a Healthy ROI
The return on investment (ROI) for our benefit claim audits is impressive. The returns routinely go as high as four times the price of the service. It’s rare to contract for an outsourced service that adds to your bottom line, but we offer that opportunity.
When your auditor is your advocate, your plans perform how they are supposed to — employees are well served, and costs are managed. Since our founding, we’ve been dedicated to the ideals of caring for employees better while saving companies money.
To us, it has always made sense to add value as we work so that our services are revenue-positive. As a top medical auditing claims company, we provide the industry’s best ROI.
How Often Should Plans Audit?
We recommend auditing claims at least every other year and annually for larger clients because there are significant cost savings and member service improvement opportunities to be identified. Ideally, you’ll follow up by adding our continuous monitoring service. It provides monthly reporting for oversight to keep your plan well-managed and increasingly, TPA’s and PBM’s are providing allowances for audit services that assure the clients’ plans are monitored and perform well.
Our data security is tightly controlled and with continuous monitoring service, you can view your reports securely online through our web portal.
If you’re about to begin working with a new TPA or PBM, an implementation audit after the first 90 days is crucial. It’s the best way to verify your plan has been set up correctly in the vendor’s system and that you are receiving all the contracted benefits. If not, you can have them make corrections immediately.
