The law requires self-funded corporate medical plans to be audited routinely. But besides those requirements, there are excellent reasons to do it. Today's health plan audits have a much higher degree of accuracy than ever before. They help companies manage costs and serve their eligible employees better. Years ago, random sampling was the method du jour, and while it was better than nothing, it left quite a bit to be desired. Claims administrators, often medical insurance companies, would make some changes after an audit, and they would continue their work without much change.
Thanks to advances in claims audit technology that began during the 1990s and have continued right up to today, it's now possible to review 100-percent of claims. It doesn't take much imagination to see how looking at every claim revolutionizes the auditing process. It catches every error and makes sure that dollars are being spent and benefiting plan participants (your employees), and nothing is being wasted. As soon as company benefit managers see the results of a 100-percent audit, they are impressed by how much actionable data it produces. Random sample audits can't match the quality of the data.
100-percent claims audits help company benefits managers conduct oversight on their claims administrators, and they help with reporting to upper management. Employee benefits plans are large expenses for many companies, and managing them closely is a priority. When you can give the CEO a data-driven answer about cost and payment trends in the benefits area, it will reflect credit on you like never before. Also, claims overpaid or paid in error siphon resources away from those who genuinely need the benefit plans. It's a good deed to protect resources for the company and its employees.
Claims administrators also step up their games when continuous claims monitoring is added after an audit. It means that the auditor checks every claim in real-time to make sure it is being paid correctly. If there are issues or problems to correct, continuous monitoring uncovers them in the very early stages before they become significant. It's much more efficient to prevent future errors than to let them pile up and deal with them after an audit. With today's budgetary pressures and skyrocketing costs, making sure that plans are running as effectively and efficiently as possible is an excellent idea.