Small Details Add Up to Big Medical Plan Expenses
Carefully negotiated contracts between self-funded health plans and third-party administrators (TPAs) for medical claim payment processing are delicate agreements. The plans expect oversight in the form of a healthcare claims audit and as part of their ongoing oversight. Auditing reviews the TPA's work paying claims and its accuracy. The budgets are significant, and even small error patterns quickly add up to substantial expenses. It's also why more self-funded plans are using the same audit processes to monitor claim payments continuously. It generates real-time reports that detail claim payments and expenses.
Today's more accurate audits and monitoring are thanks to notable advances in analytical software that continues to improve. In the old days, claim auditing was based on random samples, and it was easy for things to slip through the cracks. Not that 100-percent of claims are reviewed, the game has changed in favor of plan sponsors. Independent auditing firms specializing in health care claims audits provide outstanding services that generalist audit firms have trouble matching. It is common for sophisticated audits to uncover payments for non-covered items, overpayments, and much more routinely.
If you're a corporate benefits plan manager working in-house and negotiating your company's TPA agreement for claims payments, be aware of the fine print. Some vendors are trying to negotiate limits on auditing services that can reduce your ability to run oversight. In those cases, you would have no ability to double-check what's reported by your TPA and puts you at a disadvantage in negotiations. Best practices are for you to have the ability to double-check as need, which can include auditing and monitoring claim payments in real-time. Both give you the data you need to manage your plan well.
You also want auditors to be able to work in any way needed to review your claim payments. All are experienced auditing major health insurance carriers that act as TPAs and can do so without disrupting or inconveniencing anyone. The goal is always to root out errors and overpayments to help a plan stay on track serving its members, and control costs effectively. Therefore, make sure to avoid any TPA agreement that limits audits or monitoring capabilities in any way. Your company management depends on you to report on your plan's financial performance, and it is a major cost exposure with risks.
