The Best Claim Administration Oversight is Audits
Claim processing agreements are carefully crafted between third-party administrators (TPAs) and their medical plan clients, laying the groundwork for a financial relationship that covers countless details in the claims payment process. Given the rising costs of healthcare, the role of medical claim auditors has become increasingly important. Regular reviews ensure that agreements align with experience in claim payments, allowing plans to stay on top of their financial commitments. It’s beneficial to track whether TPAs are meeting performance guarantees, and consistent oversight helps ensure they do.
In recent years, concerns have arisen about TPA contracts that may limit auditing activities, so plan sponsors must remain vigilant. Relying on the same entity that processes claims also to manage oversight presents inherent risks. While one might hope for transparency and a client-first mentality, the reality is that perspectives can vary. Plan sponsors often view the situation differently from claim processors, which is why auditing can play a vital role in bridging this gap by providing factual data to support negotiations. A healthy relationship between sponsors and TPAs should benefit both parties.
Although generalist audit firms can handle claim reviews, they often lack the specialized knowledge that dedicated firms bring to the table. Consequently, not all claim auditors are created equal, and choosing the right one significantly influences audit outcomes. High-quality data enables improved oversight of both your TPA and your Pharmacy Benefit Manager (PBM). When entering new contract negotiations, it’s crucial to scrutinize the fine print and ensure there are no barriers to conducting beneficial audits. Well-managed plans frequently perform self-audits to catch mistakes early.
Performance guarantees and self-monitoring are now standard elements in TPA contracts, but self-reporting is not foolproof. An impartial review from a specialist auditor is the most reliable approach. Plans that diligently conduct audits often find they can recover significantly more funds than the cost of the audit itself, sometimes as much as 4 times that cost. Advances in auditing technology mean that 100% of claims can now be reviewed. Additionally, there’s a service aspect to consider: when claims are paid accurately, it benefits all members involved, enhancing their experience with their health plans.
