Frequent Claim Audits are the Trend
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tfgpartners
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Frequent Claim Audits are the Trend
Because of the substantial claim payments made by outside vendors, effective oversight has become increasingly important. This has led large employers who sponsor plans to work with a healthcare auditing company for medical claims reviews and pharmacy benefit plan audits. There is a growing need to verify the accuracy of third-party administrators and pharmacy benefit managers, given the considerable benefits involved. The trend of outsourcing claim processing has been ongoing, prompting a rise in the popularity of oversight functions, where audit reports serve as vital management tools.
Historically, the impetus for auditing self-funded benefit plans stemmed from the need to comply with ERISA and Sarbanes-Oxley regulations. However, this landscape changed with advancements in software, making 100-percent audits the standard. These comprehensive audits yield significantly higher accuracy and thoroughness compared to earlier methods that relied on random sampling. Sponsors quickly recognized the value of these audits, often finding savings and recoveries that were several times the cost of the audit itself. As a result, regular audits became the norm, leading to improvements.
With large employers processing thousands, if not millions, of claims annually, the potential financial exposure is substantial. C-suite executives feel the pressure from shareholders and investors to manage costs effectively and provide clear explanations for any budget overruns. The insights gained from audits and monitoring are critical for informed discussions and increased oversight. Third-party administrators and pharmacy benefit managers often offer accuracy guarantees, but relying solely on their self-reported data leaves room for significant errors. It’s clear that independent oversight is needed.
As accountability for all cash outflows intensifies, claim audits have gained even greater importance. These audits ensure the accuracy of the work done by TPAs and PBMs, as well as the management of plan sponsors. They also provide valuable historical insights that help shape future financial planning by clarifying expenditure trends. Auditors from smaller independent firms that specialize in claims auditing bring a distinct perspective, often possessing backgrounds in large health plans and technical expertise that greatly enhances accuracy in the auditing process. It’s crucial to find an excellent audit company.
Historically, the impetus for auditing self-funded benefit plans stemmed from the need to comply with ERISA and Sarbanes-Oxley regulations. However, this landscape changed with advancements in software, making 100-percent audits the standard. These comprehensive audits yield significantly higher accuracy and thoroughness compared to earlier methods that relied on random sampling. Sponsors quickly recognized the value of these audits, often finding savings and recoveries that were several times the cost of the audit itself. As a result, regular audits became the norm, leading to improvements.
With large employers processing thousands, if not millions, of claims annually, the potential financial exposure is substantial. C-suite executives feel the pressure from shareholders and investors to manage costs effectively and provide clear explanations for any budget overruns. The insights gained from audits and monitoring are critical for informed discussions and increased oversight. Third-party administrators and pharmacy benefit managers often offer accuracy guarantees, but relying solely on their self-reported data leaves room for significant errors. It’s clear that independent oversight is needed.
As accountability for all cash outflows intensifies, claim audits have gained even greater importance. These audits ensure the accuracy of the work done by TPAs and PBMs, as well as the management of plan sponsors. They also provide valuable historical insights that help shape future financial planning by clarifying expenditure trends. Auditors from smaller independent firms that specialize in claims auditing bring a distinct perspective, often possessing backgrounds in large health plans and technical expertise that greatly enhances accuracy in the auditing process. It’s crucial to find an excellent audit company.