In the past, self-funded medical and pharmacy benefit plans used random sampling to audit claims, accepting a level of accuracy that was less than ideal. With the evolution of audit software, however, auditing transformed from a simple compliance exercise into a powerful strategic tool. The introduction of 100-percent claim audits, which examine every payment, signified a turning point. Now, a thorough medical claim and PBM audit is standard. Plan managers now have access to oversight data and analytical tools that were unimaginable previously, leading toward more effective management.

In spite of advances in automation, human review is important in facility claims auditing, especially for spotting recurring error patterns. Identifying and correcting repetitive mistakes plays a key role in boosting plan performance. When costs are managed effectively, and members receive better service, the plan fulfills its objectives. As health care costs in the United States continue to rise every year, claim auditing is becoming increasingly important for financial stewardship. Implementing a monitoring service after an audit is also a sensible step to help maintain cost control over time.

To ensure health plans function optimally, audits must cross-check claim payments using multiple methods, including comparison with summary plan descriptions to validate compliance with plan design. Since third-party administrators (TPAs) often manage multiple plans, they may process claims according to standardized procedures, inadvertently missing unique provisions of individual plans. These oversights are seldom intentional, but they do occur as a result of system-driven processing. Thorough auditing is essential to uncover variances and ensure correct payments.

Today’s auditors and monitoring services have markedly improved data reporting and accuracy. Clients now receive clear, accessible reports that offer the detailed information necessary for effective plan oversight. Human review of electronically flagged claim payments further increases the accuracy and value of these reports, allowing a detailed understanding of claims payment activity. The improvements have transformed claim audits, making them more effective and insightful than in years past. Given today’s skyrocketing costs, audits and oversight have become more important than ever.