Employer-sponsored health plans often find themselves in the news, and recently, various plans have made headlines due to lawsuits alleging that administrators have overcharged them for years. These irregularities, which can also be caught by medical claim auditing, indicate a troubling breach in the relationships between plan sponsors and large health carriers managing their plans. If these allegations are substantiated, it highlights the crucial need for regular oversight of these plans. Claim auditors are vital in identifying routine errors and significant discrepancies affecting cost plans.

The effectiveness of an audit largely depends on its design and the specific aspects being evaluated. By choosing an auditor with extensive expertise in medical billing, a plan manager increases the likelihood of uncovering systemic issues that may result in financial losses of thousands or even millions of dollars. It underscores why claims auditing can be revenue-neutral or even beneficial. Typically, the costs associated with an audit are outweighed by the errors it uncovers, which is why many plans opt for more frequent audits, some even opting for continuous claims monitoring.

Advancements in technology have significantly improved the efficiency of claims reviews, with both accuracy and speed improving steadily. The increased precision of electronic audits means that less staff time is required to perform them. Nowadays, it is often quicker and more efficient to audit 100% of claims rather than rely on random sampling. The results are consistent when every payment is reviewed and allow for year-over-year comparisons. In contrast, random sampling yields varying results, making it less effective for ongoing analysis -- maintaining oversight of your plan is more manageable than ever.

Considering the numerous benefits associated with auditing claim payments or implementing continuous monitoring, it's clear why plan sponsors are embracing these practices. There are regulatory and compliance advantages and improvements in fiduciary best practices. With significant sums of money passing through third parties daily, the need for oversight is critical. The recent coronavirus pandemic further illustrated this point; plans that were regularly audited or monitored were better equipped to handle the unexpected surge in utilization, as they had a clearer understanding of costs.