Most plan sponsors don’t think about audits when negotiating or renegotiating an ASO Agreement with their third party administrator. However, taking the time to ensure that your audit rights are protected is a wise move. Doing so will save time and lead to a more positive audit experience when the time comes to conduct your audit.
When negotiating your ASO Agreement, here are the top 11 things that you can do to ensure that you maintain a strong right to audit your plan:
- Don’t restrict yourself regarding overlapping date ranges on consecutive audits. By doing this, you will limit your claim auditor’s ability to find certain types of claim overpayments. And even more importantly, in the event that you are legally compelled to conduct a claim audit, there should be language to allow the situation to occur.
- Don’t restrict yourself to perform claim audits less frequently than once a year. This is especially applicable to large plans. It is also important because the recoverability of an overpaid claim rapidly diminished as the claim ages over 12 months.
- Protect your right to audit a minimum of 24 months of claims. This should be the time between the final paid date of the claim to the time you provide audit notice to the administrator. Without this ability, you can potentially leave gaps of time where you would be prohibited from auditing.
- Don’t abdicate the decision of whether or not to fix the problem to the administrator. If an claim overpayment is identified, it should be corrected in the past as well as in the future.
- Don’t allow your administrator to accept less than 100% overpayment recovery without your approval. They may insist on a dollar threshold where they do not have to attempt recovery. If so, ensure that scenarios where a large number of low-dollar problems are identified in one group are not ignored. In this situation, insist on a settlement rather than a recovery. And you should only allow the threshold to apply to isolated problems.
Look for 6 to 11 in tomorrow’s post.
