The motivations behind why an organization might consider conducting a claim audit are endless. However, below are the 6 most common:
Compliance/Sarbanes Oxley/Fiduciary Obligation: Most organizations retain a fiduciary obligation to operate the plan in the best interest of the plan participants. Health benefits usually represent a large expense. Making sure that shareholder resources are being spent properly is often a focus of internal audit departments. Sarbanes Oxley requires that reasonable check and balances be instituted. And common sense tells you that periodically, it is a good idea to make sure that your getting the accurate service that you expect.
New Plan/Plan Changes: Changes that are made to a plan or the implementation of a new plan often lead to interest in ensuring that the changes are implemented properly. While it may seem obvious, if the changes aren’t implemented properly and in a timely manner the desired objective of the change will not be realized.
New Plan Administrator: When you change or add a new administrator to the mix, it is common to conduct a post-implementation audit. This is often done after the first few months of claim processing and ensures that the plan was implemented properly.
Recovery of Funds: When economic times are tough, and even when they are not, many organizations want to retrieve overpaid claims to the maximum extent possible. This is one of a variety of methods of cost containment that organizations are widely adopting. However, proceed with caution as there are many pitfalls that can significantly inhibit your ability to achieve these results. See here for more information on the common pitfalls of conducting an audit focused on the recovery of overpayments.
Specific Concerns: From time to time, most organizations experience administrative problems with their health plan. Sometimes the problems are administrative or of minor impact. Other times they are more evasive and have substantial monetary impact. When this occurs, many organizations will choose to employ a specialist to help quickly investigate the problem.
Utilization Changes: When an organization identifies an unexpected utilization trend – either positive or negative, it is an indication of potential problems with the administration of the health plan. In some situations, there are circumstances that reasonably explain the trend upon a high-level analysis. In other cases, there is no logical explanation. This is often a queue to consider an audit.
