Not All Benefits Plan Audits are Alike

Large and mid-sized companies with self-funded medical plans aim to provide excellent health care for their employees. But they also need to manage costs carefully. Accurate claims administration is a must to accomplish both objectives – and only outstanding medical benefits plan auditing can confirm it is happening consistently. It's why a 100-percent audit that covers every claim is such an imperative. There is no other way to evaluate plan performance that is as accurate or insightful. Anyone in a benefits management or financial oversight role understands the value of a thorough audit.

In the early days of benefits plan auditing and for many years after that, audits covering only a random sample of claims were the standard. They added value in some ways but had drawbacks as management tools because of what they missed. There was also a lengthy review process that followed. It ate up valuable time that could have been better spent on other things. Claims administrators became accustomed to the random sample method, and complacency developed. At the same time, medical costs continued to skyrocket, and companies with self-funded plans had their budgets strained.

In time, advances in computer technology made it possible for the best benefits plan auditors to begin perfecting a better method. There were several concurrent goals: improving accuracy, saving time, and improving the data gathered so that it could be used to improve plan performance. The result was the medical benefits plan auditing that reviewed every claim followed up by a manual review to improve accuracy further. As millions of claims have been audited with this more effective method, the value of claims auditing has grown exponentially. It reduces costs and serves employees better.

Many well-managed companies today expect a 100-percent audit of their medical claims, and the same can be done for other benefits plans. Employees are well-served, and costs are managed more effectively. When presented well, audit data can lead to structural changes in claims administration that yield cost savings and plan performance improvements for years to come. No random-sample audit can match the results of a 100-percent claims audit. As technology and methods continue to improve, the amount of time and resources required for 100-percent audits continue to decrease.

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