Audit Specifics for Pharmacy and Medical Claims

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Company Medical and Benefit Claims Auditing | TFG Partners

The employee health plans covering medical and prescriptions sponsored by large corporate and nonprofit employers bring substantial cost exposures. Frequently auditing claims is one of the best tools available to plan sponsors to control costs and serve members consistently. The popularity of third-party administrators and pharmacy benefit managers to pay claims has taken the function out-of-house. It brings cost efficiencies and expertise and transfers direct daily control to employees the plan sponsor doesn't supervise. Auditing provides a layer of oversight to restore an element of control.

 

Audit accuracy depends on several factors and is different for medical and pharmacy plans. For example, a review of medical claims needs to check doctor's charges that appear too high for certain services. They also need to compare costs for tests that fall outside of reasonable and customary standards set by the National Correct Coding Initiative. It covers code pair tests that should not be reported together because one test negates the need for the other. Flagging these overcharges puts a plan in a solid position to negotiate for rebates and refunds from providers. Audits recover more than they cost.

 

As auditors review pharmacy claims, there are other unique aspects to cover. The first is making sure they are paid according to the plan formulary. Generic medications are a particular area of focus because of their enormous cost-saving potential. Quantity limits and early refills also need scrutiny along with rebates. It's also crucial to conduct drug utilization reviews. Members need to receive the right medicines for their needs that fit within the plan formulary of covered products; cost efficiency relies on many small factors, and audits help flag irregularities so they can be corrected going forward.

 

Well-timed auditing has many advantages because it improves the success of overpayment recoveries and improves plan oversight. The significant improvements of the past decade have been thanks in part to advances in software and technology. More details are reviewed quickly, and the accuracy of audit data continues to improve. It also adapts to the needs and nuances of medical and pharmacy benefit plans that need to be reviewed based on different criteria. As medical costs continue to rise and plan sponsors feel financial pressure, the need for frequent auditing will only increase over time.

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