Large corporate and nonprofit employers that sponsor medical and prescription plans for their employees have a lot on the line. The third-party administrators (TPAs) and Pharmacy Benefit Managers (PBMs) that process their claims handle millions of dollars. Therefore, medical claim auditing services are essential when starting with a new claim processor. These initial reviews are also known as implementation audits and report system accuracy in properly administering claims. They are invaluable oversight tools for management to confirm the accuracy of the claims processing system and its initial setup.

Specialist auditing firms are the best bet when they review 100-percent of claims and check each one for hundreds of factors. Most recommend an implementation audit be planned for 90 days after new TPA and PBMs begin their work. Vendors committed to excellence should welcome audits as proof of their accuracy and good work. If a company resists them, it might be revealing about their conduct. The value to plan sponsors is catching mistakes and system processing irregularities early so they can be corrected and overpayments recovered. It isn't straightforward when you wait too long and have million-dollar problems.

When audit reports flag a problem, it's factual data that are actionable and not in dispute. It's why the oversight value to sponsors is significant. Members are also better (and more fairly) served when everyone's claims are paid consistently. It's common for mistakes to favor some while denying others inadvertently. The cause of claim processing mistakes often lies in the administrator's system that has default setups and fails to be customized. Implementation audits are a quick way to flag those spots and lead TPAs and PBMs to the desired areas. They self-police, but independent oversight is better.

The opportunities for saving multiply based on the number of plan members. More prominent employees with thousands of employees have the most incentive to audit. But mid-size employers also have cost exposure, and the price for the audit is often far less than what it recovers. It's why medical claims auditing is a budget-neutral activity that many plan sponsors favor. What started as a regulatory compliance activity has grown into a strategic management tool with financial value. Steer clear of the old random-sample auditing because it's less accurate than 100-percent methods.