Many health plan sponsors might not have thought much about oversight in the early days of outsourcing their claim processing to third-party administrators (TPAs). Sponsors used health plan auditing services more for regulatory compliance than anything else. But as those audits have improved in accuracy over time, it has become clear they are valuable management tools. Letting TPAs and pharmacy benefit managers self-report on their performance is acceptable, but it can't be the only way to monitor plan performance. Independent auditing firms are uniquely qualified to provide oversight.
Two of the most significant leaps ahead in medical and pharmacy claim auditing have been the 100-percent method in which all claims are reviewed rather than random sampling and better reports. Presenting information in concise, easy-to-read statements has made the data much more actionable and empowered sponsors to have meaningful exchanges with TPAs and PBMs about their performance and accuracy. It's led many plan sponsors to sign up for continuous monitoring that reviews processing and payments in real-time. It has ushered in an era of accuracy and accountability that was unheard of previously.
Spotting significant expense trends in their early stages is one of the most important benefits of a continuous monitoring service. It allows plan sponsors to plan and budget for new costs and, in some instances, manage them more effectively. One of the most challenging aspects is sudden unexpected events like the coronavirus pandemic that causes a utilization spike and new costs. Watching claim experience in real-time is invaluable because it prevents surprises or out-of-control situations. Given the impact claim expenses can have on the budget or bottom line, insight is essential.
No one can say enough about the value of independent audit firms specializing in the health plan and pharmacy claim reviews. Many are led by executives with backgrounds at large health insurance carriers that act as TPAs and PBMs. Their insight into the process allows them to customize audits and the systems they run on to handle a plan's specifics. They can also act as advocates for sponsors with millions of dollars in financial exposure to be protected (and managed well). Generalist firms may have audit expertise but lack the needed understanding of health and prescription plans and nuances.
