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Data-Driven Health Plan Cost Management


Large employers often self-fund their benefit plans for various, including financial advantages. However, the costs associated are substantial and can vary significantly based on external factors. As a result, effective oversight, such as a health plan and Rx audit, is a vital consideration for plan sponsors. One of the most impactful methods for examining expenditures and ensuring that claim payments align with the plan's parameters is through medical claims auditing. Over time, there has been a notable evolution in the approach to claim auditing, transitioning from random samples to auditing 100% of claims. 


Initially, audits served as a compliance function, but they have evolved into essential management tools. The need for oversight has become increasingly crucial as claim payments and processing have been outsourced to third-party administrators and pharmacy benefit managers. While this trend offers advantages and cost efficiencies, it has also led to a greater need for auditing to ensure these external entities meet their performance guarantees. Conducting 100% audits can effectively identify systemic errors, allowing for their correction and preventing similar issues in the future.


In the current landscape, many benefit plans integrate audit software into their operations as part of a continuous monitoring service. This approach provides real-time audit-like reports, serving as highly effective oversight and plan management tools. By implementing such measures, sponsors can assume a more proactive role and provide guidance to third-party administrators and pharmacy benefit managers. Retaining control over claims administration is crucial for sponsors as it ensures that their financial resources are managed effectively. It's a wise move in the short and long term.


Additionally, plan members benefit from more accurate claim payments, particularly those enrolled in high deductible coverage. Specialized independent auditing firms focusing on claims are considered the best option for ensuring accuracy and achieving excellent results. These firms possess specific expertise in the field that is challenging to match, and their allegiance is solely to the companies they serve, advocating for their plans and interests. Most specialist firms also utilize advanced, proprietary software that operates efficiently, requiring minimal time commitment from the plan sponsor's staff.


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