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Health Care Cost Containment and Claim Audits
Many large corporations and nonprofit organizations offer health and prescription plans for their employees. When these plans are well-managed, they can effectively provide services while helping to control costs, which is crucial for balancing budgets. One of the most effective ways for plan sponsors to maintain oversight of payments is through claim administrator and pharmacy benefit manager audits. Since claim processing is typically outsourced, it’s essential to have an independent auditor conduct the review, and those who specialize in claim reviews tend to deliver more precise results.
Most third-party administrators (TPAs) and pharmacy benefit managers (PBMs) assure their clients of accuracy; however, plan sponsors require oversight. With medical and pharmacy claim payments at an all-time high, there’s a lot at stake. Each Rx claim comes with its own negotiated rates, formularies, and rebates. As plans work hard to manage costs while serving their members effectively, audits can be beneficial. They not only identify errors but also validate where operations are running smoothly. Over time, audits have evolved into essential tools for management, going beyond compliance requirements.
During financially challenging times, such as the early days of the coronavirus pandemic, organizations seek transparency in their operations. Audits utilizing specialized software provide clear insights into claims processing. Plan sponsors have discovered that consistent vigilance is key, as unaddressed errors can compound and lead to financial repercussions. It’s more cost-effective to prevent erroneous payments from happening in the first place than to chase down funds after they’ve been disbursed. Recovering money often involves negotiations and can severely impact the organization’s finances.
An audit that reviews 100% of claims, which is a key aspect of some best practices today, generates solid data that can inform discussions with TPAs and PBMs. This depth of oversight empowers sponsors to identify inconsistencies. Relying on claims processors for self-reported issues is risky, as it can overlook problems. By comparing audit results against the reports from TPAs and PBMs, sponsors can assess their accuracy more reliably. Given the significant financial stakes involved, auditing is crucial for effective oversight and sound financial management in both for-profit corporations and nonprofit organizations.
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