We all know how important it is to stay current with preventive screenings and wellness visits to ensure our personal good health. But “wellness checks” for your health plan administration are also critical to the financial well being of your plan. After all, you want to be confident that your claims administrator is paying claims correctly and in compliance with your contract and benefit plan designs so there are no big surprises down the road.
Yet I’m always surprised when I talk with a benefits manager who has worked for a company for 5 to 10 years, and they can’t recall ever conducting an audit of their claims administrators. A claims audit is an important wellness check that should be conducted every year, and it should be a priority for every plan sponsor who wants to reduce wasteful spending caused by administrative errors and fraud and abuse.
Most administrative contracts put restrictions on the time period of claims that can be audited and limit how far back they will pursue recoveries for errors. The longer a plan sponsor waits to conduct an audit, the more dollars they forfeit from a recovery perspective. More importantly, failing to regularly conduct audits allows continued wasteful leakages from plan funds because errors are not identified and corrected soon enough.
As the old business adage goes, you can’t manage it if you don’t measure it. So add an annual health plan claims audit to your calendar of wellness checks. I know from my experience that this is the only way you can be confident you’re maximizing the financial performance of your healthcare benefit.