Claims audit reporting can help you decide.

Healthcare plan managers sometimes overlook the value of auditing members’ actual medical claims and payments. However, making sure that a healthcare plan is set up properly and performing well is a way of checking the work of a third-party administrator (TPA) and a wise step toward preventing future errors.

Large volumes of claims practically ensure that there will be errors such as duplicate billing, pricing mistakes, or mistakes in member eligibility. For this reason, it’s advisable to audit your claims data to assure compliance with contractual guarantees. Milliman MedInsight can help you analyze your data using audit testing and reporting.  Using several standard reports within MedInsight, you can estimate how accurately your claims are being paid and determine whether you may benefit from a full claims audit.   It’s important to note that only a thorough claims audit will validate the audit results such as those found in the MedInsight analytics, and that no electronic audit can account for all possible payment situations.

Today’s computerized audit testing in MedInsight makes it possible to examine 100% of a plan’s data. This is far preferable to the earlier practice of manually reviewing only a sample of data. Because of the various ways a medical claim can be paid – such as based on whether it is medically necessary, preventative, experimental – as well as claim limitations, copayments, membership status, and other factors, there are a great many potential payment issues.  The difficult task for a health plan is to know where potential issues indicate actual claims processing deficiencies, and a continuous claims audit reporting ability can help.

Electronic tests.  The following are only a few of the tests MedInsight runs on a complete claims-data set:

• Member not eligible: Identifies claims paid when the member was not eligible at the time of service based on data in the supplied enrollment file.
• Duplicate procedures: Identifies paid duplicate charges where the patient, procedure, date, and provider are the same.
• Outlier physician charges: Identifies procedures that have been paid at a rate of more than two standard deviations above the mean rate for that procedure.  This edit often identifies adjudication mistakes and out-of-network contracting opportunities.
• Possible COB opportunities: Identifies claims that have no COB recovery even though the patients have COB recovery history and/or COB indicators on their enrollment records.

Using the MedInsight standard reporting tool, the MedInsight Claims Audit Summary report shows the results of the following audit tests.

For each test, the report shows the number of claims that were found to fail the test, the billed and paid amount of claims how much should have been paid and savings potential metrics.

The most important aspect of auditing focuses on pricing—verifying that the benefits spelled out in the contract are in fact being provided for eligible members and at the price levels contracted for. This is the first step toward correcting administrative practices, cleaning up enrollment, improving the claims data, or renegotiating a TPA contract.

Claim audits used to be a “once-every-three-years” due diligence procedure, but more plan sponsors and brokers are now turning to annual audits.  MedInsight can be used to identify specific audit opportunities or as a monthly screening method to keep tabs on large volumes of claims.