The recent coronavirus pandemic served as a reminder about how an unexpected event can cause health care expenditures to skyrocket. Most large employers with self-funded health plans felt a significant budgetary impact during 2020. In the post mortem, to understand where the money went, medical bill auditing services provide an essential service. Using the most sophisticated claim audit software ever available, auditors today can quickly review 100-percent of a plan's claim payments in record time. The best firms follow it up with a human review of everything the software flags.

During an extraordinary medical cost event like the COVID-19 pandemic, some unscrupulous people try to use it as a cover for fraud and abuse – they need to be caught and stopped as always. But it also creates many more opportunities for overcharges and mistakes in claim processing because third-party administrations (TPAs) were stretched thin with staff and handling a higher-than-normal work volume. It was a perfect-storm scenario for causing problems, and thorough and accurate auditing is the best way to untangle what happened, correct mistakes, and recover the overpayments that were made.

For nearly every self-funded benefit plan, especially medical and prescriptions, the cost of an audit is less than the funds it will recover. When something is budget neutral (or better) and automatically improves plan performance, it's a no-brainer to schedule. Today's auditing is vastly more accurate than the random sample methods of the past because it checks 100-percent of claims paid. Better auditors handle nearly all of the work and require very little time from in-house plan managers. In departments that have been pared down over the years, the auditing firms can easily pick up the slack.

There is also no reason that sophisticated claims audits need only happen in arrears. Many self-funded plans now sign up for a continuous monitoring service. It means their claim payments are checked in real-time, and mistakes are flagged very quickly. It's a big help in reducing systemic errors and tightening up claim processing. It's easy for TPAs to process claims according to their methods and miss some of the specifics of each plan. When an audit flags them, they are easy corrections to make and keep budgets and plan performance on track. It's time to see medical claim audits as strategic management tools.