It’s budget season! As self-insured employers prepare budgets for the new year, how nice would it be to find some extra dollars in your second largest expense item next to payroll? Imagine what you could do with more.
Most self-insured companies assume that their Third-Party Administrator (TPA) has a zero claims payment error rate, when in fact a 1-3% error rate is uniquely accepted in the healthcare industry and even written into agreements with TPAs via performance guarantees. That is your money, and it can add up to thousands, or millions, of dollars over time.
The good news is that it is possible to identify and recoup these erroneous expenses. In fact, it is a reasonable and necessary expectation to comprehensively audit this significant expense to potentially return 1-3% (or more) of a company’s annual medical spend to the stakeholders and extend the viability and sustainability of its healthcare plan offerings to its employees.
You might be an assumer if …
Incorrect assumptions like the following could mean that large amounts of cash are disappearing from your bottom line each year:
- Do you assume there is a built-in system by your claims payer to catch 100% of payment errors? (There is not.)
- Do you assume someone will tell you if there is a systemic error in your plan costing you thousands or millions annually? (There is no way to know without a comprehensive audit.)
- Do you assume someone will tell you if there are thousands or millions of dollars you could recoup but are about to lose due to the “two-year, no recovery” limitation? (It is your fiduciary responsibility, not theirs.)
- Do you assume all your healthcare claims are paid according to your plan’s intent? (Highly unlikely. Errors happen. People are not perfect, especially when they are paying with someone else’s money.)
You know what they say about assuming. Don’t let your boss discover that because of inaccurate assumptions, you have let a pile of cash slip through your fingers.