When you are preparing a company budget, are you including healthcare audits? Budgets and healthcare audits are both necessary pieces for fiduciary responsibility. Failure to audit could be a red flag that you haven’t protected the financial interests of your employees & employer.
What’s at stake?
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- Employers pay an average of 86% of healthcare premiums for single coverage and 72% for family coverage.
- Health insurance costs approximately $2.64 per hour for private industry workers.
- In 2020, the average annual premiums for employer-sponsored (self-insured) health insurance were $7,470 for individual plans and $21,342 for family coverage.
Source: SanaBenefits
Obviously, this is a significant portion of a company’s budget. Healthcare costs are expected to continue to rise, so company leaders must find cost savings while still providing competitive, quality care for their employees.
Protecting Employer and Employee
Simply, healthcare claims audits find errors. And if your company is providing healthcare, there are errors in your claims. Your healthcare budget, and your employees’ healthcare expenses, can be contained with regular audits.
In a successful comprehensive audit, you will recover overpayments and identify potential systemic issues causing the incorrect billing. Both are important.
Overpayment of Healthcare Claims
Recovering funds is the most important step for both employer and employee. If claims are overpaid, the employer will see more expenditures in individual claims, but also potentially be quoted for higher premiums at the next negotiation period.
For employees, claim overpayments can negatively impact employees’ deductibles and co-insurance payments. Look at the following example.
An employee had gall bladder surgery in an in-network surgery center. A primary and an assistant surgeon performed the surgery. Assistant surgeons are generally priced at 20% of the full schedule rate. However, this assistant surgeon was out-of-network and billed more than $20,000 for the surgery. Since the assistant surgeon was paid at full billed charges, the patient ended up paying more for their co-insurance than they would have paid if the assistant surgeon had been paid according to the applicable fee schedule. The employee did not have any other medical claims for the year, but unfortunately still reached their out-of-pocket maximum due to this claim processing error and was out more than $3,800.
Systemic Errors in Healthcare Billing
Systemic errors are different than data entry errors. With systemic errors, there is a process in place that is causing repeated errors in billing. Eliminating these root cause problems should reduce the number of claim errors you have in the future.
For example:
A facility may be unbundling charges that are meant to be billed as one item. Unbundling is when providers charge for line items individually instead of using a code that bundles charges. By unbundling the provider gets paid more than they should had the correct bundled code been used.
Have you met your fiduciary responsibilities by including audits in your company budget?
If the answer is no, contact us. “Health plans have a fiduciary responsibility to their members to make certain that the members’ claims are processed and paid correctly,” says Barry Silver, Healthcare Horizons Senior Vice President. “Otherwise, their employees could end up paying more money than they should on medical bills. The plans can engage external auditors to review the medical claims payments to assess if their claims process is functioning properly and that their claims are being paid as accurately as possible.”
Our unique audit process will help you return the maximum dollars to your bottom line. If your budget is already set for next year, an audit is still important because it will give you a strong comparison of your healthcare expenses so that you can strategically plan going forward. It really is never too late to take charge of your company’s healthcare expenses.