Recently Healthcare Horizons completed an annual audit for a long-term client. The client’s contract with its third-party administrator (TPA) strictly limits audits to random sample audits, thereby not allowing comprehensive audits. In performing prior audits, it was apparent that the TPA was erroneously paying certain claims, but such claims were not selected via the random generated process so they could not be submitted as payment errors.
This year, our random sample generator selected one such claim for audit, and we were able to report the payment error to the TPA and prove that it was a systemic error. For Healthcare Horizons employees this ended years of frustration; for our client it ended years of overpaying certain claims being erroneously adjudicated. It also recovered tens of thousands of dollars for the employer and ended annually overpaying similar sums of money by our client.
Annuitized Benefit
Thus, our client is now benefiting annually from the root-cause correction of the TPA’s errors. That is what we refer to as an “annuitized benefit” resulting from our audit. It will benefit our client and its employees for many years to come! We strongly encourage self-insured employers to not fail to capture such annuitized benefits that arise from comprehensive claims audits. If your company is not having comprehensive audits performed annually, contact us today- DON’T WAIT! If you are having sample audits performed, contact us today to learn more about what you are missing. As Professor Ronald Klimberg of Saint Joseph’s University Haub School of Business has reported, “random sampling misses over 90% of the errors caught by the methodology based on the 100-percent-of-claims analysis.”
If you do not have annual audits performed, you are guaranteed to miss out on recovering 100% of overpayments! If random sample audits are being performed, you are probably missing the recovery of 90% of overpayments. Be sure that your company and its employees are not overpaying for healthcare services.