Podcast

How to Grow Your 2025 Healthcare Budget

In today’s competitive healthcare landscape, managing costs effectively is crucial for the sustainability of healthcare benefits for an organization and its employees. The budget process, encompassing everything from forecasting to allocation, is a cornerstone of financial health. For companies self-funding their health insurance plan, this process is even more important. While the budget process might seem straightforward on the surface, it’s often fraught with complexities that can impact both the financial health of the organization and the quality of benefits offered to employees. It’s time to grow your budget!

The Challenges of Self-Funded Healthcare Budgets

As you crunch numbers and prepare your 2025 budget, healthcare spending can be one of the more difficult line items to predict for numerous reasons:

  • Rapidly Evolving Healthcare Costs: Healthcare costs continue to rise at a significant rate, making it difficult to accurately predict future expenses.
  • Unpredictability of Needs: While past data is helpful, illness and injury cannot always be planned for and may be more serious than expected.
  • Regulatory Changes: The healthcare industry is subject to frequent regulatory changes, which can impact both costs and compliance requirements.
  • Emerging Healthcare Trends: New technologies, treatments, and care delivery models can introduce both opportunities and risks to the budget.
  • Data Complexity: Analyzing and interpreting complex healthcare data can be time-consuming and challenging for organizations without specialized expertise.

Enlist Help to Find Lost Dollars and Grow Your Budget

While benefits managers may have a strong understanding of their organization’s needs and the history of their plan, they may lack the specialized knowledge and tools required to navigate the complexities of self-funded healthcare budgets for the reasons mentioned. Partnering with a professional benefits consultant can provide the expertise and support needed to ensure the sustainability of healthcare benefits and protect – or even grow – the healthcare plan budget. One tool to achieve this goal is a healthcare claims audit.

Healthcare claims audits ensure accuracy, identify potential fraud or abuse and recover overpayments tied to employer healthcare plans. At Healthcare Horizons, we use a comprehensive audit method to track every claim and recover the most dollars possible. Our experienced auditors are adept at recognizing the red flags in a healthcare data set that may indicate an overcharge, systemic error (one that keeps repeating and snowballs into huge losses) or fraud. Once a claim is flagged as suspicious, we begin the process of working with the third-party administrator to correct the mistake. Once all parties agree the issue has been properly identified, the overpaid dollars are returned to the plan’s bottom line.

Healthcare claims errors typically range from 1 to 3 percent of total claims and can cost employers hundreds of thousands of dollars annually. That is a substantial piece of a budget.

Don’t Miss Out on Funds in Your Next Budget

Healthcare claims audits are an excellent tool to protect your self-funded healthcare plan. However, this strategy is most effective when combined with a solid service agreement with your third-party administrator. We will also review your current service agreement to ensure that it includes full audit rights. Limited (such as random sample audits) audit rights mean you can’t control what is analyzed – or how much money you may be entitled to have returned.

By leveraging the insights and tools offered by professionals, organizations can make informed decisions, optimize their budgets and protect their financial health in the face of an ever-changing healthcare landscape.

Healthcare Horizons is a leading expert in providing healthcare claims audit services, identifying overpaid or erroneous claims through our 100% Difference model and recovering millions of dollars for clients’ bottom lines while upholding the highest ethical standards. Since 1999, the Knoxville, Tennessee-based company has provided superior healthcare claims audits for some of the world’s largest self-insured employers. We have successfully identified and facilitated the recovery of millions of dollars of overpaid claims for our customers.
budget planning

Why Your Budget Needs to Include Audits

man flipping money

Have you ever gotten a notice saying that you might have unclaimed money from a refund, settlement, or inheritance? What was your first reaction? Most people think about what they would do with this “surprise” windfall. But guess what? It was always your money! You just didn’t know it was missing. It’s time to put it back in your budget!

As the 2nd biggest expense for most self-funded companies, healthcare plan line items should be an area of particular focus. In medical claims audits, we find errors 100% of the time through our comprehensive audits. Simply, if audits are not in your annual budget, you are throwing away YOUR money. Including a comprehensive medical claims audit in your annual budget is money well spent. It’s like the old adage: you have to spend money to make money.

Cost Containment Protects the Company Budget

Including comprehensive audits in the annual budget is a proactive cost containment strategy. With healthcare costs rising each year, and more high-value claims filed and paid by self-funded plans, it is no longer enough to assume your third-party administrator can catch every error.

The numbers tell the story. Each year, Americans file 232 MILLION healthcare claims!

Even if only 1% of the claims are incorrect, that is more than two million mistakes! In fact, the industry average is almost 3% in errors. Put a low average dollar amount of $1000 to every mistake and plans could be overpaying healthcare claims by more than TWO BILLION dollars!

Here are some examples of how ignoring mistakes in data claims would have cost companies thousands of Lost Benjamins but were thankfully caught through a comprehensive audit.

High-Value Claims are a Leading Cause of Error

In data compiled prior to the Covid-19 pandemic (2019 compared to 2015), high-value claims increased by double-digit percentages. (Information below summarized by Stop Loss Insurance Brokers.) These costs lead to higher premiums for the insurer and higher out-of-pocket expenses for the insured.

  • In 2019, 7 out of every 100,000 employees had a claim exceeding $500,000, up from 37.1 in 2015. That’s a four-year increase of 82 percent and an average annual percentage increase of 13 percent.
  • 9 out of every 100,000 employees had a claim exceeding $750,000, up from 13.8 in 2015. That’s a four-year increase of 66 percent and an average annual percentage increase of 10 percent.
  • Eleven out of every 100,000 employees had a claim exceeding $1 million, up from 6.3 people. That is a four-year increase of 75 percent and an average annual percentage increase of 8 percent.
  • 3 out of every 100,000 employees had a claim exceeding $2 million, up from 1.0 in 2015, a four-year increase of 130 percent, and an average annual percentage increase of 21 percent.

Our comprehensive audit system analyzes every claim. Our trained experts spot inconsistent trends in claims data, which occur in all claims, but have bigger negative repercussions the larger the claim amount. While a high-value claim on its own isn’t going to automatically have errors, the ones that do exist cost companies and employees deeply. Identifying these claims, particularly the systemic errors that occur when numerous claims are being made for one illness, saves companies thousands, and sometimes millions, in reclaimed overpaid dollars.

Comprehensive Audits Protect Your Budget and Bottom Line

Overpaid dollars, through inaccurately filed claims, can cost your healthcare plan thousands of dollars. Using our unique 100% difference auditing process, we find these errors and flag them for recovery. Incorrect claims impact not only the current claim but also the affordability of your plan. When it is time to renew your policy, the amount paid out is a key factor in determining your policy price. You do not want to pay for incorrect claims that falsely inflate the payout number.

So, back to our original question: How would you spend dollars that you suddenly weren’t spending on healthcare? With the money you save by including medical claims audits in your annual budget, you have options for your company. You might fund:

  • Additional training
  • Raises
  • Employee appreciation programs
  • Technology upgrades
  • THE LIST IS ENDLESS!

Remember, the provider of a healthcare plan (that’s YOU, the employer) is responsible for errors in medical payments. It is your fiduciary responsibility to ensure that claims are not overpaid and that your company’s bottom line stays healthy. We can help. Contact us now to talk about the cost and savings you can expect by performing a comprehensive audit so that you can include it in next year’s budget.

__________________________________________________________________________

Healthcare Horizons is a leading expert in providing healthcare claims audit services, identifying overpaid or erroneous claims through its 100% Difference model, recovering millions of dollars for clients’ bottom lines with uncompromising ethics and accuracy. Since 1999, the Knoxville, Tennessee-based company has provided superior healthcare claims audits for some of the world’s largest self-insured employers, involving all national and most regional payers. We have successfully identified and facilitated the recovery of millions of dollars of overpaid claims for employers.