Podcast

insurance savings with medical claims audits

End Each Year with Big Savings on Healthcare Claims

Finding Savings for Your Bottom Line Has No Season

While the end of the year is the time many people evaluate their personal and professional finances, saving money isn’t limited to a calendar date. However, particularly in business, end-of-year financial reviews set the stage for the upcoming budget process. If your company is self-insured, reviewing your employee healthcare plan costs to identify savings should be your number one priority – after all, your company benefits are the second greatest expense behind only employee salaries.

Healthcare Claims Audits are Important for More than Just Savings

The cost of healthcare in the United States is staggering. Health insurance expenditures totaled $3.6 TRILLION in 2018. If you’re one of the 99% of large firms that provide employee health insurance, you’re paying a big part of this tab! There is no indication that this number won’t continue to rise – in fact, some estimates show costs increasing year-over-year by at least 10%. Reviewing the amount paid out against your company’s policy is vital to insuring that neither the company nor the employees are overpaying.

Each year benefits and human resources managers face the important – yet tiring – task of renegotiating health insurance benefits for their self-funded company. What if this year, you were prepared to negotiate for a service that directly impacts your company bottom line by finding big savings? Comprehensive healthcare claims audits are a tool to help you find dollars that can be returned to your company budget. Additionally, these audits ensure you are meeting fiduciary requirements mandated to all insurance providers through the CAA or Consolidated Appropriations Act.

Comprehensive Audits vs Random Sampling

Much like you trust your doctor to run annual blood tests to look for underlying health problems, you can also trust a qualified auditor to review your medical claims each year. These consistent reviews will show inconsistencies, data entry errors and systemic faults in your claims processing. BUT it’s not wise to leave this process to chance. You don’t ask a doctor to only look at your triglyceride counts instead of a full cholesterol panel and you shouldn’t settle for looking at only a portion of the filed claims.

As many as one in ten medical claims have errors! Imagine that you only review five percent of your claims. How can you be expected to recover all of the overpaid dollars? If you only do a random sample audit, you are betting a lot of money that your audit will land on one of the mistakes in your data set. A better option is a comprehensive audit. Our process looks at every claim and identifies those that potentially have errors. Once identified, we work with you – our client – to determine which claims should be pursued for recovery. The best part is that we do all the work and you get the savings!

Recovered Money is the Gift that Keeps on Giving

Everyone has a wish list, especially this time of year. Businesses are no different. Employee benefits are important to attract new hires and for retaining team members. However, they all come at a cost. For every dollar overspent on a healthcare claim from your self-funded policy, that is a dollar lost that could be used for another program. To ensure you aren’t erroneously lining the pockets of a healthcare entity instead of funding initiatives in your business, insist that your TPA include comprehensive medical claims audits in your service agreement. The investment in time (as little as four hours) and money (you pay when we recover) will deliver the best ROI for your company’s bottom line. That is something to celebrate all year!

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.

Post Open Enrollment Mental Recharge

Mental health and wellness are more important than ever in employee benefit plans, but are you practicing what you preach? As you wrap up open enrollment, you can lead by example and take time to recharge and improve your mental and physical well-being. Below are different activities that can boost your mental attitude.

Social Activities

Truly Disconnect. We are all guilty of checking email after hours or responding to a late-night work text. Once you’ve hit send for the final time on this year’s open enrollment documents, do yourself a favor and turn off your cell phone when you leave the office (and leave your computer there as well!).
Plan Family Time. The holidays will be here before we know it. Take time now to plan for the festivities. Planning ahead not only helps you avoid unwanted surprises during family visits, but you’ll also reconnect with family members.
Engage in Extracurricular Activities. Did you miss your last book club meeting? Have you wanted to try the new spin class? Set aside the time on your calendar! Connecting with others is an important part of mental wellness.

Physical Activities

Improve Your Sleep. Sleep is crucial to mental – and physical – well-being. You most likely were not sleeping as soundly as you would have liked during the past couple of months. Make sure your sleeping place is peaceful, that you disengage from electronics at least an hour before trying to sleep and that the room temperature leans toward cool.
Exercise. Even a 30-minute walk can raise your spirits and provide physical benefits. Adding weight exercises also provides continued metabolism burn throughout the day!
Get Back to Healthy Eating. When we’re busy or stressed it’s easy to let healthy food choices slide. Convenience becomes more important. Now is the time to reset. Make a meal plan, prepare lunches to avoid eating out every day and stock up on healthy snacks like fruit and nuts.

Spiritual Activities

Meditate. Reminding yourself that there is something bigger than us can help put the craziness of open enrollment in perspective. Meditating can involve praying, mantras or simply deep breathing.
Read. Escaping to other places through books is a great way to detach from the all-consuming questions surrounding healthcare plans.
Practice Mindfulness. After many days of solely focusing on the open enrollment process, appreciating the world around you is a simple, yet effective way to reduce stress, anxiety, depression and chronic pain. Building mindfulness can be as simple as repeatedly bringing yourself back to the present throughout the day. Click here for a great introduction to the practice.

Your own negotiated healthcare plans should include professional mental health services. If you feel the need to speak with someone about stresses you are facing, reach out.
The benefits are there, so take advantage!

How We Can Help Post Open Enrollment

We are here to help find overpaid medical claims for self-funding companies. Recovered money might be used to treat employees to a mental health break with a coffee bar, chair massage at the office or noise-filtering headphones. Regardless of whether the reclaimed dollars go back to the company bottom line or are used for wellness programs, HR benefits administrators and insurance brokers can rest a lot easier knowing a chosen healthcare plan isn’t paying out more than it should! That’s what we call mentally refreshing!

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.

Medical Claims Audits Find More Than Money

What Medical Claims Audits Find

First, and most importantly, comprehensive medical claims audits WILL find overpaid dollars in healthcare claims. Is that all you need to know? Great! Click here to contact our office to schedule a consultation click here for medical claims audit information

But wait, there IS more! Reviewing all claims in comprehensive audits is only one way we identify potential cost savings errors in self-funded healthcare plans.

In the constantly changing healthcare environment, periodic audits are essential to help identify and correct patterns of overpayment. At Healthcare Horizons, we are committed to thoroughly reviewing all available data to ensure that our clients’ fiduciary obligations regarding healthcare payments are being met as accurately as possible. This results not only in the recovery of overpayments but also in the correction of root-cause issues to improve efficiency and generate long-term savings for our clients.

Based on this thorough review of data, we make recommendations to our clients after each audit to help contain costs going forward and protect their bottom line.

Three Common Audit Recommendations by Healthcare Horizons

1) Clients should consider negotiating enhanced audit rights in future administrative services agreements.

Healthcare Horizons always recommends that clients explore options for a more comprehensive, targeted audit of all future claims if the audits are currently limited in scope by their Administrative Services Only (ASO) agreements. If the ASO only allows for random sample audits, the chance of finding errors drops significantly. (Read this blog about the importance of equal fiscal protection for your company.)

2) Clients and their TPAs should agree upfront on how out-of-network charges will be handled.

Too often we see claims processed according to what the TPA believes the plan defines but catches the clients (and usually the employee) by surprise with an unexpected out-of-pocket payout. We recommend two key inclusions: a set agreement for the maximum allowed amount that will be paid on out-of-network claims and the ability to consider pricing options other than full-bill charges. A maximum limitation sometimes found in agreements is to cap the out-of-network payments at 125% of the Medicare amount. Healthcare Horizons also helps with out-of-network charge negotiations, specifically in helping to identify fair pricing strategies.

3) The Client and TPA should discuss plan intent for situations in which other primary coverage should pay as primary.

This occurs frequently with employees that are also eligible for Medicare. Once an employee or a former employee under COBRA turns 65, Medicare should provide the primary coverage for them. If the employer plan is secondary to Medicare under federal law, the plan will not pay benefits for services or supplies that are included within the scope of Medicare’s coverage. This occurs even if an employee fails to enroll in Medicare when eligible. In other words, if a participant is eligible for Medicare Part B benefits but does not enroll, the plan should pay as if the participant had enrolled in Medicare Part B. The plan would then pay any secondary coverage after the Medicare Part B estimation.

The ASO needs to include language that addresses Medicare Part B estimation requirements. This outlines how the TPA estimates what Medicare should pay for a particular claim. Then the TPA factors that estimate into determining what the employer plan will pay on the claim.

Medical Claims Audits Protect the Company

Not having medical claims audits as an annual must-do is like not reviewing your insurance coverage for five years or not balancing your checkbook (we think that is still a thing!). Only by having a full, comprehensive look at all medical claims are you able to determine if there has been an overpayment, misinterpretation of benefits, fraud and abuse, or systemic errors causing up to thousands of dollars of repeated Lost Benjamins. Self-Insured plan fiduciaries are responsible for making sure the healthcare plan is administered properly. Any errors or unexpected bills are the COMPANY’S responsibility to pay and sometimes fall to the employee. The good news is that you don’t have to leave that to chance. Let’s talk about what medical claims audits can find for you!

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Healthcare Horizons is a leading expert in providing medical 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.

The Top Two Questions to Ask Your TPA

We talk a lot about WHY you should be getting external healthcare claims audits. (These statistics emphasize the importance.) So, in this article, we are going to assume you have made the excellent decision to have audits. Congratulations! But did you know that all audits aren’t created equal? Do not assume that your self-insured healthcare plan’s audit rights are covered by the TPAs standard language. These are the top two questions you need to ask your TPA to make sure you are not paying for a less-than-thorough audit.

1. Do you allow for full 100% comprehensive auditing, without restricting the audit to random sample selection?

TPAs are entrusted by clients to manage the claims and payments of the plan, but their money is not at stake – yours is. Your company deserves the same protection a TPA would require for their own fully-funded plan.

There are two primary types of audits: random sample and comprehensive. Insist on comprehensive audits.

The typical outdated methodology for medical claims auditing is random sample selection. In this type of audit, auditors randomly select 200-300 claims out of millions of transactions. Auditors examine those claims for errors based on predetermined criteria and extrapolate the results to determine a claims error percentage of the entire data set. This approach historically has been considered standard practice when handling a large number of claims, but it carries a high margin of error that can work against the company in three ways.

If the auditor encounters an error on a randomly selected sample claim, it is virtually impossible to determine if the error is isolated or systemic in nature.
It is likely that significant one-off errors exist outside of the random sample selection.
It is often difficult to convince payers to issue settlements based on the results of a random-sample audit.

We are different because of our comprehensive auditing process. We review every healthcare claim and Healthcare Horizons leadership submits a specifically targeted selection of claims to review onsite with the carrier. Our approach yields much better results because we identify both isolated and systemic errors and assign actual dollar impact to those errors, making a much stronger case to the payer.

If you are settling for a random sample selection audit, you are throwing money away. Unfortunately, many TPAs only want to allow random sample selection audits. They know the likelihood of any error being found using this method is much smaller. When comprehensive audits look at every claim, data errors will be found. But finding mistakes is a GOOD THING – for you. Insist on comprehensive audits.

2. Do you limit the number of audits that can be performed?

Service agreement audit language may contain many stipulations. A common restriction is on the number of audits conducted over a set length of time. Much like restricting audits to random sample selection, restricting audit frequency significantly limits the potential for errors to be discovered. Therefore, your ability to recover overpaid dollars is also greatly reduced.

Service agreements should not limit the number of times you can request healthcare claims audits. We recommend annual audits, not every other year as many TPAs enforce. One of the reasons that annual audits are so important is that claim recoveries are subject to time limits. It is common for the service agreement language to restrict claims recovery to two years or less. Here is the basic problem: when audits are not performed each year, claims may be too old to recover.

For example, in 2022 we can look back at the 2021 claims dataset for errors. If the audit is not performed until 2023, these 2021 claims will be too old to recover. If you are not having regular audits and a claim falls out of the timeline eligible for review, you will be out the dollars overpaid.

For our largest clients, we may audit quarterly, but annual reviews protect self-funded companies and their employees from overpayments and out-of-pocket expenses. In addition, our auditors are there to improve processes by providing suggestions and identifying inconsistencies, which will help eliminate overpayments and systemic errors.

The Top Two Questions Make the Difference

Now you know the top two questions to ask your TPA to ensure you are receiving the fullest scope of audit rights. Your next step is to work with someone that understands your rights, can execute a comprehensive audit, and return the most money to your bottom line.

In our 23 years of providing comprehensive healthcare claims audits, we have seen virtually every benefit setup, provider contract method, and claims administration policy that one would expect on claims audits of the world’s largest self-insured employers. Because of this experience, we quickly assess gaps in the healthcare audit rights in your service agreement. We offer a free audit rights assessment to make sure the audit language in your service agreement is not limiting your ability to recover funds. It is YOUR data and, more importantly, YOUR money. Don’t leave it on the table!

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. We have successfully identified and facilitated the recovery of millions of dollars of overpaid claims for employers.

Healthcare Claims Mistakes Happen. Ignoring Them Could Cost You.

“Accountability is the glue that ties commitment to the result.”
Bob Proctor

Are you worried that if claims mistakes are found in your healthcare data set that you will be held responsible? We hear this a lot, but the fact is, NOT finding the mistakes and leaving them uncorrected is what makes individuals or companies look bad.

Human Resources departments should continually find ways to conserve costs and ensure HR is a bottom-line contributor for the company. After payroll, employee benefits are the next biggest expense for a company. Keeping expenses manageable while still providing robust benefits is a delicate balancing act. In today’s job market, benefits are a must. But just because your company will fund healthcare plans for employees, it doesn’t mean the expense shouldn’t be held in check. Fortunately, finding the mistakes in medical billing records is a straightforward way to show accountability and return money to the company. That returned money is then available for other worthy company initiatives.

What happens if you don’t find the claims mistakes?

According to a report in Becker’s Hospital Review, as many as 80% of medical bills contain errors. As healthcare costs continue to rise, so does the need for healthcare payers to reduce overspending from avoidable billing errors and improper claims reimbursement.

As an example, let’s say medical claims errors occur in 10% of claims filed. If a self-funded company has a third-party administrator (TPA) processing more than $1 million in claims payments each year, this could mean $100,000 of overpaid claims, at a minimum!

“Given the sheer volume of claims submitted each day, capturing and reconciling discrepancies based off of claims data alone isn’t just ineffective — it’s flat-out unviable. Payment integrity systems that review claims data against medical records are helping payers identify potential waste and abuse with greater accuracy than ever before, uncovering immediate and long-term cost savings opportunities.”[1]

This is what Healthcare Horizons does through our comprehensive audit process. With comprehensive audits, the full data set of paid claims are reviewed for errors in claims payments. Many companies who realize that they should be auditing annually are still relying on random sample audits. Random sample audits are better than nothing, but Healthcare Horizons believes they are not sufficient to ensure adequate cost containment measures are in place for the plan. We find that random sample audits rarely find significant overpayments or systemic errors. Are you willing to settle for 90% accuracy? (Read more about why you shouldn’t settle).

What do claims audits find?

The root cause of our audit findings usually involves one of 5 types of errors. Often, we find more than one of these errors has led to overpayment of medical claims.

Systemic error. These are errors that may have occurred when the plan was established and typically involve charges that repeat.
Manual one-off error. The most common mistake, this is usually due to human error when inputting information.
Lack of action on retroactive information changes. Reviews are frequently performed to determine patient eligibility for certain procedures or claims. If the changes in eligibility are not entered into the system, incorrect charges or reimbursement requests will be submitted. These inaccurate claims result in erroneous denials or payments when compensation should not have been made.
Discrepancies in plan interpretation. Since humans interpret plan requirements, incorrect payments can happen if there are differences of opinion about what the plan covers.
Provider billing errors. This error is also typically human error. Transposing just one number can cause medical claims to be incorrectly coded and paid.

Implementing tools, like audits, to find these errors shows a high level of ownership and responsibility to ensure the best management of employee and company dollars.

Finding claims mistakes isn’t about pointing the finger.

We have uncovered many examples of systemic errors in claims processing that could cost a company millions of dollars in potential lost payments. Our case studies page outlines some of the most egregious examples of overpayments. Our comprehensive audits not only find the errors and allow the company to recover these overpayments, but we then work with the company and their TPA to fix the ongoing issue that caused the overpayments from the onset.

With the new CAA (Consolidated Appropriates Act) in place, plan fiduciaries have new sign-off responsibilities beginning in December of 2022. Comprehensive audits are a tool to ensure HR leaders and C-Suite management feel comfortable that the systems in place for processing the large number of healthcare claims are accurate, and include a way to fix errors…including the fees you may not know existed. As the plan owner, you have the final responsibility for these costs. So, the question left to ask is: Would you rather find the mistakes in your healthcare claims data, or would you rather someone discover the error down the road when it is potentially too late to recover overpayments? You can be the hero. We help make sure you are protecting the financial integrity of your employer-provided and funded healthcare plan.

We will be at SHRM in New Orleans next month and would love to talk about the systems you have in place and how we can help with your financial bottom line. Stop by Booth #2870 for a giveaway and we will be happy to answer your audit questions!

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. We have successfully identified and facilitated the recovery of millions of dollars of overpaid claims for employers.

[1] https://www.modernhealthcare.com/finance/identifying-addressing-common-medical-billing-errors-pre-post-payment

Benefits Brokers Have Tools to Save Money

Benefits brokers are trade professionals.

Just like any other profession, we count on them to provide expertise in addressing our problems. In healthcare, benefits brokers have tools that can save self-funded companies money on their health plans.

General Contractors for Health Insurance Plans

Think of benefits brokers as a general contractor for your self-funded health insurance plan. If you are renovating your home, you most likely will hire a general contractor to oversee the project. The contractor does not have all of the tools for a kitchen repair. Instead, they call a plumber to move water pipes, a flooring specialist recommends the best type of material for the traffic in your space, and an electrician makes sure all wiring is up to code. You want someone experienced in each area to make sure the project is done correctly and with the best return on investment.

Your self-funded insurance plan deserves the same treatment. A benefits broker has numerous tools to contain the costs of your plan, saving the company and employees money.

Benefits Brokers Tool: Claims Audits

One of these tools is a comprehensive claims audit. We partner with benefits consultants and brokers to provide this tool. Comprehensive claims audits discover and recover overpaid monies and identify systemic errors that can cost companies hundreds of thousands of dollars or more!

All audits are not created equal! What to look for in a healthcare claims audit process:

Comprehensive Audits vs. Random Sampling. All healthcare claims data sets have errors. Do you really want to leave finding those errors to “chance?” That is exactly what a random sample audit does – eliminates the auditor expertise in finding errors – for a luck of the draw. Our comprehensive process ensures every claim is analyzed for potential error.
Internal Audits. TPAs will sometimes perform limited internal audits for their self-insured clients. This is like the fox guarding the hen house! External audits are a best practice for satisfying the employer’s fiduciary responsibility.
Realistic Time Frames. Many TPAs limit the number of times the plan can be audited as well as the length of the look back period for recovery on overpaid claims. Annual audits avoid the “too old to recover” claims.

Cause the Effect

For Human Resources leaders heading to the SHRM conference in June, you’ll recognize this phrase as the theme of the event. Incorporating audits into your overall healthcare plan is a direct action that leads to a positive effect. Ask your benefits broker if audits are included in the recommendations they are providing. If not, ask them to contact us. This is a must-have tool! Be sure to carefully review the audit rights in the administrative services only (ASO) agreement with your third-party administrator. Have more questions? Stop by SHRM Booth #2870 and we can talk through your current situation and show you how we can help bring cost-savings to your company’s bottom line.

A Win-Win Tool

If, as a broker, you are not offering this tool to your clients, let’s talk! Providing audits is a win-win. Clients look to their benefits brokers and consultants to help save the company and their employees money. Company benefits coordinators and human resources leaders should be a bottom-line contributor for their companies! Make sure you are using every tool available to you to help them. As the health insurance professional, you are the general contractor in charge of the overall health plan for your client. Let’s partner to make you a winner!

For more details on how audits bring value to brokers and their clients, read “4 Claim Audit Benefits for Self-Insured Clients.”

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.

Tax Day: Double-Check the Details

If you’re like us, before taxes are submitted you will double-check the details several times. It’s smart to give the return one more review to make sure nothing was missed. If it’s important to review your personal finances, isn’t it equally important to review your business’s financial health?

Audits Find Errors

In our business, we all too often see healthcare plans that never receive the benefit of another review. Self-insured employers trust third-party administrators to process and pay claims that are consistent with the plan details and are error-free. In many cases, there is no incentive for the TPA to identify and correct errors. Make sure your agreement allows for audits. It is your money!

Double-Check your Audit is Comprehensive

don't gamble double-check your audits — Photo by Conor Ogle

Does your healthcare service agreement allow for comprehensive audits to find errors and recover funds? Even when a random sample audit is conducted, the odds are against you that it will land on a claim filed in error. Additionally, there is no way to find and resolve systemic issues to prevent future claims paid in error.

That is why we are so passionate about comprehensive claims audits. We want our clients to have the peace of mind that comes with knowing that every claim has been reviewed and that every systemic issue has been corrected. Please contact us to discuss a claims audit for your plan.

*This blog was originally posted 4/18/2106 and has been updated.

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.

Equal Fiscal Protection for Your Company

Companies that self-fund their healthcare plans have a fiduciary duty to ensure that those plans are being administered properly – even if that administration is done by a third-party administrator (TPA).

Your company deserves the same fiscal protection from your TPA that the TPA provides to its fully insured clients. ERISA requires plan sponsors to file government reports, provide information to participants, protect plan assets, and deliver benefits to participants.[i] The only way to know that you are protecting assets and delivering benefits is by ensuring that your claims are being processed correctly.

TPA Fiscal Protection Pop Quiz

QUESTION: Would a TPA that fully funds a healthcare plan randomly choose which claims to audit?

ANSWER: NO! It is common sense that random sampling is not as effective at catching claim errors as a comprehensive audit. So why are too many companies accepting random sampling language in their service agreements with the payer? Allowing a TPA that manages claim payments of your plan (and doesn’t fund them with their own dollars) to only audit a few random claims is like letting the fox guard the henhouse.

QUESTION: What testing performance guarantees protect my company?

ANSWER: Not many. Performance guarantees are stacked against you if random sampling is used. It comes down to math.

Let’s say the guarantee is 98% accuracy in filed claims. Your company files 50,000 claims per year. Even if 1,000 of those claims are processed in error, the company meets its guarantee. HOWEVER, in random sampling, only 250 to 400 claims are usually analyzed. The likelihood that those few claims contain errors is a gamble the TPA is willing to make. Are you?

QUESTION: Our TPA found an error through random sampling, so the process is working, right?

ANSWER: Even a blind squirrel finds a nut every now and then. Finding errors and returning overpayments to your plan fund is the primary objective of any audit. However, if you don’t fix the source of the problem, you are likely to continue to lose money through systemic or repeatable errors. Comprehensive audits not only find the claim errors but will identify systemic issues that are causing continued mistakes.

QUESTION: Did your TPA tell you their audit language is standard and must stay in the agreement?

ANSWER: THIS IS NOT TRUE. It’s your plan, your money, your employees, your responsibility! Change the audit language to ensure the fiscal protection of your company’s bottom line, as well as the pocketbook of your employees.

The Fiscal Protection Bottom Line

If your service agreement only allows for limited TPA-provided audits, don’t sign it. In a random sample audit, the claim picked to be analyzed might be correct but be sandwiched between unexamined errors, costing your company thousands of dollars. Demand that language be included that gives you YOUR right to work with other companies to conduct comprehensive audits.

To put it succinctly, a TPA will most assuredly look at EVERYTHING if fully insuring a plan versus managing a self-funded plan. Your self-funding company deserves the same coverage they give themselves.

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.

[i] Tiaa.org

The Biggest Mistake in Healthcare Agreement Negotiations

Each year, companies – and their employee benefits manager or health insurance broker – hold negotiations with third-party administrators (TPAs) to handle the details of self-funded healthcare plans. These agreements can directly impact a company’s bottom line.

Considering the rising cost of healthcare and incidences of significant overpayments of claims, including fraudulent or abusive claims, ensuring the plan addresses its fiduciary responsibilities is very important. If you are currently in the important “negotiations season,” be sure your self-funded healthcare plan is fully protected.

Did You Know?

You don’t have to accept the standard audit language in a proposed TPA agreement. It is an ERISA fiduciary responsibility of human resource managers or benefits consultants/brokers working on behalf of their plan to ensure that the language included in a services agreement is beneficial to everyone, but most importantly to the company.

The Most Common Mistake in Negotiations

Most TPAs will tell clients that they do in fact have audit rights within their agreements. However, in too many cases, the language is very restrictive and doesn’t really protect the company. Not negotiating for full audit rights is a HUGE mistake!

Full audit rights include these key components:

Comprehensive claims review, not just random sampling
Non-restrictive targeted sample size
Minimum of two-year period for recovery of overpayments
Fee structure based on recovery, not fixed

Random Sample vs. Comprehensive Audits

Random sample audits are usually listed as the allowed audit type the standard audit found in
most TPA agreements. Sometimes TPAs do not allow any type of audit. The biggest downside to random sample audits is that they, obviously, do not allow for a full review of all the data. When only a randomly selected portion of a data set is analyzed, it is nearly impossible to identify any patterns of abusive billing or systemic issues.

While benefits consultants claim they are performing audits and don’t need an external audit company, most of these audits only consist of

high dollar claims,
eligibility reviews, or
obvious fraudulent charges.

Here is one example of how a random sample audit works.

Auditors randomly select approximately 200-300 claims out of millions of transactions.
Auditors examine those claims for errors based on predetermined criteria.
Auditors extrapolate the results across the entire range of millions of claims to determine a claims error percentage of the entire population.

This approach carries a high margin of error that can work against the company. The fallout from the random sample approach is significant.

If the auditor encounters an error on a randomly selected sample claim, it is virtually impossible to determine if the error is isolated or systemic in nature.
It is likely that significant one-off errors exist outside of the random sample selection.
It is often difficult to convince payers to issue settlements based on the results of a random-sample audit.

Random sample audits may leave undiscovered mistakes, and therefore money, on the table. This penalizes not only the company but the employees as well.

Conversely, a comprehensive audit starts with a review of the entire data set and an identification of known trouble areas. Audit companies with decades of experience can see red flags in data sets and start reviews at this point. Then, the comprehensive audit can pinpoint isolated and systemic errors in the audit process. Actual dollar amounts are assigned to these mistakes, making it very easy for payers to see where reimbursement is owed. As a result, employers can recover significantly more in overpayments and can correct root causes of the issues, which will prevent future claims from being paid in error.

Demand Comprehensive Audits Rights During Negotiations

There are numerous misconceptions about working with an outside auditing firm. The most common is that many TPAs believe working with a company like Healthcare Horizons will penalize them. At Healthcare Horizons, we work WITH a TPA to ensure errors are found and corrected. The TPA has the interest to see that their client is protected.

During the next negotiations cycle, HR departments, benefits consultants/brokers, and TPAs need to work together to demand accountability in healthcare claims and protect the financial interest of the client.

Use this checklist to make sure you have comprehensive audits rights in your TPA agreement. It’s YOUR money and your fiduciary responsibility to make sure that your medical plan is being administered appropriately.

Healthcare Horizons offers a free assessment of administrative service agreements to determine the proper inclusion of audit rights. Contact us so we can help you manage your fiduciary responsibility as it pertains to your company’s self-funded healthcare plan.

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.

No Surprises Act Impacts Businesses

Don’t Let the No Surprises Act Catch You Off Guard!

By now, anyone providing healthcare plans as an employee benefit should be aware of the new No Surprises Act, effective at the beginning of 2022. Whether you are the human resources manager tasked with outsourcing this important benefit or the health insurance broker providing options to companies for coverage, the new law has several components that must now be met and coordinated through plan sponsors.

The good news is that the No Surprises Act adds more transparency and accountability – all designed to protect the consumer. However, what is coming as a surprise to many companies that self-fund their employer healthcare plan, is that the employer is the one responsible for all compliance.

What are the key provisions of the No Surprises Act?

No Surprises Act protects patients and members from surprise or hidden fees — The No Surprises Act mandates that providers and healthcare plan administrators post cost information to members in a clear and timely manner.

Increased transparency is the overarching intent of this new law. Designed to make healthcare costs easier to understand, providers and plan administrators must provide more information to members than ever before. Examples include:

Providing timely good faith estimates of costs
Clearly outlining the explanation of benefits once charges have been submitted by the provider
Offering cost comparison tools easily accessible by the member

How are self-insured employers impacted by the No Surprises Act?

Employers must be aware that their members cannot be balanced billed (Balance billing) for emergency services, non-emergent services from out-of-network providers provided at in-network facilities, and out-of-network air ambulance services. Patients will only be responsible for paying their in-network cost-sharing. If there is a difference in the cost of service, once all applicable deductibles or co-pays have been met, the employer is responsible for working with the provider to cover the remainder of the bill. The provider and the plan administrator have set guidelines for negotiating the final payment.

What steps should self-insured employers take to protect their bottom line?

It is likely the No Surprises Act will increase plan costs through both claims and IDR (independent dispute resolution) fees. Additionally, insurers will ask for increased administrative fees to provide services required by the law. But there are two important steps employers can take to minimize the financial impact.

Self-insured employers should ascertain from their third-party administrator (TPA) how the QPA (Qualified Payment Amount) will be calculated. While compliance is the responsibility of the employers, most payments will be made by the TPA. The QPA is a newly created term in the act and is the plan’s median contracted rate — the middle amount in an ascending or descending list of contracted rates. If an employer doesn’t know what that QPA amount is, predicting costs is much more difficult.
Employers should fulfill their fiduciary responsibility and request comprehensive external audits of their medical plans to make sure their TPA is processing claims correctly. Unfortunately, many TPAs restrict audit rights to a random sample selection of paid claims that can be reviewed. And many self-insured groups aren’t auditing their paid claims at all. Auditing medical claims is an industry best practice and should be standard practice for self-insured employers.

Having a plan provides peace of mind.

A thought-out plan for implementing the requirements of the act should be in place for any company that provides a healthcare benefit to employees. Plan sponsors should review the new requirements of the No Surprises Act with consultants, service providers, and legal counsel. The plan should detail who will be responsible for monitoring the impact of the new law. One of the key components that should be included in a plan is regular, comprehensive audits. Audits not only find and recover overpayments but also identify systemic issues within the payment process. Mistakes happen, but they are even more likely to occur when new policies and procedures are put in place. Finding the mistakes early helps contain costs for both the employer and the employee.

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.