Podcast

3 Things Benefits Managers Told Us at SHRM

The SHRM conference in New Orleans this year was spectacular (ending the event with a Brad Paisley concert was icing on the cake!). It was wonderful talking with friends in the Human Resources world – in person – and meeting many benefits managers eager to find ways to contain costs in their employee benefits plans. In listening to these HR professionals, we learned three things:

Most benefits managers think their brokers or TPAs handle all the auditing of their healthcare plans.
Some were unaware that they should be reviewing audit rights in the ASO agreements.
All worry about how much work it would be for them to do an audit and how much stress it would cause them.

Don’t Assume Your TPA is Looking Out for You

Your third-party administrator is tasked with one job: to process your medical claims in the most efficient manner. As benefits managers for self-funded employers, you trust your TPA to process the healthcare claims correctly so that you are not overfunding healthcare payments.

Unfortunately, even though so much of the process is automated, humans are still involved in the process. And humans make mistakes. Mistakes fall into one of two broad categories: one-off or systemic. (You can see a more detailed breakdown of the types of errors in our recent blog: Mistakes happen. Ignoring them could cost you.)

One-off errors are mistakes that, once fixed, shouldn’t happen again. These can include transposing a number in the claim code or misspelling a patient’s name. But just because these are “simple” mistakes, don’t think the financial hit can’t be significant! (Here is one example.)

Systemic errors are embedded issues within the claims process. These mistakes can cost a company hundreds of thousands of dollars over time. Typically, these errors occur because a mistake was made in setting up the plan. Examples include claims being filed through a location instead of a provider (as in this example) or a treatment being capped at a certain amount due to being categorized as out-of-network, when it actually is in-network.

The TPA has little incentive to look for these errors and recover overpaid monies. Why – because they are paying with your money not theirs. While most TPAs are excellent at what they do and truly do want to process claims mistake-free, it’s impossible to do so at 100%. In fact, estimates show that up to 80% of claims data has an error. Not all of these errors have a financial impact, but many do. If your TPA, through your service agreement, is telling you they will perform an audit and that they guarantee a 98% success rate, you should ask for more details. Is the audit a random sample selection of claims for review? If so, it is highly likely they won’t randomly select the claim with the mistake. Are you willing to take that chance?

Your Company Does Not Have to Settle for the Standard Audit Language

In any negotiation, the first offer is probably not the best. The same is true for the audit rights language in most TPA service agreements. While the agreement says that you have audit protection, the language is typically very restrictive. For instance, does the agreement say that you cannot work with an outside audit firm? Make sure you are negotiating for comprehensive, independent audits. Not sure what to look for? Read this blog for tips. Additionally, we offer a no-cost audit language assessment to determine the effectiveness of the audit system in place for your company.

HealthCare Horizons Does the Work for Benefits Managers

HR professionals are busy. Our audit process involves you as much – or as little – as you want. Once you set the process in motion by giving us access to your medical claims data, we only need to involve you to decide which claims you would like to pursue for recovery. We provide clear communication on the impact the recovery will make (hint: it isn’t just the amount of dollars reimbursed!) and we will work with your TPA to move forward. If there is a systemic error, we will also explain in detail where the breakdown in the setup occurs so that your TPA can correct the problem.

As for stress? The only stress involved will be if you DON’T have regular comprehensive audits. Now that you know that there are most assuredly mistakes in your data set, the idea of losing money that could be returned to your company’s bottom line will cause sleepless nights.

The Only Bad Mistake is the One You Don’t Address

We say it often, not finding mistakes will do more long-term harm to your company, and potentially your credibility, than having an audit discover errors. Finding the claims errors and recovering dollars from overpaid medical claims means more money for your company’s bottom line. As the benefits manager, that is your responsibility. That money can go toward other valuable programs within your organization. Not to mention the money you save employees. Now you know. So now is the time. Contact us to start your medical claims audit. Cause the Effect.

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.

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.

2022 Healthcare Benefit Outlook

It’s that time of year. Time for the annual reflections on the past year and predictions for the next. While you might think there isn’t much change when it comes to employee benefits and healthcare trends, the past two years have proven to be full of surprises. So, we’ll look at the highlights from 2021 and then explore what we see as the 2022 healthcare benefit outlook.

The Impact of the Pandemic

2021 highlighted the negative impact of the Covid-19 pandemic in the workplace. Employers had to analyze nearly every aspect of their work culture, and that included employee wellness. Out of these reviews, clear trends emerged. Women experience more burnout than their male counterparts. Mental health issues were up across the board as people struggled with work and home worries. Remote work exploded, adding new issues for human resources, cybersecurity teams, and the home-work balance. However, as the saying goes, necessity is the mother of invention. (1)

The Healthcare Benefit Outlook

According to new research by LinkedIn, the top three things Americans value most in their career now are work-life balance (34%), compensation (32%) and benefits (26%).

When you hear ‘employee benefits,’ the first two things that jump to mind are probably paid leave and healthcare coverage. With the Covid-19 pandemic stretching into year two, these are still the top “wants” from employees. However, we’re also seeing companies offer a larger variety of perks and solutions to attract and retain strong teams.

Some of these non-traditional benefits include hybrid work options, mental health benefits, more personal time off (with less stipulation for how the time can be used), and financial planning assistance. Yet, the biggest changes are likely to be seen in how healthcare is provided and funded.

Healthcare Benefit Coverage

At its core, the pandemic was a health care crisis. The panic and uncertainty that evolved from sickness, fear, or loss of income emphasize the importance of investing in comprehensive healthcare benefits for employees. Insurance brokers and human resource benefit managers need to keep this insecurity in mind as future benefits are structured.

Flexibility is Key

Gone are the days of one-size-fits-all plans. More personalized healthcare coverage is expected to grow over the next year. Employees realize they may need, or want, different levels of care than their co-workers. This is not surprising when almost every area of our lives, from how we stream television to our GPS, is customized. The areas listed should be explored to provide the best comprehensive coverage for individuals and families. (2)

Personalized coverage. Each insured member should be able to choose the best care and price-point for their needs. This is actually a win-win for employees and employers. For example, when set up from the onset, people who first use lower-cost interventions see lower prices, if or when their care escalates. This rewards high-value care decisions that can make employee populations healthier in the long run.
Personalized cost-sharing. Most employers provide an equal level of coverage for all employees. But that approach isn’t personalized. In fact, it can contribute to coverage inequity and perpetuate health care disparities. For example, consider two employees who have a $3,000 deductible on their employer-sponsored health plan, receive the same subsidy from their employer, and are eligible for the same level of coverage. To many, this sounds fair, but if one of them earns $30,000 a year and the other earns $300,000, their ability to access coverage is very different—and that is inequitable.
Personalized experience. We can’t forget about opportunities to personalize care navigation and support experiences. People want to feel seen and heard. It’s important that employees have access to a broad network of high-quality, low-cost providers who speak their language, understand their culture, sexual orientation, gender identity, etc.—and they need help finding these providers.

Healthcare Benefit Outlook Incentivizes Utilization

Data shows 15% of Americans with employer-sponsored health insurance deferred some care between March and September 2020.

This statistic foreshadows both short and long-term implications for not prioritizing preventative care, which catches small health concerns before they become costly more serious issues.

“For years, we’ve used deductibles and copays to manage utilization and minimize cost increases in the hope that individuals would become better educated and make better health care decisions with some financial skin in the game. However, even before the pandemic, it was becoming clear that this didn’t work, but rather caused employees to defer and even skip preventative care altogether. And now, as preventative care utilization tanked during the pandemic, employers will increasingly see the costly, long-term effects of offering plans that don’t incentivize receiving care early and often.” (3)

Employees need to know their options and be able to access the care they need, when and where they need it. This will improve health, reduce high-cost claims, provide a return on the investment of the resources and costs, and deliver a health program with value for all employees.

What Does This Mean for HR & Insurance Brokers?

The status quo is changing. It’s not what it was 3 years ago and it likely won’t be the same at the end of 2022. First, it’s up to you to provide employee healthcare benefit options to clients that meet the needs of both employee and employer. You can achieve these goals during enrollment season:

Find plans that remove barriers to employees accessing care
Ensure the plans offered have uncomplicated user experiences so that confusion does not become a deterrent to use

Second, since we all know that prices aren’t likely to come back down – especially in healthcare – identifying cost savings for benefits is imperative.

Finding cost savings to provide exceptional benefits

We want to help you provide the best overall employee benefits in 2022 and beyond. Addressing overpayments in one of your largest budget line items is a great first step. But you first must know what your data says. Then you can look for ways to reduce overpaying on healthcare claims. Dollars can then be reallocated toward other company initiatives or help keep healthcare costs from rising.

Our “every claim” audits find the errors in data sets – and they are there! Some may be one-time mistakes, but others may be systemic issues causing repeated overpayment and loss of dollars. We are experienced in identifying both.

It is also important that your medical claims are being processed according to your plan design and intent. In our audits, we review your claims according to the unique benefits detailed in your medical plans to ensure those benefits are being administered correctly. If not, these types of processing errors could continue to reoccur and add up to significant overpayments.

2022 will be full of challenges with new legislation for transparency and rising costs. However, we saw perseverance and out-of-the-box thinking this past year that gives us hope in regard to the healthcare benefit outlook. We would welcome the opportunity to partner with you in providing a cost-efficient experience for your company or clients.

Sources:
(1) https://www.benefitspro.com/2021/12/07/progress-report-how-far-have-employee-benefits-come-in-2021/
(2) https://www.benefitspro.com/2021/11/16/personalized-health-benefits-are-the-future/
(3) https://www.benefitspro.com/2021/11/16/3-benefits-trends-to-consider-for-a-post-pandemic-workforce/

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.

Analyzing healthcare budgets and finding errors with audits

Budgets and Healthcare Audits: A Smart Partnership

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.

budget and audits present money as gift — Healthcare audits return YOUR money back to your budget.

What’s at stake?

- 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.

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.

looking at green dollar sign with magnifying glass

Healthcare Claims Audits: Are you auditing?

Your company needs to be conducting annual healthcare claims audits. YES, you are entitled to claims audits! Healthcare claims are one of the biggest expenses for companies that self-fund their employee healthcare plans. How do you ensure you are not overspending on claims?

Employer Healthcare Costs are Rising

Healthcare costs, to no one’s surprise, have continued to rise. This includes costs for services, costs to employers, and costs to individuals. While companies are picking up a large percent of the bill each year through premiums, the employees are seeing higher out-of-pocket costs, both in payroll deductions and overall deductibles.

Healthcare Claims Audits can help save employees money and keep deductibles from rising. — Average Annual Deductible for Employer-Sponsored Health Insurance Plans
*Source: Statista.com*

Healthcare claims audits help keep spending under control by finding overpayments and recovering funds. Then, that money can be used to retain the current benefit level or be invested in other company initiatives.

Employers cover about 70% of health-insured workers in the United States.

Employees still cite health insurance as the most desired benefit in the workplace. This benefit is usually the biggest cost outside of salary for employers.

Key Fact:

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!

A few more quick stats:

In 2020, the total direct written premiums totaled almost $825 billion. This was an 11% increase over 2019.
The average single-employee coverage cost to an employee was more than $7,000.
Employers cover the largest share of worker health insurance premiums, averaging about 30% of family premiums and 18% for single coverage. (Source: balancingeverything.com)

Don’t you want to know that your contribution is being managed properly? Healthcare claims audits are the way you can help control the financial integrity of your investment.

Why Healthcare Claims Audits?

Each year, 232 MILLION healthcare claims are filed in the United States.

Even if only 1% of the claims are incorrectly filed, that is more than 2 million mistakes. In fact, the industry average is almost 3% in errors. Unbelievably, this is considered acceptable. The truth is that mistakes are going to happen, but you CAN control the impact on your company with consistent healthcare claims audits. Two outcomes are likely. Both results protect your investment and return dollars to your budget for other uses.

The audit finds overpayments & recoveries are returned to the company.
If the audit is more than a random sample audit and instead analyzes every claim, the audit also finds systemic errors in the claims process. These findings allow solutions to be implemented so the same errors do not continue to cost your company money in the future.

What Do Healthcare Claims Audits Find?

Your healthcare claims are data sets. Trends are discovered based on a complete analysis of data. Once these trends are identified, policies can be reviewed and revamped as needed. This is not unique to healthcare claims audits. But, what is unique is that self-funding companies often do not know that they are in control of this data, not a third-party administrator (TPA).

You own this data. We can’t emphasize this enough. While TPAs often include basic audits in their service agreements, they are not financially motivated to ensure complete accuracy. Yet, not performing an audit can cost a company hundreds of thousands of dollars in overpaid claims. We are seeing more and more service agreements with language that is limiting a company’s right to audit all their paid claims and even discouraging outside audits. Do not sign agreements with this clause in place! TPAs are not our adversary. Rather, we work with them to save you – the main stakeholder – the most money. We do the work – so you don’t have to!

Key Fact:

Healthcare fraud costs the United States nearly $6 BILLION a year. Thankfully, most mistakes aren’t fraud. But when fraud does occur, it can mean substantial losses. Audits find the legitimate mistakes and the fraudulent claims.

Best ROI for Hours of Your Time

HR managers, benefits managers, and insurance brokers are already stretched thin. We get it! Our audit process lets you choose how involved you want to be in the process. If you only have a few hours to dedicate to exploring your audit options, that’s all we need. Once you’ve identified any specific issues and provided plan documents, we do the rest.

So, now that you know healthcare claims audits are an option, don’t wait. Start saving your company and employees money today! For more information on how our “every claim” audit is different, please read our blog “We do the work, you save the money.” Contact us directly at 800-646-9987 or online.

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.