Contracts between self-funded health plans and their medical and pharmacy claim managers are built on negotiation and trust. These deals also merit oversight, mainly through healthcare claims and PBM audits, to ensure that claims are handled accurately. Given the substantial budgets involved, even slight errors can develop into high costs over time. As a result, many self-funded health plans now employ ongoing audit processes that provide continuous, immediate monitoring of claim payments. Such oversight uncovers potential mistakes and supplies reports that help sponsors control costs. 

Modern audits and monitoring capabilities have become far more accurate due to advances in analytical software, which still evolves rapidly. Previously, health claim audits relied on random sampling, allowing many errors to go unnoticed. Today, with the ability to review 100 percent of claims, plan sponsors have a distinct advantage. Specialized independent audit firms now offer expertise that generalist firms often cannot match, routinely identifying overpayments, non-covered items, and other errors that can raise costs if left unchecked. It helps contain costs and meet the sponsor’s ever-increasing fiduciary duties.

For corporate benefits managers negotiating TPA agreements, it is important to examine the fine print. Some vendors may attempt to impose restrictions on auditing rights, which may hinder your ability to properly oversee plan operations. Losing the ability to independently verify TPA-reported data puts your organization at a disadvantage. Best practices dictate retaining the right to audit and monitor all claim payments—ideally, in real time. This enables you with the accurate, timely data needed to manage your health plan successfully and ensure all claims are processed as intended.

It is important that auditors have the flexibility to review claims in whatever manner is necessary. Experienced audit professionals can work with major health insurance carriers acting as TPAs without causing disruption. Their mission is to identify errors and overpayments, keeping your plan financially healthy and guaranteeing members receive proper service. Do not accept any TPA agreement that restricts audits or monitoring in any way. Ultimately, your organization relies on your ability to report accurately on plan performance, making strong oversight key for managing risk and controlling costs.