With good reason, large employers have adopted self-funded medical and pharmacy benefit plans, which require medical claim and pharmacy benefit manager audits. Initially, audits were a necessity to comply with specific regulations. At that time, audits typically involved reviewing a random selection of claims. However, as technology and auditing practices have advanced, the landscape has shifted dramatically. Today, audit software allows for the review of every claim, significantly reducing the need for intensive human oversight. This change has proven to be a game-changer for employers.

By reviewing 100% of claim payments, auditors quickly identify overcharges and errors that may have gone unnoticed. The impact is substantial, particularly for medical and pharmacy plans, where routine analysis can yield significant cost savings. Nowadays, many companies opt for more frequent audits, and some have even implemented continuous auditing processes. It means that employers have access to real-time data on their claim payments and can promptly address any discrepancies, which is crucial for those managing Third-Party Administrators (TPAs).

Inaccurate payments can lead to disparities in treatment, especially for those with high-deductible plans who rely on the trustworthiness of their benefit descriptions to meet their healthcare costs. Accuracy becomes doubly important when it affects individuals' financial burdens. With ongoing hikes in medical and prescription costs, the rationale for consistent audits has only strengthened over the years. The COVID-19 pandemic intensified these challenges, drawing attention to shocking cases of inflated charges that made headlines. Many large employers faced daunting budget implications during this time.

By swiftly identifying and addressing these inflated charges, companies mitigated financial losses and regained control over their expenses. Additionally, audits have shown that they frequently uncover savings 4 times their cost, making them not just a regulatory necessity but also a sound financial strategy. Ultimately, the evolution of audit practices has not only enhanced the accuracy of claim payments but also provided peace of mind to employers and members alike. Accurate auditing is crucial for financial sustainability and ensuring that all members are treated fairly.