Large employers often self-fund their benefit plans, aiming to provide medical and prescription coverage for their employees while also enjoying financial advantages. However, as more companies outsource their claim administration, the need for medical claim and pharmacy benefit manager audits is increasingly essential. Oversight enables plan sponsors to monitor expenses, especially in an era of continually rising costs. Today's audit technology examines each claim, generating detailed reports that illuminate costs, errors, and potential opportunities for improvements in processing systems.

When a self-funded plan transitions to a new claims processor, conducting an implementation audit after 90 days is advisable. This audit evaluates the plan's setup on the latest processing system. It helps identify mistakes early, before they snowball into larger issues. For larger employers handling thousands of claims weekly, even a minor error can escalate into a million-dollar problem quite quickly. Also, catching discrepancies early on is beneficial for working with medical providers on recoveries; it's far more difficult to reclaim large overpayments months or even years after the fact.

As expectations for accuracy rise, the same standards apply to claim payments. With tighter budgets, there is little room for mistakes. Audits focused on recovering overpayments play a crucial role in maintaining financial health and controlling spending. They also provide early insight into cost trends, which is invaluable for managing budgets effectively. Having access to concrete data in financial discussions can empower plan sponsors. Upper management, in particular, values the clarity that audits provide, especially as costs rise and affect budgets and financial statements.

There has been a noticeable improvement in the quality of auditors' reports. For in-house plan sponsors, clear, accessible audit reports are beneficial for overseeing third-party administrators (TPAs) and PBMs. Nothing carries as much weight as factual data, and having it available prepares you for meaningful discussions. If you find your TPA self-reporting on performance, an auditor's findings provide a crucial benchmark for comparison, highlighting areas where the two reports may align or diverge. This insight can be beneficial for decision-making.