In the wake of the coronavirus pandemic, auditing claims – both medical and pharmacy – continues to be a much-discussed topic. The COVID-related spike in costs was historical for some plans as new tests and services came onto the market at wildly varying costs. Depending on where a plan member sought services, the price billed for like items could be vastly different. Audits have helped untangle the details to understand what happened and prepare for similar future events. They're the only way to understand what happened for self-funded plan sponsors (large employers). The information is vital.

Specialist claim auditing firms with unique expertise and proprietary software to conduct the reviews were best positioned to help. Their services often include reviewing 100-percent of claim payments checked against dozens or hundreds of details. The post-mortem, in many cases, revealed eye-popping charges and cost trends in some areas. Mistakes and other irregularities are flagged, and sponsors are given detailed reports on their plan's performance. Only with this level of detailed insight can in-house staff work with and perform oversight of third-party administrators and pharmacy benefit managers.

The medical claims audits focus on a specific set of checkpoints. They need to review thousands of claims quickly and check for doctor fees above reasonable and customary. Also, lab test charges need to be analyzed and compared against National Correct Coding standards. Payments above or outside of standard rates need to be questioned and recovered. Redundant test pairs are a significant issue in some cases, and they're hard to ask about until plan sponsors have information. Better claim auditors are known for their thorough and easy-to-read reports with actionable information. 

The checkpoints differ in the pharmacy portion of a claim audit but are equally numerous. Each claim needs to be checked against the formulary to look for name brands versus generics. Most plans require generics when available, and they aren't always dispensed. They're the most basic and consequential error in pharmacy claim auditing, and the number can add up to large totals. Going above quantity limits for refills is another area to scrutinize as part of utilization reviews. Providers may be unknowingly making these errors, and unless they are flagged, they can multiply over time.