The difference between an audit of your healthcare claims and on-going monitoring
Written for SmartLight Analytics
Large employers with self-funded healthcare insurance plans typically have post-payment audits of their healthcare claims as a part of Administrative Services Only (ASO) agreements. These audits seek to review claims for payment integrity. However, audits are generally done infrequently on a small sample size, just skimming the surface of the total number of claims. In comparison, ongoing monitoring offers employers a continual review of all claims. According to recent statistics, 65% of employers offering health insurance have self-insured plans1. In the U.S. today nearly all employers with 1,000 or more workers offer health insurance, which means monitoring spending on healthcare is an increasingly important task for employers and benefit managers.
In many ASO agreements, the annual audit outlined will take a small random sampling of 300 to 350 claims per year. That represents a tiny subset of claims and can limit what is revealed by the audit. This is especially true if the audit uses analytic models based on known issues within claims. Conversely, an ongoing monitoring approach digs deeper and can reveal more useful data for self-funded employers. Most significantly, ongoing monitoring analyzes 100% of claims data continually and is customized based on each employer’s population to look within the claims data for potential issues. This is important because employers need as much information and data as is available to make fiduciary decisions about their plans and to determine exactly how dollars are being spent.