Properly adjudicated claims are a key goal of claims administrators, colleges and universities, and student members alike.
Inaccurately processed claims can end up being timely and costly. Overpaid claims will negatively affect claims experience leading to higher premium renewals. These can be especially harmful for self-funded plans where the college or university holds the risk. Underpaid claims can lead to additional time processing claims and handling appeals and some unhappy members.
The good news is that claims administrators take this very seriously and have comprehensive processes in place to ensure timely and accurate claims processing. That said, there may still be some that initially slip through the cracks.
A claims audit and a claims readiness assessment are two methods, conducted by a third-party, that can be used by plan sponsors and claims administrators to ensure accurate claims processing.
So, what is the difference?
A claim readiness assessment is used when a plan is transitioning from one carrier to another to ensure proper set up of a plan’s specific benefits before actual claims are incurred. This assessment is typically paid by the carrier.
A claim audit consists of a random review of already adjudicated claims to confirm they were properly processed. Critical to the audit process is the inclusion of a “right to audit” provision in your carrier contract.
Key areas that can be reviewed during a readiness assessment and audit include:
- Claims
review – both statistical and non-statistical claim samples, including
electronic screening capabilities. Components include, but are not limited to:
- Member eligibility
- Accuracy of system data
- Medical necessity (if applicable)
- Proper authorizations (if applicable)
- Paid according to benefits and provider’s contracted rates
- Benefits coordinated correctly with secondary insurance (if applicable)
- No duplicate claims
- Operational reviews of key areas of claims administration
- Evaluation of claim appeals
- If performance guarantees are in place, an evaluation of a vendor’s self-reported performance under a performance guarantee contract would be part of a claims audit.
A customer service evaluation can also be a key component of a review. An administrator’s customer service operations can heavily influence a plan member’s perception of the administrator’s overall capabilities. Poorly administered customer service can rapidly increase the noise level from plan members.
Do not be afraid to ask your carrier for a claims audit or readiness assessment. They also want to make sure their claims processing is seamless and that their partner clients and universities and student members are satisfied with their services.