Large employers, whether corporate or institutional, often choose to self-fund their employees' medical and Rx coverage. Well-managed self-funded plans reduce costs and better serve employees. As a result, medical claim and PBM auditing services have taken on greater importance, providing in-house plan managers with vital oversight. Today, claim payments are handled by third-party administrators, and without proper auditing, internal teams lose critical control. Given the high costs of medical care and prescriptions, it is essential to thoroughly review claim payments to secure accuracy and accountability.

Initially, government mandates such as ERISA and Sarbanes-Oxley spurred the need for plan audits, but today auditing is essential for more than just compliance. Claim auditing is a strategic management tool that improves both member service and cost containment. When all claims are reviewed, organizations gain important insights and can ensure members receive accurately processed claims. Although TPAs may guarantee processing accuracy, exclusive thorough auditing can confirm these claims. Diligent in-house managers consistently verify TPA performance through scheduled audits.

For large publicly traded companies, sudden changes in medical expenses can impact balance sheets and quarterly earnings. Events such as the coronavirus pandemic have illustrated the importance of close monitoring of medical claim expenses. Organizations that utilize ongoing auditing and monitoring services possess the most accurate, real-time understanding of payment trends. While TPAs provide reports, in-house teams furnished with advanced auditing tools can independently verify this data. Senior management relies on these teams to explain and anticipate unforeseen shifts in medical costs.

TPA service agreements typically include performance guarantees, making it vital to verify whether these standards are being met. Independent auditing firms specializing in facility claim audits deliver objective reports on plan performance. While their findings often align with TPA reports, discrepancies can reveal significant issues. For instance, if an audit indicates 96% correctness compared to a TPA’s claim of 100%, that four percent gap can translate into major financial losses. This demonstrates why routine audits and continuous monitoring are investments that frequently pay for themselves.