5 Service Offerings Your Health Plan Sponsor Should Be Aware Of  

As a plan sponsor, keeping up to date with the various service offerings that exist can be challenging, let alone knowing which are most applicable. This guide offers a concise overview of our common service offerings designed to assist plan sponsors in overseeing and monitoring their third-party service providers. These services can be conducted individually to address specific concerns or requirements, or they can be combined to establish or improve a comprehensive monitoring and oversight program.

A risk assessment aims to identify potential vulnerabilities, gaps, and areas of exposure within administrative processes and systems, enabling healthcare plan sponsors to proactively manage risks, implement effective controls, and safeguard the integrity, efficiency, and compliance of its health plan.

Risk assessments should be updated at least annually to ensure that potential risks are proactively identified and managed. Additional updates are necessary whenever significant changes occur within the health plan, such as changes in plan design or benefits, implementation of new technologies or systems, changes in regulatory or compliance requirements, or major shifts in participant population or demographics.

In the event of a significant security breach, compliance issue, or other incident, a risk assessment should be promptly conducted to understand the root cause and implement corrective actions. Depending on the organization’s risk tolerance and the specific risks identified, more frequent updates (e.g., quarterly or biannually) may be required for certain high-risk areas. Continuous monitoring of risks and controls can supplement periodic risk assessments, ensuring that emerging risks are identified and managed in real-time

Medical claims audits play a crucial role in the monitoring and oversight of third-party service providers to a health plan. Claims audits ensure the integrity, accuracy, and compliance of claims adjudication, promoting transparency, accountability, and trust among stakeholders. They help identify opportunities for process improvements, reduce errors and inefficiencies, and mitigate operational and compliance risks for healthcare plan sponsors. Medical claims audits are typically conducted to assess the administration of various types of benefits, including medical, pharmacy, dental, vision, and disability benefits. However, the industry lacks consistency in the terminology used to refer to these audits. To provide clarity amidst this confusion, the following list highlights some commonly associated names for these audits: healthcare claims audit, insurance claims audit, comprehensive claims audit, third-party administrator (TPA) audit, post-payment audit, prescription benefit manager (PBM) audit, prescription drug audit, dental administration audit, vision administration audit, and disability administration audit. It’s important to note that this list is not exhaustive.

Withum’s claims audits may consist of one or multiple individual service offerings aimed at achieving the plan sponsor’s objectives. Typical services encompass 100% electronic claims review, operational review, focused claims audit, and / or statistical claims audit.

A 100% electronic claims review refers to a thorough examination of all submitted claims using electronic means, without manually reviewing each claim individually. This process involves proprietary software and data algorithms that analyze claims data electronically, flagging discrepancies, errors, or potential fraudulent patterns for further investigation. The aim of a 100% electronic claims review is to improve efficiency, accuracy, and consistency in claims processing while identifying and addressing issues in a timely manner.

An operational review is a comprehensive examination of an organization’s internal operations, processes, and procedures to assess their efficiency, effectiveness, and alignment with strategic goals and objectives. The operational review of a third-party administrator’s or PBM’s claims administration process aims to identify opportunities for process optimization, cost reduction, and performance improvement while ensuring compliance with regulatory requirements and enhancing the overall member experience.

A focused claims audit is a targeted examination of specific aspects or areas within a claims administration process. Unlike a comprehensive audit that reviews all aspects of claims processing, a focused audit concentrates on particular elements, such as a specific type of claim, a particular provider, a certain timeframe, or a particular issue or concern identified through previous audits or data analysis.

The purpose of a focused claims audit is to delve deeper into areas of potential risk, inefficiency, or non-compliance, allowing plan sponsors to address specific concerns, improve processes, and enhance overall claims administration effectiveness. This targeted approach enables auditors to allocate resources more efficiently and prioritize areas of greatest concern, which may lead to more effective risk management and process improvement initiatives.

A statistical claims audit is an audit method that utilizes statistical sampling techniques to evaluate the accuracy and compliance of healthcare claims processing. Instead of reviewing every single claim individually, statistical sampling involves selecting a representative sample of claims within a defined population based on predetermined criteria and then analyzing this sample to draw conclusions about the entire population of claims.

In a statistical claims audit, auditors use statistical methods to determine the sample size, select claims for review, and extrapolate findings from the sample to estimate error rates or compliance levels across the entire claims population. This approach allows organizations to identify trends, patterns, and areas of concern within their claims processing systems efficiently and effectively.

By leveraging statistical analysis, plan sponsors can gain insights into the accuracy, efficiency, and compliance of the claims processing operations of its TPA or PBM, enabling them to identify areas for improvement, implement targeted interventions, and optimize overall claims management processes.

A manufacturer rebate audit of a PBM involves scrutinizing the accuracy and compliance of rebate agreements between the PBM and pharmaceutical manufacturers. This audit ensures that rebate calculations, payments, and reporting align with contractual terms, regulatory requirements, and industry standards.

Key focus areas include verifying rebate data accuracy, reconciling payments with financial records, and assessing compliance with contractual obligations and regulatory guidelines.

A compliance audit of contract terms with a TPA or PBM involves reviewing the contractual agreements between the healthcare plan and the service provider to ensure adherence to specified terms, conditions, and regulatory requirements.

This audit may assess various aspects of compliance, including service-level agreements, pricing structures, rebate arrangements, data security measures, claims processing accuracy, and adherence to industry standards and regulatory guidelines. The goal of the audit is to verify that both parties are fulfilling their contractual obligations, identify any areas of non-compliance or discrepancies, and mitigate risks associated with contract performance.

An eligibility process review involves assessing the procedures and practices used to determine the eligibility of individuals for coverage under the plan. This review typically examines the enrollment process, documentation requirements, verification methods, and decision-making criteria to ensure that individuals are accurately assessed for eligibility based on the plan’s eligibility criteria and regulatory requirements. The review may also include evaluating the effectiveness of eligibility verification systems, data accuracy, compliance with privacy and security regulations, and the handling of eligibility appeals or disputes.

The goal of the eligibility process review is to identify any gaps, inefficiencies, or compliance issues in the eligibility determination process and implement improvements to ensure accurate and timely eligibility determinations for plan participants.

These are among the most common service offerings to help self-insured health plan sponsors in overseeing their service providers. It is important to recognize when it is necessary and how often these assessments should take place to ensure cost savings, vendor oversight, regulatory compliance and overall data security.