HCA offers a suite of audit services including a combination of both electronic/physical claims and eligibility reviews that are designed to determine if the carrier/TPA/PBM is doing its job. We support self-insured plan sponsor's carrier/TPA/PBM vendor management via a suite of performance evaluation services, such as claim audits, eligibility data audits, dependent eligibility audits, claim office operational reviews, and performance guarantee drafting that serve to quantify whether the quality of a TPA’s administrative service is at the optimal level.
Specifically, our goal is to answer the question: are the TPA’s administrative policies, procedures, and actions serving to appropriately contain costs, as expected, or are they contributing unnecessarily to those costs?
The goal of an audit is not necessarily to save money. In many cases, our clients seek validation to see if the TPA’s performance is consistent with “best practices.”
Types of Audits:
Random Sample Claims Audit – this is the most popular of claim audits. We will take a statistically valid, stratified random sample of approximately 250 claims and send an audit team out to the TPA for one week on-site to review these claims.
Eligibility Reconciliation Audit – through an electronic exercise, we compare the employer’s payroll information that they send to the TPA vs. what the TPA is keeping as eligibility.
Dependent Eligibility Audit – we investigate an entire population of employees to determine if the dependents they are enrolling are truly eligible. There are three types of Dependent Eligibility Audits.
|1.||Affidavit – employees sign a document attesting to the accuracy of the dependents they cover.|
|2.||Expert System - employees are asked to take a 15 minute survey to determine if their dependents are eligible. Many dependents drop off through this process. After the survey has been completed, the system determines a subset of the population to be followed up with a full document approach.|
|3.||Proof Document – all dependents are disenrolled from the program and re-enrolled with a full set of documents to validate marriages, births, and dependency status via tax returns, etc.|
Electronic Claims/fraud Audit – a series of edits and rules are applied to an entire claims file to see if there are any problems. These are powerful “bolt-on” services to complement the base value of the data warehouse.
Rx Claims/fraud Audit – similar to the electronic claims/fraud audit above, except for Rx claims paid by a Prescription Benefit Manager (PBM).
Why are audits valuable?
The quality of plan administration service has a profound effect on annual benefit costs. Therefore, regular systematic evaluations of quality and accuracy in claim procedures are necessary elements of a plan sponsor's effective cost containment strategy. As a plan sponsor, TPA audits help satisfy fiduciary responsibility. As an employer, TPAs are provided with a "blank checkbook" through which millions of dollars are paid each year so TPA audits are a necessary component of a CFO's internal control strategy. For public companies, TPA audits help meet management's Sarbanes-Oxley obligation to establish an adequate internal control structure.
Why Healthcare Analytics?
The HCA TPA audit suite of services is offered on a fee for service basis vs. a contingency arrangement. This method of engagement avoids the introduction of any conflict of interest. Many services only offer "overpayment recovery" projects which are only focused on the identification of overpayments (to the exclusion of underpayments and non-financial errors, which can have a greater customer service impact) and do not provide an evaluation of any other aspects of a TPA's administrative performance. We offer a complete suite of both sample-based and electronic claims and eligibility audit capabilities.
On the Dependent Eligibility Audits, our preferred approach blends a web-based survey approach with a full document audit. This approach maximizes ROI for our clients.
In most cases, we can develop performance guarantees into our audit products.
For more information about Healthcare Analytics, please call us at 609.452.2488.