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Healthcare is expensive, and the last thing plan sponsors and members need is to pay more than they’re supposed to. That’s where audits come in.
Ideally, self-funded medical and pharmacy plans will be audited every two or three years. If the results aren’t satisfactory, it makes sense to conduct a follow-up audit once the vendor has made corrections and conducted remediation. In these instances, it’s not unusual for a plan to ask the vendor to fully or partially fund the second audit. Other plans, such as dental and vision, don’t need to be audited as frequently since the results are generally satisfactory, and less money is at stake.
What should be on your radar screen during your next audit? For pharmacy programs, we recommend regular monitoring for errors in:
Billing practices for out-of-network medical claims can be problematic too. The common practice of balance, or “surprise” billing — when patients receive unexpected charges for out-of-network services — has received a lot of negative press recently. These charges can be egregiously high. Permitting the reimbursement of an out-of-network assistant surgeon’s services at a level of up to 500% more than that of the network surgeon actually performing the surgery could be considered egregious. While some administrators are attempting to address the egregious billing of out-of-network providers, most are more liberal in their administration. During audits, administrators should not only evaluate the reasonableness of billed charges but also the rates of reimbursement.
Plan sponsors should also conduct implementation audits to ensure vendor and plan changes, even small(er) ones, are implemented quickly and correctly. Incorporating an audit schedule into your plan management process will ensure you don’t leave plan dollars on the table and are meeting your fiduciary obligations.
Lisa Oswald is a Partner who has been with Mercer for 19 years and is currently the National Pharmacy Benefit Audit Leader.
Lori Wilmsen is a Principal and a member of Mercer’s national Performance Audit Group with over 30 years of experience in healthcare claims and customer service.