You’re considering an audit of your healthcare plan. But it’s been awhile since your last audit so there have likely been changes to the terms of your self-funded health plan as well as changes in staff at your TPA where your claims are administered. Mistakes happen…especially when changes are made to plan provisions and claims adjudication staff.
Everyone knows that incorrectly paid claims can be a huge problem if not caught and corrected quickly. Not everyone knows, however, that both overpayments and underpayments cause problems. Chances are a closer look will show you what you’re really paying for.
Overwhelming Overpayments
Overpayments occur when you pay more for a service than agreed upon. This is the most obvious of the two payment issues discussed here. It’s also where you can recover money spent incorrectly. Here is a simple example of this problem; a procedure covered for an employee that no longer works for your company. Since she’s no longer employed with you, she is ineligible for benefits. The TPA was behind a week or two in entering changes to eligibility in their system because of a holiday. Since her coverage wasn’t terminated in a timely manner, you’ve most definitely overpaid on that claim. Need another example? Let’s say your member received care from an in-network doctor, but your TPA calculated the charges as if the doctor were out-of-network. You just overpaid that claim.
An audit will find these leaks, whether for eligibility, copays, deductibles or any other number of over payment errors. When an error is identified, most TPAs will adjust claims without much fuss so lost dollars are recovered. But without an audit, you may never know an overpayment took place.
Ubiquitous Underpayments
Your gut reaction might be that underpayments are a good thing, right? You are paying less after all. Maybe not. There are a lot of other factors to take into consideration before you get excited about paying less for a service. For example, your member should be charged a $20 copay for an office visit with an in-network provider – or $35 for visits with physicians outside the network. The member saw an in-network doctor but was billed $35 for an out-of-network visit.
That means the plan underpaid the claim by $15 – or your member overpaid by $15. You wonder, what’s the harm in that? It’s only $15. At CTI, we believe that underpayments are just as important as overpayments. First of all, your member has been overcharged. Second, when an error like this occurs it causes member calls to customer service representatives, time your TPA spends re-working claims, and manual intervention for correction. It might seem like YOU are paying less, but you should also keep in mind the importance of member satisfaction as well as additional fees or charges from your TPA for time spent re-working claims.
Continuous Quality Improvement
Performing an audit can detect overpayments and put money back in your pocket. It can also detect underpayments and keep you in the good graces of your employees. Finding an audit company that commits to the continuous quality improvement processes is a great way to not only identify these errors, but make sure they don’t pop up again in the future. Stopping the cycle now puts money back in your pocket and keeps your employees happy. Who doesn’t love a win-win?
Underpayments and overpayments are both undesirable outcomes when conducting an audit. They each cause their own issues for you and your members that will need to be addressed to stop the leaks in your claims adjudication process. Hiring CTI can not only recover the money you’ve lost from these errors but also help you identify and correct them through continuous quality improvement, leading to a more efficient and effective process.
