How Medical Claims Auditing Works
Medical claim auditing reviews the payments a given health care plan has made to providers on behalf of its members during a previous year or other defined amount of time. They are most commonly conducted by self-funded medical plans required to audit themselves first by government regulations and now because auditing is an excellent plan management tool. Self-funded health care plans are typically sponsored by large employers, both corporate and nonprofit. Medical claims auditing was conducted initially by random sample, and today most of the best claim auditors review every payment.
Self-funded health plan claim auditing has become more frequent as plans increasingly outsource their payment infrastructure to third-party administrators (TPAs). The TPAs are typically large managed care plans with extensive provider networks (doctors, specialists, hospitals, outpatient surgery centers, etc.) that can also be used for the members of a self-funded plan. A claims audit provides in-house staff at a large employer with meaningful oversight of their medical claim payments. While TPAs commonly make accuracy and performance guarantees, the only way to confirm the actual results is with an audit.