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Effective Strategies in Claims Quality Auditing

By December 1, 2022MA, November 2022

In light of ever rising benefit costs, employers and Medicare Advantage (MA) plans should consider regular claims quality auditing as part of an overall benefits and cost-containment strategy. Claims audits are designed to ensure that claim processing quality is at an optimal level and ensure that plans comply with Centers for Medicare & Medicaid Services (CMS) expectations (or commercial group contract requirements).

A claims audit is an excellent way to verify the accuracy of your medical claims processing while also meeting due diligence objectives.  Claims audits identify risks related to systemic or human processing issues, resulting in an overpayment, underpayment, or other erroneous claim processing, including misapplication of contractual cost share.  The errors detected in a claims audit can identify:

  • Updates need to system programming, benefit configuration, or provider contract set-ups,
  • Policy, procedure and training needs,
  • Needed changes in operational departments workflows,
  • Risks and recovery opportunities that help decrease financial underpayments and overpayments, and
  • Priorities for remediation activities that can enhance performance and reduce erroneous claims payment, leading to an improved medical loss ratio.

Determining the best approach and the appropriate resources to effectively manage claim oversight, while maintaining required turnaround times and member and provider expectations is challenging for any MA plan. However, a failure to effectively manage claims accuracy will result in member and provider dissatisfaction and increase the potential for compliance actions. For Medicare Advantage, in addition to CMS program audits, a MA plan’s inappropriate denial of claim payment requests can surface in one-third financial audits, with the potential for enforcement actions, including Civil Money Penalties (CMPs).


When a MA plan contracts with claims processing organizations, capitated provider groups, IPAs or other entities to pay claims, the MA plan retains its obligations to meet its statutory and regulatory requirements for the timely and accurate payment of claims. Ongoing monitoring and auditing of claims delegates is required to demonstrate effective oversight.  The MA plan and the delegated entity must have a well-defined claims management structure that includes claims quality oversight.  Demonstrating effective oversight should consider:

  • Audit staff (experience and number) at both the MA plan and the delegate
  • Audit methodology and frequency
  • Ensuring audits are performed by internal audit or compliance staff to allow for an independent review
  • Ensuring the delegate has a documented process and training in place to not only pay claims timely but accurately, with reporting of results to the MA plan
  • Regular monitoring of reported results by the MA plan
  • Regular auditing of the delegates QA process by the MA plan, which may include internal review of claims that the delegate has indicated as accurate and review of claims not included in the delegate’s sampling, and
  • Review of remedial activities taken when errors have been identified to ensure root cause(s) has been identified, claim adjustments have been made and steps have been taken to prevent reoccurrence.

BluePeak Advisors strongly recommends MA plans dedicate resources to regularly validate the accuracy of internal and delegated claims processing on a daily basis. A solid claims quality program requires:

  • Dedicated staffing with the knowledge and expertise to review multiple claim types;
  • A consistent sampling methodology that ensures review of a variety of claim types, and ongoing review of all claim processors,
  • A reporting and escalation process that ensures that errors are corrected timely, and
  • An ongoing performance improvement process that ensures that system updates, policy and procedure changes, and remedial training are provides to prevent future claim errors.

BluePeak can help!

BluePeak can help identify and remediate any Part C claims processing deficiencies through our Part C End-to-End Claims Processing audit.  BluePeak can perform an assessment of the claims processing function, including review of policies, procedures and workflows or perform auditing of claim samples to assess accuracy of benefit configuration, provider contract set-up, cost share and member liability calculations, denial processing, and associated notifications.  BluePeak subject matter experts have conducted claims audits on Medicare Part C claims processing, as well as employer group / commercial business and associated review of third party claims administrators who have been delegated all or part of the claims function.  The BluePeak’s Claims Processing Audit ensures we are with you every step along the way!

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