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Why Medical Claims Audits?

By February 9, 2022March 7th, 2022Claims, Medicare

In view of ever rising benefit costs, employers and Medicare Advantage plans should consider a medical claims audit as part of an overall benefits and cost-containment strategy.  Medical claims audits are designed to ensure that the claims processing quality is at an optimal level (i.e., the policies, procedures, and actions are serving to appropriately apply benefits in accordance with plan parameters while containing costs).  Also, medical claims audits will serve to address an employer’s fiduciary responsibilities (as typically required by governmental regulations such as The Employee Retirement Income Security Act (ERISA) and Sarbanes-Oxley Act) or in the instance of Medicare Advantage plans to ensure that Medicare requirements are followed in accordance with the Code of Federal Regulations (CFR) 422, Title 42 and as outlined in the Medicare Managed Care Manual (MMCM) as well as the Medicare Claims Processing Manual for timely and appropriate payment.  The claims audit process can also confirm that plans comply with CMS expectations to ensure that sanctioned providers are not paid Federal dollars.

In short, in an era of non-stop, spiraling benefit costs, a medical claims audit is an excellent way to verify the accuracy of your medical claims processing while also meeting due diligence objectives.  Medical claims audits identify risks related to systemic or human processing issues, resulting in an overpayment, underpayment, or erroneous claim processing.  The errors identified in a claims audit will identify the need to update programming in the system, update a policy or training program, or identify changes needed in the operational department.  Medical claims audits will assist the plan in identifying the risks and recovery opportunities that help decrease financial underpayments.  Lastly, a medical claims audit helps prioritize the plan’s attention on remediation activities that must be completed to enhance performance and reduce erroneous claims payment, leading to an improved medical loss ratio.

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