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Paid-Claims Audit For Self-Insured Companies

Situation:

Employee health care costs are rapidly escalating. To contain and control costs, many CEOs, CFOs, VPs of Human Resources, Directors of Employee Benefits, Employee Benefits Managers and Employee Benefit Plan Administrators have converted to self-funded insurance plans. While self-funded insurance plans have many advantages, they also present several unique challenges and fiduciary responsibilities.

The Problem: 

  • Self - funded companies have contracted their administrative responsibilities to insurance companies or Third-Party Administrators (TPAs) to process their claims in accordance with their medical, vision, dental, and/or prescription services employee benefit plans.
  • Due to the high volume of claims handled by the company’s contractors and other factors, it is quite common to have a number of claims processing errors.
  • It is estimated that the overpayment error rate ranges from 10% to 20% of overall costs per year for these affected companies.
  • For these reasons, a majority of self - insured companies overpay their medical, vision, prescription and/or dental claims to some extent.
  • Uncontrolled, these overpayments can impact profitability and shareholder value, potentially creating a competitive disadvantage with needlessly increasing employee benefit costs.
  • A small number of companies have initiated routine claim processing audits to identify problem situations and fulfill their fiduciary responsibility.

Who is at Risk?

Self - insured companies that have not had a paid - claims audit within the past 3 years.

Solution: 

  • An EisnerAmper Healthcare Services Group paid - claims audit customized for your company’s needs and concerns.
  • EisnerAmper’s approach includes utilizing a statistically valid sample of paid- claims in medical, dental, and/or prescription areas.
  • Once a valid conclusion is reached, EisnerAmper formally reports these results to the company. EisnerAmper assists the company by presenting our methodology, findings and recommendations for cost savings.
  • The implementation of EisnerAmper’s recommendations can recover 3 to 7 times our professional fees charged. The ratio of professional fees charged to cost recovery varies by contractor, employee benefit plan, and EisnerAmper’s costs for the audit (optimum value is in the NY, NJ, CT, and eastern PA regions).

Benefits: 

  • Potential savings in the form of refunds.
  • Helps control companies’ employee benefit costs.
  • Ensures management and board fulfill fiduciary responsibility to maximize shareholder value by focusing on operating costs.

Case Study:

A 6,000-employee window and door manufacturer engaged EisnerAmper’s Healthcare Services Group for a paid - claims review service. The company had not conducted a paid - claims review for three years. To date, we have identified more than $1.6 million in potential savings for their medical and prescription plans. This was the result of claims processing error corrections and benefit plan redesign recommendations.

EisnerAmper’s Healthcare Services Group 

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