The Virtual TPA Health Claim Audit
This “how to” claim audit tool is based on an article written by our Alliance Partner, Richard A. Schacht, entitled “Electronic Auditing, The Wave of the Future?” The article appeared in The Self-Insurer, which is published by the Self-Insurance Institute of America.
Case Study: An employee benefit plan covering approximately 15,000 lives. The employees generate $2 million in physician, hospitalization, pharmaceutical and other health benefit charges. The employer wants to hire a health claims expert to review the performance of their third party administrator “TPA.” However, the employer is concerned about the timeliness and cost of a TPA audit – as well as making sure the auditor complied with the confidentiality mandates in the Health Insurance Portability and Accountability Act “HIPPA.”
Engagement Plan: Utilizing HIPAA’s requirement for Electronic Data Interchange “EDI” as a center piece, an engagement plan is formulated to electronically evaluate the performance of their TPA. The purpose is to benchmark the TPA’s performance against industry best practices.
Benefits of the Virtual TPA Audit: The virtual audit is conducted remotely, thus eliminating the incurrence of thousands of dollars in travel, meals and lodging expenses. Provided the employer routinely tests their eligibility records on file with their TPA, on-site field testing may not be necessary. Another facilitator of the virtual audit process can be the employer’s implementation of EDI standards under HIPAA