Undergoing regular claims audits is important for health plans, independent physician associations (IPAs), management services organizations (MSOs), and other entities responsible for paying health insurance claims. Claims audits help organizations improve accuracy and timeliness when paying or denying claims, identify and correct common errors, and maintain compliance with federal and state regulatory guidelines.
Accuracy and timeliness are especially important given the complex regulatory environment in which payors operate, with multiple entities having oversight authority. For example, in California, plans are subject to oversight from CMS and the Office of Inspector General at the federal level, as well as the Department of Managed Health Care (DMHC) and the Department of Health Care Services (DHCS) at the state level. Regulations from these entities frequently change, e.g., a California bill will shorten the time to complete a Medi-Cal claim from 45 to 30 calendar days starting January 1, 2026. Organizations that fail to comply with federal and state guidelines can face financial and reputational consequences, including accrued interest, sanctions, penalties, enforcement actions, and corporate integrity agreements.
Working with a trusted advisor on your claims audits can give your organization access to knowledge, experience, and resources to help navigate these complexities, avoid costly penalties, and maintain regulatory excellence. This article will explore different types of claims audits and when they are appropriate, as well as how the audit process works.
Types of Claims Audits
Claims audits may be performed quarterly or monthly, depending on your organization’s situation. Regular delegate audits are also important for plans that subcontract claims processing to vendors.
- Quarterly audits are important for routine evaluation and maintenance of the organization’s claims processing. They offer a broad view over a three-month period, providing an informative summary of claims data. Quarterly audits can help identify trends and patterns, including errors or inaccuracies that should be corrected. They can also help detect possible fraud, waste, and abuse; maintain compliance with evolving regulations; provide guidance for re-educating staff; and provide benchmarking data regarding providers within the same network or specialty type.
The number of claims included in a quarterly audit can vary based on the organization’s size, member population, and audit objectives. In our experience working with health plans, the number may range from 150 to 450. Including a distribution of paid, denied, and misdirected claims, as well as claims subject to provider dispute resolution (both overturned and upheld), can help provide a detailed picture of the organization’s claims processing.
- Monthly audits can be beneficial for organizations that have noticed a pattern of inaccuracies or inefficiencies—perhaps during a quarterly audit—and want to pinpoint and correct the issues as quickly as possible. They can help identify billing, coding, and reimbursement errors, as well as help reduce accrued interest and financial losses due to late or incorrect claims payment.
Monthly audits can also drill down to a specific provider or provider type to help address an anomaly or discrepancy. For example, if an organization has recognized an issue with incorrect payments for family planning claims, it may choose to perform monthly audits of a sample of claims of this type.
- Delegate audits focus on claims processed by vendors or subcontractors to verify that these delegates are carrying out functions according to standards and that their performance is not putting the health plan at risk. The frequency of delegate audits depends on the contract terms and level of delegation, but it is typical to perform them once a year. These audits provide many of the same benefits as quarterly audits, in addition to helping ensure accuracy based on the division of financial responsibility between the plan and its delegates.
How Claims Audits Are Performed
There are two options when working with a trusted advisor to perform a claims audit, each of which has its uses and benefits.
- Granting access to the claims system: Providing your advisor with direct access to the system can help improve timeliness and efficiency, as it eliminates the time and administrative burden of gathering and sending specific documents. During the review, your advisor will need access to the following to properly review claims:
- Each claim as entered, as well as the claim image as submitted
- Utilization management, for authorizations
- Member profile for each claim
- Provider profile for each claim
- Providing PDF files: This option can be beneficial if it is not possible to grant your advisor direct access to the claims system. It requires effective communication and administration on the part of the plan to help ensure your advisor has access to all documents requested. At Forvis Mazars, our professionals can provide a detailed list of documents the plan should provide to allow for timely review of the claims. Files can be sent as a single PDF that encompasses all claims in the sample, or as separate PDFs for each claim.
How Forvis Mazars Can Help
Our Payor Services team at Forvis Mazars includes dedicated professionals with extensive claims experience and certifications such as Certified Professional Coders (CPC), Certified Healthcare Auditors (CHA), and Certified Fraud Examiners (CFE). We can tailor an audit to help meet your goals, targeting the types of claims presenting challenges for your organization. We can comb through hundreds of claims to help gauge accuracy and timeliness and identify opportunities for your organization to refine your claims processes and educate staff to help prevent errors and comply with regulations. Our goal is to help you maintain financial discipline and regulatory excellence in pursuit of achieving health for your organization and those you serve.
If you have questions or need assistance with a claims audit, please reach out to our team today.