Both ERISA and Sarbanes-Oxley mandate audits for self-funded health plans. Additionally, many states impose audit requirements on large nonprofit organizations to review paid claims. However, thanks to today's advanced medical and Rx audit methods, the potential savings from an audit often far exceed the price of the service. When in-house staff oversees health and benefit plans, they collaborate more effectively with external administrators. Many audits and monitoring processes today reveal errors that can outweigh the costs of the audit services, which often surprises organizations initially.

The reason for these improvements lies in advancements in computer software for the auditing process. Audits become more thorough by examining all claims rather than just random samples. A meticulous approach allows for the quick identification of errors and enables the discovery of other claims with similar issues. The result is a higher level of accuracy and more reliable data, which equips plan managers to perform their roles more efficiently. Additionally, when there are sudden cost increases, audits make understanding the reasons behind them easier, serving as a valuable management tool.

While regulatory compliance is a clear incentive for auditing self-funded plans, the benefit of better serving the employees covered by these plans is also beneficial. Continuous monitoring and advanced auditing techniques provide insights into the services rendered, as the claims document the services members receive. Moreover, this data can inform initiatives to promote healthier lifestyles by highlighting prevalent health issues within the group. Focusing on prevention and wellness is advantageous for everyone involved and enhances members' overall quality of life.

As technology continues to enhance budget management in various sectors, it's crucial to maintain oversight of self-funded health plans. It underscores the importance of monitoring following an audit, providing real-time insights into claims payments, and identifying processing errors. Ongoing scrutiny fosters more substantial relationships with external processors by establishing a routine oversight. Compared to conducting audits on only random samples after the fact, today's standards necessitate continuous claims monitoring to enhance oversight and effectively manage these plans.