Passive Health Audit Strategies
Health Spending Account (Defined Contribution) vs. Health Insurance (Defined Benefit)
Eliminate the need to scrutinize each claim by changing the focus to the claim total per member rather than components of the total. Defined contribution medical and dental plans shift the responsibility of auditing charges for products and services to plan members.
Coinsurance requires the employee to pay a percentage of the expense. As such it motivates the employee to shop for value and scrutinize the bill.
- distributing claim payments at work helps audit employee eligibility for benefits
- employee contributions to the dependent premium for health and dental encourages those with spousal coverage to decline duplicate dependent coverage
- employee contributions to the health and dental premiums encourages those with spousal coverage to decline duplicate coverage for themselves and their dependents
- too much convenience, like direct electronic submission of claims, encourages ineligible spousal and dependent claims by employees who ignore the co-ordination of benefits provision
Assignment of Claims
The concern with assigned claims is that the patient no longer assesses the value of the benefits they use. Patients that pay for services and submit claims for reimbursement is keenly aware if the charge was $20 or $200. Direct submission of claims leaves little room for the patient to make cost benefit analysis. It also removes the patient from the role of reducing charges for services not provided. This places a greater burden on the adjudicator to prevent fraudulent claims.
Electronic Submission of Claims
In order to reduce administration cost some benefit administrators pay claims based on smart phone applications or web based forms. While this might be convenient for employees it could be very costly if employees claim more when they don’t need to provide proof of purchase.
- Employees with coverage through a spouse could claim the full amount from both plans.
- Employees with financial stress might claim for products and services that were not purchased.
- Employees who are about to quit might claim a little extra.
We make such an effort to manage benefit costs by designing a plan with cost containment features it just makes sense to require actual proof of purchase by requiring employees to provide an original receipt.