WHAT IF… You could recover 4 to 8% in cash or billing credits from your organization’s health benefits program from prior years and compound those savings to reduce current and future costs?

WHAT IF… You were able to control the cost of your employees medical programs inhouse?

WHAT IF… A comprehensive audit of your medical plan could be made and the audit fees would be of no consequence to your organization?

It is obvious that group health benefits is a major budget concern and most confusing when it comes to your medical plans in the areas of claims adjudication utilization/rating formulas and administrator’s fees. Considering the efforts expended by managers to hold down the cost of employee health benefits, the results are more often than not disappointing. It is our practice to relieve you of those disappointments.

JAF utilizes state-of-the-art business concepts and acumen in the resolution of the most difficult management problems. Our professionals are hands-on, innovative, results-driven, bottom line managers. We are a group of professionals with over 140 years of accumulated experience and know-how in the administration of Employee Benefit Plans. We have the expertise in all areas of the operations of Third Party Administrators, Insurers, Brokers and Company managed plans. JAF is able to offer its service to any organization without regard for geographic proximity to our location. We effectively become an extension of your offices minus the overhead and staffing concerns associated with “doing it yourself.”

JAF is most confident that we will recover a significant dollar volume from our audit. With that in mind, it is our practice not to charge any fees until our client realizes dollar recoveries. Our fees are on a contingency basis related to any direct savings and rebates in the form of cash or credits.

Why Use JAF?

For most organizations, health care related costs represent more than 35% of employee benefit costs, and 15.2% of overall payroll costs.1A portion of that is likely from improper claims adjudication. Therefore, organizations can gain five key benefits by partnering with JAF on claims audit.

1 March 2004 Employee Benefit News

Experience. JAF has extensive auditing experience, including each staff member having at least five years’ experience with managed care health insurance plans. JAF’s staff has audited Health Maintenance Organization (HMO) Plans, Point Of Service (POS) Plans, Preferred Provider Organization (PPO) Plans, as well as traditional Indemnity Plans. JAF’s experience leads to higher levels of recovery and shorter audit timeframes.

Time Savings. The complexity of the claims auditing process–variation in claim forms, contract language, health insurance codes and administrative procedures–can reduce the effectiveness and efficiency of TPA, broker, or employer self-audits. This is another reason why you need the trained and experienced staff of JAF’s claims auditors.

Medical Cost Savings. Your company benefits from recovered claim expenses that would have otherwise been lost. In addition, you and your administrator will receive recommendations to help prevent future errors that increase medical costs.

Knowledge and Control. Employers rely on their health care claims administrator for proper and timely adjudication of benefits, and reporting of utilization & financial data. Decisions based on these data are used as a cornerstone for benefit plan design and cost control. When the data include improperly adjudicated claims, your organization incurs unnecessary costs and makes decisions on future medical claim management based on that incorrect information. Partnering with JAF on a claims audit allows your organization to make health benefits decisions with confidence.

Confidentiality. JAF is committed to protecting all information accumulated during the course of an audit. All data is strictly guarded during the audit and once it is completed. Your records will be retained in a our facility for a period of 2 years after the conclusion of the audit and disposed of by shredding each document. Additionally, JAF will sign Confidentiality Agreements you may require and will provide a Hold Harmless Agreement in order to protect your organization, Insurer, Third Party Administrator or any other parties to the Agreement.

What Do We Audit?

  • HOSPITAL – All claims payment lists will be reviewed in detail for each covered individual under your plan. When our audit selection process deems it necessary, copies of the actual billings will be looked at in detail.
  • PHYSICIAN – All services submitted by any physician will be authenticated and coupled with any other provider services such as hospitals, pharmacies, and durable medical equipment companies.
  • PRESCRIPTION – Analyze all paid prescriptions as they relate to each diagnosis to insure they are to treat the individual. Check for over utilization of certain drugs.
  • DURABLE MEDICAL EQUIPMENT – Ensure that the items received by the patient are necessary to the treatment of the diagnosis.
  • FINANCIAL STATEMENTS – All reports and documents resulting in financial statements from any participant (other than eligible members of the plan) will be reviewed for accuracy and formulation

How Do We Get You Cash or Credits Back?

All of the claims noted above will be thoroughly checked for duplicate payments and errors. We will also look for liability from a third party, including but not limited to:

  • Other Health Insurance
  • Workers Compensation
  • Automobile Insurance
  • General Liability
  • Medical Malpractice
  • Home Owners’ Insurance
  • Product Liability
  • Negligent Parties

JAF Services the Following Types of Plans.

  • Fully Insured Programs are reviewed in all aspects of claims payment accuracy and authenticated financial documentation provided by the insurer.

The health benefit programs’ financial and claims payment risks are the responsibility of an insurance company. Your organization pays administrative and risk fees among many other charges. For the monthly premium you remit you receive any negotiated discounts with providers (many times a substantial discount) on the actual medical, hospital, prescription or durable medical equipment billings. Insurers systems are available 24/7 to providers. The credit card aspect of using their I.D. card is very desirable.

  • Cost Plus Insurer / Third Party Administrator / Company Administered / Self Funded / HMO programs are claims payment driven reviews and administrative financial audits.

COST PLUS – INSURANCE CARRIER: Health benefit programs financial and claims payment risks are the responsibility of your organization. The insurer will charge a series of administrative fees in addition to a stop loss insurance fee. That is, any claims projected over the limit the insurer has determined that your organization claims will reach for a period of time, usually 1 year. The advantage of dealing with a large national insurer is that there are substantial provider discounts available to your organization. This type of arrangement is a relatively stable one for organizations of 500-1000 employees or more. The larger the organization the more stable the utilization can be predicted. Insurers systems are available 24/7 to providers. The credit card aspect of using their I.D. card is very desirable.

COST PLUS – THIRD PARTY ADMINISTRATOR: A TPA’s generally provides the same services as noted above (Cost Plus – Insurance Carrier). However, the discounts offered to them are not nearly as good as those afforded a large national insurance carrier. They sometimes buy into a greater provider discount from other managed care organizations or national insurers. Their claims processing systems are geared toward paying the actual billing generated by the providers. Large national insurance carriers are able to commit to providers on a worldwide basis rather than more regionally. Insurers also have more of a capacity to back off approvals and payments to providers contractually.

COST PLUS – COMPANY ADMINISTERED: Normally organizations that choose this option are usually very large in size (over 2000 employees). The higher the number of employees the easier it is to predict future use of the benefit and subsequent budget appropriations. This type of program will require a number of specialties other than claims and financial examiners and managers. Consultants in other disciplines, including but not limited to Physicians, Nurses and Actuarial Professionals, will likely be needed. Organizations will have to either negotiate discounts with providers or buy into a program where there are discounts available.

HMO (HEALTH MAINTENANCE ORGANIZATION): These benefits are appropriate for all size organizations. The benefits are usually administered by large, nationally recognized organizations. Costs may vary by size of organization. The HMO generally uses age/demographics and paid claims to provide billing rates for their customers. The provider discounts which are available, are the same as those of fully insured programs.

How Do we Audit Benefit Programs and Claims?

  • All audits are performed on a retrospective and prospective

It is our intent to review claims and financial records as far back as the law or your administrative contract permits. It is our experience that by auditing 3 to 5 years of previously paid claims and financial records that the costs associated with the current and future medical programs will drastically be reduced. The methodology which we will leave with your organization will allow you, or if you choose, JAF to easily track and correct any problems as they arise.

  • 100% of the claims volumes are audited – TWICE.

Software especially designed to be compatible with the data that the Health Benefits Program Administrator utilizes will be developed to look at each claim and compare them to the unique parameters we have developed. Once processed through our system, 100% of claims that have passed the initial software review and have not been red-flagged are re-audited by our claims audit specialists.

Who Do We Audit?

Our audit services are available to organizations of 300 or more covered employees. Whenever an outside firm performs a claims / financial audit, the volume of claims and the dollar value of those claims determine the payback. Smaller organizations (less than 300 eligible employees) should not be self-funded or on a cost plus basis. Statistically it can be a financial nightmare, since it is impossible to predict with any degree of certainty the future claims of employees. Those organizations that are fully insured are under a separate set of administrative fees and statistical calculations than a larger one.

For further information regarding Claims Auditing for Employers and to learn how JAF Consulting, Inc. can assist your organization, contact us at 856-241-1900 or email info@jafconsulting.com.