A claims audit evaluates numerous claims management policies and procedures which include but are not limited to:
- claims investigation
- coverage/compensability evaluations
- damage evaluations
- reserving practices
- litigation management
- documentation
- member/client communication
- subrogation/contribution potential
- settlement practices
If any of these areas of claims management are not being handled effectively and efficiently then that means that your organization is losing MONEY. Many of you have probably heard the term “leakage”. In claims, the term refers to the gap between the optimal and actual payment of monies from the loss, expense, and legal incurred of a claim. A significant source of leakage is process inefficiency.
To be effective, audits must be:
- Periodic
- Consistent
- Measurable against promulgated performance standards
- Identify potential problem areas
- Recommendations should be specific and attainable
- Culminate in action plans
- Include scheduled follow-up by the risk pool focusing on the opportunities identified
The ultimate goals of an audit are to improve quality, assure statutory compliance, stimulate the improvement of the overall claims handling, benchmark performance, and SAVE YOU MONEY.
Contact Praxis if you wish to find out more!