How to Manage Post-Payment Audit Risk

Insurance profitability experts believe that a payment scrutiny program can be as successful a profit-building strategy for insurance companies as raising premiums or adding members. For instance, Business Insurance estimated 5%-10% of all BCBS claim paid incorrectly (March 2003), which is echoed by Aetna's estimate of 11% payment error in 2002. Payer's full-scale payment scrutiny program involves both pre-payment review and post-payment audit. Accordingly, the provider's billing strategy must involve the elements of both maximizing payments and retaining them in the future. Note that malpractice and general liability insurance policies do not cover audit defense legal fees and costs, leaving the provider fully exposed to audit liability.