Tuesday, October 10, 2006

100% Claims Audits Revisited

Nearly one year ago, Double Dubs graciously asked me to be a regular contributor on this most amazing blog of his. I think all of us can agree that what he has built here is impressive. He has created a reference tool for HR professionals (both in and out of the technology space) to come research and learn. He provides links and footnotes for us to delve as deeply as we care to delve into his posting of the day.


When he asked me to contribute, he wanted me to comment on items such as vendor management and total cost of ownership (TCO). He wanted his readers to be able to learn about getting the most out of their vendor relationships. He wanted to explore the financial aspects of HR service delivery as well.

For me, the perfect opportunity to do this is provided in the area of health claims administration. I believe we are seeing an almost “perfect storm” scenario: out of control costs, questionable independence in placements, ineffective vendor management of claims processing, lack of accountability/auditability, risk management challenges, Sarbannes/Oxley, HIPAA etc.

The fact is, from a TCO and vendor management perspective, most companies don’t know what inaccurate claims are costing them, and ineffective vendor management is the rule rather than the exception. I assume you can tell by my last three postings that I am generally dissatisfied with business-as-usual claims audit from an effectiveness, independence, and general utility perspective. I have been impressed with the recognition by individuals in the market place of a driving need for claims audit services which provide real value to companies by helping to quantify and contain costs and provide the tools to better manage vendor relationships.

Last week’s post highlighted a company doing just that. This blog, I believe, should be a place people can come to learn about trends in the market, services being provided, technologies being developed, and yes, vendors providing the services. This is why last week’s post highlighted a specific company which is demonstrating “the intersection between HR Strategy and HR Technology.”

HR Best Practices is demonstrating that intersection, and my purpose in highlighting them last week was not, in the words of Romain, for “marketing/commercial intentions.” As they say, I’ve got no dog in that hunt. As for responses to posts by vendors, I would hate to think that this would become a place of edited or censored comments. I believe the source should be considered any time a comment is made. I also believe those in the vendor community can provide great value by commenting here themselves. It enables us to learn straight from the horse’s mouth, so to speak. Of course, we wouldn’t want the space to be filled with rumor and innuendo posted by anonymous screen names. That would result in a devolvement in all we hope to accomplish here.

All that being said, I did get a private e-mail response to last week’s post alerting me to another company providing seemingly similar, if not identical services to those highlighted last week. A representative of Independent Healthcare Initiatives contacted me, and after rescuing the e-mail from a seemingly overaggressive spam filter, I learned quite a bit that the readers here can probably benefit from.

I visited their website, and viewed the testimonial video. The IHI messaging is very similar to HR Best Practices. IHI also provides an ROI guarantee: actually waiving fees if they can’t demonstrate cost savings. I am looking forward to receiving a presentation over the web.
For me, this is what it’s all about: identifying a need in the marketplace and filing it! Here now are two companies who have done just that. They also stand by their services with ROI guarantees. For a company wanting to contain costs and better manage their vendors it certainly wouldn’t hurt to consider the 100% audit approach.

I’d love to develop a roster of companies providing these services. Again, as I requested last week, please drop me an e-mail or respond directly to this post to let us all know about what is going on in this space!

About the authorDonald Glade is President and Founder of Sourcing Analytics, Inc., an independent consulting firm specializing in helping companies optimize their HR / benefits / payroll service partnerships through relationship management, financial analysis, and process improvement.

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