Archived Insight | November 22, 2019

Claims Auditing That Reviews Your Entire Claims Process

Since 1973, Segal has conducted scores of retrospective on-site claims reviews of public sector health plans administered internally or by third-party administrators. Our consultants have extensive background in claims processing and operational reviews.

This experience makes them uniquely qualified to evaluate established administrative procedures, suggest areas for improvement and ensure proper controls are in place for efficient plan administration.

Questions about claims auditing?

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About Claims Auditing and Implementation Reviews

We'll will work with you to determine what your greatest challenges are. We can target our reviews to the areas that make an impact on the bottom line or that best support your plan's overall goals.

We tailor each claims auditing project to the plan's specific concerns and objectives. We offer an array of services and tools relating to claims adjudication of all plan expenses (i.e., medical, dental, disability, vision, life insurance).

They include the following.

  • Administration procedures review of day-to-day operational processes and the claim-control measures in place for efficient plan administration.
  • Analysis of claims data to determine utilization trends and comparisons
  • Claims system logic testing of system capabilities, examiner edits and automated benefit calculations
  • Duplicate claims analysis to electronically identify potential overpayments that may have bypassed system edits
  • Electronic eligibility reviews to compare multiple data sets and identify discrepancies that impact claims processing and/or suggest administrative deficiencies
  • Implementation audits before and after a change in vendors or plan design are critical for early detection of potential system errors.
  • Post-implementation assessments of plan setup, adjudication procedures and automated system capabilities before going into production
  • Pre-implementation review to assess established procedures and system capabilities of a new administrator or examine a major benefit revision
  • Performance validation to ensure correct operation of claims-adjudication procedures
  • Administrative Procedures to meet fiduciary responsibilities, validate plan costs, enforce or implement performance guarantees, address benefit concerns and increase participant satisfaction
  • Stratified samples offer overall confidence in the processing accuracy for all claims
  • Targeted samples validate areas of concern or claims identified through electronic queries
  • Specific stop-loss coverage analysis to confirm appropriate procedures are in place for prompt filing and accurate reimbursement.

Your questions answered

Interested in claims auditing? Get in touch. 

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Should you audit your plan?

Consider an audit if your plan:

  • Does not require certified dependent documentation
  • Recently changed administrative service providers
  • Does not receive and validate monthly adds/drops from its administrator

Strategies and recommendations for eligibility audits vary based on group size and benefit philosophy.

Segal can help plan sponsors establish appropriate controls to ensure that benefits are only paid for eligible participants and dependents.

Eligibility assessments and DEVAs


Nationwide estimates suggest that eligibility errors are prevalent in health plans.

In fact, eligibility audits are reported to produce 10 - 15% reductions in the number of eligible dependents.

To protect against financial losses, it is imperative for group health plans to use eligibility safeguards and perform audits.

We can conduct eligibility audits to identify:

  • Social security numbers that are not on plan sponsors' records, resulting in increased administrative fees and potential overpaid claims
  • Overage children and ex-spouses who no longer meet dependent definitions
  • Administrative procedures that fail to recognize and determine full-time student status and/or coordination of benefits
  • Late termination notices to claims staff and the lack of procedures for reviewing ineligible claim payments

Dependent Eligibility Verification Audit (DEVA) Services

Segal can work with you to determine an appropriate approach for your plan’s dependent eligibility verification.

For example, a strict audit terminates dependent benefits until confirmation of their eligibility is received, while a much softer approach asks employees to sign a statement confirming dependent eligible status.

Segal can assist with the following.

RFP and proposal evaluations

We'll coordinate with plan sponsors to describe the overall process, outline management decision points and collect information required to request proposals.

The RFP process can be formal or modified to enlist proposals from industry leaders.

Project management

Segal will coordinate with plan sponsors from start to finish, outlining project objectives and required deliverables, monitoring vendor performance to ensure timely completion of all projects and determining if additional outreach steps may be required.

Review operational procedures for new enrollees

We'll coordinate with plan sponsors so that procedural changes for the intake of new dependents ensure consistency for all enrollees.

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This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.