Most claims never get checked. That is where the waste hides.
Medical and pharmacy claims are paid on trust far more often than employers realize. On a fully insured plan that is the carrier’s problem. On a level-funded or self-funded plan it is yours, and nobody sends you a notice when a claim is paid twice, priced outside the contract, or billed for a service the plan excludes.
The same three patterns, at almost every group.
Payment integrity work is unglamorous and specific. It looks at individual claims rather than at the loss ratio, which is why it finds things a renewal analysis never will.
Duplicates and Rebills
The same service paid twice under slightly different codes or dates, or a corrected claim paid alongside the original. Routine, recoverable, and invisible in aggregate reporting. They appear when a provider resubmits a claim that looked unpaid, or when a corrected claim is keyed as new instead of as a replacement. Catching them means matching claims line by line on member, provider, date and service, which is the first pass any competent audit runs.
Contract-Rate Mismatches
A claim paid at a rate the network contract does not support. Finding these requires comparing the payment against the contract, which is exactly the comparison nobody performs by default. The usual causes are a fee schedule updated in the contract but not in the payment system, or a claim priced under the wrong provider agreement. An auditor needs the pricing terms themselves to catch either one, not just the paid amounts.
Eligibility and Coordination Errors
Claims paid for people who were not covered on the date of service, or paid as primary when another plan should have paid first. The same upstream eligibility problem that causes wrongful denials also causes wrongful payments. Both trace back to the eligibility file: a termination entered late, or other coverage that was never recorded. Fixing the file stops the next wrong payment, which is worth more than recovering the last one.
Finding the error is the easy half. Getting the money back has a clock on it.
Every plan document and network agreement limits how far back a payment can be revisited, and the clock runs from the payment date, not from the day you noticed. An audit that lands after that window closes produces a report, not a refund.
What Is Actually Recoverable
A duplicate payment and a contract-rate error are recoverable as a matter of contract. A medical-necessity judgment usually is not. Sorting findings into those two piles before anyone writes a letter is what keeps the exercise from becoming a standoff with your own carrier.
Who Pursues It
On a self-funded plan the money is yours, and the claim goes back through the administrator under your plan document. On a fully insured plan the carrier keeps it, and what the error buys you is leverage at renewal. Those are two different arguments, and using the wrong one wastes the finding.
The Window
Corrections have to be raised inside the plan’s own billing-adjustment window, which is why this runs on a cadence instead of as a year-end project. The windows differ between the administrator agreement, the network contracts and the stop-loss policy, so we read all of them before an audit is scoped. A finding that lands late is still accurate, but it is no longer money you can collect.
What Comes Back
We do not publish a recovery percentage, because it depends entirely on what the audit finds and how old it is. What you get before we start is which findings are inside the window and which are not. That split decides whether an older period is worth auditing at all. Findings outside the window still earn their keep as evidence of where the payment process is weak going forward.
Stop-Loss Reimbursement
On a self-funded plan the largest single recovery is often not an audit finding at all — it is a claim that breached the specific deductible and was never filed the way the contract required. We run that filing against the contract’s own notice and proof-of-loss deadlines.
Medical claims are the biggest line, not the only one.
The same discipline applies anywhere a third party pays money on your behalf, against rules somebody else wrote.
Dependent Eligibility Verification
An ex-spouse who was never removed and an adult child past the age limit stay covered until somebody checks. On a self-funded plan you pay those claims in full, and the correction is permanent rather than a one-time refund, which is what makes this the highest-return review on the list. It also runs as a standing check rather than a one-time sweep, because eligibility goes wrong again the moment a life event is not reported.
Pharmacy Claims, Discounts and Rebates
A pharmacy audit tests something a medical audit cannot: whether the discounts, dispensing fees and rebate guarantees written into your contract are the ones actually applied. A guarantee nobody measures against is a sentence, not a term. The test compares what was paid at the pharmacy against the discount promised for that drug type, and the rebates credited against the rebates owed. If the contract limits what you can review, that is the term to renegotiate first.
Dental, Vision and the Account Balances
The smaller lines get less scrutiny for exactly the reason they deserve some. Dental and vision claims, COBRA premium accounting, and HSA, HRA and FSA balances all reconcile the same way, against eligibility and against the plan rules. The errors here look like dental claims paid after a dependent was removed, COBRA premiums billed but never collected, or account balances that do not match the contributions actually deposited. Each is small on its own and repeats every month until someone reconciles it.
Medicare Part D and Retiree Coverage
Retiree drug coverage carries its own subsidy and disclosure rules, so an error there costs you twice: once in claims and once in a compliance position you would rather not have to defend. A subsidy determination can be reopened at the sponsor’s request, within a year for any reason and up to four years where there is new evidence or a computation error, so a year that came up short is worth revisiting while it still can be.
Hospital prices vary more than quality does.
Published research on hospital pricing gives employers something they never had: an external reference point. Analysis of commercial claims has found private plans paying hospitals in the region of two and a half times what Medicare pays for the same services, with wide variation between facilities in the same market.
Network Cost and Quality Data
We push carriers and vendors for real cost and quality data by provider rather than accepting a network’s reputation as the whole story. Transparency requirements have made more of this available than most employers use. In practice that means asking for price and outcome data on the specific facilities your employees actually use, and pressing when a carrier offers only network-wide averages. The answer shapes plan design and which providers we point employees toward.
Where the Steering Is Worth It
When a facility in the same network costs several times another for the same procedure, plan design and employee guidance can move volume without restricting anyone’s care. The usual tools are a lower copay or coinsurance at the better-value facility and plain guidance at the moment a procedure is scheduled. Steering works best on planned care like imaging, lab work and elective surgery, where the employee has time to choose.
Reference-Based Pricing, Honestly
A reference-based approach can change the arithmetic considerably. It also changes the employee experience, and both belong in the decision. We advise on it case by case rather than placing a program. The first question we test is whether the hospitals your employees rely on will accept a reference price or push back, because that decides how often the plan has to step in. That answer comes from your own claims, not from a vendor’s pitch.
A finding is worthless until somebody acts on it.
Holding the Vendor to It
A correction that is agreed and then not made is not a correction, so the same claims get pulled again the following month to confirm the money actually moved. Each agreed correction is tracked to a named contact at the administrator and a target date, and it stays open until the credit shows up in the claims data or on the invoice.
Billing Reconciliation Every Month
The carrier invoice checked against enrollment so the error is caught in the month it happens, when it is still a correction rather than a negotiation. The usual mismatches are premiums still billed for someone who left, a new hire enrolled but not billed, and a tier change after a birth or divorce that never reached the carrier. Carrier contracts usually limit how far back a retroactive termination is credited, so the monthly check is what keeps those credits collectable.
Reporting You Can Act On
Claims, pharmacy and stop-loss data in one view with outliers flagged, so the audit question is asked during the year rather than after it. Outliers means large claimants approaching the specific deductible, drug spend moving faster than medical, and claim patterns that break from the prior year. Seeing them mid-year leaves time to file a stop-loss notice, change a vendor or adjust contributions before renewal.
What employers ask about claims auditing.
Do claims really get paid incorrectly?
Often enough to be worth checking. Duplicates, rebills and contract-rate mismatches are ordinary, and on a self-funded plan every one of them is your money rather than the carrier’s. Administrators pay at volume on automated rules, so one wrong rule repeats on every claim it touches until someone spots it. A sample audit of your own claims is the honest answer for your plan.
Is reference-based pricing a good idea?
It can lower cost, and it moves risk onto employees when a provider balance-bills. It works where it is paired with real member support; it fails where it is sold as a pricing mechanism on its own. The question to put to any vendor is who defends the employee when a hospital sends a balance bill, and how often that has happened on the plans they already run.
What do we do with the findings?
Recover them. An audit producing a report and no recovery has cost you the audit fee, so the engagement should be judged on what came back rather than on what was found. Before the audit starts, we agree with you which findings will be pursued, who at the administrator responds, and how recovered money is credited back to the plan. That turns the report into a work list with owners.
Claims Audit and Recovery in Bloomfield Hills for Plans That Pay Their Own Claims
Many self-funded and level-funded employers pay a lot in claims each year. Yet few ever check whether those claims were paid the right way. Claims audit and recovery in Bloomfield Hills helps you find errors and get money back under your contracts.
We are CFH Insurance Consultants, an independent benefits firm in business since 2007. No carrier owns us. We work with employers in Troy, Southfield, Auburn Hills, Detroit and across Michigan.
Claims Audit & Recovery
When you fund your own plan, the claims money is yours. An administrator pays claims for you under a contract. A claims audit checks that each payment matched your plan and your contract. The broader term is payment integrity. That means making sure the plan pays the right amount, to the right provider, for the right service.
Common errors include duplicate payments, wrong pricing and claims for people no longer on the plan.
Here is how we help with claims audit and recovery in Bloomfield Hills:
- We read your administrator and pharmacy contracts for audit rights.
- We find, set up and oversee an independent claims auditor.
- We review the findings with you in plain words.
- We hold the administrator to its contract when money is owed back.
We do not pay or process claims ourselves. We help you check the people who do.
Can a self-funded employer audit its health claims?
In most cases, yes, but the contract sets the rules. Look for an audit clause in your administrator agreement. It should say:
- How often you can audit
- How far back an audit can look
- Who pays for the audit
- How the administrator must respond to findings
If the clause is weak, fix it at your next renewal. It is much easier to add audit rights before a problem than after one.
What is a pharmacy benefit audit?
A pharmacy benefit manager, or PBM, runs the drug side of many plans. A PBM audit checks drug pricing, rebates and fees against the contract.
Michigan now licenses PBMs under Public Act 11 of 2022, with licensing in place since 2024. Ask whether your PBM is licensed, and what your contract lets you review.
Common questions
Does this apply to fully insured plans?
Mostly no. In a fully insured plan, the carrier pays claims with its own money. Audits matter most when the claims money is yours. The part that still applies is the invoice: fully insured premiums can carry charges for people who left, and reconciling the bill against enrollment catches them. Level-funded plans sit in between, so check how your contract returns a claims surplus.
Will an audit damage our relationship with the administrator?
It should not. Audit rights are written into many administrator contracts. Using them is normal oversight. The friction comes from surprise, not from the audit itself. We give notice through the channel the contract sets out, share the scope in advance, and let the administrator respond to each finding before anything is escalated.
What happens if the audit finds errors?
We review the findings with you and hold the administrator to its contract for any money owed back. Each finding is sorted by whether it is recoverable under the contract and still inside the adjustment window, then sent to the administrator with the claim detail behind it. Where the error came from a system rule, we also ask for the rule to be fixed so it stops repeating.
Talk to us about claims audit and recovery in Bloomfield Hills
Book a 30-minute call and bring your administrator contract. We will tell you what audit rights you have. Visit 41000 Woodward Avenue, Suite 350 East, Bloomfield Hills, MI 48304, or call 248.370.8853.
Send us your renewal.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents — two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
An independent employee benefits consulting firm. We look at the entire benefits program — cost, plan performance, risk and administration.
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