For a company to pay any claim, it first seeks justification as to whether the claim is valid or invalid. The only sure way to determine the validity of a claim is through a Claim Auditing Process. Therefore, understanding the whole claim auditing process and what it entails is of paramount importance to any firm. The paper’s main objective is to expound the different steps that are entailed in the claims auditing process. The paper’s introduction illustrates why claim auditing is an essential tool for a firm’s successive claim payment plans. In the subsequent paragraphs, the paper offers a thorough elucidation of the nine steps that are generally followed for successive claim payment or objection. First of all, the foremost step that the paper explicates is the identification of an adequate way of defining errors. The paper elucidates more on when and why the step is vital in the claims auditing process. Secondly, a detailed explanation is presented in the second step, that is, the establishment of a sampling method. Particularly, two techniques; audit prospective or retrospective techniques, useful in the step are explained.
The third step discussed in the paper is set up of the period of sampling. The paper clarifies why the period is not precise and why it changes depending on the firm. Additionally, the subsequent step offers a thorough explanation of how to decide the number of claims that should be analyzed. The fifth step presents the different categories of data that are used in claims auditing. In addition, the importance of the different constituents of records is stated.
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Moreover, the sixth step accounts on the importance of evaluating documentation and assessment of findings. Similarly, the concept of “reverse” audit in high-risk areas is elucidated in step seven. Besides, an example is offered to clarify on “reverse” auditing. Subsequently, the method of quantifying the findings of the process is clarified in step eight while the last step the paper tackles calculation of payment errors and how discrepancies that arise are handled. The paper concludes with the necessity of claims auditing process to the stakeholders and shareholders in general.
