Claim Audit - Dirty Words?

Jun 15, 2010

Does "audit" have to be a dirty word? I know, I know, scads of articles, white papers and the like have tried to paint "audit" as something nicer than evil. These are typically written by people working for organizations in the audit business in an attempt soften the audit stereotype. And, yes, here's another writer in the audit business (it's part of what we do) trying to change the audit perception. Hypocrite you say?

Maybe. Probably. I guess so. It isn't the first nor will it be the last time I'm accused of hypocrisy. Contrary to what I tell my kids, I've sent an email or two from behind the wheel, I've put sharp knives in the dishwasher silverware basket blade up, I still (once in a great while) drink from a large container while standing in front of an open fridge door and, well, yes, I have used the last of the toilet paper roll and not reloaded.

So, what's my angle? By the way, have you noticed that you hear the word "so" much more than you use to - especially to begin a sentence? It sounds so condescending. "So, to explain the interface between the four nipple fravous the ......Sorry...Back to my angle. Nomenclature. Because we call it an "audit", we think of it as a bad thing. We've performed over 80 of these things. Invariably, we get an inquiry to "do an audit". Once we perform the due diligence, determine exactly what the customers really need and expect as outcomes, the engagement becomes a more positive initiative that focuses on opportunities to improve.

Like most people, when I hear the term "audit", I think of taxes, the IRS, SAS 70, or Sarbanes Oxley. All of which have negative connotations. To me, the stereotypical meaning behind "audit" involves a random selection, searching very hard to find something wrong and then penalizing the wrongdoer. I suppose there are instances where an organization might want to perform a disability claim audit as defined above but I can think of other ways to find fault and punish.

Here's my sales pitch.

  1. We don't like random samples of claims for review; even if they are "statistically valid" (can someone write to me and explain statistically valid?). We want to understand the goals, objectives and focus of the review. We prefer to analyze the claim data and target claims that will specifically address the purpose of the audit rather than taking a chance with a random selection that might exclude claims that should be reviewed.
  2. Opportunities for improvement - Our goal in a claim "audit" is to identify areas where the claim organization might improve including training, workflow efficiencies, caseloads, data integrity, timeliness of decisions, use of risk management techniques or claim system effectiveness.
  3. We like to think our claim "audits" help (not penalize) a claims organization. Not only have we scrubbed the claim data, we'll prioritize claims for the analysts, identify red flags, uncover potential bottle necks.
  4. Our audits include specific claim strategies in detailed file plans so (that word again) the analyst has a roadmap.
  5. We provide more information, data, insight, depth and breadth than the standard industry audit.

Our website says we perform claim audits. We hemmed and hawed over the word when we launched our site.  We landed on keeping the word "audit" since that's how most of the industry thinks about claim reviews and it enhances SEO. Hopefully, those 80 or so "audits" we've performed didn't seem like "audits" and maybe we can change the nomenclature one "audit" at a time.

So, (just kidding) the next time you're thinking of a claim audit, don't think IRS, think nomenclature.

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