Concurrent Audit and Analyses at Work

Problem: Several clients did not find the results of retrospective audits useful. Many clients also felt that the financial findings that identified problems with the PBMs were too hard to capture or were non-recoverable. As a result, we were presented with the problem of how to improve the audit process in a more concurrent fashion.

Methodology:

We addressed the problem from several vantage points:
1. 1. What was the reason for the audit?
2. 2. What were the client’s goals?
3. 3. How would the results be used to improve management of the Plan?

Aside from corporate rationale and Sarbanes-Oxley motivations, the major concern was to use the information to manage the Plan better and at a lower trend. The current approach for reconciling invoices was to sum claims and paid amounts to compare against the invoice totals. The result, essentially was no information to use for managing the Plan. We utilized this information to digitize the entire audit and make the results useful monthly, concurrently and at an affordable cost. The rationale for the audit was to improve management and to direct changes to improve trend. The goals were designed to be both short and long-term to manage drivers of short-term and trend for long-term.

Outcome:

The client then had point-of-sale results and accompanying analyses to use for:
1. 1. Identifying the current situation for:
2. a. Cost accounting for every penny spent
3. b. Drivers of spend by demographics, geography, categories of medications, individual medication cost inflation
4. c. Trending results by spend, PMPM and PUPM to compare to national and peer results
5. 2. Predictions
6. a. Predictions for future spending
7. b. Forecasting based on new entrants and demographic shifts
8. 3. Outcomes based on quality and national metrics that were compared to targets for peer-to-peer improvements
9. 4. Action plans and recommendations for managing drivers, trend, and the impact of new entrants