What is the function of a claims audit in the insurance industry?

The function of a claims audit in the insurance industry is primarily to ensure claims are processed correctly. This process involves reviewing a sample of claims submitted to the insurance company to assess their accuracy and adherence to established policies and regulations. By conducting audits, insurers can identify any discrepancies, errors, or potential fraudulent activities in claims processing.

These audits help maintain the integrity of the claims process, ensuring that policyholders receive the benefits they are entitled to while also protecting the insurer from financial losses due to incorrect payments or fraud. Moreover, a claims audit can provide insights into the overall efficiency of the claims management system, leading to improvements and refinements in procedures.

The other options, while related to various aspects of the insurance industry, do not capture the primary purpose of a claims audit. Determining eligibility focuses on policyholder qualifications rather than claims accuracy. Verifying the financial status of the insurer involves financial audits rather than claims audits. Evaluating the effectiveness of health programs pertains to program assessment rather than the specific critique of claims processing practices.