The current healthcare space has created confusion about health insurance -not only among healthcare providers but also among patients.
Many patients are totally unaware of how the insurance mechanism works, as it comes with many cost-sharing options They may not even know the difference between premium, copay, deductible, coinsurance and out-of-the-pocket maximum –all of which work together to provide health coverage.
Patients are confused over why their plans come with higher co-insurance, despite opting for a low-cost premium plan. Having negotiated lower payment rates, they feel cheated when availing an out-of-network service takes up their bill. They are puzzled that they are denied coverage, little realizing that they may not have met the deductibles.
Research has shown that most of the claims are denied or delayed due to gaps in patient information. This may be linked to incorrect form-filling during their visit, or failure to update the medical dossier of the patient at the front-desk/reception, expiry of insurance cover, missing claim form, a mismatch between service provided and diagnosis, lack of pre-certification and so on.
In this backdrop, it is imperative to verify insurance eligibility most diligently and also make the verification process more effective.
Why is Insurance Eligibility Verification Important?
Insurance Eligibility Verification is the procedure of verifying a patient’s insurance in terms of:
➣ Coverage status
➢ Active or Inactive status
➣ Eligibility status
Without this information, healthcare services may be derailed. Insurance eligibility verification is important as it is directly linked to claim denials or payment delays of a healthcare practice, especially the account receivables (A/R). This happens when the eligibility verification is not performed correctly.
If the verification is carried out step-by-step as listed below, there is little chance of confusion around insurance claims. The steps explained below will also throw light on the importance of insurance eligibility verification.
1. Patient Scheduling – When automated appointment scheduling software, patient self-scheduling through the online scheduling feature and prioritization of appointments are followed, patient scheduling can be greatly streamlined. Add to this appointment reminders through email and phone texts, waiting lists, and rescheduling of canceled appointments and your patient scheduling function will be robust.
2. Patient Enrolment – Patient demographics is the core data of a healthcare facility. The main question is, what should be included and what may be omitted. For instance, identification –name, date of birth and address are required; so are diagnosis, allergies, and medical history; however, patient emergency contact, family doctor, insurance provider may be captured elsewhere under specific heads.
3. Eligibility Verification – The most neglected aspect of revenue cycle management, eligibility verification –if done right, can increase the number of “clean” claims. If the verification process is smooth, many problems like delayed payments, rework, decreased patient satisfaction, increased errors, and non-payment can be addressed.
Verification of Coverage and Benefits: It is important to periodically check the coverage and benefits extended under the insurance plan of the patient. For this, an accurate record of patient information has to be maintained because any changes like marriage, birth, and divorce can change coverage and benefits. In the process, it is good to advise the patient on benefits like co-pay, deductibles, in and out- of- network services.
4. Pre-authorization – Prior authorization for treatment is obtained from the payer. You can read more about it here.
5. Contacting Patients – Contacting the patient if any additional information is required.
6. Billing System Update – The patient details, including the coverage and other details, are updated in the billing software.
Current Challenges of Insurance Eligibility Verification
According to the Centers for Medicare & Medicaid Services (CMS), two-thirds of physician practice revenue is lost due to billing leak, and 30 per cent of claims being denied or rejected on the first submission.
Healthcare providers in the U.S. lose up to $125 billion a year owing to inferior billing practices. Findings from Remit Data, claims that two of the top five claim denial reasons were insurance-coverage related –the culprit being insurance eligibility verification. Millions of claim denials occur because the eligibility verification has not been completed or there is no coverage for the patient under this plan.
There are occasions when the team at the healthcare facility who are liable for the insurance verification are saddled with many tasks. This includes recording patient check-in details, patient checkout details, answering calls and handling additional responsibility of staff who are on vacation in addition to the insurance eligibility verification. The multi-tasking and sheer burden of work also lead to mistakes.
Overall the claims are rejected or delayed due to partial or inaccurate information given by the patients during their visits to the healthcare provider or when the existing coverage details are not updated by the healthcare provider. This leads to delayed pay-outs, increased A/R (accounts receivable) time, and also decrease in the cash flow; this leads to the resubmission of claims and finally claim denials. Consequently, there is a backlog of ARs
Different Types of Eligibility Verification
There are mainly two types of insurance eligibility verification:
1.Basic Verification Process
Under the basic verification process, the eligibility timeline is verified, which includes effective coverage dates. In addition, the patient details including name, address, contact information, claim limits, pre-existing criteria and plan types are also captured; the basic verification also gives information on whether the provider is within the network or out of network.
All these details are entered into the insurance eligibility verification form. Apart from the verification process, the co-pay, co-insurance, dependent insurance, and other deductibles are also confirmed.
This type of basic insurance verification process is recommended for a smooth healthcare process, as some patients who renew their policies in the first quarter may not do so in subsequent quarters and hence may not be eligible for insurance coverage.
Advanced Insurance Verification
Under the advance verification, all the steps under basic insurance verification are completed. In addition, a few other details, including renewal rate frequency, whether yearly or monthly, are included. It also records details including health fund usability, i.e. the amount of insurance that has been utilized of the total allocated for the year. Similarly, co-pays for the tests, lab fees, pre-certification are documented. Under this process, even inclusions and exclusions are verified.
Benefits of Insurance Eligibility Verification Services
Insurance eligibility verification service extends many key benefits:
✓ Increased Cash Flow
Updated eligibility verification helps in better claim submission and lesser claim denials. It helps healthcare practices to maintain cash flow through the decrease in write-offs and improved patient care.
✓ Efficient Workflow
Insurance credentialing services help to enhance the entire process of revenue cycle management. An efficient and streamlined workflow will lead to lesser claim denials and improved patient experience.
✓ Increased Self-Pay Revenue
There will be an increase in the self-pay revenue as patient information is electronically matched with the healthcare database. This helps in helping patients whose “cover” is not known; it helps to submit their claims after cross-checking the eligibility and cover status online, thus streamlining pay pipeline for self-pay patients.
Six Steps to Optimize Insurance Eligibility Verification Process
Here are some of the techniques that can be followed to make the insurance verification process work seamlessly:
- Checking regularly for appointment scheduling through the appointment and scheduling software.
- Educating the patient about coverage and financial obligations.
- Verifying the patient’s coverage with the payers by contacting the insurance executives through calls, Interactive Voice Response (IVR), and insurance portals.
- Updating patient information is crucial. The billing team has to collect the details and get the eligibility verified, mentioning the co-pay, coverage period, and claim details.
- The front desk also has to follow-up the patient details and check if issues are arising concerning insurance eligibility; if so, the problem should be resolved to avoid denials.
- Real-time verification is also one of the solutions as it helps to update and store patient data.
Having a detailed process of eligibility verification at the healthcare desk eliminates hours on the phone or using several websites to verify eligibility information. Moreover, it decreases the claim delays and denials, and there is a timely response to coverage. This, in turn, can make your revenue practice management more efficient and raise your overall bottom line.