The healthcare revenue cycle is a complex yet crucial process for generating consistent and reliable medical billing income. Since the health insurance verification process is part of the initial step in the revenue cycle, any errors at this point can jeopardize the facility’s or provider’s billing revenue.
Over the past two decades, many studies have demonstrated that administrative expenses like billing & coding, insurance administrative costs, and physician administrative activities account for up to 25% of total national health care expenditures (JAMA).
Cost-reducing improvements like cutting down on medical billing errors and adopting health insurance verification software can help reduce expenses and drive revenue for providers and medical facilities like SNFs, acute care hospitals, and LTACHs.
What is the health insurance verification process?
When checking in patients, administrative staff walk through several outlined steps to verify insurance eligibility. This is done for the purpose of ensuring claims can be submitted for medical treatment, and patients are eligible for coverage.
Failing to perform this step can result in unpaid or denied claims and an unnecessary financial burden on patients. Verification prior to service can eliminate these revenue leaks that ultimately cost healthcare providers a lot of money.
Eligibility verification process:
Receiving patient demographic information
The first step is obtaining relevant patient demographic information from a referral source (like a hospital) or the patient directly. This ensures all future documentation is filled out accurately.
Verifying patient info with the insurance carriers
The next step is getting information from the insurer, including:
- Payable benefits
- Co-pays
- Co-insurance amounts
- Out-of-pocket maximums
- Deductibles
- Policy status
- Date policy went into effect
- Date policy ends
- Plan exclusions
- Type of plan (HMO, PPO, EPO, etc.)
- Claims mailing address
- Referrals
- Pre-authorization
- Other coverage details
Confirming coverage on both primary and secondary payers
Some patients have more than one insurance policy – one would be identified as the primary while the other acts as the secondary policy. Medical clinics must be careful to correctly identify which insurance policy needs to be billed. Failing to bill properly can result in more than just financial issues but can cause legal problems as well (and no provider wants to deal with that).
Accurate documentation
It’s imperative that administrative staff verify all patient data is entered into their record with precise accuracy to prevent any errors or delays with claims and payments. Even seemingly minor discrepancies can have severe consequences for timely reimbursement.
Verifying insurance is part of what medical billing step?
Eligibility verification is critical during multiple points of the revenue cycle, from the initial appointment scheduling to post-appointment billing and management. Any missteps can financially impact the provider and facility.
Understanding common offenses in the initial verification process can help billing staff identify areas for improvement.
Failed eligibility: 5 verification errors that can affect your bottom line
Because insurance verification systems are essential to the revenue life cycle, identifying common problems can help organizations determine where they might need an automated solution. An automated solution can help prevent revenue loss in paid claims and in time spent handling billing issues by staff members.
1. Wrong patient information
Transcribing accurate information into the patient’s billing profile and medical record is vital to submit a successful claim. The foundation of the medical claim depends on correct data, and even a single wrong number or misspelling could result in a costly denial.
Administrative staff should be educated on the importance of medical billing errors & patient rights. Errors can have a significant impact on your facility and reputation, leading to HIPAA violations and even fines.
2. Inactive insurance policies
Patients having inactive insurance policies are one of the most common reasons for claim rejection. The most efficient way to deal with this problem is to check eligibility prior to service being provided to ensure coverage.
3. Neglecting to ask about a secondary policy
Some patients have more than one active health insurance policy for various reasons. One policy acts as the primary, and the other is designated as the secondary policy. During eligibility checks, staff members need to ask about any secondary coverage to ensure billing is handled correctly.
This responsibility can be time-consuming when a facility or clinic’s admin staff is juggling multiple obligations at once, which is why an automated system can almost fully eliminate failed eligibility.
4. Failure to get a copy of the patient’s insurance card
Even if the patient provides details over the phone or info is obtained in person, it’s not uncommon for inaccuracies to occur. Always make a copy of both sides of the insurance card so you have it on hand to refer back to if needed.
Ultimately, maintaining excellent communication with patients is vital. If there’s ever any question about personal or insurance information, verifying with the patient is the easiest way to prevent medical billing errors during verification.
5. Failure to properly verify patient is eligible for SNF coverage
Billing errors and failure to verify SNF eligibility properly can result in massive costs to a facility. The patient is required to have a 3-day consecutive inpatient stay at a hospital before being eligible for a skilled nursing facility. Even small errors and omissions in both the health record and billing information may have a significant effect on reimbursement from CMS.
What are the benefits of checking patient eligibility before service?
Implementing a streamlined insurance verification process can have positive benefits for any practice or healthcare facility, including:
- Decreasing the number of claim denials
- Avoid inaccurate billing
- Avert HIPAA violations
- Curtail late or missed payments from patients
How do clean claims impact healthcare organizations?
Improving the level of your clean claim directly correlates to more revenue generated by reducing write-off rates and increasing profits.
It is estimated that around 80% of claims are denied due to no authorization being obtained from the carrier — a key part of the revenue cycle and insurance eligibility verification step.
Medical offices and facilities often don’t have the capacity to handle high volumes of prior authorizations and simply can’t find a reliable or cost-effective vendor to outsource this responsibility to.
There are a couple of crucial factors that influence why insurance verification is a significant issue for healthcare organizations:
- Staff rely on manual processes like performing data entry and making physical copies of insurance cards, all while interacting with patients in person and over the phone. These confounding factors make data omission almost impossible to circumvent.
- The crucial step of entering accurate information into the billing system and patient record is performed by an administrative staff that is typically the lowest paid and have the highest turnover. There is hardly an incentive for overworked employees to perform monotonous and tedious tasks that take away from personal interaction with patients.
How Approved Admissions simplifies and solves the health insurance verification process
Automated solutions allow admins to seamlessly verify eligibility for patients using real-time eligibility (RTE) technology. Health insurance verification platforms like Approved Admissions ultimately help reduce claim denials and free up staff time for other responsibilities.
Tech-driven solutions are increasingly becoming the new normal as the healthcare industry shifts. For example, now that telemedicine has become accessible to almost everyone, companies are rely more on automated portals and apps to capture key information that would otherwise be collected in person.
Utilizing these tools will ultimately improve processes and help facilities operate at a much higher level of efficiency.
Benefits of real-time eligibility
- Administrative employees can shift away from time-consuming phone & fax communication and get RTE query results in minutes
- Reduce claim denial rates
- Streamline the revenue life cycle
- Increase revenue for your medical office or facility
- Increase patient satisfaction and retention
- Minimize billing errors and missed payments
Execute a smoother eligibility verification process
Gathering and submitting accurate information for insurance verification and claim submissions is a key component in generating revenue for organizations like SNFs, LTACHs, clinics, and medical offices. Precise patient data and insurance information are critical to reducing write-off rates and the occurrence of claim denials.
Back-end eligibility verification can almost eliminate the five common errors that frequently plague providers and affect their bottom line. By switching to a real-time eligibility system, you can reduce errors and delays while getting important insights from major healthcare payers. It’s a win-win!
Request a demo today and learn how Approved Admissions can help you increase your revenue and improve medical claims billing processes. We’ll show you how to get those payments flowing smoothly without any headaches.
