According to a 2012 study published in the¬†New England Journal of Medicine, the Institute of Medicine (IOM) estimated that the United States spends $361 billion on healthcare administration, which is more than twice the nation’s spending on heart disease, and triple the amount spent on cancer. A large proportion of these administrative costs are related to not performing insurance eligibility verification and/or errors in verifying patient eligibility, leading to claims denial and costly resubmission processes. Benefit verification is a key component of the revenue cycle management services provided by medical billing companies and can help physicians reduce administrative costs.
The last several years has seen the rise of a large category of patients who have coverage for only preventive or outpatient services. A TransUnion Healthcare Report showed that patients saw a 13% increase in both deductible and out-of-pocket maximum costs between 2014 and 2015. Dermatology, Orthopedics and General Surgery were among the medical procedures with the highest out-of-pocket costs for patients. Underinsured customers often do not pay for what’s not covered, leading the medical practice to lose revenue or incur higher costs from collection efforts.
To collect patient payments, physicians need to understand their coverage details, verify and communicate their benefits to them, and collect payments that are due when services are provided. Patient eligibility verification leads to accurate claim submission and prevents claim denials. In fact, a recent report published by Managed Healthcare Executive notes that 48% of denials arise from the patient access point and is often caused by the practice staff failing to verify insurance coverage.
Today, many practices are relying on an insurance verification specialist to verify new and returning patients’ insurance benefits. Outsourcing this important process will reduce administrative costs, cut losses, improve collections and also enhance patient satisfaction. The services provided include:
- Collecting or verifying existing patients’ current information at each visit
- Verifying new patients’ insurance coverage and eligibility well in advance of the visit
Details verified to confirm insurance eligibility are :
- Patient’s name and date of birth
- Name of the primary insured
- Social security number of primary insured
- Insurance carrier
- ID number
- Group number
- Insurance company’s contact information including phone number, website and address for submitting claims
After verifying these details, the insurance verification service provider will contact the insurance company via telephone to confirm the following :
- That the patient has coverage
- Insurance coverage effective dates
- In-network or out-of-network coverage
- Whether need pre-authorization and/or a referral by a primary care physician is required
- Deductible amount / whether deductible has been met for the year
- If the policy is in danger due to non-payment of premiums
Checking insurance eligibility well in advance of that patient visit is a strong indicator of Accounts Receivable (AR). The practice staff can then communicate and explain this information to patients before they arrive for an appointment. If benefits verification is not performed, it will lead to increased administrative costs due to the efforts to try and address open AR or open claims.
In reliable medical billing companies, the insurance verification team will work with the practice management constantly to understand the office’s charges and contracts. These specialists have extensive experience working with government insurance as well as commercial insurance companies and can provide customized patient¬†eligibility¬†verification services for all medical specialties and practices of all sizes. Their services allow practices to submit clean claims, avoid the costs associated with reprocessing claims, and streamline the collection process from both patients and payers. Providers can focus more on providing quality healthcare and practice staff can be assigned to other revenue enhancing activities.