Insurance Verification vs. Insurance Authorization

Insurance Verification vs. Insurance Authorization

Outsource Strategies International (OSI) has extensive expertise providing insurance verification and authorization services. Our team will verify the insurance coverage details of each patient, both new and returning, before services are provided. Our support can eliminate risks of denials due to patient ineligibility and enhance practice cash flow.

In today’s podcast, Loralee Kapp, one of our Solutions Managers discusses the difference between insurance verifications and insurance authorizations.

Podcast Highlights

00:11 What is RCM?

00:29 What does RCM involve?

00:55 What is insurance verification

01:51 What details are collected before the patient’s visit

02:42 Benefits of proactive patient eligibility verification

04:00 What is insurance authorization?

05:11 Difference between insurance verification vs. insurance authorization

Read Transcript

Hey all, this is Loralee Kapp, the Solutions Manager with Managed Outsourced Solutions. Today I want to discuss with you the difference between insurance verifications and insurance authorizations.

00:11 What is RCM?

Revenue cycle management, known as RCM is the administration of financial transactions that result from the medical encounters between a patient, provider, facility and/or supplier, according to the Healthcare Business Management Association, the HBMA.

00:29 What does RCM involve?

RCM involves several processes from the time that the patient schedules an appointment to claim submission and payment collection. Insurance verification and authorization are key processes performed in the initial phase of RCM or medical billing insurance claims process. Though both aimed at preventing claim rejection and delays, insurance verifications and prior authorizations are distinct and different processes.

00:55 What is insurance verification?

But start with going over what insurance verifications are? The life cycle of a patient begins with the appointment scheduling and registration where demographic and insurance information is collected. This sets the stage for insurance verification – the process of checking the patient’s healthcare coverage and benefits prior to the encounter. The goal of this is to confirm –

  • if the patient has active insurance coverage
  • what procedures and services are or are not covered and
  • how much of each procedure the insurer will cover and the patients financial obligation

The following information is collected when the patient calls to schedule an appointment

  • the patient’s name and date of birth
  • the name of the insurance provider
  • name of primary insurance plan holder and their relationship to the patient
  • Patient’s policy number and group ID if applicable and
  • the insurance company’s phone number and address

01:51 What details are collected before the patient’s visit

A reliable insurance verification service provider will make sure that the all the required details about the insurance eligibility and benefits are collected before the patient’s visit. This includes

  • the type of plan and coverage details
  • calendar year or policy year
  • the effective date
  • plan annual maximum
  • plan deductible
  • primary and secondary insurance
  • per code coverage, if available
  • copays and deductibles
  • DME coverage
  • plan exclusions
  • referral or pre authorization requirements and
  • out of network benefits

Insurance verifications specialists will get a full breakdown of the patient’s insurance coverage and benefits by visiting payer web portals or calling the insurance carriers with the information collected from the patient during the initial phone call.

02:42 Benefits of proactive patient eligibility verification

Proactive patient eligibility verification is crucial for the success of a claim submission and medical billing:

This improves the patient experience – verifying the patient’s insurance before at the office and counter and communicating to them as to what their plan covers and doesn’t cover will ensure transparency. This will enable the patients to know about the cost of their care and can help them better prepare to pay their bills. With transparency throughout the political billing process, patients will not face any costly surprises.

This reduces claim denials – if the patient’s information is outdated and the provider uses that to submit a claim, it would result in an instant payment denial. Verifying patient eligibility upfront will ensure that claims are submitted with current and accurate data for a prompt payment. Insurance verification services minimize claim denials and save time and money that would go into working those denied claims.

This can also maximize your cash flow – proper insurance verification will ensure that claims are submitted with up to date information. Meaning, clean claims will be approved faster and speed up the medical billing cycle. With reduced denials and a larger number of clean claims submitted, this will increase a practices cash flow.

04:00 What is insurance authorization?

Now let’s go over what an authorization is. Insurance authorization or prior authorization is a health plan cost control process by which physicians and other healthcare providers must obtain advanced approval from a health plan before a specific service is delivered to the patient to qualify for payment coverage. The American Medical Association states that prior authorization is also referred to as pre- certification, pre-authorization, prior approval or pre-determinations. Insurance companies use the prior authorization process to determine if a prescribed medical treatment drug or medical equipment will be covered in full or in part.

The insurance authorization process begins when a service prescribed by a patient’s physician may not be covered by their health insurance plan. The physician’s office has to communicate with the insurance company and complete a prior authorization form along with documentation supporting the medical necessity of a specific procedure, test, medication or device and the prior authorization is a time consuming process that can delay a patient’s access to care.

05:11 Difference between insurance verification vs. insurance authorization

Now let’s go over the difference between an insurance verification vs. an insurance authorization.

The difference between insurance verification and insurance authorization are as follows –

Unlike insurance verification which is performed before the patient encounter, the prior authorization begins when a procedure, test, medication or device that the physician prescribes for patient requires pre approval from the insurer.

Insurance verification is related to the process of creating and filing medical claims and obtaining payment for patients services all prior authorizations about obtaining prior authorization for said services.

For a smooth pre authorization process, medical billing personnel need to be a knowledgeable about the CPT code for the service for which approval is requested. Insurance verification process focuses on coverage status, active/inactive status and eligibility status.

Both insurance verifications and authorizations are time consuming processes that can lead to denials. That’s why they are best handled by experts. Outsourcing these tasks to an experienced insurance verification company can go a long way toward saving time, preventing denials and delays as well as optimizing reimbursement and improving patient care and satisfaction.

Importance of Insurance Verification in Dental and Medical Cross Coding

Importance of Insurance Verification in Dental and Medical Cross Coding

One of the leading dental billing companies in U.S., Outsource Strategies International (OSI) provides billing and coding services for dentists, endodontists, orthodontists, and periodontists. Our comprehensive suite of dental billing services includes dental eligibility verifications and other services.

In today’s podcast, Amber Darst, our Solutions Manager, discusses verifying insurance in dental and medical cross coding.

Podcast Highlights

00:13 Medically Necessary Treatments Billable To a Medical Plan

01:06 Medical Necessity In Dental Medical Cross Coding

01:34 Using Correct Codes

02:08 Importance of Insurance Verification

Read Transcript

Hello, this is Amber Darst, Solutions Manager at Managed Outsourced Solutions. I’ll be talking today about verifying insurance when it comes to dental and medical cross coding.

00:13 Medically Necessary Treatments Billable To a Medical Plan

Some dental treatments can be considered medically necessary. At that point, some medical plans will pay towards their services. So, here’s a list of some of the treatments that are often considered medically necessary and therefore billable to a medical plan. We have treatment related to inflammation and infection, dental repair of teeth due to injury, exams for oral/ facial medical problems, extraction of wisdom teeth under certain conditions and the extraction of multiple teeth at one time, certain periodontal surgery procedures, consultation and treatment for TMJ, pathology that involves soft or hard tissue, appliances for sleep apnea and congenital defects.

01:06 Medical Necessity In Dental Medical Cross Coding

So, when it comes to dental medical cross coding, the most important consideration is the medical necessity to do so.

Medical necessity requires that the services and procedures be in compliance with recognized medical standards and be appropriate and necessary for the diagnosis or treatment, prevention of a medical condition, improvement of a condition, or the rehabilitation of lost skills.

01:34 Using Correct Codes

The key to successful claim submission is using the correct code to report the treatment provided. To report dental procedures to dental plans, providers generally use the CDT code procedure code sets. However some medical payers will not pay for treatments that come under the category of CDT procedures which then requires appropriate CPT codes to be used. The specific reason and the treatment that was provided should also be specified using ICD 10 codes.

02:08 Importance of Insurance Verification

It is very important to verify the benefits and coverage for every patient prior to initiating treatment. Dental medical cross coding can be very confusing and time consuming. Outsourcing this task to a reliable insurance verification company will alleviate this burden from your staff. The insurance verification specialist will take the time to gather the proper insurance information and report this on the verification form for whether a medical insurance can be built for a portion of these services.

And that’s it. Thanks for listening in!

Common Reasons for Claim Denials

Common Reasons for Claim Denials

Practices need comprehensive insurance verification services to determine patient coverage and benefits before the office visit.

Outsource Strategies International (OSI) has vast experience in working with insurance companies to confirm patient insurance eligibility and coverage.

In today’s podcast, Amber Darst, one of our Solutions Managers discusses the common reasons for claim denials.

Podcast Highlights

00:10 Common Reasons for Denials

00:22 Coverage Limits

00:40 Data Entry Errors

00:51 Outdated Insurance Information

01:04 Issues In Coordination of Benefits

01:23 How Insurance Verification Helps

Read Transcript

Hi, this is Amber Darst, Solutions Manager at Managed Outsource Solutions, here to talk to you today about some common reasons for claim denials.

00:10 Common Reasons for Denials

Receiving a claim denial is so frustrating and there are several things that can lead to this happening. Here’s a short list of some of the most common reasons a claim can be denied.

00:22 Coverage Limits – If the patient has already reached their allowed benefits for the procedure that’s listed on the claim for the benefit year, there will be zero payment from the insurance company. It’s very important to note the frequencies and limitations for each patient’s plan.

00:40 Data Entry Errors– Having the data of birth or member ID wrongly inputted into the system, which is then printed on to the claim, will be certain to cause a claim denial.

00:51 Next, Outdated Insurance Information – Insurance plans change and oftentimes patients aren’t even aware submitting to a term policy. This will result in a claim denial.

01:04 And Last, Issues In Coordination of Benefits– Not knowing which insurance is primary and which is secondary when a patient has more than one active policy can create an issue when submitting claims. If you submit the initial claim to the secondary first,denial is likely to occur.

01:23 How Insurance Verification Helps

The good news is that these scenarios can be avoided by ensuring that each patient has insurance verification completed before the date of service. Checking all of the above information with the insurance companies ahead of the appointment is the most productive way of reducing claim denials, resulting in maximum reimbursement.

And that’s all! Thanks for listening in.

How Insurance Verification and Pre-Authorization Services Support Accurate Documentation

How Insurance Verification and Pre-Authorization Services Support Accurate Documentation

Outsource Strategies International (OSI) is an experienced provider of a reliable insurance verification and authorization services. Our team takes care of any specialty’s patient eligibility verification and authorization requirements, which improve cash flow, reduce denials and minimize delayed payments.

In today’s podcast, Amber Darst, our Solutions Manager, discusses how insurance verification and pre-authorization services ensure accurate documentation.

Read Transcript

Hi, this is Amber Darst, Solutions Manager at Managed Outsource Solutions.  Today, I will be discussing how insurance verification and pre-authorization services ensure accurate documentation that payers are looking for.

Getting medical claims approved by payers is one of the most daunting tasks faced by healthcare practices. Submitting clean, accurate claims to payers requires practices to ensure clinical documentation submitted with the correct diagnosis and procedure codes along with documentation proving the medical necessity for the procedures. Importantly, medical practices also need to have comprehensive preauthorization and insurance verification services in place to determine patient coverage and benefits under their insurance plan.

00:51 What Payers Look for in Claims

So what do payers look for in claims? The two main things payers look for in claims are – compliance with payer eligibility requirements and good clinical documentation.

Eligibility problems are one of the main reasons for claims denial. Millions of claims are denied because eligibility has expired or the patient or service was not covered by the plan in question. Certain conditions have to be met in order for an individual to be considered eligible for insurance coverage. When they adjudicate claims, payers look for documentation that provides evidence of the patient’s eligibility for benefits.

Payers will also check if prior authorization requirements have been met. Payers require prior authorization for certain drugs, treatments, tests, and other medical services on the grounds that it promotes patient safety and guideline adherence, and helps control healthcare expenditure. When they authorize a service before the patient encounter, payers assign an authorization number that the medical billing service provider should include on the claim submitted for payment.

In addition to checking whether the service is authorized, the insurance company will also assess claims to find answers to questions relating to the patient’s coverage, such as:

Is the patient a member of the plan?

Is the coverage valid?

Is this particular service covered by the benefits of the plan, and so on.

02:23 How Insurance Verification Services Help

Practices need to have an efficient patient eligibility verification process in place. Insurance verification involves checking the patient’s insurance coverage and benefits prior to the date of service to ensure the payment for services. Outsourcing this task is the best option to free front office staff of this cumbersome but necessary process.

Insurance verification and authorization companies are dedicated to preventing denials that can occur due to eligibility problems. With proper verification, providers can check whether the patient’s insurance is active, premiums are paid, services are covered, and deductibles are met.

For insurance authorizations, this service will involve obtaining authorization for certain medical treatments that need to be approved prior to being provided. The company will also follow up with the patient as needed to obtain any additional information required to process the claim. Patients will be informed about their financial responsibility or out-of-pocket costs. After the medical records and billing systems are updated with all the necessary information, the insurance verification company will send the claim on to the payer.

03:44 Good Clinical Documentation

So, let us talk about what is considered good clinical documentation

Inadequate or missing documentation is a major reason for claim denials.  Claims and associated medical records are reviewed for compliance with payer coverage, coding, and billing rules and the documentation should include:

–           A definitive diagnosis that supports severity with the correct ICD-10 codes and

–           The plan of care based on the reported diagnosis as well as the goal of the plan and when the patient can expect to reach the goal

The documentation should be adequate to support the claims as billed. It should provide evidence that the allowed services were medically necessary and actually provided at the level that it was billed. Documentation is examined to see whether they meet payer guidelines relating to medical necessity, preadmission rules, requirements for therapy, formulary and non-formulary medicines, and other payer specific requirements.

04:46 Clinical Documentation Errors

When the medical documentation submitted along with the claim is inadequate to support payment for the services billed, the claim is then considered as having “insufficient documentation” errors. Some other examples of clinical documentation errors include: a missing physician signature on an order, incomplete forms and progress notes, unauthenticated medical records, and no documentation of intent to order services and procedures. It is the responsibility of the physician to ensure good documentation and report medical services using the right ICD-10 and CPT codes.

Medicare’s national and local coverage determinations lay down the standards that must be followed to attain a benefit category and reimbursement. Likewise, all commercial insurance companies have their own guidelines based on the contract. Insurance verification and authorization companies are knowledgeable about these rules and can help practices ensure accurate claims submission and prevent denials.

And that’s it.

I hope this helps. But always remember that documentation and a thorough knowledge of payer regulations and guidelines is critical to ensure accurate reimbursement for the procedures performed.

Thanks for listening in!

Benefits of Insurance Verification for Behavioral and Mental Health Billing

Benefits of Insurance Verification for Behavioral and Mental Health Billing

A professional medical billing and coding company in U.S., Outsource Strategies International (OSI) can take care of all your insurance verification and authorization requirements. OSI provides efficient medical billing and coding services for individual physicians, medical practices, clinics, and hospitals.

In today’s podcast, Meghann Drella, one of our Senior Solutions Managers, discusses the benefits of insurance verification for behavioral and mental health billing.

Read Transcript

Hello and welcome to our podcast series. My name is Meghann Drella and I’m a Senior Solutions Manager here at Outsource Strategies International (OSI). Today, we’ll be discussing how insurance verification supports behavioral and mental health billing.

Addiction to alcohol, opioids, and substance abuse requires comprehensive treatment and care. Most drug and alcohol treatment centers provide effective residential treatment programs, drug and alcohol detox and inpatient treatments, based on patient evaluation, physical health and well-being. Treatment methods may include therapy, drugs, meditation, and more. Most residential substance abuse programs help promote collaboration and incorporating the life skills.

00:45 Medicaid and Medicare Coverage for Behavioral/Mental Health Treatments

Most standard health insurance plans will provide coverage for some form of addiction treatment. Behavioral medicine billing requires expertise in different areas – verification of benefits and eligibility, billing, and collections. Unlike other specialties, medical billing for behavioral & mental health especially substance abuse, is complicated mainly due to the type of care offered to patients and the coverage provided and rapidly changing industry laws and regulations. Certain plans cover medical detox, long-term residential treatment care, inpatient hospital detoxification, outpatient detoxification, inpatient rehab, outpatient alcohol and drug abuse rehabilitation, dual-diagnosis treatment and aftercare counseling or therapy, while others do not. Both Medicaid and Medicare provide some level of coverage for substance use disorder. While Medicare A covers the inpatient services during a hospital stay, Medicare B coverage provides assistance with outpatient care and prescription drugs that are covered by Medicare D.

According to Advanced Data Systems Corporation (ADSC), drug rehabilitation treatment centers across the United States are struggling with cash flow issues as denial rates increase, leaving patients with the burden of rising financial responsibility amounts. Addiction treatment centers are typically leaving 20-30% of their earned revenue unearned. ADSC highlights the key performance indicators (KPIs) that treatment centers should monitor to ensure consistency in billing collections:

  • Bill Charge Lag Times
  • Clean Claim Rates
  • Day Revenue Outstanding (DRO)
  • Accounts Receivable- Aging(A/R)
  • A/R over 60/90 Days
  • Denial Tracking
  • Payment Waterfall metrics
  • Revenue Actualization percentage and
  • Referral Trending

Treatment duration or length of the treatment is one of the key factors that insurance carriers consider. While some carriers cover the entire length of the treatment, other plans will only cover a few days. Providers have to ensure that their patient’s health plan lists addiction treatment as a covered benefit and what their specific insurance covers. This is where insurance verification comes in. Earlier, services for the prevention and treatment for substance use disorders were not covered under mental health and general health care services.

03:01 Causes of Mental Health Claim Denials

Most claims get denied because the patient isn’t eligible for the services provided or the patient information doesn’t match the insurer’s information.

Other common causes of mental health claim denials are:

  • Failing to complete prior authorization before the treatment
  • Documentation errors such as not including timesheets or encounter notes
  • Not documenting the medical necessity of the procedures/treatment
  • Poor coding accuracy or not using appropriate medical codes
  • Typical policy violations in billing for behavioral/mental health treatments
  • Not recording progress notes promptly

Behavioral medicine medical billing services provided by reliable companies include insurance verifications and authorizations that help physician practices avoid claim denials and delayed payments.

03:55 Best Practices to Improve Reimbursement

ICD-10 has thousands of billing codes pertaining to substance abuse and behavioral health treatment. Whether you are doing the billing in-house or outsourcing it to a medical billing and coding company, make sure that the medical billers & coders are trained well in the current standards to ensure clean claims. Coders should know the latest ICD, CPT and HCPCS codes for behavioral & mental health. To receive reimbursement for every level of care offered, it is important for behavioral & mental health facilities to implement accurate insurance verification process.

The best practices to consider include

  • Collect maximum details from the patient
  • Always verify eligibility and benefits not only for new patients, but also for hospital admissions, on the Date of Service (DOS) and for a follow-up
  • Regularly track submitted claims to identify and resolve any issues for denials without exceeding the time limit
  • Have a clear understanding of the usage of new Health Behavior Assessment and Intervention (HBAI) CPT codes while billing for mental health services
  • Have a strong prior authorization team to ensure all the benefit verification is done well before the patient’s office visit

An experienced medical billing company provides the service of trained behavior & mental health billers, coders and insurance verification specialists. Many providers are also investing in medical eligibility verification software, which allows their staff to instantly check medical eligibility and avoid reimbursement issues.

I hope this helps. But always remember that documentation as well as a thorough knowledge of payer regulations and guidelines is critical to ensure accurate reimbursement for the procedures performed.

Thank you for joining me and stay tuned for my next podcast.

Pharmacy Prior Authorization – Important Points to Note

Pharmacy Prior Authorization – Important Points to Note

An established medical billing and coding company based in the United States, Outsource Strategies International (OSI) serves diverse medical specialties.

In today’s podcast, Natalie Tornese, one of our Senior Solutions Managers, discusses some important points about Pharmacy Prior Authorization.

Read Transcript

Hello everyone and Welcome to our Podcast series. My name is Natalie Tornese and I am a Senior Solutions Manager at Outsource Strategies.

I wanted to talk a little bit about Prior Authorizations. As I talk about this topic I may use PA as an abbreviated way to say prior authorizations. So that’s what I mean when I refer to it as a PA.

A December 2017 study from the AMA reported that 86 percent of physicians said that prior authorizations have increased during the prior five years, with 51 percent saying that they have increased significantly. The PA process for approval of high-cost specialty medications is a bear, and costs pharmacies and physicians’ practices a lot in terms of time and money.

So, what is a prior authorization?

Prior authorization (PA) is a requirement that healthcare providers obtain advance approval from an insurance plan before a specific medication is delivered to the patient to qualify for payment coverage.

Health insurance companies use a PA as a means to ensure that a drug prescribed is truly medically necessary and appropriate for the patient’s situation. It is a method for minimizing costs by ensuring that the prescribed drug is the most economical treatment option available to treat the condition. For example, if the patient is prescribed an expensive drug, the insurance company may authorize it only if the physician can show that it is a better option than a less expensive medication for the condition.

What types of drugs require PAs? 

According to Consumer Affairs, the following kinds of drugs are subject to a prior authorization –

  • Brand name medicines that are available in a generic form
  • Expensive medications, such as those needed for psoriasis or rheumatoid arthritis
  • Drugs used for cosmetic reasons such as medications used to treat facial wrinkling
  • Drugs prescribed to treat a non-life threatening medical condition
  • Drugs not usually covered by the insurance company, but said to be medically necessary by the prescriber
  • And drugs that are usually covered by the insurance company but are being used at doses higher than normal

Blue Cross Blue Shield specifically requires prior auth for medications:

  • that have dangerous side effects
  • are harmful when combined with other drugs
  • should be used only for certain health conditions
  • that are often misused or abused
  • are prescribed when less expensive drugs may work better

What are the steps involved in the pharmacy prior authorization process?

The physician prescribes a specific drug. If the person requires a PA, the pharmacy will contact the physician who prescribed the medication and inform the provider that the insurance company requires a PA. At this stage, the patient can either opt to wait for coverage approval from the insurance company or pay for full cost of the prescription themselves. The physician will contact the insurance company and submit a formal authorization request according to the plan’s guidelines, along with all necessary forms. The insurance company may also require the patient to complete some paperwork and sign some forms. The insurance company will review the request and may either authorize the drug or refuse to cover it.

So, what are the common reasons why a patient’s prior auth request may not be approved?

  • Well, the patient did not give the insurance company, physician or pharmacy enough time to complete the needed steps, which can take several business days
  • The insurance company denied the claim
  • The insurance information was outdated or the claim was sent to the wrong insurance company
  • The medication was not medically necessary
  • Supporting evidence was inadequate
  • The physician’s practice did not contact the insurance company for the prior approval
  • The wrong prior authorization code was used to bill the medication
  • The payer’s rules have changed
  • The practices does not have the capability to manage prior authorizations
  • The physician did not meet the payer guidelines

As you can see, that there are lots of reasons why a prior auth request may not be approved. In some cases, the approval of the drug may be valid for a limited time such as one year or one month. In such cases, you have to restart the authorization process over again if that time is gone by.

How long does the prior authorization take?

Well, it is time consuming for physicians and their staff. A 2010 AMA survey found that physicians spend about 20 hours of a traditional work week on PA activities. They also reported that more than 60% of physicians said they need to wait at least one business day to complete prior authorizations, while 30% said they had to at least wait three business days or longer to get a response on the request. Further delays can occur if coverage is denied and must be appealed and an appeal can take several days to process.

So if a patient believes that their pharmacy PA was incorrectly denied, they can appeal the rejected claim. They would need to first contact the insurance company and ask why the claim was denied. If the insurance company indicates a billing error or missing information, patients can work with their physician to review the paperwork and fix any errors that caused the denial. They can also ask the physician to provide backup evidence or notes that can help prove that the prescription is medically necessary. The chances of success in resolving a prior authorization denial are higher when the physician ensures that all clinical information is included with the appeal, including any data that may have been missed from the initial request.

I hope this helps, but always remember that documentation and a thorough knowledge of payer regulations and guidelines is critical to ensure accurate reimbursement for the procedures performed.