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Health and Fitness · May 9, 2021

Insurance Eligibility Verification – What Are the Best Practices?

Insurance verification or patient eligibility verification refers to the process of checking a patient’s active coverage with the insurance company and verifying the authenticity of his or her claims. It is a key step in the medical billing and coding process for medical practices and specialties. A solid insurance eligibility verification process must be in place to reduce claim denials and improve the overall bottom line. Most claim denials are due to not properly verifying benefit information prior to services being provided. Claim denials not only impact revenue performance for hospitals, but also affect the quality and accessibility of patient care.

According to an analysis by Change Healthcare, hospital claim denial rate has been steadily increasing since 2016, with the average rate increasing by 23 percent in 2020 and one in four denials originating in Registration and Eligibility. The analysis also indicates that most of these claim denials are potentially avoidable. The report suggests that strategies such as staff education and automation of front-end steps can help practices prevent common reasons for claim denials. Hospitals have reported a large portion of claim denials arising from shortcomings related to missing or invalid claim data, which included unspecified billing issues, missing or invalid explanation of benefits, and service not covered.

Before providing treatment, practices need to verify all details such as eligibility, payment terms, co-insurance coverage, and deductibles for all encounters, whether inpatient, outpatient, or ambulatory care to improve their accounts receivable process.

With accurate patient eligibility verification, practices can

  • reduce billing and coverage errors
  • improve cash flow
  • minimize rejections and denials
  • submit clean claims
  • prevent non-payments
  • avoid claim re-submission
  • improve bad debt write-off scores
  • increase upfront collections

It is important to verify all eligibility benefits for all new patients, hospital admissions, any patient who indicates a change to their coverage, and for all high dollar procedures. To avoid claim rejection, the verification process must be done before the patient is admitted into a hospital, sees a physician, or gets services from a medical professional.

Here are some key practices to include in your insurance verification process.

Ask the right questions at the right time

The first step is to find the right verification method for your practice and once you choose the right method, it’s important to make sure your staff is verifying patient eligibility at the right time. When to verify details is also important. The right time to choose is during patient scheduling and registration for consultation either by phone or directly.

Train your front office staff to verify all key details such as – insurer’s name, phone number, claims address, insurance ID, group number, name of insured and demographic details, effective date and end date for the policy, payable benefits, co-pays, co-insurances, deductibles, patient policy status, effective date, type of plan and coverage details, plan exclusions, specific coverage, claims mailing address, referrals and pre-authorizations, life time maximum and the patients’ coverage on all primary and secondary payers. Collecting details early provides enough time for staff to clear up any mistakes or gaps in coverage before the treatment is provided.

Collect a copy of the patient’s insurance card 

During patient registration, staff can consider getting a copy of the patient’s current insurance card. An updated image of the insurance card can be stored in the electronic health record, and this helps to confirm that the plan coverage is active.  Check the plan policy coverage and effective term dates either by contacting the insurance company or through their website, if possible, at least 5–7 days before the patient’s initial visit. Also make sure to check the patient’s insurance card at the time of check-in to confirm you have the correct insurance plan listed.

Obtain prior authorization for specific services

Certain medical treatments need to be approved or pre-certified prior to being provided. Prior authorization (PA) is a requirement that healthcare providers obtain advance approval from an insurance plan before a specific medication is delivered or a specific treatment is provided, which is medically necessary and appropriate for the patient’s situation. During verification, it is important for the front office staff to check whether the carrier requires pre-authorization or a referral. The staff must verify that the prior authorization and referral number(s) are correct on the claim.

Let the patients know their out-of-pocket insurance costs

Let the patients know their financial obligation upfront. If the treatment or medications are not completely covered under insurance, make sure to let the patients know their financial responsibilities before the procedure. Make standardized medical bills that are easier for patients to understand and pay. Also, provide patients with estimates of cost at every encounter, as price transparency reduces the risk of patients being shocked by a huge medical bill. Providers can consider offering payment plans based on the amount the patient owes, making it easier for them to pay. With a better plan, patients will be relieved from the burden of making one large payment.

It is also important for practices to implement a good denial management program to ensure that they are getting missed payments and reimbursements. Professional medical billing and coding companies, like Outsource Strategies International, provide a series of solutions – ranging from patient registration and scheduling to claims transmission to the insurance provider. Medical practices can consider partnering with such companies to submit clean claims and thus receive accurate reimbursement.