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Why Verifying Insurance Is Critical for Healthcare Providers

Team Fuse
Team Fuse

According to census data, over 90 percent of people in the United States have some form of health insurance. For hospitals and practices, a vast majority of annual revenue comes from payer reimbursements. However, an uptick in claims denials is creating a massive source of revenue loss and administrative burden for providers. 

The biggest driver for denied claims? Inefficient and inaccurate insurance verification processes.

Proper insurance verification is vital for providers and organizations. In simple terms, insurance eligibility verification is the process of confirming a patient's coverage before rendering any services. It involves verifying that policies are active, understanding what services are covered,  determining a patient's financial responsibilities and more.

Today, insurance eligibility verification is more crucial than ever. Increasing out-of-pocket costs, changing policies and increasingly complex plans are creating new challenges for both patients and providers. Practices that fail to verify patient insurance details upfront expose themselves to frequently denied claims and severe cashflow issues.

Understanding the Insurance Eligibility Verification Process

Patient insurance verification is a front-end check that involves confirming coverage before providing service. When done correctly, it can prevent patients from receiving unexpected bills while mitigating the risk of denied claims for providers. The process sounds simple, but it's more complex than most realize. Here's a quick breakdown of how medical insurance verification works.

Patient Information Collection: During the intake process, practices need to collect accurate patient information, including their name, date of birth, policy numbers and more.

Checking Coverage Status: Next, the staff needs to confirm that policies are active on the date of service. They must also check that the practice is within the payer's network.

Verifying Benefits: At this point, practices must discover what's covered and what's not. They also need to be aware of any limits or excluded services.

Identifying Patient Responsibilities: During this process, practices must also verify details like co-insurance, copays and deductibles.

Understanding Prior Authorization Requirements: Some CPT codes require additional documentation and a more detailed approval process before payers will cover services. Practices need to understand these requirements to prevent outright claim denials.

There are several methods for performing medical insurance verification, including using payer portals. However, portals often aren't enough to understand the nuances of patient eligibility. Some details, such as prior authorization requirements, require staff to call payers directly. Calls are often the only way to understand the requirements of CPT code-level benefits, but they come at the cost of time and administrative resources.

Key Steps in the Process

Now that you understand what the process entails, let's examine the actual workflow for verifying a patient's insurance coverage.

Collect Patient Demographics and Insurance Details: Start by gathering relevant patient data. You'll need their full name, date of birth, policy number, group number and plan name. If covered under a shared plan, you'll also need to record the relationship with the insured. Accuracy is crucial here, as even simple errors can lead to delays and claim denials.

Submit Data to Payers: The next step is to submit the collected information to payers, either through their online portal or through the phone. Make sure to note the method used to submit information and record any reference numbers provided.

Review Responses: After payers respond, you'll need to review coverage dates, in-network status, benefits details and all other relevant data. 

Document Patient Responsibilities: Payers also respond with information about copays, deductibles and co-insurance. Record all out-of-pocket costs that patients will need to pay, and communicate with the patient early on.

Obtain Prior Authorizations (If Necessary): If any CPT codes require prior authorization, you must initiate that process as soon as possible to prevent delays. Depending on the payer, you may need to submit documentation such as clinical notes, patient medical history and lab results.

Collecting Accurate Patient Information

Inaccurate information leads to instant denials, negatively affects revenue cycle management and creates tons of extra work for your staff. Your team needs to gather complete and accurate information upfront. That means requesting to see both sides of an insurance card, double-checking all policy numbers and confirming the spelling of all names.

If working with existing payments, don't assume that nothing has changed. Always review the information you already have and verify it for accuracy.

To reduce errors during the data collection phase, follow these tips:

• Check name spellings and policy numbers multiple times

• Scan or photograph cards for record-keeping and reference

• Use standardized forms and checklists to ensure staff gather all pertinent data

Methods to Verify Patient Insurance Coverage

As mentioned earlier, there are several ways to verify a patient's insurance coverage.

Phone Calls: The old-school approach still works. Staff can call payers directly to confirm coverage and benefits. While it is thorough, this method is time- and labor-intensive. Plus, it's still prone to human error.

Payer Portals: Online payer portals simplify things, allowing practices to check coverage without speaking on the phone. Online portals can be faster to use, but they're often incomplete. That's especially true when learning about prior authorization requirements.

Automated Verification Software: Automated verification software is quickly becoming the new standard, and it's not hard to see why. Software platforms integrate with existing EHR and practice management platforms, pulling live payer data to verify insurance eligibility in seconds. They can even perform real-time insurance verification checks, significantly reducing administrative work while virtually eliminating the risk of human error.

How Verifying Insurance Reduces Claim Denials

Verifying insurance upfront allows your team to catch potential issues before submitting claims. Whether you're dealing with missing authorizations, inactive policies, or are about to serve a patient with an out-of-network policy, thorough verification processes ensure you catch those issues early. As a result, you save time and experience fewer denied claims.

Claims denials aren't just frustrating. They're also costly. In 2023, the healthcare industry reportedly spent $18 billion overturning denied claims. Reworking a single denied claim can cost your practice anywhere from $25 to $118. Furthermore, delayed reimbursements caused by denials and reworks can impact your cash flow for over four months. Pair all that with hours of additional administrative work addressing issues that resulted in the denial, and you're looking at substantial financial implications.

Denials can render effective revenue cycle management impossible, hindering your practice's growth while also contributing to a negative patient experience.

The Role of Prior Authorization in Medical Insurance Verification

Prior authorizations add some confusion and complexity to insurance verification processes. Certain services, such as high-cost procedures, hospital admissions, imaging tests (including CT scans and MRIs) and medical equipment, among other things, require additional documentation before payers will cover them.

Ignoring prior authorizations, whether intentionally or unintentionally, can lead to issues such as instant denials, payment delays and surprise bills for your patients. Furthermore, your practice will need to spend time and resources on costly reworks or appeals.

Insurance verification can help you avoid all that. When performing eligibility checks, your team must always review prior authorization requirements and initiate the relevant processes before proceeding with claims submission.

Benefits of Automated Patient Insurance Verification

Manual insurance eligibility verification is certainly adequate, but it's not the most efficient way of doing things. Manual processes are prone to human error. It's also laborious, taking substantial time to complete while wasting valuable staff resources.

Automated patient insurance verification addresses those pain points and more. Technology streamlines the process from start to finish, with automation performing eligibility checks in real time, eliminating concerns about wasted resources or human error. Additionally, automated systems are scalable and grow with your practice.

That's not all. 

Automated systems also enhance the patient experience. Not only does the improved accuracy prevent surprise bills, but it can also facilitate faster check-ins. Real-time patient eligibility verification confirms coverage in seconds, all without the need for mountains of paperwork or lengthy wait times.

Your staff benefits, too. Because software handles the heavy lifting, there's no need to talk on the phone, perform manual patient checks or rework claims due to mistakes. Automated patient verification even lowers the risk of denials and billing errors.

Ultimately, automated systems are the ultimate solution for fast, accurate and comprehensive insurance verification. Software will help your practice work more efficiently, enhancing revenue cycle management while maintaining a strong cash flow.

Improve Your Revenue Cycle with Streamlined Verification

With numerous changes affecting the insurance industry, inadequate verification processes can significantly impact your practice. Improving your approach makes all the difference. Strong insurance eligibility verification is the foundation of a healthy revenue cycle. Confirming coverage upfront can lead to fewer denials, leading to faster reimbursements and more predictable cash flow.

Let Fuse help transform the way your practice handles insurance verification. Fuse is a solution that automates verification processes to improve accuracy, reduce administrative burden and optimize efficiency. With Fuse, you can spend less time dealing with delays and claim reworks. Instead, you'll enjoy more time with patients, predictable revenue and happier staff.

To see how Fuse can revolutionize your verification workflow, schedule your demo today.

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Insurance Verification
Automation & Technology

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