Insurance Verification Software: Why You Should Verify Benefits Eligibility With Technology
Denied claims are the bane of healthcare revenue cycle management. According to the American Academy of Family Practitioners, payers deny as much as 5% of claims. Appealing these denials costs your organization ($25 per claim for clinics and significantly more for hospitals). More than half of all denied claims are abandoned, and all these lead to significant revenue losses.
A significant proportion of denied claims are due to noncovered services or patients. Limitations on coverage, preexisting conditions, failure to obtain pre-authorization, and several other situations can be grounds for denying reimbursement. Verifying insurance coverage before providing services is vital in claims denial management.
Insurance verification confirms a patient's insurance coverage and benefits before any services are provided. This verification also makes sure that they are in your network and that their plan covers the services you will provide. It's important that your registration staff perform this verification so that patients without appropriate insurance will know they'll have to pay entirely out of pocket. This prevents patients from getting unexpected bills and the resultant dissatisfaction with your organization.
What is insurance verification software?
Insurance verification software communicates with the payer and fetches information about the patient's plan, coverage, and limits. Building insurance verification into your registration workflow will protect your organization from providing services for which reimbursement will not be obtainable.
Insurance verification is crucial to submitting clean claims and getting reimbursements promptly. Improper verification may result in delayed payments or unpaid claims, both detrimental to any healthcare organization.
Submitting claims for patients with expired insurance or for services not covered by their plan leads to certain denials. Denied claims drain employee time and increase your organization's administrative expenses.
A Medical Group Management Association study found that almost a quarter (23.9%) of claim denials are because of patient eligibility issues. Patients may have plans that don't cover the service you're providing them, and sometimes the patient's plan changes, so a previously covered service will no longer be reimbursed. Automated insurance verification software checks eligibility in real time, eliminating these errors.
Cost of appeals
Your organization can appeal denied claims after reworking them and correcting any errors. The Change Healthcare Healthy Hospital Revenue Cycle Index studied data from 724 hospitals and found that 63% of appeals were successful. However, there's a cost to providers — $118 per claim as administrative expenses.
Revenue losses from denials
The Change Healthcare Healthy Hospital Revenue Cycle Index also found that payers initially denied about 9% of claims. The amount involved in such claims is $262 billion a year. Even after appeals and partial reimbursements, the loss of patient revenue is significant.
Appeals are successful in only a portion of denials. Many organizations avoid resubmitting denied claims because of the additional expense. The abandoned claims and unsuccessful appeals can cause enormous losses — as much as 5% of total patient revenue.
Adding more staff to chase denied claims is not productive; taking steps to reduce denials is better for your bottom line. Eligibility verification software and automated, real-time eligibility confirmation are of greater value. These measures are a vital component of denials management and help practices be more efficient with their revenue cycle.
Common features of insurance verification software
There are several tools available for verifying patients' insurance eligibility. They vary in algorithms, methodology, and pricing but have certain features in common.
Real-time insurance eligibility verification
As soon as your registration people enter a new patient's ID and other details, the software fetches all the data you need. It communicates in real time with the payer and informs you of the coverage and benefits available to the patient. An insurance card can be outdated, and relying on printed documents can be unreliable.
Insurance eligibility software can communicate with Medicare, Medicaid, and commercial payers to apprise you of the patient's current coverage and limits.
Eligibility software is capable of batch workflows, processing inquiries about multiple patients simultaneously. The throughput of your front desk is accelerated, making your registration process pleasant for patients. Staff time savings are also significant.
Automate pre-authorization requests
Some treatments and procedures require pre-authorization, and providing the service without securing it means an automatic claim denial.
Eligibility verification software can identify the requirement and apply for pre-authorization automatically.
Integration with EHR and HIS systems
Your organization's smooth operations depend on the hospital information system and electronic health records system. Staff must enter all patient data and details of services provided into these systems. There is room for costly errors here — a single digit wrongly entered can cause a claim denial.
Benefits verification software should integrate with your existing EHR and HIS systems. This will facilitate the error-free transfer of data regarding eligible patients.
Coding error scrubbing
Automating insurance verification has other benefits for claim denial management. The software can identify missing information, identify coding and documentation errors, and prevent incorrect coding.
Benefits of eligibility verification software
Technology helps eliminate errors in insurance verification and improves your cash flow. Your staff can concentrate on providing high-quality experiences and service to each patient without worrying about reimbursements. Your registration desk can tell patients immediately if they'll have to pay for the services out of pocket, preventing unpleasant conversations and unhappy patients. The chief benefits of eligibility verification technology are to your revenue cycle management.
Get paid faster by payers
Insurance verification is a huge step toward submitting a clean claim. Claims of patients not in network or availing services not covered are immediately rejected by insurers. Making sure that the patient is eligible for your services goes a long way to getting timely reimbursements. Rapid payments mean maximized cash flows and lesser administrative expenses.
Reduce rejected claims and denials
A significant proportion (16%) of rejected and denied claims arise from providing excluded services, according to the Kaiser Family Foundation. Only 2% of denials are for medical necessity issues.
Preventing just 15 denied claims a month saves $4,500 yearly from reworking claims. Such prevention also realizes payments sooner, improving the financial health of your organization.
Improve clean claim rates
Clean claims are the Holy Grail of revenue cycle management. Getting the claim right the first time leads to rapid payments for services provided. Every rejected or denied claim delays the reimbursement, increases the costs of claims, and leads to lost revenue.
Bayada is a large organization serving 31,900 clients a week. They improved their first-pass claim acceptance rate by implementing eligibility verification from 90% to 98%. Their reimbursements were received 15% faster, and their return on investment was $250,000 in less than a year. They have less work on the front end, allowing the company to redeploy some staff.
Mitigate fraud and identity theft
Identity theft to avail medical services or goods on someone else's insurance plan and fraud to obtain money by falsifying medical records are increasing in frequency and magnitude. Besides the financial burden, inappropriate medication and treatment may also result from identity theft. There could be legal liability for adverse outcomes. Such frauds cost insurance companies and healthcare organizations billions of dollars every year.
Dependable identification of insured patients is necessary to ensure that a rightful beneficiary is availing of benefits. Printed identity cards are not foolproof, and medical insurance companies are moving to biometrics instead. When issuing the policy, the insurance company records the biometric information (face recognition, fingerprints, or others). Your organization confirms it when admitting or registering the patient. These steps will not only cut out fraud but also help patients who're not carrying identity documents or need emergency care.
Speedier new patient registration
Since verifying insurance before providing services is essential, you're probably doing it at your front desk. Insurance verification can take up an enormous amount of time, slowing the registration process.
Insurance verification software is not only more capable than manual validation, but it is also much faster. Registering new patients takes a fraction of the time, and you can cut down waiting time for patients and free up staff time for other tasks.
Better staff productivity
Manual verification requires asking for insurance documentation, entering it into the system, and then calling the payer to confirm eligibility. Larger payers like Medicare, Medicaid, and Blue Cross will have to be approached through your billing system. You can't depend on insurance cards because coverage could be changed or discontinued.
These requirements use up precious staff time. Automating the insurance verification runs through these tasks rapidly. Setting up this system to import data into your EHR will further optimize your staff's workflow. This procedure reduces data entry errors. Your staff can process more patients in less time, improving their productivity and patient satisfaction.
Cost of health insurance verification software
This vital service comes at a low cost, considering the savings to your organization. Eligibility verification tools come with various plans and generally cost 15 to 25 cents per patient. The charges for larger practices are higher than for smaller ones, so your actual cost will depend on overall patient volume.
Effective insurance verification software protects your revenue by reducing denied claims. Even patients completely satisfied with their medical care will be unhappy to learn their claim was denied and that they're responsible for payment. Integrating this technology saves staff time, improves patient experiences, and enhances your organization's revenues.
Automate insurance verification & related workflows with MD Clarity
MD Clarity’s Clarity Flow software can automate benefits eligibility, patient estimates, and more. Schedule a demo to see how we can help automate workflows for your healthcare organization and take the pain out of verifying patient eligibility and providing estimates at scale.