Published: Oct 28, 2022
Updated: Dec 18, 2023
Workflow Automation

Insurance Verification Software: Why You Should Verify Benefits Eligibility With Technology

Suzanne Delzio
Suzanne Delzio
8 minute read
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U.S. healthcare providers’ average claims denial rates hit 12% in 2022, and, year after year, lack of eligibility is a top reason payers deny provider claims. Limitations on coverage, preexisting conditions, failure to obtain pre-authorization, and several other patient details can be grounds for denying reimbursement during the patient eligibility verification process. 

Providers understand well the importance of establishing eligibility before service. Still, during a dire healthcare staffing shortage, having revenue cycle team members determine eligibility by checking payer portals one by one has become impractical and costly.  

The most recent CAQH Index reveals that automation in the form of insurance verification software saves healthcare organization team members 14 minutes per transaction. With the average physician seeing 20 patients per day, that’s 4.5 hours that software cuts from the staff member’s day. Here, you’ll learn about the advantages of using insurance verification software, the best solutions for your organization, as well as the key solution features you should insist upon. 

What is insurance verification software?

Insurance verification software is an automated tool that accesses patient insurance information on payer and other databases to confirm eligibility, coverage details, and benefits. This software helps healthcare providers avoid denials due to inaccurate or incomplete insurance information and reduces the administrative burdens involved in manually verifying eligibility. Providers can use insurance verification software as part of an end-to-end revenue cycle management solution or as a stand-alone solution. 

Due to staffing shortages, some providers today see patients before their eligibility has been established. Providers’ prime directive is to provide care, after all. Building insurance verification into your registration workflow protects your organization from providing services to uninsured patients. Given patients’ changing insurance providers and the frequent changes to their plans, confusion on both the patient and provider end can result. The more patients with insurance eligibility established up front, however, the fewer accounts end up as aging accounts receivable or provider bad debt. 

Once staff discovers a patient does not have the appropriate insurance, they must inform the patient that they have to pay entirely out of pocket or seek care within their own network or via another provider. The No Surprises Act stipulates that providers must inform self-pay patients of their obligations; failure to do so can lead to penalties.  

Benefits of eligibility verification software

With fast answers from insurance verification software, your registration desk can tell patients days before their appointments if they'll have to pay for the services out of pocket. Upfront information helps prevent unpleasant conversations with unhappy patients who have received “surprise” bills after service. Now that it’s the healthcare organization’s responsibility to deliver good faith estimates to all self-pay patients, revenue cycle teams now prioritize this important step. Insured patients also appreciate knowing their co-pays, co-insurance, and deductible amounts before their appointments, details robust insurance verification software can provide. 

Submit clean claims to get paid faster by payers

Insurance verification is a huge step toward submitting a clean claim. Claims of patients not in network 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 lower administrative expenses.

Avoid denials appeals costs

While payers now deny an average of 12% of claims, different organizations have even higher denial rates. Denial rates in the Pacific Northwest region are the highest at 17 percent and the Kaiser Family Foundation reports that insurers also denied 17 percent of claims in 2021 overall. 

The Change Healthcare Revenue Cycle Denials Index reveals that 22% of claim denials stem from patient eligibility issues. The next most common reason is missing or incorrect claim data at 16% and the third most common is missing medical documentation at 14%. 

A significant proportion 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, one of the reasons most covered in the media.

Diminishing denials reduces provider costs. While appealed denials are approved at a rate of 41 percent, this process is not without its costs. Change Healthcare’s Revenue Cycle Denials Index puts the cost of reworking a claim at a range from $25 to $117. The average of those two numbers is $71.  Preventing 5 denied claims each week saves the provider $17,040 per year in costs ($71 x 240). Such prevention also realizes payments sooner, improving cash flow. 

Improve clean claim rates

Clean claims are the Holy Grail of revenue cycle management. The industry standard benchmark for Clean Claim Rate is 95 percent. 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. When your first-pass claims are paid on first submission, you save money, time, and resources spent on costly re-work and appeals. You also improve your EBITDA numbers. 

These aspects of the revenue cycle help increase your clean claim rate:

  • verified eligibility and benefits
  • precertification and referral requirements checks
  • clarity on insurance filing limits
  • continual staff training
  • denials tracking and report capacity
  • updated patient information 
  • denials tracking and report capacity
  • code to ultimate specificity
  • completed medical necessity check
  • documentation on file for delivery when necessary
  • current payer changes
  • claim scrubbing
  • a denial management review process

Find sources of secondary insurance and get paid

Because insurance verification software scans numerous databases, including government agencies, commercial insurance providers, and public records, it can find benefits records faster and with more confidence than a patient sorting through old files and letters. Leveraging advanced algorithms and data analysis, these software solutions can identify secondary insurance policies patients may not even be aware of.

By uncovering secondary insurance, healthcare organizations can maximize reimbursement opportunities, reducing financial burdens for patients and streamlining revenue cycle management processes. Patients gain by minimizing out-of-pocket expenses and potentially accessing a broader range of healthcare services through enhanced coverage. Providers gain by keeping the patient in their care. A win-win for all. 

What is secondary health insurance?

Secondary insurance refers to additional insurance coverage that a patient possesses, beyond their primary insurance plan. The origins of secondary insurance include:

  1. Employer-sponsored Plans: Many individuals receive primary insurance benefits through their employer. However, if the employer offers multiple insurance plans, employees may select two or more plans, providing secondary coverage.
  2. Spousal and Dependents' Coverage: Marital and family situations can introduce secondary insurance opportunities. If a patient's spouse or parent carries a separate healthcare insurance policy, it may act as secondary insurance for the patient.
  3. Medicaid and Medicare: Patients eligible for both Medicaid and Medicare may receive benefits from both programs, with one serving as primary and the other as secondary insurance.
  4. COBRA and Continuation Coverage: The Consolidated Omnibus Budget Reconciliation Act (COBRA) enables individuals to retain their employer-sponsored coverage for a limited period after losing their job. This could contribute to secondary insurance coverage.
  5. Accident, Worker's Compensation, or Liability Insurance: In cases where patients have incurred injuries due to accidents or work-related incidents, secondary insurance coverage may be available through accident, worker's compensation, or liability insurance policies.
  6. Veterans and Military Coverage: Veterans and active-duty military personnel may access healthcare coverage through veterans' administration or military insurance programs, which could serve as secondary insurance.

Maybe you even forgot one or two of those. In a world where health insurance has drastically changed and jobs (and marriages) come and go, it’s no wonder patients are confused about what coverage they have. Juggling unaligned notices from their insurers, their spouse’s insurers, and their providers, they often ignore it altogether. But when a medical issue arises, they may need all the insurance coverage they can get. 

Improve patient satisfaction

Most patients are anxious to get their medical issues resolved. They don’t like hearing that their insurance has denied their treatment because a provider failed to verify eligibility. They wanted this information before they engaged with your physicians. Having weeks go by with medical issues worsening only to hear that their treatment wasn’t approved aggravates them. Frustrated patients do not refer you and they may even complain on social media or review sites. If your practice is outside their network, the sooner they know, the better. 

Your patients can have a smooth and hassle-free experience through electronic, real-time verification. This process ensures quicker confirmation, resulting in fewer delays during procedures, and enables patients to adequately plan for the costs involved. With robust insurance verification software, they will also be informed in advance about the coverage provided by their insurance, including limits on benefits, copays, deductibles, and out-of-pocket expenses. By receiving cost estimates and the ability to create a payment plan, patients can avoid unexpected medical bills and feel less frustrated with their healthcare journey. When protected from medical surprise bills,  they trust your organization to provide their care honestly and with transparency. 

Mitigate fraud and identity theft

Identity theft conducted through falsified medical records is increasing. Printed identity cards are not foolproof. Besides the financial burden identity theft creates, it can also lead to inappropriate medication and treatment. Such frauds cost insurance companies, patients, 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. Some medical insurance companies are moving to biometrics to ensure accurate identification. 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 an enormous amount of time, slowing the registration process.

Insurance verification software is not only more accurate than manual validation, but it is also much faster. It helps you cut down waiting time for patients and free up staff time for other tasks.

Increased 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 must 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.

Your best sources of insurance verification software

As providers strive for efficient patient eligibility determination, they wonder whether to rely on their electronic health record (EHR) systems or consider a third-party software specialists to carry out patient eligibility checks? Review the advantages and disadvantages for each approach below to choose the best solution for your organization. 

Advantages of using your EHR for patient eligibility checks

Healthcare providers that leverage their EHR systems for patient eligibility checks have some advantages. First, an EHR-integrated eligibility check streamlines workflow by allowing providers to conduct insurance verification seamlessly within their existing system. Using a single platform eliminates the need to switch between applications, leading to improved efficiency and reduced administrative burden for staff.

EHRs often offer real-time integration with payer systems, providing up-to-date insurance information. Providers can identify any coverage changes, ensuring accurate billing and reducing claim denials. Additionally, EHRs can facilitate a faster patient intake process by pre-populating insurance details from previous visits, saving time for both patients and staff.

Advantages of using third-party patient eligibility software

While EHRs provide a convenient option for patient eligibility checks, partnering with third-party software specialists have advantages of their own.  Specialized eligibility solutions focus entirely on revenue cycle management, allowing healthcare organizations to leverage the industry expertise that is coded into eligibility solutions. By relying on experienced vendors, providers can enhance their eligibility verification accuracy and efficiency, thereby improving their reimbursement rates and reducing denials.

Third-party software often offers advanced features designed specifically for eligibility verification, such as automatically updating insurance coverage status. These functionalities enhance the overall revenue cycle management process by minimizing errors and the need for manual interventions.

Another advantage of utilizing third-party patient eligibility software is its potential interoperability with multiple EHR systems. This flexibility allows healthcare organizations to work with their preferred EHR vendor while seamlessly integrating a specialized eligibility solution, capitalizing on the best features from both platforms.

Because getting the majority of patients verified matters most

Overall, the decision relies on individual organization requirements, workflow preferences, and the complexity of your revenue cycle management needs. Ultimately, prioritizing accurate and efficient patient eligibility checks is crucial for effective healthcare operations. Your ultimate goals should be to perform as many eligibility checks as possible pre-service, and attain the initial clean claim rate that minimizes denials. Press all vendors to prove that they can deliver accurate eligibility accuracy pre-service to the majority of your patients before you select your solution. 

Key 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

Insurance eligibility software communicates with Medicare, Medicaid, and commercial payers to apprise you of the patient's current coverage and limits. As soon as registration staff enters 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.

Batch workflows

Eligibility software is capable of batch workflows, processing inquiries about multiple patients simultaneously. With batch processing, the throughput of your front desk is accelerated, making your registration process pleasant for patients. Staff time savings are also significant.

Automated pre-authorization requests

Some treatments and procedures require pre-authorization, and providing the service without securing it means an automatic claim denial.

Some eligibility verification software solutions identify the requirement and apply for pre-authorization automatically.

Integration with EHR and HIS systems

Benefits verification software should integrate with your existing EHR and practice management systems. This connection will facilitate the error-free transfer of data regarding eligible patients. Miskeying is a common source of denials. Automation skips the need for staff to enter data, saving them time and avoiding common miskeying errors. 

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. Comprehensive solutions can alert staff to these missing details and errors, preventing denials. 

Automate insurance verification & related workflows with MD Clarity

An inefficient patient eligibility verification process can quickly result in high denials, long revenue cycles, and unpaid debts, causing financial strain and instability. Avoid these challenges with MD Clarity’s Clarity Flow, software that can automate benefits eligibility, patient estimates, and more. An automated process with real-time verification, Clarity Flow is a simple yet effective solution that improves your healthcare organization’s net revenue and alleviates burdensome staff workloads.

Clarity Flow’s advanced automated features streamline the workflow of benefits and accurately predict patients' out-of-pocket expenses. By utilizing this solution, you not only ensure compliance with the No Surprises Act but also enhance transparency in healthcare, ultimately improving the patient experience.

Discover the power of real-time efficiency by opting for Clarity Flow. Request a demo today 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.

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