Research suggests ~30% of all claims are denied or rejected on the first submission. The success rate of resubmissions is somewhere between 55% and 98%. Resubmission involves time and effort wastage, and revenue leaks. One of the most effective ways of addressing the challenge of denials and rejections is to have a highly effective Insurance verification process in place.
Claim denials happen for a variety of reasons. One of the most common reasons is submitting a claim for an illness that is not covered during the waiting period. Denials also happen because of reasons, like:
- Inaccurate patient details during enrolment…
- Patient cannot be identified by the payer
- Non-disclosure of all facts related to health.
- Type of employment of the patient.
- Pre-existing conditions.
- Termination of coverage.
- Missing or invalid pre-authorization.
- Missing documentation.
- Missing referral from the personal care physician.
- Lack of clarity in Coordination of Benefits.
- Incorrect or missing ICD codes, and
- Delay in filing the claims.
Verification is a critically important component of the revenue management cycle. A well-defined and robust verification process ensures information accuracy, checks coverage and benefits before the date of service (DOS), and ensures payment. Claims are reimbursed only if:
- The insurance is in force.
- Premiums have been paid.
- The services are covered.
- Deductibles are met, and
- The healthcare service is medically necessary.
Verification – who, when, and what?
The healthcare facility front office is responsible for doing the verification. Verification must be done each time the patient makes an appointment, on the DOS, and again for a follow-up. The two most important aspects of verification are patient eligibility and insurance benefits or coverage.
Patient eligibility verification ensures that the patient is entitled to the benefits. Performed by the healthcare service provider, it checks:
- If the patient’s demographic data is current and correct on the insurance identification card and that required premiums are paid.
- The coverage is in force and valid on the DOS.
- Benefit options comprising patient responsibility for co-pays and co-insurance are specified, and
- There are confirmed prior authorization requirements for treatment from suitable sources.
For eligibility verification, healthcare providers work directly with government and commercial insurance companies. Many progressive healthcare providers outsource this function to third-party medical billing specialist companies. Using professional help minimizes denials and payment delays, reduces operational expenses, maximizes revenue at the time of service, saves back-end time, and enhances patient satisfaction.
Insurance benefits/ coverage verification confirms the patient’s active medical coverage with the insurance company and prevents billing issues. Healthcare service providers’ verifications teams check:
- The service is covered in the plan i.e. regular check-ups, maternity, pathological diagnosis, Routine Services
- Who the subscriber is – patient or spouse?
- In-network vs out of network service provider and benefits, and
- Primary or secondary insurance coverage
In crux, the healthcare service providers, irrespective of the scale, must have a well-laid out and comprehensive verification process in place. Both eligibility and coverage verification are the safeguards for accurate and timely revenue. Failing this, the healthcare provider will be losing revenue for the services, due to denials or cause unnecessary payment delays.
Timely and accurate determination of the patient’s eligibility at the front-end provides clarity to the patient’s coverage, out-of-network benefits, and payment obligation. Providers can submit clean claims and avoid re-submissions. Claim rejections and payment denials will get reduced, upfront collections increase, thus improving the revenue cycle management practice. Last but not the least, this also adds up to the patient’s satisfaction, the eventual beneficiary of the entire healthcare system.