Medical services are getting expensive day by day and this is not something to lie about and that is why around 90% of Americans have health insurance to afford a service.
The whole process of revenue cycle management revolves around a single fact and that is patient satisfaction. This very step plays an important role in the whole process of revenue cycle management this step involves confirming if the patient’s insurance plan can fully cover the services they need or if there are chances of co-pay or deductibles, which means the patients might have to do payments and this step helps the patient to know their financial responsibilities and reduces the chances of any financial surprises for them. In simple words the process of knowing if the insurance plan is active or not. But why is the whole process so crucial? Let’s explore the answers below.
What is insurance eligibility verification?
What does insurance eligibility verification mean and how does it work? This step verifies if the insurance plan can fully cover the services being provided to the patient while identifying the benefits of the insurance plan and seeing if it has some kind of limits. It also identifies if there is a need for a co-pay or deductibles, which is necessary for a patient to know before the services are provided to them so they don’t get financially surprised.
Key Elements of Insurance Eligibility Verification:
These are some key elements of insurance eligibility verification:
| Key Elements | Description |
|---|---|
| Verification of Active Coverage: | Process of confirming that a patient has valid and up-to-date insurance coverage. |
| Scope of Services: | This step confirms that the services that are going to be provided are being covered by the insurance plan. |
| Financial Clarity: | This step tends to identify if there is a need for a co-pay or uncovered payment. |
Importance :
These steps are very important to let the patient know about their financial responsibility so the patient doesn’t have to face financial surprises.
What are the Advantages of Verification of Insurance Eligibility?
Timely Payment
Healthcare providers often do not get paid on time as a result of mistakes or insufficient information about the patient’s insurance. Industry surveys show that due to problems regarding eligibility at the time services were given, 20-30% of denied claims are caused by eligibility issues.
Financial Clarity for Patients
Patients can understand their financial responsibility adequately when they are provided with the information at the very start; they do not feel a burden when it comes to their time to pay. Enabling this verification will allow for a large number of patient cost estimates to be obtained at the time of enrollment, which will not only result in fewer billing errors but will also foster trust between the patient and the provider.
Lower Claim Denials
Many reworkings of a claim are often expensive and create a reverse effect that negatively impacts the administrative process of claim denial. It is said that the cost of reworking a claim averages around $25 and this adds a lot of pressure to the administration staff. $25 is an ordinary amount spent on reworking claims, hence by utilizing precise verification systems, cut the rejection of claims to 30-50% strengthening the billing and eliminating the waste of time and resources.
Regulatory requirements
Considering HIPAA and other compliance with several requirements protects confidential patient information. The penalties for non-compliance can go from 100 dollars to 50000 for each instance of violation, hence it is vital to embed compliance checks into the first step which is verification of eligibility
How Does the Insurance Eligibility Verification Process Work?
Insurance eligibility verification is the step of identifying if the insurance plan can cover the services that are going to be provided it also tends to identify the need for copay etc, and the financial responsibility of the patient which helps them manage accordingly.
Step 1: Collect Patient Information
What to Do:
- You need to ask for the patient’s name, date of birth, and contact details.
- Record insurance policy number and group ID.
- Needed medical services are specified.
Step 2: Verify Coverage with the Insurance Provider
How to Proceed:
- Confirm policy status and coverage period.
- Identify covered services and check for exclusions or limitations.
- Use phone calls, online portals, or verification tools for accuracy.
Step 3: Confirm Financial Responsibilities
Key Tasks:
- Evaluate deductible amounts, co-pays, and out-of-pocket maximums.
- Verify if prior authorization is required for services.
Step 4: Update Records
Actions Needed:
- Document all verified information, including approvals or authorizations.
- Ensure the patient’s records are accurate and updated.
Step 5: Communicate with the Patient
Next Steps:
- Clearly outline services covered and expected costs.
- Inform the patient of any further actions, such as referrals or paperwork completion.
Why Follow This Process?
- Prevents financial surprises for both patients and providers.
- Ensures a smooth claims process and clear communication.
Real-Time Insurance Eligibility Verification: The Modern Solution
Instantly verifying the patient’s insurance eligibility can make it very easy for healthcare providers to verify if the whole patient’s service is being covered by the insurance plan. It helps healthcare providers verify if the insurance plan fully covers medical expenses and reduces administrative burdens. We can also use real-time insurance eligibility processes to reduce the chances of errors that might be caused by manual errors. Integrating real-time verification and EHR (Electronic health record) helps healthcare organizations in many ways.
Challenges in Insurance Eligibility Verification
When you look at the process of insurance eligibility verification, you will find many issues and errors. Therefore, it becomes essential to encounter these problems in strategic ways. We have gathered some common challenges that are mostly found in insurance eligibility verification.
- Manual Verification Issues
- Inconsistent Data
- Changing Insurance Policies
Benefits of Insurance Eligibility Verification
For Healthcare Providers:
- Improved Revenue Cycle Management: Automating eligibility verification can lead to substantial cost savings. For instance, the CAQH 2022 Index reports that such automation has helped providers avoid almost $81 million in costs arising from manual transactions.
- Operational Efficiency: There has been almost 25% automation that has helped organizations minimize the chances of errors and claim denials.
- Compliance Assurance: Automated verification ensures adherence to legal and regulatory requirements, minimizing the risk of non-compliance penalties.
For Patients:
- Financial Clarity: Proper insurance verification reduces financial surprises, ensuring patients have a clear understanding of their coverage and are financially prepared.
- Care Delivery: By confirming coverage, providers can direct patients towards treatments covered by their plan, avoiding unnecessary delays or denials of care, and improving their overall experience.
- Enhanced Experience: Transparent communication fosters satisfaction and loyalty, leading to a more positive patient experience.
Final thoughts:
The most essential part of knowing if the insurance plan is covering the services a patient is availing. Insurance eligibility verification helps healthcare organizations manage their revenue cycle and maintain a steady flow of financial matters. This process is not only useful for providers but also alerts the patients about their financial responsibility.
Call (224) 231-6880 for a free consultation and streamline your eligibility verification today!
FAQs About Insurance Eligibility Verification
How does the Insurance Eligibility Verification work?
Insurance eligibility verification checks if a patient’s insurance plan is active while looking into requirements if they can be fully covered by the insurance plan of the patient. These processes help you ensure that the billing services are smooth and accurate.
How Does Real-Time Insurance Eligibility Verification Work?
This is a process that helps verify details about the coverage of the insurance and aims to minimize delays and errors to ensure timely reimbursement.
Why Is Medical Insurance Eligibility Verification Crucial?
Medical insurance eligibility verification is a crucial process used in revenue cycle management because this process helps you to reduce the chances of claim denial and helps build trust among patients and providers by identifying their financial responsibility.
What Are Common Challenges?
The most common issues are the manual processes and lack of knowledge about the regulatory standards of a government or organization. These issues can be solved by outsourcing a medical billing company.