Step-by-Step Health Insurance Verification: The Process and Methods

    Within the revenue cycle management process, it is essential that healthcare providers check a patient’s insurance status before admitting the patient. Today, health insurance plans are quite diverse and this makes coverage checks quite challenging. This article will discuss the health insurance verification process and explain the various methods that are used.

    Overview of Health Insurance Verification

    Eligibility verification is the process of determining whether a patient is covered under an insurance policy, the benefits, and his responsibility. Completing validation at the onset of the process helps prevent claim denials or unexpected patient charges for expenses not covered by the insurance company.

     

    Key goals of upfront medical insurance verification include:

     

    • Confirm effective dates of coverage
    • Check patient responsibility like copays, deductibles, coinsurance
    • Minimize claim denials due to eligibility issues

     

    Completing these verification steps can maximize reimbursement and save considerable time compared to resolving issues claims submission.

    Step 1: Collect Patient Insurance Information

    The first step is to collect accurate patient insurance details. This information is typically gathered during appointment scheduling or patient registration.

     

    Key insurance details needed include:

     

    1. Primary Insurance Carrier: Such as Medicare, Medicais, or HMO (Aetna, Cigna, BCBS, UnitedHealthcare, etc.)
    2. Policy Number / Subscriber ID Number: Found on the insurance card.
    3. Group Number: Often included on the insurance card. May also be known as subscriber group number.
    4. Policy Holder Name and Date of Birth: Necessary if the policy holder is different than the patient.
    5. Patient Date of Birth: Needed for eligibility checks.
    6. Effective Date: First date that a policy is active. May also request an expiration date.
    7. Copays / Deductibles: Ask the patient if they know their responsibility levels.

     

    Documenting all information accurately from the start prevents issues later in the verification and claims process.

     

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    Step 2: Validate Health Plan Eligibility

    The next vital step is verifying patient eligibility to confirm their health plan coverage is active for the specific date of service.

     

    Traditionally, several methods were used:

     

    • Payer Provider Portals: Offer eligibility checks based on patient data entered into portal.
    • Verification Through Phone: Calls to the payer to determine eligibility for each patient.

     

    In modern healthcare though, automated solutions gain popularity rapidly:

    • Eligibility Verification Vendors: Services that provide batch eligibility checks across payers automatically and in real time.

     

    Upon eligibility check, key pieces of data to document include:

     

    1. Eligibility Status: Active, terminated, pending, etc.
    2. Effective Dates: Start and end dates for coverage period.
    3. Deductible and Out-of-Pocket Status: Amounts paid toward each to date.
    4. Copays / Coinsurance: Applicable benefit levels.
    5. Other Insurance Information

     

    Documenting these eligibility details provides confirmation of active coverage for the patient and planned services.

    Step 3: Validate Patient Responsibility Estimates

    By this stage of verification, you have confirmed active coverage and understand health plan benefits that apply. Carefully double-check patient cost-share responsibility.

     

    This entails projecting:

     

    • Coinsurance or co-pays percentages: Percent of allowed amounts due from patient. Often set on 20% of the allowed rate.
    • Remaining deductible: Deductible amounts already credited this year to project balance due.
    • Out-of-pocket status: Amounts counting toward max out-of-pocket limits based on claims paid.

     

    Having these projections enables providing patients with their financial responsibility for services. This improves transparency and reduces surprise billing issues for the provider.

     

    Prior Authorization

    The next step involves obtaining prior authorization for the planned patient care services.

     

    Be sure to check the following:

     

    • Authorization Requirements: Services often needing authorization include high-tech imaging, orthopedic procedures, injectables, etc. 
    • Pre-certification Policies: Some payers mandate approval for facility services like hospitalization and surgery.
    • Place-of-Service Rules: Payers may limit locations where covered, such as in-office vs. ambulatory surgery center.

     

    The insurance company must recognize and approve all treatments before they are provided to the policyholder/patient. Failure to obtain authorization can lead to additional claim denials.

     

    The biller needs to communicate with the insurance company either by phone or fax to secure authorization. This task demands expertise from the billing staff for drafting and submitting the request.

    Medical Insurance Verification Software: The Best Option in Today’s Realities?

    The use of phone calls and portal look-ups to verify the coverage details is cumbersome when there are many patients. This can affect the efficiency of the billing employees.

     

    This reality is making medical insurance verification to be done more and more by automated software. Benefits of using such tools include:

     

    • Increased efficiency: Automation reduces manual tasks, speeding up the verification process.
    • Accuracy: Software tools minimize human error, ensuring accurate verification results.
    • Time-saving: Automated systems can handle verification tasks faster, freeing up staff for other responsibilities.
    • Real-time updates: Software can access insurance databases in real-time, providing immediate verification status.
    • Cost-effectiveness: Automation reduces operational costs associated with manual verification processes.

    Furthermore, some software solutions can have prior authorization management as an integrated feature to enhance revenue cycle management.

    While insurance verification becomes more complex, it becomes difficult to manage through manual processes for most practices. The most effective approach is to outsource this administrative work to intelligent software that has direct access to payer data in real-time. The costs are present in the form of initial investments, however, the advantages of automation and the corresponding revenues make it possible to consider spending on these platforms. 

    Key Takeaways

    Understanding health insurance eligibility is crucial for effective healthcare management. It involves gathering detailed patient insurance information, using different verification methods, and maintaining accurate records. Automated software has transformed this process, making it faster and more dependable. The aim is simple: to connect healthcare providers with insurance details, resulting in informed decisions, smoother revenue cycles, and enhanced patient care.

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