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With So Many Patients, How Do I Know Who Is Eligible?
By HealthFusion®
March 2004
Not all of the factors that influence claims payment are within your control, but you can take steps to lessen at least some of the frustration and unnecessary expense associated with claims delays and denials. The American Association of Health Plans, the Healthcare Financial Management Association, and the Specialty Society Insurance Coalition recently convened a committee representing health plans, physicians, and hospitals to examine problems with claims processing and identify best practices. Some of the strategies described in this white paper are based on information developed by that committee (as it relates to eligibility), which includes the American Academy of Family Physicians, American College of Obstetricians and Gynecologists, American Academy of Dermatology, Bethesda Healthcare System, Piedmont Hospital, Group Health Inc., and Health Alliance Plan.
Claims submitted to the wrong payer
If a high percentage of your denied claims are denied because they were submitted to the wrong payer, take the following steps:
- For new patients, collect information about insurance coverage when they book their first appointment to allow you ample time to process it. Ask patients to provide the following information about their spouse and dependents as well as themselves: Social Security number, birth date, and group/policy numbers for each of their insurance providers, including Medicare and Medicaid.
- Make it a policy to copy patients' insurance cards at their first visit to your office. If the patient has secondary coverage, copy the card for that policy as well. After the card is copied, check eligibility electronically. Since the card is not proof of eligibility, just copying the card is an incomplete solution to identifying the responsible payer.
- Upon each patient's arrival at your office, review the insurance information you have on file and ask whether it is current. If the patient makes changes, copy the patient's insurance card again. Keep accurate records of all insurance information (current and previous) for use in claims follow-up, appeals, disputes, or coordination-of-benefits issues.
Claims denied due to ineligibility
To reduce the number of claims denied due to ineligibility, confirm eligibility for every patient visit prior to the visit. Healthcare eligibility is the number one cause for claims to be rejected and never paid. In most hospitals and doctors' offices, eligibility is never checked – with the exception of inpatient admissions and outpatient surgery. Without current eligibility, the provider is blind as to where to send the bill, who is covered under the plan, the correct insured information, and the benefits available for the particular type of treatment. The most prevalent result is an incorrectly routed claim mailed to the wrong insurance pay-point or intermediary such as a preferred provider organization (PPO), TPA, HMO, MSO, or insurance plan. Frequently, these claims require ten times the amount of follow-up energy and time to collect or end up as bad debt. Not to mention the impact these delays have on patient satisfaction. This all adds to the frustration level for customers.
Around twenty-five percent (25%) of the claims processed today are rejected by the payer, and over eighty percent (80%) of those claims are rejected because a thorough eligibility verification was not made prior to or at the time of service. Most frequently, registration staff rely on existing information that was provided months or years previously – information that has probably changed several times since the patient's last visit.
With the advent of PPOs and MSOs, the initial pay-point has changed dramatically. As one example, many of the PPOs require that the provider sends the claim to the PPO for re-pricing to contractual rates and then be sent to the payer for payment. If the claim is misdirected to the payer, it has to be mailed from the payer to the PPO and back again, frequently adding three to four weeks onto the collection cycle.
If eligibility is not checked at the point of care, medical providers also lose a valuable opportunity to collect co-payments or deductibles at the time of service as well, which requires an inordinate amount of follow-up effort once the insurance payment is received. A self-pay portion requires, on average, 60 to 120 days paying after the insurance payment is received, and these represent the single highest risk for any provider. Self-pay balances to medical providers rank dead last in typical consumers' hierarchy of bills to pay.
Why you may not have been trained to verify every office visit and outpatient procedure?
Before HealthFusion was available, it simply would not been cost effective for most providers in the short run. To telephonically verify insurance coverage requires an average of 20 minutes per call – with holding patterns of up to thirty minutes. At $12 per hour for staff time, that verification call could cost as much as $9. If the average charge per visit is only $75, the cost to merely verify insurance represents an average $4.00 per call or 5% of the total charge. With 50 patients a day in a busy practice, the total cost could be as much as $200 per day.
Historically, when the only way to check eligibility was to call the health plan, the net return on investment for the time spent was cloudy. Now with HealthFusion, verification can be performed in just a few seconds. If over 80% of all rejections could be resolved by thorough eligibility verification, the hours saved by not having to re-bill each account easily make up for the cost of verification at the point of care.
In the past, confidentiality was a major hurdle for the Internet, with reports of hackers violating servers' security. The government has issued standard encryption requirements that can probably withstand most hackers' efforts, and HealthFusion complies with these federal standards.
For the most sophisticated practices, HealthFusion can accept from the provider a HIPAA-compliant text file and return to the provider the HIPAA-compliant response. This service saves large practices many keystrokes, and no time is lost in submitting inquiries. In addition, by automatically populating fields, you eliminate any data entry errors.
With HealthFusion, it makes excellent sense to verify eligibility, submit a correct claim the first time, and to the correct location. Processing time could be significantly shortened, and the cost to collect the claim can be reduced by more the 60%. Bad debt will also be substantially reduced.