Why Checking Patients Insurance Eligibility Is So Important In Medical Billing February 9, 2023

insurance eligibility

As a physician, providing quality care to patients is your top priority. However, you must also take into account several technical factors. Transparency is also essential when verifying a patient’s eligibility.

Most patients will not have insurance or even be aware of their insurance eligibility, which can result in coverage issues for their appointment at your clinic. As long as you verify that information before the appointment, that’s fine. Physicians must conduct an insurance eligibility screening before a patient’s first appointment. Doing so will allow the physician to verify insurance coverage and less likely to refuse the patient’s treatment.

As per the  2021 CAQH analysis, practices spend an average of 12.64 minutes manually verifying insurance eligibility for each patient. Considering this may seem like a great deal of time, it is not a good idea to finish it later.

What is the difference between insurance authorization and insurance verification?

Insurance verification and insurance authorization (prior authorization) are essential steps in the Revenue Cycle Management (RCM) or medical billing insurance claims process. These processes both aim to prevent claim rejections and delays, but they are distinct from one another.

Insurance verification differs from insurance authorization in the following ways:

  • Contrary to insurance verification that occurs before the patient encounters, prior authorization begins when an insurer requires pre-approval for a medical procedure, test, medication, or device the physician prescribes.
  • Verifying insurance helps create and file medical claims and obtain payment for patient services. In contrast, prior authorization is about getting prior approval for services.
  • Insurance eligibility verification aims to determine the coverage status, active status, and eligibility check status. Medical billing personnel must know the CPT code for the services for which approval is necessary to ensure smooth prior authorizations.

In summary, insurance authorization refers to getting approval for treatment. Meanwhile, insurance verification confirms that a patient’s health insurance plan covers the treatment. They both are essential to ensure that the patient’s treatment is covered by insurance and to avoid any unexpected charges.

How to Verify a Patient’s Insurance Eligibility?

If your staff has access to a real-time medical billing platform, verifying insurance eligibility can be smooth. A lack of access to efficient tools to verify patient eligibility led to an increase of 23% in hospital insurance payment denials in 2020.

Therefore, verifying a patient’s insurance is an essential procedure in medical billing that helps ensure that the patient’s insurance plan covers their treatment. Here are the steps to verify patient insurance:

  1. Collect the insurance information from the patient – this includes the patient’s name, date of birth, insurance policy number and group number, and insurance company name.
  2. Check the patient’s insurance card – ensure that the card information matches the patient’s data.
  3. Contact the insurance company – call the insurance company or check their website to confirm that the patient’s coverage is active and that the policy is still in effect.
  4. Confirm the patient’s benefits – check the patient’s coverage for the specific treatment or procedure that is being requested and verify the patient’s co-pay, co-insurance, and deductibles.
  5. Keep accurate records – make sure to document all the information you receive from the insurance company, including the date of verification, and keep it on file for reference.
  6. Pre-authorization – some insurance plans require pre-authorization for specific treatments, procedures, or medications. In such cases, obtaining pre-authorization from the insurance company is vital before providing the service.

It is important to note that insurance eligibility verification should be done before the treatment is given to avoid any surprise bills for the patient or the provider. Additionally, insurance policies and coverage can change, so it is a good practice to verify insurance coverage regularly, especially for patients with chronic conditions.

Importance Of Insurance Eligibility Checking In Medical Billing

This section explains why checking a patient’s insurance eligibility in Medical Billing is essential.

  • The checking of patient eligibility is crucial when insurance plans expire or programs aren’t covered.
  • Many patients need to learn what their insurance coverage or deductibles are. If you notify your patients as soon as possible, they can have the time to plan for the extra expenses or work with the practice to create a payment schedule.
  • On-time payments are essential to the majority of patients. With this eligibility check process, patients can get all the information they need to avoid getting a surprise bill.

The Benefits of Patient Insurance Verification

The patient insurance verification process confirms a patient’s insurance coverage and policy details before providing medical treatment. This process can have several benefits for both patients and healthcare providers.

  • Make Check-in and Billing More Efficient

A patient’s eligibility is automatically verified during the check-in. Upon coverage verification, providers can proceed with their scheduled visit knowing that payment is on its way. Patients whose insurance does not cover services can find out how much their out-of-pocket costs will be. It creates a sense of transparency from providers throughout the billing process that patients appreciate.

  • Strengthens Patient-Doctor Relations 

If you verify the patient’s insurance information before the appointment, you not only help your service, but you also help the patient because you let them know ahead of time that their insurance may not cover this visit. In this way, you provide information to your patients a day beforehand so that they can choose what is best for them. Patients will appreciate knowing what needs to be paid in advance. As a result, the patient-doctor relationship is sure to improve in the future.

  • Improves Reimbursement Rates by Reducing Denials

The lack of patient insurance verification may result in insurance denials due to inaccurate data or non-covered patients. In this case, the claim you submit will not be paid, which can harm your service’s finances. On the other hand, if you verify all information before the visit and get pre-authorizations, insurance companies have no reason to deny the claim. As a result, you have a much higher chance of receiving reimbursements.

Nevertheless, if medical practices fail to verify insurance claims properly, they may not be paid for their services. It can also lead to financial problems, including lost profits, struggle in collecting patient payments, and administrative expenses are high.

That’s why a system should be in place to track and follow up on pending authorizations. Additionally, practices should coordinate closely with their billing staff to ensure that claims are submitted on time.

Tap Into Our Expertise

Both insurance verification and authorization are time-consuming processes that can lead to denials. That’s why experts best handle them. Outsourcing these tasks to an experienced insurance verification company can save time, prevent denials and delays, optimize reimbursement, and improve patient care and satisfaction. 

At 5 Star Billing Services Inc, we offer the highest level of performance for high-quality medical billing and coding. Save your money by outsourcing to a professional billing service.

Schedule a call with our experts today!

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