What Is Insurance Verification: A Guide for Providers

A positive healthcare experience for the patient, resident, and even the provider, depends on so many factors. One seemingly minor factor can quickly become one of the most crucial and most time-consuming for a facility’s staff: insurance verification.

What is insurance verification and why does it play such an important role in creating a positive experience?

Imagine this: A patient seeks and receives care. They’re greeted by friendly staff, their interaction with the provider leaves them feeling confident that they have been well-cared for, and they receive the care they need, whether it was a well check, a treatment plan, or a procedure. But after the visit, the insurance claim is denied because the patient’s information was inaccurate or coverage had lapsed. Now, an otherwise seamless experience causes a headache for both the provider and the patient or resident. Billing staff have to spend the time to get the correct information and potentially seek an appeal. Even worse, the patient could end up with a higher-than-expected out-of-pocket cost, and the provider could lose revenue.

The problem could have been avoided with a strong insurance verification process.

What is insurance verification?

Eligibility verification establishes that a patient’s or resident’s health insurance policy is valid and current, and that the policy covers the needed care. In doing so, providers help to avoid time-consuming and costly issues.

The verification process involves:

• Confirming demographic information. Providers must be sure that the name, date of birth, and address are accurate to avoid problems that could arise if the information conflicts with what is on file with the insurance provider.
• Verifying insurance policy information. In addition to having insurance policy name and number, providers need the name and birth date of the primary policy holder. It’s important to remember that the policy holder may not be the patient or resident themselves.
• Contacting the insurance provider. Billing staff must confirm with the insurance provider that the patient or resident and their care are covered, whether pre-authorizations are needed, and what out-of-pocket expenses would be incurred.

Why getting insurance verification right matters

For providers, insurance verification serves as a safety net for the revenue cycle. A breakdown anywhere in the insurance verification process opens the door for a denial that can mean lost or delayed revenue, as well as additional work for billing staff. In fact, 67% of providers attribute denials to problems with front-end workflows. According to the providers surveyed, those problems included inaccurate or missing data related to patient or resident information, demographic, or insurance data – all of which would be caught with a reliable eligibility verification process.

Just as importantly, avoiding errors in coverage leads to a better healthcare experience for patients and residents. While verifying coverage, providers can determine what the out-of-pocket financial responsibility will be ahead of time. That helps avoid unexpected bills or phone calls with the insurance company to try to overturn a denial.

Understanding the barriers to insurance verification

It’s easy to see why insurance verification is so important, but that doesn’t mean the process is always easy. Some of the common challenges for providers include:

• Time: Eligibility verification can be time consuming, especially when more than one insurance policy is involved or when pre-authorization is needed for care.
• Incorrect information. Sometimes the information submitted to providers is not accurate. Language barriers can get in the way, or someone might be unaware or confused about their policy information, such as when a young person is still covered under their parents’ insurance.
• Outdated or invalid insurance coverage. The information on file for an existing patient or resident might be outdated or invalid. Coverages can become outdated or invalid with job changes, age, or family status.
• Mismatched information. An address can be slightly off from what an insurance provider has on record, someone may have changed a last name, or a person may have written a nickname on an intake form instead of the legal name listed with the insurance company. All of these inconsistencies could trigger a denial.
• Data entry errors. Despite their best efforts, staff may not have all the information on hand at registration. Or, a special character in the name of the patient or resident might not be possible to input, causing a discrepancy between the provider and the insurance company’s databases.
• Incomplete reporting of coverage. More than 13% of Americans – and more than 52% of Americans aged 65 or older – are covered by more than one insurance plan. If patients or residents provide incomplete insurance information, coverage that would increase reimbursement or reduce out-of-pocket costs may be missed.

One of the best ways to overcome all of these barriers is automation.

The value of automation to verify insurance eligibility

Even though most providers know how important insurance verification is, creating an efficient process that reduces errors and protects the revenue cycle is a challenge. Traditionally, verification has been a time-consuming process that requires countless phone calls or visits to multiple insurance portals by billing staff. And when staff have to spend time on rote billing tasks, it takes away from the valuable work they would rather spend their time on.

An automated process changes that. Coverage checks happen instantly, errors are repaired, and secondary insurance coverage is flagged to alert you to coverage that might have been missed. On top of that, staff can create batch inquiries that verify coverage for multiple patients at once, saving a significant amount of time while making sure that a process crucial for protecting the revenue cycle hasn’t been missed.

Strengthen your insurance verification process

Reducing denials and creating a smoother patient or resident experience is possible with the right technology. Ease the burden of insurance verification on providers by verifying coverage faster.

See how Inovalon’s Eligibility Verification™ can help you protect revenue by simplifying coverage checks.

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