Claim denied. Ugh! These are two words that make all those involved in the health care revenue cycle cringe. Unfortunately, claim denials are very common, costly, and time-consuming to correct. However, there are strategies to avoid them, with the potential to significantly increase your bottom line and decrease your revenue-related headaches. We’re going to talk about one of those strategies here — real-time eligibility.
Eligibility verification is one of the first phases in the revenue cycle and by far the most significant. Did you know eligibility issues are one of the top five reasons claims deny? In fact, nearly 24% of claims submitted are denied for eligibility and registration issues, such as the patient not being eligible for medical benefits on the date of service, or having incorrect demographic information, like date of birth or a misspelled name.
The eligibility verification process is directly linked to claim denials which can have a variety of unwanted consequences. This includes a hike in the number of days in A/R, an escalation in write-off rates, a standstill of cash flow, inflated costs to collect, and most importantly, delays in a patients' access to treatment. The process of verifying eligibility needs to be both efficient and accurate in order to determine the responsibilities of both the payer and the patient.
Most claim denials are avoidable, in fact, 90% of them could be avoided. Research also shows that of those denied claims, approximately 60% of claims are recoverable, meaning they can be corrected and resubmitted for reimbursement.
This sounds pretty good, right? Well, the reality is that a whopping 65% of denied claims are never reworked, which translates to a huge loss in revenue. The remaining claims that are reworked can be a drain on resources when factoring in both time and overhead costs. The average cost to correct and resubmit a denied claim can range anywhere from $30 - $125 per claim.
By implementing the right tools and processes, such as checking real-time eligibility, the likelihood of having your claims denied decreases significantly. By simply using real-time eligibility tools, you’ll be able to increase the number of “clean” or error-free claims submitted, tackling a number of the top reasons claims are denied, such as eligibility, no authorization, or being covered by another insurance plan.
But what exactly is real-time eligibility, and how do I use it to my advantage?
Real-time eligibility is a software tool that allows medical staff to electronically confirm a patient’s insurance coverage by interfacing directly with the insurance carriers. This instant eligibility check provides an up-to-date overview of the patient’s coverage and plan benefits. Real-time eligibility can answer important questions such as if the insurance policy is active, the start and end dates of a policy, deductible amounts, copay coverage, and if prior authorization is required. Verification checks can be done at the time of the patient’s appointment, or even prior, which not only saves both the staff and patient time during check-in but also provides a clear understanding of both the provider and patients’ responsibilities.
Real-time eligibility benefits all those involved in the revenue cycle management process. For example, the amount of time staff spends checking and verifying a patient’s coverage is reduced significantly, as it eliminates back and forth phone calls, and the need to check multiple systems in order to verify coverage. Additionally, verifications are saved to the patient’s record, which provides an audit trail and proof of insurance coverage. Plus, it makes it much easier to submit clean, error-free claims, which facilitates faster payment and improves cash flow, which leads to increased provider satisfaction. Let’s not forget about the most important part of the revenue cycle, the patient. Being able to communicate to the patient their financial responsibility prior to, or at the time of service, makes for a much-improved patient experience.
Claim denials are preventable when identified and addressed early in the revenue cycle process. By implementing real-time eligibility, you can decrease the burden of claim denials, and in turn, enhance revenue, improve the overall patient experience, and let the provider focus on what matters most — patient care.
If you are interested in learning more about pMD’s billing and revenue cycle management services, please contact us here or give us a call at 800-587-4989 x2. We’d love to hear from you!
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