By: Libby MacFarland, Billing & Coding Advisor, PECAA
There are many different aspects that go into the revenue cycle within a practice. Establishing a solid system for revenue cycle management is an essential part of having structurally sound financial security within your practice. Cash flow is imperative when it comes to financial security.
Financial security comes from third-party insurance companies as well as your patients. One of the biggest fallacies that practices face is not realizing that your patients are your primary payor. Patient payments make up roughly 60% of your revenue. If patients are the primary payor, why are we allowing them to leave the practice without paying their portion of the visit? The simplest answer, practices find it challenging to determine how much the patient owes out of pocket before they leave the office.
Return On Investment
Many offices find it challenging to justify putting in staff time and money to check insurance benefits. At times when we are in the day-to-day grind, it is challenging to see where your return on investment can come from when checking insurance benefits.
Let’s review the ROI. You may spend a few hours a day to check your patient’s insurance benefits, collect your patients out of pocket portion of the visit, and submit the claim to insurance. There is a good chance that there will be little to no balance remaining for your patient, or a small refund might be due. You have now collected most if not all money within 4 weeks.
The opposite side of the story is not checking insurance benefits prior to seeing your patient. You send them a bill once insurance has paid (2-6 week average), you wait another 30 days for your patient balance, then you send another bill, wait another 30 days, and then another bill, etc. Statements cost the practice between $5 and $25 per statement. Statistically speaking, when a patient walks out of the door without paying their bill, the chances of recovering that money from your patient goes down 40%! So now you are 8 to 16 weeks post visit, still waiting to be paid for services provided. The additional costs added in to collecting patient balances include multiple statement generation, staff hours to follow up with patients, and possible collections agency fees. Checking patient benefits aids in turning your practice from a cost center to a profit center.
Insurance Verification
One of the first things the PECAA Billing and Coding team recommends to practices is to check insurance benefits prior to seeing patients; with a recommended timeframe of 3 days prior to the scheduled visit. You may be asking, how is checking insurance benefits going to help collect patient balances prior to the patient leaving the office? Here are the benefits of checking insurance verification prior to a patient visit:
- Confirms correct demographic information of patient/subscriber information for
insurance claim submission - Confirms active insurance coverage
- Confirms in-network/out of network status
- Checks for co-pay, deductible and co-insurance amounts owed by the patient
- Confirms primary/secondary payor status
There are various ways to check insurance benefits for your patients. In the past, the only way to check insurance benefits was by phone, which can be very time consuming.
Online Verification
As the era of electronics has progressed, most major payors and many smaller payers have created websites to check insurance benefits for patients using their provider portals. Generally speaking, websites/provider portals will give all of the benefits listed above. Some even go into detail regarding code/diagnosis codes and how it will be processed through the patients plan.
Clearinghouse
An additional way to check insurance benefits for patients is through your clearing house. Many clearing houses offer insurance verification for patients; sometimes for an additional charge. PECAA’s vendor partner APEX EDI offers these capabilities to their users. While using a clearing house is less of a burden than checking each individual website, it comes at a price. Most clearing houses don’t give specifics for codes, and some don’t even give co-pay, deductible, co-insurance or in/out of network definition. What you will find out is if that ID number is correct and if the patient has active coverage.
Phone
The least favored way of checking benefits, mainly because it is very time consuming, is by the phone. While this is sometimes necessary, we always recommend this as a last resort for insurance verification. Why you ask? It takes a large amount of time and time is money. Phone calls can last up to an hour sometimes! If by chance you do need to contact an insurance carrier by phone, make sure to be as specific as possible with the representative to ensure that you are getting the most accurate information as possible.
Here are a few examples of specific questions to ask:
- Is the patients plan in network with our provider/office?
- If no: does the patient have out of network benefits?
- Does this plan require a referral/authorization?
- Is this an HMO plan?
- What is the co-pay amount for the office visit?
- Are diagnostic testing/labs applied towards the patient deductible?
- What is the patient deductible, out of pocket maximums, co-pays, co-insurance?
- What has been satisfied?
- Are you the primary insurance (*specifically important if the patient is Medicare eligible)?
Regardless of which way your office choses to check benefits, by checking benefits you are able to provide your patient with their out of pocket expense information prior to the visit. If the insurance is estimating a high out of pocket expense, preparing your patient for this is also imperative. It gives the patient the choice to reschedule, cancel or accept that the money will be due at the time of service. Ultimately lowering your outstanding patient balances and increasing patient satisfaction.
It is incredibly important to remember though, the benefit information you are obtaining from the insurance company is NEVER guaranteed, it is always an estimate. Telling your patients that their estimated out of pocket cost will always go over smoother than thinking their $40 co-pay was all that was due. Regardless of how you check your benefits, you will not always get accurate information. Maybe the website wasn’t updated yet or there was a new representative that didn’t know how to read the benefits? Errors can be made with insurance verification, that is why the phrase “estimate” is crucial when speaking with your patients about their benefits.
Want Assistance From PECAA’s Billing Advisors?
The PECAA billing and coding team has put together some helpful tips and a sample insurance verification form that is available for our Members. Please note that you will need to be logged in to the PECAA website in order to obtain these forms. Please feel free to e-mail any questions to billing@pecaa.com.
