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Why to and how to improve insurance verification processes
"There are too many hoops to jump through," laments Kelly Turner, billing manager at Harbour Women's Health in Portsmouth, N.H. She refers to the process of verifying patients' insurance coverage. Understaffed physicians' offices, outmoded processes for checking eligibility, the sheer number of covered patients, the frequency with which they change coverage, and the slow advance of online technology have all contributed to making a mess of the verification process.
The result is a definite "fingers crossed" attitude characterizing most practices' attempts to get paid for the services they provide. Phoning in insurance verifications can be a billing manager's biggest headache because it requires inordinate amounts of expensive staff time -- and can still lead to denied claims.
"You have to sit in a quiet place and not be interrupted," says Nathan Beraha, MD, of Anchor Medical Associates in Lincoln, R.I. "The receptionist can't do it with the phones ringing and patients coming in. You need a dedicated, secluded person."
Adds Turner: "There are umpteen different phone numbers to call, depending on the plan you're dealing with. National Blue Cross/Blue Shield must have 50 different phone numbers. You're always being transferred."
All those staff hours spent on hold translate into wasted dollars for both the provider and payer. Verification has been estimated to cost physician offices approximately $10 to $20 per call, and many hard-pressed practices simply give up -- despite the potential loss from denied claims, according to Healthcare Financial Management.
"Many practices don't prioritize verification because it's not intuitive," says Elizabeth Woodcock, director of knowledge management for Physicians Practice Inc. "Physicians are looking to get overhead and staffing ratios down, so they eliminate positions [that focus on insurance verification]."
It's worth the time
On the surface, phoning in verifications seems to be fundamentally flawed. But before you head back to a cash-only practice, take heart: there are strategies you can use to streamline verifications in your practice.
"Stipulate a clause in your payer contract that says if you get verification, they can't come back to you and say, 'Oh, our records were wrong,'" suggests Woodcock. "If you get the verification, you have the right to bill and be paid for the service. It's not impossible to get that clause, but most doctors don't ask for it -- they usually don't even read their contracts."
With this clause in place, providers can resubmit rejected claims with details of the contract attached.
If the insurer balks, don't buy it. "This tells you the insurance company doesn't have administrative processes in place and you won't get paid even if you do your work properly, and that's not fair," says Woodcock.
Strategies for getting reluctant insurers to come to terms include meeting with the insurer's provider representative to work out a solution, writing to the medical director of the insurance company, complaining to the state medical society and the insurance commissioner -- or not renewing the contract.
Once strong contracts are in place, devote as many staff members as you can to verifying coverage, and standardize a process throughout the office. "We're pretty dogged [about verifications] here," says Mike Pulaski, CEO of the Peachtree Orthopedic Clinic in Atlanta. "We generate lists before patients come in and we verify each time, for re-checks as well as new patients. We set up a triage: all new patients and surgeries are verified. All re-checks are verified every three months. We go through the charts the day before and tag those people we want verification evidence from."
Pulaski admits the process requires "vigilance, scutwork, list making, and follow-through" -- exactly what many practices feel they can't afford to spend time on. But Pulaski likens that attitude to "leaping over a $100 bill to pick up a penny."
The hard work and time pay off for his practice. "When we decided to devote a percentage of our staff to verifications, our payment percentage increased 4 percent. We're a $20 million business, so 4 percent of that is $800,000," says Pulaski. "If each [verification staff member] is paid $30,000 a year, you're paying only $120,000 to get back $800,000. And if you get a clean claim paid the first time, you don't incur added expense of doing follow-up on denied claims."
"The big issue with being on the phone is the human factor," says Dave Pedersen, a vice president of health plan consulting at First Consulting Group in Chicago. "For instance, someone might call and ask if a patient has maternity coverage, and they get a yes answer, so they hang up. When the claim is filed, they realize the procedure in question is experimental -- fertility treatments, for example -- and it's not actually covered. EDI [electronic data interchange] standards can help organize and disseminate data, but they can't counteract human assumptions, omissions, and so on."
Who's ready to e-verify?
Given the inherent difficulties of obtaining verifications by phone, then, are physicians ready to hang up and log on to the Web for verifications? It's a rhetorical question for Beraha. "Do I think they are ready, or do I think they should be?" he laughs. Anchor Medical Associates uses a Web-based workflow automation system to manage its verification process. "We get near 100 percent of our verifications when we go online," he adds.
For those practices that want to move the verification process online, there are still barriers -- notably, that not all payers offer online services.
"Blue Cross of Rhode Island isn't online yet," says Beraha. "For that payer, our percentage of verifications goes down -- and Blue Cross probably makes up 40 percent of our business," he says. "When we see our rejection rates, they're clearly higher for Blue Cross where we don't have online eligibility, so we just don't verify. If a payer is not online, we're more likely to get rejected."
Even if your payers are online, there can be difficulties obtaining accurate verification information.
"Online clearinghouses aren't ideal because all they give you is a yes-no answer: 'Yes, you're covered,' or 'No, you're not,'" says Kim Ivkov, vice president of interactive marketing for HealthTrio in Nashville, Tenn., which develops Web-based management tools for the healthcare industry. "If you get your benefits information from an online system that uses clearinghouse data, you still have to pick up the phone to get more in-depth information on co-pays and benefits."
"Having your staff pull data from payer sites is not ideal," agrees Todd Park, chief development officer and co-founder of Mass.-based athenahealth, a provider of "intelligent" Web-based practice management systems. "They have to take time out to go to the URL, pull up the payer, enter the patient information, check eligibility - then go to another URL for another payer and do it all over again. They just don't have time to enter all that information for hundreds of patients."
With great potential for increased efficiency and reduced claims errors, why aren't more insurers getting their online verification act together?
"The challenge is weighing how much market share they have in a given geographic region against the cost of providing online services for physicians," says Pedersen. "If you're United Healthcare and have an 8 percent market share, the return on investment is not great. If you're Blue Cross with a 55 percent market share and a higher number of claims coming in, the investment is more palatable."
Online multi-payer systems like MedUnite or WebMD are another option, providing "one-stop shopping" to practices by gathering information from multiple payers and presenting it in a uniform way, thus avoiding the inefficiencies of clearinghouses. But they present their own challenges.
"To make multi-payer systems work, you need a critical mass of physician offices and a critical mass of payers on board," says Pedersen. "It requires significant marketing activity, almost office by office, to get doctors to adopt new technology and tools. And the average physician's practice deals with 20 to 30 payer organizations, so it's hard to offer doctors the necessary payers."
Pedersen says this creates a Catch-22 for everyone involved. "The doctor says, 'Unless I get 10 of my 15 payers it's hardly worth it,' and the payer says, 'Unless I get 30 percent of my doctors it's not worth it.' If it were easy, [online verification] would have been done a long time ago."
So while costs are going down, and technological barriers are falling, it's still not a given to succeed in verifying insurance coverage online. Many doctors are waiting for one Web-based resource to consolidate all payers and emerge as a standard online verification tool. Unfortunately, that sort of undisputed champion is unlikely to appear any time soon.
In the meantime, the best option may be to follow Pulaski's advice: nip write-offs in the bud by pre-verifying.
"I argue that the same mentality that says it's not economical to use staff for verification is the same mentality that won't provide follow-up for denied insurance claims -- so you won't get around to acting on letters the insurance company sends saying you've been denied," says Pulaski. "Sooner or later you're writing off half your charges. The whole thing could be cut off at the pass by verifying."
Lori Rogers-Stokes can be reached at firstname.lastname@example.org.
This article originally appeared in the Spring 2002 issue of Physicians Practice.