Medical practices need to have procedures in place to lessen the risk of not being compensated for patient care. It's more than just checking insurance cards - that's but the eligibility verification starting point. That card's not a guarantee that the patient is covered for the visit and the related costs that may follow from it. Not only must the insurance coverage be verified, but also the patient's identity. 7 percent of all identity theft involves the fraudulent use of someone else's medical insurance card - a fast growing figure.
Verification of identity and coverage can be time consuming and costly, adding to the administrative burden of a practice. Yet to not do so is very risky. Providing services to a bogus patient creates an uncollectable debt, even should the impostor be arrested. Likewise, if it's later discovered a patient wasn't covered due to policy exclusion or limits, the patient may not be able to pay.
There are many automatic services available that simplify eligibility verification. The American Medical Association (AMA) estimates that eligibility verification costs $3.70 per patient when done manually, but only $0.74 when done electronically. Given that a single physician in the US has on average 1,200 patients, that's a savings of approximately $3,700 in annual savings in processing alone. The gain in having patients' eligibility and coverages properly verified is significantly higher. Some electronic verification systems also can check patients' financial responsibility history as part of the verification process. This enables practices to know who should be required to pay any balance due before walking out the door. The AMA notes that about half of the better performing practices are those that collection 90% of payments due before the patient leaves the office. Doing so also helps a practice lessen its use of third party billers, whose use only ads to administrate costs and lessens revenue - part of the 12% of "administrative excess" noted by Health Affairs.
Collecting at the time of service can also improve a practice's relationship with its bank. Banks often monitor a practice's debt levels and cash flow. Ideally, they see more money coming in from patients at time of service and a concomitant reduction in a practice's debt, note various consultants. If this isn't happening, it may affect a practice's banking relationship, especially when a line of credit's in place.
The simplest, least costly and most profitable solution to eligibility verification is having a system that performs automatic verification.
Government funded insurance, such as Medicare and Medicare Tricare also have an array of automated systems available through vendors to verify patient eligibility. Some of these systems are now accessible through mobile devices, with at least one vendor providing verification access through an iTunes app.
Avoiding Balance Billing
Balance billing issues are a large challenge for practitioners and patients, and a growing social policy issue. Obamacare's state exchanges and metal coverages (bronze, silver, gold) are bringing millions of unsophisticated medical insurance consumers into practices across the land. Many believe that their insurance coverages are as stated in their policy and that all services are so covered. They may not realize this isn't true only when they receive a huge balance billing statement, which they can't or won't pay.
When referring a patient to a colleague, Obamacare insured or not, it's prudent to first determine if that practice accepts that patient's medical insurance. It only takes a moment and can reap dividends: Medical bankruptcy is the primary cause of personal bankruptcy in the US. If your patient walks into a balance billing scenario, referred by you, he may just angrily walk on all his medical bills. Help your patient, help yourself, by confirming eligibility before making the referral.