Did you know that many claims are denied before the patient ever steps foot in the office? Don’t let that happen to you.
This article examines one of the highest denial reasons—patient eligibility—and why this is becoming more common in medical practices around the country. Also, most practices don’t recognize the damage these denials cause and, worse, that they are easily preventable. But prevention must start before the patient ever visits the office and receives services.
The economy continues to sputter, and many believe we are still deep in a recession. Nationally, unemployment was at 9.6 percent in September 2010, and it’s even higher in many areas around the country. As more employees lose their jobs, many also lose their health benefits. Without income, they cannot afford the COBRA premium payments, so their insurance often terminates. The bottom line is that high unemployment means less jobs, less health insurance benefits and increased claim denials due to non-eligibility.
Companies also are feeling the pinch. Not only are they reducing their workforce, they are also looking for ways to reduce their expenses, and employee benefits represent one of their larger costs. Oftentimes, while employees keep their jobs, their health benefits are being cut. Therefore, “consumer-directed” insurance plans continue to grow and add further responsibility to the patient through higher co-payments, higher deductibles and reduced covered procedures by payers. This results in higher patient responsibility, which leads to reduced collections if the practice is not mindful of this occurrence.
All of this adds up to less insurance reimbursement and higher patient responsibilities, due to the following problem that exists today:
- Patient’s insurance is changing (carrier changes)
- Patient’s responsibility has changed (higher copayments, higher deductibles)
- Carriers are reducing covered procedures (higher patient responsibility)
- Patients have less disposable income to take on the higher responsibility
- Patient’s illnesses and need to see a physician/provider have not gone away
These factors lead to increased denials, increased delinquent patient payments and reduced collections, which results in reduced income for the providers.
Many of these issues around denials for eligibility and delinquent patient payments can be remedied with pre-visit activity, date of service activity and education/communication.
There are things the practice can do to reduce the eligibility denials, as well as the time and resources pursuing patient balances. Activities such as verifying insurance, completing eligibility verification and collecting a pre-payment on higher dollar procedures can help reduce the impact of these economic variables that are negatively impacting practices across the country.
It is more important than ever to check every patient’s insurance each time they walk into the office. I have advised practices for years on this basic activity, and I am still surprised by how often this is not done or not completed in the appropriate fashion. In spite of all the economic variables–the increased patient balances on the accounts receivable (A/R), the slow pay from these patients, the significant extra effort around pursuing eligibility related denials–the first thing I hear from the staff is, “Do we have to do it for every patient?” or “What about the patients we saw last month?” The most shocking is, “We already have their insurance card on file, so I don’t want to bother them or I don’t have time to look at their card.” These are actual quotes I have heard over and over.
The answer is, YES! A patient’s insurance can change daily and the patients either don’t want to tell you (could be embarrassment from a lost job or bankruptcy, where they can’t pay bills), they didn’t realize the change in insurance took them out of network (and now seeing you is not paid for) or didn’t realize their deductible has now changed (for example, from $1,000 a year to $6,000 a year, so that procedure is now their responsibility). The staff has to be educated on what has changed in the market and why the patients will not be forthcoming to tell you they have different responsibilities than the last time they visited.
If the staff makes it a habit to ask every person every time for their insurance card each time they visit, part of the battle is won before the patient is ever seen. Your staff also should look closely at what they are copying. It is staggering to see the number of claims that are denied because of non-eligibility when the patient provided a card that clearly is not valid, and the staff member didn’t even look at the card to see something has changed (name, address, effective date, different insurance card, etc.). They simply copy it and move on. For example, if they would have identified that a patient had Blue Cross last time and now is showing an Aetna card, then maybe something should be updated in the system. If so, then the claim will go out to the right carrier. If not, the claim will go out to the wrong carrier, a denial will come back for inactive eligibility and, after a little research, staff will find the insurance information was not updated. This scenario just cost the practice extra time (the claim has to be reprocessed), resources (staff has to touch this claim again when it could have been done right the first time) and money (provider cash flow is affected).
It is imperative that every patient show their insurance card. Get a copy of it if possible because your staff may not be looking close enough, and it’s time-consuming to call a patient back for updated information. The staff should also look at every one closely and compare that to what is in the system.
Most software systems today have some level of eligibility verification that it can perform. Kareo, the software Aesyntix Billing Solutions utilizes for its revenue cycle management (billing) customers across the country, has a built-in eligibility checker. Once the insurance information is in the system, we can check eligibility within seven seconds. A screen pops up identifying whether or not the patient is eligible with that carrier, what their co-payment amount is and, often times, what their deductible is. Not all carriers are covered by this; however, most major ones do participate. If this is done a few days in advance of the patient visit, then the practice can reach out to the patient and ask for updated insurance information for verification. Why see the patient if you know their insurance is not updated or if you know a certain procedure is not covered? Also, if they have a high deductible, they may not be aware of their responsibility. This gives you an opportunity to communicate with them what their responsibility will be.
This is important, as many patients simply do not realize a lower premium (so they can save money) typically results in a higher deductible. The word “deductible” is foreign to most patients, but it does result in a higher patient responsibility that they may not be aware of. Thus, they will get a bill for what they are responsible for. Please keep in mind that most practices bill as a courtesy. The patient is still responsible for the services they seek if their insurance carrier deems the patient ineligible, service not covered, out of network or some other reason.
This is problematic as many patients get upset and state to the practice, “I have never paid $____ (fill in an amount) for an office visit,” or “The doctor only saw me for five minutes and you want to charge me $____.” This is new to them; their insurance company previously paid for the procedure because their insurance at the time had less patient responsibility. Ultimately, there is a change in culture here, and patients are the last to catch on because they have not had the financial burden in the past.
Therefore, complete an eligibility check beforehand, or you will find you will waste many hours pursuing denied claims (non-eligibility) and then addressing an upset patient. This wastes time and resources when it all could have been prevented before the patient ever walked into the practice. And not only does this slow down your cash flow and eat up your staff time, but the probability of collecting those dollars goes down as soon as the patient walks out the door.
As a matter of fact, Aesyntix Billing Solutions now provides patient eligibility and pre-payment services for many of our revenue cycle management customers for higher dollar procedures. Because of the high deductibles and changes in insurance, our service increases the probability of payment and reduces resources needed to pursue denied claims and/or patient responsibilities by having the patient pay their portion before the procedure or at the time of service. The exact amount of patient responsibility is not always known, so we determine an amount due based on a first-stage surgical procedure and notify the patient we will charge them for what their responsibility of the services rendered is. This becomes a win-win. The patient understands their responsibility before the procedure, and the practice collects the money earlier in the process. But the true victory is that everyone understands their role and the probability of collecting is 100 percent. If patients don’t pay, they don’t receive the service.
The economy has thrown a twist into the provider/patient relationship. As the economy continues to struggle, insurance carriers are increasing their premiums, decreasing coverage and passing some of the responsibility to patients. This is a change in the way insurance claims were handled a few years ago. Practices have to understand this change in business and appreciate the fact that their patient responsibility (accounts receivable) is growing and will continue to grow. Their staff resources are getting eaten up pursuing denials that are preventable. Identifying this change and having your staff incorporate these activities will decrease the frustrations, decrease the time spent on preventable denials and increase overall cash flow.
Thom Schildmeyer, MBA, is President of Aesyntix Health, Inc., a medical billing service based in Roseville, CA.