According to industry sources, the greatest source of denials stem from breakdowns in patient eligibility verification. In fact, this one issue alone can account for as much as 75% of denials.
The problem stems from patients either not being covered or being ineligible for the services provided. Eligibility-related claims denials typically occur for one of four reasons:
- The staff failed to check patient eligibility at all. While considered a core best practice, failure to check eligibility occurs more frequently than anyone would like to admit.
- The patient was not covered by the payer at one of three critical times in the process. The staff must be sure to verify insurance to the line item level three days before service, on the date of service, and before submitting the claim. Failure to follow this process exactly can result in a denial.
- The staff had difficulty interpreting the 271 payer response string in order to validate patient coverage for the service provided. With the complexities of insurance coverage this is a common issue.
- The staff assumed the patient would qualify for Medicaid retroactively after the service was provided. Making such assumptions, especially where the Centers for Medicare and Medicaid Services (CMS) is involved, can create all sorts of havoc in the revenue cycle.
The challenge with these issues is many providers will tend to manage them on a one-off basis, endlessly treating the symptoms instead of addressing the disease. The better solution is to resolve the root cause of the issues so you can avoid them entirely.
Electronic requests for X12 270/271 have vastly simplified the verification process, yielding an average of nine minutes saved for each eligibility request. Yet the complicated strings of data delivered by payers make it difficult to review and interpret responses down to the service level. How can the eligibility search process and data reported be improved to enhance staff efficiency and reduce denials?
The more we investigated the issues around eligibility related denials, the more we realized an expanded and automated coverage search solution was needed. Our research revealed:
- Patients can be unaware of their insurance information or unknowing that they even have or had coverage available.
- Healthcare providers run into challenges when:
- Initial coverage has lapsed
- The patient has changed insurance carriers between services
- Benefits are actually covered under an alternate-supplementary plan (i.e. Primary vs. Secondary Coverage scenarios)
With these additional challenges in mind, ZirMed’s automated Coverage Discovery solution helps providers uncover any potential missing, hidden, changed, or alternate coverage. Deploying similar Lean, Six Sigma approaches, we routinely find 5% to 15% billable insurance through the use of proprietary algorithms that mine more than 1,200 payer connections and billions of transactions.
Improving your ability to determine patient eligibility is one significant way to prevent denials. For more ways to mitigate denials listen to the podcast, watch the replay, “Denial Management, Take Control of your AR” or call ZirMed at 855-999-7138.