Insurance Verification: Avoiding Denied Claims

Imagine for a minute that you have received a denial in the mail for an insurance claim and it states that services are not covered or this procedure requires prior authorization. You think for a moment...why didn't someone know about this ahead of time.

Of course, someone would have known if your office had a system in place to make sure that you didn't receive those types of denials. Most insurance denials are due to the lack of verifying insurance benefit information prior to services being provided. The most common denials are:

Requires Prior Authorization

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Some medical procedures or services may require the provider to obtain authorization prior to services being performed. Denied claims due to unauthorized patient procedures or services can be a major loss in revenue that should not be taken lightly. Although most medical offices are moving closer to 100% verification for patient services, there is still no guarantee that every account will make it through the insurance company claims department stamped paid.

It only takes a little extra effort on the part of the medical office to guarantee that the necessary steps have been taken to avoid lost revenue for no prior authorization.

Coverage Terminated or Member Not Eligible on This Date of Service

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It is important that providers verify their patient's insurance eligibility each and every time services are provided. Insurance information can change at any time, even for regular patients. Verifying insurance benefits prior to services being rendered can make the medical office aware if the patient's insurance coverage is active or has terminated. This will allow you to get more up-to-date insurance information or identify the patient as a self-pay.

Services Performed Are Non-covered

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Insurance companies and individual policies vary on which medical services they cover. It is great customer service to advise your patient prior to a procedure or service being performed that they may be responsible for it themselves. This way your patient can make that decision ahead of time rather than unknowingly being stuck with a huge bill.

Exclusions or non-covered services refer to certain medical office services that are excluded from the patient's health insurance coverage. Patients will have to pay 100% for these services. This is another reason why it is important to contact the patient’s insurance prior to services being rendered. It is poor customer service to bill a patient for non-covered charges without making them aware that they may be responsible for the charges prior to their procedure.

Maximum Benefit for This Service Has Been Met

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This denial is usually reserved for recurring office or hospital visits such a physical therapy, behavioral health services or chiropractic services--just to name a few. Most insurances have a limit to how many visits they allow in a given period. If you identify that the patient's maximum benefits have been met you are able to offer different payment options.

Requesting money from a sick patient for some people seems insensitive, however, it must be understood that health care costs money. Although it may be a touchy topic, collecting upfront payment from your patients is a necessary aspect that needs to be addressed.

6 Steps for Obtaining Authorization

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  1. As soon as the patient has been scheduled for a procedure, the insurance verification process should begin.
  2. If the insurance company requires authorization for the procedure, contact the physicians office immediately to find out if authorization has been obtained.
  3. If the physician's office has obtained authorization, get the authorization number from them. If they don't have it, contact the appropriate department at the insurance company to get the authorization number. It is also a good idea to make sure the information they have matches your records.
  4. If the physician's office has not obtained authorization, politely inform them that they must get it before their patient can have their procedure. Usually, physicians are very compliant with this request. They want their patients to have the best care and would not do anything to jeopardize them from being able to have a procedure performed.
  5. Always follow-up with the insurance company. If possible request a fax of the approved authorization for your records. You may need it later.
  6. If a procedure changes or something is added at the last minute, contact the insurance company as soon as possible to add the changes to the authorization. Some insurance companies allow as little as24-hourr notice for approval on changes.
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