Can’t find a total verification solution? Small steps can improve the process

Financial needs make insurance an upfront issue

(Editor’s note: The payment burden for hospitals and their health systems is increasingly shifting to access managers who oversee patient financial services. The ability to determine whether a patient’s insurance covers an MRI or CT scan can save — or lose — thousands of dollars for the hospital. Beginning this month, Hospital Access Management offers a two-part series on what’s happening now with insurance verification procedures, and what’s coming in the future.)

Are you a manager of an admitting department or patient financial services operation who is waiting for a long-term solution to the insurance verification quandary? You may have a long wait.

Software vendors are offering pieces of solutions, but with insurance companies dragging their heels on adhering to accepted standards for electronic data interchange, there is no real incentive to offer comprehensive electronic solutions.

It is estimated that less than 5% of hospitals verify insurance coverage electronically, and the practice varies widely by region. An East Coast provider, with relatively few third-party payers, may handle 50% or more of its business through an insurance verification service. But a hospital in California or Minnesota — where the Medicare business alone may be split among 15 or more managed care companies — will have a hard time finding a service to cover a meaningful part of its patient load.

Meanwhile, registrars struggle to do the job manually, sometimes spending much of the day on the telephone — often on hold — to get through to payers, and consulting thick binders stuffed with plan details to determine benefits eligibility.

Still, providers who link electronically with third-party payers for verification of a substantial amount of their accounts say the payoff is great. In an era of ever-multiplying managed care plans and increasingly complicated provisions, some providers say they need whatever automation is available just to stay even.

Managers looking to improve their verification process will have to decide where to begin — at the lower end of the technological process, or the more advanced stage.

Covenant Healthcare, a health system in Milwaukee, handles what it calls the VAC functions (verification, authorization, and certification) in the traditional way, through telephone calls to payers, says Penny Goodyear, RN, MSN, regional director. Covenant uses on-line connections with a few payers to check the payer’s database for patients, but Goodyear describes these arrangements as unsophisticated. The automated part of the process gives only a yes-or-no answer on insurance verification, and registrars must then call two phone numbers to complete the VAC process.

But the health care system is looking to the future by putting VAC at the front end of the revenue management cycle — squarely in the registration realm — rather than splitting it between registration and the billing office.

That will make it easier in the future when registrars have direct connections to payers’ enrollment databases, allowing them to see the details of patients’ coverage on their computer screens.

Goodyear ultimately would like the VAC duties to be attached to the scheduling process, but says technology is not conducive to doing that in quick fashion today. Covenant — which does 60% of its scheduling with physicians’ offices — experimented with verifying insurance during the patient scheduling process, but found that it had a negative effect.

For one thing, if the insurance data in the physician’s office are not accurate, the hospital is collecting useless information. Also, it can be counterproductive to delay the appointment-making process, Goodyear points out. "Our primary goal is to satisfy the physician’s office — they’ll do business with whoever makes [the scheduling process] easiest."

At present, the key to Covenant’s system is heavy use of preregistration — 98% of scheduled patients, both inpatient and outpatient, are preregistered up to two weeks in advance, including the VAC functions, she says.

Goodyear is working with her software vendor to develop technology to support future innovations, and she has learned from experience not to try to adapt her hospital’s processes to an inflexible product, she says.

"We don’t expect them to have what we need at the get-go, but we also don’t just take what the vendor offers," she adds. "We’re committed to understanding the work flow, then working toward what we need."

Emory University Hospital in Atlanta is among the minority of hospitals that contract with an outside company to receive on-line insurance verification from select third-party payers.

The hospital’s computer system accesses the database of National Verification Systems (NVS), a Marietta, GA-based company. In addition to confirming a patient’s eligibility, NVS provides an address to which the bill should be sent, a telephone number to call for precertification, and some additional benefit information. But for clients on the NVS system, all verification is done electronically.

The mailing address and precert phone number are the crucial elements for Emory, says Ramon Velez, CPAR, admissions supervisor. "We’re concerned mainly that the patient is covered and that we get the mailing address and precert telephone number."

As soon as the registrar completes an admission, a keystroke starts the NVS system on a search of its database, then prints out the information within five to 10 minutes, Velez says. For self-pay accounts, the database contains everyone in Georgia who receives Medicare or Medicaid, and the system searches out that eligibility information. All that’s needed is the patient’s name and Social Security number.

The system also will make a correction if, for example, the Medicare code at the end of the nine-digit number is incorrect. Although many Social Security numbers have an "A" at the end, the letter should be a "D" if the patient’s spouse is deceased and the patient receives benefits through that spouse, Velez notes.

The payers listed on the NVS system account for 35% to 40% of Emory’s patient load, he estimates. The figure formerly was closer to 50% before a payer recently withdrew from the system.

Emory has five employees who verify between 13 and 17 accounts a day, including those on the NVS system, Velez says. Verifying coverage for patients not included in the NVS system is a long, drawn-out process. Access employees often remain on hold for up to half an hour at a time, or are forced to call a payer two or three times, he notes. Verifying eligibility without the NVS system would take an extra two or three hours a day, Velez estimates.

"The information we’re getting is excellent," he adds. "I only wish the number of insurance companies [included in the database] was larger."

Several years ago, the Sisters of Charity Health Care System in Staten Island, NY, saw that the growth of managed care was pushing reimbursement issues from the back office to the point of admissions, says Dan Coluccio, administrative director of patient financial services. He began reorganizing his operation accordingly. He moved his patient accounting manager forward to supervise the registrars, at the same time recognizing those employees would need help from automation to do their jobs successfully.

Rely on experience, but offer the best tools

The key to success is getting good insurance information at the front end to avoid problems and delays at billing time, says Coluccio. "But because contracts vary and there are so many, it’s impossible to have large numbers of registrars as educated as they need to be to do the job as well as it needs to be done," says Coluccio. "You rely on experience, bring billers to the front end, but then you give them tools to work with — computer systems and other electronic systems."

At Sisters of Charity, the result of that philosophy is a comprehensive on-line repository of insurance plan information combined with an electronic insurance verification system. When a patient presents to register at one of the health care system’s facilities, the process is as follows:

The registrar keys in the name of the patient’s insurance company, and is prompted by the computer on how to choose from among what could be five different plans offered by that company. It might ask questions such as, "Does the patient have a green, white, or yellow card?" to help make those distinctions.

When the registrar hits the key for the specific plan, the computer displays information about the coverage — prompting the registrar to, for example, call a toll-free number to get prior approval for services.

As the health care system adds, cancels, or modifies managed care contracts, the information files are updated by a person who acts as a liaison with the managed care department.

Meanwhile, the system, developed with Boston-based software vendor SDK, interfaces with a MediAmerica insurance verification system that accesses a MediAmerica database of information on third-party payers.

"While we’re registering a patient, [the MediAmerica system] will go out and verify the patient — checking by Social Security number if it’s a Medicaid patient — and come back and let us know if the patient is eligible," Coluccio says.

Through MediAmerica’s system, Sisters of Charity is able to verify approximately 80% of its accounts electronically — including all of the Medicare, Medicaid, and Blue Cross of New York business, plus about 30% of the commercial carriers. Although Coluccio knows the health care system’s accounts receivables are in better shape as a result of these technological innovations, he says it’s hard to make concrete before-and-after comparisons.

With managed care contracts becoming more numerous and complicated, "we’re trying to hit a moving target," he says. "I’m more inclined to say, ‘Where would we be if we didn’t do this?’ We would have lost ground if we hadn’t made these changes."

(Coming next month: What does the future hold for insurance eligibility issues? Can precert be done on-line? What opportunities does the Internet present?)