Electronic verification has outpatient impact

Expect a healthier bottom line

The benefits of electronic insurance verification are obvious for your inpatient operations, but they also can provide a nice boost to your outpatient bottom line, experts say.

The cost-effectiveness is a major plum for outpatient care because the dollar amounts of missed copayments often are small for each person, but can add up dramatically.

For instance, because individual laboratory tests conducted at your outpatient facilities are not a big revenue source, there may be a temptation not to pursue verification. "Now, many just say, We’ll take the losses [if the test isn’t covered],’ but with this method, the computer’s doing it automatically, for maybe 25 cents, so you don’t have to worry about a huge cost," says John St. George, principal in St. George Consulting, in Canaan, NH.

Is a healthy return on investment important for convincing your bosses to invest in such a system? Ask them if they would be happy with a 200% return on investment from reduced bad debt and better cash flow, not to mention easier insurance verification. That’s what the University of Pittsburgh Medical Center (UPMC) expects within the first three years of using a new computerized insurance eligibility verification system it is installing.

UPMC will use the Integrated Eligibility Service system manufactured by HDX (Healthcare Data Exchange), based in Malvern, PA.

Eligibility checks in real time

"Our ambulatory business is growing quickly," says Chuck Nagy, EDI coordinator at the center. "Without the system, we can’t verify eligibility for a large percentage of our outpatient visits simply because we don’t have the time or an efficient means to do it. As a result, we are not always collecting the patient copayment at the time of registration."

At the 600-member physician group practice of the University of Wisconsin Medical Center, the HDX service is integrated with another scheduling system, says Peggy Campbell, information systems manager.

"It used to take us at least 24 hours [to verify eligibility], and sometimes we didn’t get the information at all," Campbell says. "The payer responsible for 15% to 20% of our $15 million in monthly billings was so overworked they didn’t have time to give us subscriber numbers." Using electronic verification, "We can get the subscriber number right on our existing work stations. In fact, the patient’s eligibility can be checked before the appointment is made."

HDX is one of a handful of companies providing interactive managed care electronic data interchange. It has customers at 250 sites in 36 states, says Steve Shihadeh, general manager. Customers using the service typically complete an eligibility check in a matter of seconds, he says. "On the first [registration] screen, they’ll launch the transaction, and by the time they get to the third or fourth screen, our data will be back."

The eligibility check happens behind the scenes, in real time, so that the registrar doesn’t have to break off the interview and make the patient wait as he or she calls for verification or, at best, walks to another terminal to get the response, Shihadeh says.

Higher returns on investment

Significantly, he says, the eligibility data are integrated into the computer screen. That means when the eligibility response comes back, it doesn’t go to a separate computer station, meaning registrars don’t have to scribble down the information and then rekey it into the registration screen.

The data that’s transmitted to the hospital can include any or all of the following, says Pete Reynolds, manager of marketing and business development for HDX.

• demographic information;

• benefit coverage information such as copays and deductibles;

• the name and phone number of the patient’s primary care physician;

• perhaps, depending on the capabilities of the partners, even precert requirements.

The percentage of the provider’s payer mix that HDX can cover varies by region — from 30% in any market to as much as 90% in very mature markets, Shihadeh says. The cost of the HDX system varies, depending on volume and payer mix, but Reynolds says providers usually can count on a 5 to 1 or 10 to 1 return on their investment from higher reimbursement and less bad debt. When thousands of dollars in reimbursement can depend on determining whether a patient is covered by Medicaid or by a Medicaid HMO, the payback for such a cost outlay can be rapid, he says.