No! (Surprise Billing): Verifying Eligibility and Enrollment to Avoid Revenue Leakage

With healthcare organizations’ margins shrinking due to the COVID-19 pandemic, effective revenue cycle management is more critical than ever.

Healthcare organizations need to identify, address, and resolve the leaks in their revenue cycle. Patient scheduling, where the revenue cycle begins, is a great place to start. Claim denials are a major source of revenue leaks, so taking proactive steps to reduce denials on the front end of the revenue cycle is essential.

Claim denials are common and costly. Approximately 9 percent of claims, representing $262 billion per year, are initially denied. For the typical healthcare organization, as much as 3.3 percent of patient net revenue ($4.9 million per hospital) is put at risk due to claim denials. Although about 63 percent of these denied claims are recoverable, it costs providers about $118 to rework a single claim.

Patient ineligibility is one of the top reasons for claim denials, with 24 percent of claims denied due to eligibility and registration issues. When a patient doesn’t have valid insurance, the claim will be denied. Someone who has been a patient at your organization for five years may not have valid insurance this year; the patient may have changed jobs and/or insurance plans. Therefore, insurance verification prior to providing services is crucial to prevent lost revenue. In addition to the provider’s time, other investments are at risk of being written off when a patient’s insurance is no longer valid, including materials and time spent on case preparation. This is why healthcare organizations go to great lengths to verify patients’ insurance well in advance of an encounter. If the patient isn’t covered, the procedure isn’t done.

While most healthcare organizations verify insurance eligibility prior to scheduling appointments, many practices overlook an equally important process—provider enrollment verification. Similar to a patient without valid insurance, when a provider is not properly enrolled with a health plan, his/her encounters will be written off. If providers see patients before they’re enrolled in a health plan, that claim will be denied, bad debt will accumulate, and patients can end up with a surprise bill.

When healthcare providers are not enrolled properly with one or more health plans, or if they have accidentally allowed their enrollment status to lapse (by missing a re-enrollment/revalidation deadline), billing disruption is inevitable. An otherwise clean claim submitted for services will either be denied by the health plan or covered at out-of-network rates. Either scenario could result in a surprise medical bill, as the patient will likely be billed an amount other than their standard in-network fees.

With providers seeing up to 3–4 patients per hour, the financial impact of writing off encounters due to enrollment-related claim denials can be significant. Nevertheless, few healthcare organizations have processes in place for provider enrollment verification as stringent as insurance verification.

How to Avoid Enrollment Claim Denials

Identify: Track and Analyze Claim Denials. To fully appreciate the impact of provider enrollment on your organization’s bottom line, you must quantify lost dollars. To do this, track denial codes to quantify how much revenue (reimbursement) is lost when encounters are written off. For a true, big-picture view, you should track information over a period of time (quarterly, semiannually, and annually). Examine the denial reason codes to identify denials that are due to provider enrollment issues. Do some departments have more enrollment-related claim denials? Use this information to take steps to correct enrollment problems.

Address: Assess provider participation status in all contracted health plans. Conduct par/non-par analyses to identify providers who are either not enrolled or enrolled inaccurately with your organization’s contracted payers. Your goal should be to ensure that all eligible providers are enrolled at their respective billable locations prior to seeing patients. Participation does not end once providers are initially enrolled. Be aware of the re-enrollment/revalidation timeframes of each health plan so that providers remain in-network.

Resolve: Verify provider enrollment status before scheduling patients. Provider enrollment verification must become a standard part of the patient scheduling process—alongside patient insurance verification. When a patient’s insurance coverage cannot be verified, most providers will suspend the scheduling and registration process until the patient’s ability to pay is confirmed. These proactive steps should likewise be taken when a provider’s enrollment cannot be confirmed. Obtain real-time participation status updates and monitor enrollment via your enrollment software’s enterprise-wide dashboards.

Expecting schedulers to call and verify provider enrollment every time a patient schedules an appointment is not realistic. Provider enrollment software simplifies the verification of provider enrollment status by giving schedulers real-time access to providers’ enrollment information. If a provider is not participating with a particular payer or product, they should not be seeing patients. Schedulers should not schedule patients with those payers or products until the provider is participating, or they should re-direct the patients to a provider who has current participation.

TractManager’s Provider Enrollment software and services streamline, automate, and accelerate the enrollment process for government and commercial payers. Our technology-enabled provider enrollment solution conducts par/non-par analyses; provides real-time participation updates; and reduces enrollment-related claim edits and denials through dynamic data validation.

To learn more about our Provider Enrollment solution, which is integrated with our provider contracting, credentialing, and privileging solutions, download the 4 D Provider Onboarding Guide.


Allyson Schiff

Senior Director, Strategy & Growth, Provider Management

Allyson Schiff joined Newport Credentialing Solutions in 2009 and joined TractManager when Newport was acquired in 2018.


Related Blogs:

Related Resources:

Our Solutions Automate and Streamline Your Provider Management Processes.

Learn how our integrated MediTract CLM, Provider Onboarding, and Physician Analytics capabilities deliver measurable results to your healthcare organization.

Share This