How Insurance Verification and Pre-Authorization Services Support Accurate Documentation

Hi, this is Amber Darst, Solutions Manager at Managed Outsource Solutions.  Today, I will be discussing how insurance verification and pre-authorization services ensure accurate documentation that payers are looking for.

Getting medical claims approved by payers is one of the most daunting tasks faced by healthcare practices. Submitting clean, accurate claims to payers requires practices to ensure clinical documentation submitted with the correct diagnosis and procedure codes along with documentation proving the medical necessity for the procedures. Importantly, medical practices also need to have comprehensive preauthorization and insurance verification services in place to determine patient coverage and benefits under their insurance plan.

00:51 What Payers Look for in Claims

So what do payers look for in claims? The two main things payers look for in claims are – compliance with payer eligibility requirements and good clinical documentation.

Eligibility problems are one of the main reasons for claims denial. Millions of claims are denied because eligibility has expired or the patient or service was not covered by the plan in question. Certain conditions have to be met in order for an individual to be considered eligible for insurance coverage. When they adjudicate claims, payers look for documentation that provides evidence of the patient’s eligibility for benefits.

Payers will also check if prior authorization requirements have been met. Payers require prior authorization for certain drugs, treatments, tests, and other medical services on the grounds that it promotes patient safety and guideline adherence, and helps control healthcare expenditure. When they authorize a service before the patient encounter, payers assign an authorization number that the medical billing service provider should include on the claim submitted for payment.

In addition to checking whether the service is authorized, the insurance company will also assess claims to find answers to questions relating to the patient’s coverage, such as:

Is the patient a member of the plan?

Is the coverage valid?

Is this particular service covered by the benefits of the plan, and so on.

02:23 How Insurance Verification Services Help

Practices need to have an efficient patient eligibility verification process in place. Insurance verification involves checking the patient’s insurance coverage and benefits prior to the date of service to ensure the payment for services. Outsourcing this task is the best option to free front office staff of this cumbersome but necessary process.

Insurance verification and authorization companies are dedicated to preventing denials that can occur due to eligibility problems. With proper verification, providers can check whether the patient’s insurance is active, premiums are paid, services are covered, and deductibles are met.

For insurance authorizations, this service will involve obtaining authorization for certain medical treatments that need to be approved prior to being provided. The company will also follow up with the patient as needed to obtain any additional information required to process the claim. Patients will be informed about their financial responsibility or out-of-pocket costs. After the medical records and billing systems are updated with all the necessary information, the insurance verification company will send the claim on to the payer.

03:44 Good Clinical Documentation

So, let us talk about what is considered good clinical documentation

Inadequate or missing documentation is a major reason for claim denials.  Claims and associated medical records are reviewed for compliance with payer coverage, coding, and billing rules and the documentation should include:

–           A definitive diagnosis that supports severity with the correct ICD-10 codes and

–           The plan of care based on the reported diagnosis as well as the goal of the plan and when the patient can expect to reach the goal

The documentation should be adequate to support the claims as billed. It should provide evidence that the allowed services were medically necessary and actually provided at the level that it was billed. Documentation is examined to see whether they meet payer guidelines relating to medical necessity, preadmission rules, requirements for therapy, formulary and non-formulary medicines, and other payer specific requirements.

04:46 Clinical Documentation Errors

When the medical documentation submitted along with the claim is inadequate to support payment for the services billed, the claim is then considered as having “insufficient documentation” errors. Some other examples of clinical documentation errors include: a missing physician signature on an order, incomplete forms and progress notes, unauthenticated medical records, and no documentation of intent to order services and procedures. It is the responsibility of the physician to ensure good documentation and report medical services using the right ICD-10 and CPT codes.

Medicare’s national and local coverage determinations lay down the standards that must be followed to attain a benefit category and reimbursement. Likewise, all commercial insurance companies have their own guidelines based on the contract. Insurance verification and authorization companies are knowledgeable about these rules and can help practices ensure accurate claims submission and prevent denials.

And that’s it.

I hope this helps. But always remember that documentation and a thorough knowledge of payer regulations and guidelines is critical to ensure accurate reimbursement for the procedures performed.

Thanks for listening in!