The healthcare industry is rife with insider acronyms and language. Take, for example, the terminology used to describe various processes in the healthcare financial realm. Revenue cycle management (RCM) professionals use words like insurance eligibility, discovery, and verification to describe activities related to finding and (hopefully) billing commercial or government coverage for healthcare services provided. The challenge is that these terms are sometimes erroneously used interchangeably. When that happens, the term may not accurately reflect the activity.
It is helpful to explore some common misconceptions so that healthcare RCM teams who use or are considering using insurance eligibility, discovery, or verification products can ensure that these products will deliver what is expected.
Misconceptions about insurance eligibility, discovery, and verification
Many RCM professionals operate with the understanding that determining whether a patient has eligible coverage is the same thing as verifying that the services rendered are covered by their policy. Therefore, once they identify active coverage, they don’t conduct further research to determine coordination of benefits (COB) or payer order. They may not realize the problem with this approach until the claim is denied — leading to delayed, reduced, or no reimbursement.
Another common misconception is that the terms insurance “discovery” and “verification” mean the same thing. Most RCM professionals believe that if they run verification on the information available for a patient and it comes back as “Coverage Not Found,” there is no insurance, and the patient should be classified as self-pay. When an RCM professional runs verification, they usually run it against a policy or plan provided by the patient to ensure the plan is active.
Yet, running verification only on the patient information on hand is not the same thing as insurance discovery. If the RCM professional does not make an insurance discovery attempt after receiving the “Coverage Not Found” response and decides by default to kick the patient into the self-pay bucket, the probability of collecting reimbursement becomes significantly lower than if the claim was sent to a payer. In addition, self-pay collections efforts drive up overhead.
Finally, RCM professionals often think they can simply run insurance discovery to obtain the same results as they would receive by running insurance verification. This is not true. In fact, if the patient provides insurance information, that policy should be checked by running verification first, prior to running any discovery process to identify additional coverage (and then run again to verify any new coverage found). It is worth noting that many RCM professionals will input minimal information about the patient before running insurance discovery and expect to receive results with a high degree of confidence. In truth, the more information is input, the better the results will be.
Closely related RCM optimization processes play distinct roles
With so much confusion about what these terms actually mean, let’s establish some basic definitions:
- Eligibility — refers to whether a patient’s insurance policy makes a particular healthcare service eligible for coverage
- Insurance Discovery — finds coverage that the patient has but may not know about or did not disclose
- Insurance Verification — verifies whether coverage (provided by the patient or identified through discovery) is active
A best-in-class RCM optimization technology solution should marry these processes to provide users with the most complete, accurate, and reliable data available, as early in the patient encounter as possible.
For example, AI-enhanced, automated tools can significantly improve data quality from the start. Insurance discovery tools have the potential to identify billable primary, secondary, and tertiary coverage in real time, even for accounts that initially returned an “coverage not found” response. They can also help identify retroactive Medicaid eligibility for uninsured patients. Insurance verification tools can then confirm whether coverage is active and perform automated cross-checks on any coverage flagged as inactive, improving confidence in the accuracy of the data.
In terms of financial impact, these tools can lead to considerable revenue gains by identifying commercial or government coverage on claims that might otherwise remain unpaid. For providers, this can mean capturing more significantly more reimbursement and improving revenue cycle efficiency, including a faster time to cash.
Know what your solution can deliver — and what it can’t
Robust, verified coverage data means fewer errors and better results. RCM professionals can leverage the information to make intelligent decisions before a claim is submitted to the payer(s). Top-performing solutions can help improve the clean claims rate, increase revenue, and accelerate time to cash.
But not all solutions are alike, and persistent industry misinterpretation of insurance eligibility, discovery, and verification processes can muddy the waters for even the most seasoned RCM professional. Before committing to an investment in RCM optimization technology, buyers should be certain that they understand potential gaps in their internal workflows, as well as what any technology options under consideration can deliver.
Moreover, if you believe that you are already running “eligibility” or “discovery” but are not seeing the results you think you should be, terminology may be the culprit. Armed with a better understanding of what to expect from each process, you can now re-evaluate current technology capabilities and explore whether it’s time to reset, replace, or upgrade the solutions you have in place.
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About Us
ZOLL AR Boost is the comprehensive, revenue cycle management optimization solution suite that automatically finds, corrects, and verifies patient and payer information. It helps healthcare financial teams capture more revenue, reduce administrative burden, and improve the patient financial experience. The solution delivers accurate, actionable data to reduce claim costs, drive self-pay and high-deductible conversions, and improve revenue collection compliantly. ZOLL Data Systems provides software and data solutions that help RCM teams and healthcare providers improve financial, operational, and clinical performance.
