A Conversation with Stephen J. Herman, MD

herman: Eligibility verification can help organizations ensure accurate data, avoid unnecessary busy work, and minimize revenue loss. Important information is displayed to a practice when verifying eligibility. This may include the patient’s status with active coverage vs. inactive coverage, primary and secondary payer details (which can often be difficult to determine), claim submission address, and demographic data about the patient that, if incorrect, could lead to a denial.

Industry research generally states that 25 percent to 30 percent of claims are denied on first submission. Denied claims are typically “reworked” and resubmitted, which entails significant expense. Resubmitted claims may have more than one problem. When a medical office is provided with detail about the denial, the insurer typically lists a single issue to be resolved. The office fixes this issue and resubmits, but the next problem causes a subsequent denial. Thus, it may take many passes to finalize claim acceptance.

Given this scenario, it is critically important that as many details as possible are correct when a claim is first submitted. Eligibility verification is an important component to ensuring accurate claims. Industry literature states that information received via an eligibility verification process can enable practices to correct about one-third of all denials. Practices should perform this important work step.

With the impact of the Deficit Reduction Act (DRA), imaging centers can no longer afford to miss out on revenue that could be lost due to denied claims. These practices are also seeking cost containment opportunities. Getting a claim right on the first pass can eliminate significant expense associated with rework.

Eligibility checking can also be important to help clarify and enhance efficiencies surrounding the patient’s portion of the bill. Traditionally, patients are billed for their portion of an exam after the carrier has paid its portion and sent the patient an EOB (explanation of benefits), which details copay, co-insurance and deductible information. In this scenario, the practice mails invoices to the patient – often a month or more after the procedure is performed – then waits a month or more to receive payment, sometimes after a number of reminder letters. This results in a lag on payment, and can also be cumbersome for the patient, thus straining patient relations.

A typical eligibility response contains current status of the patient’s deductible, as well as any copay or co-insurance information for the patient’s plan. This portion of the bill can be collected prior to the procedure being performed, eliminating the expense and delay of waiting until insurance information is processed and avoiding reactions from patients who are surprised when seeing the bill.

Until recently, imaging centers have not, in general, verified insurance status. The DRA has driven organizations to seek new opportunities to reduce expenses and increase revenue. And while eligibility verification can provide tangible results, many imaging centers still do not perform this step because it introduces a new function into their organizations’ workflow. In many practices, staff members are pressed to perform numerous tasks to register a patient – time is not available to check insurance.

Even for practices that want to check insurance eligibility, the process can be cumbersome. Generally, it involves making a phone call to the carrier, and often being placed on hold for long periods of time.

More recently, many carriers have enabled practices to verify insurance via the Web. However, this has also proven cumbersome for many practices, as it involves going to each individual carrier’s Web site, navigating to the appropriate page, and entering username and password information, which often differs across carriers. Even when getting eligibility information online, each carrier displays details in a unique format; thus, staff members spend time locating specific information. An imaging center may need to hire a more senior person to perform the eligibility verification function, translating into higher human resource overhead.

herman: MedCurrent Verify is a user-friendly application that runs on an Internet-enabled PC in the imaging center. The system is HIPAA-compliant and requires a basic log-in. This single log-in, however, provides access to eligibility verification from more than 350 carriers, eliminating the need to navigate and log into each individual site.

The solution provides a single input window where the user enters a few fields of data in order to locate the patient’s insurance details. Some carriers have unique requirements for data. In these instances, MedCurrent Verify clearly displays more details about the required information.

Responses are returned in realtime, usually in about five seconds, displaying current information directly from the carriers’ system. Responses are displayed in a consistent, easy-to-read fashion regardless of the carrier, making it straightforward to locate information about the patient, his/her status, and other details.

MedCurrent Verify is provided as standalone software for use on an office-based PC. Or, with the solution’s toolkit, RIS vendors can integrate it into their solutions. When integrated, patient information is pulled from RIS-based data, thus eliminating redundant data input.

herman: Insurance eligibility verification software can help reduce denied claims, thus contributing to increased revenue for the center. Additionally, because claims are more likely to be accepted on first pass, they are likely to be paid more quickly, thus improving cash flow. Collecting the patient’s portion of a bill upfront or more quickly after an exam can also aid cash flow.

For organizations that manually perform eligibility verification, MedCurrent Verify can eliminate rework and minimize busy work, thus minimizing overhead expenses by reducing billing staff resources, whether employed or contracted.

Relationships with referring physicians can also be impacted. Patients scheduled for radiology procedures may not be informed or understand that their portion of the bill could be quite high. If they learn this for the first time in a bill they receive up to two months after the procedure, they may complain to the physician who made the referral to the imaging center. Relations are strained with both the referring physician and the patient.

Research shows that patients who are well-informed of costs are much more satisfied with their healthcare experiences than those who are not. Eligibility verification software can enable imaging centers to more fully inform patients about billing issues.

herman: Yes, many physician practice management systems have embedded insurance eligibility verification functionality or offer it as an add-on module. This function is more traditionally part of their workflow in primary care and, more recently, specialty practices. In imaging, however, it is emerging as a new workflow function. The vast majority of RIS solutions were developed for imaging practices in the pre-DRA era, when insurance verification was less in focus. As opposed to practice management systems, most RIS systems do not provide embedded verification eligibility functionality.

herman: In 1994, I began using voice recognition software in my radiology practice. Over the next few years, I designed a radiologist workstation incorporating voice recognition functionality. This led to my founding of Interpra Medical Imaging Network, a corporation that developed and marketed the product. Interpra was acquired in 1999 by Merge Technologies (now Merge Healthcare). I served as the chief medical officer for Merge until 2003.

During that time, I became keenly aware of the numerous challenges faced by imaging centers, including those dealing with a myriad of billing problems. I joined together with colleagues to start MedCurrent, focusing on the development of technology to streamline insurance eligibility processes.