OCR Insurance Card Check In: How to Cure Payment Dysfunction in Healthcare

Every year in America, $190 billion in unnecessary spending goes towards the administration of healthcare payments. The time, money, and procedure spent on collecting, processing, posting, and reconciling payments is labyrinthine at its best. Insurance companies and customers pay at different times in the payment cycle, complicating the tracking process. 10% of insurance claims get denied, causing 35% of denied claims to be reworked and resubmitted. The work required to resubmit claims costs up to 18x more than a claim correctly filed the first time, and often, the error that caused a claim to be denied was a simple case of incorrect patient identification or failure to receive prior authorization. 90% of denied claims are avoidable, so it’s time to start avoiding them.

Dysfunction in the payment system doesn’t only cause problems for healthcare providers. It also lays an undue burden of stress on patients. When it comes to healthcare, most Americans (particularly Millennials and Generation Z) want to receive price estimates upfront. However, only half of the estimates they are given are accurate. This is a problem because 67% of Americans worry they could not afford a medical bill higher than they plan for. That number includes people with employer-sponsored insurance. Receiving a surprise charge in a medical bill is all too common; in 2018, 59% of consumers were shocked by how much they had to pay in medical bills.

What causes medical costs to be so unpredictable? There are numerous factors at work, but a major one is the growth of high deductible health plans (HDHPs) in popularity. 19.7 million Americans are enrolled in high deductible plans. From 2007 to 2017, HDHPs with health savings accounts grew 450% in usage while HDHPs without savings accounts grew 231%. Unfortunately, patients who switch to a high deductible health plan often experience higher out-of-pocket costs, confusion regarding payment responsibility, and an increase in unexpected medical bills.

Furthermore, the current payment processing system is plagued with inefficiency. A $20 copayment in cash can cost a practice $50 to process. If so few as 100 denied claims a month were instead correct the first time, the average practice would save $37,000 a year. For the average hospital, eliminating rework on claims could save them $149,000 a year. Mistakes occur when systems aren’t interoperable, meaning they cannot be used together. Manual data transfer between systems is both labor intensive and prone to error. The switchover also creates difficulty verifying insurance eligibility.

How can the payment system be fixed? One solution to arise initially from the COVID-19 pandemic is increasing contactless check in, OCR insurance cards, and payments, and one company offering this service is Practice Squire. Pre-registration collects necessary data like photo ID and insurance card, and can confirm insurance coverage is valid on the date of service. This includes checking for prior authorization and identifying accurate, upfront pricing estimates for individual patients. Automated insurance eligibility verification can save an average practice 11 hours of administrative time every day, up to $4500 per month.

Source: PracticeSquire