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What is Insurance Discovery and Why Does It Matter For Your Hospital?

February 16, 2024
Hospital admin on computer

In a perfect world, hospitals would have organized files of patient demographic information, each with a neat and tidy guarantee of coverage. But in reality, hospitals deal with self-pay accounts, bad debt, write-offs and uncompensated care on a regular basis. These elements are a regular part of the industry, but with the right insurance discovery tools, your team can fight back.

What is Insurance Discovery? 

Insurance discovery is the process of finding active billable insurance on self-pay patients who present without coverage.

Self-pay patients have a significant impact on bad debt and high levels of collections for hospitals. Insurance discovery services find hidden or unreported insurance quickly and easily with one exhaustive search.

Solutions use best practice search methods, algorithms and machine learning to search historical data, public databases and private data sources usually proprietary to the software creator. Results include primary, secondary and tertiary sources of coverage from both government and commercial payers.

The Evolution & Current Relevance of Insurance Discovery 

There are many reasons why a patient may present as self-pay. A patient may not realize they have insurance or, for any number of reasons, may omit knowledge of their insurance. Human error can also factor in. Perhaps the front desk staff forgot to ask a patient to update their health insurance coverage and it happened to change. 

Additionally, insurance is simply difficult for many patients to understand. Plan details, explanations of benefits and personal situations, which all factor into available coverage, can change rapidly. Patients often misunderstand their insurance rather than intentionally misrepresent it. 

However, by the time the claim is denied or responsibility for the bill is placed entirely on the patient, they have already returned home. From there, it becomes extremely difficult to track them down to receive payment or information to rework a denial. The result is often uncompensated care, or lost revenue that occurs when a hospital provides care and does not receive payment in return. 

Health insurance discovery is the first step to combating uncompensated care and the foundation of a healthy revenue cycle. With minimal information from the patient and little work from staff, it automatically checks eligibility for multiple sources of coverage all at once.

The Insurance Discovery Process Explained

The process varies based on the provider, but a sample process may look like this:

  1. Setup: Including onboarding, file creation and portal or SFTP setup. The final file to run through an insurance discovery solution usually includes data like the provider NPI, patient account number, name, date of birth, gender, admit date, discharge date, zip code and total charges. Typically, this data can be extracted from an A/R file.
  2. Initial report creation: Once the file has been uploaded, the software takes over, completing data mining and running a full exhaustive check of potential payers for indicated accounts.
  3. Claims are re-billed: Once coverage is found, claims can be updated and billed to correct insurance. This must be done quickly, as payers have different timing requirements for filing (usually 90 days after service). A good solution should complete this process in 10-30 days. 
  4. Receive reimbursement: After claims are billed correctly, the hospital receives additional reimbursement and successfully reduces uncompensated care.
  5. Monthly reporting: As this work continues, software generates a monthly report showing data including how many hits the software got and how much money the hospital received in re-submitted claims.

Why is Insurance Discovery Important for Hospitals?

Simply put, healthcare, like any other business, needs profit to exceed expenses. Uncompensated care is one of the biggest contributing factors to an unhealthy revenue cycle and subsequent reduction in profit.

There are several key ways insurance discovery impacts a hospital’s operations and bottom line. 

Insurance Discovery Impacts Revenue Recovery

Uncompensated care is a longstanding problem for providers that continues to grow. Between 2000 and 2020, uncompensated care in the United States climbed to an estimated $745 billion. Since then, it has continued to grow, with the American Hospital Association (AHA) consistently reporting annual losses in the billions.

Definitive Healthcare surveyed 3,855 U.S. hospitals between 2015 and 2018. The results found that hospitals with more than 250 beds went from $33.2 million in uncompensated care in 2015 to $39.7 million in 2018. The rate of increase continues to grow at an average annual rate of 6.2%.

The same survey found the smallest hospitals were hit even harder. The average cost of uncompensated care for hospitals with fewer than 25 beds went from $1.8 million in 2015 to $2.3 million in 2018, growing at an average annual rate of 8.5%!

Healthcare providers get reimbursed faster when the identifying process to determine the third-party payments is integrated and automated as part of a full revenue recovery solution. Integrating insurance discovery with in-person eligibility checks and online eligibility checks via a patient portal creates a holistic approach to reducing uncompensated care.

Improve Patient Data Accuracy & Management 

A good insurance discovery solution can identify hidden coverage and verify patient demographic information all in one. With this knowledge, claims can be accurately sent to appropriate payers.

This information is then saved in the patient’s account. Their claims can then be more accurately billed for potential future visits rather than sitting in self-pay and bad debt accounts. The earlier the provider can intervene and find coverage, the better. 

Boost Patient Satisfaction & Experience 

Insurance discovery programs lessen stress for patients by removing the financial burden. With this out of the way, the patient can focus 100% of their attention on healing and treatment. Patients don’t have to endure follow-up calls and emails from the hospital financial department or even worse, bedside visits for eligibility screenings. 

What To Expect from Insurance Discovery Software

A provider should have high expectations of their insurance discovery solution. After all, its impact on uncompensated care is too great to expect anything less. Good software has several key features that give it advantages over existing manual processes. 

Benefits of Using Automated Solutions vs. Manual Process

Outdated manual processes are rife with human error. Solutions provide a number of advantages, including:

  • Searching many payers at once, providing more opportunities to turn bad debt into reimbursable claims.
  • Searching multiple types of payers, including government and commercial payers simultaneously.
  • Checking multiple patient accounts all at once rather than one by one. 
  • Increasing efficiency of a hospital’s revenue cycle. 
  • Reducing write offs and bad debt. Industry statistics show between 1% and 5% of self-pay accounts will be written off as bad debt despite having eligible coverage.
  • Boosting team performance with automation and workflows. 
  • Providing regular reports for team and leadership detailing improvements in uncompensated care levels. 

How Office Ally’s Insurance Discovery Solution Can Help

Office Ally’s goal is to identify additional reimbursement opportunities for your organization. Our Insurance Discovery solution provides a 100% comprehensive review of governmental and commercial payors to expand your revenue recovery. Click here to explore Office Ally’s pricing for healthcare solutions.

Office Ally Insurance Discovery Features & Capabilities

Our Insurance Discovery software boasts the following industry-leading features:

  • More than 20 years of superior coverage detection
  • Average hit rate between 10-30%
  • Currently processing more than 250 million claims per year
  • Supporting over 850,000 NPIs nationwide
  • Customizable reporting tools
  • Constant updates to evolve alongside the fast-paced healthcare industry
  • Free assessment available.

To prove our concept will yield higher returns for your organization, we offer a free, no-risk Insurance Discovery assessment. There is no upfront cost and no fees unless our solution recovers revenue.

Implementation is simple, and results in a complete and trusted back-end revenue recovery loop with guaranteed results. Click here to contact the Office Ally team and set up your free Insurance Discovery assessment.

Case Study & Success Story

When a large health system on the East Coast (made up of 14 locations) had concerns their existing vendor was underperforming in finding coverage for self-pay accounts, it conducted an audit. 

The audit found the company was seeing more self-pay accounts after an expansion and the existing vendor was driving results based on eligible individuals, not eligible claims. The hospital was using more resources and getting fewer results. After the audit, the hospital decided to make the switch to Office Ally’s Insurance Discovery tool. 

Insurance Discovery conducted a comprehensive review of over 87,000 or 100% of the facility’s self-pay accounts going back one year. A total of 21.2% of those accounts already worked by another vendor had “ACTIVE” coverage on date of service and were left on the table as a loss to the provider. 

The return for the facility was significant and swift. A report with eligible claims data was provided to the hospital to bill upon execution of agreement, and assessment was completed in 10-days of receiving target data file. In all, Office Ally recouped $3.14 Million in payments.

If it’s time for your organization to see similar results, start working with Office Ally today.

Frequently Asked Questions (FAQ)

What is insurance discovery?

Insurance discovery is the process of finding insurance coverage for patients by searching multiple payers in an exhaustive check. This process prevents payment from becoming the patient’s responsibility or being written off as bad debt. 

How does insurance discovery work?

Insurance discovery tools use machine learning and algorithms to search multiple public and private databases and cross-reference them with existing patient data. The ideal result is a source of coverage for patients presenting without insurance. 

How long does it take to set up insurance discovery software?

Setup period varies depending on software, but it is extremely possible to see results in as little as 10 days. Typically, the process takes anywhere from 10-30 days from setup to reimbursement. 

There are many reasons to adopt an insurance discovery solution, the strongest of which point to the need to increase revenue while decreasing uncompensated care. Automating the insurance discovery process can mitigate risk, save time, boost team success and decrease bad debt. 

In the fight against uncompensated care, insurance discovery is your first line of defense for improved revenue cycle management. 

For more than 20 years, Office Ally’s industry-leading team has worked to identify reimbursement opportunities for your organization. Sign up for our free insurance discovery assessment: