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 By John Kivimaki
Director of Patient Accounts
Mary Rutan Hospital
Seeing the Value of Electronic Eligibility Verification
Before we started working with RelayHealth, we didn't do much eligibility checking at Mary Rutan Hospital, a 105-bed facility in Bellefontaine, Ohio.
If we didn't get a card from Medicaid patients, we would call a voice response line to see if the patient was covered. Patients with commercial insurance would usually present us with a card, but that did not guarantee coverage.
Unfortunately, we could not verify eligibility in a timely manner. With Medicare patients, we just took the information from a previous account or the patient's card. When patients had commercial coverage, we accepted the information on their cards, because we simply did not have the time to consult payor Web sites and make phone calls to verify eligibility before the bills were generated from our hospital information (HIS) system.
When our revenue world started to change, we felt an even greater need for quick eligibility verification. More uninsured patients, an increase in the number of high-deductible health plans and the growth of Medicare Advantage Plans (which enable beneficiaries to receive healthcare through a variety of commercial health plans) made it even more crucial for us – and for our patients – to address coverage issues.
Why? Many of these Medicare Advantage patients arrived without their cards, and we erroneously processed their bills through Medicare instead of the specific Medicare Advantage plan. In addition, we didn't address their payment responsibilities at the point of service, and frequently co-pays and deductibles would not be paid.
Automating Eligibility Checking to Realize Results
In 2004, we addressed this problem by serving as a beta site to develop the HIPAA 270/271 eligibility process with RelayHealth.
Together, we developed a batch eligibility process where Medicaid account files from the previous day's registrations are accessed by RelayHealth's RevRunner and downloaded into the state's eligibility data base. Results are returned within the day to the HIS where reports are generated to correct any outdated information. We now use the batch eligibility process for approximately 25 payors. The eligible and ineligible responses received back from the payors are entered into our HIS.
Identifying self-pay patients for Medicaid: Electronic eligibility verification has created a windfall of sorts for us. When we used the technology to automatically identify whether self-pay patients were eligible for Ohio Medicaid, we found that many patients were qualified for assistance, but didn't realize it or had not applied for Medicaid.
Because Medicaid allows you to go back for a full year for eligibility, we went through all self-pay accounts and identified more than $300K worth of revenue from Medicaid-eligible patients. From 2004 to 2007, we uncovered more than $1 million in Medicaid-eligible revenue — all monies that never would have made it into our ledger book had we not started checking eligibility electronically.
Expanded connectivity to commercial payors: By adding electronic connections to 25 major commercial payors, we now can quickly receive eligibility reports that tell us if a patient is eligible for coverage according to the individual plan's benefits.
And results continue to materialize. For example, from September through December of 2008, we verified eligibility on 161 patient accounts from these payors, worth $85,494 in revenue. If we continue to realize such results, we could net more than $250K in additional revenue annually.
Prior to using the electronic system, this money would have been written off to bad debt. In addition, identifying eligibility early in the process helps us cut costs by reducing the time our staff must spend to produce statements, verify eligibility or chase bad debt.
Taking it to the Next Level: Real-Time Eligibility Verification
Our next step is to implement real-time eligibility verification via an electronic dashboard. Once implemented, our staff will be able to review eligibility at a glance and verify the right insurance, identification numbers and address at the point of service.
 With verification of insurance prior to service, we will be
able to address co-payment and deductible issues with
patients immediately. This will greatly enhance our
point-of-service cash collections as well as
reimbursement potential down the line.
With accurate insurance information, we will immediately
bill the correct payor for the correct amount, eliminating
delays in the reimbursement cycle.
With correct patient addresses, we can confidently send
statements and not have to spend time investigating
potentially forged addresses. Patients will receive their
statements, and we can expect more timely payments for
their deductibles and co-payments.
Realizing Verification Improves Revenue Cycle Performance
The significant results we've achieved to date have convinced us that addressing eligibility is one of the most effective ways to improve revenue cycle performance. Just the impact to the bottom line from our eligibility verification of bad debt accounts illustrates its value. We look forward to the increased benefits of making the process real time.
John Kivimaki is Director of Patient Accounts at Mary Rutan Hospital in Bellefontaine, Ohio. In 1993, he was selected as "Receivables Manager of the Year" by Zimmerman and Associates. This award recognized the most innovative financial managers in the healthcare industry. He served on the Ohio Hospital Associations' ABC (Admitting, Billing, and Collections) Committee for four years, and is on the editorial boards for HARA (Hospital Accounts Receivable Analysis); "The Receivables Report" newsletter; and "Health Care Billing and Collections Manual." In addition to his membership in the Healthcare Financial Management Association (HFMA) Central Ohio Chapter for 20 years, he is also a member of the Central Ohio Patient Account Managers (COPAM), having served as treasurer and past President.
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