Guide to Insurance Eligibility Verification for Medical Practices
- Nisha Mehta, MD
- Jul 16
- 8 min read
Verifying a patient’s medical insurance is a critical process for every medical practice to help reduce claim denials, improve cash flow, and increase efficiency in revenue cycle management. Improper verification can lead to delayed payment, bills your patient isn’t expecting (and may not be able to afford), and an increased burden on you or your staff to resolve issues. Below, we cover insurance eligibility verification, steps in the process, and tips to improve your protocols so you can focus more on the patient without worrying about payments.
Much of the information in this article has been derived from original material contributed by Cosentus, one of our partners who helps medical practices with their credentialing, billing & coding, revenue cycle management, and accounts receivables (and offers PSG members 5% off services through our affiliate link with code PSG5OFF).Â
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What do we mean by medical insurance eligibility verification?
Insurance verification is the process of confirming a patient’s medical coverage and benefits with their insurance provider before rendering services. This process is critical to the revenue cycle as it:
Ensures that the patient’s insurance is currently active
Identifies what services are covered
Denotes any authorizations or referrals required for services to qualify
Clarifies any copays, deductibles, coinsurance, or other financial responsibilities the patient has
Why is verifying a patient’s medical insurance eligibility important for the revenue cycle management cycle (and more)?
Medical insurance verification helps protect physicians and their practices, as well as patients. Proper insurance verification:
Increases billing accuracy. Verification ensures you have the most up-to-date and accurate information for your patient’s insurance, which reduces the risk of billing errors stemming from incorrect details.
Reduces claim denials. One of the most common causes of claim denials is issues with eligibility. Verifying the patient’s insurance confirms they have active coverage and confirms the details of their coverage prior to providing care. This can help identify potential issues (such as pre-authorization requirements) that may lead to a claim denial if not proactively addressed and discussed with the patient.
Helps you get paid faster (and more accurately). When your practice confirms eligibility in advance, your team can submit cleaner claims that are less likely to be flagged by insurance. This speeds up the receivables cycle, allowing for faster reimbursements and a more predictable and reliable cash flow.
Informs patients of their financial responsibilities. Patients may or may not know their financial obligations for copays or the status of their deductible. They may expect all treatments to be covered because they have insurance, without understanding necessary prior authorization requirements in order for their insurance to cover their portion of services rendered. Verifying insurance ensures patients clearly understand their financial responsibility and are better prepared to cover their portion. This reduces confusion, frustration, and potential billing disputes in the future while helping increase patient trust, fostering a better doctor-patient relationship.
Improves the patient’s experience & satisfaction. Verifying insurance before the appointment allows your staff to notify the patient of any potential hiccups and resolve issues prior to arrival. This expedites the check-in process and reduces wait times, enhancing the overall experience for your patients, which can help minimize negative patient reviews.
Collects accurate payments upfront, reducing follow ups. Having accurate billing allows you to collect the patient’s financial responsibility prior to an appointment, reducing follow ups after services have already been rendered. Chasing down missing information to fix claims and working through rejections not only slows your cash flow, it creates additional administrative burdens for your staff and increases the likelihood of having to write-off revenue in collections.
Improves compliance with regulations. Insurance verification helps you comply with healthcare regulations and obligations per your contract with insurance companies and payors, which reduces the risk of potential legal issues.
What does the insurance eligibility verification process consist of?
There are multiple steps to the medical insurance verification process (we also cover tips on how to improve your process below):
Collect patient information during registration. The patient’s personal and insurance details are taken, including their full name, address, date of birth, contact details, and copy/image of the front and back of their insurance card.
Confirm insurance eligibility & benefits. Verify the patient’s health insurance to confirm the patient’s plan, coverage status, policy limitations, copayments or deductibles, and any pre-authorization requirements.
Confirm referrals (if applicable). If the insurance company requires a referral from a treating clinician, ensure your practice has one on file or reach out to the patient to obtain one prior to scheduling.
Complete pre-authorization (if applicable). If pre-authorization is required for a particular treatment or service, submit the necessary documentation to the insurance company to obtain approval prior to the appointment.
Update and keep records. Document all verified information in the patient’s records for each patient encounter, including the coverage details, copay or deductible, and any pre-authorization or referral information.
Communicate information to the patient. Share relevant information regarding your findings (eligibility status, financial obligations, pre-authorization requirement/status, etc.) to the patient. Follow up with any questions or concerns (or updates) that arise during the verification process.
Once insurance is verified and any required referrals or prior authorizations are obtained, you can see the patient. Make sure you collect any copays or deductibles at the time of service.
If your practice is struggling with the insurance verification process, you may want to consider outsourcing to a third-party company to help improve your practice’s processes and efficiencies.
Related PSG Perk:
Our partner Cosentus​ has been highly reviewed by several physician clients and has helped several of our physician members' private practices with their credentialing, billing and coding, revenue cycle management, and accounts receivable services. Cosentus offers a dedicated team to manage the medical insurance verification process for you. As part of a perk for PSG members, they offer a free professional billing and coding review, as well as 5% off services through our affiliate link with the code PSG5OFF.
How long does insurance verification take?
The insurance verification process can vary in length depending on:
The method of verification you use
The specific policy with the insurance company and the complexity of the coverage
In-network versus out-of-network status (out-of-network may require directly contacting the insurance company, which can slow the process)
Pre-authorization requirements
Internal backlogs at the insurance company (can lead to delays in responses)
Timing of the verification request (weekends and holidays can slow down the process)
It can take anywhere from a few minutes with electronic eligibility verification to a few days with manual verification and/or pre-authorization review and approval.
Best practices & tips on how to verify insurance eligibility and benefits
The following tips can help your practice improve your insurance verification process.
Establish clear protocols & train staff. Establish a standardized protocol for the insurance verification process and consider developing a checklist your staff can reference and use. Provide training to your administrative staff to ensure they clearly understand the entire process, and make sure to keep them updated with any changes in policies & procedures.
Use electronic verification tools. Real-time electronic eligibility verification tools can provide an efficient and reliable verification method that can provide results in a matter of minutes. These tools have access to insurance databases and can retrieve a patient’s insurance information, such as the status of coverage, benefits, and pre-authorization requirements. While staff can manually call or log into payer-specific portals to verify insurance, electronic tools reduce potential errors from manual entry and speed up the overall process.
Verify insurance eligibility prior to a patient’s appointment. Whenever possible, verify insurance before the patient arrives for their appointment. This allows you and your staff to address any potential hurdles (pre-authorizations, etc.) which can reduce wait times and potential frustrations.
Clearly communicate with patients. As part of your staff training, emphasize clearly communicating with patients regarding the importance of keeping their insurance information on file up to date and its impact on their financial responsibility for care. Have staff request insurance information when scheduling a new patient and have patients confirm the current information on file when checking in for a follow up. Remind patients to bring their insurance card for all appointments.
Run verification in batches. If you have a lot of patients to verify, consider batch verification methods, which allow you to verify multiple patients’ medical insurance simultaneously. This can save you staff time and effort.
Should my medical practice outsource its health insurance eligibility verification?
If you are doing insurance verification frequently at a high volume, it’s worth considering outsourcing your insurance verification to a third-party partner. This can help optimize the efficiency of your in-house staff and help keep your staffing overhead costs lower.
A third-party company will also have experts used to handling various plans and policies, including complex plans that can slow down the verification process. They can help provide faster and more accurate verifications, reducing the chances of disputes and streamlining your practice’s revenue cycle management.
Related PSG Perk:
Our partner Cosentus​ has been highly reviewed by several physician clients and has helped several of our physician members' private practices with their credentialing, billing and coding, revenue cycle management, and accounts receivable services. Cosentus offers a dedicated team to manage the medical insurance verification process for you. As part of a perk for PSG members, they offer a free professional billing and coding review, as well as 5% off services through our affiliate link with the code PSG5OFF.
Completing the revenue cycle management cycle
Once you’ve completed the basic process of insurance verification and provide services, a few additional steps to help ensure a smoother overall revenue cycle:
 Document the services provided to the patient, including the diagnosis, treatment, and medications prescribed in their medical records. If you find yourself struggling to keep up with documentation effectively, we have resources (with perks) on our physician career support resources page that might be able to help.
Generate an insurance claim with the patient’s medical information, the services rendered, and any other costs related to services/treatment.
Address any issues arising from the review of the claim and payment processing.
Reconcile the patient’s account with payment received from the insurance company.
Follow up for any remaining outstanding balances, and track the progress of collections as part of your accounts receivables process.
Conclusion
Insurance verification isn’t just an administrative task associated with patient care–it’s a safeguard to help protect your practice’s overall revenue cycle. By training your staff to verify eligibility and benefits before appointments and by communicating clearly with patients, you can avoid denials, improve your cash flow, and help deliver an overall better experience for your patients.
Additional resources for physicians in private practice
Explore related PSG resources:
We offer a free private practice educational series for physicians interested in virtual events to help you start and manage your practice. Sign up for our PSG weekly newsletter for alerts on upcoming events and registration links.