Dec 18, 2023 2.5 min read

What You Need to Know about Insurance Verification and Authorization for Better Reimbursements

There are several steps involved prior to providing dental services and the submission of claims. If not done accurately, these steps can lead to claim rejections and denials. The only way to prevent this is to verify that every aspect of preparing claims is accurate. Two processes that a lot of practices make errors in are verifications and pre-authorizations. Insurance verification and authorization belong to the initial, crucial stage of the RCM or dental claims billing process.

What Exactly Are Insurance Verification and Authorization?

Insurance Verification

Insurance verification is the process of confirming that a patient’s insurance policy or plan covers all the services that are scheduled to be provided. It involves confirming a patient's insurance plan details and other information that will be required to submit the insurance claim. It is important to verify all the information, no matter how trivial it may seem, with the patient records so as to find any gaps or to determine the legitimacy of the claim. Even the smallest of mistakes, like a patient's date of birth or a misspelled name can result in an immediate rejection.

Insurance Authorization

Insurance or pre-authorization, on the other hand, is the process of getting approval from the insurance provider to perform specific services. The approval is to be sought before providing any treatment, as it determines whether or not you will get paid for the services provided. The chances of a claim being accepted or rejected are directly affected by this process. This is used by the insurance payer as an efficient means of ensuring quality and cost management while paying the claim.

You will, most likely, need to submit a treatment plan to the insurance provider for review. This will include a detailed description of the proposed treatment as well as the estimated cost of services. They evaluate it according to predetermined criteria and carefully examine the request to determine whether the recommended treatment corresponds with the illness that the patient has complained about. If the insurance company approves of the treatment, they will issue an authorization letter, which confirms that they will pay for the services provided.

Difference Between Insurance Verification and Authorization

The pre-authorization process starts when the treatment for a patient needs pre-approval from the insurer, as opposed to insurance verification, which is carried out before submitting claims and before providing any of the service.

Prior authorization is concerned with gaining prior approval for services, whereas insurance verification is concerned with the process of drafting and filing medical claims and receiving payment for patient care.

Practice staff needs to be familiar with the CPT codes for the services for which pre-authorization is required for the process to run smoothly. Verification of insurance focuses on eligibility, active or inactive status, and coverage status.

Common Challenges With Insurance Verification and Authorization

Navigating insurance verification and authorization is an ongoing process and lapses can cause roadblocks in your RCM. The most common challenges with these are the inaccuracies in patient details and a lack of understanding of dental codes and coverage limitations. These challenges can often lead to patient dissatisfaction and uncollected payments.

Both processes can be time-consuming but once you have an effective system in place, the process becomes smooth and reduces glitches in your RCM. They can go a long way towards saving time, avoiding denials and delays, maximizing reimbursement, and improving patient care and satisfaction.

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