The healthcare industry is rife with insider acronyms and language. Take, for example, the terminology used to describe various processes in the healthcare financial realm. Revenue cycle management (RCM) professionals use words like insurance eligibility, discovery, and verification to describe activities related to finding and (hopefully) billing commercial or government coverage for healthcare services provided. The challenge is that these terms are sometimes erroneously used interchangeably. When that happens, the term may not accurately reflect the activity.

It is helpful to explore some common misconceptions so that healthcare RCM teams who use or are considering using insurance eligibility, discovery, or verification products can ensure that these products will deliver what is expected.

Misconceptions about insurance eligibility, discovery, and verification

Many RCM professionals operate with the understanding that determining whether a patient has eligible coverage is the same thing as verifying that the services rendered are covered by their policy. Therefore, once they identify active coverage, they don’t conduct further research to determine coordination of benefits (COB) or payer order. They may not realize the problem with this approach until the claim is denied — leading to delayed, reduced, or no reimbursement.

Another common misconception is that the terms insurance “discovery” and “verification” mean the same thing. Most RCM professionals believe that if they run verification on the information available for a patient and it comes back as “Coverage Not Found,” there is no insurance, and the patient should be classified as self-pay. When an RCM professional runs verification, they usually run it against a policy or plan provided by the patient to ensure the plan is active. Yet, running verification only on the patient information on hand is not the same thing as insurance discovery.