Operating margins continue to shrink for healthcare organizations, making it critical to capture every dollar of earned revenue. While your current processes help mitigate revenue leakage, partnering with an external insurance discovery vendor can help you find payment opportunities you're missing—up to seven percent of accounts—potentially translating into millions of dollars annually.
To determine which solution best meets your unique needs, it's vital to properly evaluate potential vendors and their capabilities. This blog will help you ask the right questions and find hidden revenue to maximize yield.
What is Insurance Discovery?
Insurance discovery, also known as coverage discovery, is an automated process designed to identify active insurance coverage that patients did not present or were unaware of at the time of service. Unlike standard eligibility verification—which confirms the status of a known insurance policy—discovery actively searches for unknown policies.
These solutions utilize patient details like name, date of birth, and ZIP code, then cross-reference that data against databases including direct payer connections, clearinghouse data, credit bureau data, and government program rosters. Insurance discovery can be deployed pre-service (during scheduling or registration), at the point of service (e.g., in an emergency department), or post-service (typically within a window after discharge or before accounts reach bad debt status) to capture retroactively activated coverage, such as Medicaid approvals.
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Eight Tips for Choosing an Insurance Discovery Vendor
Tip 1: Find a Vendor With a Proven Track Record of Success
All vendors can talk the talk, but which ones can walk the walk? The answer to this question can determine whether you're successful in your search for an insurance discovery vendor.
Why it matters: A partner with a strong market presence, widely accepted products, and solid performance history offers reassurance of their capability and reliability. A proven track record of success is crucial in a constantly evolving healthcare industry. Experienced vendors can best adapt to change and ensure they're positioned to strengthen your bottom line by discovering the most coverage and revenue opportunities.
What to look for: Choose a partner that owns a product widely accepted and used by the market—and has the performance history and client references to prove it. Instead of guessing what may happen, let a partner's proven results give you confidence to make the right choice.
Tip 2: Find a Vendor That Provides a Seamless Onboarding Experience and Ongoing Customer Support
Whether your healthcare organization is transitioning from another vendor or implementing insurance discovery for the first time, a smooth onboarding process is crucial to getting off on the right foot.
Why it matters: No two healthcare organizations are the same. To achieve a seamless implementation experience, the vendor should be committed to an open line of communication and possess a willingness to tailor an approach based on your requirements and customizations. As the partnership continues, the vendor should provide a clear and accurate picture of what's needed—and be eager to support you should any issues arise so that you can maximize your return on investment.
What to look for: Choose a partner with an open line of communication and willingness to tailor an approach based on your requirements. A partner should be able to provide a clear and accurate picture of what's needed—and be eager to support you throughout the onboarding process with a dedicated team of experts.
Tip 3: Find a Vendor With Comprehensive Coverage Capabilities
Customer support is important, but finding the best insurance discovery solution also requires partnering with a vendor that can find you the most coverage possible.
Why it matters: Coverage goes well beyond the broad categories of Medicare, Medicaid, and commercial insurance. Finding the most coverage requires innovation and rigor. You're at risk of leaving significant dollars on the table if your vendor can't search for hard-to-find coverage.
What to look for: Find a partner that views insurance discovery as a holistic process, rather than as an opportunity to search for various types of coverage at a single stage of the revenue cycle. Look for a vendor that's constantly innovating their solution to maintain their ability to discover hard-to-find coverages. For example, vendors that leverage intelligent automation can search for coverage at every stage of the revenue cycle and go beyond traditional methods to find maximum coverage.
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Tip 4: Find a Vendor That Offers Customization Capabilities
Your insurance discovery needs—just like your patient population and payer mix—might not be the same as your neighbors. And they don't have to be.
Why it matters: Customization factors vary from which coverage you're provided to when in the account lifecycle coverage is returned to you and what pricing model is used. The right partner can account for all these factors and will tailor the solution so that it fits your specific needs.
What to look for: A one-size-fits-all approach rarely provides added value. Find a partner that can narrow or widen their payer search parameters and offerings to deliver the most yield. If you predominately serve Medicare patients, find a solution that offers customized datasets and queries for this payer group. Additionally, an integrated solution—from front-end to back-end—will best position your team to efficiently identify coverage for more recovered revenue.
Tip 5: Find a Vendor With Strong Customer Service
Open lines of communication between you and your partner are important. The market is changing, and your partner should be available to listen and quickly pivot to meet your needs.
Why it matters: Insurance coverage can be complex, as can the results delivered by a partner. Rules and regulations, just like staff and technology, can change over time. While an insurance discovery solution is mostly automated once implemented, the process for getting maximum value out of your results might not be.
What to look for: Commitment to customer service and success is key. Choose a partner that puts action behind the results provided—one that's available to answer questions and keep you on track to recover revenue. An active customer service team might also show a company's commitment to product updates and upgrades.
Tip 6: Find a Vendor That Offers a Flexible Pricing Plan That Aligns With Your Budget and Strategic Goals
Margins are tight for healthcare organizations. While there are varying pricing models for insurance discovery solutions—subscription and contingency-based being the most common—knowing the total potential cost of a solution compared to the potential return on investment is important.
Why it matters: Regardless of the pricing model that works best for your budget, you should be driven by results. Look beyond the bottom-line cost of a solution and assess it against the projected return on effort.
Subscription-based models: These models offer predictable fees, and results are delivered swiftly. With this model, you'll pay the set amount regardless of the volume or value of results you choose to act upon.
Contingency-based models: Alternatively, contingency-based models create a performance-driven environment that benefits both the vendor and the client. With this model, vendors are motivated to generate highly actionable findings, given that their compensation is tied directly to your reimbursement success. This model fosters a partnership where the vendor is deeply invested in the quality of the work, aligning their incentives with your financial recovery efforts.
What to look for: Vendors that offer flexibility and transparency when it comes to pricing are best positioned to fit your needs, regardless of which model you prefer.
Tip 7: Find a Vendor With Flexible Data Delivery Options
Data is a valuable tool and needs to be delivered in a way that's usable. How it's provided will affect your internal workflows and business processes.
Why it matters: You know which data delivery model best aligns with your resources—whether that's through a batch file, integrated within your current accounting system or EHR, or a vendor portal workflow.
What to look for: Flexibility in data delivery is key. Choose a partner that provides information that's easiest for you to use based on your specific needs. Ultimately, it's your data and results—and your investment.
Tip 8: Find a Partner Who Considers Your Success Their Success
You want to know you can count on your vendor to work diligently on your behalf and provide you with the tools and knowledge needed for success.
Why it matters: Success comes in many forms, and goals change over time. Having a clear understanding of how a vendor defines success will help you decide if they're a good fit. A forward-thinking partner can stand behind the results they say they'll deliver.
What to look for: Choose a vendor that continually tries to win your business and is clearly invested in your long-term business goals. You want a partner that can scale and has a well-defined, strategic vision. Ask about the frequency of solution updates and upgrades, and how these changes are prioritized and rolled out.
Key Considerations Beyond the Basics
When evaluating insurance discovery vendors, several additional factors can significantly impact your success:
Integration and Technical Capabilities
Ensure the vendor can integrate seamlessly with your existing systems. Whether you use Epic, Oracle Cerner, MEDITECH, Athena, or other EHR platforms, the insurance discovery solution should work within your existing framework without disrupting workflows. Ask about:
- EDI connectivity and payer network access
- Integration timelines and implementation support
- Data exchange formats and frequency
- Compatibility with your patient accounting systems
Continuous Search and Automation
The most effective insurance discovery solutions don't perform one-time searches. Look for vendors that:
- Conduct continuous searches as patient demographics or statuses change
- Leverage intelligent automation and machine learning to identify more active coverage
- Use hundreds of query permutations and patented data-matching technology
- Provide a safety net so billable insurance doesn't go past timely filing deadlines
Security and Compliance
Given the sensitive nature of patient data, security certifications are non-negotiable. Verify that the vendor maintains:
- HIPAA compliance
- HITRUST CSF certification
- SOC 2 Type 2 certification (where applicable)
- Regular security audits and updates
Measurable Impact
Ask potential vendors about the typical results their clients see, including:
- Percentage of self-pay accounts converted to billable insurance
- Average recovery amounts
- Impact on days in accounts receivable
- Reduction in bad debt write-offs
- Improvements to Disproportionate Share Hospital (DSH) and Dual-Eligible Bad Debt reimbursement
How Insurance Discovery Reduces Patient Complaints and Improves the Patient Experience
One often-overlooked benefit of insurance discovery is its positive impact on patient satisfaction and complaint reduction. When insurance coverage is identified before bills are sent to patients:
- Patients receive fewer unexpected bills
- Collections calls and disputes decrease
- Patient trust in your organization increases
- Staff can focus on higher-value patient interactions rather than resolving billing issues
Healthcare organizations using insurance discovery solutions report significant reductions in patient phone calls related to insurance updates and billing questions, leading to improved abandonment rates and overall patient satisfaction scores.
The ROI of Insurance Discovery
The financial impact of implementing an effective insurance discovery solution can be substantial:
- Revenue recovery: Healthcare organizations typically find billable third-party insurance for five to seven percent of patient accounts, with some cases as high as 12 percent
- Reduced bad debt: By identifying coverage before accounts age, organizations can reduce bad debt by two to four percentage points of net revenue
- Improved cash flow: Collecting from payers is typically twice as fast as collecting from patients
- Cost avoidance: Identifying coverage reduces the need for extensive collections efforts and write-offs
Frequently Asked Questions
How quickly can we expect to see results after implementing an insurance discovery solution?
Most healthcare organizations begin seeing recovered revenue within four to six weeks of implementation. The timeline depends on factors like integration complexity, account volume, and your organization's ability to work identified accounts.
What's the difference between insurance discovery and eligibility verification?
Eligibility verification confirms the status of a known insurance policy, while insurance discovery actively searches for unknown policies the patient may have. Insurance discovery goes beyond standard verification to find coverage patients didn't present or weren't aware of at the time of service.
How does insurance discovery handle demographic discrepancies?
Advanced insurance discovery solutions identify and highlight demographic discrepancies between hospital and payer data (such as "William" vs. "Bill") to ensure clean claims are billed. This helps reduce denials caused by minor data mismatches.
Can insurance discovery solutions work across multiple facilities and states?
Yes, the best insurance discovery solutions are designed to work across diverse healthcare organizations, including multi-facility systems operating in multiple states with varying regulations. The solution should be customizable to accommodate different state requirements and payer mixes.
What kind of support should we expect during and after implementation?
Look for vendors that provide dedicated implementation support, regular check-ins, easy-to-interpret results, prioritized worklists, and custom reporting. Ongoing support should include technical assistance, strategic guidance, and product updates to ensure continued success.
Make an Informed Decision
Selecting the right insurance discovery partner is pivotal for enhancing the financial performance of your healthcare organization. By considering factors such as a partner's track record, support during onboarding, coverage capabilities, customization options, customer service, pricing model options, data delivery flexibility, and commitment to your success, you can make an informed decision that maximizes revenue recovery and strengthens your bottom line.
An end-to-end insurance discovery solution can act as your compass—leading you to the hardest-to-find coverage and helping you protect the revenue you've earned.
For a complete roadmap to selecting the right insurance discovery vendor, download our Insurance Discover Buyer’s Guide. You’ll find more information on the tips discussed here, as well as four additional tips to further assist you in finding the right partner to meet your revenue goals.
