How to decrease your costs and increase reimbursement rates by streamlining verification of benefits workflows

Traditional VOB processes require staff members to spend time on hold with insurance companies, manually entering data into multiple systems, and inputting missing information. This workload translates to high labor costs.

Beyond labor expenses, inefficient VOB workflows lead to claim denials, which costs. Revenue Cycle Management: The Art and the Science, published in Plastic and Reconstructive Surgery journal, shares that claim denials cost hospitals roughly $262 billion per year, creating cash-flow issues across the healthcare industry. Research published in Health Affairs examining Medicare Advantage claims from 2014-2019 found that approximately 1.4% of services were denied due to coverage criteria, with nearly one-third of beneficiaries experiencing at least one denied service annually.

Historical data from a 2011 Government Accountability Office (GAO) report on private health insurance denials documented a variation in denial rates, with aggregate claim denial rates ranging from 11 percent to 24 percent across states that collected such data. Furthermore, the GAO report found that denial rates varied across insurers, with one state showing a range from 6 percent to 40 percent among six large insurers.

When verification is incomplete or inaccurate, claims get rejected, requiring costly rework and delaying payment by weeks or even months. Each denial costs a practice between $25 to $117 to resolve, according to industry estimates. 

The impact extends further than just denial costs. Research shows that providers fail to collect 2% to 5% of net patient revenue due in part to inefficient revenue cycle management processes, as documented in the Revenue Cycle Management article. 

The link between VOB efficiency and reimbursement rates

Streamlined verification of benefits doesn't just cut costs, it impacts reimbursement rates. Eva Hibnick from One Body, an AI verification of benefits tool, says that current provider portals and electronic verification tools are not sufficient and are missing information which leads providers to not have a complete picture of the benefits data. “If you don’t know authorization status and you aren’t sure which copay applies, you will likely not get paid by insurance companies. It’s so important to spend the resources needed to make sure you are verifying patient benefits accurately.” When benefits are verified accurately and completely before services are rendered, claim rejections can be decreased. As emphasized in the Revenue Cycle Management article, critical information must be identified during patient preregistration, including deductibles, coverage, changes in insurance for established patients, referrals, and copays.

The 2011 GAO report on private health insurance denials revealed that a proportion of claim denials stemmed from preventable errors. The report found that "coverage denials occurred for a variety of reasons, frequently for billing errors, such as duplicate claims or missing information on the claim, and eligibility issues, such as services being provided before coverage was initiated." Maryland data cited in the report showed that duplicate claim submissions alone accounted for 32 percent of all denials in 2007. Even more concerning, 74 percent of denied claims didn't meet the state's criteria for "clean" claims, those including all required information for processing. These historical findings show a challenge that many denials are preventable through proper verification.

Practices that implement efficient VOB workflows report first-pass claim acceptance rates of 95% or higher, a benchmark cited in the Revenue Cycle Management article as the target for net collection rates. This compares to typical industry denial rates of 5% to 10%, which can be improved through automated workflows. A Health Affairs study of Medicare Advantage claims documented how denial rates increased 60% over a five-year period, with denied spending reaching approximately 0.68% of total spending, this shows the need for proactive verification. 

Five strategies to streamline your VOB workflow

1. Implement automated verification technology

There are several companies that integrate with clearinghouses and payer portals to pull accurate, current information automatically. The Revenue Cycle Management article recommends verifying insurance eligibility electronically before every patient appointment, noting that automation can improve denial rates while reducing administrative burden.

By investing in automation, practices can reduce VOB processing time by up to 70%, freeing staff to focus on more complex cases that genuinely require human intervention. 

An example of an automated tool that can provide you with comprehensive, accurate verifications is One Body.

2. Standardize your verification protocol

Create a checklist that ensures every verification captures the same information such as coverage status, deductibles, copayments, coinsurance, out-of-pocket maximums, prior authorization requirements, and specific coverage limitations for your services. According to the Revenue Cycle Management article, medical coding accuracy should exceed 95%, even higher when coding diagnosis-related groups, as this is critical for favorable audit results. Document this protocol and train all relevant staff. Consider creating job aids or quick reference guides that staff can consult during the verification process. 

3. Verify benefits at multiple touchpoints

Implement a tiered verification approach such as initial verification when appointments are scheduled, re-verification 48-72 hours before the appointment, and real-time eligibility checks at the point of service. 

Automated systems can handle most re-verification, catching the policy changes that would otherwise result in denied claims. Research in Health Affairs found that laboratory services accounted for 76% of services denied under Medicare rules, often due to lacking appropriate diagnosis codes, this shows how even routine services require verification attention. The Revenue Cycle Management article emphasizes how important it is to crosscheck all entries before claim submissions and verifying that claims submitted have indeed been received and processed.

The 2011 GAO report documented that when denials do occur and patients appeal, 39 percent to 59 percent of internal appeals resulted in insurers reversing their original coverage denial. These reversals often happened because additional information was provided during the appeal process, information that should have been verified and included initially. 

4. Integrate VOB with your practice management system

Siloed systems create inefficiency and increase error rates. When verification data lives separately from your scheduling, billing, and clinical systems, staff must manually transfer information between platforms, this is a process that can result in transcription errors.

Modern integrated systems allow VOB data to flow automatically into your practice management software, populating patient records with coverage information, flagging authorization requirements, and even calculating patient responsibility estimates. 

5. Establish clear communication channels with patients

Use the accurate benefit information you've gathered to provide transparent cost estimates before services are rendered. This builds trust, reduces collection challenges, and minimizes the surprise bills that damage patient satisfaction and collection rates.

Consider implementing automated patient notifications that confirm coverage, explain financial responsibility, and request payment for known copays or deductibles at the time of service. As noted in the Revenue Cycle Management article, patients bear higher financial responsibility for procedures, making upfront collections critical to avoiding bad debts. The research recommends providing patient-specific estimates two to three weeks preoperatively, clearly defining their portion of fees and establishing solid payment plans if needed.

Measuring success and continuous improvement

To ensure your streamlined VOB workflow delivers the promised benefits, establish key performance indicators (KPIs) to track progress. The Revenue Cycle Management article identifies several metrics for maintaining revenue integrity:

Monitor these metrics:

• First-pass resolution rate: The percentage of claims paid on first submission, indicating overall revenue cycle management effectiveness
• Denial volume and rate: Target denial rates of 5% to 10% or lower
• Days in accounts receivable: Should be 30 days or less for optimal cash flow
• Clean claims ratio: Should exceed 95%
• Charge capture lag time: Benchmark should be 2 days or less

FAQs

How often should practices review and update their verification protocols?

At least quarterly, to align with payer policy updates and staff performance feedback.

What role does staff training play in maintaining efficient VOB workflows?

Ongoing training ensures consistency, accuracy, and compliance with both payer and documentation requirements.

Are small practices able to afford automated verification systems?

Yes, many vendors offer scalable, cloud-based solutions with affordable subscription pricing tailored for smaller operations.

How can automation affect patient experience?

Automation reduces wait times, improves billing transparency, and minimizes surprise costs for patients.

What is the difference between eligibility verification and benefits verification?

Eligibility checks confirm if coverage is active, while benefits verification determines the scope and limits of that coverage.