How Annual Benefit Resets Complicate Billing and Disrupt Access to Care

Benefit verification is an essential part of the provider-patient relationship. Without prompt and accurate cost verification, patients lose trust in providers and often opt out of necessary care. With instant verification, providers can deliver upfront and accurate cost estimates, empowering patients to make informed decisions about their healthcare.

However, benefit verification is not a once-off occurrence but rather a recurring responsibility. One of the greatest stumbling blocks for healthcare benefit verification is annual benefit resets. When a patient’s health insurance renews, their coverage can change alongside associated costs, deductibles, and visit limits (even if they don’t realize it). This forces providers to reverify patient coverage to ensure accurate billing and whether the provider can still accept the patient’s insurance at all. Failing to do so can result in unexpected out-of-pocket expenses for patients and revenue inefficiencies for practices. 

What are Benefit Resets? 

Insurance benefit resets refer to the annual renewal of an individual's health insurance. 

All Americans receive the opportunity to renew or change their insurance plan once a year during a designated open enrollment period. During the same period, insurers and employers (in the case of employer-sponsored health insurance plans) can make adjustments to the benefits they offer. 

Under the Affordable Care Act, insurance bought through the Health Insurance Marketplace (healthcare.gov) uses the common open enrollment period of November 1st to January 15th. However, open enrollment periods for employer-sponsored health insurance plans can vary. For example, many school districts have their benefits set to renew during the summer when new teachers are hired. 

Insurers tend to consolidate open enrollment periods to mitigate risk and discourage individuals from delaying enrollment. 

While the above stats represent a national breakdown, ask Nirvana for a breakdown of your target patient population. 

Why Benefit Resets Make Benefit Verification More Difficult and Require Increased Administrative Hours

Benefit resets represent a considerable challenge for billers as they can trigger changes to coverage and occur at a high volume during a few, key periods throughout the year. 

Unfortunately, administrators cannot wait for a benefit reset to be highlighted by patients as many are not aware they have taken place or will have an impact on their routine healthcare. Data shows that 80% of Americans spend less than an hour researching their health coverage for the year and most simply renew the plan they had previously. 40% of marketplace participants did not manually renew their plans, instead relying upon auto-re-enrollment. 

During the re-enrollment period, insurers and employers can make adjustments to plans or auto-enroll an individual in a similar but not identical plan. Consequently, patients may assume their coverage has remained unchanged and end up blindsided by a bill. 

Additionally, payers can be slow to update billers on policy changes, in some cases only updating their verification portals in the months following enrollment. 

For this reason, billing teams must remain vigilant during open enrollment periods to ensure that patients’ benefits are being re-verified. However, without sophisticated technical solutions, the sheer volume of benefit resets occurring during common enrollment periods may overwhelm administrators. 

Most independent practices have an average patient load of 1,000. If 83% of their insurance resets during January, an administrator would need to conduct 830 rounds of benefit re-verification. With manual verification taking an average of 10 minutes, it would take 138 hours or 17 working days to complete. Most practices do not have the administrative support necessary to complete this task, resulting in benefits being re-verified as patients seek appointments or not verified at all. 

How Benefit Resets Can Impact Patient Access, Denial Rates, and Revenue Recognition

Using manual verification during a period of intense benefit resets has a direct impact on patient experiences and outcomes. 

At the beginning of the year, manual benefit verification can be particularly slow due to the high volume of insurance plan changes and in some cases, can take up to seven days. This prevents providers from confirming coverage and offering up-front cost estimation when a patient makes initial contact. 

Price transparency is a top concern for patients. Studies have found that 60% will not book an appointment without a cost estimation. Therefore, the inefficacy caused by benefit resets can result in patients canceling appointments or delaying care. In mental and behavioral health, where consistent check-ins are more likely, delays in treatment can have significant repercussions. 

It is also possible that benefits will not be re-verified before a patient’s appointment resulting in an unexpected upfront bill or denied claim after the fact. Patient payments are less reliable than insurance reimbursements and slow down revenue collection while denied claims are burdensome to resubmit, costing 5 to 18 times more than an accepted initial claim. For this reason, most claims are never resubmitted once denied. 

Verifying benefits as soon as possible, before an appointment, is essential for the success of patients and providers. Manual solutions cannot keep up during benefit resets, making them a recurring, costly challenge. 

‍Click here to read how Nirvana’s continuous coverage monitoring automation tool can help providers tackle benefit resets and increase verification accuracy.