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What Do You Need to Know to Develop Medical Insurance Verification Software?

Paul Kovalenko Paul Kovalenko | January 19, 2023 | 12 min

Medical insurance verification software is critical for mitigating healthcare fraud. Although medical insurance fraud is considered a felony in the eyes of the law, it is ridiculously common. The Coalition against Health Insurance Fraud reports that medical insurance fraud costs the nation an estimated $308.6 billion annually. 

Also, the medical insurance market is consistently growing and is estimated to hit $4.15 trillion by 2028. The best bet for insurance brands and medical businesses to keep up with the ever-rising demand for health insurance plans and meet patients’ expectations is to leverage technology. In other words, developing health insurance verification software should be the priority of every insurance provider that wants to reduce coverage-related claim denial, save time, and be the people’s favorite. 

But who needs medical insurance verification systems development? It’s useful for insurance providers, hospitals, medical practices, and for tech brands looking for software partners to build a user-based insurtech and healthcare solution at a fair price. 

In this all-in-one article, you’ll understand how the health insurance verification process works. You’ll also learn how to manage and create insurance verification software and how custom healthcare software development differs from commercial IT products. 

What Information Does the Program Contain?

It’s important to understand what information the medical insurance verification program contains to know what to expect.   

Patient’s eligibility status 

If you run a hospital, private practice, or any medical business, you want to know if patients have medical insurance. This is popularly known as real-time insurance benefits verification; so called because it shows whether a patient is indeed covered for care. The medical insurance verification software confirms a patient’s active coverage with the insurer and automatically forwards the result to the doctor. 

Patient’s biodata

The program shows insurance cardholders’ biodata, including their personal and demographic information such as their name, address, date of birth, social security number, and phone number. It also contains the patient’s medical diagnosis, policy number, and group ID number (if applicable). 

Patient’s medical insurance policy type

The policy type determines covered benefits. For instance, Medicare does not offer dental insurance. Always note the insurance plan and what it offers. Available policy types include :

  • Government-sponsored health plans such as Medicare, Medicaid, Children Health Insurance Program (CHIP), Tricare, among others.
  • Health maintenance organizations (HMOs).
  • Point-of-service (POS) plans.
  • Exclusive provider organizations (EPOs).
  • Preferred provider organizations (PPOs).
  • High-deductible health plans (HDHPs), which may be linked to health savings accounts (HSAs).

Patient’s network information 

Unless it’s a medical emergency, many insurance providers do not reimburse out-of-network claims. The verification program will show patients’ network information, such as in-network benefits, out-of-network benefits, referral requirements, and applicable financial responsibilities. 

Plan exclusions and service limitations

Using the verification program, you’ll know what’s covered and what isn’t at a glance. It’s not news that claims related to non-covered services are automatically denied. 

The program also indicates payout conditions such as limits, annual maximums, co-pay, co-insurance, and plan deductibles. 

Patient’s authorization status

Insurance brands will automatically deny claims involving surgical or special procedures without pre-authorization. The beauty of the verification program is that it shows whether or not a pre-authorization is required by the insurer. 

How does the Health Insurance Verification System Work?

In simple terms, insurance verification software communicates with the insurance company and fetches the patient’s coverage information. 

The health insurance payout cycle begins when a patient schedules an appointment to see a medical specialist. As a prerequisite to booking, hospitals and medical clinic request demographic and insurance information. The purpose is to double check:

  • If the patient’s insurance coverage is active.
  • If the patient’s name and date of birth match with what’s on their insurance card.
  • Covered and uncovered medical services.
  • Applicable co-pay and deductibles — the insured’s financial obligation.

Prior to tech solutions, medical insurance verification was entirely a manual process. Just to confirm a patient’s benefit, the medical provider’s front desk staff would contact the insurance company either by phone, fax, or by logging into many online platforms. The entire industry of third-party companies exists to breach the communication gap between medical and insurance providers. However, software solutions have been created to solve this problem. 

Insurance Verification System Features

Automating health insurance verification software requires a set of features to enable the system: 

EHR and HIS integration capabilities 

Facilitates error-free transfer of patient data by integrating the software with your existing EHR and HIS systems. You’ll need your staff to manually enter patient data and details of services for this integration to be possible. 

Real-time insurance eligibility verification

Insurance verification software is pretty good at quickly fetching patients’ data. Once you enter a new patient’s insurance details, it sends a real-time request to the insurer and informs you of the coverage and benefits available for patient care. This is way better than the insurance card, which can be outdated, fake, or unreliable. 

Batch workflows

Take a wild guess at how many new patients walk through the doors of hospitals per day. Now, imagine the nightmare of manually processing each patient’s insurance data, one after another. Insurance verification software offers batch workflows, which can process multiple patients’ inquiries at the same time. 

Data error scrubbing

The insurance verification system can automatically identify documentation and coding mistakes, as well as missing information, and prevent incorrect input. This feature helps in limiting claim denials. 

Data resubmission capabilities

The data resubmission features allow automatic correction and subsequent resubmission of information to the insurance company. 

Pre-authorization capabilities 

This feature can automatically process pre-authorization requests for applicable medical procedures. 

Other Features

✅ Notifications and alerts features inform you of changes as well as uncovered charges not included in the patient’s plan.

✅ Dashboard feature helps you investigate coverage information and automatically get verification details.

✅ Automated verification automates the verification process and determines if patients with upcoming appointments will be covered on the scheduled date.

✅ The insurance reporting feature allows a single-screen check of certain information over a specific timeframe. 

✅ The insurance payment calculation feature allows error-free calculation of co-pays, co-insurance, deductibles, and benefits coverage.

Need help building a medical insurance app?
Contact Langate today

Benefits of Using the Insurance Verification Software

Among all the benefits, insurance verification software allows you to:

Facilitate fast payout and save time

The verification program gives quick and timely feedback, making sure that eligible patients receive prompt medical care. Out-of-network claims that are not covered are immediately rejected, saving time for all parties involved. 

Prevent denied claims 

More often than not, denied medical insurance claims are due to the provision of uncovered services and data errors. Only a very small proportion is due to medically necessary issues. 

Understanding how to develop medical insurance verification software can help reduce the rate of rejected claims and denials. 

Mitigate medical insurance fraud and identity theft

Medical insurance fraud or theft is not a victimless crime. The financial burden costs the healthcare industry and insurance organizations billions of dollars every year. 

Building a medical insurance verification software will ensure that only legit patients receive insurance coverage. 

Worthy mention: You may be wondering — ‘how frequently should patient insurance information be verified?’ Well, the answer is monthly or every time the patient requires medical attention. This is to catch any coverage or deductible changes. 

Improve staff productivity

Manually performing insurance verification requires asking for insurance-related documents, inputting them into the portal, and contacting the insurance company. You’d need a medical billing system to approach insurance top guns like Medicare, Blue Cross, and Medicaid. This takes up the bulk of staff time and reduces productivity. Automating your insurance verification process hastens the process and optimizes workflow. You can save even more time for your staff by creating a medical billing solution. Read our article on how to develop medical billing software to save even more time for your staff and prevent possible errors and mistakes.

Expedite new patient registration process

Using insurance verification software simplifies front desk confirmation of a patient’s eligibility status. Because the process is much faster, it cuts down patients’ waiting time and frees up staff time.

Steps of Creating a Medical Insurance Verification Software

Creating medical insurance verification software is simple — you need to decide, contact, plan, try, and launch the product. Now, let’s get down to brass tacks. Below is a step-by-step guide on how to create an insurance verification program:

Step 1 — Determine and collect the primary requirements of the stakeholders

Every good API technology is user-based. We recommend starting by collecting the core needs of every user of the future software. Then, consult a trusted software development organization. Available options include:

  • Cooperating with a technology partner like Langate.
  • Outsourcing certain tasks to a dedicated IT provider.
  • Using the services of an on-shore Tech Organization.
  • Hiring a skilled in-house IT staff.

Certain factors, such as budget, project complexity, and the total cost of the product, will depend on your choice. For instance, most technology partners provide the required skill set and business analysis at a fair price. Speak with a professional software development team to figure out the number of features you need to get a custom medical insurance verification software. 

Step 2 — Gather the results of the business analysis 

Get the results of the research done by the software development team. Always choose a team with expertise in health tech and insurtech solutions because they will pay attention to every challenge your medical staff is facing when verifying health or dental insurance. 

Coming up with a business analysis result, the tech team will then:

  • Recommend software features that can solve your needs.
  • Provide SRS data report containing detailed software and design information. 
  • Plan to create a minimum viable product (MVP).

Step 3 — UI/UX Design

For people to love your product and want to use it, it should have an appealing and user-friendly design. UI/UX designers create images, animations, and the overall style of your software to make an intuitive interface so your users won’t struggle while navigating it. Only after that can you get to the development (coding) itself.

Step 4 — Development

Once you finish your research on the target audience and develop an intuitive and attractive design, your technical partner or development team can get to the coding, preparing to launch a fully-functional product. Important note: at this stage, you should already have a clear marketing strategy regarding your solution so it would reach wider auditory when launching.

And always remember that development is incomplete without having test engineers who provide QA services. They will test the user interface and do comprehensive performance testing. They also check for malware and bugs that can affect the product’s functionality. 

Step 5 — Support and Maintenance 

Even when the solution is ready for use, the final product will always require ongoing support and maintenance in case you need new features or enhancements. 

Cost of Creating Software

So what is the cost of creating health insurance verification software? Well, it depends on the feature set, the size of the medical organization, and the number of developers you hire. Most developers charge on an hourly basis. 

Know this! The software will be built from scratch and will require a lot of planning. We recommend getting a roadmap and planning your budget before starting. Also, get a quote from the development team and have a rough estimate of what you might pay to make medical insurance verification software. 

Let’s review the estimated price for MVP (Minimum Viable Product), as it’s the earliest version of the software you can present to your customers. Usually, MVP is used to assess the software’s usability, functionality, and feedback and determine what features need to be added or removed before the final launch. In our case, it will do perfectly to get a rough minimum price to create software. Let’s say you hire a technical partner for $65, then the overall cost of developing will be as follows:

Defined Tasks or FeaturesDevelopment Time, hEstimated Pricing, $
Road map and pre-development work: Involves planning of software structure, finalizing requirements, continuous integration, server setup, and more.~904,500
Development of standard features:
– Data management
– Insurance verification
~70-1503,500-7,500
Development of other features:
– EHR integration
– Error scrubbing
– Batch workflow
– Data resubmission
~200-30010,000-15,000

Note that the eligibility verification costs here are very approximate, and it’s best to discuss them with our technical team. Always have the full picture — ask about design and other expenses like support and maintenance. We can bring your idea to life and are ready to develop your product.

Consider Langate Your Trusted Partner

At Langate, we’ve been providing healthcare technology for medical professionals and insurance companies for more than 20 years. We prioritize user experience and make complex custom health software with a user-friendly interface. You don’t need to lose sleep when you get us onboard because we will take full charge of the technical part of your project — from roadmap to launching and maintenance. 

We believe that great healthcare products are born of communication, transparency, and synergy between you and our team. We take every step and make every decision together. 

Want to see real cases? Let’s take our client, Approved Admissions, who leveraged our expertise in the business to create a bug-free insurance eligibility verification system. Their core need was to simplify data integration for all staff members in their 700+ facilities handling over one million daily transactions. We solved this problem by:

  • Improving the data treatment plans
  • Reshaping the interaction between professionals
  • Establishing data interchange between multiple healthcare systems

Want our experienced developers to help you develop medical verification software? Welcome to the winning team. You are one step away from joining our growing team of satisfied clients. Contact us now to learn about our services. 

Final Thoughts

The health insurance verification software development process is not as difficult as you may think. In fact, it should be a priority for every medical practice and insurance agency that wants to stay afloat. 

Getting a technical partner onboard is your best option, given that you will get all the required skill sets and manpower at a reasonable price. It’s always good to have a meeting with the team to discuss all the ideas and goals, ask questions and get recommendations on what technology stack to use, what’s best for your practice, and a better estimate of the software’s pricing. You are at the right place! So let’s discuss how to do insurance verification system solutions together. 

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