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Denied Medical Claims Are Costly but Preventable with Patient Identification

The U.S. healthcare system is no stranger to problems, unfortunately. In fact, it has been plagued by a plethora of issues for several years. While some of the problems are definitely solvable, external issues alongside other factors cause the problems to continue. Some of the many problems are astronomical prices, the lack of price transparency, interoperability issues, the abundance of data breaches, medical identity theft, and patient safety issues. While we have covered some of these topics at one point or the other, let’s take a look at another crucial problem, denied medical claims, how they are problematic for everyone, and how positive patient identification can prevent them. 

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Denied medical claims are costly and cumbersome for everyone involved

Denied claims are not a recent problem within U.S. healthcare – most hospitals and health systems are quite familiar with them. One can safely say that denied medical claims are quite expensive – an average hospital can lose around $3.5 million due to them. However, denied claims not only affect hospitals but also insurers and patients, albeit in different ways – let’s see how.

Claim denials in a nutshell

In the U.S., healthcare is closely related to reimbursements from Medicare, Medicaid, and commercial insurers. Patients get health insurance, go to their healthcare provider, get treated, and that’s about it. However, a lot more goes on behind the scenes regarding healthcare reimbursements. 

After providing healthcare services to the patients, the hospital processes the information and sends the claims to the insurance company. While healthcare providers usually get reimbursed by the payer, some of them face expensive hiccups. Due to billing or coding issues, patient identification errors, medical record mix-ups, or other problems, the payer identifies inconsistencies after receiving claims, and they might reject or deny said claims. While some claims can be resubmitted, checking for and fixing the errors is time-consuming, costly, and requires a considerable number of resources. 

All of the above leads to back-and-forth exchanges between care providers and payers. Insurers have to reject claims, caregivers lose out on a significant amount of revenue, and many patients even receive shocking, incorrect bills. However, some even lose healthcare services, especially those associated with Medicaid.

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Let’s take a look at a few statistics to see how Medicaid patients suffer due to denied medical claims. However, do keep in mind that denied claims can be detrimental for any patient. 

A worrying study regarding denied claims

A very recent study has shed light on denied claims and how physicians or hospitals are reluctant to see Medicaid patients due to reimbursement issues. 

According to the study, at least 25% of Medicaid claims have been denied upon initial submission. On the other hand, 7.3% of Medicare claims were denied whereas commercial insurers denied 4.8%.

Moreover, the study also states that around 17% of revenue is lost due to billing problems associated with Medicaid patients, whereas the numbers are quite lower for patients covered by Medicare (5%) and other payers (3%). 

While any type of denied claim is extremely costly, the statistics show that the Medicaid ones are quite problematic. Moreover, since Medicaid is associated with low-income families, reimbursements are lower as well.

All of this just leads to caregivers being reluctant to look after Medicaid patients. 

Denied medical claims are preventable 

One of the topmost priorities of physicians and healthcare providers is to look after the patients, Medicare or otherwise. Instead of worrying about denied claims, hospitals and health systems can work on reducing or eliminating them with the right tools and strategies. 

Fortunately, RightPatient, the industry’s leading touchless biometric patient identification platform, can help reduce denied claims substantially.

Denied and rejected claims typically occur because of billing and coding errors – most of which can be traced back to medical record errors, patient mix-ups, and identification issues. RightPatient eliminates all of that, and more, as it ensures that the accurate information is fed to the correct EHR at all times. As a result, billing and coding errors are drastically reduced and so are denied claims – boosting the bottom line. 

How are YOU reducing denied claims in your healthcare facility?

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Healthcare Revenue Cycle Management Optimization is Crucial as In-Person Visits Increase

Believe it or not, while COVID-19 was arguably one of the worst problems faced by the U.S. healthcare system, it was just ONE of many. That’s right, there are a plethora of issues that have been hampering healthcare for years, causing patient safety incidents, lost revenue, and more. Unfortunately, these losses went through the roof due to COVID-19 – they were estimated to be around $323 billion in 2020. While the pandemic is slowly waning, things are going in the right direction as providers are opening their doors for in-person visits. To recover from the pandemic’s financial losses, healthcare revenue cycle management optimization must be one of the topmost priorities for health systems – let’s take a closer look at why it’s important and some strategies that can help with revenue cycle optimization.

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Revenue cycle management in healthcare facilities

Healthcare revenue cycle management might be quite complex, as it contains many intricate processes, but it is simple enough to understand.

Revenue cycle management, in a nutshell, is used by hospitals and health systems to keep track of the “revenue” they receive by treating patients. It has many steps, but RCM starts from the first interaction with the patient, for instance, appointment scheduling, and continues until caregivers receive the final payment. 

If broken down, revenue cycle of healthcare facilities usually contains 7 components:

  • Preregistration
  • Registration
  • Charge capture
  • Claim submission
  • Remittance processing
  • Insurance followup
  • Patient collections

As this list shows, the revenue cycle starts from the first interaction with the patient and ends with receiving the full amount for providing healthcare services to the patient.

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While it might seem simple, healthcare revenue cycle management is quite complicated and difficult, especially when it comes to collecting claims from the payers (insurance providers). 

Why optimizing RCM has never been more crucial

While it was always important for healthcare providers to improve RCM within their facilities, doing so now might ensure their survival and get them through this trying time. COVID-19 has drastically affected healthcare providers, and while some received bailouts in billions, others had to close their doors permanently. The rest of them are simply struggling through the financial losses, but as in-person visits are increasing, things look brighter for the caregivers, as long as they are implementing strategies that optimize RCM right from the start. 

That being said, let’s take a look at some of the strategies that can be employed to optimize healthcare revenue cycle management.

Strategies that enhance healthcare revenue cycle management

Examine the entire RCM process to identify gaps

While the age-old saying is “If it isn’t broke, don’t fix it”, rapidly evolving environments beg to differ. How do you know that it’s working out fine for you? Unless your denied claims are reduced to virtually zero, there’s always room for improvement. 

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Analyze the entire RCM process to see if there are addressable gaps that require improvement – even the smallest ones matter. Talk to patients, survey your RCM team, take a look at the current numbers, and determine where you want the numbers to be. If issues are not found, then great – the problem might not lie in RCM, but if issues exist, work on them. RCM is evolving rapidly, and with the changes brought about by COVID-19, introducing technology in almost every aspect of the service to improve efficiency and collaboration has become the new normal. And speaking of collaboration, let’s move to the next point. 

Improve collaboration between your front-end and back-end RCM teams

The traditional practice is that the front-end and back-end teams work towards the same goals, but separately. However, if they work more collaboratively then the entire process will become seamless and it will help optimize RCM as information is never lost or misinterpreted – helping to receive payments much faster and in greater numbers, improving the bottom line. 

Using solutions that guarantee accurate patient information

When it comes to RCM, one of the biggest impediments to its optimization is denied or rejected claims – most of which can be traced back to billing and coding errors. On the front-end, if the patients are misidentified or if inaccurate medical records are used, then there are bound to be inconsistencies that are picked up by the payers. These errors lead not only to billing errors and denied claims, but can also be detrimental to positive patient outcomes – affecting the bottom line and the goodwill towards the hospital. As a result, ensuring patient data integrity and accurate patient identification is a must – both of which can be done with RightPatient.

RightPatient is a tried and tested biometric patient ID platform that safely and accurately identifies patients using their faces. The patient only needs to look at the camera – the platform does the rest, making it an entirely contactless process, something that is crucial in the post-pandemic world.

Not only does RightPatient make identification faster and accurate, but it also ensures that accurate information is fed to the registered patients’ EHRs every time they opt for healthcare visits, reducing billing and coding inconsistencies and denied claims in the process.

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Claim Denials are Damaging More Than 30 Percent of Hospitals – Are You Stopping Them?

Claim denials have always been a problem – it is a fact that they have occurred in all kinds of health issues for many years. Nevertheless, it got pushed to the back of the line due to the COVID-19 as well as problems with IT in the healthcare field, efforts to get people vaccinated, etc.

Sadly, claim denials have gone up – they are happening much more often now. In fact, it’s reported they have gone up 20 percent in the last 5 years! That, along with other gloomy statistics, was announced in a recent study from Harmony Healthcare. With that out of the way, it’s time to look more closely at this situation and how revenue cycle management in healthcare operations can be improved by identifying patients correctly.

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A short update on claim denials

Claim denials, additionally called denied claims, are simply claims normally sent in by a healthcare supplier to the authorized payer, except for particular reasons, they were deemed “unpayable.” That occurs because of issues with coding and billing, mixing up medical records, missing filing deadlines, inadequate medical needs, or additional pertinent explanations.

So, here is what’s going on currently regarding denied claims.

Several disturbing statistics concerning denied claims

The COVID-19 pandemic triggered nearly everything to become worse, including denied claims. In fact, the earlier stated study showed a massive one-third of hospitals stated their denial rates were 10% or over. The study included more than 130 healthcare providers all over the United States and this rate of denial ranged between 6 and 13%. The accepted “danger zone” for denied claims is touted as 10%. 

This study likewise explained why hospital administrators think denied claims happen. Thirty-two percent said it was caused due to coding errors while twenty percent said the reason was front-end concerns. Nonetheless, both these issues may be based on mix-ups with medical records, which comes from patients being misidentified – we will speak more on that topic later. 

Whilst these revealed denied claim frequency, what’re the real issues denied claims cause?

The massive effect of denied claims

Denied claims are exceedingly expensive if faced – and may amount to around $4.9 million for the healthcare supplier. No matter how big or small a provider is, that is a huge portion of cash, and could even cause some hospitals to close.

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Understand, denied claims are not merely expensive on their own, FTEs or full-time equivalents must do their best to fix any coding errors so the successive claims won’t be refused or refuted. This means the FTEs aren’t doing their normal job, which slows down other work and causes the whole process to be ineffective. Altogether, these facts cause a major blow to the bottom line of these hospitals. 

As earlier stated, numerous denied claims are generated because of issues at the front end as well as coding mistakes, which happen a lot due to misidentifying patients.

The way denied claims and misidentifying patients are linked

This is very easy to figure out – it begins at the registration desk. The incorrect EHR gets noted with the patient, so, incorrect info is placed in the medical record. That may occur because of an error like an overlay or duplicate. If no one discovers the error before the treatment is concluded, the patient’s provider ends up sending the wrong claim info to the authorized payer. 

As the claim is being processed, the authorized payer closely inspects it and sees there are errors, thus the claim gets denied. Misidentifying patients causes coding errors and front-end problems. These issues can be averted if the patient is identified properly. 

RightPatient decreases claim denials, and goes beyond! 

RightPatient helps many healthcare facilities protect millions of their patients’ records. It’s the industry’s top touchless biometric patient identification platform. It works by identifying patients via facial recognition, thus averting overlays, duplicates, and mix-ups with medical records from the beginning. Therefore, this averts the claim from being denied, thus saving hospitals lots of money. It just may be the answer you need to reducing denied claims.

The benefits of RightPatient do not end there. Besides reducing denied claims, RightPatient improves patient safety, enhances healthcare outcomes, and ensures positive patient outcomes. 

Does your healthcare facility prevent denied claims efficiently?

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5 Strategies That Can Rebuild Revenue Cycle for Healthcare Facilities

As the pandemic wanes, at least for now, many businesses are rebuilding. The US healthcare sector is no exception, picking itself up and dusting itself down gingerly, preparing to welcome back patients and see an uptick in revenue again. Working on the revenue cycle for healthcare providers has never been more important.

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For some hospitals and departments, it’s already too late – the pandemic forced them to close. Others are hanging on, with staff returning from furlough and machinery being switched on and recalibrated for the first time in over a year. As more people are fully vaccinated, it becomes simpler to see patients in person again, which will lead to the increase in revenue the healthcare sector badly needs. However, it’s not all plain sailing. Providers could still lose over $120 billion this year, so it is vital to be careful with any attempts to ramp up income. The fewer denied claims there are, the better the bottom line will be. That being said, let’s take a look at some strategies that will help optimize the revenue cycle for healthcare providers.

5 strategies to enhance revenue cycle for healthcare providers

Check the existing revenue cycle management processes

The first option is to see whether any immediate improvements can be made to the existing system. This will be down to the back-end developers and IT specialists and will not be visible to patients. After that, it’s time to look at the patient-facing part of the cycle. Ensuring staff members are fully trained in customer service is a good place to start with optimizing revenue cycle management. That way, they will know what questions to ask when registering or checking in patients and how to check their insurance, treatment codes, and eligibility. They will know how long to allocate for different types of appointments and when to ask for immediate payment.

Use technology to your advantage

The easiest way to ensure that everything runs smoothly is by identifying patients accurately right from the start of the treatment process. This could be done using a patient identity verification platform such as RightPatient that eliminates the need for asking patients questions, patient record mix-ups, and more, reducing denied claims in the process.

That was just one example – optimizing the revenue cycle for healthcare providers is not difficult, it just needs a bit of help at times. Technology can be that hidden assistance.

Prompt, correct coding, and billing is key

An organization should not expect prompt payment if its internal processes are lax. Ensuring accurate coding and billing leads to lower chances of denied claims. Complete elimination of denied claims is impossible, because of some uncontrollable factors, but rigorous checking of coding will, in turn, generate accurate bills which are more likely to be agreed on the first time by the insurers.

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Utilize up-front collection

If possible, the up-front collection is the best way to optimize the revenue cycle for healthcare providers. This eliminates an entire step in the revenue collection process, as the bill does not need to be seen by accounts receivable at all. Instead, it lands on the collected revenue team’s side for processing. While this approach will not work for every patient, it can be an effective tool for immediate revenue generation.

Accurate patient identification underpins everything

Well-trained staff members are likely to know exactly how to identify a patient and take payment politely using a fast processing system, but the whole thing falls if the patient’s identity is incorrect on the system, or if changed details are input wrongly. Denied claims are annoying and time-consuming to rectify. There are ways in which technology can help minimize the chances of this happening, however. 

Getting the patient’s identity and billing details correct from the first interaction with them makes things so much smoother. It prevents duplicate medical records and overlays, for a start. If a patient only has one EHR, there is little to no chance that the insurer will find fault with the claim and so will settle the amount faster. Denied claims cost millions of dollars for every provider, often due to poor electronic health records and a lack of robust identity checks. Incorrect patient identification puts the patients at risk too.

One of the most innovative ways of ensuring accurate patient identification from the get-go is by using RightPatient. This touchless biometric patient identification platform is being used by several healthcare providers and has several benefits. It allows patients to identify themselves even in virtual consultations and during in-person visits, all they need to do is look at the camera, meaning that they don’t have to run the risk of others overhearing sensitive personal data when checking into a clinic. Nor do they have to use touchscreens or keypads to enter information – making it hygienic and safer than ever.

RightPatient is the solution that ensures accurate patient identification, reduces denied claims, duplicate medical records, and ensures fast billing.

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Improving Revenue Cycle in Healthcare Facilities in a Post-Pandemic World

The pandemic hasn’t only been difficult for the healthcare sector in terms of the number of patients treated and the severity of symptoms. For the American healthcare system, it meant a huge loss of revenue for everyday treatments, as every available resource pivoted to caring for the patients affected by COVID. Those facilities that couldn’t pivot were left with no option but to close and file for bankruptcy as their income was hit. Some managed to survive by furloughing their staff or redeploying them to care for the large number of seriously ill patients which COVID produced. As a result, revenue cycle in healthcare facilities took a huge hit.

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Some organizations, though, were luckier than others and were able to deploy remote triaging and virtual consultations by phone and video using the latest videoconferencing software – all of which can be bolstered by utilizing a touchless biometric patient identification platform such as RightPatient. This allowed them to continue to treat patients, and earn income, which softened the blow to their finances and helped both patients – who suffered no break in treatment – and staff – who were retained rather than furloughed.

Revenue cycle in healthcare facilities during the pandemic tanked, to put it mildly. Normal service dropped off a cliff and around three-quarters of healthcare providers had to put revenue cycle management in place, as well as ensuring employees could practice remotely and maintain effective social distancing when they did have to attend their workplace.

The return has started, remotely

Now that treatment cycles are returning to pre-pandemic levels in many places, the staff members are also returning to their usual roles. They are returning to treating their regular patients and making sure of their incoming revenue whilst minimizing the losses their facility may have suffered.

In order to optimize their abilities, staff members have learned how to use technology to help them assist patients remotely during the pandemic. This approach is likely to remain in place for those patients who are unable for any number of reasons to attend an in-person consultation.

One of the most popular ways to use tech in medicine is by organizing a remote consultation, by telephone or video call. This helps staff to find out quickly what ails their patient and can help them triage the patient more effectively, immediately. They can tell the caller at once whether they need to attend, offer an appointment if so and have all the notes from the call available when the patient comes in. If a referral is needed, the process can be started straight after the phone call, without waiting for an appointment or paperwork.

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Of course, processes still need to be followed. Not only does that enhance patient safety, but it also embeds the familiar for both patient and healthcare employee. Sorting out the paperwork before the patient arrives is of prime importance, and means everyone will know what is going to happen and what they can expect to be billed or paid for. Staff should check whether there is an authorization for the service under the patient’s insurance and what the patient’s responsibility is regarding this. Ensuring everyone is aware of charges and can reconcile them quickly is better for the provider’s income levels too. Being organized allows accurate expenditure planning, which helps everyone balance incoming revenue against outgoing expected payments.

Communication is key for improving revenue cycle in healthcare

Face-to-face, by email, text, shared app, or phone: no matter how teams communicate, it is best that they do. Patients with comorbidities or multiple conditions need dovetailed treatment, a patient pathway across several providers, and it is best to schedule appointments logically. Scheduling several simple appointments across nearby providers in one day is a possibility to reduce travel headaches for the patient, although it may make it an expensive time when the bills come due. That also relies on the finance and revenue cycle team knowing that they are to bill a particular insurance company for a defined treatment to a named patient on a given date. Communication makes all of these processes simpler and can help provide the necessary paper or electronic trails to ensure timely billing, and therefore prompt payment. The notification to finance should come from the clinical team, as they are treating the patient. They also know exactly which procedure was undertaken and how, so are best placed to ensure the billing is correct. 

An efficient billing cycle is one way to ensure reliable income, as everyone knows what is due to be paid, by whom, and when. It’s not just the medics and revenue billing team who have a part to play here either. Every healthcare professional who attends to the patient has a responsibility to produce documentation for their part in the patient’s care – all of this works towards optimizing revenue cycle management in healthcare facilities.

Technology can enhance revenue cycle in healthcare facilities

Accurate billing is essential when attempting to collect revenue. Billing the wrong patient, or a different insurance company, can delay payment and cause extra effort and paperwork for no gain. Correct patient identification at the start of the treatment cycle makes billing much simpler. A biometric touchless platform such as RightPatient can help eliminate patient misidentification and the nearly $5 million of denied claims which result.

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Hospitals Can Reduce Denied Claims By Preventing 6 Issues

The COVID-19 pandemic has caused arguably the worst financial strain the US healthcare system has ever experienced. While all healthcare systems around the world are facing similar challenges, the US is currently witnessing the highest number of cases in the world – over 10 million people! As the numbers continue to increase, so do the losses, and healthcare providers must reduce their costs to cope with these unprecedented numbers. That being said, reducing denied claims is more crucial than ever, as they cause caregivers to lose a significant portion of their revenue. Let’s take a look at denied claims, how they affect caregivers, and six errors caregivers must avoid to improve revenue cycle within their facilities, leading to improved bottom lines.

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What are denied claims?

While this is a common term heard within healthcare facilities, many still don’t understand how much loss can be incurred for any given healthcare provider. To put it into perspective, Change Healthcare stated that denied claims can cost around $4.9 million on average for any hospital. But what are claim denials?

Simply put, denied claims are those that are classified as unpayable by the payers (insurance companies) after they receive the process them. Claim denials often occur because there’s some form of error present within the claim that becomes apparent after processing. Issues such as missing information, sending the wrong information, and non-covered services are the common reasons why claims are denied. However, there’s another form known as a rejected claim.

When one or more issues are detected within a claim even before it was accepted or processed by the insurance company, it is classified as a rejected claim. Coding errors and mismatched procedures are the most likely causes that lead to such claims.

How do denied claims affect healthcare providers?

Claim denials are a massive pain point for healthcare providers as they decrease already razor-thin margins, significantly increase collection times and reimbursement, and consume valuable resources such as FTEs (full-time equivalent).

As we can see, claim denials significantly affect a hospital’s bottom line. Moreover, while 63% of claim denials can be recovered down the line, the administrative costs are a nightmare – $118 per claim. Thus, it’s better to avoid denied claims right from the beginning.

That being said, let’s take a look at the top six issues that lead to claims being denied.

6 issues to avoid that can help reduce denied claims

Absence of information

One of the most common mistakes that lead to claim denials is sending inadequate information to the insurance company. Even the smallest details such as date of surgery, date of onset, demographic information, etc., are liable to classify claims as unpayable.

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Issues with coding

Using an obsolete codebook or incorrect codes is a common mistake that leads to claim denials, as they cause revenue leakage.

Insufficient documentation occurs when there are missing elements required for the services billed, and it is extremely crucial to prevent them. Thus, immaculate documentation is critical to prevent legit claims from being converted to denied ones. If proper documentation is not present when coding and submitting claims, then insurance companies classify them as denied because they consider that the services were not performed.

Duplicate bills

Duplicate claims are quite common and are usually attributed to human errors. These occur when the revenue cycle staff forgets to remove a claim from the patient’s account after resubmitting the claim. However, as claims processing systems consist of tools that help detect duplicate ones, the systems flag and classify the anomalies as either suspect duplicates or exact duplicates. As the entire healthcare process is quite complex in nature, it might lead to original claims appearing as duplicate ones – resulting in a claim denial.

Simply preventing duplicate claims is not enough. Properly coding the billed service with required modifiers and documentation is crucial to help identify the bill as original and not as a duplicate.

Not filing claims at the right time

Various rules and regulations must be followed regarding claims and failing to do so will result in even legitimate claims being denied. For instance, the Affordable Care Act reduced the deadline window for submitting Medicare claims to 12 months from 15-27 months after the date of service.

Not verifying coverage eligibility for the services provided

Healthcare insurance is quite volatile, leading to constant changes. As a result, it is crucial to check eligibility every time services are provided to the patients. While this might seem like a tedious task, it will help save a significant amount of money down the line.

Whenever a patient comes in for healthcare services, it is essential to check whether the coverage is still in place (read: not terminated), the service provided is covered by the plan, and the cap has not yet been reached. However, a healthcare provider can cover its services using plans with a cap as long as it follows provided guidelines meticulously and provides the required documentation. 

Patient identification errors

One of the biggest problems that leads to claim denials is patient identification errors. Imagine this: if a patient is not accurately identified right from the start, the claim will be filed against the wrong medical record and the insurance company may ultimately classify it as denied. To ensure that claims are not denied and are processed smoothly, patient identification is a must. That’s where RightPatient can help.

RightPatient is a touchless biometric patient identification platform that locks patients’ records with their photos – protecting patent data. It can even remotely identify patients, making it ideal to be used across the care continuum and any touchpoint.

After scheduling an appointment, patients need to provide a personal photo and a photo of their driver’s license. RightPatient matches the photos to verify their identities, and when patients arrive at the hospital, all they need to do is look at the camera. The platform matches the saved photo with the live one, instantly eliminating any chances of the claims being denied.

Healthcare providers can reduce denied claims, optimize the revenue cycle, avoid duplicate medical records, improve healthcare outcomes, and even prevent medical identity theft with RightPatient – enhancing patient safety in the process.