The Importance of a Thorough Benefits Investigation

When navigating insurance complexities—especially with specialty medications—a Benefits Investigation (BI) is essential. It’s more than just a formality: it’s a critical part of your pre-service process that helps avoid costly surprises for both patients and providers.

What Is a Benefits Investigation (BI)?

A benefits investigation is a detailed review of the patient’s insurance plan—medical or pharmacy—to determine:

Out-of-pocket costs
Provider eligibility (in or out of network)
Service-specific coverage requirements
Prior authorization or predetermination needs

It’s often mistaken that a prior authorization alone is enough. However, without a thorough benefits check, even an authorized service may result in denials or unexpected costs.

We recommend combining all verification steps—benefits check, prior authorization, and eligibility—into a comprehensive Pre-Service Review for full clarity and risk reduction.

Why It Matters

You’ve likely heard this disclaimer before when calling an insurance provider:

“This information is a quote of benefits and is subject to the patient’s coverage at the time of service.”

It may sound like legalese, but it’s an important reminder: Policies change. Life changes. Patients may switch employers, update coverage, or face new eligibility restrictions.

Best practice: verify insurance and eligibility before each visit and for each service offered. This protects your patients from unexpected bills and protects your practice from reimbursement losses.

Step-by-Step: Conducting a Benefits Investigation

✅ Step 1: Identify the Insurance

Get a copy of the front and back of the insurance card
Confirm policyholder details

✅ Step 2: Confirm the Service or Therapy

Gather relevant CPT/HCPCS codes and diagnosis codes

✅ Step 3: Prepare Required Information

Provider name, NPI, Tax ID, contact info
Patient name, DOB, ID#, group #, address, contact info

📋 Key Eligibility Questions to Ask

Is the plan active? What’s the effective and potential termination date?
Are there any preexisting condition clauses or waiting periods?
Is our provider in-network?

💡 Benefit-Specific Questions (by CPT/HCPCS Code):

Are there unit limitations or exclusions for this service?
What are the patient’s financial responsibilities (copay, deductible, coinsurance)?
Is prior authorization or a predetermination required?
How do I submit these, and where can I find policy guidelines?

Medical vs. Pharmacy Benefit: What’s the Difference?

Understanding whether a service or medication is covered under the medical or pharmacy benefit can affect:

Access to therapy
Patient cost
Billing process
Provider reimbursement

🏥 Medical Benefit Overview

Also known as “Major Medical,” this covers services delivered in-office or at an outpatient facility.

Covers medications administered by a provider
Buy-and-bill model applies
Billing is post-service
Deductibles and coinsurance apply
Includes PPO, HSA, FSA, and flex spending accounts

💊 Pharmacy Benefit Overview

Used when patients self-administer medication or receive it via pharmacy-delivered methods (oral, auto-injector, topical, etc.).

Often involves a separate pharmacy deductible
Includes retail, mail-order, or specialty pharmacy
Medicare patients use Part D
Uses a tiered formulary system
Prior authorizations and tier exceptions may apply
May involve co-pay cards or co-pay accumulator programs

💡 Pro Tip: Medical vs. Pharmacy Impacts Dispensing

Whether a drug is billed under the medical or pharmacy benefit depends on:

The delivery method
How and where the medication is administered
The reimbursement pathway chosen by the provider

🧾 Copay Cards & Accumulator Programs

When affordability is a concern, don’t overlook:

Manufacturer copay cards
Co-pay accumulator program rules
Tier exceptions (especially important for Medicare)
Support from a Field Reimbursement Manager (FRM)

✅ Final Thoughts

A benefits investigation is not optional—it’s essential. It ensures:

Patients get access to the therapies they need
Providers avoid reimbursement headaches
Everyone is informed, protected, and prepared

By turning benefits verification into a structured, repeatable process, your team can support patients more effectively and reduce financial risk for your practice.