AI-Supported Insurance Verification and Payer Prioritization for a Medical Billing Company

About Our Client

The Client provides medical billing and reimbursement-related services to healthcare organizations in North America. The company helps healthcare providers prepare and submit medical claims, follow up on unpaid claims, and obtain reimbursement from insurers.

The Need to Automate Insurance Verification and Payer Prioritization

The Client wanted to help its customers — healthcare providers — reduce the manual effort of verifying patients’ insurance coverage and determining the correct billing order for insurers. These tasks often required front-desk staff to contact insurers or navigate separate payer portals, making the process time-consuming and error-prone.

To streamline these tasks, the Client wanted to build a web application that would extract insurance information from patients’ cards using AI, verify coverage electronically, and determine which insurer should be billed first. Before investing in full-scale web application development, the Client needed a proof of concept (PoC) to validate whether these capabilities could be combined into a single automated workflow.

Automated Insurance Checks and Payer Priority Rule Engine

ScienceSoft developed a proof of concept for a web application that helps front-desk staff at healthcare provider offices check patients’ insurance eligibility and determine which payer should be billed first. The application uses a multitenant architecture that lets multiple healthcare organizations use the system with separate access and organization-specific settings.

The application provides the following capabilities:

• Insurance card scanning and payer matching. AI-supported text recognition extracts payer and member IDs, group numbers, and patient details from uploaded insurance card images. If a payer ID is incomplete or unclear, a matching mechanism uses name and address information to find the correct payer in the connected payer network.
• Insurance eligibility checks. The application connects to insurers through the Stedi network to verify patients’ insurance coverage and benefits for planned services. Users can track each eligibility check's progress in real time.
• Payer priority determination. When a patient has multiple insurance plans, a rules engine automatically determines which insurer should be billed first, based on the Client’s proprietary decision logic.
• Administrative settings. The Client’s staff and tenant administrators can configure payer IDs for individual healthcare organizations and resolve cases where the system cannot automatically identify an insurer. This helps ensure that eligibility requests are sent to the correct payers.

The workflow starts when a front-desk staff member enters the patient’s name and date of service, then uploads images of the front and back of each insurance card. The system extracts the details for review, checks eligibility, and applies the payer priority rules.

The results screen shows coverage information by primary, secondary, and tertiary payer, flags coordination-of-benefits issues — including when another payer should pay before Medicare — and provides billing instructions. This allows front-desk staff to verify insurance eligibility and obtain billing instructions without specialized billing expertise. The workflow is designed around a target of less than two minutes per patient.

AI-Supported PoC Opens the Way to More Efficient Medical Billing Services

ScienceSoft delivered a working PoC for a medical billing company looking to automate insurance checks for its customers, healthcare providers. The application combines AI-supported insurance card recognition, electronic eligibility checks, and automated payer priority determination in one workflow.

The PoC demonstrates how healthcare providers could handle these tasks faster and with less manual effort. Importantly, front-desk staff at medical facilities could use the application without specialized billing knowledge. This gives the Client an opportunity to expand its services, help its customers reduce their administrative workload, and make its offering more attractive to healthcare organizations.

With the core functionality proven feasible, the Client has a foundation for further development. Future plans include expanding AI capabilities to identify payers, analyze relationships between insurance plans, and potentially determine billing priority.

Technologies and Tools

React, .NET, Azure SQL, Stedi, Azure AI Document Intelligence, Microsoft Entra ID.