CAP TODAY Pathology/Laboratory Medicine/Laboratory Management
Valerie Neff Newitt
May 2017—The laboratory financial systems of yesteryear were built to deliver on a prime directive: achieve optimal, timely payment. Fast-forward to today and the overriding goal remains largely the same, but the means to the end has become more sophisticated, with billing/accounts receivable/revenue cycle management systems providing capabilities to recover outstanding payments, pinpoint reimbursement bottlenecks, and deliver a diverse range of data. Experts say such capabilities are required armor in the professional joust for more profitable collections and a competitive edge in today’s health care marketplace.
“Getting paid is simply the first level of expectation,” says Mark Droste, managing director of revenue cycle management at SCC Soft Computer. “Now the higher emphasis is on getting paid with greater efficiency—throwing fewer bodies into the process in order to squeeze out more profits from the gain in system efficiency.” Consequently, automation has become an imperative in laboratory revenue management systems.
Compare billing/accounts receivable/RCM systems using our interactive product guide
“Reimbursement just keeps your doors open,” Droste says, “but to grow your business you need analytics. You must ask, ‘Who are my clients? How profitable are they? What are they ordering? Are we providing the right test mix?’” This, Droste continues, is the value software companies bring to the table—“analytical reports that drill into every little detail and every layer of the operation, from the location of the physician’s office and what their specialty is, to an analysis of reimbursement and payer performance.”
Deb Larson, executive vice president of Telcor, concurs. Without such insights, “labs are leaving millions of dollars behind,” she says. “If you don’t know which payer didn’t respond to you, you can’t go after the money.”
Analytic capabilities that can be built into billing software now run the gamut from month-end numbers to profitability analysis; productivity intelligence detailing how many errors that required correction by payer or client were performed by each billing staff member; expected reimbursement versus actual collection; length of time for collection from various payers; payment denial analysis, including frequency of denials pertaining to payers or CPT codes; and identification of profitable clients, payment bottlenecks, and much more.
Furthermore, these capabilities are designed to generate and analyze information quickly. “It is critically important that labs hone down to that level of information in real time because business is conducted in real time,” Larson says.
Droste, too, says billing software must be able to pinpoint where money is stalled at every stage of the revenue cycle. “Everyone can run an error report or a denial report. But the ability to tie it all together and say, ‘Here is a six-month-old bill and it is held up because of this specific reason,’ that makes all the difference,” he explains. “Labs need data transparency to translate it into something actionable and to determine a winning game plan.”
In addition to providing pertinent analysis, robust billing systems can streamline tasks, driving greater efficiencies and cost savings. “Earlier there was not the scrutiny we now must place on every bill,” explains Bob Dowd, vice president of strategic accounts development at NovoPath. “It is an outgrowth of the fact that test reimbursements by payers keep going down and payments keep being reduced. Additionally, payers are denying payment on increasing numbers of tests, which in many cases must then be paid by the patient directly.” Consider, for example prior authorizations, which are growing in number and which, Dowd notes, are a “fairly onerous task,” depending on the payer and the state. “And if you are a large lab with patients in all states, you must be cognizant of what requirements are in force in every state you serve,” he adds.