Revenue cycle services: can they quell billing woes?

Anne Paxton

October 2018—Envision a long stretch of roadblocks of all shapes and sizes, staffed by unsympathetic and ever-changing guards, with new roadblocks springing up all the time, and you’ll probably have a fix on how most laboratories have viewed billing, going back decades. Thousands of payers, each with its own rules, constantly shifting federal and state regulations, and back-office human error have long made denied claims par for the course.

Revenue cycle management (RCM) applications, available for purchase from several software companies, have helped hospitals and laboratories more efficiently navigate the payer and regulatory landscape as they conduct their own billing. But an emerging option for laboratories is to remove even more of the stress from the process by subscribing to an RCM service.

With its new Telcor Revenue Cycle Services (TRCS), software company Telcor hopes it has struck on the next big thing in RCM by offering to liberate labs from billing almost entirely. “Soft launched” on a subscription basis to a small number of customers in 2017, TRCS is having no trouble finding buyers. “We were only expecting to have a few customers to begin with, but business has definitely increased dramatically in a short period of time,” says Kwami Edwards, vice president of the Lincoln, Neb.-based firm.

Recent startup laboratories are among those that seem most primed for a service like TRCS to take billing off their hands. At Alimetrix, a newly formed laboratory that uses multiplex PCR-based technology to provide gastrointestinal and sexually transmitted infection tests, the decision to subscribe to Telcor’s TRCS late last year was driven by frustration with its former third-party billing service, says chief technology officer Mark McQuain, PhD. “As a new startup in the diagnosis-of-disease space, we didn’t have an established billing structure. But we weren’t getting much direction from our third-party biller. We weren’t issuing bills, they weren’t sure what the problem was—nothing was getting done.”

The laboratory pays a monthly fee whether or not it submits claims, plus a percentage of collected payments. But the billing space is complicated, Dr. McQuain notes. “We depend on Telcor to navigate it for us.”

Implementing TRCS took considerable staff effort at Alimetrix, including setting up a virtual private network to increase the security of the system. “But that’s really not that daunting. You also have to set up a faxing service, and Telcor guides you through doing that with a third-party vendor.” To organize the billing, a number of questions had to be answered. “For example, Telcor wants to know all the CPT codes you’re actually doing. Then they can advise you on how to bundle those appropriately, so that you’re submitting bills in the customary manner that the payers have come to expect.”

To date, Dr. McQuain has found Telcor to be thorough in examining the causes for denials and issuing appeals. “Some of them just can’t be collected on. It can’t be helped. But Telcor does seem to chase down all the loose ends to see if there’s anything to be done. Sometimes it’s too late because appeals can’t be resubmitted. But they can pick it up and say, ‘Well, here’s what we need to change going forward.’”

The Telcor data metrics have been useful, Dr. McQuain points out. “They may tell us the areas where we’re getting a lot of patients in our offices who may not have insurance coverage. We get a report from them on a claim-by-claim basis showing which patients are covered by which plan and which office they are coming from.”

So, for example, Telcor told Alimetrix which patients had payers who required prior approval in order to pay a claim for certain procedures. “We were able to tell our sales staff, here are the offices where you need to post a flyer saying, ‘If you have a patient covered by this particular insurance plan, you need to request prior approval for a test.’ And that helped us get paid or helped the patient to receive payment from their insurance company.”

Those are services he could not duplicate with his own staff, he says. “It would take a lot from our staff to collect all those metrics.” But even more valuable is the knowledge Telcor brings to the table, he points out. “For example, if denials are a problem, Telcor can advise on next steps. In some cases, you’re better off moving on and just writing them off. But in other cases, they might say the only thing that will help is in-network status and you need to be focusing hard on getting that. They seem to have more of a game plan for all of the scenarios that get thrown at us. And because they get paid a percentage of collected revenues, they are incentivized to make you do the right things to get paid.”

When Cedar Diagnostics, a full-service clinical toxicology and pathology laboratory in rural southwest Colorado, decided to sign on to Telcor’s Revenue Cycle Services, it was quite a leap for a laboratory that didn’t even do billing in its own laboratory information system, says Alex Cudkowicz, MD, general manager. “We would just send all our paper off to the billing company. So we went from probably the most primitive system in the country to the most sophisticated, with no stop in between.”

As the July 1 go-live date this year approached for TRCS, he was expecting implementation to be “a complete and utter disaster” because of the laboratory’s inexperience with billing. A lot of work was required to get implementation done on schedule, and the learning curve has been steep, he admits. “But in my opinion, implementation went very well.” Thankfully, he adds, “I would say it was only a mild nightmare.”

Cedar Diagnostics’ clients are primarily smaller hospitals, multispecialty physician groups, and government entities. In exchange for their using Cedar exclusively for all laboratory services, “we provide a lot of added-value services,” Dr. Cudkowicz explains. “That includes helping clients with their in-office facility or hospital-based labs. We help them control the costs of expensive and esoteric tests, understand how to bill, and bring efficiencies to their lab operations.”

Sometimes the approaches seem counterintuitive. “The typical lab company thinks, ‘I’m going to get paid x amount of dollars for this test. Therefore the more of this test I can get billed, the more money I can make.’ Our philosophy is the opposite because we are partnering with our clients.” His laboratory will look at the client’s test menu, usually quarterly, and might say, “‘Hey, you sent us 100 PSAs in the last 90 days. Maybe you should bring that test in-house. And if you did, here’s the cost, here’s how you would bill for it, and here’s the revenues you would expect to gain from doing it.’ Then we’ll help them write the procedures and do everything needed to bring that test in-house.”

Since the laboratory has subscribed to TRCS, Dr. Cudkowicz is pleased with how responsive it is compared with the prior third-party billing service Cedar contracted with. In the past, “we really struggled with understanding exactly why denials were happening and how much money we were losing from denials and other issues.” With Telcor’s icon now displayed on his computer desktop, answers are a click away. “If I have a question like how many claims is Blue Cross denying, I can just go into the TRCS app and get that information.”

Saving the expense of staff to do manual entry of data is another plus, in his eyes. “To use Telcor, we added one FTE to our staff and then assimilated other work into the responsibilities of existing staff. So it’s been a very efficient system.”

His background in medical lab billing is limited, he says. “Revenue service management is giving me a much better understanding of billing.” And down the road, Dr. Cudkowicz thinks, lie exciting possibilities stemming from the Telcor data that can be mined from the billing. “There will be a lot of amazing data I can use with my clients. It’s a very robust program and has more data than I’m even aware of at this point.”

He believes much of the lab industry is on the wrong track now in the quest for savings. “A lot of companies are beating each other up for pennies to have a slightly cheaper test than their competitor. But the real savings comes from providing a test utilization management system, in which you work with clients in a complex disease situation,” to follow an ordering algorithm.

Cedar has set up certain tests in its computer system for which, if they are ordered, the pathologists will review the lab data and call the client if the test is not appropriate. Initially, there was worry that questioning clinicians on their test orders might meet with resistance. “But our experience has been the opposite. Because with a lot of these complex molecular tests, our doctors don’t understand what they’re for. There is a fear that if they don’t order them, somehow it’s malpractice. It’s been very positive for our company because the doctors are appreciative of the information,” Dr. Cudkowicz says.

Through TRCS, the move away from a paper-based billing system has had a big impact, he says. “Already, in the first two months, we’re seeing a substantial increase in revenue from the insurance companies. I can click on my icon to see where we’re at with each claim in the process.”

But Telcor won’t drop a claim until it’s complete, and flagging such claims does more than just hustle them through to payment. “We can see what tends to be missing, and I can get with my people and say Dr. Smith never gives us a date of birth, customer service will go out and talk with Dr. Smith, and we can solve that problem.”

Full access to data metrics is one of TRCS’ strongest features. In addition to monthly custom reports, “If you’re sitting at home at 3 AM wondering, ‘How many of my urine colony counts are being billed?’ you can go online and look it up.”