The business of laboratory revenue cycle management (RCM) becomes more complex every day; with reductions in reimbursement, increasing rejections and denials, payor specific billing rules, shifting financial reporting and accounting requirements (PAMA, FASB ASC 606, medical economics reporting), OIG and EKRA (false claims) compliance standards, malware and ransomware attacks, etc. Once there was a time when it was acceptable to manage a laboratory’s RCM process utilizing static software products solely designed to generate claims and client invoices. As our industry evolved, the only way laboratories could continue with these types of products is through the use of “bolt-ons” or “workarounds” and by layering customization on top of these products. However, it’s been a long time since high volume laboratories have been able to effectively or compliantly fulfill their RCM needs and financial reporting requirements by continuing to utilize systems with poor visibility and “black box” processes.
The most successful laboratories in the country have the clinical resources and technology to process tens of thousands of test orders per night and return a quality result to their ordering providers, typically the very next day. These laboratories understand a high percentage of the orders they receive each day arrive without all the information necessary to bill AND GET PAID for every test associated with the order. While there are many software products with the ability to generate vast numbers of claims, these products fail in their ability to confirm the integrity of the data and match it with varying submission requirements.
of all requisitions lack a payor-specific ICD-10 or other information resulting in partial or full claim denial.
of Anatomic Pathology submissions lack a payor-specific ICD-10 or other information resulting in partial or full claim denial.
Given the high volume of denials, it becomes a nearly impossible task for labs to manage the hundreds or even thousands of these daily “exceptions” using a traditional or static billing software product, no matter how many workarounds are in place. Frequently it takes multiple interactions before the right information is received to correct and submit a clean claim. A robust and scalable technology solution that intelligently automates the high volumes of interactions for clean claim submission is a must and is the only feasible way for high volume labs to thrive in today’s challenging diagnostic environment.
Some labs continue to add modules, layer in code, or add bots on top of static software to try and address their billing product deficiencies. However, in a challenging diagnostic environment that continues to change, these types of temporary fixes eventually lead to problems downstream. It is inevitable to have conflicting code-sets and “bot” breakdowns. More problematic are the conflicts introduced with each evolving bolt-on and added layer of code. Ultimately, when the failure(s) occurs, the root cause and the timing of the failure is hard to pinpoint, further compounding the situation. This spider’s web of queues and code are ripe for errors and compliance risk. In today’s audit heavy environment, lab leaders should scrutinize whether these types of “black box” operations should be considered, even on a temporary basis.
Every laboratory strives to eliminate errors, reduce denials, improve payments, and manage receivables. However, what makes a lab exceptional at cash collections is an effective and efficient revenue cycle management workflow. Having technology that proactively identifies and addresses issues before submission of the claim is critical to a best-in-class RCM process. Streamlining internal procedures using intelligent automation powered by machine learning helps produce a robust billing workflow that maximizes clean claim submissions. Without a clean-claims-upfront workflow, a billing team is challenged with trying to manually segregate and work hundreds or thousands of partial and full denials. Likewise, attempting to manage denials on the back-end results in discovering fewer appeal opportunities or higher than actual contractual allowances, adjustments, and write-offs (true bad debt). Also impactful to a lab’s business are the potential complaints from physicians when the lab attempts to collect necessary information for orders placed weeks earlier. Challenges such as out-of-network status, reimbursement limitations, and coverage determinations lead to denials and result in significant appeal-related activities. Put all of these factors together, and they are the perfect storm for an inefficient RCM process. Laboratories that invest in the most advanced and scalable RCM infrastructure coupled with ongoing and expert managed services from their RCM partner can avoid this perfect storm and provide the foundational tools for their billing and finance teams to ensure an optimized RCM process.
Essential Technology and Managed Services for Today’s Large-Volume Laboratories
Highly automated workflows and configurable business rules provide laboratories and pathology groups with the ability to customize their internal and external interactions and reduce costs while maximizing their ability to collect by only submitting clean claims. One payor recently increased its laboratory procedure related edits to over 10,000, and another major carrier implemented new LCDs for flow cytometry without providing any sort of notification. These two recent examples reflect the importance of global visibility to changing payor requirements and highlight why utilizing systems AND services that facilitate front-end identification and collection of missing information per the payor’s specific requirements, is the only effective way to manage the RCM process. The ability to communicate with the ordering provider in their preferred manner dramatically increases the chances of timely and accurate submissions and payments. With XIFIN RPM’s intelligent automation, the payor specific edits occur up front with the laboratory in full control of configuring the edits, the related interactions, and defining next steps between the clients, the payors and the patients. Since all XIFIN clients leverage the XIFIN platform, even small laboratories have the same functionality and information available to them as the most sophisticated laboratories in the country, yet they can configure interactions to their own best practices.
Appeals and preauthorization processes have become an essential requirement for all laboratories and pathology practices. This is true whether or not the tests being performed are in-network or out-of-network, and irrespective of the payor in question; all clinical and pathology laboratories need to have processes in place to address the increasing requirement of medical necessity documentation. High volume laboratories benefit from visibility and automation that identifies when an order requires a preauthorization and when a component of the claim is not reimbursed at the appropriate (or expected) amount. Having a fully integrated prior authorization and appeal process that allows the laboratory to auto-populate payor-specific forms and letters, and then manage, track and score responses to provide insight to where the process is effective or insufficient has increasingly become a critical success factor to maximizing cash collections.
Enhancing client and patient interaction is table stakes for labs to remain competitive. Successful laboratories grow their value by incorporating physician and patient engagement technologies such as patient, client and patient service center portals, inbound and outbound interactive voice response (IVR), and SMS (text messaging). Below are some statistics of patient and physician engagement for XIFIN clients, you will notice that those who are using both IVR and Patient Portal experience even greater results then IVR alone:
Implementation of IVR Alone
Reduction in calls requiring an agent
Incremental increase in payment per patient
Implementation of Both IVR and Patient Portal
Reduction in calls requiring an agent
Reduction in going through the IVR
Additional incremental increase in payment per patient
No one should be surprised that ordering providers and their teams are going to continue to submit laboratory orders with exceptions or “errors”. Payor requirements for laboratory and pathology testing continue to evolve making it nearly impossible for physicians and their staff to keep up. It only stands to reason that when these providers are being asked to address errors, they want to be notified promptly, and in a way that aligns to their internal workflow, if they are expected to respond.
These are just a few workflow capabilities that enable the most efficient interaction with ordering providers:
Streamlined Requests for Information: As you would expect, some ordering providers continue to insist on fax messages and phone calls as preferred methods of interaction. However, a growing number of providers are opting to receive a single email notification requesting them to log in to the laboratory branded client portal. It is the most efficient process, since they can address all issues for multiple patients while being provided with immediate feedback using real-time payor specific edits, and as needed, securely upload requested patient-related documents.
Accessible and Transparent Client billing Practices: Physician clients and institutions with direct billing have traditionally had to call the lab to determine the client bill price for a test. Now with the right portal technology, they can conveniently look up their client price, review current invoice(s), or make a payment. They can even use the portal to respond to patient inquiries regarding their estimated amount of responsibility for the test(s) the physician is ordering.
Patient Portal: Allowing a patient to make an online payment has long been a basic functional aspect for most laboratory websites. More advanced RCM platforms with integrated portals enable bill payments to be credited in real-time for the exact amount paid. There are no delays, and no additional invoices after payments are made. Plus, there are fewer chances for data entry discrepancies.
Real-time visibility, data warehouse, end of month package, business intelligence, and machine learning are critical tools for successful laboratory management teams. Since laboratory providers are dealing with vast numbers of daily encounters, exceptions, rejections, denials, and appeals, it is essential they can see the extent of the issues. The truth is that due to their lack of visibility and related difficulties trying to deal with back-end responses, most laboratories end up with millions of collectible dollars getting buried in their contractual allowances—never to be collected. For the laboratory to be able to quantify these numbers properly, they require the ability to complete an end to end reconciliation. That means visibility between the laboratory information system (LIS), the RCM system, and payors, as well as calculations of initial denials, accurate receipt of each line item for payment and potentially multiple responses by primary and secondary payors. Having a laboratory infrastructure that is interoperable and is designed to integrate or interface with upstream and downstream applications helps make the end-to-end reconciliation easier. These types of next-generation RCM solutions provide real-time order to cash visibility and expedite claim processing, exception handling, and cash collection using rules-driven automated workflows.
Additional RCM Capabilities that Help Maximize Cash Collections
The truth is that most laboratories end up with millions of dollars of viable revenue getting buried in their contractual allowances because of lack of visibility. High performing labs seek out and use a full-fledged financial solution that has referential integrity and is specifically designed to provide the visibility and insight needed to collect on every claim regardless of the value.
Contact us if you would like to learn more about XIFIN’s machine learning enabled revenue cycle management solution, XIFIN RPM. It would be our pleasure to demonstrate how our platform can improve your cash collections.