As a laboratory leader, you understand the value and impact of the patient care data you generate for hospital and community patients. On the business side of things, however, you aren’t always provided with the appropriate tools and visibility to position the lab to also be a profitable business entity.
The time is now to challenge your current revenue cycle situation, including system and services, to ensure your outreach lab can gain influence and pull its weight among hospital and health system executives.
To ensure your lab claims are getting the proper attention and level of visibility needed to increase your revenue and cash and grow your business, start by asking your revenue cycle team the following key questions about write-offs and reimbursements:
Bad Debt and Automated Write-Offs
Performance of Tests and Ordering Clients
Hospital revenue cycle systems and staff are frequently instructed to concentrate efforts first on working high dollar claims (i.e., inpatient surgeries). Often, resource constraints lead to a policy of automatic write-off of any claim below a certain threshold that requires any additional effort. We’ve seen this threshold frequently set at $100, but $500 and higher is not uncommon at many health systems. This means that if your lab claim is below the threshold and has missing or invalid information on the front end or receives a denial on the back end, the revenue cycle team is NOT working to collect on your behalf, and instead, an automated write-off occurs. These write-offs can be a substantial amount of your outreach business, and paint an inaccurate view of your business. Further muddying the financial picture is the fact that it is common for hospitals and health systems to incorrectly categorize the write-offs as revenue adjustments rather than bad debt, thereby implying the write-offs were not collectible.
To grow and run a profitable business, you need easy access to your lab-specific data. Many revenue cycle systems are unable to provide quick answers to the example questions above, as well as any lab-specific KPIs. You need to understand the profitability of specific tests and clients to ensure your growth is focused in the proper areas.
Outsourcing Your Lab's RCM
If your current RCM team can’t quickly answer your questions in a satisfactory manner, the time is right to push for a change and consider a new outsourced laboratory RCM partner.
When selecting a vendor for your lab’s billing, you should look for: