Revenue cycle management (RCM) for laboratories and pathology practices is constantly evolving in complexity. Payors introduce new and more rigid policies that make collecting reimbursement for services rendered increasingly difficult. XiFin recently published a new whitepaper, Overcoming Reimbursement Compression: The Latest Trends in Denials and Appeals Management for Laboratories and Pathology Practices that provides an in-depth view of the latest trends and offers a strategic approach to automate critical tasks that save time and improve appeal success.
This blog post covers two essential topics from the paper:
1. The Importance of Patient Engagement in Maximizing Reimbursement
Patient engagement is vital in facilitating reimbursement and maximizing cash collection. Patients expect transparency and ease of access to information from their healthcare encounters. Because many laboratory, pathology, and molecular diagnostic encounters are not directly patient-facing, patient engagement tools are essential, particularly when it comes to communicating claim denials and patient financial responsibility.
Effective use of patient engagement tools are known to accelerate payments.
XiFin customer data show a significant increase in patient payments received in the first 30 days of the billing cycle after integrating text message and automated calls into the traditional patient billing process. In the scenario illustrated below, for example, this XiFin customer collected 26.6% more payments in the first 30 days after implementing a text message reminder between the first and second statements.
Prior to implementing text messages, the customer followed a traditional three-statement dunning cycle. As seen in the table below, more than forty percent (42.6%) of total payments received occurred after the first statement (within the first 29 days of the dunning cycle). More than one-third (34.8%) occurred after sending the second statement (between days 30-59 of the dunning cycle). More than one-fifth (22.6%) were received after sending the third and final statement (during days 60-90 of the dunning cycle).
A XiFin customer collected 26.6% more revenue in the first 30 days after implementing a text reminder between the first and second patient statements.
Results of the traditional three-statement dunning approach:
Once the customer added a text message between each statement, 21.3% of all patient payments were received after the first text message. An additional 11.7% of payments were received after the second text, preceding the final notice.
Results of the dunning cycle with text messaging integrated into the cycle:
The volume of payments received from patients in the first 30 days of the dunning cycle increased by 26.6%, dramatically accelerating the collection of patient payments. That shift was driven out of the traditional 60–90-day window, a dual result of adding text messages and shifting the timing of statement delivery.
Comparison of dunning cycle with and without text message integration:
The convenience of text messaging allows patients to connect to the call center or to the XiFin RPM Patient Portal, where a payment can be made immediately. In addition, XiFin customers can customize their dunning cycle, depending on how their specific patient population responds to texts, paper statements, and the timing between billing cycles. Studying the behaviors of patient interactions at the client level also empowers a more strategic approach to engagement and improves patient satisfaction.
2. Denial Trends Drive Reduced Revenue and Higher Costs
Not only do denials extend time in accounts receivable, contributing to bad debt on services already rendered, but they also require the most attention from staff—increasing the cost of billing. Hard denials, such as Medical Necessity, make up the most challenging revenue to collect, about 5-10% of total denials received.
In addition to creating delays and revenue loss, denials show how payors administer their policies—even when those policies are unpublished. They signal adjudication trends, such as when denials are managed with a Patient Responsibility (PR) code or Contractual Obligation (CO) code. Therefore, monitoring these trends is critical to understanding how once collectible revenue (i.e., PR denials) may no longer be collectible (i.e., CO denials), or vice versa.
Fundamentally, an effective revenue cycle management process is rooted in the ability to file clean claims to the degree that is possible. Improving those outcomes requires focus on the exceptions—the denials.
At XiFin, we invest in front-end configurations and workflows to identify denials prior to submitting the claim to the payor. As we monitor denial trends, we build more robust front-end workflows and add automation (such as integrating with insurance discovery and prior authorization vendors) to reduce the associated burden on billing teams. In addition, molecular testing coverage continues to expand, reducing non-covered denials. The stabilization of these medical policy-related denials is positive. The jump in demographic denials, however, requires additional consideration.
Want to learn more? Download the full analysis and report to learn about insights into the changing behavior of payors, the ways payors modify claim processing protocols that drive denials, and XiFin-recommended practices for an appeal process designed to help you automate critical tasks that save time and improve appeal success.Download