The sustainability of any business depends on getting paid for its products or services, and medical labs are no exception. Medical billing is complicated, so it is extremely important to have an efficient process in place to ensure that claims are submitted in a timely manner and none get lost in the shuffle due to rejections and denials.
Success Depends of Effective Revenue Cycle Management
The term “revenue cycle management,” or RCM, is commonly used to define all aspects of a medical business that affect revenue. This includes the detailed management of filling out and submitting claims and dealing with any subsequent denials or rejections, but there is much more to it. For a lab, it begins with insurance verification and follows through to old AR recovery if necessary. RCM also includes payer credentialing, compliance and charting reviews, end of year payback, etc.
Common Issues in Lab Billing Processes
Every lab should have a streamlined process for managing all aspects of RCM in place, but most labs get busy with patients and issues that arise, and the administrative aspects of revenue management fall to the wayside. Here are some things to watch for to keep your laboratory billing on track.
- Insurance verification—Insurance verification should be done when a patient calls or comes in for lab work. Patients often forget to mention that their coverage has changed, particularly early in the year, and even if they have the same company and plan, the insurer may have changed things with the annual renewal cycle.
- Poor communication with patients—As soon as insurance coverage is determined, the patient should be informed of their payment responsibility. If there is a copay, it is most effective to collect it up front, and if charges are undetermined, it is still important to explain to the patient how it will be determined and what the range will be. If a patient pays a $35 copay and is not informed that there will still be a charge for some of the lab work, they will be angered to receive a bill and less likely to pay it, but this kind of situation is easily avoidable by explaining the charges from the beginning.
- Outdated Information—Billing codes change annually, and government payers/insurers make all kinds of changes to their coverage and billing rules, so it is important for billing staff to access the latest information. If the codes have been updated and an old one is submitted, payers will reject the entire claim without even reviewing it.
- Manual data entry and research—Filling out paper claims is time-consuming and prone to errors that result in rejected claims that then have to be researched and corrected before being paid. Up to date software should be used for entering data as well as finding the current codes, which requires having access to a program that is fully integrated with the payers and codes—and is updated frequently.
- Lack of a review process—The aspect of RCM that is most likely to be lacking from in-house lab billing services is a review process that assesses the amount of claims paid and unpaid, determines what problems are causing lost revenue, and communicates the information to the staff so that errors are corrected and don’t recur.
This list of issues doesn’t even include the many details involved in medical coding. Having a dedicated staff of certified billers who are experienced in lab billing services is key to your success.
Outsourcing RCM to Medcare MSO has proven to greatly increase revenue for our laboratory clients. As a dedicated medical billing company, we have taken an innovative approach, including developing our own proprietary software to ensure our clients have immediate access to all the latest codes and insurer changes. Medical billing for labs is one of our specialties. Call us at 800-640-6409 or get a free demo today and we will show you how we can increase your lab revenue and make your job easier.