What exactly is the process for laboratory billing, and who is involved?
In simple terms, the lab billing cycle is a series of interactions between a clinical lab (or its outsourced medical billing company like Medcare MSO) and the patient’s insurance company. The length of the lab billing process is determined by the complexity of each’s patient’s account and can last anywhere from days to months.
To begin the billing process, a diagnosis and procedure code must be assigned for the provided services. These codes are essentially what helps the insurance company determine if medical services are necessary and if the patient has appropriate coverage. In the laboratory billing system, there are multiple codes that can be used: International Statistical Classification of Diseases and Related Health Problems (ICD) and the Current Procedural Terminology Codes (CPT).
How Does Laboratory Coding Work?
The ICD is widely considered the standard tool when it comes to clinical, epidemiology, and health management. The codes, which are maintained by the World Health Organization, classify different diseases, symptoms, complaints, abnormal findings, causes of injury, etc. The CPT codes, however, are maintained by the American Medical Association and are utilized to convey information about services and procedures to providers, patients, insurance companies, and coders.
CPT codes are primarily assigned and analyzed for financial and administrative purposes. Once these codes are applied, the lab billing cycle enters into the collections process—meaning the payer will be billed, usually electronically. Once claims are approved, the laboratory will be reimbursed for a pre-determined percentage of billed medical services.
What Happens if the Claims Have Been Denied?
If the processed claims have been rejected, they are generally sent back to the provider under Explanation of Benefits (EOB) or the Electronic Remittance Advice. The provider must then determine what was wrong with the original claim, make corrections, and resubmit. This process is often repeated multiple times, largely as a result of incorrect coding. The billing cycle can become quite lengthy if claims are being submitted by personnel who do not specialize in laboratory coding.
There are simple ways to avoid denials of laboratory billing claims, but having a dedicated team of medical billing specialists and coders will reduce denials, recover unpaid claims, and shorten reimbursement cycles.
Medcare MSO is a trusted name in medical billing services because we believe in providing extraordinary solutions that go above and beyond standard practices. We provide customized insurance & patient billing services, healthcare recovery assistance, and practice management solutions to organizations of all types and sizes. Our innovative medical software is engineered to simplify all aspects of practice management and patient engagement and is currently being utilized in over 80,000 healthcare facilities nationwide.
3 Tools to Improve Your Lab Billing Practices
If your lab handles billing in-house, you always have to be on the lookout for tools to improve your billing practices. After all, the goal is to stay competitive and profitable. Large labs generally rely on robust software systems to ease their workflow, but for smaller companies, this can be seen as a difficult or costly option. That doesn’t have to be the case—you simply need the most effective, cost-efficient tools to address the unique needs of your lab.
Your primary focus should be on controlling costs and getting higher reimbursement rates without compromising the quality of care that you provide. Three tools that can significantly enhance your billing practices include
(1) A well-designed laboratory information system,
(2) Instant adjudication, and
(3) Free ICD-10 converter software. Let’s take a closer look at each one.
1. Laboratory Information System (LIS):
A good LIS allows lab techs and medical professionals to identify any issues with the revenue cycle that contribute to or create financial burdens. It takes all of your past data and gives you insight on what type of performance you might expect in the near future. With a good LIS system, you are able to improve profit potential by implementing new policies and procedures that help you avoid claim denials.
2. Instant Adjudication:
The success of your laboratory depends on your flow of clean, paid claims, and that means you have to continually assess and improve your billing processes. Accelerating cash collections at the time of service (meaning while the patient is still present), has never been more critical than now. With automated eligibility tools, you can verify a patient’s coverage, file a claim, and receive a response before they’ve even left the office.
3. ICD-10 Converter Software:
For bigger practices, this might not be as pressing of an issue, but for smaller practices that need assistance converting thousands of codes, this software might be a good option. This software bundle is known as the ICD-10 charts and can convert up to 10,000 codes. Using the data from these charts, you have a much better chance to code your claims correctly and reduce denials.
These three tools could make a positive impact on your laboratory billing practices and increase profitability. Many labs, however, find that outsourcing all or part of your billing needs saves both time and money. Medcare MSO offers customized lab billing solutions & systems to meet the unique needs of your lab. From standalone services like AR Recovery and Census Entry, to complete, comprehensive billing services, we provide exactly what you need, when you need it.
The Next Big Thing in Lab Billing
With the way things are going in lab billing, it’s crucial that you don’t stay stagnant. The field is always expanding, and with new tools for business improvement emerging constantly, you don’t have to rely on outdated methods of laboratory billing. By utilizing some of the latest innovative solutions to face today’s billing challenges, your company would be in a position for long-term success. Taking advantage of technology is one of the ways you can do this, being that almost everything in today’s society is based around it. It is the future.
What Kind of Technology?
As far as lab billing goes, technology is helpful because it can provide companies with the opportunity to use a specific kind of software. This is billing software that is designed for laboratories, overall improving how smoothly the financial operations at your lab are able to run, and helping you collect the payments at a faster rate. And with laboratory managers already having a considerable amount of responsibility on their plate, it’s a nice weight lifted off their shoulders when this is taken care of automatically, with little to no room for error. The best feature in this kind of software is something called the claims processing.
In simple terms, it is able to validate each claim and the different codes that it uses before sending them out; that way you can correct any typographical errors that were noticed first. This feature speeds up the entire process dramatically, saving you the time and energy from having to repeat those steps multiple times. Billing software allows you to check the patient’s’ eligibility and insurance status before the time of treatment; meaning that if they aren’t covered, there won’t be any rude awakenings afterward. And if that isn’t enough, your company is able to customize the bills for each specific doctor that you’re working with.
All of these things considered, you’ll ultimately be shifting most of the accountability from your staff to a computer. Meaning that the long, extensive training required before will no longer be necessary and they will have more time to focus their attention on engaging with the patients and making sure that they are satisfied.
So while the field of lab billing is indeed becoming more and more complex every day, it’s also becoming easier at the same time. Technology is the future, and laboratory billing is hopping on board with it. With its help, your company will be running smoother than ever in no time.
5 Things that Slow Down Laboratory Billing Processes
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 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 co-pay 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.
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.