Mako Medical Laboratory

Case Study

Review Period

3 Months

Old AR Recovery Improvement

Up to 15%

Monthly Revenue Increased by

13% to 15%

Revenue Increased by

15%

Summary of our work

Like many labs today, Mako Medical Laboratories was struggling financially due to rising costs and payers cutting the amount they would pay for services. Medcare MSO was contracted to take over their medical billing and instituted rigorous AR collection processes and implemented a system of efficiently tracking and managing claims. With this combination, old AR recovery was improved by 15% and monthly revenue was increased by 13-15%.

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Challenges

Mako Labs provides a full suite of laboratory services including common tests such as urine toxicology, routine blood testing, and oral fluid testing, but also offers more advanced technology such as Polymerase Chain Reaction (PCR) and Pharmacogenetic (PGX) testing. The lab bills between two and three million dollars monthly.

Prior to turning billing over to Medcare MSO the lab had a large amount of its expected revenue held up in accounts receivable (AR) and an outdated collections system that was not working for them. On top of that, some of the government payers that had received claims were holding back payments.

The lab was dealing with:

1

Outstandings

$30 million in outstanding balances.

2

Yearly loss

Over $1.5 million lost every year in uncollected bills.

3

Claim Denials

Between $300,000 and $500,000 in claim denials per month.

Part of the reason Mako was losing revenue was because their coding was not up to date with the CMS toxicology coding guidelines. They were also losing a significant amount of money because they had not mastered the more complex PGX billing and coding requirements.

Solutions

Medcare MSO began working with the lab by addressing old AR recovery. They then moved on to managing the laboratory billing by implementing a system designed to track and obtain maximum reimbursement for every claim.

These issues were discovered and remedied:

Wrong-coding issues:

Medcare MSO’s experienced billers have been trained in laboratory coding and claims are scrubbed before being sent to clearinghouses.

Missing encounter forms or requisitions:

The new system verifies that each claim includes the appropriate documentation.

Inefficient denial and rejection handling:

Medcare MSO has developed a system for tracking every single claim until it is paid so that clean claims are submitted, and rejections and denials are swiftly addressed. No claims are allowed to fall through the cracks and expire.

Lacking a system for old and current AR maintenance:

The current system for managing claims includes the AR process. Each claim is tracked through the AR process until it is resolved.

Problems with payment posting of AR recovered balances:

Posting is also part of Medcare MSO’s standard process, making sure all payments are properly entered.

Payers holding payments:

This turned out to be primarily an issue with provider credentialing with a state Medicaid program. Medcare MSO resolved the issue and helped Mako recover over 200 thousand dollars.

Overlooked mileage billing:

Mileage was not being billed for specimen collection from homebound patients, but the lab is now being paid for this legitimate service, thanks to the implementation of compliant billing practices.

Medical necessity errors:

The necessary examination of test results had not been done to document medical necessity, resulting in denied claims.

Results

Medcare MSO has managed the medical billing for Mako for three and a half years with consistent results. They have audited more than 20,000 requisitions a month and recover more than $1 million in old AR annually. The overall increase in revenue since the two have been working together more than covers the cost of the service—plus the lab no longer has to staff a billing department or deal with insurers and payers.

In the years since taking on its AR and billing, Medcare MSO has helped the lab introduce new procedures such as PCR and PGX, which have brought in a lot of new revenue. Newer technologies are more suspect by payers and requirements for claims are more stringent. The MoldX enrollment process for molecular testing has to be completed before a lab can bill for any molecular claim and medical necessity worksheets and other compliance documents are required. It can be difficult to find billers who know how to manage the entire process, but it is no longer an issue for the lab because now they have a team of billers who understand the correct procedures and required documentation necessary to get these high-reimbursement claims paid.

Medcare MSO’s practices have increased the lab’s old AR recovery by about 15% and the revenue from ongoing billing by 13-15%.