Like most business enterprises, molecular, clinical and physiological pathology laboratories sustain themselves by paying for the services they provide. But what makes laboratories and other health organizations unique is that most of their bills have to be submitted to insurance companies and other payers. Unfortunately, to the disdain of laboratory managers, payers use several reasons for refusing payment.
Medical denial in healthcare has increased since the start of the pandemic, and according to industry publication Medical Laboratory Observer (MLO), medical labs are particularly hard hit, with average denial rates of 15 percent for in-network claims and 15 percent for out-of-network claims. is 30 percent. -off-network. However, on top of low reimbursement rates, ever-changing payer rules, and a growing population of uninsured and underinsured patients, today’s laboratories also face large fluctuations in patient volume and unprecedented staffing shortages. All this is making it difficult for some laboratories to prosper.
To Get Best Pathology Lab Management Software : CLICK HERE
Lab Billing Denials Are Expensive
Although some denials are simply a cost of doing business, many can be easily avoided. According to LigoLab RCM Billing Manager Farzad Abdi, most denials are the result of human error.
Despite this, lab managers are hesitant to change the way they work. Many people are not willing to spend money on improving their Revenue Cycle Management (RCM). However, the stakes are getting higher for those looking to invest in new solutions.
Improper coding and other inaccuracies play a major role in the denial of the claim, he said. But it’s easy to fix with automation. By simply automating their billing and coding processes, we’ve helped some labs increase revenue by as much as 30 percent.
Expenses are rising and reimbursements are shrinking, so it is not acceptable to leave hard-earned money on the table, Abdi said. Lab who want to grow and sustain their business have no choice but to innovate, and RCM solutions that offer automated billing and coding are a step in the right direction.
How is Denial are Triggered?
Clean claims are dependent on accurate coding and adequate knowledge of payer policies and billing procedures. This can be a significant challenge for smaller labs that may not have a billing specialist on staff. Therefore, laboratory managers will need to train the staff they have or undertake the training themselves.
Another aspect of billing that can be problematic is timing. Often, denials that result from late claim submissions cannot be contested, and the consequences for submitting claims late can be severe.
If a lab insists on manual billing and coding, they’re still going to have to spend money on training and staff, said Abdi. Coverage policies are constantly evolving and each payer has its unique way of doing things. Even certified coders have a hard time navigating all that is involved.
There is a shelf life on when a claim can be submitted, Abdi said. Because of this, lab workers are often in a hurry to weed out claims, even if they are coded incorrectly. Unfortunately, this type of approach can result in thousands of dollars in damages and hundreds of hours spent on appeals of claims.
Imagine how difficult it is for laboratories to calculate and operate a tiered structure using manual procedures, said Abdi. Also, some payers want to accommodate labs for alternative payment methods. Now, labs not only have rolling totals and discounts to counter, but they also have a variety of payment methods to manage.
Another trend that is making the billing process even more difficult for laboratories is that some payers and high-volume customers now have volume discounts and other credits on a daily, weekly or monthly rolling basis embedded within their new contracts. Things like that are needed. COVID-19 testing has made it more common.
With everything lost, laboratories of any size can benefit from technologies designed to reduce billing and coding problems. Platforms such as the award-winning LigoLab LIS and the RCM Laboratory Operating Platform help labs save time and grow collectibles by adding easy-to-deploy automation.
When it comes to billing, it is important for laboratories to implement systems that not only increase productivity, but also protect them from errors and losses, said Suren Avunjian, CEO of LigoLab. That’s why LigoLab’s RCM solution includes a rules engine and automation that can be customized and easily updated. Labs and their payers can see, in real time, everything being processed, and any necessary adjustments can be made at a time. Can be done with the simple push of a button. Because of this, a process that once used to take weeks now only takes minutes, and most importantly, it is error-free.
Harnessing the power of rules and automation
LigoLab’s billing and coding automation is powered by a powerful, proprietary rules engine developed from terabits of data analysis and decades of practical billing experience. Although sophisticated, the technology is easy for laboratories to deploy and its use does not require specialized software knowledge. It can be set to run automatically and can be monitored and customized as needed. Its functions are straightforward and intuitive.
LigoLab’s system also uses NCCI editing to alert users when code conflicts or problems with units and modifiers arise.
LegoLab’s automation can accurately assign ICD-10 and CPT codes based on NCD, LCD, or payer specific coverage policy, Abdi said. It also learns from previous denials and alerts if there is a potential for denial before a claim is submitted.
One of the mistakes labs make is overuse of the same modifier in all cases, Abdi said. This will eventually lead to wholesale denials and, in some cases, attempts to compensate for previous claims paid by payers. LigoLab protects against this by alerting laboratories to possible denials.
In short, LigoLab completely automates everything that a billing expert would repeat,” Abdi said. “The only thing needed is some monitoring and some minor adjustments now and again. What’s even better is that the system never gets tired, never asks for leave, never requires training, and never leaves for another job.
The lab’s billing patterns are incorporated into the way LigoLab’s automation works. From lab to lab, 95 percent of the billing work they do is redundant, so the system can quickly understand lab billing patterns and follow them without any errors or second guesses. For the other five per cent cases, the billing administrator just needs to click on “Create Billing Pattern” and that pattern will be added to the system for future use.
The rules and automation contained within the platform maximize net collection for the laboratory and minimize compliance risk,” Avunjian said.
Automation is the key to quality and scalability
The average coder can code about 250 claims per day with minimal errors. If the RCM workload of a laboratory is expanding beyond the point of manual processes, automation is essential.
There is an increasing reliance on diagnostic testing within the medical community, Avanjian said. Thanks to the widespread adoption of evidence-based medicine and the demands created by COVID-19, laboratory services are now in high demand, and will be for the foreseeable future.
When COVID-19 first hit, the LigoLab partner lab experienced a huge surge in cases. Some labs went from processing a few thousand tests per month to about 500,000 claims per week. Without billing and coding automation, the billing teams in these laboratories would not be able to meet the demand. Using manual processes would have been next to impossible. Thankfully, with LigoLab’s RCM solution, laboratories were able to scale successfully, achieving a clean claim rate of over 98 percent.
Another LigoLab customer used manual processes for their client billing tasks for several years before taking advantage of LigoLab’s RCM features, including its rules engine and automated billing and coding capabilities. Soon after the implementation of the RCM module, the same laboratory received immediate payment for its investment, in which billing processes that took several weeks, with frequent delays due to clerical errors, now take only a few hours. Better yet, the lab’s billing staff was freed from time-consuming administrative tasks and was able to go after every dollar was due.
Within weeks of deploying our solution, the lab was collecting 20 to 30 percent more each month due to the reduction in errors and costly overhead, and this was without increasing testing volume, Abdi said. The lab has maintained that level of additional revenue ever since.
Industry research indicates that this type of outcome is not an isolated case. A recent report found that healthcare companies saved $122 billion in administrative expenses through RCM software in 2020 alone. The same report identified another $16 billion in savings achievable by automating just nine steps in a daily administrative workflow. This is a significant return on investment that laboratories should consider as they weigh the pros and cons of upgrading their RCM strategies.
When you consider the increase in productivity and profit, and the reduction in AR and cost with billing and coding automation, any investment in new technology is well worth it, concluded Abdi.
It makes perfect business sense to choose a solution such as the Ligolab LIS and RCM Laboratory Operating Platform. The platform’s full integration with LIS and its rules-based capabilities enables laboratories to automate billing workflows from order creation to invoicing, giving them substantial leverage that reduces denial and audit risk while increasing net collections and profitability. reduces. Also, thanks to LigoLab’s automation, the lab doesn’t have to worry about the loss of knowledge or skills due to employee turnover.
In addition to automated ICD-10 and CPT coding and client billing, other innovative features of LigoLab include.
- Advance demographic and insurance verification
- Insurance search services
- Automatic claim verification and error correction
- White page address look-ups
- Real-time data processing workflow queues for increased visibility
- Detailed statistical reports to help laboratories monitor trends and KPIs
All of these features combine to create a modern laboratory operations platform that legacy LIS and billing systems cannot match. With this, laboratories scale easily and efficiently as automation helps in increasing revenue by reducing errors and time spent on claims.
About LigoLab
LigoLab is an award-winning provider of innovative end-to-end healthcare software for pathology laboratories, serving 150+ facilities across the country. As a comprehensive enterprise-grade solution, the LigoLab LIS and RCM Laboratory Operating Platform™ includes modules for Anatomic Pathology, Clinical Pathology, Molecular Diagnostics, Revenue Cycle Management and Direct-to-Consumer, all on a powerful and integrated platform who are in every role, every department, and every case. LigoLab empowers laboratories to better serve patients, differentiate themselves in the marketplace, scale up their operations, and become more compliant and more profitable.
