Advanced Billing Technology

Challenges facing laboratories continue to mount as financial pressures in healthcare increase. Inadequate legacy billing systems and inaccurate financial information combine to erode lab fiscal performance and profitability. Fortunately, hospital laboratories can overcome many of these hurtles by either partnering with an outsourced revenue management service provider that utilizes a billing platform designed for laboratory claims or by purchasing a lab-specific billing system.

A lab-specific billing system has advantages over typical hospital billing systems that often are incapable of managing complex fee schedules and other key aspects of the billing process. The right kind of technology unlocks financial information that hospitals require to transform outreach labs into solid profit centers. Many hospital-based billing systems, although fine for handling inpatient and outpatient lab billing, are unable to generate the financial metrics needed for outreach and reference labs to achieve revenue growth or report costs as a percentage of revenues, profitability, client statistics and other vital data.

Lab-specific Systems

Laboratory information technology, from the front-end to the laboratory information system to the billing system, can greatly influence the profitability of a lab. While paper requisitions are still a common reality, the industry trend is moving toward Web-based order entry or electronic interfacing to the electronic medical record. This leads to greater efficiency and accuracy of the charge transaction. A billing system that allows robust client configurations, including customized invoice formats, improves customer satisfaction and helps achieve positive financial results.

At a minimum, the technology should have automated error identification prior to claims submission or invoicing to improve efficiency and reduce days in accounts receivable and better meet client, payor and regulatory requirements. Comprehensive rules are also needed to validate crucial information on billing transactions received electronically from a host system.

Automating the validation process lessens the need for manual intervention, while logical work queue functionality allows for real-time online management oversight and streamlining of processes such as clearinghouse submissions and electronic remittance, charge and demographic interfacing and admission/discharge/transfer interfacing to monitor the 72-hour rule.

Business Intelligence

Hospital labs tied to hospital billing systems for processing outreach transactions typically lack the capability to offer multiple fee schedules and discounts as a result of revenue and volume thresholds. A lab-specific billing platform, on the other hand, can provide unlimited fee schedules and discounting options to help hospital labs better compete with national labs for market share.

Lab-specific billing systems should provide client modeling for pricing and support services prior to contracting to determine client profitability. They should house cost information and marry this data to revenues collected, and users should be able to view profitability by test, payor and client in a real-time fashion. Access to this information helps labs make strategic decisions regarding which tests should be performed in-house and which payors need contract revisions. Systems should continuously monitor for expected fee discrepancies from payors.

Robust business intelligence is essential in effective laboratory billing technology. As one example, systems should display which clients are underutilizing laboratory services as previously contracted. This enables laboratories to identify clients that might be gravitating to another lab or cherry-picking the more profitable tests based on payor. Systems should compare clients' expected versus actual performance to provide labs with the ability to strategically evaluate clients' successes. Based on client utilization reports, a lab could determine whether it is unnecessary to provide a client with a phlebotomist or if it is providing clients with too many supplies.

Additionally, a given billing technology should be able to compare proposed pricing with costs, fee schedules and other client pricing; provide detailed sales territory and client statistics reports to help sales teams better manage their clients; and support compliance via online provider acknowledgement records. Systems should be able to export data to a spreadsheet for further analysis and offer e-mail capabilities for information-sharing with clients.

Whether an independent lab or a hospital outreach facility, all laboratories should consider outsourcing revenue cycle management to a vendor that utilizes a lab-specific billing platform or purchasing a lab-specific billing system for ultimate efficiency and productivity.

Donna Beasley is national director, Revenue Builder™ for Labs, McKesson Revenue Management Solutions, Alpharetta, GA.