For laboratories, managing finances and maintaining profitability is no simple task. With tighter margins, unique billing and coding, and complex reimbursement schedules, labs, and especially independent labs, need to pay strict attention to their finances. However, navigating all the available data can be challenging without access to the right tools. That’s where revenue cycle management comes into play, along with lab-specific tools like iNsight, which deliver the metrics and financial insights needed to maintain profitability and long-term sustainability.
Revenue Cycle Management (RCM) For Labs
The RCM process for labs is essentially the moment a patient gets a script to obtain lab services through final payment procurement (whether from the patient or reimbursement from the insurance) and every step in between. Understanding how RCM works for labs can help demystify the myriad of data points and performance indicators that show the health and status of the lab’s financial matters. Effective RCM management means paying attention to financial insights, which will create the conditions for accurate billing, high reimbursement rates, and optimal cash flow.
Unique Needs of Diagnostic Laboratories
Diagnostic laboratories provide lab services that include diagnostic tests, which are coded much differently than patient visits or procedures. In addition to the unique coding, labs often deal with multi-payer sources and reimbursement requirements, as they receive payments from individuals, private insurance, and government-paid insurance like Medicaid and Medicare.
It’s critical for laboratories to take a keen interest in their financial insights because those data points can significantly impact the lab’s bottom line. Whether it’s streamlining billing, automating processes, or optimizing profit margins on individual tests, labs must take the time to carefully manage their operational costs to stay solvent.
What Financial Insights do Labs Need?
Independent laboratories need to keep a close eye on key performance indicators to ensure their operations are running profitably, efficiently, and functionally. The following financial insights are imperative for labs to have. Without them, they are unable to assess their performance, make changes to benefit operations, or understand their business finances.
Charges and Visit Count
By having access to financial insights on charges applied and the number of patients, independent labs can track the services they provided and the volume of business that they are doing. This will help labs have a solid picture of what incoming revenue they have and what the potential is for growth. This can help labs assess pricing strategies as well as how much more business they can take on.
Rejection and Clean Claim Ration
Independent labs need to be aware of how their claims are being processed—meaning, what percentage is rejected and how many claims are processed cleanly without any issues. Having this data accessible can help labs identify pain points in their billing and coding, identify areas of opportunity (and automation) to improve claim reimbursement and reduce denials, and have a better idea of how long their claims are taking to process.
Hold Status by Entry Month
Understanding how long it takes for claims to process is critical in knowing what cashflow is available—and it can help identify problems in billing and coding. Oftentimes, claims that are held up are missing information, coded incorrectly, or other issues. This can affect how fast the payments are processed.
Charge Log
A charge log is an easily accessible list of what charges are billed out. This is helpful for multiple reasons, but most importantly, so no charges go unbilled. Additionally, labs can identify what types of charges, whether it’s diagnostic tests or a specialty lab, are most frequently run. This is a financial insight that can help guide how the lab operates.
Billing Log
Keeping track of claims submitted is an integral process for laboratories. Having this information, along with the capability of sorting into more nuanced categories of denials and approvals, will help labs understand what has been submitted for claims processing and what hasn’t. Track billed amounts and forecast cash performance easily and quickly.
AR
Having accounts receivable data is one of those standard financial insights that laboratories must have. The ability to sort data into AR by fiscal billing day, month, as well as aging trends. These are critical accounting metrics.
Revenue Per Specimen
For laboratories specifically, being able to track revenue per specimen, specimen types, is integral to knowing what services to offer and at what prices. Having this financial insight can help shape how the lab makes money.
Trends
By being able to sort financial insights by trends, laboratories can identify favorable and unfavorable payers, payer class, practice provider and more, they are better equipped to make decisions about their lab.
Learn About iNsight
Make informed decisions based on real data. Get the financial insights you need with iNsight—learn more here:
How Does iNsight Help Independent Laboratories?
Independent labs can get the tailored information they need to operate the business side of their lab through iNsight from Credence Global Solutions. iNsight is a revenue cycle management tool designed specifically for independent labs, allowing the capability to sort financial insights according to their needs. With the iNsight tool, independent labs can gain access to the financial insights that they need to run effectively, efficiently, and profitably.
Ultimately, independent labs can gain actionable insights from this user-friendly tool and get comprehensive data in customizable, organized reports to operate with precision.
Easily Access Comprehensive Data
INsight gives independent laboratories easy access to the data that moves their lab. In order to analyze profitability, which payers are paying, how claims are paid, what’s going on with the accounting department, whether billing and coding is being handled properly, and more, labs need to be able to get a snapshot of what’s going on in any area of their business. iNsight gives labs access to the financial insights that will shape operations.
Get iNsight
Are you interested in transforming your independent lab’s revenue cycle management process? Try iNsight, a new comprehensive data tool from Credence that will provide all the financial insights your lab needs to optimize profit margins and manage your RCM effectively. To get a demo of iNsight, contact us!
