There are many programs and proven strategies that can facilitate growth for laboratories. With so many programs, it can be hard to balance servicing new client needs and your own financial goals. Billing information and data is crucial in determining financial and service objectives. Client profitability needs to be considered as well to improve your own margins. The end goal is to optimize the financial benefits while providing patient care.
Information is necessary when keeping up with billing systems. One of the first things to consider when getting good information is to examine patient activity and volume. Ideally, your billing functions will generate claims based on the lab’s activities. Knowing gross charges associated with patient encounters, paired with how many CPT (current procedural terminology) codes you have, should give information that is descriptive of the status of the lab’s billing functions.
Regarding outsourced lab billing, it is imperative to know the amount of gross charges. There should be a strong correlation with the volume produced in the lab system with what was sent out. When the numbers don’t add up to the expected charges, it may be a matter of delayed testing orders and billings based on claim submission times.
The best way to keep up with your billing is examining the number of gross charges compared to patient activity. This includes making sure you’re familiar with the number of accessions received and backlogs, examining the number of claims that are suspended or on edit for missing information, as well as researching your “red-flag” claims with missing or written off information.
Effects on Billing and Collections
There are many issues that can have effects on billing and collections. When managing profitability, it’s also important to consider client information inputs & errors, medical necessities without documentation, and the rate of denied work. Denials can be easily managed by keeping up an A/R table. This table is crucially important in gaining missing information from a client. Specifically, your software should be capable enough to filter outstanding claims by payer, date of service, and last bill date to help oversee claims.
These methods will allow you to work them in an impactful manner. Proactive management of your business begins with an understanding of economics. Overall activity of gross charges and what you collect is obvious, but what about your costs at the CPT and accession levels? Reviewing revenue per accession and CPT codes will show you the true foundation of your costs. Knowledge of your fixed and variable costs will help show you the dynamics of client/payer relationships. Understanding your loss leaders is key.
Strategies to Maximizing Profitability
There are several strategies to employ when maximizing your profitability. It takes discipline to discard low margin accounts. Determining your competitive advantages (practicing specialties) and productive niche markets is a clear way to maximize growth. Don’t be afraid to renegotiate payer contracts either. This facilitates a win-win atmosphere amongst your business and clients. At the core of these methods and strategies lie one thing: Information. It is critical to familiarize your team with gross charges, CPT rates, daily accessions processed, and your number of claims with incomplete and missing info. Profitability ultimately relies on how well you understand the interdependencies within your Lab. Strategies employed to minimize cost, maximize profit, and efficiently receive payment will facilitate long term success with any business model.
Credence Global Solutions provides solutions to accommodate labs of all sizes. From revenue cycle management and patient financial engagement tools, labs can outsource billing effectively so they can focus on growth and client relationships. to increase collections and time spent on collections. With over 200 years of industry expertise, our executive leaders have their fingers on the industry pulse and understand our lab clients needs and processes. Contact us today for a deeper dive into how we can help your laboratory.