Ever get that feeling that there should be more charges in the billing system?  How many times have you or someone else said something like “we did 3000 samples last month, but we only see 2500 that got billed”?  Are salespeople complaining that all their samples aren’t in there?  How can you tell if they are just complaining, whether the referral source didn’t send as many as they think or claim (which we all know happens), or if there were more samples sent or received and instead of getting billed they are just going “poof”?

 

Where can revenue be lost?

Tons of places.  Most people in the laboratory world are familiar with the concept that not all claims get paid.  Everyone is used to this concept if you have been in the business for any period of time, so you know that there is some loss in that billing process where payers don’t pay.  And at least you can see where the loss resides by looking at denials or unpaid samples that are sitting in AR (or you should be able to).  In fact, if you want to dig, you can determine which payers are the worst or what particular problems could be investigated that make up the largest number of written off claims or unpaid claims.

 

But What if there was no claim?  How would you know there was something wrong in the revenue cycle?  You can quantify what percent of your claims are written off or sitting unpaid in AR, and you can maybe even compare this to other labs (this is feasible although few labs do this).  But what if a claim was never created for a particular sample?  No one would ever follow up on it and try and get it paid.  It would never be written off and would never be sitting unpaid in accounts receivable.  It would just disappear into the void never to be heard from again.  How is this possible?

 

Think of your revenue funnel where they can fall out at any stage:

  1. Samples accessioned
  2. Samples billed
  3. Samples paid

 

There is a step that people don’t realize is missing from the above.  In fact, there are actually several steps potentially depending on your RCM workflow.  Where does loss come from where samples just disappear?  Did you billing department or company make a mistake or was it something else?

 

Let’s walk through your operational steps in the RCM process and look at where there can be problems that result in lost samples.

 

RCM Workflow Gaps

Samples come into the lab, then they get accessioned.  Let’s stop here for second.  There will be some samples that never get accessioned for various reasons.  Your lab may keep a log of these outside the LIS and this log can be incorporated into the charge reconciliation (and we recommend you do this) so that you can get a complete view of how many samples are being sent and from where, as well as any problems that result in an inability to accession the sample concentrated in particular referral sources.  For the purposes of this article, we are going to assume the volume that don’t get accessioned is low and manageable in your operations.

 

After accessioning the test(s) are run, then resulted, and the status in the LIS/LIMS is changed to typically either “Resulted” or “Ready to bill”.  Samples can get stuck in a “Pending” status or similar and never be resulted, so one part of the reconciliation should be to look to see how many get stuck in this stage.  Many workflows for labs leave all samples as “Resulted” or “Ready” because there is no automatic flag to switch it over even if there is an interface or if someone manually logs into the LIS in order to bill the samples.  The reality is that it doesn’t matter.  Samples can be labeled in the LIMS “Pending”, “Resulted”, or even “Billed” and still not be billed.  If you are doing the recon, you will find any and all of these and get them billed, regardless of their status in your lab system.

 

If someone is entering claims manually from the LIS into billing system (this is common), someone needs to go through the list of accessions that are in some status like resulted.  Billers can be manually going down the list and miss one or even some accessions and not enter them, since it is hard to track.  Even if there is a flag to switch to “billed”, they can lose track and just flip the wrong ones.  We have seen billers sometimes even miss a day of accessions entirely.

 

What gets confusing is that many LIS just automatically flip something to “Billed” under some conditions like once the data is sent via interface.  However, “sent to billing” is not the same as “received by billing”, much less “entered by billing”, or actually “billed”.  When an interface is present, there can be many problems.  The LIS never sends the record for the accession.  The record is sent, but it never gets through the interface engine to billing.  It could be that there was some problem with the file or just that someone didn’t create a rule to handle that situation, so it just disappeared.  If no one is checking the interface engine logs they can get stuck there.  Additionally, they can get sent from the interface engine to the billing system and not have been entered.  And of course, they may never have gotten billed.  We have even seen really complex scenarios where their was a weird intermittent problem where some part of the record was missing like Insurance ID field, so even though insurance had been loaded it was dumped into Self Pay and just billed to the patient with little success.  Other times because of poor match up in master data files, the insurance didn’t match anything correctly in the billing system and got billed to the wrong payer, who then denied for ineligibility.

 

How Big is the Problem?

The average across all labs is close to 5% of accessions that simply disappeared and were never billed.  Most often these are accessions that never get sent to billing, but they are often also samples where there was some problem that resulted in them being unable to be entered or billed.  We have done reconciliations that found thousands of samples in a single year that were never entered into the billing system.  If you are down at 1% you are exceptional…or you just haven’t found the problem yet.  We just performed one that found 1,850 accessions missing out of just 19,000, which is nearly 10%.  I wish I could say this was extraordinary, but it is not.

 

What’s a Lab to Do?

Charge reconciliation.  Daily, monthly, and rolling 12 months.  Identify anything that was accessioned but not billed and track it down and get it out.  Daily recon requires an excel/csv file sent along every day to reconcile what was received in the interface.  That helps with one part, but still won’t catch what was never sent.  Anything that is stuck in unresulted status for too long will show up and can be investigated. If it was resulted and just never flagged for billing, it can still be billed.

 

Baby Steps First

Full blown reconciliation takes a significant amount of time to set up and get right, but when you do it is extraordinarily rewarding – like free money.  Export an accession list with the status from your LIS and cross reference it to see which accessions are not in your billing system and run some pivot tables.  The foundational and critical requirement of course is that your billing system needs to load and report accession.  You will quickly start finding unbilled and unentered accessions.

 

Contact us to find out how many claims are missing that could be submitted.  Found claims is found money.

 

About Apache Health

Apache Health is a revenue cycle management (RCM) analytics, benchmarking, and auditing company. Our sole mission is to help providers make more money from their RCM using data.  The founders of Apache formerly ran a large medical billing company that was acquired by a private equity group in a rollup. Apache’s predictive analytics will benchmark billing performance and project exactly how much more revenue you should earn from your existing volume of patients.  Using many factors and a blend of artificial intelligence and specialty specific benchmarks, the model projects whether changing the billing process would improve collections for your particular mix of procedures and payers. Apache Health can help you evaluate whether to outsource the billing, determine which billing company to select to maximize performance, or track in-house billing performance improvement over time. For more information contact:

Sean McSweeney

Apache Health

www.apachehealth.com

888-422-5514