How to Prevent Profit Losses on Laboratory Payments

Bad data, missing information, revenue leakage, and disparate systems don't just create confusion and disorganization for diagnostic labs -- those problems also cause losses with the lab's bottom line.  

How? 

By creating incomplete or incorrect information in the lab's billing and claims process. That can lead to denied payments or getting paid less than what the lab is actually owed. 

And since labs deal with multiple applications, multiple vendors, and different middleware solutions that complicate their ability to normalize and standardize data and make it nearly impossible to recover lost revenue. 

What's the solution?  

The solution is creating the Perfect Order. Step 1 is capturing orders electronically through multiple methods. Step 2 is verifying order accuracy. And step 3 is scanning for potential fraud or non-compliance. 

To be clear, this entire process should happen almost entirely automatically with technological solutions -- not manually with paper and pen. 

When the data is cleansed and validated earlier in the process, labs will experience fewer issues downstream. Using rules-based orders management and paper-to-digital conversion, you can turn imperfectly submitted orders into clean, compliant orders at record time and scale.   

The solution also increases payment collections with revenue cycle management services such as pre-authorizations, eligibility verification, billing and collections, and denials management.  

Here are some things that your IT systems should be doing in order to make sure your diagnostic laboratory doesn't experience any profit losses on lab payments.

1. 100% Electronic Orders

Start by implementing an order management system that allows for orders to be placed electronically. This could be through a web portal, an electronic health record (EHR), or an XML interface.  

This will ensure that all orders are placed electronically and in a standardized format. It also helps with data cleansing and validation.

2. Pre-Authorization Verification

Make sure to also verify pre-authorization for services and procedures. This verification should be done before the lab sends the order to the insurance company. 

This will help to ensure that only valid orders are being sent and that no false claims are being made. 

3. Patient Payment Processing & Collections

In order to improve patient collections, make sure that you have a system in place for processing payments and collecting on bills. 

This could be through an online payment portal or by mailing out bills and collection letters. Ideally, payment options should be discussed before tests are even performed.

4. Accurate Patient Matching

One of the biggest causes of incorrect payments is inaccurate patient matching. This happens when the wrong patient is matched to a test or procedure. 

This can be caused by incorrect or incomplete patient information, misspelled names, and mismatched social security numbers. 

To prevent this from happening, make sure that your system has robust patient matching capabilities. This will ensure that the correct patient is always matched to the correct order.

5. Patient Eligibility Confirmation

Patient eligibility verification is another key step in preventing incorrect payments. This is the process of confirming that a patient meets the eligibility requirements for a certain test or procedure. 

This can be done with software that checks and verifies insurance information, age, and other eligibility criteria. 

6. Scrubbed & Corrected Orders

Once orders have been verified and matched to patients, they need to be scrubbed and corrected. This means that any incorrect or incomplete information needs to be fixed. 

This could include fixing misspelled names, correcting social security numbers, and updating insurance information -- good software can do all of this on autopilot. 

7. Corrected Claims Submission

Once the orders have been scrubbed and corrected, they need to be submitted as claims to the insurance company. 

This should be done in a standardized format and using the correct billing codes.

8. Fraud Prevention

Finally, make sure that your system has capabilities for fraud prevention. This could include features such as: 

• Checking for duplicate orders

• Checking for incorrect or excessive services

• Checking for high-risk providers

• Detecting billing patterns that may indicate fraud

Final Thoughts

By using the right technology, you can help your diagnostic laboratory prevent profit losses on lab payments.  

Implementing an automated order management system, pre-authorization verification, patient payment processing & collections, and accurate patient matching will go a long way in ensuring that your lab gets paid correctly for the services it provides. 

The key is having good IT systems that do the heavy lifting for you. If you want to learn more about getting software built for your lab that will list your bottom line and streamline your payment processes, check out what we do here at Gistia. We're more than happy to discuss solutions with you and your team.