Overcoming Hospital Laboratory Revenue Cycle, Interoperability Issues

February 24, 2020 - There used to be an expectation that a hospital's enterprise system would handle the workflows, claim filings, and all-important billing processes of its associated laboratories. Today, however, a lab’s revenue cycle management (RCM) complexities, which include changing regulations, data size management, and continual technological advances, continue to intensify. As a result, enterprise systems are finding it difficult to handle lab demands and take advantage of new data and revenue opportunities the labs afford.

Hospital margins are tightening, so optimized lab claim collections are important even for relatively low dollar value items. But many health systems find their enterprise systems, which are designed for higher ticket hospital charges, are not up to the task of handling laboratory claims; the labor costs associated with current enterprise systems make the process unviable for laboratory billing. As a result, many health systems have adopted policies that write off large portions of otherwise collectible laboratory revenue.

Fortunately, that trend has shifted, and health systems are looking to transform their view of their labs’ value and are looking to labs to add efficiencies, productivity, data sharing, and business intelligence to the mix, as well as increase claim collections.

By turning their labs into revenue streams instead of cost centers, hospitals are finding that their labs can provide better data management and financial integrity, which can exponentially transform their business model for the better. For example, labs using a sophisticated RCM solution can use analytics to perform financial analysis and forecasting, inform payer relations, benchmark, and identify best practices that contribute to improved care and outcomes.

In an environment where every data point and dollar matter, here are critical considerations about data improvement, billing, and a purpose-built lab RCM solution, which can contribute to increasing overall profitability and high-quality patient outcomes.

Lab Data and Actionable Insights

Ideally, a lab should aim to be a future-ready, high-performing, service-oriented diagnostic profit center for its health system. To be successful, a lab needs a long-term, digital-first strategy that encompasses key elements to make it happen: technology, data accessibility, processes, access to expertise, and people.

Ultimately, the lab should aim to:

• Advance laboratory services both from the patient perspective as well as operationally
• Gain economies of scale that lower unit costs, increase volume, and improve operating margins
• Redirect resources toward higher-profit and more complex activities
• Remove process and workflow inefficiencies that lead to lower margins
• Flexibly expand test menus and service offerings
• Share knowledge among the health system, payors, and providers to continually improve performance
• Deliberately carve out a meaningful role in the continuity of care mission

To fully capitalize on a transformed laboratory RCM, the health system must make financial decisions that enable a dynamic, end-to-end specialized cycle of processes. Automating the back end of billing, as is typical with enterprise RCM, is simply not enough to gain even a fraction of the benefits that outreach and ancillary labs can contribute to the health system.

Going Beyond Back-End Laboratory Billing

To facilitate long-term purposeful data accessibility and meaningful data-driven decision making, a dynamic laboratory RCM solution requires accurate data and insights that are propagated across front-to-end processes in real time. Platforms supported by specialized services and expertise can lead laboratories to better workflow automation that:

• Minimizes denials
• Maximizes cash collection
• Improves connectivity to eliminate data silos and bridge disparate systems

Labs that implement a next-generation RCM strategy with synergy to the overall operating model will have the ability to manage health system economics complexities, influence decisions that impact costs, and anticipate, manage, and offset immediate and future risk.

Often, organizations see enterprise systems as being able to solve laboratory challenges without further operational or IT investments into the system. But that assumption can bring great distress, lost revenue, and the missed opportunity to share data and business intelligence with the rest of the system. Enterprise systems simply lack the granularity and referential integrity to accurately measure and manage a laboratory’s financial contribution.

Purpose-Built Cloud-based Laboratory RCM

Enterprise systems are not tailored for the unique needs of a laboratory and thus introduce inefficiencies in processes that add up to sizable, unrecognized, cost saving, and revenue enhancing opportunities, especially for outreach and outpatient activities. A cloud-based purpose-built laboratory RCM, in contrast, is tailored with specific technologies, workflows, and processes to help hospital labs meet their specific requirements.

Being cloud-based is a key element for a successful purpose-built RCM as the platform nullifies risks and enables end-to-end management. A cloud-based lab RCM platform:

• Negates risks posed by software acquisitions
• Presents better levels of affordability
• Allows ease-of-use via a web-based interface

Therefore, a purpose-built laboratory RCM can help:

• Minimize labor costs through automation and processes focused on submitting collectible clean claims up front
• Achieve fewer denials and improve appeals success, which boosts reimbursements
• Better mitigate risk and adherence to compliance requirements
• Reduce labor costs via logic specialization, configuration, and intelligent workflow automation 
• Magnify financial visibility using machine learning-enabled business analytics and visualizations
• Enhance bidirectional data exchange to improve care and produce better outcomes, richer engagements, and experiences between labs, patients and physician clients
• Reduce compliance exposure using intelligent workflow automation to minimize clerical decision making
• Complement and advance your EHR system

Finally, vendors of purpose-built laboratory RCM solutions will have expertise in both the technology and the germane lab challenges the RCM system solves, including workflow and billing.

Conclusion

Hospital outpatient or ancillary labs and outreach programs have to be malleable to adapt to new regulations and take advantage of revenue opportunities. Health systems that rely solely on enterprise systems for revenue cycle and billing need to make a decision to leverage lab RCM to solve billing challenges, share business intelligence throughout the system, and increase lab revenue opportunities. To do this, consider the myriad benefits of a transformative, cloud-based, purpose-built laboratory RCM solution, which can handle copious amounts of data and is ready to adjust quickly to new industry trends, regulations, and business goals.

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About the Sponsor

XIFIN is a San Diego, California-based health information technology company with solutions (XIFIN RPM, XIFIN LIS, XIFIN ProNet, and VisualStrata) that span the diagnostic RCM, laboratory information systems (LIS), precision medicine informatics, and digital pathology consultation spaces. XIFIN RPM is used by seven of the top 10 largest labs and supports four of the five largest integrated delivery networks in the United States.