In 2021, labs dealt with many difficult revenue cycle challenges ranging from changes in COVID-19 CPT codes for collecting and transporting samples, as well as increased denials because of Place of Service (POS) rules for reimbursement. Here are considerations when planning for the challenges in the year ahead.
The No Surprises Act
With the No Surprises Act effective January 1, 2022, it becomes crucial for labs to understand their client base. This legislation applies to non-emergency services performed by a non-participating provider (such as a lab or pathology practice) at certain participating healthcare facilities. The No Surprises Act defines a Healthcare Facility as a hospital, hospital outpatient department, critical access hospital, or ambulatory surgical center. If the referral comes from one of the aforementioned facilities and the lab or pathology practice is out of network for the patient and is a covered service, the No Surprises Act goes into effect.
The important keys for labs to know about each order going forward is:
- If the client fits the facility description, i.e., a hospital, hospital outpatient department, critical access hospital, or ambulatory surgical center and the patient’s insurance is out of network for the lab or practice processing the sample—the No Surprises Act applies.
- For the lab or pathology practice to understand state laws impacting their business. If the state does not have a state law regarding balance billing or is not enforcing it, the federal No Surprises Act should be followed if the necessary criteria is met.
Place of Service Denials
In 2021, labs saw an increase of denials due to improper place of service codes. Some payers require the claim be submitted with the POS being where the sample was collected, i.e., a doctor’s office, nursing home, outpatient hospital, etc. rather than where the testing was performed. Some labs have experienced denials when the claim is submitted with the POS as the lab instead of the sample location. However, when some labs have the correct POS per payer requirements, the claim is denied on the basis the work should have been done elsewhere or the location where the sample was drawn should submit the claim.
Due to these inconsistencies, some claims are being delayed or denied. TELCOR RCM combats this issue by configuring rules to apply the POS based on the ordering client. This automates assignment of claims to where clean claims are sent without review and exceptions are sent to a separate workqueue to be reviewed resulting in reduced denials and improved reimbursement.
Extensive Prior Authorization Requirements
Throughout 2021, we observed payers adding more requirements for elective testing, especially in the toxicology and molecular categories. This caused labs to submit claims without receiving prior authorization, leading to increased denials.
With TELCOR RCM, labs can pause charges if prior authorization is required. These claims are sent to a prior authorization workqueue where billers can create the authorization package required for approval. This allows labs to send clean claims out the first time resulting in fewer denials and reduced payment time. Staff can then focus on the hard-to-collect dollars to increase revenue and drive profitability.
New Year, New Deductibles
While not a new challenge, this is a yearly issue for all labs. With insurance deductibles resetting at the beginning of the year, payer billing essentially turns into patient billing until patients meet their deductibles, which can often make collections more difficult. Once patients meet deductibles, payers will start reimbursing those claims, but the first few months can be extremely tricky.
Two features help improve patient collections: the patient-centric design of the application and a patient portal.
Billing software that is patient-centric, rather accession-based, allows for quick access and identification of patient records rather than searching through multiple records tied to a patient by accession or date of service. When a patient calls regarding a bill, the billing staff can enter the first and last name to receive a list of all services provided specific to that patient. This allows questions regarding demographics, services provided, invoicing, claims, etc. to be answered quickly and efficiently. Additionally, a patient can receive one statement per month with all open services listed. This reduces questions and confusion often caused when patients receive separate bills by date of service.
Labs using TELCOR iLabBill® Account also improve collections. The patient portal provides access to demographic information, services performed, account balance, and more. Payments can be made using a credit card and are then posted directly into TELCOR RCM providing real-time status of patient accounts.
TELCOR serves hundreds of labs across the country providing industry-leading revenue cycle management SaaS and billing service solutions. By providing real-time visibility into analytics and improving workflow efficiency, TELCOR empowers labs to take control of their billing and positively impact their bottom line. Learn more about TELCOR billing solutions.