Strategies to maximize reimbursements.
A The financial end of a laboratory business is often managed by a finance department, with little or no input from laboratory personnel. For most laboratorians, once a laboratory test is completed and reported, nothing more is considered. Billing is part of the post-post analytic process. But it is essential to maintaining financial security for a lab. And it must be remembered that billers and other finance people are not expert in laboratory procedures, and thus may not be aware of nuances of laboratory testing. Here are some things that whoever does the billing must keep in mind:
CPT codes: Ensuring that the correct Current Procedural Terminology (CPT) codes are used is essential. Each year the American Medical Association updates CPT codes, making changes, additions, and subtractions as deemed appropriate. Thus someone within the laboratory should review CPT codes on an annual basis. CPT codes that were once correct for a particular service may have been expanded to include newer codes that may have a different reimbursement. Consider how the molecular testing codes have changed over the past few years. In addition, periodic CPT reviews, in part, meet Laboratory Compliance initiatives.
Fee schedules: Reviewing the fee schedule is another key action. The cost of performing many routine laboratory tests may increase over time due to inflationary or supply cost increases. Also, consider tests associated with new technologies (e.g., molecular microbiology) that provide a higher level of diagnostic accuracy. Consider performing a test-cost analysis for these newer technology-based tests, as well as for the more complex, labor-intensive, and esoteric tests, to ensure that appropriate compensation is received.
Payer mix: Payer mix is important in understanding the rules of reimbursement for the many different third-party payers. In particular, understanding Medicare rules often serves as a basis for understanding private insurers, since many of them tend to follow Medicare's practices. Further, Medicare and Medicaid generally generate more than fifty percent of total reimbursements. (1)
Knowing your payer mix allows focus on those payers and their rules. You will do well to understand not only Medicare rules, but also those of the top four or five private insurers that your laboratory accepts insurance from. It is also important to obtain fee schedules from each of these top insurers to ensure that your charges are greater than what insurance companies are willing to pay. Note, some insurance companies will release only the top 15 or 20 CPT-based lab tests' reimbursements at any given time.
Denials: Understanding the reasons for denials is also very important. Medicare and other insurance companies have sophisticated algorithms to sort, review, and accept or deny payments for all laboratory tests. The average laboratory may see up to 30 percent of its claims denied, for a variety of reasons. (2) Table 1 shows a few situations of denied claims and potential corrective actions to take in order to get paid. Note, Medicare posts explanations of edits on the CMS website (https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/ MLNProducts/downloads/How-to-Use-NCCI-Tools.pdf).
Write-off policy: Every billing office has a write-off policy that states a dollar amount that serves as a cut-off in making a decision in working an overdue or denied account. For example, if an account is $40 or less, it is written-off. Some services within a hospital generate hundreds if not thousands of dollars per procedure (surgicals, MRIs, PET scans, etc.) and thus this write-off rate may be appropriate. However, most laboratory reimbursement rates are significantly less; thus a lower write-off rate may be more appropriate. Instituting correct billing procedures for high-volume tests and to follow-up and challenge denials can recuperate otherwise lost funds.
(1.) Garber KM. Forecasting: Hospital payer mix 2014 and 2024, US. May 2, 2016. https://aharesourcecenter. wordpress.com/tag/hospital-payer-mix/.
(2.) Siedlick L. What are the top 3 ways to increase the revenue of my hospital laboratory? The Arx Group. May 29,2014. https://arx.group/.
Editor's note: Tips answerer Anthony Kurec, MS, H(ASCP)DLM, is Clinical Associate Professor, Emeritus, SUNY Upstate Medical University in Syracuse, NY. He's also a member of the MLO Editorial Advisory Board.
Problem Example Reason for Resolved Denial Patient - John vs. Misspelled Submitted Demographics Jonathan names, use of claims must - John Doe nickname, accurately vs. John B. dropped or reflect the Doe added middle exact name as - Green, initial, printed on Johnson, submitted wrong insurance Smith, etc. name card. National Coverage CPT: 85610- CPT code ICD-10 and CPT Determinations: Prothrombin submitted with codes must be List of 24 common Time an ICD-10 code included on tests by CPT codes ICD-10: A91 not on the list the list. that are supported (Dengue by appropriate ICD- hemorrhagic 10 diagnostic codes fever)--On list, acceptable ICD-10: J09. X2 (Influ -enza)--Not on list, denied Modifiers (indicates Modifier 50: Appropriate Second charge a test has been Bilateral modifier is not (CPT) must altered by some procedure-- used have modifier specific Bilateral 50 appended to circumstance but has bone marrow it. not changed in its performed, 2 definition) charges submitted, one is paid, the 2nd is denied as duplicate service Mutually Exclusive 81001-- Two mutually Can only Edits (codes that Urinalysis, exclusive tests charge for the should not be automated w/ ordered on same 81001 reported together) micro 81015-- day Microscopic only Medically Unlikely 80051 x 3 Limits the # If medically Edits (Electrolyte units per day necessary to panel done 3 have 3 done, times) the first two are billed as 80051x2; the third is billed as 80051-59.
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|Title Annotation:||TIPS: FROM THE CLINICAL EXPERTS|
|Publication:||Medical Laboratory Observer|
|Date:||Dec 1, 2017|
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