Clinical pathology laboratories are vital for diagnosing and managing different health problems by examining bodily fluids and tissues. Apart from delivering accurate diagnoses, these labs have many hidden aspects, such as the complex billing process. Billing errors can occur at any stage, leading to financial losses for the laboratory. In this article, we will explore 7 practical tips that clinical pathology laboratories can follow to avoid billing errors, ensuring a smooth revenue cycle and financial stability.
Understanding the Billing Process in Clinical Pathology Laboratories
Understanding the critical procedures and components of clinical pathology laboratories’ billing is essential to negotiating its complex system. Let’s go into more detail to understand the process better.
Patient Registration and Verification
The registration process, the first step in a patient’s interaction with the clinical pathology laboratory, marks the beginning of the billing process. The patient’s personal, contact, and vital health insurance information are noted during this initial step.
Labs have implemented a safe online registration system to make this process more efficient. Patients enter their information into the system, which automatically validates the accuracy of their health insurance, including their insurance information.
Test Conduct and Billing
The laboratory conducts the prescribed tests once the patient’s registration and insurance verification are complete. The range and complexity of the tests will dictate the overall cost. A detailed bill is then generated based on these tests.
For example, a patient undergoing a routine blood test will be billed differently than a patient requiring a more complex histopathological examination. This variation is due to the different resources, time, and expertise necessary for the two types of tests.
Direct Billing or Insurance Claim Submission
After the generation of the bill, it’s either sent directly to the patient or submitted to the health insurance provider for reimbursement, depending on the patient’s insurance coverage and the laboratory’s policies.
Most laboratories have an automatic system that decides the billing route based on the patient’s insurance details. If the insurance covers the diagnostic services, the system directly submits the bill to the insurance company. Otherwise, the bill is sent to the patient.
Tracking and Reporting
Lastly, keeping track of payments and maintaining detailed financial reports is essential. These reports aid in regularly auditing the billing process, catching errors and inaccuracies that could lead to financial losses.
For instance, the billing department in laboratories utilizes advanced analytics tools to track and analyze their billing data. They can quickly identify late payments, pending claims, and billing discrepancies. This vigilant tracking ensures that the laboratory’s revenue cycle flows smoothly.
Billing Errors in Clinical Pathology Lab
Billing errors in clinical pathology laboratories can occur at any stage of the billing process, from charge entry to coding to claim submission. Every lab must be aware of lab coding errors and timely fix them to avoid financial consequences.
Some of the most common billing errors are discussed in the table below:
|Incorrect coding||It occurs when the wrong code is used for a procedure or service. This can happen due to human error, misunderstanding of the coding system, or software failures.|
|Incomplete or inaccurate patient information||It occurs when the patient’s information is not complete or incorrect. Human mistakes may be the reason for this, as in the case of transposing numbers, names being misspelled, or system faults.|
|Failure to obtain prior authorization||Insurance companies apply prior authorization to determine if a procedure, service, or medication will be covered. If prior authorization is not obtained, the claim may be rejected, and the patient may be required to pay for the medical diagnoses out of cash.|
|Late or missing claims||Claims must be submitted within a certain time frame to be considered for payment. Late or missing claims can result in the denial of payment.|
|Improper coding for bundled services||When a single code is available that captures payment for the parts of a procedure, that should be used. Unbundling uses different CPT codes for the various process elements due to a misunderstanding or to maximize payment.|
|Unbilled Tests||This occurs when tests are performed but not billed. This can happen due to human error, such as forgetting to enter the test into the billing system or software glitches.|
|Underpayments||This occurs when the insurance company pays less than the amount billed by the laboratory. This can happen due to errors in coding, contract negotiations, or other factors.|
|Documentation Errors||Errors in documentation can occur at any stage, from specimen retrieval to specimen analysis. They are generically categorized as preanalytic, analytic, and post-analytic phase errors.|
According to a tipsheet on pathology billing, mistakes in the billing process can lower collections by 5% or more, costing a typical practice or department at least $200,000 and typically more. The cheat sheet lists the four places most likely to make mistakes: eligibility, underpayments, front-end reconciliation, and pathological documentation.
Tips to Avoid Billing Errors in Clinical Pathology Labs
1. Automate Billing Process
Automation can help to combat billing errors in clinical pathology by reducing the number of manual tasks involved in the billing process. This can help to improve accuracy and efficiency and can also help to identify potential errors early on. Additionally, automation can help streamline the billing process, reducing the time needed to get paid.
There are several ways to automate the billing process in clinical pathology. One way is to integrate electronic health records (EHRs) with billing systems. This can help ensure that all necessary information is accurately captured and transmitted to the billing system. Another way to automate the billing process is using software like Medifusion, designed specifically for clinical pathology. This software can help to automate tasks such as coding, charge capture, and claim submission.
2. Implement Regular Auditing
Regular auditing of the billing process can help identify and correct errors before they become a problem causing lab workflow delays. This can be done by reviewing a sample of claims regularly to ensure they are accurate and complete. Auditing can also help identify trends and patterns in billing errors, allowing labs to implement targeted improvements to reduce the risk of mistakes in the future.
3. Invest in Training and Skill Development
Investing in training and skill development for staff involved in the billing process can help reduce the risk of errors. This can include training on coding systems, billing software, and best practices for accurate and complete documentation. Ongoing training and skill development can also help ensure that staff are up-to-date with changes to coding systems and insurance requirements.
4. Adhere to Standardized Coding Systems
Adhering to standardized coding systems, such as the International Classification of Diseases (ICD) and Current Procedural Terminology (CPT), can help ensure that claims are coded accurately and consistently. Using standardized coding systems can also help reduce the risk of incorrect coding due to misunderstanding or misinterpreting codes.
5. Establish Stringent Quality Control Measures
Establishing stringent quality control measures, such as double-checking codes and patient information before submitting claims, can help reduce the risk of errors. Quality control measures can also include regular reviews of billing processes and procedures to identify areas for improvement.
6. Promote Clear Communication
Promoting clear communication between staff involved in the billing process and between the laboratory and insurance companies can help reduce the risk of errors due to misunderstandings or miscommunications. Clear communication can also help ensure all parties know about changes or updates to billing requirements or procedures.
7. Commit to Continuous Process Improvement
Committing to continuous process improvement by regularly reviewing and updating processes and procedures can help reduce the risk of errors over time. This can include implementing new technologies or systems, updating training programs, or making changes to billing processes based on feedback from staff or audits.
Avoiding billing errors in clinical pathology laboratories is essential for ensuring the laboratory’s smooth revenue cycle operation. Laboratories can reduce the frequency of billing errors and increase their revenue by using the tips in this article, such as putting in place a strong front-end reconciliation process, confirming patient eligibility, tracking underpayments, and maintaining accurate pathology documentation. To ensure the lab’s financial stability and profitability, laboratories should regularly audit their billing process and apply best practices.