College of American Pathologists
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  Views from the inside—the latest in
  lab billing software


CAP Today




May 2013
Feature Story

Jan Bowers

What are some of the tools and features of a billing system that can boost productivity?
Mark Droste, general manager, SCC Soft Computer: In this industry, manual intervention will kill you on cost; it will just erode your profit margin on any client. Thus, the key is having the technology to provide as much automation as possible in the revenue cycle. It’s important to understand your core business and have the system do the heavy lifting for you. Our system does correct coding initiative edits; medically unlikely edits; order consolidation, which combines multiple orders per patient per date of service into one claim; and diagnosis type, which determines whether a procedure was performed as diagnostic or screening and applies the appropriate CPT.
Francisco R. Velazquez, MD, president and CEO, Pathology Associates Medical Laboratories (PAML), Spokane, Wash.: We’re a national reference laboratory, but we also have community-based joint ventures with hospital networks for testing, and we do the billing for those networks. We have close to 40 hospitals in eight geographic locations in the joint ventures. The Xifin system tracks and updates changes not only on the CPT codes but also in the payer contracts*#8212;and we have hundreds of agreements—quickly and accurately. Right now, because we’re still in the process of implementing the Xifin system, there’s a labor pool that spends a fair amount of time keeping track of all these changes and updates, making sure we have the right codes for everything and that we’re in compliance. Now these tasks will be more automated and efficient, which will allow me to focus my IT resources into areas that are more strategically important for the company, such as connectivity, value-added, and utilization.
Wally Soufi, chairman and CEO, NovoPath: NovoBilling is designed to work with NovoPath, our laboratory information system for anatomic pathology, although it can work standalone as well. Marrying the two products eliminates double data entry, enables automatic charge capture, and lets you manage all of your CPT codes, ICD-9 codes, and fee schedules in one place.

What features of a billing system can help laboratories collect payment for everything they’ve done?
Lale White, CEO, Xifin: We have a very high level of editing in our system, and it’s identifying missing elements or problems that will prevent the claim from getting paid almost instantly, as soon as it comes in the door. Internally, we allow data mining of any previously paid claims for the same patient, so the system looks to see if missing information for that patient exists on prior claims. If it finds it, it immediately corrects it and nobody has to do anything. But if it finds some data and it’s not sure it’s a perfect match for that patient, it queues it for someone to review. This is a Web-based product, so if in fact it can’t find the information it’s looking for internally, it will go outside the system. It will go to the payer, to other services that provide data, to a skip-tracing agency like Search-America to update an address. This is all done instantly, because it’s real time. If it can’t find the information from any of these resources, it will go back and request it from the ordering physician or the patient, depending on the information being sought.
Kirk Hansen, director of regional pathology services, University of Nebraska Medical Center, Omaha: We’re the outreach laboratory for the University of Nebraska Medical Center. Our gross billing is about $20 million per year, and we have about 400 clients throughout the region. We had been outsourcing our billing but noticed that our accounts receivable was falling further and further behind. We met with Telcor, decided to use its system in-house, then hired a revenue cycle manager who now does our billing along with six others. We added FTEs, but even so, our cash flow has improved by 30 percent since we made that decision in August 2012. With the system in place, we identified over $1 million sitting in a work queue that somehow got rejected; it was mostly professional fees. The system allowed us to drill down and look at every receivable, and it took us six months to look at every claim that was sitting out there. There are many work queues in Telcor: claim remittance, denial reports, so many different facets that let us drill down by client, by claim, and by payer so we can provide the information we need to expedite the claims.
Soufi (NovoPath): The key to a successful billing department, in my view, is knowing what is current and what’s not, and what needs followup by staff. NovoBilling can generate live customer reports for different users based on their role. For instance, you could have one staff member dedicated to just Aetna followup, and that person can monitor everything that’s going on with that insurer. If you’re diligent, you’re going to have the tools to find out where every dime is and know exactly why it was paid or not paid.
Droste (SCC): As tests become more complex, electronic order entry is becoming more important. We work with client organizations to deploy our own Web portal for orders and results in physician office settings, with our compliance logic embedded in it. So you have something in the front end doing a lot of the data scrubbing before it hits our billing system.
Jim Terrano, president and CEO, Telcor: We have a credit card module through our system that allows patients to pay online. That’s improved collections significantly; our clients used to write some of those off. Also, we try to make it easier to identify outstanding bills and follow up on them so that you reduce the number of transactions you have to send to bad debt by making everything online, real-time, and interactive. When the patient calls with questions about a bill, the person in client services can see everything that’s ever happened with that person online; they can answer the questions and facilitate payment.

How can laboratories use business intelligence/analytics tools to maximize profit?
Hansen (UNMC): I use Telcor to analyze business trends: where are we overall, are we trending up or down, how is our procedure volume; then we can look at each client and see where we’ve lost or gained business. Part of my job is to put together our sales and marketing plan. So throughout the year, we can look at each client and say, we’re getting bone marrows and we’re getting flow cytometry from this hospital or clinic, but we’re not getting any type of liver or kidney biopsies. Why aren’t we? Then we can target that business. So that’s been a feature that’s helped us grow our bottom line and our business, and it’s worked really, really well.
Soufi (NovoPath): We have an ad hoc query capability that allows our clients, essentially, to think of whatever scenario they want and get whatever data they’re thinking of. They can get data based on the provider, on payers, on tests, and on revenue, and if the billing managers are taking a look at this information, I believe it helps them make better decisions. For example, if you have a client that’s sending you a patient mix that’s uninsured or underinsured, you’re going to be out the money, so the lab may decide that it doesn’t want to collect samples from this particular provider.
Terrano (Telcor): You can go into the system and find out how to manage your lab more effectively by looking at the real-time productivity of your employees and your overall laboratory, and at the profitability of your accounts (how much business are they sending you versus how much it’s costing you to service them). When you’re looking at all that, it allows you to make decisions for which you’d otherwise have to manually collect the data, or not have it all. Now you can educate a physician who’s sending you bad data, or find out whether Dr. Jones is actually a profitable account for you or not.
Droste (SCC): In business intelligence reporting, you can no longer dump tons of information into a spreadsheet and expect the client to sort it and dice it. You really have to provide reports that tell a story. Within two or three mouse clicks, they get the information they’re looking for, whether it’s the performance of a physician’s office or even the performance of a pathologist—how many cases they’re processing, how much money they’re generating for the organization. We’re able to track reimbursement by specialty, so the lab can see whether business is going up from general practitioners and down from specialists, for example. Laboratories will need the tools to look at those changes, see where the business is coming from and where they need to market themselves.

As our health care system moves toward the accountable care model and away from fee-for-service billing, what role might the billing system play in helping laboratories adapt to this paradigm shift?
Terrano (Telcor): As I look at what ACOs are, there are still some unknowns as to how everything is going to be paid. But we know that the growth of ACOs will place a high demand on the clinical lab because some of their patients will be part of an ACO and some will not, so they’ll have to be capable of billing for both. Optimizing care for a disease state will require both clinical and billing data so outcomes can be reviewed and affected. Having a billing system with easy access to real-time data by multiple parameters is essential if an ACO is to be successful.
White (Xifin): Billing is changing from fee-for-service to value-based. You have to be able to have the richness of data to provide decision support in order to support the value of your assay. If we continue down the fee-for-service road, then all we’re looking at is maximizing the number of times your test is performed. In the ACO environment, the lab has to play a greater role in the delivery of the lab test at the time it’s needed, and it has to play another role in the decision support area after the lab result is delivered, which is selection of therapy. That’s really, I think, where this is going.

What does capitated billing require of a billing system?
White (Xifin): Patients can be in a capitated plan that has other services that are fee-for-service and not capitated. So the system has to be sophisticated enough to do the eligibility check, to be able to bill multiple parties if that’s required, and be able to determine which services in that capitated contract are fee-for-service versus under the cap. And you need a flexible billing scenario, because some of them want a monthly statement with all the patients and some want patient-by-patient statements, so quite a bit of functionality is being required now.

Interviews conducted and edited by writer Jan Bowers.

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