College of American Pathologists
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What billing systems need to succeed

2003 billing/accounts receivable system survey

Hal Weiner

A billing/accounts receivable system that handles only straightforward billing and accounts receivables is behind the eight ball in today’s marketplace.

With increased pressures on test reimbursement, lab managers need to be able to monitor key indicators, such as days outstanding by payer, profitability by provider, and other management data that are critical to a successful laboratory business operation. The ability to nimbly manage the revenue cycle is becoming a major factor in maximizing cash flows and reducing write-offs. As a growing number of large organizations implement core laboratories that serve multiple operations, systems also need to address the needs of multi-company and multi-facility billing. Features that assist the claims-management process, such as automated eligibility checking, access to skip-tracing databases, and in-house collection agency processing, are worthwhile.

It is imperative that systems provide clean claims the first time. It costs an average of $25 to process a re-bill to a third-party payer, according to the Medical Group Management Association. In many cases, this represents more than the profitability of the billed item. And in 2002, the Medicare program recovered $1.5 billion in fraudulent claims, highlighting why strict compliance regulations to reduce fraud are forcing health care organizations to better manage their claims submission processes.

Expert rules that include federal and local payer edits are now part of many systems. Some vendors also contract with third parties, such as Info-X, for updates to the rules, saving billing offices countless hours spent maintaining their own rules sets. A few vendors even provide tables update services that hospitals or labs can contract for separately.

At least four billing/accounts receivable system vendors—Antek HealthWare, Cerner, Medical Data Processing, and Xifin—are now offering their entire product under an application service provider arrangement. These vendors provide service on a per transaction basis and operate a centralized server over the Internet.

When evaluating billing systems, ask vendors to share measurable benefits that can be achieved with their system and to provide a projected return on investment. Effective measurements include percentage reductions in denials, re-bills, days sales outstanding, manual payment posting, collection ratios, error rates, and other direct cost reductions. And visit user sites armed with objectives and checklists. In addition to focusing on features and functions, assess ease of use and productivity.

CAP TODAY highlights 15 products in its 2003 billing/accounts receivable system survey. The tables are based on information provided entirely by the vendors. We urge readers to verify all information pertinent to them before making a purchasing decision. Be aware that because a vendor indicates that it has a feature installed in 100 percent of its customer sites does not mean that any of those sites are operating the feature, assuring its functionality.

Be sure to ask questions that provide a “big picture” of the vendor, such as, How much money is being spent on research and development and new product upgrades? When was the last major product release, and when is the next one planned? How many new contracts were signed in the past year? Has there been a net increase or decrease in your installed base of billing systems?

New to this year’s survey is Tamtron, which introduced a billing module for its PowerPath anatomic pathology system in 2002. SIA, which was featured in previous CAP TODAY billing surveys, declined to participate this year.

Weiner is president of Weiner Consulting Services, LLC, Florence, Ore. He can be reached at