Automating Laboratory revenue cycle management to meet Compliance

Too often, we witness hospital and individual healthcare providers expecting outpatient laboratory facilities to use the same revenue cycle management (RCM) module that they use and that is part of the EHR software. While the providers may believe the conventional RCM system to be the most cost-effective, it fails to take into account the specific needs of the labs which help maximize revenue and manage compliance risks effectively.

Compliance and regulatory requirements have a great impact on hospital outpatient lab claims processing. They include 72-hour and 14-day rules and several other legislation. According to the 72-hour rule, all services, diagnostic or outpatient, rendered during the DRG (diagnosis related groups) payment window need to be bundled with the impatient ones while billing. Therefore, if an outpatient service is provided outside this window, it cannot be billed to Medicare. This rule applies to a hospital or a facility that provides preadmission services.

The date of service requirements until 2018 mentioned that-

  1. The date of service for a specimen stored for more than 30 days, is the date the specimen was recovered from storage.
  2. The date of service for hospital outpatient specimens stored for 14 to 30 days post-discharge, is the date the test was performed.

However, some tests are exempt from these requirements now. A revised rule was introduced in early 2018, adding exclusions to OPPS (the hospital outpatient prospective payment system). These exclusions were mainly added for tier one and two of the molecular pathology and advanced diagnostic lab tests.

The fact of the matter- these rules are complex! In order to accurately automate the laboratory revenue cycle management, the RCM system must be able to make distinctions. The system must be capable of recognizing an outpatient service, determining the discharge date and calculating the timeframe between the discharge date and the hospital request date.

Additionally, an RCM system must be capable of determining whether if it needs to bill for the whole fee or split out the technical component or bundle the charges. Adding to the complexities, labs need to change the DOS on some claims because as per the new rule, the DOS is not the date of specimen collection, instead of the date on which the lab performs the test. Therefore, these kinds of complexities in laboratory medical billing cannot be handled by an enterprise EHR system.

Outsource Laboratory Medical Billing!

An effective Laboratory revenue cycle management system goes a long way in making a laboratory a valuable and revenue generating business. Therefore, in order to thrive in the modern environment of revenue compression and complex regulations, it is best that you outsource laboratory medical billing to obtain purpose-built, effective solutions for your laboratory.

Bikham Healthcare offers the most discrete laboratory medical billing services and Laboratory Revenue Cycle Management to healthcare providers and groups. Visit for more information about their services.

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