Whether a clinical laboratory is a start-up or has been in business for years it is likely that giving away free testing is occurring without owners and operators even knowing it. Successful, established labs are even more susceptible, as high-volume claims can actually mask losses. However, over time, hundreds of thousands of dollars are at stake and any dip in claims volume can create an expedited path to an untimely demise. So, what can be done?
- Evaluate Workflow. This is one of the easiest and most cost-effective ways to control revenue potential. If a laboratory isn’t performing verification checks with a patient’s insurance plan to ensure their services are covered as part of the standard operating procedure, revenue is at risk. Not all patient insurance plans will pay, and this extra step gives the lab time to notify the patient of their options, including self-pay. Self-pay eliminates chasing overdue balances or worse, writing off an uncollectible balance altogether. It also maintains a positive patient relationship and eliminates the scenario in which a disgruntled patient receives a high bill from their insurance.
- Understand Referral Sources. A surefire AR nightmare that laboratory owners and operators can avoid stems from vetting referral sources diligently. It is imperative that laboratory owners understand the need for asking difficult questions prior to entering a referral relationship. For instance, what type of insurance will incoming patients have? Does the insurance match with the payor contracts the laboratory already has in place? Being transparent regarding the plans the lab can accept vs the those not in network removes future issues with disgruntled patients and ultimately a source of revenue, the referral. This discussion also allows laboratory owners time to strategize based on potential referral volume. Questions might include: Is it worth applying for a plan currently not in network? Does a self-pay model make the most sense for certain patients? Accepting every patient is not always realistic and high-volume referrals do not always equate to revenue generating referrals.
- Network Participation. Labs planning to market in select areas must consider which insurance plans are of highest concentration. Marketing in highly populated areas or based on close relationships occurring within a geographic area is a great starting point. Assessing the process for getting paid and what a lab needs to do to make that happen should be the biggest priority.Evaluating network participation before referral relationships are solidified, should be part of every vetting process.
Evaluating in-network participation, verifying patient plans and having candid conversations with current and future referrals are essential ways to ensure a laboratory venture reaches its true revenue potential.