For Diagnostic Laboratories, Billing Errors Can Be More Painful and Stressful – Than the Procedures Themselves

For patients in the midst of medical treatment, doctors’ appointments and test results add an invisible layer of physical and emotional stress that often overshadows any inevitable financial burden. But, when diagnostic laboratories experience issues with regard to insurance reimbursement, such barriers can make repayment more painful than the procedures themselves, as the provider struggles to claim compensation for services rendered.

According to industry experts, between 30 and 80 percent of all medical bills contain errors, with 25 to 30 percent of said errors being monetarily significant. In fact, according to an audit piloted by Equifax, medical bills totaling $10,000 or more typically feature an average error of $1,300. Of course, in most cases, these issues are the result of human error, as the systems healthcare providers employ largely require manual input, which ultimately lends itself to inconsistencies and delays.

Not capturing the correct diagnostic codes is the main problem, whether wrong at medical record level or not transmitted correctly to the lab along with the requisition. Not having the updated insurance information is another issue along with silos of systems.

As Kayla Matthews notes for Healthcare In America, many of these mistakes are honest—a diagnostic code for an exam of both limbs when only one was assessed, or a typo that results in a different (and more expensive) diagnostic code than the one that was prescribed. However, the problem lies with the fact that these errors can lead to patients’ insurance companies rejecting their claims, simultaneously making it more difficult for patients to receive the care they need and lowering the overall quality of care these providers can deliver.

You see, the system that doctors, hospitals, and healthcare providers use to classify patient diagnoses, symptoms, and procedures performed—ICD-10-CM (International Classification of Diseases, Tenth Revision, Clinical Modification)—grew from 24,000 to 155,000 in recent years in an effort to improve the specificity of information gathered. Thus, the increased complexity of this universal coding system now often leads to an array of human errors, as those responsible for tracking the necessary data aren’t yet familiar with these new operations, distracting from the more important tasks at hand.

“While employees can try to manage medical billing errors on their own by looking for red flags like rejected insurance claims,” Miles Varn writes for Employee Benefit Adviser, “discrepancies between the insurer’s explanation of benefits and the provider’s balance bill, and checking the documentation they receive from their provider to make sure it accurately reflects the services received before they leave the physician’s office, the process can be time-consuming and confusing. When employees have to spend time trying to get errors on their medical bills corrected, they can become more distracted and less productive at work.”

Thus, in many instances, healthcare providers are consumed by the need to get these facts and details correct to the point where they must sacrifice the quality of care. Providers fret over the codes, while patients agonize over coverage. In the end, relationships become fraught, as neither party can focus on what’s truly important—the health in healthcare. Diagnostic laboratories must actively work to alleviate these stressors to ensure that a patient’s clean bill of health doesn’t come with a hefty medical bill, too. After all, the patient’s financial health impacts their mental and emotional health, which subsequently influences their physical health. It’s in everyone’s best interest to streamline the entire process in order to guarantee that any unexpected or undue financial burden never falls upon the patient’s shoulders.

While such efforts might seem irrelevant when it comes to the bottom line and profit margins, empathy remains imperative throughout the healthcare industry, as the patient must always be the lab’s primary concern. If patients repeatedly encounter inferior service, they will look elsewhere for alternative care, and the long-term ramifications of this switch will become increasingly costly down the road.

Research conducted by HIMSS, in partnership with OODA Health, emphasizes that what’s at stake goes far beyond financial ramifications, as dysfunctional patient billing remains bad for the patient’s health. After exploring the specific impacts of billing complexity, researchers “found that the prospect of having to deal with medical billing distracts patients from complying with their care. Sadly and ironically, lower compliance is likely to lead to even more medical bills down the line.”

However, it gets worse, as “clerical and financial tasks distract clinicians, too,” researchers claim. “Two-thirds report that dealing with administrative work, such as patient collections, takes time away from patient care.” Therefore, it’s critical that labs deliver high-touch customer service to certify all matters are handled quickly and efficiently, with the least amount of resistance for everyone involved.

Ideally, diagnostic laboratories will pursue a more proactive approach to their billing procedures in an effort to stop problems before they start. To ensure they’re reimbursed properly and promptly, all labs should constantly clarify and confirm all patient data to minimize the potential for clerical errors. Offer patients a portal that affords them direct access to their data so they may input and confirm insurance information themselves.

Most issues originate upon intake, as incomplete or incorrect information within the Electronic Health Records (EHR) sets said labs up for imminent failure, so due diligence will ultimately ease or eliminate worries. To remove the silos that often hinder data accuracy, labs should advance internal technology by establishing a single dashboard that houses necessary information in one user-friendly database. This will allow lab technicians access to current patient insurance information in real time as they work to close the ever-present gap in the patient-provider-payer relationship.

“In order to get there, diagnostic providers (laboratories) must take that first step towards initiating patient engagement and transparency by realizing that as a non-patient facing community, they must work even harder to achieve better patient engagement,” Lâle White and Jane Hermansen write for HIT Consultant. “Relationships with the patient should not start when they receive an invoice, but rather from the moment their physician orders a lab test. The good news is, the technology that exists today gives labs the ability to drive better patient engagement, providing them with the cost and healthcare data information they expect. Providers that embrace healthcare consumerism will experience a more open continuum of care and improved connectivity between the patient, pathologist, and provider.”

ISM offers comprehensive, sustainable solutions to solve a broad range of business challenges for Diagnostic Laboratories. Contact us for a free consultation or call 1-844-WANT-ISM (1-844-926-8476)

Prem Pusuloori
Integrated Systems Management, Inc.