From regulatory changes and decreased reimbursements to time and resource constraints, it is no secret that laboratories today are facing growing challenges in an increasingly digital healthcare environment. To succeed as we shift toward data-driven, patient-centric care, laboratories need new approaches and solutions that will improve workflows while empowering them to maintain profitability.
Physical medical charts, handwritten requisitions, paper orders, results sent by faxing or couriers, and airmailed medical data are becoming a thing of the past. With the rapid increase in adoption of electronic health record (EHR) systems in the last couple of decades, nearly all practices are now not only entering their patients’ demographics, insurance information, billing formation, and clinical data into their EHRs, but they are expecting to have the capability to order lab tests and receive lab results directly from within their system.
Interfacing between the EHR and the lab
Practices expect laboratory connectivity not just for convenience but also to satisfy requirements for meaningful use. However, not all laboratories have the bandwidth to build and maintain interfaces between their laboratory information system (LIS) and their provider clients’ EHRs.
While some laboratories are investing in their own interface platforms and development resources to enable LIS integration with EHR systems, interface fees can be costly, and employing an IT department dedicated to building and maintaining multiple interfaces with multiple systems can be a big strain on a small lab.
Many labs are cutting costs and reducing internal resources by utilizing an interface management platform with easy-to-configure, built-in connectivity to top EHRs in the market. This strategy can significantly reduce deployment speeds and IT resources, cut support costs, and empower laboratories to allocate more time toward growing their business and achieving organizational efficiency.
While the necessity to interface the LIS with EHRs may seem like an added challenge, labs can also view the adoption of EHRs as an opportunity to increase profitability by leveraging the data collected within the EHR.
Laboratory errors directly lead to increased healthcare costs and decreased patient satisfaction. It’s estimated that more than 25 percent of all pre-analytical errors result in unnecessary investigation or inappropriate patient care, resulting in additional financial burdens throughout the healthcare system.
Additionally, pre-analytical errors represent between 0.23 percent and 1.2 percent of total hospital operating costs. This unnecessary expenditure can be extrapolated to a typical U.S. hospital with approximately 650 beds to $1.2 million per year.
The financial impact of inaccurate data is not the only item laboratories must manage. As a result of the shift toward value-based care, laboratories play an increasingly important role in delivering patient-centric healthcare.
With an estimated 70 to 80 percent of clinical decisions being made based on laboratory results, the meaningful information labs deliver deeply impacts a patient’s diagnosis and treatment. Duplicate tests, mismatched patient records, and a lack of the total patient healthcare history contribute to a damaging patient experience, and often produce profound long-term results for the patient.
Laboratories face immense pressure to send accurate results every time to circumvent negative financial impact and to improve patient safety, experience, and satisfaction.
Leveraging data from the EHR to maximize reimbursements
The good news? Over 90 percent of claim denials are preventable. Most denials can be attributed to a user error or technical error, including claims with missing information such as absent or incorrect patient demographic data and technical errors, lack of medical necessity, lack of pre-authorization, erroneous patient demographic information, incorrect provider data, and more.
Reducing denied claims is a significant way for laboratories to maximize reimbursements and increase profitability. Laboratory solution providers are innovating new technologies for laboratories to leverage to collect clean orders data from the EHR not only during the time of the order, but also after the physician hits “send” and even after the order is received by the lab.
This end-to-end connectivity to EHRs for clean orders data delivered directly to the LIS not only improves the quality of care, it helps labs decrease operational costs while improving their bottom lines.
Accessing clean demographic and insurance data from the EHR
While laboratories are integrating LIS systems with many EHRs for HL7 order transfers, labs that provide physicians an external ordering system to place test orders may encounter a higher risk of receiving inaccurate patient demographic and billing information on orders. When physician staff are tasked to retype patient information into a second system while filling out a requisition, this process quickly becomes tiresome, and the duplicate data entry inevitably leads to typos, missing fields, and inaccuracies.
Bridging the laboratory ordering system with the practice management or EHR system via demographic interface ensures the patient demographic and insurance information received by the lab is the same clean, up-to-date information residing in the EHR. Demographic data is pulled into the lab requisition at the time of the order, which saves the practice staff the time and effort it takes to retype patient data and increases satisfaction for the provider as a laboratory client.
Ensuring complete test order data and generating ABNs at the time the order is placed
In addition to ensuring up-to-date patient demographic data, laboratories may face the challenge of ensuring other data included in the order is accurate and complete such as provider information and diagnosis codes, eligibility for insurance, Advanced Beneficiary Notices (ABNs), and Ask at Order Entry (AOE) Questions pertaining to certain tests. This information is imperative to laboratories to ensure they are ultimately paid for their services.
Technology is available today that allows laboratories to configure rules that intercept the order, verify the inclusion and accuracy of data, and alert physicians of incomplete or incorrect information including data related to patient demographics, insurance, provider information, patient history, additional authorization and medical necessity information, specific laboratory-rules-based AOE Questions and ABN checks. This type of software supports error correction for the entire order before accessioning and can automatically generate ABN and necessary documents to be sent along with the specimen, reducing the work the laboratory has to do to retrieve complete information.
Automating the retrieval of medical necessity and prior-authorization details
Required clinical documentation is often still missing in orders the laboratory receives, without which claims are denied. While providers may have collected this information at the time of the order and entered it into the EHR, often times they do not provide documentation with an order to support a claim of medical necessity.
To be reimbursed for their services, laboratories need access not just to demographic and insurance information, but also to clinical documentation of medical necessities and insurance pre-authorizations.
Payers often request additional documentation after claim review, which requires the lab to request encounter notes and other clinical documentation from providers. Payers are increasingly requesting prior-authorization paperwork with orders, adding cost to providers as well as significant lab cost to obtain when such information is not initially provided.
CMS has listed insufficient documentation, including a missing signed progress note, signed office visit note or signed physician order, or documentation to support the medical necessity of ordered services as the top reason for improper payments for laboratory services by Medicare, and commercial insurers require similar information. It is widely reported that missing information is a top reason for avoidable or preventable denied claims across all insurers. Studies have shown that the average price to rework a single claim is twenty-five dollars. Medical Group Management Association (MGMA) reports that 50 to 65 percent of denials are never reworked, a number that quickly adds up to millions of lost dollars for a high-volume laboratory.
Fortunately, labs today have the option of automating the collection of data required for medical necessities directly from the EHR without having to reach out to the practice for each incomplete claim.
Establishing clinical data connectivity to physician EHRs to extract and deliver clinical data and encounter documentation for a patient empowers laboratories to access the pre-authorization details required for medical necessities taken at the time of the order but not included in the requisition. This data can be submitted with the claim, used to validate prior-authorization form fields received from providers based on demographics, test codes ordered, diagnosis codes, and histories used by the provider to bill the encounter, or held for later requests or appeals.
By leveraging connectivity to the practice’s EHR, laboratories can receive 100 percent clean orders that include essential patient demographic, insurance, and clinical data. The result is a streamlined ordering process that reduces the risk of most pre-analytical laboratory errors, minimizes laboratory calls to practices and hospitals, increases first-time claims submissions, reduces operational costs for the laboratory and the practice, improves provider experience, and provides more reliable results for better patient care.