In billing, No Surprises and other complexities

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April 2023—Another administrative layer and “up in the air” is how lab billing experts describe what the No Surprises Act requires of laboratories and where things stand. When they met online March 3 with CAP TODAY publisher Bob McGonnagle, they talked about this and digital pathology and the problems of no or slow payments. “Compared with five years ago, the number of denials has increased and turnaround time on full payment on a claim has lengthened significantly,” said Tom Scheanwald of APS Medical Billing.

CAP TODAY’s guide to billing/accounts receivable/RCM systems begins here.

Matthes

The main themes in last year’s discussion of billing and revenue cycle management were the No Surprises Act, the increase in prior authorization demands, and, with that, the problem of denial of payment or extremely slow payment. Kurt Matthes, can you tell us what’s top of mind for you on the No Surprises Act?
Kurt Matthes, vice president, reengineering and service, Telcor: Laboratories need to have a mechanism for providing a patient with an estimate of what their liability could be. Labs’ customer service team members need to understand when, how, and where to present estimated liability when a patient contacts them and have a mechanism to produce the information, provide it to the patient in a readable format, and document it—yet another administrative layer for labs to go through.

Suren Avunjian, is this going smoothly? Or is it turning out to be a nightmare of matching up estimates against bills and then having the ire of patients? How is it for your customers?
Suren Avunjian, co-founder and chief executive officer, LigoLab Information Systems: We’ve dealt with this since the start of the advance beneficiary notice days, so we’ve had the infrastructure and rule engine for over a decade and a half. Having the LIS and RCM platform as an integrated single source of truth puts us in a position to solve this nightmare from multiple angles. On the front end, the client and patient portals enable interactive engagement with the stakeholders and the ability to capture all the order details, calculate and display the estimates, and streamline the sign-off process. In the case of self-pay, the platform can calculate the exact pricing for the clinical lab services performed. If it is pathology lab work, the pricing is approximated since additional fees may be incurred per the pathologist’s direction. Regarding co-insurance fees, the patient responsibility amount mainly depends on the relevant insurance provider’s determination.

Tom Scheanwald and Matt Zaborski, what is your take on the No Surprises Act as it relates to your customers?
Matt Zaborski, VP of sales and marketing, APS Medical Billing: The setting where the service is delivered is key. If you’re an independent laboratory, you might have more control over those resources, like your LIS, to produce good-faith estimates. But when you’re a hospital-based pathology group, the hospital or other facility you’re servicing is the custodian of that process. Creating better synergies and integration with those clients, specifically the physicians the laboratory is servicing, is key.

Is it going more smoothly than you might have imagined, or is it turning out to be problematic?
Matt Zaborski (APS Medical): It’s up in the air. The Centers for Medicare and Medicaid Services and the Department of Health and Human Services have been lenient in enforcing the good-faith estimate. Some groups are waiting until they have to comply.

Tom Scheanwald, president and chief operating officer, APS Medical Billing: We’ve had conference calls with hospital systems in which we have clients and they’re still struggling with pulling the information from various departments for a given patient’s care. It’s not as clear-cut as Congress thought it was when it put the law into effect. There’s still uncertainty about it.

Matt Zaborski (APS Medical): There’s the never-ending issue of, What services will I be providing? Will I need an IHC stain? An ER/PR and HER2? It’s impossible to tell, and you’re not allowed to guess. You have to look at the H&E-stained slide before you can order advanced studies. Pathologists and laboratories don’t fit in the box in many ways. It will be interesting to see how it develops. Hopefully the time they’re taking and the extended leniency period proves that HHS took a hard look at what is required of whom.

That’s a good point.
Tom Scheanwald (APS Medical): I had a discussion with people in a business office of a hospital and their CFO. They’re trying to put together a good-faith estimate on patients who have a colonoscopy as an outpatient procedure at the hospital. Pretty straightforward. They’re looking for how much the pathology charges will be. And we all understand pathology; it’s not a set price. It’s built on number of specimens, special stains, other conditions that warrant additional studies, and a case can go from $100 to a couple thousand dollars depending on what the pathologists find. Trying to get across that that’s how billing works for pathology is difficult; it doesn’t click with how other specialties bill.

Harley Ross, what has been your experience at XiFin as people grapple with this?
Harley Ross, chief commercial officer, XiFin: The challenge remains that in addition to the charge, location, and specimen, we still see downward pressure on basic blocking and tackling around interoperability with payers and scrubbing of patient demographics and getting the eligibility right, especially with so much employer-sponsored health insurance and the expansion of the Medicare Advantage and Medicaid footprint. For us, the focus on that and what we see with our client base, especially as the public health emergency ends and we don’t know how that will land, is going to be making sure that outside of supporting the No Surprises Act, you’re getting it right and you’re not gating on the back end or creating a bad experience with your patients or having lower payments. The attention is on automation and continuing to dial in this type of activity. It’s interesting for us to be talking about electronic data interchange transaction sets in 2023, but it’s still a challenge. There’s an emphasis on scrubbing data and getting it right, and it starts with how you automate that at the point of service.

Ross

This plays a big role in the prior authorization as well, doesn’t it?
Harley Ross (XiFin): Yes, and we are happy to see that CMS is finally focusing on electronic prior authorization. It couldn’t happen soon enough. It is an administrative burden on all labs that have any type of requirement there. And with data scrubbing, you have to have a solid charge fee and payer master construct in place to make sure you can clearly identify this, which adds to the administrative burden.

The other dynamic is that laboratory benefit management companies, like Avalon Healthcare Solutions, are coming into the space, and you’re not sure what the payer policy is and you can’t get clear answers. Unfortunately for the lab industry, we’re still burdened with a punitive prior authorization process that doesn’t allow us to control our own destiny, and that hasn’t changed in the past year. If anything, it has become more complicated because it’s not clear where lab benefit management companies and payers will land.

Pathologists see many things becoming more complex, and I think many laboratories and pathologists think these complexities they’re asked to deal with are an excuse for slow pay or no pay. Would you agree with that, Tom?
Tom Scheanwald (APS Medical): Yes. Compared with five years ago, the number of denials has increased and turnaround time on full payment on a claim has lengthened significantly. I don’t understand the reasons for it, but now we have carriers going through first-, second-, third-level appeals. It can take up to 150 days to get resolved and paid. In no other profession does it take that long to get paid.

Kurt, talk about your experience with slow pay. I’m confident that this complex and frustrating payment system is a part of why pathologists might lean toward retirement. Would you agree with that?
Kurt Matthes (Telcor): Yes. We see that across our customer base too—a growing need for groups to have a strong process in place for appealing claims and serving up the documentation the payer requires for it to roll through the level-one, level-two, level-three process. A lot of the smaller pathology groups don’t have the staff to deal with the increased burden of having to appeal claims.

At Telcor we take a hard look at the automation behind it and the integration points on how to compile the appeal, classify it, understand what needs to be put in place, and with an integrated solution, like a document management module, have the material to build the package and serve it up in an automated fashion, keeping costs down. That strategy needs to be analyzed on a continuous basis because you may be effective on a level one with one group but not with another. You need to have the analytics to see where you are and aren’t getting paid so you can figure out what works and refine your strategy.

Avunjian

Suren, you deal with pathology practices big and small, but many of them are not blessed with a lot of staff to help solve these problems. What are you building into your systems to help with this?
Suren Avunjian (LigoLab): One of our approaches to solving staffing issues is leveraging a rule and automation engine designed to adapt to any lab operation, large or small. This approach gives our partners a chance to stay ahead of workflow-related challenges via preloaded rule sets. For example, payer mapping combined with local and national coverage determination rules capture potential denials up front. Transforming the denial aspect of billing workflows into a front-end process results in a first-pass pay rate as high as the upper 90th percentile. Our primary focus for automation is not the reduction of staff but to increase compliance and revenue acceleration and collection by severely lowering the rate of claim denials and appeal work. Driving maximum transparency and attacking the challenge with a large rule set that’s able to capture potential denials before they’re submitted is a healthier and more sustainable approach to the RCM process.

Harley, when someone engages with XiFin, what do you do to help them solve the challenges?
Harley Ross (XiFin): It’s less about systems and services and more of a strategic discussion. Laboratories are deciding whether to drop a patient to self-pay on the front end, and payers are winning because the patient pays for the out-of-pocket expense and does not get the benefit of it being applied to their high deductible. Because of the administrative overhead, time to reimbursement, and the pressure to get reimbursed, some laboratories are making that decision at the point of service. They think, I have a cleaner client experience, a cleaner patient experience, and I’m not incurring the labor and expense and time to revenue. That’s the sad fact we’re facing as an industry.

At XiFin, we feel strongly about advocating against this. The payers should be doing their job. From a market access perspective, we pride ourselves on advocacy and take that approach with CMS and key payers and say, How do we make this better so it doesn’t impact patient care? You shouldn’t be putting the burden back on the patient. Payers are winning out by being punitive; it’s the unintended consequence of payers getting away with this behavior.