Case Studies » Leading Testing Lab

Healthcare billing optimization

Identifying root causes and streamlining processes

You can’t fix what you can’t see, so transparency is critical when it comes to optimizing billing processes.

A leading laboratory specializing in renal testing was losing revenue opportunities to long billing cycles, write-offs, and a lack of visibility into the root causes of billing delays and roadblocks. Over the years the billing staff continued to grow to support manual investigation and remediation of the growing issues. Some root causes were known, but the client lacked the ability to quantify the impacts and develop a business case for a solution.

In an effort to uncover and understand the causes at the root of their inefficiencies and lost opportunities—and to accurately quantify the impact of the root causes—they called Celerity to assess the situation and develop prioritized recommendations for remediation. By addressing these root causes, the laboratory would be able to capture revenue lost to write-offs, accelerate billing cycles, ease administrative burdens, improve competitiveness, and gain insight into their billing processes.

Services

  • Operational Excellence
  • Organizational Analysis
  • Performance Measurement
  • Process Optimization

Analyzing processes and making recommendations

Celerity embarked on a 10-week assessment focused on analyzing process constraints through a series of interviews, observations, research, and data analysis. The data analysis portion was particularly challenging because it had to be done manually from paper copies and text files. During the discovery phase, we:

  • Compared and contrasted billing processes across multiple sites
  • Evaluated order processes, including order applications and channels, paper orders, and stat lab orders
  • Evaluated hold and denial practices and business logic

During the discovery phase, we found that the top-10 hold codes accounted for 80%-90% of the issues with holds, and identified numerous quick fixes to get revenue flowing.

After we identified the blocks caused by billing being held or denied, we made prioritized recommendations for remediation, focusing primarily on reporting and root cause mitigation. During our discovery, we found that the top-10 hold codes accounted for 80%-90% of the issues with holds, identifying numerous quick fixes to get revenue flowing. Holds happen when there is a discrepancy in the laboratory information management system (LIMS), the billing system, or between systems that prohibit the order from being billed. If they are not resolved correctly, they will often result in the order ultimately being denied for payment by the patient, clinic, or insurer.

Delivering results that make a significant impact on revenue

The client was very pleased with the comprehensive, revenue-generating results of Celerity’s discovery. We delivered a prioritized list of remediation measures—ranging from quick wins to longer-term solutions—that could save the lab millions of dollars each year. This included recommendations to increase the efficiency of their billing processes through standardization, consistency, and the removal of exceptions. When implemented, our recommendations will result in:

  • Increased transparency into the billing process
  • Improved cash flow through an 80%-90% reduction in holds
  • Increased revenue through 50%-60% reduction of denials, totaling $2M-$5M/year
  • More efficient use of manpower

Before Celerity

No visibility into billing process, roadblocks, and delays

Billing holds blocking cash flow into laboratory

Revenue stymied by multiple billing denials

Additional staff needed to address billing roadblocks

With Celerity

Increased transparency into root causes of billing issues

Root causes identified, enabling 80%-90% reduction in holds

50-60% reduction in denials after identifying previous causes

Roadblocks identified and remediation recommended to reallocate staff

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