Specific Pain Points for Clinical Labs
As an ancillary service, clinical laboratories find themselves in a unique situation where they don’t have direct contact with the patient. This workflow creates a dependency on ordering physicians, to provide patient demographic and insurance information when forwarding specimens and testing materials. In this situation where the laboratory is one step removed from data collection, they are reliant on another entity for accurate information to properly bill insurance payers or process successful prior authorizations, often reactively once testing has already been performed.
When the ordering provider does not initiate the prior authorization before the patient’s visit, it becomes the lab’s responsibility to seek approval from the patient’s insurance company with the information available. Since insurance companies recognize the collection date as the date of service for billing purposes, labs find themselves submitting prior authorization requests after the fact.
These “retroactive” or “reactive” prior authorization requests are becoming less viable with United Healthcare and Anthem, two of the country’s largest payers, no longer granting appeals.9 This significantly impacts a long-used technique in laboratory billing to secure reimbursement and necessitates more write-offs from denied claims as overall revenue continues to decline.
Ideally, using an automated system that facilitates reactive prior authorization requests prior to releasing claims would save the laboratory industry untold dollars in reimbursement that are currently being written off through claim denials.
With significant reform campaigns underway through the American Medical Association,10 and Congress,11, 12 little change has been forthcoming and 87% of participants industry-wide13 are still manually processing prior authorizations using laborintensive methods (i.e., phone and fax) that require several hours to several weeks to complete.14