Handling Out-of-Network Billing for Labs: A Key Aspect of RCM Success
Medical laboratory tests are the highest-volume healthcare service nationwide, with more than 14 billion tests analyzed annually. However, when samples are sent to out-of-network labs, patients are left responsible for the balance, and out-of-network billing can get out of hand. If overlooked, both patients and laboratories may suffer, which can impact their willingness to receive a laboratory test in the future and ultimately hurt the labs’ revenue cycle.
To prevent unexpected financial burdens, it’s crucial to understand how out-of-network laboratory billing works and the best practices to implement for RCM.
What are out-of-network laboratory services?
Out-of-network (OON) services are tests or analyses performed by a laboratory that does not have a contractual agreement with a patient’s insurance provider. This means out-of-network labs can have varying pricing and quality of services.
Patients may have their laboratory samples sent out of network for several reasons, such as:
- Emergency situations where patients need to seek the closest available help
- Needing medical care while away from home
- Insurance network does not include a laboratory with the capacity to conduct the analysis (eg, if the laboratory test is complex or rare)
- Actively choosing out-of-network laboratory tests due to convenience
- Out-of-network providers that work at an in-network facility
Remember, patients need to be aware that some out-of-network providers can bill them for the difference between what their plan agreed to pay and the full amount charged to the plan for a lab service. This is called “balance billing.”
On the other hand, an unexpected balance bill or “surprise bill” can occur when patients can’t control who is involved in their care—for example, when they are unexpectedly treated by an out-of-network provider that they did not or cannot choose.
In both instances, the No Surprises Act can protect patients by limiting their out-of-pocket expenses. If necessary, they must sign a notice and consent form to waive their protections.
Understanding out-of-network lab billing
Many labs face the multifaceted process of billing, which involves patient registration, confirmation of medical coverage, coding of services, claim submission, and follow-up.
OON charges are documented in a superbill, which is an invoice for the services and charges of out-of-network providers.This contains the following important and detailed information:
- Patient’s information
- Date of service
- Specific services rendered
- Procedure Codes and Description (CPT) (codes that describe procedures performed on the patient)
- Diagnosis Codes and Description (ICD-10) (codes that describe the medical diagnoses)
- Modifiers (a code that tells that the procedure performed has been changed but not in its code)
- Provider’s full charges
Although the superbill allows patients to be reimbursed for medical expenses when laboratories are outside their network, patients must still be careful how they submit it. Superbills can be susceptible to all kinds of billing errors, leading to late reimbursements and denied claims.
It is best always to remind your patients to review their plan’s website to ensure they know what their insurance covers and how they will send a superbill.
Below, you’ll find Synapse Lab Billing’s proof of excellence: thoroughly checking claims for accuracy and efficiency resulted in a 60% increase in payments.
Our expert collectors handled insurance requests quickly, increasing average charges by 52%. In addition, Synapse billers matched the procedures with the covered diagnosis. Read the case study in full.
Best practices to handle OON billing
In response to the growing need for labs and patients opting for OON services, claims must get approved as quickly as possible. By leveraging various best practices in lab billing, you can equip your organization with the tools and insights needed to navigate this complex environment.
Be proactive in contacting patients
Make patient communication a priority. Inform them about superbill and how it should be processed under the No Surprises Act. This shows that you care about reducing their confusion and stress, positively impacting their trust and satisfaction.
Increase cost visibility
Help your patients understand out-of-pocket expenses through an out-of-pocket estimation tool that can illustrate potential costs.
Optimize billing and collections
Dealing with late reimbursements and denied claims wastes time and money. Rather than sifting through the kinks and knots of the entire billing and collection process, you can leverage technology like automated RCM systems and innovative platforms that cater specifically to your lab.
In the age of digital transformation, Synapse Lab Billing is a frontrunner in developing top-of-the-line RCM services and technology platforms, with growth and success as our main priorities.
When you partner with Synapse, you can navigate OON, billing, coding, credentialing, prior authorization and more, freeing your lab to serve patients across networks. Conduct lab tests and analyses with no unnecessary stress! Schedule a consultation to see how Synapse Lab Billing can maximize your revenue through our highly qualified and trained experts.
Sources
Issue, & Brief |. (2022). Issue Brief Price Markups for Clinical Labs: Employer-based Insurance Pays Hospital Outpatient Departments 3X More Than Physician Offices and Independent Labs for Identical Tests.
https://healthcostinstitute.org/images/pdfs/HCCI_labprices_brief_051223.pdf