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Using your LIS to increase lab reimbursements

October 29, 2021 | Daniel Doll
LIS to increase lab reimbursements

Faced with decreasing reimbursements and limitations in coverage, clinical laboratories struggle to maximize their revenue and collect payments for the tests they perform. Luckily, a strong laboratory information system, or LIS, can help your lab optimize its profitability by leveraging LIS to increase lab reimbursements.

The consequences of lower reimbursements

The Department of Health and Human Services (HHS) implemented the Protecting Access to Medicare Act (PAMA) in 2014. HHS and the Centers for Medicare & Medicaid Services (CMS) relied on a flawed process to collect testing data to establish market-based Medicare reimbursements. The PAMA process under-reported what the private market, including many independent laboratories and physician office labs, would need to remain viable and continue serving Medicare patients.

In 2019, CompuGroup Medical voiced our support of the American Clinical Laboratory Association (ACLA) lawsuit to correct this mistake.

The College of American Pathologists (CAP) also called out this injustice, stating, "CAP is strongly advocating for improvements to how CMS collects data from laboratories."

Sandy Laughlin, Sales Enablement Manager
With a preventative screening report, your lab could reach out proactively to eligible patients and schedule their annual screening.

Sandy Laughlin, Sales Enablement Manager

PAMA represents the latest step in an ongoing trend of tighter reimbursements for clinical laboratories. The diminishing payments are having a tangible impact on the nature of care afforded by speedy laboratory testing.

A survey conducted by the National Independent Laboratory Association (NILA) found that labs have faced years of increasing cuts for most high-volume tests. This trend exacerbated staffing shortages and led to longer wait times for results as labs struggled with the early testing demands brought on by the COVID-19 pandemic.

Maximize profitability with a leading LIS

A powerful LIS—CompuGroup Medical offers both CGM LABDAQ and CGM SCHUYLAB—offers many tools to maximize the profitability of your laboratory.

Medical necessity checking

Medical necessity checking automatically confirms that diagnoses are appropriate for the tests ordered. If Medicare does not cover a test and the patient is responsible for payment, an advanced beneficiary notice (ABN) ensures that the patient is aware of this and has agreed to cover the costs out-of-pocket.

Test-routing rules

Test-routing rules ensure that your lab sends tests out to the appropriate reference lab, as needed. This setup prevents your lab from performing tests that would not be reimbursed.

"An insurance contract might specify that tests must be performed at a specific reference lab to qualify for reimbursements," said Sandy Laughlin. Sandy is a sales enablement manager with CompuGroup Medical who served as the assistant supervisor for an immunology lab at the University of Maryland.

CGM LABDAQ is the leading laboratory information system in the United States. Intuitive. Secure. Scalable.
CGM SCHUYLAB is a trusted laboratory solution, perfect for small POLs, labs with in-house billing, and the international market.

"The lab sets the criteria for the rules within CGM LABDAQ or CGM SCHUYLAB," she said," so when a test matches the qualifications above, the lab order would be routed to the specified reference lab. An interface between the LIS and the reference lab makes this possible."

Billing system integration

Dependable lab management software offers integration with your established billing systems and practice management software such as CGM DAQbilling or CGM APRIMA to ensure that all charges are captured and billed.

With CGM SCHUYLAB, you could interface to your existing billing software or choose to implement the fully integrated billing option. CGM SCHUYLAB allows laboratories to bill directly from the LIS, sending transactions to government insurance, private insurance, and billing consolidators.

Advanced revenue reporting

Your lab can rely on advanced revenue reporting to make informed testing decisions and offer more services. A cost accounting report, for example, displays your lab's costs compared to the expected revenue for the tests being performed.

A preventative services report improves your lab's revenue by prompting the user when patient screening tests would be allowed by insurance.

"A good scenario for the preventative services reminder would be PSA testing," Sandy said. Medicare covers one PSA—a test to measure the amount of prostate-specific antigen in a person's blood and a good way to screen for prostate cancer—per year, so your lab could run the preventative services report in CGM LABDAQ to see which patients are eligible for the screening.

"By filtering for the PSA panel, the lab sees all PSAs and the last time they were run. They can use this information to reach out proactively to eligible patients and schedule their annual screening," Sandy said.

Suppose you prefer to have preventative service reminders managed on the EMR level. In that case, your lab can employ frequency limits as a check to flag any tests that are non-reimbursable by the insurance company.

Set up your lab for success

By leveraging all of the tools afforded by your trusted lab management software, you can set up your lab for success despite the challenges of tighter reimbursements and legislation such as PAMA. Optimize your profitability to maintain your clinical workforce, and make sure your laboratory can offer the quick turnaround times and dependable results that your providers and patients expect and deserve.

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