Think outside the box to solve medical necessity denials for laboratory services

Laboratory services are notoriously problematic for revenue cycle. Coding and billing these services is often complex—some services are bundled in Ambulatory Payment Classifications and the correct use of modifier -91 (repeat clinical diagnostic laboratory test) versus modifier -59 (distinct procedural service) continues to throw organizations, and EHR systems, for a loop. These back-end issues are often compounded by registration errors on the front end. A high volume of services in the laboratory department might be unscheduled and as a result staff have less time to time to conduct insurance verification and preauthorization checks.

Those were some of the challenges facing Rebecca Conroy, RHIA, OHCC, CCS-P, department head, health information management and corporate compliance, and HIPAA privacy officer at Marcus Daly Memorial Hospital, a large critical access hospital in Hamilton, Montana. Conroy is chair of the revenue cycle committee, a group tasked with identifying, monitoring, and addressing revenue issues. The committee includes representatives from patient access, accounting, IT, and HIM, and over the years Conroy has helped shift the committee from a reactive position to taking a proactive approach.

“We deep dive issues,” Conroy says. “So, if we see that there’s modifiers causing issues, we work it back to the beginning with the goal of fixing the process, not just fixing the claim.”

Everyone on the committee takes an active role by sharing information, helping to solve problems, and ensuring clear communication between departments. Communication and collaboration are key because problems in the revenue cycle typically stretch across several departments. IT might launch a software update that results in a slight change to the user interface. If the change is not communicated to registration staff, they could begin to accidentally enter information in the wrong fields, which can cause problems for the billing department and leave the hospital working denials that could easily have been prevented. To help support the collaborative nature of the committee and ensure it remains focused and results-driven, Conroy assigns committee members specific tasks as they investigate each issue.

“To get really structured and really organized, I assign homework. I tell them what I expect them to deliver and when, and then I hold them accountable,” she says. “I think that’s really key. Because for several years we didn’t really have that kind of formal structure in place and I found we were just talking about the same issue every month. I don’t want to do that. Nobody has time for that.”

Along with departmental leaders, most of the C-suite participates in the revenue cycle committee. That’s been a huge win for revenue cycle, Conroy says, because their presence ensures that the issues identified by the committee are solved in a timely manner.

Recently, the committee looked into medical necessity denials for laboratory services. Conroy identified several root causes. The laboratory lacked a robust medical necessity verification process and didn’t have internal coding and billing expertise. Conroy settled on a unique solution to the problem: Selecting a laboratory staff member to be trained as a coder.

“For the first time, we’ll have a trained coder working in a department other than HIM,” Conroy says. “She will be in the lab, and she will be owning the medical necessity checking process as well as owning part of their charges.”

Organizations typically don’t invest in coding training for staff outside the HIM department. Although it can be challenging to get approval to have non-HIM staff trained as coders, it will pay off, according to Conroy. Everyone at an organization contributes to the revenue cycle but, outside the revenue cycle department itself, relatively few staff understand their role in it.

“I think that if improving your revenue cycle is a goal, the more people that truly understand revenue cycle, the better,” Conroy says.