The Top Five KPIs: Driving Successful Lab Revenue Cycle Management

At LigoLab we believe laboratory revenue cycle management (lab RCM) should be an integral part of all laboratory workflow management solutions and that lab billing should no longer be a back-end laboratory billing process. That’s why we’ve engineered the LigoLab Informatics Platform with a powerful automation engine that builds and leverages millions of rules to ensure clean claim submissions while improving compliance and first-pass payment rates. 

In addition to supporting laboratory billing at order inception with verification and scrubbing components that help ensure error-free claims and faster payments, the LigoLab platform can also create detailed statistical reports to monitor trends and key performance indicators (KPIs).  

Here’s a closer look at five key metrics that help lab directors and managers meet their reporting needs and reduce denials and revenue leakage (thereby mitigating financial risk and maximizing profit). 

Improve Laboratory Billing with Real-Time and Easily Accessible RCM Cycle Metrics

Thanks to the Dynamic Reporting and Dashboard tools available within LigoLab’s laboratory billing solution, our partner labs (independent clinical laboratories and pathology groups) have been able to capitalize on and secure long-term growth by utilizing the following five KPIs with other common industry metrics.

Laboratory Billing Queue Throughput

• KPI Description - Laboratory Billing Queue Throughput is a KPI with the ability to quantify a laboratory's entire billing workflow in terms of efficiency by representing Demographics, Coding & Billing Review, all within a single table or chart (see example below).

• KPI Benefit - The entire picture of laboratory billing workflow efficiency can be gauged via this metric, and in combination with the Dashboard tool be accomplished in "Real Time" (with constant data refreshing). This metric also identifies the opportunities in lab billing workflows by establishing the accurate measure of claims processed from start to finish.

Claims Paid vs Contract

• KPI Description - This metric can be customized by setting a threshold percentage of the allowed reimbursement amount to compare the reimbursement rate between payers for claims. For the most accurate calculations, it is recommended to have a Dynamic Reporting utility within the LigoLab platform responsible for lab RCM (see example below).

• KPI Benefit - This benefit offers a quantitative gauge useful in determining operational laboratory workflow management aspects such as labor allocation & distribution (directing the lab billing team’s focus to specific claims) and determination of denial & appeal pursuits (prioritizing appeals with higher reimbursement). 

Paid Claim Details

• KPI Description - A metric such as the Paid Claim Details KPI brings a granular view to claim reimbursement and cash flow from the CPT Code level. The calculation of this metric includes tracing a claim from the Encounter level down to the singular CPT Code level and displaying the amount charged vs. the amount paid per CPT Code (see example below).

• KPI Benefit - This metric provides a direct view of claim & payer combinations with the highest reimbursement rates. It also identifies the laboratory billing patterns that rely on automated billing workflows. Overall this metric simplifies the laboratory billing process by accurately calculating incoming cash flow. 

Payer Aging

• KPI Description - Payer Aging is one of the most tracked lab RCM KPIs. It’s essentially a map that visually represents static cash flow from payers. This metric is typically presented using charts, thus it is vital to have a configurable Dashboard tool available within the lab’s platform for lab revenue cycle management (see example below).

• KPI Benefit - This metric assesses the lab’s potential and actual Bad Debt, which ties into Write-Offs. As a time-sensitive metric, Payer Aging can serve as a warning system for upcoming decreases in cash flow. Ultimately this metric is most effective when utilized with other KPIs, such as the previous two in a Dashboard setting.

Laboratory Billing Claims

• KPI Description - The Laboratory Billing Claims KPI provides upcoming cash flow based on payer type within a designated time indicated by the dollar($) amount for billed claims. A graphical representation of this metric allows laboratories to identify their principal payer type and perform a "side-by-side" comparison of their top incoming cash flow sources (see example below).

• KPI Benefit - This metric distinguishes key payer types based on generated cash flow linked to billed claims. Additionally, it measures lab billing workflow efficiency with a direct correlation to payer types. Overall, this KPI represents laboratory billing workflow efficiency for future cash flow by payer type.

LigoLab: A Comprehensive and Agile LIS System and Lab Revenue Cycle Management Solution

Since 2006, LigoLab has specialized in developing and licensing laboratory informatics, providing comprehensive and agile solutions for anatomic pathology (LIS pathology) clinical laboratories (LIS medical), and molecular laboratories (molecular LIS).  

The LigoLab LIS & RCM Laboratory Informatics Platform drives efficiency, productivity, market differentiation, and growth in hundreds of laboratory facilities nationwide, helping them transform into digitized and thriving organizations.

Learn More: Navigating the Future of Pathology: The LigoLab Advantage

From the beginning, the goal of our LIS company was to build a laboratory informatics platform that would unite and positively transform all diagnostic disciplines, departments, roles, processes, and specimens on one powerful end-to-end laboratory information system software for all technical and financial operations. 

Learn More: What Started as a Shared Vision Between Friends Has Become the Definitive Laboratory Information System Choice for Modern Laboratories

LigoLab’s LIS system module debuted in 2006; the flagship anatomic pathology solution was released in March of 2007 and continues to be enhanced with new releases every quarter. The lab RCM module was launched in 2019. TestDirectly, LigoLab’s direct-to-consumer lab testing software solution marked a major milestone for our company’s vision of delivering a complete platform with infinite configurability when it debuted in the spring of 2020. 

This fully integrated multi-specialty informatics platform optimizes efficiency and performance to drive all the features and modules your organization needs to succeed without having to interface multiple third-party modules or systems, middleware, or manual workarounds. 

Fueled by automation, laboratory productivity goes way up, turnaround times become much faster, and human error resulting in lost or mislabeled samples is drastically reduced.

To learn more about LigoLab’s LIS software and laboratory billing solutions sign up for a brief discovery call with one of our talented product specialists.

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