The Top Five KPIs: Driving Successful Lab Revenue Cycle Management
June 1, 2023
At LigoLab, we believe that lab revenue cycle management (RCM) should be an integral part of all laboratory workflow and that lab billing should no longer be a back-end laboratory billing process. That’s why we’ve engineered LigoLab Informatics Platform with a powerful automation engine that builds and leverages millions of rules to ensure clean claim submissions while also 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 platform can also create detailed statistical reports to monitor trends and key performance indicators (KPIs).
What follows is a closer look at five key metrics that help lab managers meet their reporting needs and minimize revenue leakage, thereby mitigating financial risk and maximizing profit.
Laboratory Billing with Real-Time and Easily Accessible 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 together with other common industry metrics.
Billing Queue Throughput
- KPI Description - 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 laboratory billing workflow efficiency can be gauged via this metric, and in combination with the Dashboard tool can be accomplished in "Real Time" (constant data refreshing). This metric also identifies the opportunities in billing workflows by providing an 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 platform responsible for lab RCM (see example below).
- KPI Benefit - Offers a quantitative gauge useful in determining operational workflow aspects such as labor allocation & distribution (directing billing team 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 the cash flow from the CPT Code level. Calculation of this metric includes tracing a claim from the Encounter level down to the singular CPT Code level displaying the amount charged vs. the amount paid per CPT Code (see example below).
- KPI Benefit - This metric provides a direct view to claim & payer combinations with the highest reimbursement rates. It also identifies the billing patterns typically relied on for automated billing workflows. Overall, this metric simplifies the laboratory billing process to accurately calculate incoming cash flow.
- KPI Description - Payer Aging is one of the most tracked KPIs, essentially a map to and often used as a visual representation of static cash flow from payers. This metric is typically represented using charts, thus it is vital to have a configurable Dashboard tool available within the platform being used for lab revenue cycle management (see example below).
- KPI Benefit - This metric can be used to assess both 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 in conjunction with other KPIs, such as the previous two in a Dashboard setting.
- KPI Description - The Billing Claims KPI provides upcoming cash flow based on payer type within a designated time period 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 and serves as an indicator of billing workflow efficiency with a direct correlation to payer type(s). Overall, this KPI represents billing workflow efficiency in terms of future cash flow by payer type.
More About LigoLab’s All-in-One LIS System that Supports Lab Revenue Cycle Management
Since 2006, LigoLab has specialized in developing and licensing laboratory informatics, providing comprehensive and agile solutions for anatomic, clinical, and molecular laboratories (click here to learn how the company was founded). The LigoLab LIS & RCM Informatics Platform is driving efficiency, productivity, market differentiation, and growth in hundreds of laboratory facilities nationwide.
From the beginning, our company goal 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 platform for all technical and financial operations.
LigoLab’s LIS 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 RCM module was launched in 2019 and TestDirectly, LigoLab’s direct-to-consumer 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 platform optimizes efficiency and performance to drive all the features and modules your organization needs to succeed, all without the need 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 with our all-in-one solution.
To learn more about all of our software solutions and how they can solve your lab’s problems with efficiency, we recommend a 15-minute discovery call with one of our talented product specialists.