Medical testing labs face AR problems with patients and insurance companies. Labs all over the country hire collection agencies to recover amount from unpaid invoices after they have been unsuccessful for two or three billing cycles.
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Patient Debt: Sometimes patients don’t pay their bills. This can be due to a lack of insurance, high deductibles, or other financial hardships. This unpaid patient debt can add up and impact the lab’s bottom line.
Reimbursement Issues: Medical labs often rely on reimbursements from insurance companies for the tests they perform. There can be delays in these reimbursements or disputes over the amount that is reimbursed. Additionally, if insurance companies change their policies and no longer cover certain tests, labs can lose a significant source of revenue.
Healthcare Policy Changes: Changes in healthcare policies and government regulations can unexpectedly affect medical lab revenue. For instance, changes in Medicare and Medicaid reimbursements can significantly affect a lab’s finances.
What kind of problems are these?
In the medical laboratory, some tests are covered by a patient’s private insurance or the Laboratory Fee Schedule through Medicare. Others are either fully or partially covered by insurance or Medicare Part B, while some are not covered at all and have to be paid by patients out of pocket. And, just like in other areas of the healthcare system, there can be uninsured patients too whom labs run testing for. When a patient has a bill that is not covered by insurance or Medicare, it is the patient’s responsibility to pay, and, unfortunately, there is a certain parentage of patients who will not pay on time or at all.
What causes these debts?
Many factors can cause these debts from the patient’s end, but there are a few specific things about medical testing lab bills specifically that make them difficult. First, lab tests are billed with the use of very specific codes that can be confusing or difficult to understand for the patient. Also, adding to this confusion is that many labs are entirely separate from the referring doctor so the patient may not recognize the name. This makes them more likely to challenge the charge and less likely to pay.
The second issue that arises with medical testing lab’s billing is that many lab requests are sent over without the patient’s social security number and sometimes even contact info attached. This can make it challenging to locate the patient or even find the right patient with that name to attach the bill to.
What can labs do about it?
The best way for medical testing laboratories to deal with patient AR problems is to hand the accounts over to professionals and hire a laboratory collection agency. A collection agency that has the experience and expertise working with labs to recover unpaid patient debt will be invaluable to labs and allow them to recover more of the AR, in a much faster time.
Laboratory collection agencies will be familiar with the specific billing codes that laboratories use and be able to explain that to the patient. They also offer things like skip tracing as part of their service. Skip tracing tracks down the correct person who owes a debt when there is invalid or incomplete contact information.
Also, while a laboratory’s billing department may be very familiar with all the rules and regulations around medical billing, they will not be as experienced with best practices around ethical debt collection. A laboratory debt collection agency will be equally familiar with all the HIPAA compliance regulation that is required in these situations as they are with complying to debt collection practices such as the Fair Debt Collection Practices Act.
| Written Notices sent by a Collection Agency |
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| Collection Calls made by a Professional Debt Collector |
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Conclusion
Patient AR and billing solutions in the medical testing laboratory are under-covered topics. This is even though it can be just as big of a problem in this field as any field in the medical profession. It can cause the same issues and hurt the long-term financial health of a lab if not dealt with appropriately. A laboratory collection agency will help you collect old AR accounts for clinical billing, DNA billing, pathology billing, toxicology billing, and molecular testing lab billing. That is why hiring a laboratory billing collection agency is the right thing to do.