Careful planning and strategic collaboration with a revenue cycle partner are essential for a successful kickoff to the commercialization process.
Setting up an early-stage laboratory for success requires meticulous planning and strategic implementation of key processes from the very start. A critical component as a lab moves towards commercializing a test is determining how they plan to bill and collect for their services. It may seem obvious – get paid for your rendered services – however, many challenges need to be overcome due to the complex US healthcare industry.
Most labs utilize a revenue cycle management (RCM) partner to help manage this process whether they fully outsource these tasks to a company or license a billing solution for their team to utilize in-house. Before searching for a partner, labs should look to have certain pieces in place to ensure when they do bring on an RCM partner, they can hit the ground running, have an efficient implementation process, and a timely go live.
Commercialization Plans
The first thing a revenue cycle partner will look for is an understanding of your commercialization plan. This includes confirming the lab is ready for billing with CLIA licenses, NPI and PTAN numbers, clinical validation and any clinical utility studies. (It is not uncommon for clinical utility studies to be published during or after commercialization.)
Next, they will look to understand how the lab plans to code and price the test. Labs have different choices to consider when deciding the best route. Labs can utilize an existing CPT code with existing local and national coverage determinations (LCD and NCD). They can also bill with a Not Otherwise Classified (NOC) code or plan to apply for a proprietary laboratory analyses (PLA) code. (PLA codes are used by many LDTs as they are CPT codes with corresponding descriptors so labs and manufacturers can specifically identify their test.) Pricing is also critical with many different influencing factors, especially if the CPT code is not yet on fee schedules.
Lastly, they will look to understand the payer mix based on the location of sales efforts, along with test volume and growth estimates. All this information allows the RCM partner to evaluate the path to reimbursement, understand potential staffing levels if billing is outsourced, and be able to accurately scope services to accommodate for current state and future growth.
It is a complex mix of coding, pricing, payers, existing coverage policies, patients, and ordering physicians that play into a sound billing policy that will maximize reimbursement in a customer-friendly manner. Choosing an RCM partner that can make sense of this complexity is key to a successful commercialization.
Lab Infrastructure
To assist in a timely go-live, labs should look to have many of the key infrastructure pieces in place so when the RCM partner starts to implement, all these other pieces are ready and able to connect to the solution.
Key pieces of lab technology infrastructure relevant to an RCM application include:
- Order management system
- Laboratory information system (LIS), Hospital Information System (HIS), Electronic Medical Records (EMR)
- Bank Lockbox
- Merchant Services
Depending on expected volumes and what solution model the lab chooses, they may need to hire additional billing staff to manage various processes such as front end, denials/appeals, and remittance. The additional cost of staffing is why many early-stage labs choose to outsource billing until volume has reached a level to where it makes fiscal sense to bring billing in-house. However, at the initial stage, if the lab decides to outsource billing to the RCM vendor, it could be overseen by a lone billing manager. The billing manager is critical to establishing a billing policy that matches the business need and clinical nature of the lab, for example adding clinical information to appeal letters and approving a comprehensive Patient Assistance Program, both of which are of upmost importance for tests without coverage.
Another beneficial staff member is a Market Access leader. This individual is responsible for working with the lab, providers, and payers to drive competitive coverage and contracts to ensure maximum economic scalability. Many RCM partners do not include this in their services, even if they promote their strong relationships with various payers, because of the clinical information needed in this role. It’s key to have an in-house or consultant as the market access leader working for the lab.
Ultimately, the journey of an early-stage laboratory towards operational and financial success is a well-orchestrated symphony of strategic planning, robust infrastructure, and finding the right partnerships. It truly is a partnership with all departments in the lab and the RCM partner to make reimbursement successful. Having these various pieces in place sets the stage for seamless integration and implementation, which will lead to a strong start to the lab’s commercialization journey.
Quadax understands the importance of building strong partnerships and exceeding expectations. By improving operational efficiency, we help you achieve significant boosts in productivity and profitability. Schedule a strategy call with our RCM experts and let us alleviate your worries as we work towards securing your financial success.
