Five simple steps to bolster laboratory outreach financial acumen
Outreach
For every laboratory outreach program, it is important to have a strong handle on the operational, clinical, and financial aspects of the business. Most outreach leaders have a laboratory background and are strong in clinical and operations knowledge but sometimes lack the necessary financial acumen. When a laboratory is unable to tell a compelling financial story, it is often viewed as a cost center and struggles to gain support and resources.
Bolstering financial acumen
An effective outreach leader develops financial literacy by understanding laboratory costs, billing, and insurance dynamics, and by effectively managing resources. Below are five simple steps to start developing the knowledge and skills to drive financial success.
1.
Develop a basic financial vocabulary.
Familiarize yourself with key concepts like gross and net revenue, direct costs and fully loaded costs, contractual allowances, and profitability. Understand how your organization’s financial leaders use these terms.
2.
Meet with your finance team.
Spend time shadowing staff in finance. It will help you understand how they manage these functions as they support the laboratory outreach program. Ask to see the laboratory-specific financial reports that are available, and learn how they create a profit and loss statement.
3.
Become familiar with how laboratory outreach testing is billed and collected.
Spend dedicated time shadowing individuals within the billing department to understand how challenges like denials, prior authorizations, and claims appeals impact the laboratory outreach program. Delve into write-off policies, patient collection processes, charity care, and payment options.
4.
Build a deeper understanding of laboratory payment dynamics.
Work with your payor contracting team to create a chart that represents the payor mix of the patients who use your laboratory services. Become familiar with the prevalent health plans in your market, understanding patient out-of-pocket responsibility for laboratory testing. Examine the electronic remittance advice (ERA) statements for several laboratory patients to learn what the payor actually paid for the services you provided.
5.
Understand the patient’s perspective.
Become familiar with how health plans and laboratory charges impact the healthcare consumer. Peruse price transparency websites. Examine an explanation of benefits (EOB) for your laboratory services. Review your own organization’s patient materials around explaining deductibles or EOBs.
Putting your knowledge to work
Once the learning is complete, it is important to use your knowledge to benefit your outreach program. Consider creating a disciplined routine with these actions to keep your skills honed:
- Read one EOB per week. Decode charges, adjustments, and patient responsibility.
- Track five patient encounters, estimating cost and comparing it to reimbursement using publicly available reimbursement data via the Centers for Medicare & Medicaid Services (CMS) Clinical Laboratory Fee Schedule (CLFS).
- Access the CMS Medicare Billing Manual for Laboratory Services (Chapter 15).
- Create a monthly financial dashboard to track your laboratory’s performance.
Through education, engagement, and demonstration of performance, you will move from being “cost-blind” to “financially fluent.” Financial effectiveness will improve the overall performance of your outreach program, ensuring long-term viability.
Visit the Mayo Clinic Laboratories’ Outreach Education section to find on-demand webinars, podcasts, and more with tips and advice you can use to contribute to your program’s financial success.
