According to a new research report commissioned by healthcare information technology company XiFin and conducted with Sage Growth Partners, clinical laboratories and pathology groups may be overlooking substantial revenue. That’s because traditional revenue cycle management (RCM) metrics do not fully capture underpayments, administrative rework, delayed reimbursements, and difficulties collecting patient balances.
The researchers identified three interconnected areas where diagnostic providers may find unrealized financial value: revenue recovery, operational efficiency, and patient engagement and access.
For a midsize pathology practice submitting 210,000 claims annually with an average value of $108 per claim, the model estimated approximately $870,000 in potential annual improvement. That included:
- $430,000 from reducing denials and underpayments;
- $110,000 in operational savings; and
- $330,000 from improved patient collections, lower collection costs, and additional capacity.
Actual results will vary depending on a provider’s claim volume, reimbursement profile, payer mix, workflows, and patient responsibility, XiFin noted. The estimates are intended to show where further analysis may be warranted rather than guarantee a particular financial return.
Traditional metrics may hide revenue leakage
Kyle Fetter, chief operating officer at XiFin, was quoted in the report. He said, “Denials and underpayments are important, but they are not the whole story. Revenue cycle opportunity also lives in manual work, delayed resolution, patient financial friction, and operational processes that are difficult to quantify. A more complete framework helps leaders understand where improvement may matter most.”
Common measures such as denial rates, accounts receivable days, collections, and claim volume provide only a partial picture of financial performance, according to the report. They may not expose the combined effect of duplicate claims, late filings, underpayments, unprioritized appeals, manual documentation gathering, and repeated claim follow-up.
The researchers also emphasized that laboratories, pathology groups, and other ancillary providers should not rely solely on broad healthcare benchmarks. Such organizations have different claim volumes, payer rules, authorization requirements, and reimbursement patterns that require segment-specific analysis.
Patient-facing processes represent another potential source of revenue loss. Errors or delays involving insurance capture, eligibility verification, estimates, prior authorization, and financial communications can affect both patient access and the likelihood that providers will collect amounts owed.
XiFin suggested that laboratories establish a baseline of revenue at risk and administrative effort before investing in artificial intelligence or automation. Potential applications include interpreting payer responses, prioritizing appeals, verifying eligibility, and preparing supporting documentation.
The findings may interest clinical laboratory professionals seeking to protect margins by capturing earned revenue more effectively, rather than relying on increased test volume.
This article was created with the assistance of Generative AI and has undergone editorial review before publishing.
