Reducing laboratory billing defects using six sigma principles

Abstract

Objective: In an effort to decrease healthcare costs, we investigated our laboratory billing practices at a tertiary academic medical center to determine where we could apply Sigma Sigma tools to improve these processes. Methods and Results: During the period of June 2009 to February 2010, we identified an estimated $1.9 million in charges for laboratory tests performed, but not billed for. Using SIPOC analytics, we determined that a large percentage of these unbilled tests were ordered by outreach services ($529,000). Applying interventions that included creation of CPT-driven lab test requisitions for Medicareapproved test panels, and training physicians and office managers to better match CPT codes with lab requests, we improved the rate of unbilled tests from 25% to 2.6%. Conclusion: The application of Six Sigma quality improvement tools to the clinical laboratory setting helped identify specific billing processes to improve (laboratory tests performed but not billed for), apply specific interventions to improve our billing processes, and create solutions to improve and maintain improved performance of our billing practices.