Reducing Lead Time for Processing Lab Specimens

Background: Lab specimens that are collected in the physician offices are brought to the hospital laboratory by courier. Each specimen is accompanied by a two-part requisition; the white part is used to run the tests and the yellow part used for billing. This project looks at the value stream associated with the yellow requisition for coding.

This project was initially chartered to reduce payment denials associated with lab tests that Medicare deems not medically necessary. In order to rectify this problem, the improvements would have involved costly and challenging interventions in physician offices. After much discussion, the project champion approved a project more focused on the workflow within the hospital departments.
 

Problem Statements:

1. Lab specimen requisitions take a median of 7 days lead time from date of service to coding.
2. The percent of requisitions with a lead time >= 10 days is 23%.
3. There are approximately 400 hours of duplicate work in the lab requisition value stream.

Goal Statements: 

1. Reduce lead time to 3 days or less.
2. Reduce the percent of requisitions with lead time > 10 days to zero.
3. Eliminate all duplicate work in the lab requisition value stream.

Critical to Quality: Establish a standardized work process for three departments

Other Performance Metrics:

• Reduce travel time for requisition by 50%
• Reduce staff time in transporting requisition by 50%
• Reduce the proportion of ABN defects by 50%
• Improve reimbursement for lab tests that have ABNs by $2000 per year.
• Reduce costs of requisition storage

Improvements:
The major improvement put in place for this project was the elimination of the paper lab requisition. At the time the specimen is registered, the paper requisition is now scanned so that an electronic copy is available to all employees involved in the value stream. This improvement added about 30 seconds of time to the laboratory staff who register specimens, but then reduced time for the staff in access services and coding departments who no longer have to look for hard copies. It also offers the prospect of eliminating batching, as requisitions are now available in real time. The three involved departments have agreed upon a plan of standardized work and all duplicated work has been eliminated. One unanticipated benefit from this project was the standardization of handling the ABN forms that come from the physician office when a lab test is known to not meet Medicare criteria for medical necessity.

Actual Performance Metrics:

• Lead time stayed constant at a median of 7 days; due to priorities set in coding department.
• Proportion of cases where lead time exceeds 10 days reduced from 23% to 9%.
• All 400 hours per year of duplicate medical necessity checking was eliminated.
• A standardized work process was created. Voice of customer survey reports improved accuracy, more time to focus on important tasks, and less rework.
• Requisition travel distance time reduced 84%.
• Staff travel time per day reduced from 30 minutes to 5 minutes (84%).
• Baseline ABN defects were 92%; since improvements now at 36%.
• Lab test reimbursements for tests with captured ABN’s -- $480 for 4 months ($1440 annualized).
• Costs to store requisitions went from $936 to $0 per year.