Tips for Laboratory Billing Reimbursement Challenges

Getting paid for services is a major challenge for independent pathologists and clinical labs. Clinical Lab Products published an article to help medical labs get paid properly. Leading lab revenue cycle management (lab RCM) companies share their best practices for streamlining laboratory billing and navigating the complex reimbursement landscape in the article below. 

LIS has an all-in-one platform with comprehensive laboratory billing solutions, so we're honored that CLP included Lab Billing Specialist Gayane Haroutyunyan's comments in this important and timely article. As usual, not all of Gayane's submissions for the article were accepted, so we're providing a full transcript of her CLP interview to our lab partners and the lab community.

After reading this article, if you have questions about lab billing or what lab billing software would be best for your business, please contact us to schedule a call with a lab billing specialist.

Q & A with a Lab Billing Expert

What does the current reimbursement landscape look like for laboratories in 2024?

CMS's recent Medicare Physician Fee Schedule Final Rule states that. The 2024 Conversion Factor is $32.74, down 3.4% from 2023. Overall pathologist payments are expected to drop by 2%, and independent lab payments by 1%. The College of American Pathologists (CAP) attributes the reductions to the addition of the E/M add-on code G2211 and a 1.25% Consolidated Appropriations Act payment cut.

What are the biggest laboratory billing reimbursement challenges and their causes? How do these challenges affect labs currently?

Laboratory compliance with ever-changing industry regulations is their biggest challenge. Both small and large labs struggle to keep up. New coding and lab billing rules often destroy reimbursement rates. Staffing shortages and high turnover rates in most labs make reimbursement difficult.

Are there any positives about the current reimbursement situation for labs?

The biggest benefit is that laboratory software systems automate and rule-based lab billing and coding workflows. Fortunately, some RCM software products can accommodate this trend and provide RCM cycle automation right out of the box.

What types of testing are consistently being reimbursed at a sustainable rate for labs? Which kinds are on shakier ground?

Geographic location, payer policies, and test codes affect laboratory test reimbursement rates. Certain tests may be considered essential and have more stable reimbursement rates. The following tests are usually reimbursed reasonably:

• Standard Laboratory Tests

• Imaging Diagnostics

• Microbiology Tests

• Clinic Chemistry Tests

• Hematology Tests

• Pathology Checks

How has legislation or the lack of it (e.g., SALSA), affected the reimbursement landscape?

Laboratory reimbursement rates are generally affected by legislation. Changes in healthcare laws, regulations, and policies can affect reimbursement, service eligibility, and provider pay. Lack of reimbursement legislation may also cause reimbursement gaps or uncertainties. Some ways legislation or lack thereof could affect reimbursement include:

• Eligibility, coverage

• Pay Rates

• Compliance Needs

• Standards for Coding and Documentation

• Quality Measures for Fraud and Abuse Prevention

What is the status of SALSA? Does it seem to be gaining traction? What is being done in the industry to advance this legislation? How can labs get involved?

Over a year ago, clinical laboratory legislation improved. Senate and House introduced Saving Access to Laboratory Services Act. 

SALSA would authorize CMS to collect private market data from all laboratory segments using statistically valid sampling for widely available test services where previous data collection was inadequate.

If passed, this bill would prevent lab reimbursement cuts in 2023 and beyond. Despite widespread support, Congress has not passed the bill. Congress did freeze Medicare's 2023 Clinical Laboratory Fee Schedule (CLFS) rate cut and delay reporting requirements.

What are some common mistakes laboratories make regarding lab billing reimbursement? How can these be avoided?

Lab billing reimbursement mistakes include inefficient denial and appeal management. This laboratory billing process requires careful trend analysis to determine claim denials. Understanding these patterns helps laboratories address denials and resubmit corrected claims faster, improving reimbursement chances.

Underusing automation in claim submission, especially for standard test cases, is another oversight. The submission process is faster and more accurate with automation. Without this, laboratories risk inefficient staff use, delayed submissions, and lower reimbursement rates.

Laboratories also make billing and coding mistakes. Claims can be denied due to inaccurate or outdated coding. Coding standards and training must be updated to avoid these mistakes.

Common mistakes include poor documentation. Claim approval requires thorough test and procedure documentation. Insufficient documentation can lead to claim denials because insurers may not justify tests.

Finally, not knowing payer policies can lead to noncompliance and claim denials. To ensure lab billing compliance, laboratories must monitor insurance policy and regulation changes.

To avoid these mistakes, laboratories should train staff regularly, use the latest lab billing software and automation tools, document meticulously, and stay current on payer policies and coding standards.

What does the reimbursement landscape look like in the next 5 or so years?

Some pending legislation on laboratory reimbursement rates paints a positive and encouraging picture, but the industry's reimbursement rate declines over the last decades contradict this.

Looking forward, several key factors could shape the reimbursement landscape:

Healthcare Policy Changes: New or amended healthcare laws could significantly affect reimbursement rates. Medicare and Medicaid policy changes are especially important.

Technological Advancements: Advanced technologies like AI and automation in laboratory billing may affect reimbursement policies. These technologies could make operations more efficient and cost-effective, affecting service valuation and reimbursement.

Shift to Value-Based Care: Healthcare's shift from fee-for-service to value-based care may change reimbursement strategies. In this case, cost-effective, high-quality labs may be favored.

Market Consolidation: Healthcare's shift from fee-for-service to value-based care may change reimbursement strategies. In this case, cost-effective, high-quality labs may be favored.

Public Health Trends: Laboratory demand, influenced by public health trends like new diseases or preventive care, can also affect reimbursement policies.