Unraveling the Complexities of Laboratory Billing

Change is the only constant in medical billing and coding, but the objective remains the same: Maximize revenue with an accurate and efficient billing process. But the complexity of some billing scenarios is overwhelming, especially when the landscape is always shifting beneath your feet. For a prime example of intricate billing environments, look no further than the lab.

What sets laboratory billing apart from standard healthcare revenue cycle management (RCM)? Pitfalls range from referrals to compliance, and consequences that start with a simple claim denial can end in serious legal ramifications.

The trouble with laboratory billing

For many providers, billing expertise comes down to familiarity with practice services. A dermatologist’s office staff will know the ins and outs of coding for their provider’s service niche, and the billing department for a family practice will have more extensive experience with general services.

Lab referrals are a different story. Billing staff aren’t always aware of clinical laboratory compliance standards, and it isn’t necessarily their fault. The U.S. Department of Health and Human Services (HHS) hasn’t updated lab compliance guidelines since 1998, leaving many billers confused about how to apply codes within increasingly antiquated standards.

Rather than sit on billing and risk denied claims, delayed payments, or legal action, billing staff are forced to apply the best practices they know to lab service coding — and such guesswork frequently leads to mistakes.

Common lab billing issues and mistakes

In laboratory billing, even minor mistakes can grow into serious situations, and what seems like logical coding may be incorrect or incomplete, which creates problems that can be tough to trace back to the original error.

Some of the most common lab billing and coding mistakes include:

• Inaccurate payments stemming from coding medically unnecessary services
• Medical necessity issues arising from insufficient documentation in support of medical need
• Order and intent errors due to a lack of referral documentation for lab services
• Direct billing conflicts which inadvertently violate state-level kick-back laws
• Related tests flagged as errors because the original referral is refuted or deemed unnecessary
• Improper use of modifier 59 triggering the improper categorization of related services

Lab billing issues are often as simple as a missing signature, an improper code, or even a qualified assumption, but even simple mistakes can generate a flawed billing sequence that can take weeks, if not months, to track down and remedy. And by then, the damage is already done.

High stakes for lab billing accuracy

Billing problems persist throughout the healthcare system, but laboratory billing is generally subject to more scrutiny. Lab billing errors — especially recurring ones — are more liable to pique the interest of HHS auditors who may flag them as potential Medicare fraud or negligence. The last thing any provider wants is an invasive audit of their billing and coding practices.

Billing inaccuracies also affect the patient experience and the provider’s reputation. What recourse might a patient choose if they’re billed for genetic testing instead of the simple infectious disease test they received? What is the provider’s liability if a patient’s bill for genetic testing is inadvertently sent to someone with a vested interest in the test’s outcome? Billing and coding issues can quickly snowball into patient-facing problems that reflect negatively on a provider’s practice.

Errors also affect provider revenue. Consider a situation in which a $900 hereditary hemolytic anemia (HHA) panel is mistakenly billed to a patient as a standard $29 red blood cell antibody screening panel. In cases like this, the provider is left to cover the cost difference, which affects revenue, and repeated errors compound the losses associated with an inefficient billing system.

Attention to detail is critical to accurate laboratory billing.

The BrightDrive approach

BrightDrive HCS recognizes mistakes and clerical errors happen, which is why we employ dedicated QA and R&D teams to monitor every step of revenue cycle management. The BrightDrive team is thoroughly trained to ensure all relevant information is collected, verified, matched with services rendered, and covered prior to filing. Our experienced staff also scrub and scrutinize all data and documents to ensure clinical and clerical accuracy, confirm medical necessity, and operate in complete compliance with ever-changing billing and coding regulations.

Partnering with BrightDrive takes the guesswork out of billing and coding, and with an established presence in labs all over North America — and claim denials of less than 3% — our team is ready to deploy our specialty billing expertise on your behalf.

Get experienced billing and coding guidance at brightdrivehcs.com.