How to Maximize Reimbursement for Molecular Diagnostic Tests

Industry estimates place the rate of claim denials for molecular diagnostic tests at approximately 20%. It’s a high figure — and a problem for practices billing for these tests. If one in five of your claims is subject to rejection, a significant portion of your practice’s reimbursement revenue can be held up in denials and appeals.

What can providers do to maximize molecular testing reimbursement? Avoid claim rejections by implementing best practices to address common claim problems before they occur.

Claim complexity

Insurance companies routinely deny lab test claims for a variety of reasons, but the root of almost all denials comes down to one of two problems: errors or incomplete information. Common examples include:

• Insufficient documentation. Lab test results or medical records are incomplete or otherwise insufficient to support the claim.
• Incorrect coding or patient information. Coders use the wrong code to describe the test, fail to designate an appropriate modifier, or submit with incorrect patient information.
• Lack of medical necessity. The test isn’t deemed medically necessary or appropriate for the patient’s condition or symptoms.

These problems often stem from the breadth of data associated with molecular testing claims, which must come from multiple parties before a provider verifies and submits the claim.

Additionally, complex medical terminology and different testing methodologies can further increase the likelihood of errors or inconsistencies in lab test claims. There’s also the sheer number of test types and modifiers to consider, which complicates claims for the provider and payor.

The worst part? Even when a claim is 100% correct, it might come back denied due to payor misunderstanding. Unfortunately, the onus is on providers to clear up any miscommunication to get the claim processed.

Maximizing reimbursements

While rejections for molecular diagnostic testing claims are expected, they shouldn’t stop at denial. To maximize reimbursements for these common claims, providers must create clear checks and balances — both before the claim is submitted and after, if it’s denied.

It starts with thorough and accurate documentation. Keep track of every detail and verify each data point across the chain of claims custody, including patient information, test type and results, lab information, and more. Proper documentation is the best way to avoid errors and discrepancies leading to claim denials or delays.

Another critical step is coding accuracy. Correct coding can significantly impact the claims and reimbursement process for a particular molecular test or procedure. It’s essential to understand the payor’s coding requirements and to ensure all coding accurately reflects the lab work. In these situations, it may be helpful to compile a list of commonly used codes or to convene with lab partners and payors for consistency across coding practices.

Finally, establish an appeals process. Understand the reason for rejection and put steps in place for remediating any missing or incorrect information before resubmitting. Above all, make sure you set a clock for processing claim rejections — the quicker you correct and resubmit the claim, the better the odds are of securing the fullest possible reimbursement.

Pitfalls to avoid

Developing processes for verifying, validating, and vindicating claims is only one piece of the puzzle. Providers must also understand where communication gaps exist among themselves, labs, patients, payors, and anyone else involved in molecular diagnostic testing.

• Knowledge of your payor is essential to successfully filing a claim. Know the specific requirements, policies, procedures, and timelines of each payor — including insurance companies, Medicare, and Medicaid — to avoid communication-related claim denials.
• Ensure all testing is compatible with the patient’s diagnosis and deemed medically necessary. Medical necessity is a critical factor in the approval of lab-based claims and must be well documented to avoid denials.
• Identify covered and noncovered instances before testing, as well as any associated costs and the entities responsible for them. This means understanding patient coverage, including deductibles, copayments, and coinsurance. It’s also crucial to distinguish exclusions and limitations.

Coupled with frameworks for accurate and complete information, provider communication will create the transparency needed to avoid claim denials — and expedite reworked claims.

Reduce the impact of denied lab test claims

Molecular diagnostic testing is associated with some of the highest rates of claim denial, but it doesn’t need to be. Use these best practices to decrease the number of rejections or delays, expedite audits and appeals, improve your practice’s cash flow, and reduce revenue cycle management headaches.

Get expert guidance for your practice’s molecular diagnostic billing at BrightDriveHCS.com.