Practical Guideline To Laboratory Billing Services 2023

Healthcare labs constitute to 80% of critical decisions in the medical facility, hospitals, and clinics. However, they only get a small fraction of the total revenue of a hospital or provider facility. If they keep struggling with claim denials or payment rejections then they can miss out on their hard-earned revenue. Therefore, healthcare labs should opt for reliable, efficient, and accurate laboratory billing solutions like outsourcing lab billing services to a professional medical billing company. 

According to a study, 70% of healthcare practitioners tend to outsource medical billing services in the USA. It allows them to work with medical billing and coding professionals and streamline their healthcare revenue cycle management for efficient business functions. 

Moreover, healthcare labs can also leverage innovative laboratory billing solutions with proper consultation to optimize their healthcare revenue cycle management and boost their business productivity. For example, if outsource lab billing services to a professional billing company then you can get the following benefits; 

  1. For an in-house medical billing department, healthcare labs have to invest a capital amount and their valuable time to research, hire and recruit laboratory billing procedures. On the other hand, you don’t have to stress about hiring every individual in your medical billing team and paying salaries. 
  2. A laboratory billing company only charges a fixed amount or percentage from the revenue they collect on your behalf after filing and submitting your medical bills. 
  3. A lab billing agency fulfills your staffing needs and extends its resources to meet the growing demands of your business. 
  4. Also, when you outsource laboratory billing services then you don’t have to invest a capital amount to buy accessories, expensive IT infrastructure, and paid holidays for your staff. 

However, whether you decide to hire a lab billing specialist or outsource laboratory billing services, it is important for you to understand the nuances and the basic guidelines of well-functioning laboratory billing services. It will also help you gauge the progress of your healthcare revenue cycle management following the HPIs of successful laboratory billing services. 

In this article, you’ll learn about the following basic guidelines for laboratory billing services

How Do Laboratory Billing Services Work?

Laboratory billing begins right when the patient walks into the healthcare facility. It includes the following step to execute laboratory billing services; 

Step 1: Patient Registration & Information Collection

When the patient walks into the healthcare lab then it is the responsibility of the patient registration/ front desk staff to encounter the patient and collect the patient’s personal information needed for the lab services which includes; the patient’s name, phone number, email id, residential address, insurance ID number, and insurance plan. 

After collecting this information, they have to execute further two steps including; 

Prior Authorization:

Prior authorization/ pre-certification is the process of verifying the justification or the medical necessity of the prescribed medical treatment, diagnostic and lab tests. Simply put, insurance companies cover a specific set of healthcare services and diagnostic procedures according to the patient’s plan. If it is not covered by the patient’s insurance plan then the insurer doesn’t reimburse the provider for their services which results in claim denials. 

All health insurance companies require prior authorization for payment approval. Therefore, it is the responsibility of the front desk staff to collect information about the patient’s coverage plan to proceed with prior authorization. 

If the patient’s insurance plan doesn’t cover the prescribed lab test, diagnostic service or blood test then the provider should ask the patient to pay their dues directly. 

If the patient’s insurance plan allows you to provide healthcare services then you can prepare medical bills and get reimbursement from the insurance company. 

When you know your right payer, then it causes less ambiguity for the patient about their financial responsibilities which improves your patient outcome. 

Verification Insurance Eligibility Criteria:

Some insurance companies impose specific criteria under which a patient can enjoy coverage from their health insurance company. Therefore, patient registration staff should walk through the patient’s insurance eligibility criteria every time they visit your lab. 

If the patient doesn’t meet the criteria then you won’t get paid by the insurance company.

Step 2: Laboratory Medical Billing & Coding

Medical billing is the process of preparing billable medical claims for healthcare providers. For this purpose, medical billers apply medical codes on the medical claims and submit them to Medicare, Medicaid, CMS, insurance companies, and HMOs to collect reimbursement for their medical care services. 

Medical coding is a significant constituent of the billing procedure. It is the process of translating a provider’s services into standard CPT, ICD, and HCPCS codes. 

There are 3 types  of medical codes applicable in the medical industry; 

Current Procedural Terminology (CPT) codes: 

The CPT code allows providers and healthcare labs to get reimbursement for their diagnostic, evaluation and management and lab tests. CPT codes are used with the ICD codes to create the full picture of the services delivered to the patient. 

CPT Codes for Laboratory Testing are Organized into Subsections as follows; 

 Organ or Disease Panels Subsection (Test Panels)

80048 – 80081 panels of defined components for coding purposes only. 

Examples of panel tests include; 

  • 80061 Lipid panel
  • 80055 Obstetric panel 

Drug Testing Subsection Laboratory CPT Codes

Drug testing subsection laboratory CPT® code range is from  80305 to 80377 which is further divided into three categories; 

Presumptive drug class screening

Identifies possible use or non-use of the drug

Any specimen type; urine, blood test, oral fluid

Definitive drug testing

Qualitative or quantitative

Identifies possible use or non-use of a specific drug and metabolites

Any specimen type; urine, blood test, oral fluid

Therapeutic drug assays


Specimen typically is a whole blood test, serum, plasma, cerebrospinal fluid

Evocative/ Suppression Testing Subsection

Evocative/suppression testing involves the administration of agents to determine a patient’s response to those agents (CPT codes 80400-80440 are to be used for reporting the laboratory components of the testing).

CPT Code Range for Pathology & Laboratory:

Pathology and Laboratory Procedures CPT® Code range 80047- 89398

ICD-10 Codes For Laboratories:

Procedure ICD-10 Codes
Screening mammogram for malignant neoplasm of breast Z1231
Essential (primary) hypertension 110
Immunization Z23
General adult medical examination without abnormal findings ZOOOO
Type 2 diabetes mellitus without complications E119
Urinary trackm infection, site not specified N390
Low back pain M545
Acute upper respiratory infection, unspecified JO69
Encounter for other preprocedural examination Z01818
Other long term (current) drug therapy Z79899

Step 3: Medical Claim Submission & Adjudication

It is the responsibility of laboratory medical billing specialists to submit medical claims to insurance companies, Medicare & Medicaid before the deadline. Therefore, they have to efficiently prepare and submit claims promptly. After submitting the claims, lab billing professionals should follow up with the medical claims from clearing houses to insurance companies. 

If a medical claim consists of formatting errors or coding errors then the clearing house rejects the claim right away. They send back the claim to the healthcare lab unpaid for adjudication. This means that the medical billing staff should review the medical claim to identify, monitor, and eliminate errors from the claims and resubmit the bills promptly. It helps you claim your rejected claims and appeal to cleaning houses and improve your revenue growth.  

The more rapidly you respond to claim rejections, the more quickly you can realize your mistakes and improve your healthcare revenue cycle management. Even after that, lab medical billers should not leave the medical claim unattended and keep following up with the medical claims until they don’t collect complete reimbursements. 

Because sometimes, several insurance companies keep delaying your payments without any reason. Therefore, medical billers should dedicatedly send reminders to the insurance companies and other third-party payers so you can collect your reimbursements without excessive delays. 

For this purpose, healthcare labs should buy modern medical billing software solutions that also feature a “reminder alert” option. It helps your medical billing team to follow the right track and send reminders to the payers according to the right schedule. 

With automatic reminders, you can automatically schedule reminder emails and messages and save your time as well. There are several medical billing software solutions in 2023 that offer automatic reminder features like NextGen Office, DrChrono, Net Health, SimplePractice, Pabau, IntakeQ, and more. 

Step 4: Reimbursement Collection & Payment Posting

After collecting the payment, the account manager or medical billers proceed with payment posting. It helps lab practitioners to stay updated with their collected reimbursements and due payments. Moreover, it keeps a track record of the payment from each claim. 

Why Outsource Laboratory Billing Services?

If you’re struggling through the challenges in laboratory billing services due to a lack of resources, excessive payment delays, backlog, manual errors and mistakes in the billing and coding procedures, and administration expenses then innovative lab billing solutions can help you navigate through these struggles easily. 

For example, when you outsource laboratory billing services to a professional medical billing company then you can get professional consultation and assistance at more affordable prices than an in-house office-based medical billing team. 

Outsourcing laboratory billing services enables you to improve the productivity of your business in the following ways; 

  • You can reduce excessive workload and hire a professional medical billing team without going through the time-taking and labor-intensive process of hiring lab billing and coding professionals. 
  • You don’t have to invest a huge capital investment in setting up expensive IT infrastructure and buying office accessories for office-based medical billing teams and clerical staff. 
  • You don’t have to pay the salaries of individual employees in the medical billing department because you only have to pay a fixed percentage or amount to a lab billing agency every month. In this way, you can increase your cost savings and reduce CAPEx (capital expenses) and OPEx (operational expenses) seamlessly. 
  • A healthcare lab technician can find more time to focus on the obligation of their practice i.e. patient satisfaction. While a medical billing company can cover the practitioners with medical billing services. 

What Are The 5 Must-Have Characteristics of Laboratory Billing Services?

However, if you decide to outsource laboratory billing services then you have to make sure that the medical billing company has the following traits; 

  • The medical billing company should be HIPAA-compliant. Since there is no official certification of HIPAA-compliance, therefore, you should inquire the workflow and data security measures of the medical billing company. 
  • The billing agency should have well-educated employees and enough headcount in the billing team to meet the requirements of your practice (there must be enough resources who can prepare and submit medical claims of your practice’s size.)
  • The medical billing company must ensure compliance with the state laws, Medicare laws, Medicaid laws. 
  • The billing agency must provide clear and best prices on the contract and they should not charge any hidden charges afterwards. 
  • The medical billing company must have extensive experience and specialized expertise in laboratory, pathology, toxicology, molecular, and census entry laboratories.

Looking for a laboratory billing company that passes the complete checklist? CureCloudMD is a US-based HIPAA-compliant laboratory medical billing company that provides specialized laboratory billing services to all sizes of healthcare labs across the 50 states. 

We provide a complete range of lab healthcare RCM (revenue cycle management) solutions including; lab medical billing services, medical coding services, account receivable (AR) recovery services, claim denial management solutions, medical credentialing services, and medical billing audit services.

When you outsource laboratory billing services to CureCloudMD then you can leverage the following advantages of our lab billing solutions; 

What Are The Benefits of Laboratory Billing Services?

Outsourcing lab billing services enables healthcare practitioners to pay more attention to the core capabilities of their business i.e. delivering quality and satisfactory patient care services. 

It also allows them to provide value-based services and medical care to the patients which boosts the business productivity of healthcare providers. Moreover, outsourcing laboratory billing services offers the following advantages to healthcare practices; 

  • You can enjoy smooth workflow due to the presence of a remote team of a medical billing company around the clock. Because when you hire an office-based medical biller then he/she can take leaves along with the paid holidays by your healthcare facility. It increases the backlog and you can also experience some delayed payments due to the absence of your employees. On the other hand, medical billing companies are responsible to provide resources and coverage for your medical billing cycle to streamline your practice’s healthcare RCM. 
  • When you outsource lab billing services to CureCloudMD then you can get better control over your medical bills because we offer highly transparent medical billing solutions. 
  • We also offer highly cost-effective laboratory billing services to every healthcare lab. We only charge a fixed percentage from the revenue that we collect on your behalf (depending upon your practice’s size) after submitting your claims. 
  • We offer highly secured and well-encrypted medical billing services in compliance with HIPAA policies.
  • We offer a free-of-cost pre-onboarding medical billing audit to all healthcare labs so they can get insights into their healthcare revenue cycle management. 

Get connected with CureCloudMD to outsource laboratory billing services and get value-based medical billing solutions. Schedule a free medical billing audit with our medical billing professionals right away. 

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