The laboratory billing process involves interactions between a clinical lab (or its outsourced medical billing for laboratories company like Medcare MSO) and the patient’s insurance company. The length of the process depends on the complexity of each patient’s account and can take days to months.
To begin, a diagnosis and procedure code must be assigned for the services provided. These codes help the insurance company determine if medical services are necessary and if the patient has appropriate coverage. In the laboratory billing system, there are multiple codes: International Statistical Classification of Diseases (ICD) and Current Procedural Terminology (CPT) Codes.
How Does Laboratory Coding Work?
ICD codes classify diseases, symptoms, and causes of injury, while CPT codes are used to convey information about services and procedures to providers, patients, and insurance companies. CPT codes are primarily for financial and administrative purposes. Once these codes are applied, the lab billing cycle enters the collections process, meaning the payer is billed. Once claims are approved, the lab is reimbursed for a pre-determined percentage of billed services.
What Happens if Claims Are Denied?
If claims are rejected, they are generally sent back under the Explanation of Benefits (EOB) or Electronic Remittance Advice. The provider must correct the claim and resubmit it. This process often repeats due to incorrect coding. Laboratory billing cycles can be prolonged if claims are handled by non-specialized coders.
A dedicated team of lab billing specialists will reduce denials, recover unpaid claims, and shorten reimbursement cycles.
Tools to Improve Your Lab Billing Practices
If your lab handles billing in-house, it’s crucial to use tools that improve practices. These tools help you stay competitive and profitable. Larger labs rely on robust software systems, but smaller labs can use cost-effective tools to enhance their workflow.
Key tools to improve lab billing include:
- Laboratory Information System (LIS): A well-designed LIS helps identify revenue cycle issues and improve profit by implementing policies that reduce claim denials.
- Instant Adjudication: This tool allows labs to verify a patient’s coverage and file claims before the patient leaves. Automated eligibility tools help accelerate cash collections and improve the billing cycle.
- ICD-10 Converter Software: This software helps convert large numbers of codes to avoid errors in claims, reducing denials and improving billing accuracy.
These tools can enhance your lab billing solution, but outsourcing all or part of the process to Medcare MSO can save time and money.
The Future of Laboratory Billing
As laboratory billing becomes more complex, adopting the latest technology will ensure your lab remains competitive. Innovative solutions such as medical billing software for laboratories streamline financial operations and speed up claims processing.
Technology and Billing Software for Labs
Billing software for labs validates claims and codes before submission, minimizing errors. It helps verify patient eligibility and insurance status before treatment, allowing for customized bills for each doctor. This reduces administrative burden and improves the billing process.
With the right software, the administrative workload decreases, allowing your staff to focus on patient engagement while billing is handled automatically.
5 Things That Slow Down Laboratory Billing Processes
Several issues can delay laboratory billing and revenue cycle management:
- Insurance Verification: Verify coverage when a patient visits the lab to avoid issues with claims.
- Poor Communication with Patients: Inform patients of their payment responsibilities upfront to avoid surprises and unpaid bills.
- Outdated Information: Billing codes and insurer rules change frequently. Using updated information ensures accurate claims.
- Manual Data Entry: Paper claims are prone to errors. Use updated software to streamline data entry and reduce claim rejections.
- Lack of Review Process: Regularly review claims to identify issues and ensure timely resolutions.
Outsourcing lab billing for dummies or less experienced staff to professionals at Medcare MSO can help improve your laboratory billing process.
Outsourcing RCM to MedCare MSO
MedCare MSO specializes in laboratory coding and billing, offering customized solutions that increase revenue and efficiency. With proprietary software, we provide the latest codes and insurer changes, enhancing the laboratory billing system.
Call us at 800-640-6409 for a demo and see how we can improve your medical lab billing process.
