What exactly is the process for laboratory billing, and who is involved? In simple terms, the laboratory billing cycle is a series of interactions between a clinical lab (or its outsourced medical billing service company like Medcare MSO) and the patient’s insurance company. The length of the laboratory billing cycle is determined by the complexity of each’s patient’s account and can last anywhere from days to months.
To begin the billing process, a diagnosis and procedure code must be assigned for the provided services. These codes are essentially what helps the insurance company determine if medical services are necessary and if the patient has appropriate coverage. In laboratory billing, there are multiple codes that can be used: International Statistical Classification of Diseases and Related Health Problems (ICD) and the Current Procedural Terminology Codes (CPT).
How Does Laboratory Coding Work?
The ICD is widely considered the standard tool when it comes to clinical, epidemiology, and health management. The codes, which are maintained by the World Health Organization, classify different diseases, symptoms, complaints, abnormal findings, causes of injury, etc. The CPT codes, however, are maintained by the American Medical Association and are utilized to convey information about services and procedures to providers, patients, insurance companies, and coders. CPT codes are primarily assigned and analyzed for financial and administrative purposes. Once these codes are applied, the laboratory billing cycle enters into the collections process—meaning the payer will be billed, usually electronically. Once claims are approved, the laboratory will be reimbursed for a pre-determined percentage of billed medical services.
What Happens if the Claims Have Been Denied?
If the processed claims have been rejected, they are generally sent back to the provider under Explanation of Benefits (EOB) or the Electronic Remittance Advice. The provider must then determine what was wrong with the original claim, make corrections, and resubmit. This process is often repeated multiple times, largely as a result of incorrect coding. The billing cycle can become quite lengthy if claims are being submitted by personnel who do not specialize in laboratory coding.
There are simple ways to avoid denials of laboratory billing claims, but having a dedicated team of medical billing specialists and coders will reduce denials, recover unpaid claims, and shorten reimbursement cycles.
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