How Labs Can Avoid Billing Errors with Payers
Laboratory billing is complex. Between constantly changing payer rules, CPT updates, and medical necessity requirements, even one small mistake can delay or reduce payments. Billing errors don’t just hurt revenue—they can trigger audits and compliance issues.
Let’s go over the most common lab billing errors and how to fix them before they cost you.
1. Submitting Claims with Incorrect Patient or Provider Information
The Problem:
Lab claims often bounce back because of mismatched patient demographics or wrong ordering provider details. Even a missing middle initial or incorrect NPI can cause rejection.
The Fix:
- Double-check all patient data before submission.
- Verify the referring provider’s NPI and taxonomy on each claim.
- Use automated eligibility verification tools in your billing software.
2. Using Incorrect CPT or HCPCS Codes
The Problem:
Labs frequently use outdated or incorrect CPT codes for diagnostic panels or molecular tests. This leads to claim denials or partial payments.
The Fix:
- Update CPT and HCPCS codes quarterly.
- Match each test to its correct code based on payer policy.
- For molecular or genetic tests, include Z-codes or additional identifiers if required by payers.
3. Missing or Incomplete ICD-10 Diagnosis Codes
The Problem:
Payers deny lab claims that lack proper medical necessity documentation or supporting diagnosis codes.
The Fix:
- Ensure the ordering provider includes a valid ICD-10 code for each test.
- Match diagnosis codes with payer-approved lists.
- Attach documentation that supports the necessity of the test (physician order, clinical notes, etc.).
4. Not Following Payer-Specific Rules
The Problem:
Each insurance company has unique claim-filing rules some require modifiers, some demand electronic attachments, and others limit test frequency.
The Fix:
- Keep an internal database of payer-specific billing rules.
- Check claim submission guidelines regularly.
- Audit claims monthly to ensure compliance.
5. Incorrect Use of Modifiers
The Problem:
Labs often misuse modifiers like 59, 91, or 26, leading to rejected or down-coded claims.
The Fix:
- Train billing staff on correct modifier usage.
- Use 91 for repeat clinical lab tests, 59 for distinct procedural services, and 26 for professional components.
- Review payer documentation to confirm when modifiers apply.
6. Failing to Capture Secondary Insurance
The Problem:
Many patients have secondary coverage, but labs fail to submit secondary claims—resulting in lost revenue.
The Fix:
- Always ask for secondary insurance during registration.
- Submit primary claim first, then secondary once the EOB is received.
- Automate secondary claim submission where possible.
7. Missing Timely Filing Deadlines
The Problem:
Most payers only allow 90–180 days to submit claims. Labs with slow workflows often miss this window.
The Fix:
- Submit claims within 24–48 hours of service.
- Use billing software to track filing deadlines by payer.
- Consider outsourcing to a professional RCM company for on-time submissions.
8. Lack of Denial Tracking and Follow-Up
The Problem:
Many labs don’t track denial reasons or resubmit corrected claims promptly, losing thousands in uncollected revenue.
The Fix:
- Implement a denial management dashboard.
- Categorize denials (coding, eligibility, documentation, etc.) to identify trends.
- Resubmit corrected claims within the payer’s appeal window.
9. Poor Communication Between Ordering Providers and Labs
The Problem:
Missing orders, unsigned requisitions, or unclear test details delay claims and payments.
The Fix:
- Maintain consistent communication with ordering providers.
- Use electronic orders and signatures where possible.
- Educate providers on complete order requirements.
Final Thoughts
Reducing lab billing errors requires structure, automation, and payer-specific expertise. A clean claim submission process can increase lab revenue by up to 30% and reduce administrative costs.
Let QuantiSurge Billing Handle Your Lab Claims
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