CEO SUMMARY: On Nov. 2, the federal Centers for Medicare and Medicaid Services released its Physician Fee Schedule for 2019. It says it will expand the number of labs from which it collects data about the lab test prices paid by private health insurers. While some labs may welcome these changes, groups representing clinical laboratories
Laboratory BillingSkip to articles
The laboratory billing process is the interaction between a clinical lab or pathology group and the insurance company (payer). The entirety of this laboratory billing interaction is known as the billing cycle, which can take anywhere from several days to several months to complete, and require several interactions before a resolution is reached. The entire process is the function of what is commonly known as the laboratory coding/billing/collections department.
Laboratory billing starts with laboratory coding. After a lab service is provided, diagnosis and procedure codes are assigned. These codes assist the insurance company in determining coverage and medical necessity of the services. The codes used for laboratory billing are the International Statistical Classification of Diseases and Related Health Problems, usually called by the short-form name International Classification of Diseases (ICD), and the Current Procedural Terminology (CPT) codes.
The ICD is the international “standard diagnostic tool for epidemiology, health management and clinical purposes.” The current version is ICD-9, with ICD 10 scheduled to become the new standard on Oct. 15, 2015. It is maintained by the World Health Organization, the directing and coordinating authority for health within the United Nations System. The ICD is designed as a health care classification system, providing a system of diagnostic codes for classifying diseases, including nuanced classifications of a wide variety of signs, symptoms, abnormal findings, complaints, social circumstances, and external causes of injury or disease.
The CPT code set is a medical code set maintained by the American Medical Association through the CPT Editorial Panel. The CPT (copyright protected by the AMA) describes medical, surgical, and diagnostic services and is designed to communicate uniform information about medical services and procedures among physicians, coders, patients, accreditation organizations, and payers for administrative, financial, and analytical purposes.
Once the procedure and diagnosis codes are determined, the lab bill enters the laboratory collections/revenue cycle management phase. The payer is usually billed electronically by formatting the claim as an ANSI 837 file and using Electronic Data Interchange to submit the claim file to the payer directly or via a clearinghouse. The payer processes the claims usually by medical claims examiners or medical claims adjusters. For higher dollar amount claims, the insurance company has medical directors review the claims and evaluate their validity for payment using rubrics (procedure) for patient eligibility, provider credentials, and medical necessity.
Approved claims are reimbursed for a certain percentage of the billed services. These rates are pre-negotiated between the health care provider and the insurance company. Failed claims are denied or rejected and notice is sent to provider. Most commonly, denied or rejected claims are returned to providers in the form of Explanation of Benefits (EOB) or Electronic Remittance Advice.
Upon receiving the denial message the provider must decipher the message, reconcile it with the original claim, make required corrections and resubmit the claim. This exchange of claims and denials may be repeated multiple times until a claim is paid in full, or the provider relents and accepts an incomplete reimbursement.
CEO SUMMARY: Each year since 2015, Medicare officials have posted the prices charged by every physician. That now makes it possible for pathology group practices to conduct a price study of their region and state to learn how their group’s prices compare with other pathology providers. A national pathology consultant points out that one way
CEO SUMMARY: Is it a violation of federal healthcare laws when clinical labs pay physicians to mail specimens and/or forgive all or part of patients’ copayments and deductibles? A federal judge’s ruling in a lawsuit against Boston Heart Diagnostics last month dealing with these two actions created a precedent that could affect all labs. It
CEO SUMMARY: Many lab professionals were disappointed at the news that a federal judge dismissed the American Clinical Laboratory Association’s arguments in its lawsuit against the federal Department of Health and Human Services (HHS). In an interview, the ACLA’s lead lawyer on the case discussed the key issues and explained ACLA’s claims about how HHS
CEO SUMMARY: While acknowledging that the American Clinical Laboratory Association raises important questions in its case against the federal Department of Health and Human Services, a district court judge ruled that the court cannot resolve the dispute and dismissed the ACLA’s claims for lack of “subject matter jurisdiction.” While not dismissing it outright, the judge
CEO SUMMARY: When commercial and government payers use auditors to review a lab’s claims, they often use statistical sampling and extrapolation to limit the time needed to review claims. But proper sampling and extrapolation require following the rigorous scientific methods to produce a representative sample of claims to draw conclusions they can apply to the
CEO SUMMARY: In a lawsuit filed in the U.S. District Court for the Central District of California, Anthem and affiliated Blue Cross Blue Shield plans alleged that 37-bed Sonoma West Medical Center, a Florida lab testing company, a medical billing company, and others used a pass-through lab test billing scheme to defraud Anthem and its
CEO SUMMARY: Publication of the draft Medicare Physician Fee Schedule on July 12 brought unwelcome news for the clinical lab industry, at least as it pertains to whether hospital lab outreach data should be included in the PAMA market study that the federal Centers for Medicare and Medicaid Services must conduct. In the draft rule,
CEO SUMMARY: In recent years, many rural hospitals have entered into agreements to expand their laboratory outreach businesses. In an interview, the president of the National Association of Rural Hospitals said rural hospitals often bill for lab outreach services under Medicare’s 70/30 shell rule. This rule, as modified by the Omnibus Budget Reconciliation Act of
THERE IS A NEW SOURCE OF LOST BUSINESS for physicians, clinical laboratories, and others. Patients are losing patience with confusing bills from their providers and opting to find new providers who offer simple, clear, and consistent bills. This turnover in patients was one key finding in a recently-published report.
The report, issued by InstaMed, a national