Prediction of ICD-10 as Negative for Labs Comes True

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IMPLEMENTATION OF ICD-10 DIAGNOSIS CODES in the United States happened on Oct. 1, 2015. At that time, a national laboratory association predicted that use of ICD-10 codes would cause Medicare Administrative Contractors (MACs) to pay labs less often and with lower reimbursement.

The Dark Report agreed with this prediction and published the warnings of the American Clinical Laboratory Association in our June 22, 2015, issue. Now, that prediction has come true, in a slightly different way. Many health plans today use the richer data generated by use of the ICD-10 codes to deny lab test claims.

Lab billing experts report that most payers are using the increased information about an individual patient’s condition to then demand clinical labs and pathology groups provide more documentation of medical necessity. These health insurers will then deny payments and some payers— including Humana—go one step further and demand repayment.

Other than coverage by The Dark Report, there has been little news in the lab industry about how lab revenue has been negatively affected by adoption and use of ICD-10 diagnosis codes. That is one point we want to make today. Clients and regular readers of The Dark Report had an early warning about how use of ICD-10 codes was predicted to shrink lab test revenues and increase payer requests for documentation of medical necessity for ever-larger numbers of lab tests.

That’s a positive outcome your lab gained from using The Dark Report as a reliable source of business and management intelligence. It puts your lab’s executive team ahead of the marketplace and gives you the knowledge you need to protect revenues that sustain your lab’s high quality mix of lab tests and services.

Also in this issue are two other stories about significant developments. One is the steady growth of laboratory benefit management (LBM) companies because they interpose themselves between the health plans they represent and the physicians who order tests and the labs that perform those tests.

The other significant story is the progress of separate lawsuits by uninsured consumers who are suing Quest Diagnostics and Laboratory Corporation of America claiming they were grossly overcharged for clinical lab tests. Should the plaintiffs prevail in these cases, there may be legal rulings that change how all labs quote prices to uninsured consumers in advance, and possibly even limit what prices they can charge cash-paying patients for lab tests.


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