Why Laboratory Medical Billing Errors Cost More Than Most Labs Realize

A hectic clinical lab can handle hundreds of specimens per day. These all constitute a potential claim and every claim must be coded, documented, and submitted properly. Laboratory Medical Billing is considered high volume, and even small mistake rates translate into substantial losses in revenue since the mistakes will be repeated with each passing patient and repeat follow-through billings.

Local Coverage Determinations and What They Mean for Laboratory Medical Billing

The local coverage determinations (LCD) Medicare publishes provide a specific list of diagnoses that justify laboratory tests. If laboratory medical billing submits a claim and the diagnosis is not listed on the relevant LCD, COVID-19-related claims will be rejected as long as the test was clinically appropriate for the diagnosis. Most labs take it as a given that the ordering provider is providing medical necessity. In the real world, the billing team will need to ensure all claims sent out have a diagnosis corresponding to a covered indication.

Advance Beneficiary Notices and Patient Financial Responsibility

If the laboratory test isn't covered by Medicare's requirements for coverage, an ABN should be given before the test is completed. Laboratory medical billing departments that handle the process of the ABN wrongly are left with balancing due to the patient who was not correctly made aware of his financial obligations. This issue is avoided altogether by embedding the ABN into the ordering routine, and providing a clear notification to the patient about the expenses he or she may encounter before assuming the buy-in.

Molecular and Genomic Testing Authorization and Coding

Genetic and molecular tests are some of the tightest reimbursement tests, and at the same time, some of the most specific requirements are placed upon payers in laboratory medical billing. In laboratory medical billing, some of the tightest reimbursement tests and most stringent payer requirements are for genetic and molecular tests. Prior authorization is a prerequisite for these tests before they are performed in most commercial payers.

These molecular diagnostic CPT codes may be revised regularly. The medical necessity documentation that supports these claims is much more specific than the lab billing documentation. Other labs are not actively monitoring molecular test authorizations, are not regularly updated with CPT changes; and have claims that are denied or delayed, requiring payers to send back missing information.

Why DME Billing Services Demand Specialist Attention from the Start

One of the areas in the healthcare system that gets the most audited billing codes is for Durable Medical Equipment (DME). Each claim must have a detailed written order, certificate of medical necessity and clinical documentation detailing the patient's need for such equipment. When this process is not followed properly, DME Billing Services can end up with denials and compliance issues which can occur months later in overpayment requests by a payer audit.

Documentation Requirements That Drive DME Billing Services

All DME billing services claims have to be backed up with the records establishing medical necessity. The primary diagnosis has to parallel and aid the order placed for the specific equipment. Effort to document patient's functional limitations. The reasoning behind a provider's ordering for a specific piece of equipment has to be clear. Without these or with a lack of detail, the claim is open to challenge and could be the subject of future enquiries.

HCPCS Code Accuracy in DME Billing Services

Durable Medical Equipment (DME) has a lot more specificity to it than most people realize. Power wheelchairs come with different codes that depend upon the weight of the chair, drive system options, seating position, and controls. The appropriate coding on an oxygen device would rely on the type of delivery and whether it is stationary or portable. DME billing services that don't understand these differences use the wrong code, thus causing the formation of denials or overpayment during the audit.

Modifier Application and Equipment Status Tracking

Modifiers convey to the renter or payor information about the type of equipment being rented, whether it is a first claim or continuing claim, and whether it is being repaired or replaced. But in case you miss a modifier or use an incorrect one in your rental claim, the reimbursement calculation will be impacted, and you may receive payment this way for each claim in the rental cycle. There are also variations in prior authorization needed by payer and equipment type, and this needs to be monitored proactively so that claims are not submitted without prior authorization.