For many pathology groups, denials for clinical pathology services aren’t just an operational nuisance—they’re a threat to long-term sustainability. While most revenue cycle teams rely on appeals and payer escalations to get paid, some denials cross a line where traditional tactics just aren’t enough.
That’s when litigation enters the picture—not as a first resort, but as a powerful tool for protecting the right to bill for services already being rendered.
David Smith, a senior advisor at Medreceivables Advisor (an Infinx company), has spent decades supporting pathology practices across the country, including privately owned groups and large corporate groups.systems. His work blends coding accuracy, contract strategy, education, appeals and—when necessary—litigation to defend practices from revenue erosion.
Here’s what pathology leaders need to know, according to David in a recent Office Hours episode.
The Battle for Clinical Pathology Billing Rights
Payers have long pushed back against the professional component of clinical pathology services, especially in hospital-based environments. Even when services are billable, some contracts leave enough ambiguity for payers to deny claims outright.
David Smith has seen firsthand how this plays out: “We’ve worked with groups that were consistently denied for services that were not only billable—but previously paid. Without intervention, those groups stood to lose millions over time.”
The issue often isn’t just the denial itself—it’s the precedent it sets. If payers believe your group won’t push back, denials multiply.
Litigation as a Strategy—Not a Last Resort
Litigation isn’t the goal, but it can be a game-changer.
David’s team has used litigation to establish the right to bill, work with payers to revisit contracts, and even recover revenue previously written off. “We don’t file lawsuits lightly,” he says. “But when payers repeatedly deny legitimate claims and ignore appeals, legal action becomes the only way to get their attention.”
In most cases litigation helps the group get their professional component clinical pathology paid for old claims and contracted for a fair rate going forward, and paid a fair price.
Contracts Matter: The Hidden Language That Costs You
A common challenge? Contracts that silently exclude pathology or fail to explicitly allow professional billing for PCCP services. According to David, “Most contracts aren’t written to block you. They’re just vague. That ambiguity works in the payer’s favor.” The solution is proactive negotiation. Groups should push for language that:
- Defines professional component billing rights
- Specifies reimbursement terms
- Includes provisions for dispute resolution
When contracts are airtight, litigation is less likely—and far more successful if it becomes necessary.
Audits and Data: Your Legal Foundation
Litigation is only as strong as the evidence behind it. That’s why David’s team conducts coding audits and documentation reviews before any legal action is considered.
“We use data to show the payer—and if needed, the court—that the services were performed, billed correctly, and medically necessary,” he explains. These audits not only strengthen legal cases, but often uncover trends in payer behavior that can inform future strategy.
Prevention Is the Real Win
In many cases, litigation isn’t even needed. The mere presence of a team willing to escalate changes the dynamic.
“When payers know you’ll fight, they’re less likely to deny without reason,” David says. “Our clients have seen denials drop simply because they made it clear that silence wasn’t an option.”
Bottom Line
For pathology groups, protecting revenue goes beyond coding accuracy and clean claims. It’s about understanding when a denial isn’t just a technical issue—but a legal one.
Litigation isn’t the first step, but in a payer environment that’s increasingly aggressive, it can be one of the most effective. As David puts it, “The practices that win are the ones that know their rights—and aren’t afraid to defend them.”
Want to dive deeper? Watch the full Office Hours episode: Litigation Strategies In Pathology RCM.