Impacted by everything from coding changes designed to further specify medical necessity to reductions in timely filing requirements mandated by insurance payers, pathology groups and laboratories are experiencing an increase in denials, impacting their reimbursement.  Add to that the price reduction intentions of PAMA (now in its second year of mandated reporting) and the shift to value-based care reimbursement, and it’s more important than ever to understand and address the trends in denials.

An additional major challenge moving forward will continue to be how non-patient facing providers can submit clean, accurate, verified claims and improve their overall patient engagement.  The answer may well lie, at least in part, in improved automation during the healthcare billing lifecycle.

Addressing Denial Trends in Laboratories

Both clinical and outpatient lab denials have been growing over time due to evolving and changing regulatory guidelines and payer changes, but the main reasons for denials remain the same:

  • Insufficient demographic information, including insurance information with eligibility and benefits, verified
  • Improper or outdated codes or lacking documentation to support the care provided
  • Late filing of claims which is almost always determined to be final upon appeal
  • Out-of-network provider used for services rendered
  • Tests or services not covered by the patient’s insurance plan
  • Prior authorization required, but not obtained

The reasons for denials fall into three categories:  1) insurance verification, 2) prior authorization, and 3) improper coding.  Let’s explore how your organization can mitigate risk by improving technology and automating otherwise burdensome administrative tasks that impair full reimbursement.

Exploring Denial Root Causes and Automated Solutions

Insurance Verification and Prior Authorization—pathology groups and laboratories straddle a complex landscape where they are reliant on hospital admissions departments and ordering providers for valid and verified patient demographic information and completed and approved prior authorizations.  By implementing an Artificial Intelligence (AI) driven solution, prior authorizations can be submitted, followed-up, and maximized through seamless integration with a network of clearinghouse integrations and EHR/EMR or LIS systems.  Comprehensive software also incorporates sophisticated insurance verification and benefits modules that automate 100% of the requests in real-time.

Coding and Documentation—Coding requires deep expertise and a significant amount of time to stay educated and apprised of the vast amount of changes and subtleties required to be able to effectively code to the highest level of specificity bringing the most compliant reimbursement.  Teaming with a third-party partner is worth exploring in today’s regulatory and insurance payer climate and may afford the expertise needed at a reduced cost.

Denials Management—Laboratory denials are often abandoned due to the sheer administrative time and effort required to secure the missing information that caused a denial in the first place.  By automating the process utilizing an intelligent workflow that is supported by a deterministic and predictive clearinghouse of insurance payer information, denials can be corrected and resubmitted/followed up on in real-time, thereby reducing the need for burdensome administrative efforts or simply abandoning the claim altogether.

Pathology groups and laboratories face a strong headwind with changes to the reimbursement process spearheaded by CMS and supported by private insurance payers.  No one denies the intrinsic value of diagnostic services that labs provide, but they seemingly don’t want to incur the costs.  Today, the resolution will require a concerted effort to improve the organization’s technology and process parameters, but also creating a team effort, whether a clinical lab with the hospital admissions department and hospitalists or outpatient labs through their ordering provider network.

Schedule a demo today to explore automating the prior authorization and denial management process.