Labs nationwide have faced significant billing and coding challenges over the past few years. These challenges are likely indicative of trends labs can expect to face in the coming years. Here is a quick snapshot of four of the top lab billing and coding trends.

1. Reduced reimbursement. Reimbursement cuts have hit providers of most services, but pathology saw one of the most drastic reductions in 2013 when the 2013 Physician Fee Schedule rule saw CMS cut the technical component of CPT code 88305 (Level IV– Surgical pathology, gross and microscopic examination) by 52%. While CMS raised the professional component by 2%, the revaluation resulted in an overall 33% decrease to the global payment for 88305, as noted in a College of American Pathologists FAQ (pdf).

2. Reduced coverage. As if reimbursement cuts weren’t bad enough, The Pathology Blawg is reporting that certain Medicare Administrative Contractors (MACs) have recently submitted draft local coverage determination policies that would eliminate coverage of select urine drug toxicology tests. It would not be surprising to see other MACs follow suit.

3. Shift away from out-of-network. Labs have long-faced challenges in gaining access to restricted insurance networks, but at least if a lab wasn’t in-network with a payer, there was the option of handling and billing for specimens if the patient had out-of-network (OON) coverage.

But there’s been a shift in the marketplace in the types of insurance products offered to consumers, and more of these products are HMOs that do not include any OON benefit. With the number of plans that include OON benefits dwindling, this is a revenue stream that appears to be gradually drying up for labs.

4. Coding changes. In 2013, all of the codes for molecular pathology tests were changed, and there were significant changes in anatomical coding for CPT codes 88342 and 88343. Coding changes present plenty of challenges on their own, but along with these changes came changes to the reimbursement methodology.

To make matters worse, the issuing of the information on the changes to the reimbursement methodology were delayed because Medicare carriers had to come up with the reimbursement formula. Since labs had to wait to receive the methodology, this then caused a delay in payments to the labs. It would not be surprising to see this pattern repeat again.

Value of Outsourcing

With pathology facing these and other challenging billing and coding trends, labs cannot afford to leave any money on the table. More and more labs are turning to the services of a medical billing company like PGM Billing to take over their billing and ensure all reimbursement dollars earned are captured. An experienced company like PGM will increase a lab’s revenue by boosting collection rates, reduce denials and delays in payment, and allow a lab to save money in billing staff salaries and benefits, training, and IT equipment and software.