I-Med Claims - Medical Billing Company
Laboratory Billing

Complete Guide to Laboratory Billing and Reason to Outsource

If you’ve ever tried to bill a client on your own, you know how frustrating it can be. But outsourcing laboratory billing services can help you avoid this headache entirely. Laboratory Billing services are necessary to help you keep track of the tests and reports you have performed. Outsourcing laboratory billing services is the perfect way to free up time and resources for your business.

What Is Laboratory Billing and Coding?

Laboratory billing services are a whole cycle determined by the type of lab services performed. A laboratory billing system is a type of medical billing that enhances a lab’s revenues and financial condition by giving the greatest level of service and hospitality. Procedure and diagnostic codes are allocated to lab tests and services as they are conducted. This assists the insurance payer in determining the medical necessity of the treatment delivered and whether or not to reimburse the claim. ICD (International Classification of Diseases) and CPT (Current Procedural Terminology) codes are the two basic coding systems used for laboratory billing. Selecting proper modifiers, billing patient insurance carriers, and ensuring prompt payment receipts are all examples of billing services. Outsourcing your laboratory billing services allows your in-house team to focus on providing the best possible care to your patients.

Types Of Laboratory Billing Services 

Laboratory billing services are classified into the following categories:

Clinical Laboratory Billing

It entails an evaluation of human samples to identify the prevention, diagnosis, and treatment procedure.

Clinical lab testing includes the following:

  • Biological
  • Microbiological
  • Serological
  • Chemical
  • Hematological
  • Biophysical
  • Cytological
  • Pathological

Diagnostic Laboratory Billing

Diagnostic laboratory billing differs from clinical billing or tests. A physician or another qualified expert must perform diagnostic tests. The sorts of diagnostic laboratory services are as follows:

  • Cytopathology
  • Pathology in Surgery
  • Hematology
  • Blood banking services


Laboratory Billing Codes

Laboratory billing makes use of two primary sets of codes that have been established for this purpose. The International Classification of Diseases, or ICD, is the first. The World Health Organization (WHO) maintains the ICD, which is recognized as the international diagnostic and epidemiological standard. It provides a foundation for diagnosing diseases, symptoms, injuries, and other concerns.

The American Medical Association provides the second code set, known formally as the Current Procedural Technology Code Set and commonly as the CPT, which indicates services are given rather than diagnoses. The CPT code set categorizes all medical, surgical, and diagnostic services US professionals provide. It is intended to give medical practitioners, coders, insurance firms, and other payers a set of uniform categories.

The following guidelines apply for submitting CPT codes for particular clinical laboratory procedures:

  • Choose the code that best describes the service being performed. The compilation of the CPT procedure coded under a given specialty does not limit its use to that specialty.
  • If a technique for a particular component is not mentioned, use the method code that best describes the procedure. As a last option, utilize an unlisted service code and an adequate procedure description. 
  • When different and unique methods are utilized to produce and report separate and distinct outcomes, the same code can be used many times.
  • Laboratory techniques are presumed to be quantitative unless otherwise specified.
  • The content under examination may come from any source Unless otherwise mentioned in the code descriptor.
  • Clinical data obtained from test results by mathematical calculation is considered part of the test procedure and is not recorded or paid separately.


Benefits of Outsourcing Laboratory Billing

Many labs use a laboratory information system (LIS) to create an electronic health or laboratory record to precisely extract the information mentioned above, which is critical to accurately representing your laboratory’s daily, weekly, and monthly operations. While a LIS can help to enhance internal workflow, promote communication between labs, medical practitioners, patients, and payers, and optimize billing processes, more than merely implementing a software program is needed. You’ll need to set aside time to study the data your billing system gathered correctly and learn how to extract information from it, primarily to identify strengths, areas of need, and growth potential.

Outsourcing laboratory billing can help many labs accomplish the required thorough revenue analysis while freeing up people resources for other essential tasks. Rather than merely installing a software system, working with a laboratory billing firm might provide various benefits. A third-party solution can also assist you in keeping your organization running smoothly in the following ways.

Reduces administrative workload

Managing the billing and coding procedure in your laboratory facilities is time-consuming. It can be exhausting for lab professionals and their administrative staff. Furthermore, handling in-house billing necessitates ongoing training of the billing personnel. So they can remain updated on billing and coding changes in the healthcare industry.

Outsourced laboratory billing and coding professionals save you time by handling tedious paperwork. Consequently, you will only have to spend hours interacting with insurance companies while monitoring medical claims. You have enough time to focus on the most important things, such as patient care. As a result of outsourcing services, you can devote more time to developing effective plans for your company’s growth.

Minimize billing and coding errors

Nearly 80% of medical claims involve some form of a billing problem. Outsourcing your billing to a company will lower your chances of submitting claims with coding or billing errors, which can cause payment delays and raise your billed hours. Above all, precise billing and coding resulted in better data for your analysis reports.

Timely Reimbursements 

Timely reimbursements are critical to fulfilling your healthcare facility’s medical expenses. However, it has been found that when healthcare professionals handle the billing process in-house, they encounter several challenges. Outsourcing laboratory billing to a third party eliminates such concerns because off-shore billing companies provide the best choices in the event of employee turnover. Furthermore, RCM professionals working for you around the clock can ensure timely reimbursements. They provide accuracy in claim submission, which leads to improved cash flow. They have considerable experience and in-depth knowledge of the most recent healthcare reforms. As a result, they can submit medical claims under industry norms. And laboratory professionals can get their hard-earned money without having to wait years.

Automatic verification

The most common reason for claim denials is incorrect verification and eligibility. Outsourcing your verification services can increase accuracy and minimize the hours spent on tasks that can be handled much more efficiently by an automated system. Even better, you won’t have to spend time and effort updating your personnel on coding updates.

Ensures Regulatory Compliance

You won’t have to worry about legal issues if you choose a HIPAA-compliant company because off-shore specialists implement administrative workflows. This allows you to stay up to date on industry regulations. They strictly adhere to HIPAA requirements to protect sensitive health information and avoid healthcare fraud. For example, certified medical coders ensure that patients’ diagnoses and laboratory procedures are accurately translated into standard codes. This protects your lab practice from healthcare frauds such as up-coding, under-coding, etc.


Your lab deserves to make every effort to enhance efficiencies, generate income, and capitalize on growth prospects. However, many lab managers need more time, personnel, or resources to devote enough attention to the subtleties of laboratory billing. Hiring a laboratory billing partner to assist you with managing your lab revenue cycle is a great way to increase lab performance and revenue growth. Outsourced billing and coding services also provide frequent analytical reports. This keeps healthcare professionals updated on the condition of their payments and the overall revenue cycle management. Integrated laboratory billing services are a solution for your staffing and analytical difficulties. Outsourcing your laboratory billing can lead to quicker billing resolution and improved data for analysis. Better data can help you to increase efficiency, plan proactively for growth prospects, and significantly enhance cash flow. 

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