What Are The 10 Essential Steps Of Laboratory Billing Services?

Healthcare labs play a critical role in the medical field by providing the foundation for critical decisions for important medical procedures. According to a study, healthcare labs contribute to 70% to 80% of critical decisions that are made in a clinical setting or hospital. However, healthcare labs only earn 30% to 40% of revenue comparatively collected by other healthcare settings. 

If healthcare labs don’t succeed to maintain an error-free healthcare revenue cycle management system then they have to struggle with increasing claim denials and reduced reimbursements. 

The laboratory medical billing service is a series of tasks that are executed precisely and subsequently to help healthcare professionals receive reimbursements for their hard-earned services. Depending upon the circumstances, it might take a matter of days to complete or may stretch over several weeks or months to complete this procedure and receive reimbursements if it contains errors and mistakes. 

Therefore, this article features complete information on the 10 essential steps of Laboratory Billing Services that’ll guide how to get paid for your services the right way. 

10 Essential Steps Of Laboratory Medical Billing Services

With the increasing complications and strict regulations for the healthcare industry in the USA, the demand for more skilled workers is also increasing proportionally. Today, there are hundreds of thousands of medical billing companies offering outsourcing medical billing services and software solutions to meet the staffing and administrative needs of healthcare providers. 

Certainly, more often healthcare providers prefer to outsource Medical Billing Services in the USA. however, some small and medium-sized clinics and labs with a very small patient volume don’t require these billing solutions and they tend to hire a medical biller or two to take care of their healthcare revenue cycle management. 

Whether you select the outsourcing option or the latter one, it is important for lab practitioners to be aware of how the lab medical billing procedure work and how to gauge the success of their lab billing services. 

Here is the complete process of laboratory billing services which consists of 10 essential discrete yet highly coupled tasks; 

Step 1: Collecting Information During Patient Registration

Usually, people perceive that the lab billing procedure starts by preparing medical claims and applying medical codes. However, lab healthcare revenue cycle management starts right when the patient walks into your healthcare facility. 

It is the responsibility of the front desk staff to collect the patient’s basic demographic information including the patient’s name, birth date, insurance ID, employment information, email ID, and phone number (optional). 

This information is recorded in the patient’s electronic health record (EHR) which allows the healthcare labs to keep the track of patient’s medical history. It is also important to verify if the patient has provided accurate and updated information. Otherwise, there are high chances of errors to inculcate into your medical billing system which is definitely not what you want from your team. 

For example, a patient has changed a job or residential address, now he’s got a new coverage plan from the new employment or the patient has shifted to another state in the USA that has its own coverage plan and eligibility criteria for the coverage of lab tests. 

In many cases, patients are not well aware about the new policies or changes to their coverage plan due to several reasons. Here comes the part of your front desk staff. They are responsible to collect this data and verify from the patient’s documents if the information is validated and up-dated. 

Taking a careful step at the beginning prevents your lab from heavy revenue losses down the line. Because the information collected from the patient is directlt referred to during the preparation of medical bills. 

If the medical billing team submits medical claims to an insurance company who doesn’t cover the lab tests or diagnostic services offered by your lab then you won’t get paid for your services. And digging up your entire EHR just to find the reason behind the denial of a single claim can be a very daunting and time-intensive task. Which will definitely make you procrastinate and feel demotivated to recover your uncollected balance. 

Caution is better than cure! It is not only true for the patients but also for the lab revenue cycle management. 

Step 2: Recognize Financial Responsibility

After collecting the patient’s demographic information, it is the responsibility of the patient registration staff to determine who is financially responsible for the services going to be delivered to the patients. 

You can simply verify the patient’s insurance ID and coverage plan and make sure if there is any third-party payer covering reimbursements for the patient care services. Also, you have to make sure that the coverage plan also supports the procedure being offered to the patient during their visit to your office particularly. 

If the insurance company doesn’t cover some procedures or services, then the registration staff should inform the patient that they will have to pay their dues before getting any services from your healthcare lab. 

Here is the secret that’ll not only help you improve your financial outcome but also your patient experience in your office. “Offer multiple and easy payment options to your patients”. 

It helps your patients understand the payment procedure easily and save them time. If you offer a little financial comfort to your patients then they’re likely to revisit your office whenever they want to get a follow-up service from your lab. 

Step 3: Patient-Provider Encounter

When the patient completes the documentation procedure, then he/she meets the healthcare provider to get care services which is often referred to as a patient-physician encounter. 

An encounter can be of any type i.e. in-person, a phone call or over the internet as video chat. The administration staff at the provider’s end fills an encounter form to record all the details about the encounter. 

This encounter form is a key document that contains the patient’s name, date, place of service, the amount paid/due, procedural and diagnostic codes for the patient condition, treatment, and prescriptions. 

The physician will take notes of the patient visit, either through voice recording, or written notes. These notes will be turned into a transcript (translated into standard CPT and ICD-10 codes). 

Step 4: Medical Transcription

The notes that are collected during the patient encounter from the physicians are turned into a medical transcript by the lab billing and coding team. No matter whether you have an in-house medical billing team or outsourced lab billing services; your medical billing team can collect your voice notes via well-encrypted voice recognition software to turn that information into standard medical codes as well as to create a medical history for the patient. 

It is important to ensure that the transcripts are error-free and safe from mistakes because they shall play a vital role in your payment. 

Step 5. Medical Coding & Superbill Creation

The medical transcription is converted into medical codes that are used to prepare medical claims during the billing process. Medical coding is the process of translating healthcare services into standard alpha-numeric nomenclature which is acceptable and recognized all around the USA. 

There are 3 different types of medical codes; 

• Current Procedural Terminology (CPT®) Codes

Introduced by the American Medical Association (AMA), the Current Procedural Terminology (CPT®) codes allow doctors and healthcare providers to use uniform language for coding their medical services and procedures to streamline reporting. 

• Internation Classification of Diseases (ICD-10)

Introduced by the World Health Organization (WHO), the International Classification of Diseases-Tenth Revision is designed to promote international comparability in the collection, processing, classification, and presentation of mortality statistics. 

This classification includes providing a format for addressing causes of death on the death certificate. The reported medical conditions are translated into standard nomenclature of ICD codes (featuring specific classification structure and the ever-changing rules for the selection and modification of these codes as applied by the World Health Organization (WHO).)

• Healthcare Common Procedure Coding System (HCPCS)

Produced by the Center for Medicare & Medicaid (CMS), HCPCS is a collection of standardized codes that are used to report medical procedures, supplies, products and services. The HCPCS codes are used to turn medical transcripts into billable medical claims to get health insurance coverage by Medicare and other insurers. 

There are 2 types of HCPCS codes i.e. Level I and Level II. 

Level I HCPCS codes: It consists of Current Procedural Terminology® (HCPT) codes. Its structure consists of 5 numeric digits. The key difference between the CPT and HCPT codes is that the CPT codes are used to report medical, surgical, and diagnostic services performed by healthcare professionals. HCPCS codes are used to report medical procedures and services to Medicare, Medicaid, and other health insurance programs. 

Level II HCPCS codes: It is used to identify products, supplies, and services that are not included in CPT. Level II codes consist of a letter followed by 4 numeric digits. Current Dental Terminology codes are included in the Level II codes as HCDT.  

Common HCPCS Codes for Pathology & Lab: 

The HCPCS codes range Pathology and Laboratory services P2028-P9615 is a standardized code set that is essential to get reimbursements from Medicare and other health insurers in exchange for the services offered by the healthcare providers. 

HCPCS code range (P2028-P9615), Pathology and Laboratory Services contain HCPCS codes for pathology and laboratory medicine services and lab tests that are performed on different body fluids, tissues, and specimens such as Cephalin flocculation blood, Congo red blood, Thymol turbidity, Mucoprotein blood, Cryoprecipitate, Platelets, & Red blood cells.

The medical transcript is converted into medical codes to prepare billable medical claims. Lab coding specialists use medical transcripts of the services offered by the healthcare provider. They encode the collected information into universal codes for procedures, diagnoses, treatments, and prescriptions. 

It helps the insurer to quickly skim through the coded medical claims instead of going through the entire medical history of the patient. Therefore, medical codes save time for insurance companies and enable them to determine whether to reimburse your claims or reject your payments. These medical codes also go into a medical claim alongside the medical office charges and the patient’s demographic information. Then lab billing specialists create a detailed report during this process which is also known as “superbill”. 

Step 6: Charge Entry / Claim Submission

After the creation of the “super bill”, lab medical billing specialists jump into the picture. They enter the medical office charges alongside each CPT code to create a charge entry sheet that is going to be later submitted to the insurance company. 

If the patient's insurance plan doesn’t cover the services provided to the insurance company then the patient itself is financially responsible for the healthcare services. Medical billers should review the charge entry sheet carefully to identify and eliminate coding errors, incorrect information, and outdated data. After inspecting the sheet, it is set for claim scrubbing and transmission.

Step 7: Claim Scrubbing & Transmission

Claim scrubbing is the proces of verifying the accuracy of CPT codes used in the medical bills. It is easily possible with the help of Electronic Health Software (EHS) that automatically checks for errors and enables medical billers to make sure that each field contains accurate medical codes. 

In this way, when the medical bills are prepared and scrubbed properly then there are high chances that they can get approved and paid by the insurance company in the first attempt of claim submission. 

After claim scrubbing, medical bills are transmitted to the insurance using a well-encrypted Electronic Data Interchange (EDI) software. This process is called claim transmission. 

If the medical bill contains errors and invalid patient data then it may end up being rejected. Medical claims may also be rejected if it is not compliant with the insurance guidelines or doesn’t contain accurate payer details. Also, the medical biller should comply with HIPAA (Healthcare Insurance Portability & Accountability Act)

The medical biller will then use the superbill to prepare a medical claim to be submitted to the patient's insurance company. Once the claim is created, the biller must go over it carefully to confirm that it meets payer and HIPPA compliance standards, including standards for medical coding and format.

Step 8: Monitor Claim Adjudication

Claim adjudication is the process of evaluating medical claims and determining the validity of data reported by the claim. Health insurance companies proceed with claim adjudication to make sure the medical claim is compliant and reimbursable. 

During this process, the insurance company performs all validity checks and upon the finding of any error or mistake they decide to either accept, reject or deny the medical claim.  

If the medical claim is error-free then the insurance company agrees to reimburse the healthcare provider. 

Claim Rejection: It occurs if the medical claim has coding errors that can be easily corrected. The medical billers review the medical claim to identify and eliminate the errors and resubmit them to the insurance company. 

Claim Denial: if the medical claim contains invalid or doesn’t comply with the payer’s regulations then the insurance company refuses to reimburse that claim which is known as claim denial. It is difficult to resubmit and appeal the denied claims, therefore, every healthcare lab should have a well-functioning claim denial management solution to help them to recover the uncollected revenue promptly.   

For example, several lab billing companies in the USA such as CureCloudMD provides a complete team who are dedicated to helping you with claim denial management. 

Step 9: Patient Statement Preparation

Once the medical claim has been processed and submitted, the patient is billed for any outstanding charges. The patient statement usually contains a detailed list of the procedures and services along with their costs, the amount that is already paid by the insurance company and the amount due from the patient to compensate the healthcare provider for offerings. 

Step 10: Statement Follow-Up

The last step of the entire medical billing process is to make sure that the healthcare providers get compensated for their hard-earned services to their fullest potential. For this purpose, the lab billing specialists must follow up with the patients and insurance companies who are behind their dues. Even when required they have to call, email and fax the payers to remind them about their payment regularly. 

Usually, several healthcare labs don’t emphasize following up with the payers due to the lack of time and data that can help them monitor their individual claims. Here comes a professional billing company on the plate as your sayour because they provide committed medical billing follow-up services helping you collect your every single dollar for an added boost of business productivity. For example, CureCloudMD is a US-based medical billing company that provides a complete range of laboratory billing and coding outsourcing services along with the claim denial management and billing follow-up services.