Four Tips to Reduce the Most Common Pathology Billing Errors


There are many complex regulations and steps involved when it comes to pathology billing and coding. Mistakes can occur at many points of your “front-end” and “back-end” processes. This can reduce collections and increase days in A/R, delay reimbursement and lead to compliance violations or fines.

In today´s era of ongoing pressures on pathology reimbursement, finding and fixing mistakes in your billing process is more important than ever. Some of the most common errors pathology practices face are unbilled tests, eligibility errors, underpayments, and documentation gaps.

1. Unbilled Tests

With the high volume of tests in a typical laboratory, it is very easy for tests to not be billed. The first control process that needs to be in place is accession reconciliation. Your billing system should identify missing accessions based on sequence numbers or a comparison with LIS or other lab reports.

Most billing systems interface with LIS, ADT, and other electronic systems, which drastically reduced the error rate versus paper. However, electronic interfaces require careful management of exceptions, such as records that are rejected.

If your practices´ charge information is on the LIS, make sure it matches with demographics from your ADT or EMR system. If not managed carefully, this matching process can result in tests not billed. This coupled with the high error rate in demographics means that there are always exceptions.

Managing these exceptions every day and assuring that they are resolved is essential to prevent lost revenue.

2. Eligibility Errors

Eligibility errors are one of the main reasons behind denials. The pathology group leadership and their billing experts (internal or outsourced) should meet with administration to review and discuss eligibility denial results. Suggesting improvements to the processes, such as online eligibility checks, verification of insurance information at discharge, etc. can be well received.

For patients presenting for a lab test, the front-end process is somewhat easier to address to reduce eligibility errors. Have an online eligibility check at the time a test is ordered. Also, having the eligibility information readily at hand also means that the co-pay and, perhaps, deductible can be collected prior to the test.

There are some cases where the patient is simply not covered. Where possible, labs should identify and address these situations prior to performing the test. Also, don´t underestimate the need for patient education: they may not know which tests are covered by their insurance and many on high deductible plans bought them for the low premium.

3. Underpayments

One of the main sources of missed revenue are claim denials. Therefore, each one needs to be worked, ideally by automatically routing to the right specialist; then tracking to assure it is worked on a timely basis.

More subtle, but often a source of substantial revenue, are underpayments of various types. This can happen when a payer remits the incorrect amount. It is essential that your lab has a good handle on expected payment amounts. The only way to catch these errors is to have the expected amount programmed into your billing system or by doing a regular payment analysis.

An important related consideration is the fee schedule. If it´s out of date, you may be filling claims below some payers allowed amounts. Or you may have newer tests without a fee established. Plus having the proper fee schedule is always useful during payer negotiations.

4. Documentation Errors

Correct coding is essential for insurers to accept claims and pay pathologists correctly and in a way that minimizes downstream denials.

Practices and departments should be getting feedback from their internal coding team or outsourced partner on error rates by physician to highlight areas of improvement. Physician training is often very productive. Pathology practices´ leadership need to stress the importance of accurate reports.

Due to the evolution of coding and payment mechanisms, documentation improvement processes are even more critical. Coders must have an excellent level of detail for accurate coding. It is more efficient to have the information included in the first report to avoid any need for clarification and addenda.

If you want to learn more about how to improve your pathology billing, download our Pathology Billing Tip Sheet white paper. Get in touch with an AdvantEdge expert and stay up to date on company and industry trends by visiting our LinkedIn page.