Industry Insights
Tips for Laboratory Billing Reimbursement Challenges
June 29, 2026
Editor's Note: This article was originally published on March 12, 2024.
Running an independent pathology practice or clinical lab comes with a long list of challenges, and getting proper payment for services rendered is typically near the top.
To help ensure that medical labs are reimbursed correctly, Clinical Lab Products (CLP) magazine (linked below) has published tips and best practices from leading laboratory revenue cycle management (lab RCM) companies to streamline laboratory billing and navigate a complex reimbursement landscape.
Linked CLP Article: 6 Best Practices for More Successful Laboratory Reimbursement
As a leading laboratory information system (LIS) company with an all-in-one informatics platform that includes comprehensive laboratory billing solutions embedded within the advanced application, we at LigoLab are honored that CLP included comments from our Lab Billing Specialist, Gayane Haroutyunyan, in the “best practices” article and happy to share the full transcript of her CLP interview here to highlight her key insights for our lab partners and the broader lab community.
If you have questions about laboratory billing or need guidance on selecting the best laboratory billing software for your organization, contact us to schedule a consultation with one of our laboratory billing specialists.
Act Now: Speak with a LigoLab Product Specialist!
Q&A With Laboratory Billing Expert Gayane Haroutyunyan
The following is a transcript of an interview conducted by CLP reporter Ann H. Carlson with Haroutyunyan.
What Does the Current Lab Revenue Cycle Management Reimbursement Landscape Look Like in 2024?
The challenges facing laboratories are reflected in the Centers for Medicare & Medicaid Services' (CMS) Medicare Physician Fee Schedule Final Rule. The 2024 Conversion Factor was set at $32.74, representing an approximately 3.4% reduction from 2023. As a result, CMS projected a 2% decrease in Medicare payments for pathologists and a 1% reduction for independent laboratories. According to the College of American Pathologists (CAP), these reimbursement cuts were primarily due to the implementation of the new evaluation and management (E/M) add-on code G2211, and a 1.25% payment reduction required under the Consolidated Appropriations Act.
What Are the Biggest Laboratory Billing Reimbursement Challenges and Their Causes?
One of the greatest challenges laboratories face is staying compliant with constantly evolving healthcare regulations, coding requirements, and payer policies. Keeping pace with these ongoing changes is challenging, and even minor compliance issues can lead to claim denials, delayed payments, and reduced reimbursement. At the same time, widespread staffing shortages and high employee turnover place additional pressure on laboratory billing teams, increasing the risk of coding errors, workflow inefficiencies, and lost revenue.
Industry Insights: Regulators Are Rewriting HIPAA - Survival Guide for Clinical & Pathology Labs
Are There Any Positives About the Current Reimbursement Situation for Labs?
Yes. The biggest positive is that coding and lab billing workflows are increasingly relying on automation and rules utilities of laboratory software systems. Fortunately, some laboratory revenue cycle management software products can accommodate this trend and deliver appropriate automation functionalities for the laboratory billing process right out of the box.
Discover More: Laboratory Billing Automation - Boosting Efficiency & Clean Claim Rates
What Types of Testing Are Consistently Being Reimbursed at a Sustainable Rate?
Reimbursement rates for laboratory tests can vary based on factors such as geographic location, payer policies, and specific test codes. However, certain categories of testing are typically considered essential and tend to have more consistent and sustainable reimbursement rates:
- Basic and common laboratory tests
- Diagnostic imaging tests
- Microbiology tests
- Clinical chemistry tests
- Hematology tests
- Pathology tests
How Has Legislation, or the Lack of It, Affected the Reimbursement Landscape?
Legislation can significantly impact reimbursement rates for laboratories. Changes in healthcare laws, regulations, and policies influence how reimbursement is determined, what services are eligible, and the rates at which providers are compensated. The absence of specific legislation addressing reimbursement issues may also leave gaps or uncertainties in the process.
Key areas where legislation or its absence affects the reimbursement landscape include coverage and eligibility determinations, payment rates, compliance requirements, coding and documentation standards, fraud and abuse prevention, and quality measures.
Discover More: The LigoLab Difference - Demonstrating the Power of RCM Automation in the Clinical Laboratory
What Is the Status of SALSA and How Can Labs Get Involved?
A little over a year ago, a positive development emerged in the legislative landscape for clinical laboratories. The House and Senate introduced the Saving Access to Laboratory Services Act (SALSA), which would provide CMS with new authority to obtain private market data through statistically valid sampling across all laboratory segments for widely available test services for which prior data collection was inadequate.
If successful, SALSA would prevent drastic reimbursement cuts for laboratories originally scheduled for 2023 and the following years. Despite extensive support, Congress has yet to pass the bill. However, Congress did approve a freeze on Medicare's Clinical Laboratory Fee Schedule rate cut for 2023 and a delay in reporting requirements.
Labs interested in advancing this legislation are encouraged to engage with industry associations such as the American Clinical Laboratory Association (ACLA) and the College of American Pathologists (CAP), which are actively advocating for its passage.
What Are the Most Common Lab Billing Mistakes and How Can They Be Avoided?
Inefficient Denial Management
One of the most common mistakes is inefficient management of denials and appeals. This requires thorough monitoring and trend analysis to identify why claims are denied. By understanding these patterns, laboratories can address denials more effectively and resubmit corrected claims promptly, enhancing their chances of reimbursement.
Underutilization of Automation
A significant oversight is the underutilization of automation in claim submission, especially for standard test cases. Without automation, laboratories risk inefficient use of staff resources, delayed submissions, and potentially reduced reimbursement rates.
Coding and Billing Errors
Inaccurate or outdated coding can lead to claim rejections or denials. Regular training and updates on coding standards are essential to avoid these costly mistakes.
Poor Documentation
Detailed and accurate documentation of tests and procedures is crucial for claim approval. Inadequate documentation can lead to denials, as payers may not find sufficient justification for the tests performed.
Failure to Stay Current With Payer Policies
Failing to stay up to date with payer policies can result in noncompliance and subsequent claim denials. Laboratories must stay informed about changes in insurance policies and regulations to ensure their lab billing practices remain aligned with current requirements.
To avoid these mistakes, laboratories should invest in regular staff training, utilize the latest lab billing software and automated RCM tools, maintain meticulous documentation, and stay abreast of evolving payer policies and coding standards.
Industry Insights: Navigating the Coding Minefield - Labs Struggle with RCM Rejections Amid Rising Scrutiny from Payers
What Best Practices Should Labs Follow to Protect Reimbursement for Both Established and New Tests?
Best practices should include a commitment to proactively complying with regulations, promptly addressing any denials, and employing coding and billing automation across all operational areas. Labs should also ensure robust front-end processes, including eligibility verification and claim scrubbing, are in place before submitting claims to payers.
What Does the Reimbursement Landscape Look Like Over the Next Five Years?
It is difficult to make reliable predictions, as some currently pending legislation paints an encouraging picture while decades of declining reimbursement rates tell a different story. Looking forward, several key factors could shape the landscape:
Healthcare Policy Changes: New legislation or amendments to existing laws, particularly those related to Medicare and Medicaid, will significantly impact reimbursement rates for laboratory services.
Technological Advancements: The integration of AI and automation into the laboratory billing process may influence reimbursement policies by enabling more efficient, cost-effective operations.
Shift to Value-Based Care: The ongoing shift from fee-for-service to value-based care models could reshape reimbursement strategies, potentially favoring laboratories that demonstrate cost-effectiveness and high-quality outcomes.
Market Consolidation: Consolidation in the healthcare and laboratory sectors may affect reimbursement rates, as larger entities gain greater negotiating power with payers.
Public Health Trends: Demand for laboratory services, influenced by the emergence of new diseases or a growing focus on preventive care, can also shape reimbursement policies over time.
White Paper: Maximizing Your Lab’s Profitability - The Case for In-House Lab Billing
Additional Laboratory Billing Resources
For more information on the current state of laboratory revenue cycle management and the RCM tools available to reduce denials and maximize net collections, explore the following resources:
- Laboratory Billing 101 - The Differences Between In-House Billing and Outsourced Billing Services
- Is Your RCM Software Vendor Putting Your Lab’s Needs First?
- LIS System and Lab Billing Data are Interdependent, So Why Not Integrate Both into ONE Powerful Informatics Platform?
Reimbursement Cuts Are Real, But So Are Smarter Solutions
Contact LigoLab today for a personalized consultation with a lab billing expert and learn how automation, compliance RCM tools, and integrated laboratory information systems and data management can future-proof your laboratory.
Learn More: Speak with a Lab Billing Expert!
