Top Reasons for Lab Claims Denials
Timely collection of revenue is a top issue among healthcare organizations, including diagnostic labs. Denials are increasingly common and can cause painful delays in receipt of revenue, if not loss of the claim. New technologies such as AI can assist in many of the reasons for denials management that may include:
Coding Errors. Incorrect, outdated, or missing diagnostic codes (ICD-10) and procedure codes (CPT, HCPCS) are common reasons for denials. Specificity in coding is crucial, especially with the complexity of ICD-10 codes.
Insufficient Documentation. Lack of necessary documentation to support the tests performed can lead to denials. This includes missing orders from physicians, insufficient medical necessity, or inadequate test descriptions.
Patient Eligibility Issues. Claims may be denied if the service is rendered to a patient who is not covered under the policy at the time of the service or if incorrect patient insurance information is provided.
Duplicate Claims. Submitting multiple claims for the same service without proper indication can result in a denial. This often happens if the initial claim is delayed and the lab resubmits the claim thinking the first one was lost.
Non-covered Services. Some tests or procedures may not be covered under a patient’s insurance plan, or they may be considered experimental or not medically necessary according to the payer’s guidelines.
Prior Authorization and Pre-certification Issues. Failing to obtain the required prior authorization or precertification from the insurance provider before performing certain tests leads to denials.
Provider Credentialing Issues. If the lab or the referring physician is not properly credentialed with the insurer at the time of the service, the claim may be denied.
Filing Time Limits. Claims that are not submitted within the payer's specified time frame, which can vary by insurance company, are subject to denial.
Technical Errors. Simple mistakes such as typos in patient ID numbers, policy numbers, provider numbers, or other key details can lead to claim rejections.
Service Not Applicable. This can occur if the service rendered does not seem appropriate based on the patient’s age, gender, or condition as per the payer’s guidelines.
Finding the root cause of denials can increase the success rate of resubmissions. Identifying the root cause of denials faster can lead to expedited corrective actions, and ultimately a shorter revenue cycle. Interested in finding out more about how technology can augment diagnostic labs revenue cycle? Contact us today to learn more.
