Summary
Laboratory and pathology billing face challenges from reimbursement threats, downcoding, denials, and prior authorizations. Medicare Advantage plans are downcoding certain tests, raising compliance issues and increasing the administrative burden on laboratories. While gold-carding programs could mitigate prior authorization burdens, collaboration among laboratories, billing organizations, and payers is needed to advance these processes.
April 2026—“Pressure from every angle” and “clawing to stay on the edge of the cliff”—two comments heard in the Feb. 18 CAP TODAY roundtable on laboratory and pathology billing and revenue collection. From narrowing networks and other reimbursement threats to downcoding, denials, and prior authorizations, the difficulties add up. Even knowing what the laboratory’s revenues actually are can be what one pathologist calls a mystery. The conversation, led online by CAP TODAY publisher Bob McGonnagle, follows.
XiFin executive chair and CEO Lâle White commented recently in Laboratory Economics that some Medicare Advantage plans have been downcoding certain tests to broad panels, particularly in infectious disease—chlamydia, gonorrhea, Trichomonas. Mike Fauver, how recent is this?
Mike Fauver, VP of enterprise solutions, XiFin: We’ve seen this type of downcoding within the past year. For example, whereas traditional Medicare has been fairly consistent in following AMA and NCCI coding guidelines, Medicare Advantage payers are downgrading chlamydia, gonorrhea, and Trichomonas to the infectious disease panel code as a way to gain cost savings by reducing reimbursements to the lab. This approach by Medicare Advantage plans potentially raises compliance issues that need to be addressed if they’re not following the appropriate reimbursement set for those procedure codes.
When you push back on the downcoding on behalf of your clients, are you getting an adequate response?
Mike Fauver (XiFin): In some cases. Laboratories that have been underpaid are often appealing these downcodes. We’ve had some luck with appeals but not complete satisfaction. Appeals can be expensive, so it adds cost and administrative burden for laboratories to chase the dollars that should have been paid to begin with.
In addition to the downcoding, we’re seeing more mention of penalties for the alleged efficiencies laboratories are bringing to bear—you’re more efficient, so we shouldn’t pay more. Diana Cardona, does that seem strange to you?
Diana Cardona, MD, MBA, professor and chair, Department of Pathology, Wake Forest University School of Medicine; chief clinical officer, Advocate Clinical Laboratories; and member, CAP Board of Governors: You’re alluding to the efficiency adjustment the CMS rolled out this year, in which it says all this new technology has come into play in the medicine arena, which means you must be much more efficient. In reality, medical records take more time to fill out. It’s more complex to sign cases out and takes longer to do so than it has in the past.
The CMS’ calculation was flawed. It does not mention pathologists or our specific codes and only mentions limited studies claiming increased efficiencies over time, yet we were included in the efficiency adjustment. That’s been an angle in our advocacy—in your calculations and explanation as to why you’re doing this, pathology was not included in the analysis, but you’re including it in the reduction in payment and reimbursement. From a congressional perspective, there is movement to help mitigate these efficiency adjustments; U.S. representative Raul Ruiz is a champion in this space. We’re trying to see if we can be successful this year in mitigating the impact.
I have been reading that there’s an increasing split in TC versus PC in anatomic pathology, in which the TC is okay and the PC is going down. There is also industry interest in providing the technical component of pathology services. Mike Kovacs, do you see that in your client base?
Mike Kovacs, senior VP, RCS client engagement, Quadax: We have seen this trend across some of our laboratory clients with increased TC volumes as clients are reviewing their TC arrangements based on efficiency, current reimbursement rates, and return on investment. We have also seen an increase in immunohistochemistry volumes across our molecular pathology clients.