April 2025—Payer policy changes—“It’s almost impossible for the provider community to keep up,” Harley Ross of XiFin said in a Feb. 14 online roundtable led by CAP TODAY publisher Bob McGonnagle. Ross and five other experts in pathology and laboratory medicine billing talked about prior authorizations, denials, narrow networks, and the need to advocate for laboratories. “The game is still the same: Get ahead of the insurance companies and use as many tools as possible ideally to avoid denials, and then to quickly make good on others,” said Isaiah Leach of Advanced Data Systems RCM. Here’s what they and others told us.
For the past several years, as we meet to talk about billing in pathology and laboratory medicine, the theme has been consistent: It’s getting ever harder to get paid, and we’re seeing increased denials we have to fight and more hurdles in terms of supplying medical necessity justifications. At the same time, the No Surprises Act has narrowed provider networks. Harley Ross, is there light at the end of the tunnel or are we still in a straight line?
Harley Ross, chief commercial officer, XiFin: Your view of this aligns with ours, and add to that cybersecurity and workforce shortages. That creates an opportunity that’s tied to artificial intelligence; you’re going to need it to combat the things you listed. We’re excited that we’re building a fairly resilient future for our laboratory clients by investing strategically in AI, interoperability, and data-driven analytics. There’s light at the end of the tunnel—not on those items specifically, but there’s a way to stay on par with it.
Tom Cronin, same question, but add to it workforce constraints. We have an unequal contest because the payers that want to deny payment seem to have infinite resources while billing and laboratory people are constrained by headcount and money.
Tom Cronin, MBA, senior vice president of revenue cycle strategy and analytics, Quadax: It is getting harder to get paid. There’s always new denials from insurance companies, and insurance companies are making changes more frequently to medical policies and/or requiring more prior authorizations. It’s important to have visibility in your RCM platform in order to stay on top of denials and understand the true reason for the denial so you can manage them properly and proactively. When you’re dealing with many insurance companies, we’ve found that using technology—a good application for AI or machine learning, for example—can quickly help identify those policy changes and denial reasons so you can take appropriate actions. Many of our clients have seen a decrease in claim denials when they are managed properly and resolved on the front end to prevent a claim denial. If a pathology group or laboratory has elected to use a billing service, selecting a partner that also has proprietary ownership of the clearinghouse and extraordinary relationships with payers for decades can be a game changer.
The cost pressure on laboratories is constant. Using the technology on the lab side to counteract the technology used on the insurance side is only fair and is necessary to maintain your business.
Isaiah Leach, is there a shift in where denials are coming from? I can see some for expensive esoteric genetic tests; pediatric tests can be tough to justify and get paid for. What is the overall situation now for billing and collection?
Isaiah Leach, MBA, director of client success, Advanced Data Systems RCM: Insurance companies will make it harder to get claims paid. It almost seems to be part of their business, which is why we have to continually try to protect our clients proactively on the front end of denials. The goal is to get a certain denial only once from a particular payer and not have it repeated, and for any denials that sneak through, to be able to quickly edit and resubmit them. In that way, managing denials more effectively helps to beat payers at their own game.
While I haven’t seen a shift in some specialties receiving more denials than others, the game is still the same: Get ahead of the insurance companies and use as many tools as possible ideally to avoid denials, and then to quickly make good on others.
Andi Brooks, do people have enough appreciation for what they must do as a laboratory and as individual practitioners to ensure they’re making clean claims and meeting you halfway toward helping them get paid?
Andi Brooks, vice president of client services and practice management, APS Medical Billing: Yes. They’re learning quickly. Carriers have automation in place for denial management, which can often mean erroneous or preventable denials. For example, we had a payer in Georgia that was denying patient coverage. We would notify the patient of the noncovered denial and request updated insurance information. Patients let us know the insurance information was correct, so it was denied in error. We would refile with the correct information—which was also correct the first time—and the payer then denied “timely,” because they have AI in place that denies a claim if it comes through after a certain period, causing us to need to file an appeal. It’s vital we have the right AI in place to combat these types of denials and help ensure accurate and timely payment for services.
Another example is Avalon Healthcare Solutions partnering with many large payers as a laboratory benefit management system, or LBM. Example carriers are Medical Mutual of Ohio, Sentara, and CareSource, and we expect the list to continue to grow. Avalon denials are not as cut and dried as Medicare national and local coverage determinations. The Avalon policy may not allow payment based on certain diseases or health issues but doesn’t clearly list covered and/or noncovered diagnosis codes, like Medicare does. We are seeing denial increases and revenue impacts when Avalon becomes the LBM, and providers want to be involved. We all have to dig in, review policies, and evaluate these denials and how we can reduce them.
For one practice, we currently have a standing bimonthly call with multiple practice team members and Avalon. The practice is heavily involved in helping investigate the cause of denials and working to ensure denial reductions in the future. This can include RCM AI back-end programming, education back to the referring offices, or EHR/clinical system stopgaps or system-required overrides, which can help prevent unnecessary ordering of some tests. It’s imperative we tackle and address front- and back-end processes to help mitigate test denials. It’s a continual process that requires provider, referring provider, RCM departments, and sometimes patient involvement and collaboration.
Sarah Stewart, are there any new wrinkles since we spoke last year that you’d like to highlight?
Sarah Stewart, vice president of revenue cycle services, Telcor: There’s always something new coming from payers. There are a lot of prior authorization denials that come through but it’s really not prior auth; it’s out of network. Or it’s a lot of misdirection and payers cutting back on the way they communicate and the frequency with which they communicate. With UnitedHealthcare, Optum, you have to have an API [application programming interface] to know there’s information out there, or you have to go to their website and pull documentation manually for denials and communication that they used to send out. We continue to see denials from payers and it’s becoming more complex to follow up on why it’s denied.
Matt Zaborski, what’s your take on Medicare Advantage as it affects us all?
Matt Zaborski, chief revenue officer, APS Medical Billing: Medicare Advantage is a struggle as the payers don’t have to follow the same rules as those required by traditional Medicare. The issues my colleagues are talking about as they relate to getting paid for commercial claims apply to the Medicare Advantage population too. The traditional Medicare rules are transparent. Every payment rule and diagnosis table is largely publicly accessible, whereas with UHC Medicare, Cigna, et cetera, you have to dig for policy that’s not always published but is still enforced.
The CAP, through its Council on Government and Professional Affairs, launched a fairly aggressive program talking about how insurance companies can get in the way of optimal patient care by making it difficult to provide care and get paid for it. Tom Cronin, what have other associations done?
Tom Cronin (Quadax): Associations are doing what they can, but change doesn’t come quickly. We need more advocacy for coverage of testing to remove some of the insurance companies’ tactics that result in nonpayment of claims. We as an industry have to fight that and back up what the associations are doing. One of the industry’s biggest challenges is declining reimbursement rates. Associations are focused on this issue but those rates aren’t going up yet, even with all the effort going into it.
There’s legislation like the Medicare Patient Access and Practice Stabilization Act—let’s try to push that along.
Harley Ross, how are you engaging in forging firmer alliances and relationships with all who are affected by these problems to advance a more just and efficient billing and collection system?
Harley Ross (XiFin): We’re trying to bring transparency through our Payor Rate Transparency Monitor, which is on our website. It allows the provider community to see the data from big payers in a consumable way. It’s enlightening because you can see the contracted rate disparities.
We think data drives the discussion. Several associations advocating on behalf of the lab industry are coming to us and asking for the information. Our CEO Lâle White and others have advocated strongly for this for decades. Data allows us to have constructive dialogue.
You’re never going to tame the beast that is the payer community. You have to stay on par as much as you can. By having a constructive dialogue with medical directors, you begin to get the perspective of being able to chip away at some policy items. The greatest challenge is the velocity of the payer policy changes. It’s almost impossible for the provider community to keep up. The struggle is being able to react as fast as you can, which is where leveraging data with AI/machine learning/natural language processing comes in. Payers are using unstructured data and correspondence to trip us up on the back end, which doesn’t make it easy in terms of data mining 835 files. The more we can think about structured and unstructured data to drive a dialogue back to the payers, that’s where we’ve seen the greatest traction of being able to arm associations and others to have stronger advocacy and be a voice in the market to support the needs of laboratories.
Isaiah Leach, it seems to me that your clients are your best allies for your business. When they join you and help themselves to get paid in the optimal way, it’s better for both parties. What is your experience with that?
Isaiah Leach (Advanced Data Systems RCM): Building relationships with clients is the most important piece because having clients as collaborative partners makes things much easier for everyone. For example, clients who are engaged seem to have a better understanding of the types of denials they’re getting, even when it appears they’re doing things correctly.
Health care providers are constrained. The complexity amid the workforce shortage is getting worse, so I assume there’s a lot of work that clients and their billing consultants and systems need to work on together. Andi Brooks, can you speak to that?
Andi Brooks (APS Medical): We have to work on all fronts to attack this from every angle. Insurers have the better lobbyists and more control; providers have less control. A lot of it is working with providers and insurance companies, having meetings, implementing AI, et cetera. It can include working with referring offices if, for example, you have a referring office that regularly orders tests that are considered not medically necessary and will never get paid. It might be providing education to the client and the client working with the referring office, which is working with their mutual patients. There are many avenues and it gets harder every year, so it’s important we continue to evolve and improve.
Tom Cronin, do you see a difference between dealing with the providers who are employees of a system in a given specialty versus those who are in private practice, who, almost by definition, have a more direct interest in the flow of revenue into the practice?
Tom Cronin (Quadax): I don’t see a difference because we’re always trying to maximize reimbursement, get every claim paid, fight denials, whatever it might be. That’s our mission. It may be that a health system or private practice puts more pressure on us to improve reimbursement, being an RCM company, but transparency is key to a successful partnership in reimbursement.
Harley Ross, we increasingly hear about value-based care models, which is a polite term for fixed reimbursement. Do you think this momentum toward fully value-based care, some of which has been stimulated by statements from Medicare, is going to continue to strengthen in the health care system?
Harley Ross (XiFin): If we can take anything away from what we’re seeing as the political winds shift, I think we’ll see it accelerate dramatically over the next four years. I don’t know if it will become the new norm permanently, but this administration has shown its hand; they’re going to mandate greater oversight and audits associated with financial responsibility. Laboratories will have to continue to do more with less. With introduced legislation and regulatory changes, and the awareness that’s come with them—including PAMA, SALSA, and FDA’s LDT stance—it’s challenging to position a lab within a value-based care model. While we may be able to stymie some of these impacts, the constantly shifting reimbursement landscape and regulatory requirements present a challenge.
A year ago Change Healthcare changed the world. Outside of regulatory compliance and value-based care, this is all intertwined because cybersecurity is a material issue that is made even harder from an integration or interoperability perspective, which then makes it harder whether talking about traditional health care systems or others, like employer-sponsored health care plans. Providers want to do the right thing, but the market, complexity, and challenges have increased dramatically in the past 12 months. There are regulatory and compliance pressures—and now security pressures. There are a lot of discussions on governance tied to artificial intelligence and no way to get those resources if you’re a laboratory, so you have to partner your way out of it.
Value-based care is one more thing that has stacked the deck against laboratories, and you have to figure out how to have strong strategic partnerships to navigate the growing complexities and do it affordably, because you can’t be an expert on everything.
Matt Zaborski, there’s a new iteration of HIPAA that seems to have what I call danger for many providers because there’s going to be a great expense in complying with some of the new HIPAA regulations, some of which are aimed at computerized records and patient sharing of data. Do these new HIPAA threats come into your calculus in terms of how it will affect your customers?
Matt Zaborski (APS Medical): Yes, they affect APS as a business and the requirements on us and our technology, data management, and security. APS and many of our peers have been working ahead of the proposed changes. We’re HITRUST and SOC 2 type 2 certified. A lot of the requirements in those certifications encompass requirements in the proposal. There could be some risk on the provider side, especially for those that own small labs or other practices where the hospital isn’t necessarily their built-in security.
We make it a priority to ensure our clients are informed and make outreach efforts via white papers and our client services team to make sure they’re aware of those topics.
Isaiah Leach, how do you see it playing out at Advanced Data Systems RCM?
Isaiah Leach (Advanced Data Systems RCM): Laboratories and other health care entities may not have the infrastructure to manage security in general unless they’re partnered with a vendor that does understand security.
We often hear horror stories when speaking with prospective clients about their being hacked and unable to access their data. Advanced Data Systems RCM uses a SOC 1- and SOC 2-certified global leader in cloud hosting. As of this discussion, we’ve never experienced an intrusion, which of course means our clients haven’t either. We find it curious that more prospective laboratory clients don’t ask about security as a top three item of interest.
Sarah Stewart, can you comment on how the current environment is helping drive this consolidation?
Sarah Stewart (Telcor): All the challenges we’ve talked about make things more complicated, so smaller and even midsize practices can’t keep up with payer regulations, changing security rules, et cetera, even with assistance from automation in the system. They end up accepting erroneous denials. They don’t have the manpower to figure out what’s going on and rebuild claims two or three times, appeal for months to get reimbursement. So either the practice as a whole isn’t going to make it because they’re not getting the reimbursement because of denials, or they’re losing a lot of cash because they’re not able to get those back in the door. If they can consolidate pieces of their organization, like going to a billing service that has a team of people who deal with payers across the country, that can be a huge benefit, especially for smaller and midsize labs that are looking to expand into different areas of the country. They can have a team that knows payers and the rules and regulations across the country. For example, we work with a number of small genetic testing labs and we’re helpful to them because we know the payers. Even if they have only one claim, we know how that payer works.
Tom Cronin, do you have clients who are worried about being squeezed out because of ever-narrowing networks, and is that getting worse, better, or staying the same?
Tom Cronin (Quadax): It might be getting a little worse. I see from our clients that it’s always advantageous to be in network—fewer denials and higher average reimbursement. If they’re getting squeezed out by larger labs, like a Quest or Labcorp, that’s important; this is where labs need to differentiate themselves in the marketplace and communicate their value over the larger labs.
From a reimbursement standpoint, the narrowing of networks hurts, and a partnership between the practice and an RCM company is critical. For example, if there’s an increase in out-of-network denials on claims, we can bring that information back to our client so they can have a conversation with their insurer or plan to get in network and secure coverage. There are other ways too. If a denial goes through an appeals process, it could be a strategic area for labs to communicate the value of their tests and the benefits to patients. The appeal process is a claim-by-claim fight, sort of like a patient-by-patient coverage fight, and the results of those appeals feed information to the lab to have a coverage discussion with the insurer. Having a system that keeps track of those appeals and what the success rates are is useful information for a market access team or someone at the lab who talks to the health insurance companies to make sure that coverage can be long term, either by positively influencing coverage of a medical policy or gaining in-network status through a contract. It really is a partnership between RCM and the lab to keep or gain that in-network status for long-term reimbursement success.
Harley Ross, what is your recent experience with the narrowing of networks and what strategies are there to deal with that threat?
Harley Ross (XiFin): Networks continue to narrow. With consolidation tying into Labcorp and Quest, but also into other larger reference labs, payers are looking to have singularity because they want to drive down their costs. The member cost is going up. There’s pressure on large employer-sponsored programs to keep that cost contained, and the easiest way to do it is through a volume play tied to being able to have the narrow network. That’s not to advocate for that angle. But if you’re having a dialogue with the payers, you have to be able to show differentiation. Unless you’re bringing value add to them and their members, payers are going to challenge whether or not they need to consider that.
As molecular and genetic testing has become more commoditized and the differentiation has gone down in that space, you get the adoption of new technology, but then there are more players and they try to narrow the network. The reality is they’re fighting the same issues we are, and most big insurance companies are publicly traded, so they have to provide value to their shareholders. I’m not advocating for them, but knowing your audience is important.
If you’re going to get into a network, you have to show the value proposition associated with why they should look at it from a member perspective. They’re focusing on value-based care and wanting to make it accountable to the referring physician. As a laboratory, you have to educate the clinicians who are ordering from you about the need for a particular test. If you do that, you’ll have a successful engagement. Don’t get me wrong—you’ll have challenges. Measurable residual disease testing is becoming more popular, for example, so payers are trying to understand what adoption looks like and the efficacy associated with it.
All costs are going up. It’s making it hard for labs to focus on differentiation because they’re having to take dollars away from areas in which maybe they were going to invest in R&D and now have to invest in just running the business of being a laboratory. The macroeconomics and pressures are coming down on everyone. Labs have to be strategic when approaching payers and in thinking about getting in network.
Andi Brooks, if you were to meet a young pathologist who was joining a group, system, or hospital and didn’t know a lot about billing and collection—there’s not a lot of training in residency or fellowship on these issues—what would you say they should know?
Andi Brooks (APS Medical): Partner with the right people. It’s not the first hire; it’s the best one. You don’t want to jump on board with the first person who offers you the most money because that isn’t necessarily the best for you in the long run. You must have a partnership with either a practice or an RCM company that knows medical billing inside and out and all the nuances and requirements—things like HITRUST and SOC certified, HIPAA and HIPAA changes, and compliance—and helps get you paid, accurately and timely, while helping you stay compliant and navigate the ever-changing waters of the industry.
Isaiah Leach, what does a pathologist, laboratory manager, or laboratory executive entering the field now need to know about billing and collection?
Isaiah Leach (Advanced Data Systems RCM): They need to first determine the most fundamental question of billing and collections: What is the best, preferred approach to it? For most, that approach appears to be through engaging with an outsourced RCM company that can also help consolidate in-laboratory staffing. For others, it may be using an in-house billing and financial platform, no doubt cloud-based but possibly still on the laboratory’s own local, in-house server. Once that’s figured out, the rest should fall into place successfully. If the laboratory can identify a resource that provides both approaches and has no bias either way, so much the better.
Sarah Stewart, same question.
Sarah Stewart (Telcor): Find people you can partner with officially or unofficially to learn the medical billing world, whether that’s through joining a group or getting connected to resources and advocacy groups. We have a user group through our software that connects both. Even a little understanding helps with the feedback loop to know what you need to do up front, what challenges you can take care of before the claim goes out the door.
Tom Cronin, what does the newbie need to know and how do they learn it?
Tom Cronin (Quadax): They need to understand the complexities of pathology and/or laboratory revenue cycle. I see many new people come in, from different areas of health care or even outside the industry, who think you submit a claim and get paid. It’s not that simple with our health care environment. It’s important to have the right partner in RCM, one that aligns with your objectives and goals and can offer ample experience with best practices and proven strategies to maximize results. For example, if you are dealing with standard procedures and tests, maybe that’s not as complex, so you need a partner that can automate as much as possible. But if you’re dealing with more complex procedures, such as with digital pathology or molecular diagnostic testing, you want to work with an RCM company that’s experienced in those complexities, has the needed flexibility within the platform, and has new technology adoption within the market and knows the successful strategies and practices for those technologies.
Harley Ross, this year marks the 30th anniversary of the Executive War College. What other events and meetings are on offer for people who develop an interest in this as providers in their own practices?
Harley Ross (XiFin): It depends on the type of testing you do. If you’re on the diagnostic side of molecular and genetics, Q1 Productions has fantastic events that deal with that type of testing and reimbursement challenges. The CAP, American Clinical Laboratory Association, and California Clinical Laboratory Association have events that are important to participate in. It’s also good to get outside the laboratory to understand the health care systems your referring clinician base is dealing with, because they have their own challenges. It’s good to get into the mindset of who you’re referring your test back to and how you can be a better partner in a larger ecosystem to make sure clinicians are able to treat their patients.
Would anyone like to make a final point or pose another question?
Tom Cronin (Quadax): As an industry trend, UnitedHealthcare needs to be highlighted. It implemented the DEX [Diagnostics Exchange] Z-codes for its commercial insurance plans in phases throughout 2024 and 2025; the final phase began with dates of service on and after March 1. That’s important because it’s the first time commercial insurance plans are requiring DEX Z-codes, and I think it’s going to be an expanding program over time. If labs have not registered their test with the program, they need to do so for reimbursement.
UnitedHealthcare also launched, effective October 1, 2024, a gold card program for prior authorizations. It was implemented on a small scale, but it was encouraging to see such a program implemented. We’ll have to see how that shakes out in 2025.
Matt Zaborski, how do you think the Z-codes will play out for labs?
Matt Zaborski (APS Medical): We’ve come a long way from the gap-fill days. It’s probably good that there’s a credentialed way to get recognized and paid for the work. But having more layers in claims processing and submission creates more avenues to deny and delay. They’re not guaranteed to be uniform and a payer isn’t mandated to use it, which can always complicate your RCM.