Today’s clinical laboratories perform highly advanced testing, but the systems supporting their revenue cycle haven’t evolved at the same pace. From outdated ordering workflows to payer rules that change without notice, many labs are facing a steady drain on revenue, not because of the quality of their testing but because of what happens after the results are in.
Here’s a look at the biggest revenue cycle challenges labs face today and how they can build stronger, more future-ready processes in response.
Manual, Paper-Based Workflows Are Still the Norm
Despite advances in LIS and billing platforms, many labs continue to rely on paper requisitions and handwritten forms. That might seem like a small detail, but it creates major friction across the revenue cycle.
Inaccurate or outdated orders are a common issue. Some include test panels that no longer match what’s available, while others are missing demographic details or written in a way that’s difficult to read or interpret. It’s also not uncommon for labs to receive only abnormal results, omitting normal findings required to reflect what was performed accurately. That’s a particular problem for infectious disease panels, where every component tested contributes to the billable service.
Manual entry of order data adds more room for error. Without system integration, billing teams often have to re-enter test information by hand, sometimes into multiple platforms. This slows down the process and increases the likelihood of mistakes. Some labs employ full-time staff just to manage this administrative burden, which drives up overhead without improving outcomes.
To make matters worse, many of these systems lack basic eligibility verification. As a result, claims are submitted without confirming insurance coverage or benefit details up front, leading to avoidable denials and reimbursement delays.
Coding Rules Are More Fragmented Than Ever
The lack of consistency across payer coding policies is one of the biggest barriers to timely, accurate reimbursement. For the same test, different payers often have very different expectations, which leaves billing teams trying to hit a moving target.
Consider prostate biopsies. While some payers allow CPT 88305 to be billed per specimen, others—including Medicare and Cigna—require G0416 to be used instead when ten or more specimens are processed. Humana takes a hybrid approach: 88305 can be used for six or fewer specimens, but once the count goes higher, G0416 is required. And that’s just one example.
Adding to the complexity, labs must also comply with local coverage determinations (LCDs). Take Medicare’s LCD A58720, which defines acceptable diagnosis codes for molecular syndromic panel claims. Submitting a valid test with the wrong ICD-10 code, even one commonly seen in clinical practice, can still result in denial. For instance, pairing CPT 87631 with R50.9 (fever, unspecified) often leads to rejections, as does billing CPT 88342 alongside Z86.010 (personal history of colonic polyps).
Even when labs use the correct CPT code, reimbursement can hinge on the number of units billed. Medically Unlikely Edits (MUEs) differ by payer, so billing beyond those thresholds (intentionally or not) can mean lost revenue.
Denials Are Too Frequent and Too Time-Consuming To Fix
When claims are rejected, the process of investigating and appealing them can consume an outsized amount of staff time. Payer requirements vary widely, and there’s often no clear roadmap for what’s needed to reverse a denial.
Appeals may require detailed documentation, letters from providers, or a full narrative explaining the clinical necessity of the test. Labs that outsource billing or operate without access to the EMR often struggle to collect this information quickly, if at all.
What’s especially frustrating is that many of these denials trace back to preventable issues, like mismatched diagnosis codes, incorrect billing units, or incomplete order documentation. But because labs often don’t identify the problem until after the denial comes through, they end up in a reactive cycle—putting out fires instead of preventing them.
Without the right visibility into common denial patterns, labs can waste hours chasing down the same issues again and again.
The Fix: RCM Infrastructure That Matches Today’s Clinical Complexity
Solving these challenges doesn’t require reinventing the wheel, but it does take a smarter, more connected approach to revenue cycle management.
Labs that are leading the way aren’t just digitizing forms or installing software. They’re building strategic RCM ecosystems that combine automation, analytics, and people-driven processes.
We’re seeing labs invest in AI-powered tools and automation to:
- Validate patient eligibility at the front end to reduce denials due to coverage errors or incomplete patient information.
- Digitize and clean up order intake to catch missing demographic data or test mismatches before they reach billing.
- Apply payer-specific coding logic in real time to adjust CPT codes and units dynamically based on current policies.
- Flag high-risk claims before submission and use predictive rules to prevent rework and appeal cycles.
However, the real difference comes from what they build around the technology.
Labs seeing the most impact are pairing automation with:
- Quarterly payer policy reviews, so coding teams can adjust quickly to new requirements.
- Standardized internal coding guidelines that reflect payer-specific interpretations and LCD updates.
- Cross-functional workflows that connect billing, coding, client services, and operations.
- Real-time feedback loops where they can identify, share, and correct common issues proactively.
Some labs even assign dedicated compliance roles or internal audit teams to track shifting payer behavior and communicate updates internally. Others are integrating with referring provider systems to streamline documentation collection and reduce lag time.
Turn Your Lab RCM Into a Strategic Advantage
The labs that treat revenue cycle operations as a strategic asset, not just a back-office function, are the ones turning these industry challenges into opportunities for stronger performance.
At SYNERGEN Health, we help labs modernize their revenue cycle from the ground up with automation, analytics, and expert support to close gaps, reduce denials, and unlock better financial performance.
If your lab is still losing revenue to outdated processes, we can help you change that. Let’s talk.
