Skip to main content

Toxicology Labs- Why Simply Getting Paid is No Longer Enough

July 20, 2016

Hartford, CT -PractiSource, LLC

Young technical assistand tunes her microscopeAs a company which actively maximizes revenue for toxicology reference laboratories, we have witnessed a wide variety of billing and reimbursement scenarios over the past few years. Many of these scenarios are proper, but a large portion are either the result of not knowing any better, or worse yet, the result of knowingly false billing practices. The later scenarios can place your toxicology laboratory and all of your hard work at tremendous risk.

PractiSource has spent a lot of time working with our clients on doing things properly and in a manner which results in optimal reimbursements and correctly adjudicated and paid claims. But for many in the industry, it isn’t or hasn’t always been that way. We thought we would draw some attention to not just how to do things properly from a billing perspective, but also what not to do. We hope this information proves helpful in growing a prosperous laboratory.

Let’s take a look at toxicology billing scenarios in the areas of compliance and accounts receivable management.

Toxicology Coding Compliance

Anyone who has been in the billing business for as long as we have (not to age us, but everyone at PractiSource in a management position has been in the billing and RCM field for a minimum of 20 years), can tell you stories of laboratories, hospitals or physician practices who have not had compliant billing practices and who have paid the price. By paying the price, we mean everything from payer take-backs, to fines, and even prison time.

Granted, there has been a lot of confusion surrounding the correct coding of toxicology tests over the past few years. When we have spoken with billers who work for labs (either at billing services or at the labs directly) and ask why things were billed a certain way, we often get a response indicating that they have tried billing a number of ways, they just stuck with whatever mixture of codes resulted in them getting paid. They figured they were billing correctly just because they got paid. Nothing could be further from the truth.

As an example, we recently reviewed EOB’s from a lab (names and identifying information redacted) which was using what they referred to as a leading billing service provider to toxicology laboratories nationwide. In full disclosure, they are a competitor (which is fine). Many of such competitors started out small and rode the wave of new laboratories over the past 3 years even though they didn’t have the experience or the expertise in the field. Which is perhaps why they are doing things which are not even remotely proper. But we digress. G; Getting back to one example, on the EOB’s it was evident that they were now starting to bill the new G Codes to certain payers as required. However, they decided to also bill for specimen validity testing CPT codes in addition to the G-Codes. Why? Because they thought some of the payers would pay them. Again, just getting paid is not enough. The guidelines for the G Codes for confirmation testing in 2016 are fairly straight forward and each code includes the specimen validity testing.

Billing the specimen validity testing along with the G Code (ie. G0483) for a toxicology confirmation is what is known as unbundling. According to the Farlex Medical Dictionary © 2009, unbundling is defined as “separately billing for laboratory tests or procedures that are normally linked in order to extract more money from a payer (such as Medicare). This practice is illegal in the U.S.”

There are many other examples of such incorrect billing, but this one seemed pretty straightforward. Sadly, these types of errors are commonplace and exceptionally risky. We would hope that it is just a byproduct of the confusion which has taken place relative to toxicology testing CPT codes over the past few years, but nonetheless, it places laboratories at significant risk. Simply billing codes because they are getting paid may result in insurance take backs, fines, suits, exclusions from payers, and fraud charges. Needless to say, you could lose your lab over things like this.

So here are the do’s and don’ts of coding compliance:

DO: Make sure that you are billing your claims in a manner which actually reflects the services which were performed. If in doubt, contact a coding consultant or even a reputable billing company that can point you in the right direction. Make sure you or your billing company has properly contacted all of your payers to make sure they are submitting the right code sets (ie. CPT or G Code, depending on their policies), and adhere to the related payer policies.

DO NOT: Knowingly or unknowingly place incorrect CPT or G codes on a claim just because you believe it will result in reimbursement. Do not unbundle claims and do not use different claim sets on the same claim. And to protect yourself, do not use a billing service or biller who is suggesting you do otherwise (after all, it’s your neck on the line not theirs).

Proper Accounts Receivable Management

Two years ago it seemed that billing companies in the toxicology laboratory space could do no wrong. With lots of claims and out of network benefits driving laboratory payments sky high, non-payments, insurance mis-adjudications and billing mistakes were often completely overlooked. Why? Because the high payments more than offset the no-payments and mistakes. And lab managers did know better or were not aware of the details.

Welcome back to earth. It has been our belief (along with that of many experts), that the new Medicare codes and associated rates will have a profound impact on the reimbursement picture for toxicology reference labs over the next few years. We’ve had front row seats to this multiple times in our careers across a variety of medical specialties. Labs that fail to make adjustments are simply sticking their heads in the sand and will suffer the consequences of poor business decision making.

So, this makes it even more important that incorrectly adjudicated, overlooked, or improperly paid claims get worked appropriately and that payers be held accountable. Historically, many billing companies get a failing grade when it comes to this. Granted, it is harder to get an out of network laboratory claim paid correctly, versus say, a primary care physicians claim for an office visit. But correct, efficient processes along with diligent work and expertise yield much greater results than traditional billing services or in-house billers in the toxicology field.

Let’s take the example of a yet another situation. A few months back we started working for a toxicology reference laboratory who had previously used another national toxicology billing company, that also referred to themselves as a leader in the business. After the transition phase things were going smoothly with us, but they were left with a significant accounts receivable (A/R) with the old company. Once they had completed their service contract with the prior company, we decided we would take a shot at collecting some of the balances on those old claims. It was the least we could do for our new client. We would be going after some claims which were well over a year old, and the previous company stated that they had worked these accounts so anything we collected would essentially be “found” money. What did we find? Well, PractiSource is currently getting our client paid tens of thousands of dollars every month on these old claims just on what the previous company had overlooked or not worked properly! Like many companies, this billing company took the easy route, working the “easy” claims, but not working in the best interests of their clients.

While the additional amounts we are collecting for this laboratory every month are significant and represent well into the six figures to date (and climbing), it is not directly representative of the higher amounts which could have been collected if they just their job correctly in the first place.

A proper billing company will have protocols in place which aggressively follow up on outstanding claims. While some billers simply occasionally follow up based on outstanding claims reports, PractiSource believes in following up much closer to the actual date of service. To that end we have developed proprietary insurance-specific rules-driven follow-up engines which helps prioritize accounts and make the process of follow-up much more aggressive and helps hold payers accountable. This, combined with automation and expertise often makes all the difference in the world in the ability to truly maximize revenues for a laboratory.

Even with the new reimbursement changes coming down the road, proper billing practices will make some laboratories highly profitable while those with less sophisticated billing paradigms struggle to succeed.

A/R Management Do’s and Don’ts

Do: Make sure your billing solution not only bills out accurately and cleanly, but also aggressively pursues unpaid or underpaid claims with insurance payers. Make sure that your billing provider is giving you complete transparency into your system figures as well as access to the billing system right down to every charge, payment and adjustment at the patient level. Have regular meetings with your billing company and review payer specific issues. If you are not 100% confident that your current billing situation is maximizing revenues for you, reach out for a free analysis. You may find that everything is all right, or may find that you are leaving money on the table. Either way, it is good to know!

Don’t: Believe that just because cash is coming at a decent rate, that everything is just fine with your billing. Don’t just assume that you are maximizing collections.

Coding compliance and proper A/R management are just two of many important aspects of proper billing and revenue cycle management for toxicology reference laboratories. Other aspects include things such business analytic, interoperability of LIS/billing systems, and performance scalability.

If you have any questions, would like more details about this article, or would like a free billing and revenue analysis for your laboratory, please email PractiSource at or better yet, just give us a call at 860-840-2244.

About PractiSource

PractiSource, LLC is a full service medical billing and revenue cycle management (RCM) dedicated to maximizing medical provider reimbursement with the highest levels of concierge-style customer service and support. The company provides services to clinical laboratories (including toxicology-specific laboratories), physicians and medical facilities. Headquartered near Hartford, Connecticut, PractiSource serves clients from coast to coast. Visit

Get the Latest RCM News Delivered

Receive practical tips on medical billing and breaking news on RCM in your inbox.

Get in Touch