How to Choose the Right Laboratory Billing Company: What You Should Look For

An infographic for Synapse Lab Billing featuring medical professionals in a meeting alongside the text, "OVER 90% OF U.S. HOSPITALS outsource at least one administrative task," citing the National Library of Medicine.

Many labs agree that lab billing denials are a source of great frustration in the industry, costing $31.50 per claim you submit and resubmit. Worse, up to 65% of denials are never reworked according to the Medical Group Management Association (MGMA).

Beyond its financial impact, lab denials can create administrative burdens, increase staff workload, and lower morale. This led lab managers to adopt a forward-thinking approach by outsourcing their lab billing to a third-party company. But it’s a decision that should not be taken lightly.

In this article, let’s explore what you need to know about choosing the right laboratory billing company for you.

Why should labs outsource their lab billing?

It’s no secret that medical labs are understaffed and highly pressured to process more than 14 billion tests ordered annually. A survey from Siemens Healthineers and The Harris Poll found that lab professionals are experiencing burnout, hindering their ability to maintain high-quality standards for patients.

To address this, outsourcing the lab billing process has become a widely accepted solution, according to Jonathan Clarke, Assistant Professor of Health Policy and Administration at Penn State University:

Over 90% of U.S. hospitals outsource at least one administrative task

68% of large physician groups rely on external providers for billing and claims management

Why should labs outsource their lab billing?

And here are the key reasons why they would outsource this function:

1. Extremely complex codes: Labs use a system called Current Procedural Terminology (CPT) codes, wherein each test, panel, and methodology has a specific code. It’s easy to mix them up when your lab staff isn’t well-versed with the codes.

2. Complicated payer-specific rules: Every insurance company has its own set of rules, coverage policies, and preferred codes. You need to always keep your eye out for what one payer covers and what another might deny.

3. Compliance issues and regulatory risk: Medical laboratories in the U.S. must comply with several key federal and state laws for billing, including CMS (Centers for Medicare & Medicaid Services) Audits, Clinical Laboratory Fee Schedule (CLFS), Medicare and Medicaid Program Rules, and Health Insurance Portability and Accountability Act (HIPAA).

4. Overwhelming Denial Management: A significant part of the job is fighting denied or underpaid claims. This requires skilled staff who understand the appeals process.

Proven Laboratory Excellence

Proven Laboratory Excellence

Having lab-specific expertise means they don’t just process claims, but also optimizes them.

They know the exact CPT, ICD-10, and modifiers for thousands of esoteric and routine tests, effecxtively minimizing denials for incorrect coding.
They understand the lab’s unique financial circulatory system and have the skills in the specialized procedures.
Proactive Compliance & Advanced Data Security<br />

Proactive Compliance & Advanced Data Security

They don’t just make billing practices efficient, but also legally sound and well-protected from breaches.
They actively protect labs from audits, fines, and allegations of fraud by understanding the strict rules governing who can order tests and what clinical information is required to justify them.
68% of large physician groups rely on external providers for billing and claims management
Operational Efficiency

Operational Efficiency

At its core, lab billing partners should aid the medical lab in performing high-quality tests and delivering accurate results.

They align seamlessly with your workflow and can integrate their systems to create a smooth data flow.
They handle all follow-up and troubleshooting, so your staff doesn’t have to spend hours on the phone with the insurance companies.
A Track Record of Maximizing Reimbursements<br />

A Track Record of Maximizing Reimbursements

The fact that you gain more net revenue for your lab than your current in-house team is a testament to a good lab billing partner.
Claim denials? It’s a big “no” for them. They have skilled staff who navigate the claim appeals and challenge underpayments.
They have a good reputation among fellow labs due to their ability to recover revenue that a less specialized team would simply write off.
Additionally, here are some important questions to ask yourself:

Do they have actionable intelligence? This means they provide more than just basic reports, but also offer deep analytics on payer performance, test profitability, and denial trends.

Do they support lab growth? If you want to add complex tests, can the billing partner guide you on the reimbursement landscape, coding requirements, and potential pitfalls before the investment is made?

The right lab billing company acts as your strategic partner, not merely a vendor. This partnership will result in a higher collection rate, faster payments, and a lower accounts receivable (A/R) backlog.

By applying these standards, your medical lab is empowered to choose a partner dedicated to your financial resilience and commitment to patients.

Find your perfect lab billing fit with Synapse

Find your perfect lab billing fit with Synapse

A diagnostic lab turned to Synapse for help in increasing their average payments. After a year, this lab increased their average monthly collections by 60%.

That’s because Synapse billers have medical backgrounds and extensive training to thoroughly review and match claims to covered diagnoses. We send requests to the laboratory to get a covered diagnosis and respond to insurance requests. The result? A clean claim from the first pass.

Dr. P. N. shares their experience with Synapse and how we made a difference:

“Our office signed on with Synapse over three years ago and we couldn’t be happier with the results and great service we’ve received from them. Our revenues have increased sharply over that period and they have provided valuable assistance with credentialing, compliance and CMS quality activities. With the ever increasing burden of knowledge required to achieve the highest reimbursements, no practice can afford to be without the best practice management support and we definitely have found it in Synapse!”

Elevate your lab’s performance by booking a consultation with us. See what a Synapse partnership can do for you.

Sources:

Arnson, E. (2019, February 28). Practical Tips for Maintaining Control over the Revenue Cycle. HFMA.
https://www.hfma.org/finance-and-business-strategy/63414/

New Survey Reveals Burnout in Clinical Labs Impacts Patient Care, Staff Safety; Optimism that Automation, AI Will Help Tackle Challenges. (2024, July 29). Siemens-Healthineers.com.
https://www.siemens-healthineers.com/en-us/press-room/press-releases/harris-poll-clinical-labs

Probing Question: Is outsourcing of health care services bad? | Penn State University. (2017). Psu.edu.
https://www.psu.edu/news/research/story/probing-question-outsourcing-health-care-services-bad

You might be losing thousands of dollars. (2025, April 3). Mgma.com.
https://www.mgma.com/articles/you-might-be-losing-thousands-of-dollars-per-month-in-unclean-claims