Pathology and Laboratory Billing Basics

Find out how pathology and laboratory billing differs from billing in a doctor's office, and if you need a special certification to become a laboratory biller...

Unlike physician, facility, or DME billing, laboratory and pathology billing is centered on a very specific set of CPT codes.

All the CPT codes used by a lab include services used to evaluate specimens obtained from a patient sample. In other words, labs run labs - and that's what they bill for. Big surprise, huh?

The lab runs the test for the doctor that ordered them. Once the tests are done, the lab gives the results to the doctor. The doctor then uses these to assist in any medical decision-making.

Lab samples are usually prepared and screened by qualified laboratory personnel, with a pathologist who assumes the risk of interpretation. This means that the majority of the people who actually work in a lab and run the tests are lab technicians who run lab samples.

The billing and accounting department of the lab is usually completely cut off from the lab itself. Sometimes there are entire labs that are devoted to only billing labs, rather than performing them!

Sometimes, though rarely, the pathologist reviewing the labs will need to engage with the patient, and may perform evaluation and management services. If this is the case then the lab will also bill for these E&M services.

Types of laboratory and pathology services

There are 2 main types of laboratory services: clinical and diagnostic.

Each of these contains different types of labs which are performed for different reasons and by different providers:

Laboratory worker. Image copyright National Institutes of Health
  1. Clinical Laboratory Services: These involve examination of materials from the human body to prevent, diagnose, or treat a disease or condition.

    These types of tests can be:

    • biological
    • microbiological
    • serological
    • chemical
    • immunohematological
    • hematological
    • biophysical
    • cytological
    • or pathological.

    These are lots of big words! Basically they all mean that the lab examines samples from a person in the most appropriate way possible to test for the disease, diagnosis, or condition that the doctor is looking for.

  2. Diagnostic Laboratory Services: These, on the other hand, are different to simple clinical tests.

    Whereas clinical tests rely on a pathologist and lab technician to run and interpret samples, diagnostic tests require a physician or other certified professional to perform the diagnostic test.

    These types of tests include surgical pathology, specific cytopathology, hematology, and blood banking services.

Types of laboratories

Laboratory Billing

Not only are there different types of laboratory services, there are also different types of laboratories themselves.

Chances are, even if you work for a primary care physician, you'll still be doing some minimal laboratory billing in the provider's office.

If your primary care physician's office has a specially certified lab, then you may bill for a good number of labs each and every day (as long as they're medically necessary). These types of labs can include tests like urinalysis, complete blood count, and mono spot tests.

There are a number of different types of labs, each of which must be certified to perform and bill for laboratory and pathology tests:

  • Independent Laboratory: This is a lab that is independent of a physician's office as well as a hospital or other facility.
  • Physician Office Laboratory: This is a type of laboratory that performs tests for a physician's office, within a physician's office.
  • Clinical Laboratory: These types of laboratories use different types of biological tests to determine the nature of specimens obtained from patients. They are usually referred to as CLIA labs.
  • Referring Laboratory: A lab that receives a specimen for a test but then refers the testing of that specimen to a different lab for examination.
  • Reference Laboratory: This is the lab that receives the sample from the referring laboratory and actually performs the test.
  • Billing Laboratory: The lab that bills for lab tests and sends claims to insurance companies.
  • Medicare-Approved Laboratory: This lab meets all the criteria as a Medicare provider, including CLIA certification.

Some labs may meet more than one (or all) of these criteria, but they all must at least meet one.

Becoming a pathology and laboratory billing specialist

How to become a laboratory billing specialist

The question remains: do you have to have a special certification to be a lab biller?

The answer is no.

Just like all other fields of billing and coding, a certification, although a plus, isn't usually a required element of employment.

More importantly there aren't any specialized certifications in laboratory billing anyway!

That being said, in order to become any kind of biller or coder you have to be detail-oriented, learn basic medical terminology and human anatomy, not to mention have good knowledge of CPT, ICD-9, and HCPCS codes.

Knowledge of laboratory billing comes from a great understanding of lab codes and their uses, as well as the diagnostic services performed by pathologists and physicians.

Similar to any other type of billing, once you begin lab billing and coding there'll be a steep learning curve. But your coworkers, doctors, and peers will help you get through it, and you'll turn out on top.

To be a good lab biller and coder you have to learn your way up the ladder until you come to a firm understanding of how labs are paid and why, and what you as the biller can do about it.

If you found this page useful, please click "Like"! Thanks.