Running a lab isn’t just about accurate diagnostics—it’s about getting paid correctly for the work you do. And if you’ve ever thought laboratory billing was confusing, you’re not wrong. One missing code or tiny documentation gap can delay reimbursements for months. Or worse—lead to denials you never recover.
After working alongside lab managers and billing teams for years at Akshar MediSolutions, we’ve seen the same issues repeat: great clinical work undone by poor billing workflows. That’s why understanding the 5 essential steps in the laboratory billing process isn’t optional—it’s survival training for your revenue cycle.
5 Steps in the Laboratory Billing Process
Step 1: Accurate Test Order Intake & Patient Data Collection
The billing process doesn’t start in the billing office—it starts at specimen intake.
And this step is where most labs silently lose money.
Before any test runs, you must capture:
Patient demographics (name, DOB, insurance ID)
Ordering physician details
Medical necessity justification (ICD-10 diagnosis codes)
Signed physician order
Sounds basic. But busy front desks and rushed specimens create errors. A missing diagnosis code? Denial. A typo in the insurance ID? Rejection.
Think of intake as the foundation of a building. Get it crooked, and everything above starts cracking.
Step 2: Medical Coding & Compliance Review
Here’s where expertise really matters.
Each test must be translated into precise billing language using:
CPT codes for the procedures
ICD-10 codes for medical necessity
Modifiers, if applicable
But you can’t just plug codes into software and hope for the best.
You must ensure:
Codes match the physician’s order
Diagnoses support payer coverage policies
Bundled/unbundled rules aren’t violated
CMS and payer guidelines are followed
And here’s the trap:
Most denials happen not because tests weren’t valid, but because the documentation didn’t justify them.
At Akshar MediSolutions, our certified coders review each order as if an auditor were standing behind them. Because eventually… one will be.
This kind of compliance-first mindset is what separates average labs from those using professional Laboratory Billing Services in USA that accelerate reimbursement and reduce risk simultaneously.
Step 3: Claim Creation & Clean Submission
Now comes the moment of truth: sending the claim.
You’ll submit through electronic clearinghouses directly to:
Medicare/Medicaid
Private insurance carriers
Third-party administrators
A clean claim means:
All demographic fields validated
Correct CPT/ICD pairings
Proper NPI and taxonomy match
No mismatched provider details
A claim rejected at the clearinghouse never even reaches the payer. It’s like a package returned before it leaves the warehouse.
And that costs time.
Industry truth:Every rejected claim delays payment by an average of 7–21 days minimum. Multiply that by hundreds of tests a week, and suddenly your cash flow looks pretty thin.
Professional billing teams don’t wait for rejections—they prevent them.
As a Medical Billing Company in NJ, we run automated scrubbing tools plus manual QA checks. Because software catches patterns. Humans catch weird edge-cases… and there are always weird edge-cases.
Step 4: Payment Posting & Denial Management
Here’s where many labs quietly give up money.
Payments arrive. EOBs post. But denials?
They pile up.
Without aggressive denial follow-up, labs lose 5–12% of annual revenue to underpayments and write-offs. That’s not a guess—that’s what we see repeatedly when onboarding new clients.
Effective denial management includes:
Classifying denial reasons (eligibility, coding, medical necessity, authorization)
Correcting and resubmitting claims promptly
Appealing unjust denials with documentation support
Tracking payer behavior patterns
Because patterns emerge.
One payer consistently denies Vitamin D tests without specific ICD codes. Another flags automated chemistry panels. You adapt—or lose revenue.
And yes, this part is tedious. Appeals letters. Phone calls. Waiting on hold. But persistence pays.
Step 5: Accounts Receivable (AR) Follow-Up & Reporting
This is the step most labs undervalue—and it’s the difference between getting paid and eventually maybe collecting.
Good AR management means:
Weekly follow-ups on unpaid claims aged 30+ days
Payer escalations for underpayments
Patient billing where insurance balances remain
Monthly performance reporting
Your key metrics should feel familiar:
Days in AR
Clean claim rate
Denial percentage
Net collection ratio
Example from the field:
A reference lab in New Jersey reduced their days in AR from 68 to 34 after structured follow-ups were introduced. Cash flow doubled within a quarter. Same test volume. Same staff. Better billing discipline.
And yes—it felt like magic. But it was just process maturity.
Why These 5 Laboratory Billing Process Steps Matter
Because labs operate on thin margins.
Equipment leasing. Reagents. Payroll. Compliance costs.
Yet reimbursements often don’t arrive for 30–60 days—or longer if billing’s sloppy.
A streamlined laboratory billing process ensures:
Faster payments
Lower denial rates
Predictable cash flow
Reduced compliance risk
But here’s the honest takeaway:
Billing isn’t a side task. It’s a specialty.
Most in-house teams are overwhelmed juggling front-desk duties, specimen tracking, and claims work. That’s why labs increasingly rely on dedicated Laboratory Billing Services in USA, especially partners who understand state-specific payer rules—like us at Akshar MediSolutions, serving providers across New Jersey and beyond.
Frequently Asked Questions
Laboratory billing involves multiple steps—coding, documentation, payer rules, medical necessity checks, and strict compliance requirements. One small error in patient data or CPT/ICD pairing can trigger denials. That’s why many labs partner with experts like Akshar MediSolutions to streamline billing and keep cash flow smooth.
Start by tightening your front-end process: verify insurance, capture accurate demographics, and include clear diagnosis codes. And make sure your coding team stays updated with CMS and commercial payer policies. When labs use professional Laboratory Billing Services in USA, denial rates usually drop because every claim goes through both automated scrubbing and manual reviews.
Honestly? Accurate patient intake. If the order, demographics, or medical necessity details are off, even perfect coding can’t save the claim. Think of intake as the foundation—get it right, and everything else stacks neatly.
Most clean claims get reimbursed in 14–30 days, depending on the payer. If there are errors or denials, it can stretch to 45–90 days. Working with a specialized Medical Billing Company in NJ like Akshar MediSolutions helps labs accelerate the payment cycle because claims are submitted cleanly the first time.
Absolutely—when it’s done right. Outsourcing gives you access to certified coders, denial experts, AR specialists, and compliance monitoring. Labs typically see faster payments, fewer denials, and more predictable revenue. Teams like Akshar MediSolutions handle the heavy lifting so you can focus on running your lab, not chasing insurance companies.