Billing Laboratory Tests Without LCDs: How Labs Can Stay Profitable Despite Coverage Gaps

Clinical laboratories increasingly find themselves operating in gray areas where Local Coverage Determinations do not exist. This is especially common for molecular, genetic, and emerging diagnostic tests where clinical adoption moves faster than payer policy.

For revenue cycle teams, no LCD scenarios are often viewed as a nonstarter. Government payers rarely reimburse without clear coverage guidance, documentation requirements are higher, and denial rates can be significant.

Yet many labs continue to run these tests profitably, even when collecting only 50 percent of billed insurance claims. The difference comes down to pricing discipline, documentation rigor, and having billing systems designed specifically for no LCD workflows.

The Reality of No LCD Testing

It is true that Medicare and other government carriers generally do not pay for tests without an LCD unless medical necessity is exceptionally well documented. Commercial payers may reimburse inconsistently, often requiring appeals or supplemental documentation.

From an RCM perspective, this creates friction:

• Higher denial rates
• Increased documentation requirements
• More manual follow up
• Greater operational complexity

However, when tests are priced appropriately and billing workflows are engineered for partial reimbursement scenarios, no LCD testing can still contribute meaningful margin.

The key is controlling risk rather than avoiding it.

How ADSRCM Supports No LCD Billing at Scale

ADSRCM specializes in automated, proof driven billing designed specifically to support laboratories performing tests without Local Coverage Determinations. Instead of treating no LCD claims as routine submissions, ADSRCM applies targeted controls that reduce avoidable denials and protect downstream collections.

AI Driven Pre Submission Claim Scrubbing

The ADSRCM AI Rules Engine functions as a denial prevention layer before claims are ever submitted.

For tests without LCDs, the system automatically:

• Flags the claim for elevated review
• Applies Level 2 claim edits
• Verifies National Coverage Determinations
• Checks Correct Coding Initiative rules
• Confirms required modifiers

This ensures claims are not submitted blindly and reduces preventable denials tied to technical billing errors.

Medical Necessity Checklists for Ordering Providers

When no LCD exists, documentation becomes the foundation of reimbursement.

ADSRCM provides standardized medical necessity checklists for ordering providers that focus on capturing clinical intent and diagnostic nexus within the medical record. These checklists help ensure physicians document the rationale payers expect to see when evaluating uncovered services.

Labs using these tools routinely see a 20 to 30 percent reduction in documentation related denials, even in high risk test categories.

Proactive Denial Analytics and Root Cause Tracking

No LCD denials require a different response than routine claim rejections.

ADSRCM embeds real time denial analytics directly into its dashboards, allowing billing teams to:

• Identify denial patterns tied to specific tests or payers
• Understand documentation gaps driving rejections
• Resubmit with corrected clinical support rather than repeating the same claim

This shifts denial management from reactive resubmission to targeted correction.

Automated Eligibility and ABN Alerts

Protecting patient collections is critical when payer reimbursement is uncertain.

ADSRCM systems such as MedicsPremier perform automated eligibility checks multiple times prior to service. When a test is likely to require an Advance Beneficiary Notice, alerts are triggered so labs can secure proper patient acknowledgment before testing.

This preserves the lab’s ability to collect directly from the patient when insurance coverage is denied.

Scalable Specialist Billing Support

No LCD testing often involves complex molecular and pathology claims that general billing teams are not equipped to manage.

ADSRCM provides access to more than 300 billing specialists trained on current payer specific rules, including 2026 updates. These teams are experienced in handling documentation intensive claims and appeals associated with tests lacking formal coverage policies.

This allows labs to scale operations without building costly internal expertise.

The Bottom Line for Labs Considering No LCD Testing

Billing without LCDs is undeniably more complex. It increases operational workload and requires tighter controls across pricing, documentation, and collections.

However, for laboratories that approach it strategically, no LCD testing does not have to be unprofitable.

With the right billing infrastructure, clear provider documentation standards, and proactive denial management, labs can:

• Reduce avoidable denials
• Protect patient collections
• Maintain margin even with partial reimbursement
• Confidently operate in emerging test categories

ADSRCM was built to support exactly this type of complexity.

If your lab is navigating no LCD testing and wants to understand whether your current billing workflows are creating unnecessary risk or lost revenue, ADSRCM can help you evaluate and optimize your approach.