Why Every Hour Matters in Lab Billing

For clinical laboratories, time is money—literally. When claims take 72 hours or longer to reach the payer, the revenue cycle slows, aging AR builds, and downstream denials increase. In an environment where margins are shrinking and payers are tightening scrutiny, slow claims submission is a silent killer of cash flow.

In a recent Dark Report survey, the average pathology and toxicology lab reported a 2.8- to 3.6-day turnaround time from test result to claim submission. This delay, largely due to outdated processes and manual workflows, creates a bottleneck that leads to:

• Delayed reimbursements
• Denials due to late filings
• Outdated patient or insurance data
• More human error

What if your lab could consistently submit clean, verified claims within 12 hours of test completion?

The good news: it’s possible—and more labs are doing it every month using RCM automation and outsourced services.

What is Claims Turnaround Time (TAT) in Lab RCM?

Claims Turnaround Time refers to the window between the time a lab completes a service and the time the claim is electronically submitted and accepted by the payer. It would stand to reason that every 24-hour reduction in turnaround correlates to an improvement in monthly collections. 

Why is fast submission so crucial?

• Faster submission → Faster payment
• Cleaner claims → Fewer denials
• Shorter AR cycles → Healthier cash position
• Real-time corrections → Fewer rejections or resubmits

The Cost of Delay: How Manual Workflows Hurt Labs

Common Workflow Bottlenecks:

• Manual CPT code assignment
• Human review of modifiers
• Batch-based clearinghouse file generation
• Backlogs in claim review queues
• Reconciliation gaps between LIS and billing platform

📍 Case Example – A south Florida molecular lab
Before automation:

• Batch claims submitted twice per week
• Average time from result to payer = 78 hours
• Rejection rate: 19%
  After LIS + RCM automation:
• Auto claims posted daily
• Submission time = 11.4 hours
• Rejection rate: 6.3%
• Net revenue gain: $362,000/year

Step-by-Step: How Labs Use Automation to Speed Claims

✅ 1. LIS + RCM Integration

Linking your Lab Information System (LIS) directly with a billing platform (like ADSRCM or to the MedicsPremier platform from ADS)  

• Automatic population of CPT codes based on test panels
• Linking test data with patient insurance details
• Error detection before claim creation

Labs using integrated LIS/RCM systems reported a 65% faster claim creation cycle compared to those reliant on batch exports.

✅ 2. Real-Time Code and Modifier Validation

Rather than depending on a human biller to catch code mismatches, AI-powered billing platforms scan claims for:

• Invalid CPT/ICD combinations
• Inappropriate modifiers (91, 59, 90, QW)
• Test-specific edit rules from Medicare MACs or commercial payers

📍 Northeast Pathology Lab used ADSRCM to implement real-time code validation. Modifier 91 misuse dropped by 82%—cutting 1,400 denials per month.

✅ 3. Automated Clearinghouse Submission (No More Batching)

Manually batching claims every few days is outdated. Automation enables:

• Claims to be scrubbed and queued continuously
• Auto-transmission to clearinghouses 
• 837 files generated and error-checked in real-time

Result: Claims hit the payer in hours—not days.

4. Dynamic Payer Routing + Loop Compliance

Labs working across multiple states or with reference labs often struggle with:

• Incorrect payer ID assignment
• Missing or incorrect CLIA designations
• ANSI 837 file loop errors

📍 A Texas-based toxicology lab configured  ADSRCM to dynamically assign loop 2310B fields and auto-assign payer routing per state. Claim rejection due to “missing lab ID” dropped 96% in the first month.

✅ 5. Pre-Submission Denial Prevention (Predictive Modeling)

Instead of reacting to rejections, smart systems use historical data to flag and stop problem claims before they’re submitted.

Common triggers:

• CARC 151: Test billed too frequently
• CARC 234: Modifier mismatch
• CARC 197: Missing prior authorization

 Obviously, predictive/proactive denial flags would result in a reduction in denial volume.

Manual vs Automated Claims Workflow

Case Study: a pathology lab in Los Angeles, CA

Profile: Dermatopathology group serving 15+ ambulatory centers
Volume: 20,000+ monthly claims
Challenges:

• Long claim creation process (3.5 days average)
• Errors in test panel coding (80053)
• Manual modifier review

Solution:

• LIS connected directly to RCM system
• Automated CPT validation rules built in
• Claims scrubbed and submitted daily

Results:

• Denial rate dropped from 13.8% to 7.2%
• Turnaround time reduced to 10.5 hours
• Annual revenue impact: $427,000+

What to Automate First (if You’re New to RCM Automation)

If you’re not ready for full-blown automation, start with:

1. Claim creation – Eliminate redundant data entry from LIS
2. Code validation – Use payer edit rules to avoid denials
3. Auto-modifier logic – Let software assign modifiers based on frequency
4. Pre-submission denial flagging – Catch high-risk claims  before they’re submitted

Why Local Labs Benefit Most from Automation

Recommended Tools & Platforms ADSRCM for outsourced billing/staffing services:  

• Real-time submission
• Loop & CLIA automation
• Built-in CARC flagging
• Modifier rules by payer

• LIS-native workflows
• Denial prediction engine
• Smart test panel mapping

How Labs Measure Automation ROI

Labs that automate claims typically see improvements like:

• ⏳ Turnaround Reduction 
• 💰 Cash Flow Gains 
• 📉 Fewer Denials 
• 📊 Cleaner Claims 

What To Do Next (30-Day Roadmap)

Week 1:
☐ Analyze your current TAT and denial trends
☐ Identify 3–5 frequent CPT/modifier errors

Week 2–3:
☐ Connect LIS to RCM system or automate claim creation
☐ Set up basic clearinghouse automation

Week 4:
☐ Turn on denial prediction rules
☐ Begin daily claim submissions

Get Your Free ADSRCM Lab Billing Automation Review

We’ll analyze:

• Current claim turnaround time
• Payer-specific error trends
• Code and modifier logic
• Automation-ready opportunities

Most ADSRCM laboratory clients  see gains in 30–90 days.

MedicsPremier for Laboratories is available from ADS if in-laboratory automation is preferred. It’s the same platform as used by ADSRCM.

Disclaimer: information presented about codes and initiatives is done so according to our best understanding of them. Please visit www.cms.gov if clarifications or more details are needed.