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Think it hard to get a good laboratory billing company?  Even more so if you’re a toxicology lab.  We recently saw an enormous laboratory doing hundreds of thousands of requisitions per year that had their billing business turned down by a number of laboratory billing companies.  Mind you, this is several million dollars of billing business per year for the billing company which would be a very large client for even national firms and large well-known billing companies wouldn’t even look at it.  The majority, but by no means all of the business, was toxicology, with tens of millions of dollars of blood and molecular diagnostics part of the test mix.


Most of recall the period of time from around 2008 until around 2015 when there was a gold rush in toxicology billing.  This period brought a lot of unsavory people into the industry who were just looking to get rich quickly and bilk the system.  We know, we had some of these clients.  In fact, one of the first and largest toxicology billing companies that ended up getting into legal trouble was our first toxicology client back in 2007-2008.  Fortunately, it was clear these were not all ethical people and we had parted ways before the provider stuff hit the fan.  But those kinds of laboratories gave the industry in general and toxicology specifically a bit of a bad rep.

Since 2015 the easy money has been pretty much all gone.  One would think that this would mean that things have changed.  But the business still remains under enormous scrutiny by the insurance companies, who are still cracking down hard and don’t want to pay. 


Our impression of why most large laboratory billing companies do not want to touch this sector is that it is too much work.  The average reimbursement is down dramatically for toxicology billing and the work has gotten harder.  Blood laboratory billing is stable and not changing much (relatively – PAMA notwithstanding).  Genetics is still big money per sample which means big profits for billing lab RCM companies.  Toxicology is now low reimbursement and very high work with a lot of samples still going unpaid, which means the profitability for the billing company is not great.


Your laboratory needs people who are willing and able to perform well in revenue cycle management.  Putting in more effort to solve (or at least improve) the problems associated with tox and often billing out of network has a large positive financial impact on your laboratory.  But how to find a laboratory billing company that is willing and able?

ROI is everything and scale matters.  You need a billing manager who is going to do project management to chase down the problems and implement and track solutions.  Someone that will run the analysis to diagnose.  This requires some scale so at small volume some laboratories may either have to pay a high price or hire a billing manager internally that can do this until they can outsource it to a good company.  A simple math example shows how ROI can be achieved for both lab and billing company.  If you are paying 5% for your billing and the billing company adds 20% to its staff, you are both going to be better off.  A 20% increase in staff doesn’t generate a 1.0 correlation to results but might increase your collections by say 10%. That 20% cost increase results in a 1% rate increase, which still nets you 9% more net revenue.  You are better off financially, the billing company has happier clients and better retention, and everyone wins (except the payers).  The key is that the billing company needs to be able to demonstrate better performance quantitatively with data.

Ask for some data to compare to your current results to see how the laboratory billing company will perform.  This will serve two purposes – 1) you will be able to quantify any potential benefit to them taking over your billing and 2) you can easily weed out the pretenders who don’t know much about your business because they won’t have data to share for toxicology specifically.

Contact us to benchmark your results.

Ibex Billing is the leading analytics-based laboratory revenue cycle management (RCM) company.  We only do laboratory and pathology billing. Ibex‘s management team has hundreds of years of revenue cycle management experience. Lab billing is different than physician billing and we only do laboratory revenue cycle management. Contact us to get a sample of how our analytics will improve your financial results.

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