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5 Recurring Reasons for Denials in Laboratory Claims

10-30% of Laboratory Claims are denied the first time after submission. This alarming factor leads to significant loss in revenue.

Understanding what causes these denials and implementing preventive strategies is the only possible solution to correct this issue.

AltuMED Medical Billing helps its clients’ overcome denials and achieve 97% FTPR. In our 15+ years of Medical Billing experience, we registered some recurring reasons for denials that occur specifically to Laboratory Claims.

10% to 30% of lab claims are either denied or rejected the first time after submission.

1. Missing/wrong CLIA number

Independent laboratories performing tests must submit the CLIA number on the claim, following are the CLIA types by certification.

  • Certificate of Waiver: This certificate is issued to a laboratory to perform only waived tests.
  • Certificate for Provider-Performed Microscopy Procedures (PPMP): This certificate is issued to a laboratory in which a physician, midlevel practitioner or dentist performs no tests other than the microscopy procedures. This certificate permits the laboratory to also perform waived tests.
  • Certificate of Registration: This certificate is issued to a laboratory that enables the entity to conduct moderate or high complexity laboratory testing or both until the entity is determined by survey to be in compliance with the CLIA regulations.
  • Certificate of Compliance: This certificate is issued to a laboratory after an inspection that finds the laboratory to be in compliance with all applicable CLIA requirements.
  • Certificate of Accreditation: This is a certificate that is issued to a laboratory on the basis of the laboratory's accreditation by an accreditation organization approved by CMS.

2. CO-50, CO-57, CO-151, N-115 LCD/NCD Denials

CO-50, CO-57, CO-151, N-115 - Medical Necessity: An ICD-9 code(s) was submitted that is not covered under an LCD/NCD

Check the LCD or NCD prior to service to determine the patient’s eligibility for services. If the service being performed is not covered under the LCD guidelines, we encourage you to provide your patients with an ABN prior to performing these tests.

3. 109/N104/190/N106 N538 Non-Covered by this Contractor

109/N104/190/N106 N538 - Always check patient eligibility to ensure claims are submitted to the correct payer before submitting claims.

Refer to the Eligibility section

  • The patient may be enrolled in a Medicare Advantage (MA) plan.
  • Also, refer to the Inpatient section to determine if the service was provided while the patient was registered in an inpatient hospital or in a skilled nursing facility (SNF) stay.

4. M127 Medical Notes Missing

M127 Medical Notes Missing – Payer is requesting the medical notes to process the claim. Documentation Requirements, the following records, need to be submitted to the payer:

  • Progress notes or office notes
  • Physician order or intent to order
  • Laboratory results

5. CO 11 – Diagnosis Inconsistent with Procedure

CO 11 – Diagnosis Inconsistent with Procedure Denial code CO 11 occurs because of a simple mistake in coding, and the wrong diagnosis code was used.

That’s the first thing to check if you get this type of denial. Double-check the ICD-10 billed according to services provided to the patient and covered in LCD/NCD policy.

Understanding these reasons for denials can help devise preventive measures to improve lab’s medical billing process.

AltuMED Medical Billing pushes its clients to conduct thorougah Medical Billing Performance Analysis that helps identify such latent reasons behind faulty medical billing process. We then provide our clients with real time, actionable reports that yield efficiency in their processes within first 3 months, follow the link to get started with Medical Billing performance analysis for your lab.

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