Diagnostic Billing and Coding Denials Frequently Stem from Three Test Types
Genetic, toxicology, and even routine panels can create pitfalls for clinical laboratories.
Clinical laboratory professionals involved with diagnostic billing and coding should double check claims submitted for routine, toxicology, and genetic testing. Those three testing types are inviting private payer scrutiny and possibly worse.
“Between audits, denials, and government crackdowns, the risks are higher than ever,” said Jamel Giuma, founder and CEO at JTG Consulting Group, a laboratory IT consulting company.
Giuma spoke at a recent webinar hosted by G2 Intelligence, a partner brand to Dark Daily. The event was titled, “Avoid Payer Trouble in Revenue Cycle Management: Best Practices to Stay Ahead of the Most Scrutinized Clinical Lab Services” and is available free on demand.
Routine Panels Can Create Headaches for Lab Billing
Giuma explained that when it comes to diagnostic billing and coding, three testing areas often get oversized attention from commercial payers and the Medicare program:
- Routine panels. Lab professionals should beware of overordering these types of tests, such as lipid or metabolic panels. High volumes have attracted payer audits, Giuma said. The US Department of Health and Human Services’ Office of Inspector General (OIG) has previously noted investigations where lipid panels were billed with direct low-density lipoprotein cholesterol tests to the same patient on the same day, which the OIG said was medically unnecessary.
- Toxicology tests. Some drug testing panels to detect pain management or substance abuse have received scrutiny in 2025 for their ordering frequency.
- Genetic testing. Expensive DNA and molecular assays may get an extra look from insurers, particularly services that get tagged with CPT code 81479. The code is a vague catch-all for unlisted molecular pathology procedures. The Dark Report has noted that using 81479 is essentially begging a payer to review the claim. Giuma added that this can be a tricky area for labs developing investigational tests.
Giuma said based on data he has reviewed, payers initially deny one in five clinical lab billing claims. “That is staggering,” he noted.
Jamel Giuma noted that one of every five clinical lab billing claims gets denied by payers, making the submission process a thorny one for laboratories. (Photo credit: JTG Consulting)
Investigators Eye Laboratory Test Fraud
Meanwhile, the OIG, auditors from the Centers for Medicare and Medicaid Services, and investigators from the US Department of Justice also scrutinize diagnostic billing and coding patterns.
“They’re looking for repeat offenders or systematic over-coding,” Giuma said.
Earlier this year, as part of the largest healthcare fraud bust in US history, dozens of clinical laboratories were charged with Medicare fraud for alleged telemedicine and genetic testing schemes where deceptive telemarketing campaigns targeted Medicare beneficiaries.
Even the most scrupulous labs should heed the indictments from the fraud investigations. All laboratories can run into trouble if they don’t stay on top of compliance efforts to detect fraud risks.
Documentation of billing code justifications and claims submissions are a solid first line of defense, Giuma said.
Also, labs should closely monitor prior authorization processes and understand associated rules from payers, he added.
Giuma’s advice emphasizes that diagnostic billing and coding is an area that clinical labs can unnecessarily get snarled in if providers are not careful about how and when they order tests.
—Scott Wallask
