Pathology/Lab Coding Alert

Lab tests among the most frequent Part B errors last year, CMS says.

If you’re not fond about the idea of an auditor visiting your lab and looking through your claims, you’re not alone. But even as insurer audits increase and find additional issues during their reviews, labs have more power than ever to ensure their claims are accurate and error-free.

How? One of the best ways to prepare for government audits is to review the most common errors among Part B claims and then perform self-audits to check whether you’re making any of those mistakes.

Background: On December 7, 2023, the Centers for Medicare & Medicaid Services (CMS) released its 2023 Comprehensive Error Rate Testing (CERT) report. In the document, the government reported that $391 billion in improper payments were paid through the Medicare program for dates of service between July 1, 2021, and June 30, 2022.

For Part B, the three types of service with the most errors were evaluation and management (E/M), lab tests, and minor procedures.

To ensure you aren’t falling victim to any of the common issues, check out the errors that CMS found, along with self-audit tips to help you avoid these problems.

Check the Most Common Lab Issues

Lab tests were responsible for over $1 billion in Part B improper payments last year, with a startling 23% error rate. When broken out as separate services, these lab tests logged higher error rates than average:

The majority of the errors occurred due to insufficient documentation, which can include a missing intent to order from the provider, missing documentation to support medical necessity, a missing risk assessment for urine drug screens, or missing lab tests results in the record.

Self-audits can help you catch these types of errors and many more, if you know how to conduct them and stay on schedule with your internal reviews.

Here’s how.

First, Know What a Self-Audit Is

When you perform a self-audit, you’re comparing your providers’ billing records, claims, orders, and medical charts to verify expected treatment outcomes and medical necessity of services. In addition, you’ll look for appropriate documentation to support fees and reasonable charges for services your pathologists rendered. The plus here is that you’ll discover any problems before an outside auditor does.

Plan to perform an internal audit at least once per year and more often if you uncover low compliance rates. Depending on the size of your lab or auditing staff, every six months or quarterly could be preferable.

Determine Whether to Perform Prospective or Retrospective Audits

CERT auditors review claims that were already paid by the Medicare program, but your practice may choose to perform prospective self-audits instead. This means you’re reviewing whether the chart is accurately billed and coded before you actually submit the claims.

Retrospective audits, however, occur after the claim has been processed. If you find problems during a retrospective — also known as a post-bill — audit, you’ll have to submit corrected claims to the payer to reflect any issues you discover.