October 2025 Lab Developed Tests Have Been Set Free. Now You Need a Lab RCM Plan

Lab Developed Tests Have Been Set Free. Now You Need a Lab RCM Plan

Oversight in the lab industry has just taken a major blow from the FDA – and every laboratory needs to rethink its revenue cycle strategy.

Earlier this year, the FDA rescinded its 2024 rule that would have treated laboratory developed tests (LDTs) as in vitro diagnostics (IVDs) and medical devices. The final rule, published in May 2024, sought to expand the FDA’s authority over LDTs. But following a federal court decision in March 2025 that vacated the rule, the agency officially reverted to the pre-2024 framework in September 2025.

In short: LDTs developed and used within a single laboratory are once again governed primarily under CLIA and CMS oversight, not full FDA medical device regulation.

That reversal – while creating short-term uncertainty – also opens new doors for innovation and growth.

A New Era for Laboratory Revenue Cycle Management

This back and forth has created disruption in laboratory revenue cycle management (lab RCM), but it’s also created a new strategic opportunity. Deregulation opens the door for innovation and new partnerships – healthcare leadership now has the opportunity to bring their communities better-tailored and more forward-thinking solutions. 

At the same time, the reimbursement and lab billing question is always at play. Every new or modified test still needs a sustainable billing pathway, and payers are likely to remain cautious about coverage and clinical validity, even without the FDA rule in place. Now is the time for lab leaders to reassess their offerings from a revenue cycle perspective:

  • Evaluate your lab billing solutions, from charge capture and claim submission to denial management and appeals.
  • Strengthen your accounts receivable management workflows to reflect the evolving test mix.
  • Update compliance protocols and documentation standards to remain audit-ready.

The Staffing Challenge: Training for Complex Code Sets

One of the biggest near-term challenges in lab RCM will be staffing. Pathology and laboratory billing teams must be fluent in CPT and HCPCS code sets, especially molecular pathology and genetic testing codes that are frequently audited.

Billers must understand when tests, equipment, and even specimen transport services are billable, and how those codes interact across payers. That level of precision requires both training and data-driven oversight.

Modern laboratories are now pairing internal expertise with external vendors that specialize in laboratory revenue cycle management to fill these gaps quickly.

Navigating Uncertainty with the Right Lab Billing Solutions

Revenue cycle departments will need a solid and granular understanding of the historical impact of different lab products. This regulatory reversal doesn’t remove payer scrutiny – it shifts it. Payers are expected to step up their own review of laboratory claims, particularly LDTs with limited published validation data.

To stay ahead, successful labs are:

  • Automating pathology billing and denial workflows using specialized lab billing software
  • Auditing historical performance data to benchmark reimbursement by test type
  • Partnering with lab RCM experts to streamline charge entry, payment posting, and appeals

These actions help laboratories maintain financial stability while exploring new testing opportunities.

Turning Change Into Competitive Advantage

Any policy change at this level can feel disruptive. But in our experience, it’s also a chance to modernize.

At 3Gen Consulting, we’ve seen laboratories turn regulatory uncertainty into operational clarity, by synthesizing both internal knowledge and external RCM expertise from vendors. This synergy allows leaders to not only survive but thrive in times of change by innovating confidently while keeping reimbursement predictable.

If you’d like to learn more about how your lab can strengthen its laboratory revenue cycle management framework in this new regulatory era, feel free to contact me here or connect with one of our experienced team members.

 

Hemant Apte, Chief Executive Officer in

Hemant Apte, Founder & Chief Executive Officer of 3Gen Consulting, is a seasoned executive leader with deep domain expertise in US healthcare management practices. He founded 3Gen Consulting in 2006 and has been instrumental in offering thought leadership to his clients and providing services and solutions that are unique in the market.

How to Modernize Your Healthcare Revenue Cycle: 3Gen Consulting’s Guide to Better Results

Healthcare organizations face constant pressure: rising medical billing denials, delayed reimbursements, evolving regulations, and overstretched staff. Outdated workflows and manual processes quietly erode revenue, create compliance risk, and add stress to your team.

For provider groups across the USA, every delayed claim or denied payment isn’t just lost revenue – it’s added operational pressure. At 3Gen Consulting, we understand these challenges. Modernizing your medical billing services, medical coding, and revenue cycle management (RCM) isn’t just a buzzword – it’s a pathway to measurable improvements in efficiency, compliance, and financial performance.

Here’s how healthcare organizations can transform their revenue cycle for better results.

Leverage Data-Driven Insights to Prevent Revenue Loss

Decisions based on assumptions or “we’ve always done it this way” thinking can quietly erode revenue. 3Gen Consulting, a leading medical billing company, helps organizations leverage analytics in revenue cycle management to spot inefficiencies, reduce denials, and improve medical billing accounts receivable.

Our data-driven approach includes:

  • Analyzing claims, accounts receivable, and denial trends
  • Identifying gaps in medical coding and clinical documentation workflows
  • Highlighting high-risk areas like underreported services or incorrect modifiers

For more on leveraging data to prevent costly guesswork, see our blog: Data-Driven Healthcare Revenue Cycle Management: Why Guesswork Costs You Money.

Proactive Coding Audits: Stop Denials Before They Happen

Coding errors are one of the leading causes of denials in medical billing, delayed payments, and compliance headaches. Missing documentation, incorrect modifiers, and underreported services can quietly drain revenue and trigger audits.

3Gen’s coding audits help organizations catch these issues early. Our approach:

  • Focuses audits on high-risk areas
  • Identifies underreported services and documentation gaps
  • Implements automated tools to streamline analysis and reduce manual errors

By addressing vulnerabilities before claims submission, your medical billing and coding company can minimize rework, maintain compliance, and protect revenue.

Dive deeper into auditing best practices here: Medical Coding Audits 101: How Physicians Can Stay Ahead of the Curve.

Streamline Revenue Cycle Processes with Automation

Manual workflows increase the risk of errors and slow down revenue cycle management services. AI-powered automation can transform your RCM processes. 3Gen’s suite of platforms – including RevGen-i, CodeGen-i and RiskGen-i – streamlines claims processing, coding and risk adjustment with precision.

By integrating automation, your team can:

  • Accelerate claim submissions and payment posting
  • Validate medical coding and documentation in real time
  • Reduce medical billing denials and rework
  • Track trends and generate actionable insights

Modern RCM isn’t just faster – it’s smarter, freeing staff to focus on strategic initiatives rather than repetitive tasks.

Explore our CEO’s insights on AI in RCM: AI in Healthcare Revenue Cycle: The Big Opportunity in Medical Billing Accounts Receivable.

Invest in Staff Training and Development

Even the most advanced AI tools and audit programs are only as effective as the people using them. 

Continuous staff education ensures your team stays current on:

  • Evolving medical coding in USA guidelines and payer rules
  • Clinical documentation best practices
  • Workflow optimization and automation tools

3Gen’s provider education programs upskill coders and billers to think like auditors, enabling them to prevent errors before claims are submitted. This targeted education improves compliance, reduces medical billing denials, optimizes overall medical billing and coding efficiency, and equips teams for future AI integration and evolving payer requirements.

Learn more about the impact of targeted education here: Medical Coding Audits: The Silent Guardian Against $36 Billion in Annual Compliance Risks.

Why Partner with 3Gen Consulting

Modernizing your revenue cycle management is complex, especially with limited resources and evolving regulations. As a trusted medical billing company, 3Gen Consulting helps provider groups:

  • Maximize reimbursements with accurate medical coding services and medical billing services
  • Reduce denials in medical billing and rework across accounts receivable
  • Implement AI automation and workflow optimization for efficiency
  • Ensure compliance with CMS, payer rules, and industry standards

Our integrated approach combines medical billing and coding services, AI-driven platforms, and strategic insights to strengthen financial performance and operational excellence.

Modernize Today to Safeguard Revenue Tomorrow

Revenue cycle management is dynamic. Outdated workflows cost money, slow down staff, and increase compliance risks. By adopting data-driven insights, proactive coding audits, AI automation, and staff education, healthcare organizations can anticipate issues before they arise, reduce medical billing denials, streamline accounts receivable, and protect revenue.

With a trusted partner like 3Gen Consulting, healthcare organizations can turn challenges into opportunities, modernizing their revenue cycle to achieve long-term financial stability and operational excellence.

The ABCs of Laboratory Billing- How Pathology Groups Can Stop Losing Revenue

The ABCs of Laboratory Billing: How Pathology Groups Can Stop Losing Revenue

Running a pathology group or diagnostic laboratory is challenging enough – but revenue cycle challenges make it even harder. If your lab claims are being denied due to missing prior authorizations, incorrect CPT codes, or “medical necessity not met” errors, you’re not alone. 

Laboratory billing is one of the most complex areas of U.S. healthcare revenue cycle management (RCM). With payers tightening scrutiny on molecular and genetic testing, expanding prior authorization requirements, and rolling

September 2025 AI in Healthcare Revenue Cycle- The Big Opportunity in Medical Billing Accounts Receivable

AI in Healthcare Revenue Cycle: The Big Opportunity in Medical Billing Accounts Receivable

A recent HFMA study shows that hospital CFOs see revenue cycle – especially medical billing accounts receivable and denials management – as the biggest area of opportunity for AI [1]. This raises a key question: what do revenue cycle leaders need to do to prepare? Considering the complexity of AI technology, choosing a good partner with “pre-AI” revenue cycle expertise is

7 Best Practices for Medical Billing & Coding Services That Boost Revenue and Reduce Denials Image

7 Best Practices for Medical Billing & Coding Services in 2025 to Boost Revenue and Reduce Denials

If you’re a U.S. healthcare provider searching for medical billing and coding services, you’re not alone. Thousands of physician practices, hospitals, and labs nationwide are rethinking how they manage revenue cycle operations – because missed modifiers, lost claims, and endless denials are draining revenue.

Medical billing and coding errors cost U.S. providers billions annually — not just in unpaid claims, but also in compliance risk, staff burnout, and unhappy patients. The good news? With the right blend of technology, process, and expertise, most of these issues are preventable.

Here are 7 proven best practices that top-performing practices, physician groups, and hospitals use to keep cash flow healthy, denials low, and compliance airtight.

1. Keep Your Medical Coding Guidelines Updated — Always

Billing and coding are constantly evolving. Every year, CMS, AMA, and commercial payers release updates to CPT, ICD-10, and HCPCS codes. Missing even one update can lead to underpayment or denials — especially in specialties with frequent coding changes like radiology, pathology, and behavioral health.

Best Practice:

  • Maintain a living medical coding manual updated quarterly.
  • Subscribe to payer alerts and CMS updates.
  • Use AI-powered medical coding tools to flag outdated codes before claims go out.

Pro Tip: U.S. practices that review coding guidelines regularly see 15-20% fewer denials related to coding errors.

2. Verify Patient Eligibility Upfront

One of the most common reasons for denials? Ineligible patients. Nothing is more frustrating than delivering care and discovering after the fact that coverage lapsed or prior authorization was required.

Best Practice:

  • Run real-time eligibility checks for every patient.
  • Verify coverage for high-cost procedures and check prior authorization requirements.
  • Document payer reps’ names and reference numbers when you confirm coverage.

Industry Insight: According to MGMA, eligibility issues account for nearly 27% of claim denials [1]. Catching them upfront saves you rework and write-offs.

3. Get Documentation Right the First Time

Clean documentation is the backbone of clean claims. If the diagnosis doesn’t support the CPT, or if signatures and dates are missing, your claim will end up in a denial queue.

Best Practice:

  • Use a documentation checklist that includes DOS, provider signature, and diagnosis-procedure match.
  • Standardize templates in your EHR for consistency.
  • Perform spot-checks on high-value procedures before submission.

Even a single missed modifier (like 25, 59, or 26/TC) can mean a $500+ revenue loss. Getting it right upfront pays off – literally.

4. Track Key Medical Billing KPIs Like a Hawk

You can’t improve what you don’t measure. Practices that monitor their revenue cycle KPIs consistently outperform those that don’t – and can intervene early when something goes wrong.

Best Practice: Track at least these core metrics:

  • Clean Claim Rate (Target: 95%+)
  • First Pass Resolution Rate
  • Days in AR (Target: < 35 days for most specialties)
  • Denial Rate by Category

Use a medical billing dashboard to visualize trends and take action before denials snowball into revenue leakage.

5. Perform Regular Coding Audits

Medical coding audits aren’t just for compliance – they’re for revenue protection. Undercoding costs you money, while overcoding can trigger audits and penalties.

Best Practice:

  • Conduct quarterly internal audits (retrospective + pre-bill).
  • Train your staff on findings so errors don’t repeat.
  • Use audits to identify missed units, unbilled add-on codes, and downcoded encounters.

Our experience shows that proactive audits can recover 3-7% of missed revenue without increasing patient volume.

6. Automate Medical Billing & Coding Workflows

Manual data entry, claim status chasing, and payment posting are productivity killers. The best U.S. practices are investing in automation and AI-driven RCM platforms to streamline processes.

Best Practice:

  • Leverage AI-assisted coding tools to reduce errors.
  • Automate claim status checks, payment posting, and denial routing.
  • Integrate your EHR, clearinghouse, and billing platform to eliminate duplicate data entry.

Providers using automation report 20–30% faster reimbursement cycles and lower staff workload.

7. Train & Upskill Your Team Continuously

The medical billing and coding landscape changes fast – and a one-time training isn’t enough.

Best Practice:

  • Host quarterly lunch-and-learns on payer changes.
  • Encourage coders to maintain AAPC or AHIMA certifications.
  • Provide feedback loops: share audit findings and celebrate improvements.

The Bottom Line: Best Practices Pay for Themselves

Implementing these best practices doesn’t just clean up your healthcare revenue cycle, it also improves compliance, reduces staff burnout, and keeps patients happier. 

But keeping up with payer changes, coding updates, and endless claim follow-ups can overwhelm even the best in-house teams.

That’s where RevGen-i, 3Gen’s AI-powered revenue cycle management platform, comes in. With RevGen-i, U.S. healthcare providers get:

  • Real-time eligibility verification to stop denials before they start
  • Intelligent analytics dashboards to track clean claim rates, denial categories, AR days
  • Workflow automation for claim status checks, payment posting, and follow-ups
  • Seamless integration with EHR and billing systems for a frictionless workflow

Together with our expert billing team, RevGen-i helps U.S. providers stay compliant, capture every dollar, and get paid faster, without adding staff or complexity.

Ready to see the difference? Schedule your free RCM assessment and see how much revenue you might be leaving on the table.

References

[1] MGMA, “6 keys to addressing denials in your medical practice’s revenue cycle,” 18 March 2021. Available: https://www.mgma.com/mgma-stats/6-keys-to-addressing-denials-in-your-medical-practice-s-revenue-cycle.

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