Is improving your lab’s finances on your 2025 resolution list? Start by rethinking how you view your revenue cycle operations.

Here’s the secret: Your revenue cycle operations aren’t just a cost center; they are a strategic asset. 

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What is revenue cycle management?

Thinking of your revenue cycle management as a driver of revenue—not merely as an administrative function—will help you get paid for the services you perform, which we all know is becoming increasingly more difficult. Delayed reimbursements, denied claims, and billing and coding complexities are not new challenges, but they’re persistent. What’s changed is the need for more sophisticated strategies to address them.

Focusing on the right approaches will help you overcome these hurdles and strengthen your lab’s financial health. Here’s how to get started in improving your lab’s revenue cycle management.

1. Shortening the time between service and reimbursement

Reimbursement delays aren’t a new problem, but they’re still a massive headache for many labs. Whether dealing with out-of-network claims or pre-authorization hurdles, these roadblocks can push payments back by weeks or even months, creating cash flow issues and administrative headaches. 

Strategy: Use automation and AI for cleaner data

Clean data isn’t just about reducing errors, it’s about speeding up the entire process. 

If your lab is still dealing with a lot of paper orders (don’t feel alone; the majority are), you know how easy it is for errors to creep in during manual data entry. Automated tools with AI can step in here, not just to digitize those orders but to actually understand and interpret the data. They’ll catch things like mismatched diagnosis codes or missing insurance details before they turn into bigger problems.

These systems also help ensure claims meet payer-specific requirements without you having to constantly double-check everything. With the right setup, you can streamline your workflow, reduce the amount of time spent fixing errors, and get reimbursed faster. 

2. Playing defense against denied claims, not just offense

For many labs, handling denied claims feels like a constant game of offense. Every time a claim gets rejected—often due to outdated systems, incorrect coding, or failure to meet shifting payer requirements—labs find themselves scrambling to correct the issue after the fact. It’s an exhausting cycle: reacting, appealing, and hoping to reclaim revenue that’s already at risk. 

But what if your lab could play defense from the start and build strong safeguards to stop denials before they happen instead of always being on the offensive?

Strategy: Learn from historical data

To improve your claims process, you must dig into past mistakes. That’s where historical data comes in handy. You can spot where things went wrong by analyzing past claim issues, like incorrect coding or missed payer requirements. Looking at both denials and successful appeals gives you a clear picture of what needs fixing.

Once you understand those patterns, it’s easier to create a system that prevents the same issues from popping up again. Instead of constantly reacting to every denied claim, you can build a proactive approach that keeps your revenue flowing and ensures claims are handled right the first time. It’s about learning from past mistakes and using that knowledge to tighten up your processes going forward.

Strategy: Automate where you can, payors already are

It’s important to remember that payors are also getting smarter—and more automated. They’re using automation to flag specific codes and automatically require medical records or additional documentation. 

In response, labs need to stay extra vigilant of payor-specific requirements to avoid denials and speed up resolutions. Sending medical records in response to every denial won’t cut it anymore. Carefully reviewing payor requests (with the help of some automation) and following specific instructions can improve your success in getting paid.

Armed with insights from historical data, labs can confidently streamline key tasks like generating appeal letters and tracking responses. Automation doesn’t just speed up the process, it ensures that actions are based on proven solutions from past experiences and boosts the chances of a successful resolution. 

Strategy: Monitor success and payor correspondence

Once automated systems are in place, it’s crucial not to set them and forget them. Regularly reviewing the success of appeals strategies and staying on top of payor communications—especially paper correspondence—is essential. Some payors still mail requests for additional information, and missing these can result in missed opportunities to fix denials quickly.

Strategy: Prioritize high-value appeals

Not all denials are created equal. To maximize recovery rates, labs need to prioritize high-value appeals or those with a higher chance of success. With a proper system in place, labs can use real-time data and automation to identify which appeals should be fast-tracked and ensure that the most critical claims are addressed first.

3. Staying current with billing, coding, and payor requirements

Accurate coding and billing are crucial for successful revenue cycle operations, but it’s not always straightforward for labs. With labs working across many specialties and sometimes performing novel tests, billing and coding can quickly get tricky, especially when the coding system doesn’t always keep pace with the latest advancements in testing.

Strategy: Combine technology with expertise

As new codes and regulations are continuously introduced, staying updated is essential for avoiding delays, denials, and potential audits.

Automated coding systems, integrated with laboratory information systems (LIS), streamline coding workflows and reduce the risk of manual errors. However, relying solely on technology isn't enough. The right balance between automation and industry-specific expertise is crucial. Automation helps with speed and consistency, but industry knowledge is paramount when navigating payor requirements and setting up system requirements.

As your lab sets its sights on financial growth in 2025, the right mix of technology, expertise, and strategic foresight will be key to unlocking untapped potential.